(The following story by David Hannon appeared at Purchasing.com on March 13.)
While other logistics modes continue to report slumping volumes and rates, a recent report from analysts at Bear Stearns says that railroads will continue to see better-than-historical pricing as a result of increased demand, tighter supply, and a more mature competitive environment.
“We also expect the rails to take share from highways over the next decade, driven by Asian manufacturing, better fuel efficiency, and increasing highway congestion,” the report said.
As an example the Bear Stearns analysis says Union Pacific’s rates will increase at minimum 2.9%, but could average as high as 6% if UP is aggressive in its contract negotiations with shippers.