U.S. auto sales generate the most business for railroads in four years

Article by Christian Andrei, on May 18, 2012

The recovery in auto sales in the U.S. has also given the business of railroad companies, Union Pacific Corp. and Norfolk Southern Corp., a huge boost. In fact, both are doing the best that they have in four years. The Association of American Railroads said that in the last week of March, there were 17,283 carloads for the American rail shipments of motor vehicles and parts – the highest since June 2008.

In April 2012, there was a 21% increase compared with April 2011. Their shipments came behind the petroleum shipments. Auto sales averaged nearly 14.5 million at an annual rate from January to April 2012, making up for around 30% of the gain in Norfolk Southern's first-quarter revenue and 14% of Union Pacific's, according to company data. The truckers and even the railroad-equipment manufacturers benefited from the strengthening motor-vehicle industry.

They have helped boost U.S. growth, extending from the Port of Charleston in South Carolina to the Mexican border at Laredo, Texas. Peter Nesvold, an analyst in New York with Jefferies & Co., said, “What's good for autos is good for the economy.” He explained that supplies and finished products have to be transported and capacity will become tighter if autos continue to improve. This will then mean that the rates charged for shipments "will start to get better."

The automotive volume of Union Pacific, the biggest U.S. rail carrier and based in Omaha, Neb., increased by 15% in January- March. On the other hand, CSX Corp., the biggest eastern railroad, reported an 18% improvement. Meanwhile, Norfolk Southern had a 23% increase. The carrier based in Norfolk, Va. is the second-biggest in the eastern U.S. It posted an increase in the first-quarter revenue of $169 million. Of this figure, $49 million is related to autos. [source; Bloomberg]

Topics: united states, sales

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

BMW’s 550i xDrive has long been considered as one of the most successful business sedans in the world. For the brand, this may not be enough as it has officially...
by - January 20, 2017
Amazon is now moving beyond the four corners of online retailing. Only recently, the retail giant has been awarded a patent for its Road Network system. Since the patented technology...
by - January 20, 2017
The newest version of the Lamborghini Huracan is not a Superleggera, but a Performante. When Lamborghini filed for a patent for a new name, there were still debates whether this...
by - January 20, 2017
What is hotter and more menacing than a Hellcat? If we ask Dodge, its answer would be the “Demon.” Of course, we aren’t talking about a demon with horns and...
by - January 20, 2017
The 2018 model year could be an exciting year for fans and enthusiasts of the Chevrolet Corvette. This comes as the 2018 version of the Corvette is bound to feature...
by - January 19, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries