Shares of freight railroads Union Pacific, CSX and Norfolk Southern jumped after they reported higher revenue, as more shippers moved their cargo from truck to rail.
A drop in the number of truck drivers in the U.S. has pushed up the cost of moving cargo on U.S. roads and compelled many shippers to move some of their goods to the less-pricey rail option. The Trump administration has been tightening rules on commercial driver licenses that are issued to immigrants, including with stricter enforcement of English-language proficiency requirements.
"I'm very bullish from where we sit on demand," said Union Pacific Executive Vice President Kenny Rogers in an earnings call.
Union Pacific reported a 12% increase in second-quarter operating revenue compared to the same period a year ago, CSX reported a 10% increase and Norfolk Southern, an 11% increase.
Shares of Norfolk Southern and Union Pacific are up more than CSX. The two are working to convince regulators to approve their $71.5 billion merger, and late Wednesday Union Pacific announced a deal with Canadian National Railway that prompted the Montreal railroad to withdraw its opposition to the deal.
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