Norfolk Southern Corp. (NSC) predicted Wednesday that a traditional fall peak in intermodal freight shipments likely won't materialize this year, an outlook that may bode ill for the critical holiday shopping season.

The railroad said it hasn't seen the traditional surge in fall shipments over the past two years as the economic downturn has sapped demand, and it forecast 2009 as "another year without an obvious peak season."

Norfolk Southern Chief Executive Wick Moorman said in an interview that the railroad's intermodal customers, such as steamship lines importing goods from Asia, have warned not to expect a seasonal surge this fall.

Intermodal freight is transported by more than one mode, such as rail, truck or freighter.

"The big piece [of the peak season] in the past has been this surge in international boxes" during September and October, Moorman said. But "none of our customers are telling us that we are going to see much of one in '09."

He described the peak seasons as small in 2007 and "nothing at all" in 2008.

But he stopped short of saying his prediction for this year necessarily means it will be a poor holiday shopping season overall. Moorman said retailer inventories simply may be so low that they are able to restock slowly without spurring a seasonal rise in freight volume.

The freight-transport sector is widely considered something of a leading indicator of economic activity. United Parcel Service Inc. (UPS) said last week it has yet to see early signs of a traditional uptick in shipments ahead of the back-to-school shopping season.

Regardless, "it feels as if we have reached a bottom," Moorman said, citing stabilization in a number of freight markets and improvements in others. But he said a broad rebound will take time.

He said production cuts in the automotive sector appear to have waned, and steel output is firming. Norfolk Southern also said it is seeing some restocking in the chemicals sector, and it forecast positive year-over-year comparisons in agriculture volumes later this year because of rising ethanol and fertilizer shipments.

The railroad posted a 45% decline in second-quarter profit late Tuesday, as cost-cutting efforts couldn't offset slumping revenue and volume. Revenue decreased 33% to $1.86 billion on a 26% drop in freight volume and lower fuel-related revenue.

Norfolk Southern shares were down 2.8% at $42.40 in recent trading.

-By Bob Sechler, Dow Jones Newswires; 512-394-0285; bob.sechler@dowjones.com