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12/15/2008



Rail News: Rail Industry Trends

Rail's outlook is better than truckers' prospects, Zacks.com says


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Railroads were able to keep market share away from trucking companies, while still maintaining control over rates this year, according to Zacks.com's Zacks Industry Rank report. Railroads' pricing power enabled them to more effectively use fuel surcharges to boost revenue.

"Rail companies also benefited from the commodity bubble that occurred earlier this year via more shipments," the investment research report states. "Though demand for steel and copper has been affected by the slowing economy, coal shipments are holding up [and] a likely continued push for ethanol will help to support agricultural products."

However, the continued U.S. housing and automotive slumps, and weakened manufacturing sector will affect rail shipments going forward.

Although Zacks Industry Rank cut earnings estimates for CSX Corp. and Union Pacific Corp., the outlook for rail is brighter than it is for trucking, the report states.


Contact Progressive Railroading editorial staff.

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