Leading U.S. railroad,
) has initiated a $26 million track expansion project on River
Lines between Northern N.J. and Albany, N.Y. We expect the new
development project to benefit the company's growing freight
business and thereby lead to revenue accretion.
Over the coming years, the company also plans to focus on more
River Line capacity expansion projects that would lead to service
improvements across its network. The company last expanded
capacity on River Line in 2005, and now plans to undertake a
total of 18 miles of second track construction over a period of 2
to 3 years.
Given the growing importance of rail intermodal, rail
infrastructural development has been at the focus of all
investments undertaken by the railroads. In 2012, another major
Norfolk Southern Corporation
) sought expansion plans worth $2 billion within its
Norfolk's expansion strategies were fueled mostly by the
development of the energy sector, including the gas exploration
projects in Marcellus and Utica shale plays as well as ventures
associated with coal and power generation. Over the coming years,
it expects to introduce 32 energy-related projects in 14 states
under it service areas.
Coming back to the recent development, besides CSX, rail
freight carriers like
Canadian National Railway Company
Canadian Pacific Railway Limited
) have also shown significant activities in terms of terminal and
capacity developments. While Canadian National collaborated with
Indiana Rail Road Company to set up an intermodal terminal in
Indianapolis, Canadian Pacific started operations in its latest
intermodal terminal at Saskatchewan's Global Transportation Hub
All these recent events only lead to the fact that railroads
are experiencing increased growth in their intermodal services.
We expect all these investments to remain accretive over the long
term, supporting volume growth. However, given the current
economic backdrop, these investments can likely weigh on the
margins in the foreseeable future until there is a significant
improvement in the market fundamentals that will drive revenues
Currently, CSX Corporation has Zacks Rank# 4 (Sell) rating.
Other railroad stocks -Norfolk Southern, Canadian National and
Canadian Pacific - retain a Zacks Rank #3 (Hold).
CDN NATL RY CO (CNI): Free Stock Analysis
CDN PAC RLWY (CP): Free Stock Analysis Report
CSX CORP (CSX): Free Stock Analysis Report
NORFOLK SOUTHRN (NSC): Free Stock Analysis
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