NEW YORK — The top executive at CSX Corp., the nation's third largest railroad, on Tuesday predicted it could take another year or two for shipping volume to recover to pre-recession strength.
That echoes what economists have predicted about the economy's slow but steady recovery.
CEO Michael Ward said in an interview with The Associated Press that shipments on the railroad are steadily climbing in virtually every category, but the pace of recovery might slow later in the year.
While the economy's upward climb is evident now, CSX, like other companies, is trying to keep a lid on hiring to keep costs low.
The Jacksonville, Fla., railroad furloughed a large number of workers when the economy turned sour last year, and it hasn't yet brought all of them back to work. CEO Ward said the company has tried to make its network more efficient as shipping volume improves.
That includes putting one person in jobs that used to be handled by two, like train operators in rail yards for example. CSX has also made trains longer, which allows them to carry more without adding employees.
CSX has more room to make efficiency improvements, Ward said, which means hiring will likely stay slow for the near future. But the company's business is still looking up, as it raises shipping prices and sees volume grow.
Auto and metals shipments are expected stay robust in comparison to record lows last year. But CSX doesn't think the housing market will improve anytime soon despite recent incentives like tax credits for first-time buyers. Shipments of lumber for building materials will likely remain sluggish.
CSX believes that while the export market for coal used to make steel will slow this year as China's economic growth moderates, more coal will be used by U.S. utilities. The railroad thinks many utilities will need more coal to generate power as electricity use ramps up.
On Monday, CSX Corp. was the first railroad to report second-quarter results. Earnings rose 36 percent from a year earlier. Revenue in every shipment category rose in the three-month period except food and consumer shipments, which were flat.
Railroads are considered a key indicator of broader economic health because they haul so many things used by consumers and businesses.
Kevin Jones of The Trucker staff can be reached for comment at firstname.lastname@example.org.
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