BNSF, which moves imported Asian consumer goods from West Coast ports, hasn't seen a measurable gain in holiday-related volumes, Chief Marketing Officer John Lanigan said. CSX, the biggest carrier in the eastern U.S., and Canadian Pacific Railway Ltd. (CP) both forecast a "modest" advance.
The peak rail-shipping season, which usually boosts second-half profits, is under threat after the Midwest drought scorched crops and U.S. consumer confidence fell the most in 10 months in August. Retailers and manufacturers may be deferring orders like they did last year pending evidence that spending will pick up.
"There's too much caution in the supply chain across the retail and tech industries, where there is reluctance to stock anything resembling excess inventory," said Matt Troy, a Susquehanna Financial Group analyst in New York. "Lack of confidence in the economy and market is fueling a lot of fear. Fear breeds inertia. People sit on their hands."
