Rail acts as both a partner and a competitor for transborder freight as well as for freight intended for our ports to be shipped abroad. Almost half (47%) of the freight handled by the two Class 1 railroads is related to trade with the US while another 30% is of an international nature. However, Canadian exports were in decline in many sectors important to rail in 2008 led by a whopping 32% decline in the beleaguered automotive sector and significant declines in the forestry, chemicals and industrial goods sectors. The Canadian and US economies are contracting considerably in 2009, so both export and import volumes will take another hit. According to the Railway Association of Canada (RAC) total shipment volumes are down 20% so far in 2009. Vancouver TEUs were down 22% in February year-over-year; Montreal TEUs were down 16% in February year-over-year. Bulk cargo was also down in February year-over-year at both the Port of Vancouver and the Port of Montreal. In response to the freight recession, over 300 locomotives and 20,000 railcars have been taken out of service. The RAC expects rail freight prices to be in decline this year but with capacity being taken out of the market the question is how much of rise in prices should shippers expect when the economy picks up and capacity tightens.