There are six Class 1 Railways traded in the US market. If you look at each railway’s respective annual and quarterly filings, all of them report certain key performance indicators (KPIs).
There are four key performance indicators. The first three are incrementally more valuable. Of the four, revenue ton miles is the most important as it identifies the actual volume moved during that period of time. Only three of the six publicly traded railroad stocks report this information weekly. The remaining three only report the total annual amount in the yearly financial report. Since sales are an instrumental value with evaluating a railroad company (costs of operations, variable costs, are easy to determine and fixed costs are stable), it is a simple algorithm to determine profitability from those sales. Thus, revenue ton miles is the highest weighted value of all four key performance indicators. I believe revenue ton miles should be weighted more than 70% of all four key performance indicators.
Next, the number of carloads moved that week validates revenue ton miles due to the high correlation of the two metrics. Two of the six railroads (CSX and Norfolk Southern) do not report carloads; they use a variant called ‘Cars Online’ which includes all cars whether they are sitting at a terminal, or not being used at all. It isn’t the same as carloads. A third and important metric is velocity. Velocity is important, but only if the velocity trends poorly over a long period of time (more than 4 weeks). Other than that, velocity doesn’t impact the ability to forecast profitability due to the many variables involved.
The last metric is called dwell time. This one doesn’t really assist in forecasting profitability either. It is an efficiency measurement and I would only be concerned if it trends higher over very long periods of time (more than eight or nine weeks).
Overall, give a lot of credence to revenue ton miles, then carloads. The remaining two key performance indicators do not have a good correlation to profitability unless their results are poor over an extended period of time.