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February 2008



Rail News: Rail Industry Trends

Putting it in perspective: U.S. Class Is’ 2007 traffic ‘woes’



Don’t read too much into U.S. railroads’ 2007 traffic figures. Carloads might have dipped 2.5 percent year over year, but that’s because the data is compared with 2006’s record-setting year.

Although some commodity groups registered sharp declines (lumber carloadings dropped 19 percent primarily because of the weak housing market), others, such as petroleum products and chemicals, held their own, according to the Association of American Railroads’ annual traffic report.

Kansas City Southern’s traffic fluctuated in 2007. The Class I’s farm products carloadings skyrocketed 76.2 percent compared with 2006’s total, while motor vehicles traffic rose 66.1 percent, food and kindred products traffic jumped 61.6 percent, and metallic ores traffic increased 52.5 percent. However, KCS’ metals and products traffic dropped 46.2 percent.

Meanwhile, U.S. Class Is’ total coal carloadings clocked in at 7.2 million units and accounted for 43 percent of all traffic, but volume declined 0.9 percent year over year. BNSF Railway Co. and Union Pacific Railroad did their part by posting coal carload gains of 0.6 percent and 0.2 percent, respectively. Last year, BNSF set a coal loading record of 291.1 million tons system-wide, up 1.4 percent compared with the previous record of 287 million tons set in 2006. The Class I’s total coal carloads reached a record 2.5 million units, a 0.5 percent increase compared with the previous high-water mark, which also was established in 2006.

Short lines’ traffic falls short
Short lines registered less traffic in 2007, too. Total traffic dropped 4.4 percent compared with 2006’s volume, according to RMI’s RailConnect Index®, which includes data from 310 U.S. and Canadian regionals and short lines.
But at least one short-line holding company had a banner year. The Ohio Central Railroad System (OCRS) announced in early January that, while it hadn’t formally tabulated last year’s traffic totals, the company expected carload growth to exceed 2006’s 20 percent. In 2006, the company surpassed the 100,000-carload mark for the first time.

OCRS attributes 2007 traffic gains to new business development and efforts to retain existing traffic.




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