'Fragile’ Recovery Seen for Transport Industry

'Fragile’ Recovery Seen for Transport Industry

Slow economic growth and uncertainty about oil prices will hobble U.S. transportation companies recovering from the recession, Standard & Poor’s says.

Although many domestic transportation companies are reporting higher shipping volume, those improvements are fragile, S&P says, “particularly for the significant minority of companies with negative rating outlooks.”

The proportion of U.S. transportation businesses with negative rating outlooks on S&P’s CreditWatch has fallen from more than 50 percent in mid-2009, but remains substantial, at more than 40 percent, the ratings service said in a report Friday.

The number of negative outlooks or CreditWatch reviews is concentrated in transportation segments hit hard by the recession -- airlines, shipping and trucking, the RatingsDirect report said.

Railroads and package firms fared better because they have more stable industry characteristics and rely on demand from a more diverse group of customers, S&P said.

Contact William B. Cassidy at wcassidy@joc.com.