Rail Shippers, Carriers See 2010 Recovery

Rail carriers and their customers were encouraged by the brief peak shipping season this fall and anticipate modest growth in traffic in 2010.

Executives who addressed the annual transportation conference sponsored by the Intermodal Association of North America, the National Industrial Transportation League and the Transportation Intermediaries Association see a pick up in rail traffic as early as next spring.

"We're optimistic about 2010," said Jeff Hoy, senior manager transportation at the Home Depot. Hoy said spring is the busiest shipping season for the home improvement industry.

American Gypsum Co., which manufacturers wallboard used by home builders, sees business beginning to pick up next March, and projects growth of about 2 to 3 percent in 2010, said Wayne Johnson, director of logistics.

International intermodal traffic experienced a modest peak this fall, and the Union Pacific Railroad is optimistic that international and especially domestic intermodal business will increase in 2010, at least compared to 2009, said Brian G. McDonald, vice president-intermodal. "There will be a recovery, although it won't feel like it," he said.

As a capital-intensive industry, rail annually spends billions of dollars to maintain and expand tracks and intermodal yards and to purchase new locomotives and rail cars.

BNSF Railway during the recession continued to move forward on major multi-year projects such as double-tracking its transcontinental corridor and expanding rail hubs, said Stephen G. Branscum, group vice president of consumer products. BNSF is "judicially managing" other projects, he said.

UP, CSX Intermodal, Norfolk Southern and Canadian National are likewise continuing to invest in intermodal corridors, tunnel clearances, lift facilities and rail distribution hubs as they prepare for the more robust growth that they anticipate will occur in 2011 or 2012.

Contact Bill Mongelluzzo at bmongelluzzo@joc.com.