Rail freight projected to rise

Jan. 14, 2010
The latest projections from FTR Associates indicate that year-over-year growth in rail carloads will resume in the next few months, despite continued weakness through the end of 2009. For 2010, the firm’s data indicates that carloads will be 4.6% higher than 2009

The latest projections from FTR Associates indicate that year-over-year growth in rail carloads will resume in the next few months, despite continued weakness through the end of 2009. For 2010, the firm’s data indicates that carloads will be 4.6% higher than 2009.

“The outlook is improving,” said Eric Starks, FTR’s president. “We expect to see comparisons turn modestly positive in the first quarter and then to accelerate later in the year. We will remain cautious about our outlook for all transportation segments in the short term but we are confident that the worst is over.”

However, the Association of American Railroads (AAR) pointed out that total carload traffic in 2009 for U.S. railroads was at its lowest levels since at least 1988, when the AAR began tracking this data. The group said carload traffic in 2009 was down 16.1% compared with 2008, and down 18.2% when compared with 2007.

U.S. rail intermodal traffic, which covers the movement of truck trailers and shipping containers by rail, posted slightly better year-end numbers with traffic down 14.1% compared with 2008, and down 17.7% compared to 2007, AAR noted. Last year saw the lowest intermodal traffic levels since 2002.

“Railroads are happy to have 2009 behind them,” said John Gray, AAR’s senior vp-policy and economics. “Last year saw declines, most of them quite steep, in every major category of rail carload traffic as well as intermodal. However, we're seeing signs that the economy is improving. We're hopeful that 2010 will be a much better year for the economy and for railroads.”

For some railroads, 2009 held some bright spots of sorts. Union Pacific, for example, achieved a record year of 1.25 million domestic intermodal shipments in 2009. Prior to 2009, Union Pacific's highest domestic intermodal volume was 1.19 million shipments in 2007.

The company said the introduction of 43 new truck-competitive service products allowed the railroad to capture freight that previously moved over the highway, as well as earn additional business from Hub Group, Pacer International and other large intermodal customers.

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