Second-Quarter Rail Growth Slowing, Report Says

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ail freight volumes have been decelerating in the second quarter with a modestly slowing economy, though rail pricing continues to grow, according to an analyst’s report released Tuesday.

Edward Wolfe of Bear Stearns wrote in a second-quarter railroad report that intermodal volume growth has been slowing with the economy and more available truckload capacity.

While intermodal volumes remained strong, at 6.1% growth this quarter, trailer volumes are down 2.1% compared with growth of 0.6% in the first quarter and 10.5% in the second quarter of last year, Wolfe wrote.

Union Pacific and Canadian Pacific, which have been hurt by higher fuel costs and have had more decelerating growth this quarter, had the most “downside risk this quarter,” he wrote.

The report said carriers like BNSF and CP, with strong intermodal and coal operations coupled with strong operating performance are well positioned, while carriers such as UP with more automobile and chemical operations, are less well situated.