Monday, February 02, 2009

NY Air Brake was ahead of the curve...

Last week, I mentioned a local news story that highlighted layoffs at NY Air Brake - a manufacturer of air brakes for railroad cars - and the fact that this was a pretty good real-time indicator on shipping info around the US.

On Friday, we received another indication that rail traffic was down sharply in January.

"Freight traffic on U.S. railroads continued to trend downward during the third week of 2009, the Association of American Railroads (AAR) reported today. Carload freight totaled 267,634 cars, down 14.6 percent from the comparison week in 2008, with loadings down 9.2 percent in the West and 22.1 percent in the East. Intermodal volume of 195,182 trailers or containers was off 7.1 percent from last year, with container volume falling 2.3 percent and trailer volume dipping 23.9 percent. Total volume was estimated at 28.4 billion ton-miles, off 13.4 percent from 2008.
Eighteen of nineteen carload commodity groups were off last week in comparison with last year, with the only increase being reported in the miscellaneous category of "all other carloads", which was up 4.1 percent.

For the first three weeks of 2009, U.S. railroads reported cumulative volume of 806,168 carloads, down 16.8 percent from 2008; 598,402 trailers or containers, down 11.9 percent"

Wow - a 22% drop in East coast shipments. This really highlights the slowdown in the physical economy.

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I try to avoid individual comments on individual stocks, but I talked about Amazon last week so I thought I'd follow-up. I think the trend that Amazon started in Q4 of pricing below Walmart/Target, etc has continued. For example, Taxcut is priced about 20% lower at Amazon than anywhere else on the web or offline. So again, they're sacrificing profits for revenue. That can work for awhile, but only for awhile.

I'd also note that the US Postal Service is apparently looking into some "issues" with regards to Amazon shipping. There is little information out there right now but there is some speculation that it has to do with Amazon purposefully underestimating weights of it's packages. That could be an interesting development.

Cheers!

1 comment:

robertxpr said...

You are talking about the intermodal passenger transport or also about the logistics intermodal transportation...Since I am from BGI World wide (http://www.bgiworldwide.com) I can tell you confidently that there is not much slowdown in this sector of goods transportation...since commodity products are also involved in these transportation....