We have compiled questions for management teams ahead of the winter conference circuit which begins during the last week of earnings and continues through mid-March. Consensus estimates were too high for the rails but have since reset and set up several debates on whether or not the 2021 outlooks are too conservative for CNR, UNP, and KSU. We could see a positive update from UNP after an ambiguous 1Q21 OR guide, assuming export grain trends remain favorable. KSU will likely be the first to address the volume impact from semiconductor chip shortages, but initial auto plant closures are expected to be temporary. Absent any specific updates, near-term sentiment will likely track railroad volumes with NSC and UNP enjoying easy comps compared to CP and CNR. Labor availability during the latest COVID-19 wave remains a critical factor for every transport network, including the West Coast ports. Spot TL rates just topped contract for the first time since July 2020 which suggests time is ticking to own a broker while the falling spot rate momentum is bad for TL stocks.

However, it isn’t all doom and gloom if progress is made on a stimulus package which could extend the boom in consumer goods spending. Included in this note are specific questions categorized by topic and broad themes relevant for each of the groups in transports; see page two for a list of covered companies.