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April 2011
North American railroads' automotive traffic numbers gained traction in 2010 and the first two months of 2011. But the impact of Japan's earthquake, tsunami and nuclear disaster may cast a shadow in the months ahead.
Freight railroads' automobile carloads jumped 22 percent in 2010 compared with 2009's total, according to the Association of American Railroads' Policy and Economics Department. Meanwhile, the RailConnect Index of short-line traffic indicated a 19.6 percent rise in motor vehicles and equipment traffic during the same period.
The upward trend continued at least through the first 11 weeks of 2011, as auto-related carload traffic rose 9 percent and motor vehicle equipment for short-line railroads shot up 55.5 percent.
During year-end earnings calls with analysts, some Class I executives noted the positve impact auto traffic growth had on FY2010 revenue. But those calls took place before March 11, when a 9.0 earthquake struck northeastern Japan, causing a tsunami and nuclear power disasters. Japan's major auto plants were shut down and, as of this writing, either remained closed or were gearing up production gradually.
The production declines will affect U.S. and other non-Japanese auto manufacturers that rely on Japanese-made auto components over the next six to eight weeks, said IHS Global Insight economists during a March 24 webcast.
If the supply-chain disruptions continue over an extended period, the economic impact on key industries "could be quite painful," the economists said.
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