(The following story by Joe Ruff appeared on the Omaha World-Herald website on September 9, 2009.)
OMAHA, Neb. — Union Pacific executive Rob Knight told analysts Wednesday that freight volumes were slowly improving but to not expect a traditional Christmas peak because retailers were taking a cautious approach to consumer spending over the holidays.
“Over the last several years, frankly, what used to be a spike of a peak became more of a bump, and right now we’re not even seeing much of that,” said Knight, chief financial officer for U.P. “I think folks are going to be very cautious about building too high of inventory.”
The third quarter of July through September typically is busy with rail cars hauling televisions, toys and other consumer items as stores restock shelves for Christmas. But consumers are trimming their spending as job losses mount in the nation’s deepest recession since World War II.
The economy appears to have stabilized, but no big uptick in business was expected in 2010, Knight said.
“We see it sort of as ‘steady as she goes’ as we go into 2010.”
Freight volumes for July and August improved over the first half of the year in the automobile, chemicals and intermodal sectors but remained well below what the railroad could handle, Knight said.
Agriculture volumes should grow with the coming harvest, and steel shipments improved somewhat, he said.
Weekly carloadings in Union Pacific’s 23-state network increased from an average of 142,000 in the April and May period to 163,000 in the week ending Aug. 29 but remained about 17 percent below year-ago levels, Knight said.
About 4,500 train crew members were furloughed by the end of August, compared with an average of 5,300 in April and May, he said.