A surge of U.S. auto sales in March helped boost railroad shipments of motor vehicles and equipment nearly 19 percent year-over-year, and dealership restocking should ramp-up volume growth this month.
The Big Three U.S. automakers – Chrysler, Ford and General Motors – said sales were strong last month, with industry-wide sales hitting 1.37 million units, a 6 percent year-over-year increase, according to the Associated Press.
LMC Automotive, which provided the statistics, said sales could hit up to 14.5 million units by the end for the year, which would be 1.7 million unit more than last year but short of the 16.1 million peak set in 2007.
The growth in auto shipments has helped the major North American railroads offset sharp declines in coal and freight volume, down 9 percent and 10.7 percent respectively so far this year, according to the Association of American Railroads. CSX Transportation said auto volume was up 20 percent this year through early March, and auto manufacturing growth translates to more steel, chemical and intermodal traffic, Fredrik Eliasson, the railroad’s financial officer, told attendees of a JP Morgan Chase conference on March 15.
The strong automotive manufacturing sector in Mexico has also boosted cross-border traffic of vehicles and auto parts. Mazda, Nissan Volkswagon and Honda plan to invest about $2 billion in Mexican factories in the coming years. Motor vehicle and equipment traffic on Mexican railroads rose 7.8 percent year-over-year in the first 12 weeks of 2012.