Rail volumes could rebound in the second half of the year, but the pace of a rebound will depend largely on consumer confidence, executives from several Class I railroads cautioned at recent investor conferences.
Author: Joanna Marsh
The Port of Savannah is poised to expand service and rail capacity as the Mason Mega Rail project meets a production milestone.
Carloads for grain and motor vehicles have risen in recent weeks, a sign that the rail volumes could potentially be past their bottoming out, according to Union Pacific (NYSE: UNP) CEO Lance Fritz.
FreightWaves SONAR: Railroads Pin Hopes on Auto Manufacturing as U.S. Carloads Sustain Record Decline
The Class I railroads are closely watching the restart of North American automotive production, hoping that the slow ramp-up will not only grow motor vehicle volumes but also improve demand for supplies such as steel and plastics, according to executives at recent investor conferences. However, a key unknown variable is whether consumer demand will lift volumes for automobiles and other goods, executives said.
Directors of the ports at Los Angeles and Savannah agree that the second quarter will be tough on port volumes as both facilities cope with blanked (cancelled) sailings. The lower port volumes, coupled with a loose truck market, could be a double whammy for U.S. Class I railroads.
Canadian grain groups are taking a fresh look at pressing government officials to enact legislation that would address how the country can continue shipping grain and grain products in the event of a strike or other work stoppage, FreightWaves reports.