The New York Times (June, 2008) is reporting that railroad stocks are on the rise despite the turbulent market.
Major railroad stocks like CSX (whose shares are up 50%), based in Jacksonville Florida, and Union Pacific (up more than 30%) can credit the upward trend to their exposure to coal and grains, both of which are also doing very well in the market. Transportation analysts say that railroads have been improving their business for years. Rising fuel prices haven’t impacted railroads as much as trucking companies and other transportation sectors because of railroads’ use of diesel as opposed to gas and their ability to transport more tons per gallon of fuel than for instance trucking companies.
Locally, here in Hampton Roads, Virginia (VA), Norfolk-based Norfolk Southern’s stock has risen 35%, though it is one of the least popular major rails, according to the Times, due to its relatively higher reliance on the declining auto and housing construction sectors. Kirekeby, a railroad analyst at S&P, says he expects Norfolk Southern to “benefit from rising coal exports, which have increased since the dollar has fallen against the euro.”
As a FELA attorney representing railroad workers, I always wonder if more money for the corporations will benefit the average carman or railroad clerk. The railroads still treat workers who get hurt on the job poorly, it seems, regardless of the economics of the rail industry.