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<< Rail News Home: Mechanical

3/31/2006    Freight-Car Market

Rail News: Mechanical

Class Is' faster train speeds might signal end to artificial car demand, Rail Theory Forecasts says

For most of 2005, the Class Is struggled to boost train speed while moving record numbers of carloads. But during the first quarter, all railroads that report system velocity to the Association of American Railroads showed train speed gains compared with fourth-quarter 2005, according to Rail Theory Forecasts L.L.C.

Among U.S. Class Is, CSX Transportation and Union Pacific Railroad — which battled poor service performance for much of 2005 — reported a 6 percent and 4 percent velocity boost, respectively. In Canada, Canadian Pacific Railway increased train speed 12 percent.

“If train speeds just stop decreasing, it will mean the end to the artificial demand that has spurred orders for new coal and intermodal cars more than the traffic gains required,” said Rail Theory Forecasts President and Progressive Railroading columnist Toby Kolstad in a prepared statement. “If the speeds continue to improve at the rate recorded during the first quarter, a negative demand will soon appear because of all the cars that have been built to accommodate the slow train operation.”

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