(The following story by Dave Hannon appeared at Purchasing.com on April 17.)
Rail and intermodal provider CSX Corp. said in a recent earnings call that it expects rail rates to be up 5-6% in 2008, as high gas prices and roadway congestion drive shippers to the rails.
CSX reported a better-than-expected 46% increase in earnings for its first quarter, driven by better rates and demand for shipping ethanol and coal. Michael Ward, CEO of CSX, feels the massive amount of investment needed to fund an improved highway infrastructure in the U.S. “can be a positive for our industry.”
Ward also told Reuters that continued export of coal from the U.S. will remain strong through 2009, driving demand for rail services. As Purchasing.com reported recently, China’s demand for coal is so high that U.S. miners including Peobody are exporting coal to the Asian region.