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Short Line Traffic Climbs
March 9th, 2010Small railroads across North America are seeing their new freight loadings reach the highest levels in nearly a year, fueled by demand for a broad range of cargoes.
RMI’s RailConnect index, which takes reports from 339 of the roughly 550 small and regional railroads in the United States and Canada, said reporting carriers originated 97,538 shipments in the week ending Feb. 27.
That is the highest level so far this year, and marks the sixth straight week that new loadings by RailConnect participants topped 90,000. That range is also above the November highs, when their traffic nearly hit 90,000 new weekly loads as the economic recovery took hold.
No single cargo is powering the gains. Strength appeared in many areas, from chemicals - the short line industry’s top cargo group - to grain, coal, construction materials, metallic ores and scrap materials used as factory inputs.
The gains are also coming despite February setbacks for freight movement from weeks of unusually harsh winter storms. Traffic on RMI-reporting short lines last month was mildly behind the pace of February 2009, while January’s new loadings ran ahead of last year.
But with a break in the recent bad weather, volume in the Feb. 27 week was almost even with the same week of 2009.
New coal shipments by short lines reached 12,313 carloads in the latest week, which was the highest in months though still down 21 percent from the same point last year. Export demand for high-heat metallurgical coal from Eastern and Midwestern mines has recently picked up, industry sources say, while the storms caused some U.S. power plants to use enough on-site coal stocks to order new deliveries.
Originations of grain-loaded railcars for RMI carriers last week hit 13,728 units, down about 900 from the week before but continuing some of the strongest loadings since last fall’s harvest period.
The short lines loaded 15,723 tank cars of chemicals, also below the high point but continuing in a strong range. Chemicals include various industrial inputs used by factories, plus crop fertilizers and ethanol.
Outside those large cargo groups, recent weeks have seen fairly steady gains in some construction materials including road aggregates and lumber, metal products and even paper — a broad enough range to reflect demand across a number of industries.
- John D. Boyd, The Journal of Commerce.
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