MIAMI — Railroads and large truckers are beginning to feel wind from the recovering U.S. economy, saying shipping volumes are turning up from sustained declines, a wire service reported.
“We are beginning to see for the first time in about 18 months positive year-over-year comparisons in our tonnage,” said William Zollars, chief executive of leading U.S. less-than-truckload carrier Yellow Corp. (YELL)
“Though it doesn’t sound like much, when you’ve seen 18 months with double-digit declines, anything with a plus sign in front of it looks pretty good,” he said on Thursday.
Zollars and other leading transport executives at a Merrill Lynch conference in New York reporting modestly improving loads of cars, chemicals and consumer goods echo recent industry statistics.
Railroads posted overall shipping rises for April and May, according to the Association of American Railroads.
In another sign of a better business conditions for freight haulers, some transport groups are lifting prices.
Both Burlington Northern Santa Fe (BI) and Union Pacific Corp (UP) have announced higher rates. Truckers Consolidated Freightways (CFWY) and Yellow Transportation, a unit of Yellow Corp, have also announced price hikes.
“We see a little bit of strength in the overall economy,” Burlington Northern CEO Matthew Rose said, adding that shipments of consumer goods and industrial products were showing the most strength.
Richard Davidson, chief executive of Union Pacific, said the western railroad’s intermodal business was showing strength, as were chemicals and automaker shipments.
“We are encouraged by the car loads’ strength,” Davidson said.
Arkansas Best Corp (ABFS), the No. 4 less-than-truckload carrier, has yet to see much lift in its overall shipments even as some customers express optimism about increasing loads in coming months, according to Chief Financial Officer David Loeffler.
“But levels are not getting any worse,” Loeffler said.
Zollars described Yellow, based in Overland Park, Kansas, as poised to cash in quickly as the economy picks up steam and freight volumes increase.
Yellow should get 80 cents of every added dollar of revenues as operating income and would be looking to acquire other, weaker truckers with some of the money raised in an equity offering in April, Zollars said.