Volume Increases Hold Off Performance Improvements

In the week that ended October 23rd, railroad volumes increased 4.6% from the same period a year earlier, driven by a 10.3% increase in intermodal traffic. The strength of economically sensitive volumes, which rose 5.1% for the week, is consistent with the positive economic outlook, said equity research firm, Morgan Stanley.

Though CSX showed improvement in average train speed during the period, traffic levels continued to lag its peers, said Morgan Stanley.

Wading into the details, the analyst firm noted hurricane-related operating costs were below its expectations. The railroad’s plan for dealing with the aftermath of the four hurricanes that hit the U.S. in late summer has good long-term potential, but has not yet resulted in meaningful improvements in CSX’s operating performance.

Revenue per carload rose at nearly all of CSX’s divisions as it was having good success collection higher customer rates. Tightness in capacity led shippers to pay higher rates though CSX still had poor service levels.

Overall volumes at North American railroads were up 5.4% year to date in the week ended October 23rd. Intermodal was up 9.5% for the period.

Burlington Northern Santa Fe reported a 9.7% increase in year-to-date volumes, including an 11.9% increase in intermodal traffic.

Canadian National showed a modest 0.5% rise in total volumes and a 7.1% decline in intermodal.

Canadian Pacific showed a 7.6% rise overall, with a 9% rise in intermodal.

CSX increased volumes 2.1% and intermodal 3.1%.

Kansas City Southern increased volumes 10.4% with a sharp rise of 20.9% in intermodal volumes year to date.

Norfolk Southern was up 8.1% overall and 16.3% in intermodal volumes.

TFM, the Mexican carrier, increased volumes 4.7% and intermodal 5.1%.

Union Pacific was up 2.2% in overall volumes and 3.3% in intermodal.

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