Rails ride on intermodal growth

Intermodal growth driving rail demand

While revenues and profits were up in 2004 for almost every segment of the railroad industry, intermodal demand proved to be a leading growth area, especially at year’s end.

“We topped $7 billion in revenue for the first time in our history, and all of our major business sectors set revenue records,” said David Goode, chairman & CEO of Norfolk, VA-based Norfolk Southern Corp. (NS). He said intermodal set volume records at NS for the quarter and year, recording the biggest revenue increases compared with 2003– 32% to $441 million for the fourth quarter, and 24% to $1.5 billion for 2004.

Ft. Worth, TX-based Burlington Northern Santa Fe Corporation (BNSF) said its fourth-quarter 2004 freight revenues increased 19% to an all-time quarterly record of $2.92 billion compared with the same quarter in 2003. Its consumer products revenues increased 22% to $1.18 billion as a result of double-digit increases in the international intermodal, truckload, and perishables sectors.

Jacksonville, FL-based CSX Corp., saw its surface transportation operating income, including rail and intermodal operations, soar 32% to $315 million in the fourth quarter of 2004 compared to 2003.

Montreal, Canada-based railway giant CN saw intermodal business grow 12% in the fourth quarter of 2004 versus 2003.

Omaha, NE-based Union Pacific (UP) said revenues from its intermodal business went up 11% for the fourth quarter, just behind industrial products (17%), agricultural shipments (12%) and equal to chemicals (11%).

“High fuel prices and increased operating costs continued to impact earnings,” said Dick Davidson, UP’s chairman & CEO. “However, we continue to be encouraged by the unprecedented demand we have experienced over the past year. In 2004, our operating revenue grew to a record $12.2 billion -- a 6% increase over 2003 and our first year over the $12 billion mark. We believe this trend will continue as demand for transportation service exceeds the available supply.”

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