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Rail News: Intermodal

Latest rail-car, intermodal market forecasts far from rosy

It’s unanimous. FTR Associates has joined Rail Theory Forecasts L.L.C. and Economic Planning Associates Inc. in reducing its projection for rail-car orders in 2009 because of the deteriorating economy.

In a recent supplement to its “North American Railroad Equipment & Deliveries Outlook,” FTR predicts an expected fall-off in freight traffic during the next year will push the rail equipment market into a further decline. Although third-quarter orders placed total 2008 orders on pace for 30,800 units, orders are expected to decline the next several quarters, FTR said.

The transportation and equipment forecasting firm believes 2009 orders won’t exceed 29,000 units.

On the intermodal front, the National Retail Federation’s (NRF) and IHS Global Insight’s monthly “Port Tracker” report also includes a doom-and-gloom forecast. Cargo volume at major U.S. container ports fell again in October, meaning 2008 now is expected to be the lowest cargo-volume year since 2004, the report states. October volume decreased 5.7 percent from October 2007’s total to an estimated 1.36 million 20-foot equivalent units (TEUs).

Volume this year is projected to total 15.3 million TEUs compared with 2007’s 16.5 million TEUs. The 2008 total represents a decline of 7.1 percent from 2004’s low total of 14 million TEUs. A month ago, Port Tracker projected ’08 volume to total 15.43 million TEUs.

"Retail sales forecasts this year are the lowest they've been in more than half a decade, and the cargo volume we're seeing reflects those numbers," said NRF Vice President for Supply Chain and Customs Policy Jonathan Gold in a prepared statement. "The balancing act between supply and demand is tougher than ever because retailers want to make sure they have enough merchandise on the shelves to satisfy customers and not be forced into unplanned markdowns to move excess inventory once the holidays are over."

Port Tracker projects November volume at 1.26 million TEUs and December volume at 1.21 million TEUs, down 8.8 percent and 5.5 percent, respectively, compared with volume from the same 2007 periods. The first year-over-year gain is expected to occur in March, when cargo volume reaches a projected 1.18 million TEUs, representing a 2.3 percent increase, Port Tracker states.

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More News from 11/10/2008