What is in store for Rail in 2018?

Rail

Photo Source: American-Rails

“We feel very good about the future and look forward to next year. We are committed to provide superior service to our customers, and with the volume growth momentum still ahead of us, we see good growth opportunity. A major focus as we move into 2018 is putting more of our resources in place: the people, the equipment and the capital investments.” — Canadian National President and CEO Luc Jobin

What’s the state of the rail industry in 2018? Today’s modern railroads face diverse and unique challenges in daily maintenance projects. There is a lot to be optimistic about in the coming year for rail, though at the moment it is a cautious optimism. A strong U.S. economy and increased consumer confidence could potentially bring new investments and policies that would positively affect all levels of infrastructure throughout the country.

Overall, 2017 was a good year for the rail industry, with the ASCE’s report card giving it the only strong grade of its infrastructure report card. NASDAQ also reported strong growth for railroads in the third quarter due in part to improved focus on deliverables like coal.

Of course, there are challenges to overcome that could impact the industry. Some lawmakers have called for budget cuts, stating that trains are not profitable. National Association of Railroad Passengers (NARP) President and CEO Jim Mathews responded by saying “those in Congress who believe that passenger rail is not profitable are mistaken. What they don’t see is the big picture. A robust national–and international–intermodal transportation system is crucial to economic growth, especially in those rural and less wealthy areas where travel options are already limited.”

Uncertainty with the North American Free Trade Agreement could also be a factor that greatly impacts the rail industry. Railroads such as the Kansas City Southern that deal heavily with Mexico could potentially feel the repercussions of the deal falling through.

Union Pacific’s Lance Fritz highlights Mexico is a strong business opportunity. “Despite uncertainty around NAFTA, we consider our Mexico business an opportunity that could benefit some of our submarkets. Union Pacific moves 70 percent of U.S. freight-rail shipments to and from Mexico through gateways at Brownsville, Laredo, Eagle Pass and El Paso, Texas; Nogales, Arizona; and Calexico, California. We support trade that helps the U.S. and Mexico economies grow.”

As new infrastructure plans and investments are revealed, the railroad industry’s future will become clearer. We hope it’s a bright one.

About WVCO’s Railroad Division
The Willamette Valley Company’s Railroad Division is the industry leader in providing innovative new products and application systems for today’s railroads. The Railroad Division’s proprietary product, SpikeFast®, has quickly become the most sought-after and reliable product for plugging spike holes.The Railroad Division also offers other railroad tie products for wood and concrete ties, and unique application systems to accurately and consistently apply proven products.

Sources:

https://www.globalrailwayreview.com/article/63203/expanding-passenger-rail-u-s-economy/

https://www.globalrailwayreview.com/news/62949/report-amtrak-cuts-cost-billions/

http://www.nasdaq.com/article/railroad-industry-outlook-december-2018-cm886615

http://www.progressiverailroading.com/rail_industry_trends/article/Outlook-2018-For-Class-I-railroads-moderate-growth-is-the-best-guess–53413

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