The slowing economy is beginning to hit the Railroads, some more than others. Carloadings for the last month are down on NS, CSX, CN, UP, CP, but are still up on BNSF. KCS is up significantly, but that is over last year which was badly affected by Hurricane Katrina.
NS is the worst hit with traffic down 3.7 percent for October 2006 versus 2005.
In Michigan the political ads for some Republicans said that all the states had made an economic recovery except for Michigan. I guess the political season has ended and facts season has begun.
Andrew
Now the railroads will be back at the shippers doors looking for volume and finding out all of the knives they stuck in those same shippers backs not too long ago are not easily forgotten. I know many here are of the opinion that anything that is good for the railroads is totally fine and dandy but with railroads like UP trying for 40, 50 and even 80% rate increases all in one shot and other issues like bad billing practices etc etc can anyone say that long term it is a good thing for railroads to do everything in theri power to make shippers totally despise them ?
We worked long and hard to set up barges, transloads, backhaul truck scenarios and new suppliers close to our plants to try and stay competitive while class ones who had more traffic than they could handle attempted to dictate rates to us and administratively, treat us and many other shippers like trash. The will be finding out soon that many of us custoemrs don’t easily forget and getting old volume back from custoemrs they burned won’t be as easy as they assume.
Slowing economy? Are you sure the RR’s reduced carloadings aren’t more related to internal forces rather than external forces? Other than housing starts, all economic indicators are up, at least until Pelosi & Co. pass their wish list of legislative intrusions (e.g. minimum wage hike, CO2 tax, ending some of the Bush tax cuts, etc.)[;)]
Agree 100%.
My annuity and my personal savings account are doing great! Not only that, we have enough work lined up for years into the future.
Of course, tax increases and the like will ruin this. I suppose it is only a matter of time.
Economic Satire Aside, the real trends you are seeing are the capacity limits catching up with railroads.
They can not move more freight with current track arrangements and conditions.
The railroads might not have all the best freight cars for the freight they are moving.
Andrew
Statistically, this does not appear to be true. Over the past year, average train speeds have increased, while terminal dwell times have decreased on the four largest American Class I’s. In two cases carloads have decreased over that time period, but in two cases carloads increased over that time period. This uniform improvement suggests that railroads in general have been getting a handle on their congestion and capacity problems over the past year.
November 11, 2005/November 10, 2006
Cars on line
Average train speed
Average terminal dwell time
Union Pacific
328,445/315,417 carloads
20.4/ 21.7 mph
28.7/ 25.5 hours
CSX
230,121/226,397
19.0/20.3
27.7/23.4
NS
199,803/201,336
21.6/22.4
22.7/21.1
BNSF
220,829/226,426
21.8/23.2
24.9/23.2
Actually I was talking about here in Michigan. The CN and NS appear to be running near capacity.
If CN and NS can operate longer and faster trains, the tracks will be full when one factors in the stopping distances and siding lengths.
Andrew
The two biggest drags are Forest Products and Autos, with Metallic Ores now beginning to ease as well. United Taconite at Forbes, MN had a major electrical explosion killing one employee that has shut down half its capacity for one month now, with early January as target for getting the capacity back on line. Demand does seem off a bit though, so the other companies are glad to see that supply out of the market right now.
I think there is a “trickle thru” effect, that is undeniable.
Merely with anecdotal evidence based upon my own observations, traffic on NS’s (former Wabash) “auto artery” is really down, compared to what I recall the past few years.
Especially the past few weeks.
I guess that all those layoffs at Ford, and GM’s own hard times are taking their toll?
In contrast, NS’s (former Nickel Plate) main from Cincinnati to Chicago just seems to get busier and busier with container traffic. I’m sure that those imports represent more than just a few jobs that have been offshored, leading to a decline of local production.