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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
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      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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