Railcars just sitas freight falters

CRAIG, Mont. — BNSF Railway Co., the nation's top hauler of container rail freight, is parking miles of railcars in Montana and elsewhere because there isn't enough freight to keep them rolling.

Cars that often carry 40-foot containers of goods shipped from Asia stand like an iron fence between the Missouri River and this Montana burg known for world-class fly fishing. They stretch as far as Sandee Cardinal can see when she stands outside her home on the river's west bank between Helena and Great Falls.

The cars parked are the type that haul cargo from ships on the coast to points inland, mainly imported goods — an area that's starting to slow down because of the weak economy. Analysts say transportation usually is among the first sectors to show signs of a downturn in the economy and with Americans feeling pinched — employers eliminated 63,000 jobs last month amid declining consumer confidence — it could be a while before the idle cars move.

"If you take a look at transportation, both trucking and rail, you will see that things started softening last summer," said Arnold Maltz, associate professor of supply-chain management at Arizona State University. "The reason you are seeing all those cars parked is that the consumer economy translates into slower imports."

For the first two months of 2008, the volume of intermodal rail freight in the United States was down 3.4 percent compared with the same period last year, according to the Association of American Railroads, an industry group in Washington, D.C. Last year, intermodal traffic was flat as railroads began to feel the effects of slowing retail orders and the dollar's decline.

While shipments of store-ready consumer goods such as clothing have dipped, movement of coal, grain and ore have risen, according to the association. The latter are less sensitive to swings in the economy and help balance out the bottom line. Excluding intermodal traffic, rail freight rose 1.7 percent for the first two months of 2008 compared with the same period a year earlier. Coal was out in front last month with 576,012 carloads, or an increase of 5.7 percent.

"The railroads have actually performed relatively well when you look at their entire portfolio," said transportation analyst Todd Fowler of KeyBanc Capital Markets in Cleveland.

In Long Beach, Calif., home of the nation's busiest port complex with Los Angeles, the movement of goods has been stagnant. About 7.3-million containers passed through the Port of Long Beach in 2007, the same as in 2006, port spokesman John Pope said.

While retailers have imported fewer goods to be hauled by rail or truck nationwide, exports leaving Long Beach rose as the weak dollar strengthened overseas purchases of U.S. goods, Pope said. Rising export volume helped balance falling container imports for most of last year.

"It's a barometer of the economy," Pope said. "We're going to see the ebb and flow that mirrors what happens in the rest of the nation."

BNSF Railway Co.

BNSF in Texas, a division

of Burlington Northern Santa Fe Corp., has parked upward

of 1,000 cars in Montana,

says spokesman Gus Melonas.

More are parked in other parts

of the company's 32,000-mile

system, which operates in 28 states and two Canadian provinces.

Union Pacific Railroad

Spokesman James Barnes said the Nebraska company's intermodal business is "just a little down, but that's not unusual for this time of year." The company's commodity revenue was $15.5-billion in 2007, compared with about $14.9-billion in 2006. The agricultural segment posted an

8 percent increase over 2006.

CSX Corp.

The Jacksonville company provides rail, intermodal and rail-

to-truck transload services. CSX

says its car storage is not out

of the ordinary. The company's

revenue from surface transportation was up 5 percent, from about

$9.6-billion to $10-billion in 2007.

Sources: Associated Press, csx.com

Railcars just sitas freight falters 04/01/08 [Last modified: Wednesday, November 3, 2010 11:14am]

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