Thursday, July 14, 2011

US Road Haulage Drops but Rail Freight Looks Confident

CSX Increase Investment on Rolling Stock
Shipping News Feature

USA – According to the U.S. Department of Transportation’s Bureau of Transportation Statistics’ (BTS) Freight Transportation Services Index (TSI) the amount of freight carried by the for-hire transportation industry declined 1.8 percent in May from April, falling for the second consecutive month.

Freight shipments by road have increased in 17 of the last 25 months but have declined in three of the past four months. Shipments rose 12 percent over the last 25 months, starting in May 2009, after declining 15.7 percent in the previous 15 months beginning in February 2008.

In May 2011, freight shipments returned to about the same level as October 2008 when the amount of freight shipped was early in its decline (see graph).

However things look rosier for the US rail freight sector. The CSX Corporation’s Board of Directors yesterday authorized an increase in 2011 capital investment for certain asset purchases - primarily railcars to meet the growing near- and long-term demand for export coal. As a result, the company now expects to make 2011 capital investments of $2.2 billion, up from the previously announced $2 billion.

In a statement CSX said that “the increase is consistent with CSX's previously announced intention to reinvest an average of 18 percent of its revenues back into its business through 2015. It also supports the company's near- and long-term financial guidance.”