U.S. rail volumes still sluggish

“Our expectations for peak are somewhat muted this year. I think we’ll see a little bit of a bump, but not the traditional ball peak. …The consumer economy is still doing relatively well,” said Mark Wallace, CSX’s (NASDAQ: CSX) senior vice president for sales and marketing, during CSX’s third-quarter earnings call Oct. 16.

He continued, “[In the] fourth quarter, because of the economy and because of the consumer economy, we’re hoping to have a relatively good post-Thanksgiving holiday peak. So into the Christmas time frame. Hopefully, people order a lot of stuff online, and we have the pleasure and the honor of moving a lot of that stuff.”

Although the fall peak could lift rail volumes somewhat in the fourth quarter, overall volumes could still be pressured by uncertainty in the macroeconomic environment, Wallace said. 

“I think [the fall peak] will help our intermodal volumes this quarter. But going into next year, as we said, we’re not going to give you a lot of guidance there. It really depends on what’s driving the economy and where we are. But longer term, as we get through all these lane rationalizations and get through all this mess in a good solid economy, I would expect intermodal to do very well,” Wallace said.

But others within the freight transportation sector overall are uncertain whether freight will see a fall peak at all this year. Freight logistics firm Hub Group (NASDAQ: HUBG) questioned whether it would see a fall peak, amid lower demand and increased competition from the truckload and intermodal markets. Rail lane rationalizations have also contributed to lower volumes for the company, it said when it reported third-quarter earnings on Oct. 30.