The growth rate is stunning – even allowing for the fact that it starts almost at zero – as this is a traffic type written off 30 years ago. As you and I know, railroads are a volume business: the bigger the volume the lower the costs, the more it gets attention from the regions and headquarters, and the better the service gets. It’s extremely tough to continually marshall the resources and management attention to maintain everyday good service for a low-volume commodity. Eventually everyone gets frustrated because the cost of the resources is too high for the revenue received. But with this kind of growth, well, I have great hopes that railroads are back into the perishables business. What’s making the difference is of course fuel prices. The railroad can raise its rate significantly in order to pay for the additional cost of the service required by perishables, and still not get into truck-rate territory.
RWM