Union Pacific, one of the top railroad companies, reported a 17% drop in the fourth-quarter net income to $551 million. Union Pacific and other railroad companies are noticing these results due to the manufacturing sector being hurt hard.
Once consumers begin to spend more on goods and retailers produce more, the railroad business will have a turnaround. Railroad shipping can notice a pickup in business as construction projects that are funded by the stimulus plan begin in the spring. Also as diesel gets expensive, shipping on railroads is a more attractive shipping strategy than by truck.
Union Pacific Chairman and CEO Jim Young said, "If the economy starts to pick up, you'll see fuel prices move up. That makes us much more competitive versus moving products on the highway."
Interesting article on how transportation business is being hurt by our economy. A key component for the railroad industry will be an increase in fuel prices. Look for in the near future for the railroad along with the trucking industry to team up.
ReplyDeleteIsn't there something in the stimulus plan that involves creating a national railway system?
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