9 percent, is now tracking just below 2 percent and will continue to grow slowly. Second, the intermodal market faces


challenges. Freight is coming off the railroads and shifting back to the highways, even in nontraditional long-distance lanes. Railroads are shipping less commodities and less coal, which they are looking to replace. Te rail companies have spent billions of dollars during the last few years on their networks, mostly for intermodal infrastructure. Tey also are reducing costs and, in the case of Norfolk Southern, removing perhaps 1,000 miles of track. However, because they believe the shift to


truck transport is “largely transitory in nature,” pricing has continued to increase, he said. A first quarter survey of shippers showed they expected rail prices to increase 2.9 percent over the next 6-12 months—the smallest expected increase since the first quarter of 2009, but an increase nonetheless. He agrees with that assessment and doesn’t expect rail inflation to increase much more. “Generally your truck competitive business,


OVER THE YEARS THAT I’VE BEEN INVOLVED IN TRANSPORTATION, IT’S NEVER BEEN A GOOD YEAR TO


BE A TRUCK DRIVER. RIGHT? IT’S ALWAYS GOING TO BE A TOUGH JOB, AND I THINK THE GOVERNMENT’S JUST


MAKING IT THAT MUCH TOUGHER AS THE DAY GOES BY. —JASON SEIDL, COWEN GROUP


I don’t see the railroads slashing rates,” he said. “I see them holding up. As we talked about the LTLs being an oligopoly, the railroads as I always like to say on their worst day can be a duopoly. On their best day they can be a monopoly. And that’s why these guys are holding up a lot better.” Te news, however, is not as good for


intermodal companies. “If you’re an intermodal player right now


on the demand front, there’s not a lot of good things working for you other than maybe, say, railroad performance numbers,” he said. “Right


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now we have cheap diesel prices, we have ample truck capacity out there, and declining truck rates. Other than that, everything looks good.” Other concerns? Te deceleration of


the Chinese economy is hurting American manufacturing, as is the strong dollar, which makes American exports more expensive. Inventory levels are high, in part because a very mild winter left retailers stuck with a lot of winter-based goods, so they are curtailing purchases of their next lines. His firm’s models indicate diesel prices will increase somewhat next year. ATR


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