As Donald Trump stands poised to take office as President of the United States, transportation companies lie at the heart of his idealized American economy, whether it's railroads shipping coal by the hopper-load once again or truckers hauling American-made materials for new public infrastructure projects.
Reality may paint a different picture.
Like all other American companies, rail and ground shippers stand to record significant tax savings if Trump delivers on his promise to cut the corporate rate from 35% to 15%. But other policy proposals - and their purported gains - may very well be based on assumptions that won't materialize.
"Wishing to employ coal miners will not make cheap natural gas vaporize," Morningstar transportation analyst Keith Schoonmaker said in a phone interview. He said that the secular trend towards cheap natural gas prices is not going away and depresses the likelihood of any long-term gains in coal, no matter what Trump says about resuscitating the industry.
Class 1 railroads such as (CSX) , Union Pacific ( (UNP) ) and Norfolk Southern ( (NSC) ) still ship coal, but intermodal shipping has long since displaced the commodity as a more lucrative and practical revenue stream. Intermodal shipping is an essential element of overseas trade in which containers travel from ship to shore to truck, and will likely be affected by higher tariffs if Trump imposes them.
It's unknown how a Trump presidency will affect intermodals because of uncertainty over how he will approach foreign trade. Trump has vacillated between calls to either renegotiate the NAFTA agreement with Canada and Mexico or withdraw from it entirely. Whether he will impose heavy tariffs on Chinese exports also remains an open question.