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Rail News: Rail Industry Trends

Post-hurricane, KCS' traffic and revenue at tailwind strength


After Kansas City Southern’s rail network recovered in July from flooding and infrastructure damage caused by Hurricane Alex in central and northeastern Mexico, the Class I’s traffic recovered in August. So much so, KCS registered its highest monthly carload total so far in 2010.

During the four weeks in which Kansas City Southern de México S.A. de C.V.’s service was impacted by the storm, KCS’ volume dropped 18.1 percent year over year. In August, KCS’ carloads jumped 13.7 percent vs. August 2009’s total and increased slightly compared with volume in “pre-recession” August 2008, according to the Class I.

“August 2010 volumes made it the second-largest volume month for the company in the last three years, and surpassed internal projections developed prior to the hurricane for both volume and revenue,” KCS officials said in a prepared statement.

Despite the hurricane’s impact, second-half revenue growth is expected to approach 20 percent, said KCS Executive Vice President and Chief Financial Officer Michael Upchurch.

“This is especially significant in light of the fact that KCS’ business levels rebounded from the depths of the 2008-09 recession sooner than for the other U.S. railroads,” he said.