Monday, February 22, 2010

Strong Rebound? Not In Rail Traffic, Pal

Strong Rebound? Not In Rail Traffic, Pal

By John Shipman | 18 February 2010

An Association of American Railroads report today has some interesting nuggets that add more texture to the state of the current economic recovery.

Still empty and idle.

In "Great Expectations: Railroads and U.S. Economic Recovery," the railroad trade group notes US rail carload traffic was down 16.1% last year vs 2008, and off 18.2% vs 2007. AAR said last year's carload total was the lowest for U.S. railroads since before 1988, when it started keeping track. And "freight rail traffic today remains well below 2008 levels," AAR adds. Not a good sign. As the trade group says, "demand for rail services occurs when there is demand for the products that railroads haul," which is pretty much everything. "In other words, if America is not building or buying, railroads are not hauling," AAR says.

And while there have been some signs of pickup in volumes, the massive amount of mothballed railroad equipment— freight cars, locomotives— speaks to the anemic demand still pervading the economy. As Dow Jones Newswires' Bob Sechler reported, 440,000 freight cars were in storage as of February 1st, or 28% of the North American fleet. During healthy times, AAR says, 2% to 3% of the fleet might be in storage. The group says railroads have also had to park "several thousand locomotives," and together with the freight cars, "the industry has assets worth approximately $43 billion new standing idle."

Is That A Picture That Fills You With Visions Of A Robust Economic Rebound, Citizens?

[ Normxxx Here:  In 'olden times' (before the Age of the Internet and computers 'everywhere'), Freight Car Loadings used to be a key leading indicator [1] of the economic health of the country.  ]



The contents of any third-party letters/reports above do not necessarily reflect the opinions or viewpoint of normxxx. They are provided for informational/educational purposes only.

The content of any message or post by normxxx anywhere on this site is not to be construed as constituting market or investment advice. Such is intended for educational purposes only. Individuals should always consult with their own advisors for specific investment advice.

No comments:

Post a Comment