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FW: [T_2000] U.S. ECONOMIC RECOVERY LEADS TO CONGESTED RAIL ROUTES

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  • Andrew Dawson
    It s not ironic to see some thing about rail congestion when ones considers how much trackage has been ripped up over the past 60 years. Go figure. Andrew
    Message 1 of 1 , Jul 19, 2004
      It's not ironic to see some thing about rail congestion when ones considers
      how much trackage has been ripped up over the past 60 years. Go figure.
      Andrew Dawson


      >U.S. ECONOMIC RECOVERY LEADS TO CONGESTED RAIL
      >ROUTES
      >Rail news & views | July 2004
      >18 July 2004
      >
      >
      >IN circumstances quite different to anything experienced by
      >Britain's railways, United States' railroads are facing major
      >problems of congestion and under-capacity due to growing
      >freight demand � caused by the strengthening economy and
      >increasing imports and exports, coupled with shortages of
      >rolling stock, train crews � and even of power, for the locomotive
      >manufacturers cannot keep up with demand.
      >
      >Forty per cent of all freight tonnage in the U.S. is carried by train
      >� about five times more than in Britain. But in the first half of this
      >year rail-cargo shipments rose 6% and are now heading for an
      >annual total that would exceed last year's record, the Association
      >of American Railroads reports.
      >
      >The expanding U.S. economy, which grew at 4.4% in the first
      >quarter, and a rise in imports from Asia � notably China and to a
      >lesser extent, India � have led to major limitations on rail freight
      >movements from West Coast ports, primarily affecting the Union
      >Pacific Railroad, which by sales is the largest U.S. railroad.
      >
      >Ironically, on the other side of the world, in China � where many
      >of the US imported goods are coming from, and where the
      >economy has grown at an unprecedented 9.8% in the past year
      >� the complaint is that they don't have sufficient rail capacity to
      >cope with their booming export trade.
      >
      >China now has 70,000 km (43,750 miles) of rail tracks. "But
      >these are insufficient to carry all our cargoes," says Professor
      >Wang Derong, President of the Society for Transportation and
      >Logistics in China, and head of the new branch of the world-wide
      >Chartered Institute of Logistics and Transport in China. "China
      >is facing acute problems in its transport sector, which is
      >expected to receive priority investment in the next 10 years."
      >
      >Indian Railways at present have fewer problems and are
      >benefiting from the world trade boom. In the first quarter of the
      >current financial year, to 30 June, Indian Railways transported
      >141.39 million tonnes of freight, compared to 133.17m during
      >the corresponding period last year, representing a 6.2%
      >annualised increase.
      >
      >Last year, according to Prof. Derong, Chinese ports handled 480
      >billion TEUs (20ft equivalent units), and throughput exceeded
      >that of all U.S. ports for the past two years � since China was
      >admitted to the World Trade Organisation.
      >
      >In 2002, according to Chinese Customs' data, merchandise
      >exports were worth US$325.7bn and imports $295.2bn, leaving
      >a surplus for China of $30.4bn.
      >
      >By comparison, the United States continues to run a huge trade
      >deficit � but according to the Commerce Department, the trade
      >gap was down to $46bn (�24.8bn) in May this year, from $48.1bn
      >in April. The narrowed trade deficit reported in May was
      >unexpected, and has been put down to a weaker dollar and
      >improving global economic growth boosted by record export
      >levels.
      >
      >* "Huge strain on transportation"
      >
      >As U.S. economic recovery has grown, average freight train
      >speeds are reported to have fallen 6.7 percent in the first half of
      >this year, and a shortage of truck drivers is restricting the
      >alternative choice of road transport. The cargo network last faced
      >major strains in 2002 when there was a 10-day lockout of West
      >Coast dock workers in dispute with their employers. This year,
      >the U.S. economy is expected to grow around 4.5 percent, the
      >fastest since 1999.
      >
      >Jack Koraleski, a Union Pacific executive vice president, in a
      >letter to customers, has referred to "the huge demand and strain
      >on all forms of freight transportation" in the United States at
      >present. "We must take necessary steps to limit the volume on
      >our system if we are going to be able to restore our system
      >velocity."
      >
      >In fact, during the second quarter of 2004, the company handled
      >more wagon-loads than in any other quarter in its history.
      >
      >Union Pacific is striving to hire new train-crew workers and to
      >add locomotives and railcars (wagons). The Omaha,
      >Nebraska-based company last month said second-quarter
      >profits lagged analysts' estimates because of delays. Its
      >average train speed has dropped 12 percent this year.
      >
      >Union Pacific has announced it is limiting loadings and the
      >number of railcars (wagons) in key corridors, including on the
      >West Coast between Seattle and Roseville, California; Los
      >Angeles and El Paso; Los Angeles and Salt Lake City � and in
      >the central corridor, through Iowa and Illinois.
      >
      >The Burlington Northern Railroad, based in Fort Worth, Texas,
      >has also set limits on some eastbound international cargo from
      >Los Angeles to prevent congestion as Asian imports rise.
      >
      >Commodities, including coal and grain, and other raw materials
      >such as chemical, are chiefly shipped by rail. About 60 percent of
      >all coal burned by U.S. utilities is delivered by rail.
      >
      >But Arch Coal, the second-largest U.S. coal producer, recently
      >said rail delays and missed shipments had reduced its
      >second-quarter profit by almost 40%. A spokeswoman said the
      >company is experiencing delays on Union Pacific and CSX � the
      >number three rail freight carrier in the U.S., whose train speeds
      >have dropped 4.9 percent this year.
      >
      >"We are paying very close attention," said Roger Nober,
      >chairman of the U.S. Surface Transportation Board, which
      >regulates railroads. "I want the carriers to be sure that they
      >articulate to their customers what plans they have in place to
      >meet the fall (autumn) peak. The ultimate problem is that I can't
      >make crews, locomotives or new track materialise out of
      >nowhere."
      >
      >Nober said it can take at least a year for railroads to plan and
      >complete projects to add tracks. New workers can take six
      >months to be trained.
      >
      >To complicate the situation further, U.S. railroad operators are
      >finding it difficult to buy additional locomotives to ease the
      >congestion.
      >
      >General Electric Company, among the biggest manufacturers of
      >rail traction, has sold out all 700 units being built this year,
      >spokesman Patrick Jarvis said. The company's
      >productiorailroads such as Union Pacific have bought new
      >locomotives.
      >
      >General Motors Corporation, the other U.S. builder of rail
      >locomotives, has doubled production from last year and is using
      >all available capacity, a spokesman said.
      >
      >http://www.railnews.co.uk/displaynews.asp?ID=572
      >
      >

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