GLG News by Railcar Market Experts (EU)

Toby KolstadPresidentRail Theory Forecasts

Uncertainty is the problem for truckers and railroad intermodal managers

November 1, 2010

Analysis of:Has intermodal container business truly turned the corner? | www.progressiverailroading.com

The weekly intermodal traffic reports from the American Association of Railroads continue to encourage rail executives that the economy will continue to rebound and that traffic will continue to grow in the future, but no one knows for sure. Unfortunately, industry statistics are not available for the commodities moving by truck and railroad intermodal shipments, and gross traffic numbers leave everyone guessing as to what is behind the growth in traffic.

Toby KolstadPresidentRail Theory Forecasts

Railcar builders are looking to better times

October 29, 2010

Analysis of:Freight car orders, backlog up sharply | www.railwayage.com

The RSI announced the third quarter results for the railcar builders and there were improvements in all categories. Orders totaled over 9,100 units and deliveries continued to increase from 2,946 in the second quarter to 3,706 in the third. Moreover, the backlog of unfilled orders increased from 14,930 to 19,267. If the trends continue, and there is no reason to believe they will not, industry output will almost double in 2011.

Toby KolstadPresidentRail Theory Forecasts

Railroads are placing big bet on capturing domestic truck traffic

October 15, 2010

Analysis of:UPDATE 2-Greenbrier gets more railcar orders, shares jump | www.reuters.com

Greenbrier Corp. recently announced a number of sales and leases for intermodal container cars totaling around 5,000 wells. All of this equipment is for domestic container (53’ length) service, a traffic segment that saw some highway traffic defections to the railways during the recession. The railroads are betting that their new customers will not only stay with them but that more will follow as the economy improves and as the new eastern doublestack corridors improved railroad service levels.

Toby KolstadPresidentRail Theory Forecasts

Reliable freight and High Speed Passenger Service can’t coexist!

September 21, 2010

Analysis of:High-Speed Rail Stalls | online.wsj.com

The railroads are caught in a bind. While seeking government handouts in Public-Private Partnerships and battling congressional reregulation legislation, they have been trying not to offend too many politicians by fighting the expansion of passenger service over their primarily freight network.  It’s now crunch time and there are very few areas where the railroads can compromise: adding high speed passenger service would make track maintenance too expensive and freight service too unreliable.

Toby KolstadPresidentRail Theory Forecasts

Rail traffic is up, but it’s no barn burner

September 8, 2010

Analysis of:Norfolk Southern, CSX Say Volumes Rise as Rail Demand Holds Up | www.bloomberg.com

Rail traffic is one of the best current measures of economic activity in the country, and the weekly carload reports from the AAR are one of the timeliest indicators available. Through the 34th week of the year, the numbers read as follows: total carload traffic is up 7.1% over the same period in 2009, and intermodal traffic is up 14.3%. Compared to the second quarter of this year, carload traffic in the third quarter is down 1% and intermodal loads are up 4.8% 

Toby KolstadPresidentRail Theory Forecasts

Railroad traffic shows economic pickup underway

August 27, 2010

Analysis of:Key Factory-Related Cargoes Rise at Top Railroads | www.joc.com

The weekly railroad traffic reports from the American Association of Railroads are one of the timeliest indicators of economic activity, and the numbers in recent weeks are pointing to a pickup in industrial activity. The weekly reports in the second quarter indicated a significant slowdown in economic growth long before the Federal Reserve lowered revised the GDP numbers for the period.

Toby KolstadPresidentRail Theory Forecasts

Utilities begin to use more coal as railroad coal traffic increases

August 19, 2010

Analysis of:U.S. coal and natural gas generation rose, nuclear fell, in June | www.powergenworldwide.com

The EIA has reported that coal fired electric plants increased production faster in 2010 than overall demand for electricity has grown. Compared to June of 2009, coal fired generation was up 12.2% compared to an overall increase in demand for electric power of 7.9%. Power from plants that use Natural Gas also increased, as did power from Wind farms. Rail coal traffic has been steadily growing since the end of the first quarter and should finish the year about even to last year.

Toby KolstadPresidentRail Theory Forecasts

Railroad intermodal loads may be peaking early

August 10, 2010

Analysis of:Retailer Container Imports May Have Peaked | www.joc.com

Weekly railroad intermodal traffic has recently approached the levels recorded in mid-2008 and was on track to reach pre-recession levels by the end of the year if the normal cyclical pattern for this traffic sector prevailed. That would not have matched the other economic data normally associated with these shipments and could have created a problem for retailers in early 2011. A new report by Port Tracker however, now claims that the traditional shipping patter may not be seen in 2010.

Toby KolstadPresidentRail Theory Forecasts

Coal exports surge on Australian port problems and Asian steel boom

August 2, 2010

Analysis of:U.S. steam coal exports to support freight rates | www.commodities-now.com

Eastern coal exports rose to pre-recession levels during the first quarter due to the booming steel production in the Far East and the inability of Australian ports to handle the growth in demand for its coal resources. With collapse in demand from Canada, historically the biggest buyer of U.S. coal, Eastern railroads would have seen fewer coal shipments had not this market suddenly exploded and had not Australia failed to expand their port capacity.

Toby KolstadPresidentRail Theory Forecasts

Rails are doing well, but so are truckers and air freight carriers.

July 23, 2010

Analysis of:Railroad group: Traffic still shows weak economy | www.businessweek.com

The number of rail car loads has been relatively steady for most of this year, up over last year but significantly lower than pre-recession levels. Intermodal traffic however, has not only recovered last year’s losses but is about to pass the weekly traffic levels of 2008. The latter however, are well below the traffic levels of 2006. Moreover, indices of truck traffic levels show similar gains, so the railroad's claim to be taking market share due to a more fuel efficient operation is questionable.

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