Canadian National Railway (CN) believes the economy has touched bottom and Canada's largest railroad expects a gradual recovery, shaped more like the Nike swoosh logo, rather than a robust V-shaped rebound, Reuters reported.
Railways, often considered barometers of the overall economy, have been badly stung by the recession, with CN Rail, for example, reporting a 13 percent drop in quarterly profit last month.
But slow and steady gains have begun, said CN Chief Executive Claude Mongeau.
"We're going through perhaps the worst recession since the '30s, but the good news is we are firmly of the view that we have found bottom," Mongeau said via webcast at a Citigroup industrial manufacturing and transportation conference.
"We are managing our business on the basis that this economy is on firm ground, but with a gradual recovery."
The company expects its fourth-quarter shipments, as measured by revenue-ton-miles, will match third-quarter volume gains of about five percent over the second quarter.
"We've seen the growth on a sequential basis and the first few weeks in the fourth quarter would point to effectively another four to five percent increase," Mongeau said.
CN Rail, which has weathered the economic storm with deep cost cuts and programs to boost efficiency, believes rising fuel costs will lift demand for rail transportation in Canada and the United States.
Coupled with clogged highways, the environment for railroads "has never been better," Mongeau said.
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Source: cargonewsasia
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