FTR’s Vice President of Rail and Intermodal has cautious outlook

Todd Tranausky, Vice President of Rail and Intermodal at transport intelligence company FTR has said intermodal is going to be under more pressure than originally anticipated coming into 2020.

He said on a webcast that that over all rail carloads are going to be down significantly in 2020, down from a previous expectation of being flat to a little bit lower: “We expect volumes to be a lot weaker [than anticipated] because not only do you have extended supply disruptions, you also have imports being down for February in a significant way that will continue in March and April, due to Chinese factories being offline, due to the Lunar New Year. Once we get back to imports coming into the US, there is going to be a demand question, and what does demand look like, at that point, in the US?”

Lower crude oil prices make it not as economic for companies to ship Canadian crude down to the Gulf Coast, he said, coupled with demand disruption globally and lower demand for refined products in Mexico, as there was prior to the COVID-19 outbreak.

He went on to add: “Demand is probably going to be weaker, especially in the second and third quarters, as we start to build back up in the economy, and you are going to have more competitive truck competition for intermodal goods. There is going to be capacity out there in the trucking market and low diesel prices that will help trucks be more competitive. Intermodal is going to have to face those headwinds for longer.”

He concluded: “Cheap natural gas has gone down further as the energy complex has declined in recent weeks – that is going to be the headwind as we move forward.”

For more information visit www.ftrintel.com

30th March 2020