INSIGHT-Slow pace of rail recovery stirs fear of future woes

Fri Aug 15, 2014 1:00am EDT
 
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By Susan Taylor and Solarina Ho

TORONTO Aug 15 (Reuters) - More than eight months after an extreme winter began snarling North American rail traffic, a Reuters analysis of industry data shows delays lingering, raising the risk of a second winter of chaos on the rails.

Across the continent's seven largest operators, trains ran almost 8 percent slower on average and sat idle at key terminals for nearly three hours longer in the second quarter than a year earlier, data from the main railroads, known as Class 1, show.

While Canada's rail operators have nearly recovered, many U.S. operators lag far behind.

The concerns are sharpest in the U.S. Farm Belt, with lawmakers fearful that the biggest crops on record may be slow to reach markets or could even rot.

Rail logjams contributed to the economic slowdown early in the year, rippling across corporate America and affecting everything from car makers to ethanol producers.

Many experts blame an incomplete recovery from last winter's freight backlogs, coupled with record crops and rising competition with crude oil tankers for track space amid an economic recovery.

"It's like a sinking ship - you're bailing out at one end, but it's coming in the other end just as fast, if not faster," said Citigroup Global Markets transportation analyst Christian Wetherbee.

Performance fell behind as loads grew: between April and June, U.S. rail carload volumes grew 5.4 percent and intermodal traffic, which include shipments partly by rail, rose 8 percent, Association of American Railroads (AAR) data shows.   Continued...