U.S. railroads continue to report increased pricing power despite an ever-slowing U.S. market and declining freight volumes.

Kansas City Southern reported a 9.6% increase in first-quarter revenue attributable to "a continued strong pricing environment and carload/unit growth in some of the company's business segments." The railroad's carloadings declined 1% overall in the quarter, according to company data, but revenues from carloads jumped 9%.

Rail and intermodal provider CSX surprised analysts by reporting record first-quarter and predicting higher rates later this year. CSX said ethanol volumes doubled year-over-year in the first quarter but its overall rail volumes declined by 3% while its intermodal volumes were relatively flat.

In a recent Reuters report, Andrew Meister, a portfolio manager at Thrivent Investment Management, theorized that "On the face of it, it doesn't make sense that freight volumes are going down but prices are going up as that contradicts the theory of supply and demand. But I'm beginning to think the railroads experience 20-year cycles and that regardless of the economy right now, customers will end up paying more even if they move less freight."