Railroad revenue tends to correlate strongly with growth in the industrial economy, and the tendency has been toward growth in the U.S.
Railroads own their own infrastructure and tend to act almost as oligopolies within their geographies -- CSX and Norfolk Southern dominate the east coast, and Union Pacific and BNSF operate mainly in the western U.S. -- meaning that Union Pacific's market position is relatively secure.
While revenue will oscillate with economic growth, all the major listed railroads are engaging in precision scheduled railroading, or PSR (more on that in a moment), initiatives designed to increasing profitability, so earnings prospects are getting better.
The same PSR initiatives are improving service levels -- for example Union Pacific is improving its trip plan compliance -- and management believes it's winning market share from trucking as a consequence.
Railroads can benefit from any opportunity from a pickup in North American manufacturing due to reshoring.
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