US rail companies steam through the downturn with profit
North America’s principal rail companies underlined their growing resilience and pricing power by reporting improved operating profits for the quarter when the economic downturn started in earnest.
Over the past three weeks, the four biggest US-based operators - Union Pacific, BNSF, CSX and Norfolk Southern - all reported improved operating profits for the quarter compared with 2007, despite sharp volume falls in some commodities.
Anthony Hatch, an independent railroad analyst, said the last quarter’s figures showed the companies continued to enjoy the power to maintain prices they developed in the years of strong growth between 2003 and 2007.
In the past, railroads were often forced to slash their rates during a recession to win traffic from trucking companies and keep the cash flow necessary to service their debts.
"In the fourth quarter, we went from a slowdown to a complete collapse in demand," Mr Hatch said. "Railroads responded with a good quarter. It’s further evidence that the rail renaissance, as I call it, is actually happening."
Debt Consolidation Information
