Everything You Touch Comes By Rail, Even UPS

During the depths of the recession, trucking companies and railroads took steep nosedives, running half empty, and leaving thousand of rail cars on sidings, empty and unused. I wrote a blog about all of these railcars causing dismay in little towns, giant barriers that nobody could move.  Well, officially, railroads are no longer in a slump–a story by Jennifer Levitz in yesterday’s WSJ described their robust spending on tracks and equipment that will keep them busy and full.

The biggest customers, like UPS, say that now they plan to use rail to move any package that needs to travel 750 miles or more. Four years ago, truckers claimed at least 80% of these loads; today it’s closer to an even split.  The railroads are spending billions on track, lowering railbeds to fit double stacked cars, and raising bridges for the same reason. Even FedEx said that they’ll begin to use the railroad more for shipping because it’s getting more reliable.

And the trains are running 10-15% longer, too. Union Pacific says that they can add 20 boxcars to a train yet increase staff by a mere 1%. So expect it to take a little longer the next time a freight train passes through town. With these longer trains, the company saw a 43% profit jump, and yet operating expenses went up just 2%.  The head of Union Pacific told the reporter that a lot of people don’t understand railroads.

He said that nearly everything you touch in daily life is handled by rail.  Maybe even  your next UPS shipment!