U.S. railroads, long touted as a source of enormous capacity to take traffic off the nation's highways, are running out of room to increase intermodal business on many key routes.

The immediate need to add tracks and increase terminal capacity was raised for the first time publicly Wednesday at the Intermodal Association of North America's fall meeting.The comments suggested that decades of industry infrastructure shrinkage and poor management of railcars will have to be reversed if intermodalism is to continue three decades of continuous volume growth.

"For years, we were trying to reduce capacity," said Jim McClellan, vice president of strategic planning at Norfolk Southern Corp. "Now we are in danger of losing business because we don't have room for it. We are running out of capacity on key routes. Left alone, the situation will get worse."

Intermodal traffic is the fastest-growing business segment for the railroads. The industry crossed the 6 million-unit threshold in 1989 and handled 6.7 million containers and trailers last year, a 7.4 percent increase over 1991. Since 1980, intermodal traffic has more than doubled.

At the same time, the number of track miles operated by the nation's Class 1 railroads has steadily declined. Since 1980, more than 80,000 miles of track have been sold or abandoned, according to the Association of American Railroads.

Specific route bottlenecks identified at the IANA meeting spanned all railroads and regions of the United States and Canada. Among the bottlenecks named were the U.S.-Canada border between Ontario and Michigan; Los Angeles/ Long Beach; Southern California's Tehachapi Mountains; along the Hudson River in southern New York; eastern Oregon; along the Washington-Idaho border east of Spokane; western Indiana near Chicago; north of Atlanta toward Chattanooga, Tenn.; and in central Nebraska.

Terminal management and growth limitations also were not specific to regions or carriers, attendees said.

Their views broadened an industry dialogue that has been centered on shortages of trailers, containers and flatcars, rather than the network in which they run.

"If we look only at boxes, we are being shortsighted," said Michael Goh, senior vice president of APL Stacktrain Services.

"Flagship intermodal terminals have been expanded as far as they can and are at or near capacity," said Frank Harder, president of Intermodal Management Inc. He cited lack of available land and high land prices as

barriers to terminal expansion.

Several speakers made the point that excess capacity elsewhere in the system could not be used as long as bottlenecks existed somewhere along heavily traveled routes.

"Capacity constraints are not extensive, but they tend to block key (traffic) lanes and markets," Mr. McClellan said.

The speakers agreed that a ceiling on the intermodal industry's growth could be lifted through a combination of capital investment and better mixture of the ingredients that make up intermodal service.

Dick Davidson, chief executive of Union Pacific Railroad, told securities analysts in New York on Wednesday that his railroad was experiencing capacity constraints at Seattle; in the Blue Mountains of eastern Oregon; in California; in Memphis; and at the Laredo, Texas, border crossing with Mexico.

UP is expanding capacity at Seattle and Memphis and has a project under way to double-track the Oregon mountains.

"We've budgeted for a new bridge at Laredo and are in the permitting process," Mr. Davidson said.

Cliff Carson, general manager of intermodal service, for CN North America, pinpointed CN's $150 million tunnel project between Ontario and Michigan as an example of a capacity improvement project that would enable CN to become competitive in cross-border truck markets where it now has a 2 percent share of the business.

Meanwhile, Mr. McClellan and others cautioned that capital investments alone will not solve the problem.

"All you have to do is look at the airline industry to see that growth alone is not the answer," Mr. McClellan said.

Mr. McClellan, while sketching Norfolk Southern's plans for intermodal infrastructure during 1994, advanced other approaches to improving capacity:

* More use of double-stack trains that take better advantage of existing track space and limit the need to extend rail sidings.

* Asset-sharing, such as Norfolk Southern's plan to use and acquire a Consolidated Rail Corp. line west of Chicago to cut congestion.

* Terminal sharing.

* Shifting trains away from congested routes.

* Differential pricing that recognizes the cost demands of maintaining capacity for peak demands.

* Better use of signaling and train control.

* Willingness to use public funding that railroads have historically shunned. The Association of American Railroads is debating that issue now and is expected to decide soon whether it will change its position, said Clifford Northup, assistant vice president of taxation for AAR.

Mr. Goh said a continued shift to on-dock railyards could increase domestic shipment capacity at inland terminals in port areas.

Intermodal Management Inc.'s Mr. Harder, who said the industry has a 14 percent boost in terminal capacity within its reach, suggested better routing to eliminate the superfluous lifting of boxes. He also called for standardizing practices, equipment and information systems, and balancing capacity by smoothing out peak service periods.