ABH Consulting

Yogi might have said, “Predictions aren’t reliable,” but maybe that’s too obvious for the Sage of 161st Street. We only have to look at the great traffic and infrastructure studies in everyone’s PowerPoints (including, to be sure, my own), all of which use 2007 as the base year to look at volumes and other metrics out to 2035.

How much has changed since 2007?! How about our expectations of overall GDP growth, or of utility coal growth? Who had predicted the revival of export coal, or the start of a truly domestic intermodal revolution, or had considered, at all, the implications of the shale developments?

That said, last year we did expect domestic intermodal to lead the way, and it did — and it will. Domestic container traffic grew in the double-digits in 2011, and that’s before projects designed to accelerate its growth (the Crescent Corridor and the National Gateway, for example) truly kick in. The shale business, involving project materials and pipe and frac sand and water inbound, and water — and rolling pipelines of petroleum! — outbound will likely be the biggest story overall, as development begins on other shales besides the mighty Bakken.

What might be forgotten in all of this is the chemical industry, which for years complained that rail pricing forced it to move offshore. Now that the chemical industry judges natural gas feedstocks to be cheap and plentiful, it’s expanding hugely in the Gulf and other areas.

That reversal, with policy and economic implications, is a huge positive for the railroads that serve the chemical belt, with perhaps the biggest related smiles in Omaha. The rail renaissance continues in new and mysterious (as well as tried and true) ways.

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