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Idaho Rail Shipments Rebound by Katy Moeller Idaho Statesman, June 19, 2006

Trains may be a hassle for motorists,
but increased traffic reflects a strong economy

Keith J. Dickerson has worked for Union Pacific Railroad for more than 30 years -- and he's never been busier.

That's partly because he's manager of train operations for UP's yard in Nampa, one of the railroad's two hubs in Idaho.

But there's another reason: Rail freight shipments from, to and through Idaho have been on the rise for the past five years. What are all those rail cars carrying?

All sorts of things. It's lumber imported from Canada. Grain bound for China passing through to West Coast ports. And out-bound Idaho potatoes and onions. Idaho's railroads are just one segment of a nationwide rail resurgence.

The rebound is good news for the railroads -- but it can cause traffic problems in communities traversed by tracks, such as Kuna. City leaders are trying to find a way to build a railroad overpass that would prevent traffic delays as long as 30 minutes at the tracks.

Industry officials and analysts say the upswing in rail freight is due to a confluence of factors in recent years. "It didn't happen overnight," said Tom White, spokesman for the Association of American Railroads in Washington, D.C. "The railroad industry was losing market share pretty much through the 1980s and continued to lose market share in the 1990s."

Some of the factors cited as contributing to increases in rail shipments are: a strong economy and growth in trade with Asian countries, Canada and Mexico; growth in use of containers that can go from truck to rail car to ship; generally more reliable service than in the past; and rising fuel prices (it's less expensive per ton-mile to transport via rail than truck).

"The tide is rising with the strong economy. There's growth in the amount of stuff people need to have shipped," said Dan Ortwerth, a St. Louis-based transportation analyst with Edward Jones. "You can run a railroad in a so-so way and see growth today, but some of the rails are getting their act together."

Ortwerth was in Toronto recently, on his way home from a visit with officials at Canadian National Railway.

"The resurgence of the rails is a good story," Ortwerth said. "For 30 years, the rails have been bleeding market share away to the trucks. The No. 1 reason was service issues. The rails were so notoriously bad at customer service and on-time delivery." In 1980, the Staggers Act deregulated the nation's railroads. Since then, there has been an investment of more than $120 billion in freight railroad capital projects, and that investment continues.

Union Pacific plans to invest $2.75 billion in its network this year. Moore said the Pocatello yard will be upgraded, with two additional tracks added, and seven people have been hired to inspect and repair rail cars. On any given day -- or 24-hour period -- there are 30 to 35 trains traveling between Nampa and Pocatello, UP's other hub in Idaho, according to Dickerson.

Five years ago, there were five to 10 fewer trains per day. But it's not just that there are more trains -- they are also longer. Now it's not uncommon for trains to be a mile-and-a-half long.

"Twenty years ago, they were 5,800 feet long. Today they're 7,200 feet long and longer," said Charles G. Clark, a Boise-based Union Pacific lobbyist and special representative to the president. There are 5,280 feet in a mile. On June 12, there were 42 trains moving between Nampa and Pocatello -- 40 is considered ideal and 51 is maximum capacity.

"We have 100-car trains filled with one commodity," said Jeff Moore, Pocatello-based transportation superintendent for Union Pacific in Idaho. One example of that, Moore said, is trains filled with sodash, or soda ash, which is used to make glass, detergents and other products.

Union Pacific's Idaho operations move freight to and from several shortline railroads, including the Eastern Idaho Railroad.

Union Pacific officials in Idaho are optimistic about the future of rail freight business. "We're expecting to grow anywhere from 4 to 6 percent a year -- that's systemwide," Moore said. "We really are trying to maintain that level."

Top railroad stocks gained 30.1 percent in 2005, according to an Associated Press report. "And this year they are up 13.1 percent," the AP reported.

"But since the S&P 500 peaked on May 5, analysts observe shares of the nation's six major railroads are down an average 14 percent versus a 5.5 percent drop in the S&P.