'Fragile' Recovery Seen for Transport Industry

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

31 Jan 2010

Slow economic growth and uncertainty about oil prices will hobble U.S. transportation companies recovering from the recession, Standard & Poor’s says. Although many domestic transportation companies are reporting higher shipping volume, those improvements are fragile, S&P says, “particularly for the significant minority of companies with negative rating outlooks.”
The proportion of U.S. transportation businesses with negative rating outlooks on S&P’s CreditWatch has fallen from more than 50 percent in mid-2009, but remains substantial, at more than 40 percent, the ratings service said in a report Friday.
The number of negative outlooks or CreditWatch reviews is concentrated in transportation segments hit hard by the recession -- airlines, shipping and trucking, the RatingsDirect report said.
Railroads and package firms fared better because they have more stable industry characteristics and rely on demand from a more diverse group of customers, S&P said.

Source: Journal of Commerce