Intermodal segment and Class I railroads
US Class I railroads’ (XLI) intermodal segments compete directly with trucking (WERN) companies. In the last two years, shippers have been shying away from the rail intermodal for their shipping needs. However, with an upward turn in crude oil prices on the back of increased international trade, things are beginning to reverse.
Even though railroads are nearly four times more fuel efficient compared with trucking companies, the latter has an edge over railroads when oil prices are down. During those times, shippers prefer trucking companies for medium to long-haul freight services. Now that oil has again rebounded compared with the last year’s levels, shippers are back to avail rail intermodal services.
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