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4/1/2005



Rail News: Rail Industry Trends

Rail Theory Forecasts: Ton-mile increase will pressure U.S. roads to acquire more locomotives, cars this year


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U.S. railroads will increase ton-miles 3.2 percent this year, surpassing their 2004 total by more than 50 billion ton-miles, according to a recent projection by market analysis and rail industry forecasting firm Rail Theory Forecasts. The traffic increase will require railroads to obtain at least 600 new high-horsepower locomotives, excluding units slated to retire this year.

“In addition to intermodal traffic, which has continued to grow at a high annual rate for the last two years, the energy and material industries are straining the capacity of the railroad industry,” said Rail Theory Forecasts President and Progressive Railroading columnist Toby Kolstad. “The additional ton-miles should preclude any short-term improvements in train speed and freight-car utilization rates.”

Until traffic stabilizes, “artificial” rail-car demand — which is compensating for lengthened car-cycle times — will remain high, Kolstad believes. Although car prices are high because of a jump in steel costs, car deliveries should increase 30 percent this year, he said.

Rail Theory Forecasts publishes the "North American Freight Car Market," a survey of rail-car traffic and construction, and analysis of economic factors affecting the rail industry.


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