Ask The Experts: January 8, 2019

Tony Hatch
Independent Transportation Analyst and Consultant

Q:  How are the railroads handling the implementation of technology?
A:
  The mindset has totally changed in just a few short years.  These include the visibility projects going on at the short lines, CN’s boxcar based track inspection (thus used in revenue service rather than capacity-sucking special cars – 8 on order for 2019), and automated train inspection portals (at speed – up to 60mph - and without the manpower and time of an optical inspection).

Q:  What do you think the future holds for Short Lines?
A:  
Short Lines may be entering a New Golden Age, in terms of organic growth fueled by technology, better Class I cooperation and merchandise focus – and through the creation of new shortlines (a la CSX).

Q:  What is your opinion on AAR's current rail traffic results?
A: 
 The results suggest a slowing economy (although, as mentioned above, the comparisons are more difficult). Overall, US+Canada, Intermodal + Carload, was up 2% in November, the slowest rate of growth in 2018. Only 9/20 US and 12/20 commodities in Canada showed increases. The US carloads were flattish (actually down 0.2%; ex-coal & grain up 0.4%); intermodal up as reported by 2.5%. Canada showed us a different story – carloads up 7.5%, IM +1.7%. Leading the charge was Chemicals + (especially) Petroleum, up 8% in the US (petroleum up fully 29%). Weakness came from US Ag, motor vehicles, coal, sand….Crude by rail impact was profound – up 29% US and fully 39% up North.

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Alison Babcock