Freight volumes, rates to rise in ’18: Analysts
MISSISSAUGA, ON - The coming year appears to hold the promise of a growing economy, tighter capacity, and ultimately higher rates for those who haul freight. "When you have the economy doing reasonably well, transportation tends to be generally picking up," said Carlos Gomes, senior economist - Scotiabank, in a presentation during the Surface Transportation Summit in Mississauga, Ontario. He projects economic growth of about 2% in 2018, compared to the 3% seen in 2017. "The Canadian economy recently has been very strong," agreed Walter Spracklin, equity research analyst - transportation sector at RBC Capital Markets. But where railways have enjoyed higher volumes against the backdrop of recent growth, trucks didn't fare quite as well. Railway volumes surged in part because of the demand for fracking sand, feeding into the 6.5% boost in overall freight that moved over iron highways, he said. Intermodal freight volumes are growing as well, although grain volumes are likely to drop when compared to the strong crops of 2016. Of the Canadian railways, CN is seeing capacity tighten, leading to congestion challenges and a projected boost in capital spending.
