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Freight Transportation * USA - Fitch Ratings: Weak Demand in '08 Pressures to
The past year proved challenging for the freight transportation industry in the United States, and 2008 will likely remain difficult, at least through the first half, according to Fitch RatingsNew York,NY,USA -The Trucker News Services -6 Feb 2008: -- Fitch is a global rating agency providing credit markets with independent credit opinions... Following three years of strong demand growth that led to higher volumes and pricing power for both the railroad and trucking industries, demand began to wane in the latter half of 2006 and weakened further over the course of 2007. The hoped-for up tick in demand that many expected in the second half of this year never materialized, and demand in the peak season has been about as weak as the lackluster period last year... By contrast, shipments carried by truck tend to be more economically sensitive, with trucking volumes more closely tied to shipments of materials and components used in manufacturing, as well as the shipment of retail items and other finished goods. In addition, with railroads entering a potential recessionary period financially stronger than most truckers, with robust liquidity and free cash flow margins, the rail industry is better positioned to withstand a prolonged recession-driven downturn in demand than the relatively weaker trucking industry...
Labels: freight analysis
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