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November 2010

Rail News: Rail Industry Trends

Rail industry data and trends from Progressive Railroading November 2010


Ramping Up For Recovery: Rail-Car Orders, Ad Campaigns

The North American rail traffic rebound (see evidence of it in the charts on this page) is starting to show up in freight-car orders. Railroads, shippers and lessors are ordering "previously neglected" car types, such as small- and hi-cube covered hoppers, grain service hoppers, and intermodal platforms and cars, according to an Economic Planning Associates Inc. (EPA) "Rail Car Outlook" report issued late last month.

Based on assemblies to date, current backlogs (19,267 units as of Oct. 1, according to Railway Supply Institute data) and car builders' conservative approach to managing their backlogs, deliveries will total 13,500 units this year, EPA projects. The demand for certain car types — such as the previously mentioned small-cube covered hoppers and intermodal platforms — prompted EPA to "modestly raise" its 2011 deliveries estimate from 19,800 units to 22,500 units.

At Progressive Railroading's annual RailTrends conference in September (see article), Rail Theory Forecasts L.L.C.'s Toby Kolstad reiterated his 2010 projection of 13,800 deliveries. As for next year? Kolstad will deliver his reasoned forecast in our December issue.

A week or two before they reported stellar third-quarter financial results, a couple of Class Is kicked off new advertising campaigns. On Oct. 12, Union Pacific Corp. announced its first national advertising campaign in nearly a decade and "the most comprehensive" in the railroad's 148-year history, according to a prepared statement. The campaign is designed to illustrate the Class I's door-to-door shipping logistics expertise. UP's goal: to target new business growth. "Wherever you find business, you'll find us," the television, print and online ads say.

A week later, Norfolk Southern Corp. unveiled a campaign of its own: "One Line, Infinite Possibilities." The aim: to show how one rail line can support the U.S. economy, and provide opportunities and benefits to customers and communities, according to an Oct. 19 statement. The campaign includes a 30-second commercial ("Connects") that aired during the fall election season on various CNN and Fox News cable networks. In early 2011, NS plans to launch print, Internet, out-of-home and social media ads, as well as a second commercial called "Engines."




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