What happened to the railroad recovery?

Posted by Fred Frailey
on Friday, November 20, 2009

In mid August, after a severe traffic slump brought about by the worst recession in decades, railroad carloadings showed new signs of life, rising about 6 percent. And that bump-up in business held steady — too steady, it turned out.
 
If the economy is coming out of its long funk, rail carloadings should have continued the rise begun three months ago. But they did not, hovering between 610,000 and 615,000 units (including trailers and containers) week after frustrating week.
 
The latest report from the Association of American Railroads shows a new upward jump, to 622,000 loads. Granted, a 1 percent rise is not much to celebrate, but it may herald a break from the lull we’ve experienced.
 
Looking back to the week ending August 4, which railroads and which commodities reaped the biggest improvements? Biggest winners are the Canadian railroads. Canadian National’s loads are up 19.6 percent, and Canadian Pacific’s 16.4 percent.
 
Kansas City Southern is next, up 10.1 percent, reflecting a 15.8 percent improvement in its severely depressed Mexican operation, and a 6.9 percent gain in U.S. carloadings. Gains by the other roads: BNSF Railway 3.8 percent, CSX 4.1 percent, Norfolk Southern 5.4 percent, and Union Pacific 5.7 percent.
 
Among commodities, motor vehicles (35 percent), grain (33 percent) and metals (18 percent) scored the biggest percentage gains. But loadings of coal, by far the biggest traffic source other than intermodal, were unchanged.
 
We’ll know in the next week or two whether the latest gains in traffic will be sustained and maybe even improved upon. It’s been a rotten year in the economic life of this country. When better days begin to come our way, it's safe to predict that they’ll show up first in railroad carloadings. — Fred W. Frailey (ffrailey@gmail.com)

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