Transportation Outlook Back to the Rails

摘要

The combination of a slowing economy and historically high fuel prices is driving many manufac hirers to the railroads to deliver their products. The perception is that rail transportation is thre to five times more efficient than using trucks, explains William Greene, an analyst with equity research firm Morgan Stanley. Acknowledging that slower service and lack of rail access ex-cludes some manufacturers fron using rail, Greene notes that a sizable number of manufacturers have indicated they plan to shift some freight volumes away from truckload carriers to rail. Based on Morgan Stanley's latest Freight Pulse survey of preferred transportation modes by manufacturers, Greene sees that if companies are willing to lengthen their supply chains to keep transportation costs under control, the shift to rail will be a continuing trend. Inevitably, with an increase in demand for rail services, manufacturers anticipate that the railroads will continue raising rates throughout the year, "with full-year 2008 rates expected to rise 4.3%," according to Greene. Coal and export grain will be the greatest drivers of rail pricing this year.