In a call with Cowen Analysts last month, Kansas City Southern (KCS) CEO Pat Ottensmeyer said the second quarter had been challenging. "But we do see signs of life in a number of key areas in our business portfolio," he said on a June 27 call with Cowen, adding that the company's volume and revenue were improving.
As new volume comes back onto the network, KCS is handling it with "minimal new train and crew starts," according to the company's presentation. The second quarter brought a 23% volume drop and 24% revenue decline.
The railroad's volume at the time of the call was about 8% below pre-pandemic levels, but has grown 31% since the bottom of the volume valley in early-May. For the month of June, the railroad's volume was down 39% YoY at the time of the call, Ottensmeyer said.
Union Pacific also said in early June it was beginning to see improvements to its volume.
KCS's intermodal began improving in June as automotive plants reopened and parts were exported to Mexico. But lackluster consumer demand is still a drag on overall volume. KCS executives didn't mention any impact from the U.S.-Mexico-Canada Agreement that took effect July 1, but said interest from shippers with an "Anywhere But China" strategy could be beneficial to its Mexico business going forward.