Most of the brokerage firms are positive on the rail industry due to benefits from the ongoing pricing renaissance, bolstered by contract re-pricing and sustained fuel surcharge recovery, as well as improving service metrics. They believe that the rails will be one of the first industries to show an economic turnaround and will continue to benefit from a shift toward international bulk trade, which is conducive to rail transport. Furthermore, with rails being three to four times more fuel efficient than trucks, hours of service rules for trucks that limit productivity, and increased overall highway congestion, the firms believe the rails will continue to steal market share from the trucks.

While the railroad sector is subject to cycles of weakening demand, the firms consider the long-term fundamentals of companies to be sound. This is reinforced by: 1) low debt levels; 2) strong competitive positioning against trucks; 3) high barriers to entry; 4) tight capacity (over the long term); and 5) favorable competitive dynamic (small number of rational competitors).