Railroads Signal a Tough Year Ahead for This Industry

It's no secret that the industrial economy is set for a difficult 2020, and that's even before the coronavirus outbreak led to significant shutdowns in economic activity. In this environment, railroads are likely to suffer, and in turn, the companies that supply them will also feel the pinch. However, railroad suppliers like locomotive and component company Wabtec (NYSE: WAB), railcar manufacturer Greenbrier Companies (NYSE: GBX), railcar leasing and railcar manufacturer Trinity Industries (NYSE: TRN), and to a lesser extent Caterpillar face significant uncertainty due to the widescale adoption of precision scheduled railroading, or PSR, management techniques. Here's the lowdown.

If you want to know where an industry is headed, at least in the near term, it's a good idea to look at the spending plans of its major customers. In this case, it's the railroads, and in the U.S. this means the major listed Class 1 railroads like CSX, Union Pacific, Kansas City Southern, and Norfolk Southern.

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Source Fool.com