Demand for rail transport remains high
Demand for railcars will remain at historically high levels throughout the next few years, according to FTR Associates.
Total ton miles for rail freight is expected to rise 2.1 percent in 2006, 2.6 percent in 2007 and 2.1 percent in 2008, said the Nashville-based transportation forecast and research firm. Demand for transport by coal, intermodal and to a lesser extent farm products are high, while demand for housing materials and chemicals have slowed.
“With its two largest segments of freight doing well (coal and intermodal), railroads are less concerned about slowing growth from other freight sectors,” said Eric Starks, President of FTR Associates.
“The slowing in demand from non-core segments should allow the railroads to start making much needed improvements in productivity and turnaround times.” he added. “Average speeds are already showing improvement and with better service capabilities, demand for freight to be moved by the railroads is expected to grow at a strong pace over the next year.”