Global slowdown means 100,000 US freight cars idled
(The following appeared at RailNews.co.uk on January 24, 2009.)
LONDON Americas three largest railroads have put 107,000 freight wagons into storage 17 per cent of their combined fleets amid a deepening slump in freight traffic caused by the global economic slowdown.
So far this year shipments on U.S. freight railroads are reported by the Association of American Railroads to be down 17.4 per cent compared with the same period in 2007.
In the fourth quarter of 2008, U.S. wagon loads fell 8.2 per cent from the same period in 2007. In December alone, shipments were down 14.2 per cent.
However, the major railroads so far are managing to offset the economic downturn with higher charges, improved efficiency, cost cutting and lower fuel prices.
For example, Burlington Northern Santa Fe said its fourth-quarter earnings jumped 19 per cent and beat Wall Street's expectations while Union Pacific, the largest U.S. railroad by revenue, said its fourth-quarter profit jumped 35 per cent compared with a year earlier. And CSX has reported its adjusted income rose 16 per cent in the fourth-quarter of 2008.
According to CNN, U.S rail freight volume has been falling since late 2006 but the drop became more pronounced in the final quarter of last year.
Union Pacific has about 48,000 freight wagons in storage out of a total fleet of 289,000. Burlington Northern Santa Fe said it has about 35,000 wagons stored, while CSX has parked about 24,000.
"They're parked in every spare track I could find," Union Pacific Chief Executive Jim Young told CNN.
The three major railroads have also put hundreds of diesel locomotives into store.
CNN reported that U.S. railroads have, however, used falling freight volumes to improve overall efficiency in key metrics such as dwell time and train speeds.
Meanwhile, industry executives and analysts said there was little downside to storing rail wagons until demand improves, because they can be brought back into service quickly unlike the expensive process of storing aircraft in the dry air of then Californian or Arizonan deserts.
The slightly used exSP yard in my area is full of unused power, TBOXes, and centerbeams. I would say there is at least 40 units parked there. Scares the shit out of me.
