Railroads benefiting from auto growth

Apr 26, 2013 | 04:56 PM | Corinna Petry

Tags  railroads, automotive production, Union Pacific, Eric Butler, Kansas City Southern, David Starling, Pat Ottensmeyer, Norfok Southern Don Seale

CHICAGO — North American railroads say they are seeing the benefits of increased shipments of motor vehicles and auto parts and are preparing to service new factories in Mexico as they look to take advantage of the automotive sector’s growth.

"The growth rate of the automotive industry continued to outpace that of the overall economy during the first quarter," Eric L. Butler, executive vice president of marketing and sales for Union Pacific Railroad Co., said during the company’s recent first-quarter earnings call.

According to Butler, the company’s automotive volume grew 2 percent in the quarter, which combined with an 11-percent increase in average revenue per car drove a 13-percent rise in the railway’s total revenue. The steady pace of total auto sales in the first quarter "is expected to continue throughout the year, which combined with declining dealer inventories, should be good news for our automotive business," Butler added.....

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