Rail traffic now on a faster track

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TORONTO, Ont. – Traffic running on North America’s Class 1 rail network closed the third quarter on a positive note, growing 4% in week 39 of the year. That was the highest year-over-year increase since week 19, which ended on May 14, 2011.

“We believe the third quarter’s end coincides with the conclusion of a phase of lackluster growth which persisted for the better part of the year-to-date period,” commented transportation market analyst Jason H. Seidl, director of Dahlman Rose & Co.

Overall, volumes were up a mere 0.8% y/y in 3Q11, following 3% growth in 2Q11, 5% growth in 1Q11, and 12% growth in 2010.

“The deceleration was largely due to tougher comparisons and unusually severe weather conditions, which led to a host of network disruptions, most of which have now been resolved,” Seidl said. “The restored rail networks, coupled with what we believe will be easier comparisons in the remainder of the year, should lead to y/y growth in the low-to-mid single digits going forward. Sequential changes support the argument for improving rail traffic – week 39 was up 1.7%, week 38 increased 1.8%, and week 37, which was partly aided by easy comparisons with a Labor Day shortened week 36, was up 8.6%.”

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