Freight Rail Traffic Hit 20-Year Lows in 2009

From Warren Buffett’s acquisition of BNSF to the Obama administration’s high-speed rail initiative, the nation is abuzz with talk about a revival of freight trains as an energy-efficient alternative to trucks. 

freight_rail.jpg(Photo: TSA)

But
amid the positive forecasts for freight, the Association of American
Railroads (AAR) released data today that showed just how bad of a year
2009 was for the industry.

Total carload traffic on U.S.
railroads sank by 16.1 percent between 2008 and 2009, hitting lows not
seen since 1988, according to the AAR.

Traffic levels for
last month were 4.1 percent lower than those of December 2008 and 17.6
percent lower than the last month of 2007 — interestingly, the AAR
found that decline driven by less coal movement. Excluding coal
shipments, rail traffic actually rose by nearly 7 percent between
December 2008 and December 2009.

In a statement accompanying the data, John
Gray, AAR senior vice president for policy, chalked up freight’s
struggles to the recession. "We’re hopeful that 2010 will be a much
better year for
the economy and for railroads.”

  • I sometimes read a great blog about rail issues “Burning the Midnight Oil“. The author explained how freight rail operators are now trying to win tax credits to allow them to invest in expanded rail capacity. They were (I’ve read) hit hard by the boost in demand during the oil price spikes of late 2008.

  • Mr. Buffett’s acquisition of BNSF should give us an indication of where this industry is headed. Mass transportation is the future – it may go slow at first because of opposition from various interests and the current economic conditions, but I believe it will go full steam ahead in the next 10 years. Environmental awareness is growing and this, coupled with a rising drive towards more efficiency, will inevitably propel this industry forward.

    Dan F.

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