Short Line Downturn Eases Slightly

As a measure of how tough the freight rail market is these days, short lines had their best week of 2009 in hauling basic stone and related materials used in heavy construction, yet that category was still down 20 percent from a year earlier.

The 343 small railroads reporting into RMI’s RailConnect index for the week ending May 2 – out of more than 500 across North America – said they originated 85,855 loads of all cargo types. That’s down 32 percent from the same week in 2008, but up from 83,726 on April 25 when traffic was down 34 percent from the same point last year.

March and April have been tough months for railroads large and small, as the economic downturn continued to cut traffic sharply despite signs the recession could be slackening. And both months had heavy rounds of harsh weather that disrupted traffic across varying parts of the continent.

Even some scant upticks could be fleeting.

For instance, RailConnect short lines improved their loadings of motor vehicles and equipment to 1,131 carloads in the latest week, the best since late March. However, Chrysler is already shutting down some plants temporarily in the wake of its recent bankruptcy filing, and GM has said it plans to idle some for long periods this summer.

A number of other cargo categories are moving up or down from week to week with no clear trend, no longer falling steadily but showing little sustained pickup in demand.

The exception is the group of cargoes listed under stone, clay and aggregates. Those materials are used in highway work and early stages of other types of construction, and could be gaining as the U.S. Recovery Act stimulates building projects around the nation.

And it is a significant traffic category for short lines. The 10,673 loads they originated of those materials in the latest week ranked fourth behind chemicals, coal and grain.

But the lack of clear trends in other short line cargoes suggest that if the recession is bottoming out it could also be some time before the economy starts to perk up.

Contact John D. Boyd at jboyd@joc.com .