Railroad Roundtable; Industrial Strength Gains Steam In Q2, Confident on 2H

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Railroad Roundtable; Industrial Strength Gains Steam In Q2, Confident on 2H

TD SECURITIES (USA) LLC INDUSTRY OVERVIEW

July 7, 2026

■Airfreight & Surface Transportation: Rail Railroad Roundtable; Industrial Strength

Gains Steam In Q2, Confident on 2H

Jason H. Seidl THE TD COWEN INSIGHT

646 562 1404

Panelists spoke to broad based industrial strength that picked up through Q2 with bullish

jason.seidl@tdsecurities.com

trends now expected in 2H. Industrial development is here to stay, per our panelists, though

Elliot Alper USMCA resolution remains an important hurdle. Panelists were incrementally more mixed on

646 562 1403 service vs April call. Merger sentiment was largely cynical from participants.

elliot.alper@tdsecurities.com

Uday Khanapurkar, CFA ■Industrial demand strength has picked up in Q2, with multiple shippers and our shoreline

646 562 1362 CEO citing an acceleration of demand through Spring across a wide range of industrial

uday.khanapurkar@tdsecurities.com categories. Panelists attribute the strength primarily to energy demand and data center

construction, partially offset by a weak housing market (lumber, pulp/paper are both seeing

softness). Most panelists were pessimistic coming into '26 and are now bullish on demand

trends for the back half of the year.

■Service feedback was mixed across participants. The chemicals shipper reported good

service levels and better engagement from both the Class I railroads and short lines. The

largest short line operator also said the Class Is appear increasingly focused on customer

service. However, the building materials shipper cited meaningful service deterioration

at three Class I railroads over the past month, while the aggregates shipper said recent