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September 2008



Rail News: Rail Industry Trends

Tony Hatch: RailTrends in tune with ‘renaissance’ themes



“If you can make it there ...” The 2008 edition of the Progressive Railroading’s RailTrends conference, which will be held Sept. 30-Oct. 1 in New York City, promises to focus on key issues in this strange but nonetheless exciting time in the development of the “railroad renaissance”. We will focus on a variety of issues dealing directly with railroad finance and equipment — and, indirectly, with railroad markets and legislative concerns.

“Money — that’s what I want!” On the financial side, we’ll hear from Miller Tabak’s Jeff Tabak and Strategic Stock Surveillance’s Erin O’Reilly on the intriguing and changing makeup of the rail investor base — are the new investors a positive development for the long-term health of the industry? Are they, in fact, often actually longer-term investors than the traditional mutual funds? How do derivatives factor into current investments?

On the debt and investment banking side, we’ll have a high-powered, veteran I-banker panel moderated by well-known consultant Lee Clair on “The Impact of the Credit Crisis on the Rail Industry” — the title says it all. And at a time when rail-car fleets are for sale, we’ll hear RailTrends vet Toby Kolstad give his annual fleet forecast and Jim Husband lead a panel on equipment financing. And, of course, we’ll hear from the analysts, with good friends Tom Wadewitz and Rick Paterson joining yours truly.

“I asked my congressman and (s)he said, quote ...” We’ll help cure the end of Summertime Blues with a well-rounded discussion of legislative issues, including a thorough (re)-regulatory dialogue.

We’ve invited two key congressional players: U.S. Rep. John Mica (R-Fla.), Republican Leader, House Transportation and Infrastructure Committee; and U.S. Rep. Corinne Brown (D-Fla.), Chairperson, Subcommittee on Railroads. Although we tend to hear from congressmen who oppose the rails on a variety of issues (the squeaky wheel), these two oppose re-regulation.

That said, we expect to hear a wider variety of opinions during our annual Executive Roundtable — we’ll hear from the AAR but also from the Railway Association of Canada, the Railway Supply Institute, and, tellingly, the National Industrial Transportation League (the largest freight shipper organization).

   
Tony Hatch  
A unique, multi-disciplinary event,
RailTrends ’08 will focus on a host of
key rail industry issues in this strange
but nonetheless exciting time.
 
Linking government and finance will be our public-private partnerships (PPP) panel, following up on previous years’ discussions by focusing on CREATE, ready perhaps to spring to life in the new transportation bill coming next year. The PPP panel comprises CREATE’s Earl Wacker and Norfolk Southern’s Jim Hixon.

“It’s a 5 o’clock world when the whistle blows ...” Train whistle, that is. Thefinancial and governmental stakeholders deserve and will get their say, but it’s those working in the industry, in marketing and operations, that distinguish RailTrends ’08. Ag business has been a rare bright spot in 2008 rail volume, and even brighter in contribution. Is that sustainable? Or have we all just been riding the global commodity boom, a boom that may be showing its age? BNSF Group VP Agricultural Products Kevin Kaufman and CN SVP Marketing Jean-Jacques Ruest will discuss regulation, global markets, ethanol, etc.

We will hear about local and global commodities from ArcelorMittal USA and the American Coal Council. Meanwhile, intermodal has always been a focus of mine and I am excited that Union Pacific’s VP Intermodal John Kaiser, a veteran of my old intermodal conferences a decade ago, will showcase his strategy and outlook. How will the expansion of the Panama Canal affect western international business? Rodolfo Sobonge, VP Market Research from the Canal itself, will touch on that.

And we also will hear about U.S./Mexican intermodal opportunities from Kansas City Southern SVP Brian Bowers, who can update us on Lázaro Cárdenas, Mexico, and the cross-border strategy and outlook.

RailAmerica CEO John Giles, too, will be on hand. Giles’ company has the broadest exposure to the North American rail scene — and, since the privatization by Fortress, the least exposure to the (public) financial markets. His Sept. 30 keynote will help change that.

“I might take a train, I might take a plane, but if I have to walk, I’m gonna get there just the same ...” We think we’ve provided a unique, multi-disciplinary conference with opportunities to learn and network (our attendees are broadly diverse and highly influential themselves) outside of the mainstream. Pure financial conferences have a role, but we hope we provide a timely and varied agenda beyond that of the typical I-bank event — and in NYC.

RailTrends Program Consultant Tony Hatch is an independent transportation industry analyst/consultant.



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