Wednesday, December 31, 2008

Railroads and the economy

I was directed to a link the other day in relation to transportation issues and found an entry about freight railcars. The author uses another story from much earlier in the year to explain how the railroads are not shipping as much goods as the once did and that thousands of railroad cars are sitting idle somewhere in the wilds of Montana. This is to show that the economy is not as robust as it once was.

As one who tries to keep up with what is going on in railroading, I have seen many posts from others asking about cars that are stored in various places in Kentucky. There times during the year that some autorack cars are stored, for weeks at a time, along the Norfolk-Southern tracks near Waller Ave. I can even recall, when the tobacco industry was strong in Lexington, that Southern used to store boxcars in the fall, in order to be ready to transport the leaf to the cigarette plants elsewhere. It makes good press, to say that approximately 1.5% of a railroads entire fleet is in storage, but I think that it is just standard industry practice.

Hunter Harrison, president and chief executive of Canadian National Railroad, recently in a keynote speech to the third annual Canada Maritime Conference, held in Vancouver, British Columbia, explained his views on the future of American railroading. He sees the need for an expansion of freight rail and the need for moving more freight, from trucks, to rail. Fuel economy and reduced emissions are only a few small points where efficiency may be gained.

  • “If only 10 percent of North America’s (road) freight moved to the rails it would save $1 billion in fuel and give a big reduction in emissions,” he said. “Fuel savings, fewer emissions and reduced highway congestion: We are on the right side environmentally.”

  • Harrison said rail carriers can move one ton of freight 423 miles on one gallon of fuel. “Imagine your car giving you that kind of performance.”
Harrison and Canadian National have made a big difference in railroading in the last ten or so years, so he may be on to something here.

The second part of this story, is the need to expand our manufacturing base here in America. By making more of our own goods and shipping them by rail, we could reduce our dependence on a global economy and re-localize our lives.

We, as a nation, are doing ourselves no good deal if we import dangerous, possibly lethal goods, pay shipping by inefficient means, then ship back recalled goods and finally, discard or destroy the contaminated refuse at our expense. Is it any wonder that our balance of payments is so out of whack?

Lexington's largest beer wholesaler is in the process of moving to an expanded location, and while they are currently adjacent to a rail line and will be along side the same rail line in their new location, they do not receive any product by rail. It would not be a major undertaking to make a siding at either of these two locations, yet they choose not to. Big Ass Fan Co. could also ship and receive by rail but don't. Should we ask why?

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