Consistent with the current macroeconomic trends, railroads started the
year on a mixed note. Going by the rail traffic report for the first
quarter 2013, growth in automotive and petroleum products’ shipments was
steady while coal and grain shipments continued to cast a shadow over
the rail freight industry.
According to the Association of American Railroads’ (AAR) rail traffic
report, cumulative performance of the North American railroads
(including U.S., Canadian and Mexican railroads) have fallen 1.5% year
over year in the first quarter of the year. The biggest contributor to
this decline was grain, which dropped 11%. Coal volumes followed
closely, falling around 7%.
Going by the quarterly performance of the class 1 railroad, we see
continued lower volumes from most of these carriers. One of the largest
class 1 railroads in North America -- Union Pacific Corp. (
UNP
- Analyst Report
)
-- registered first quarter volume decline of 2% year over year. Another major railroad CSX Corp. (
CSX
- Analyst Report
)
also reported a similar level of decline in its volumes. Going forward, Canadian counterpart, Canadian Pacific Railway Ltd. (
CP
- Analyst Report
)
also experienced lackluster growth trend with flat volume growth on a year-over-year basis. (more)
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