(The following story by Mike Hall appeared on The Capital-Journal website on May 19.)
TOPEKA, Kan. — Railroads are busier than ever. Profits are up, and demand for their services is growing.
Both Burlington Northern Santa Fe Railway and Union Pacific Railroad recently reported profits for the first quarter of 2008 15 percent or more higher than for the same period in 2007.
Part of the reason is that high fuel costs accentuate the fuel efficiency advantage a train offers over most other forms of surface transportation. A steel wheel rolling over a steel rail has much less friction to overcome than a rubber tire on an asphalt of concrete highway,
“Our largest single customer now is not a coal utility or a grain shipper, it’s a trucking company — J.B. Hunt,” said Steve Forsberg, director of public affairs for Burlington Northern Santa Fe Railway.
A lot of savvy investors realized a few years ago that railroads were about to start making real money again. A share of stock in Union Pacific purchased five years ago cost about $60. Now, it will cost $153 — about two and a half times its 2003 price.
The growth of BNSF has been even more phenomenal, having grown by nearly four times in five years — from $30 per share in 2003 to $108 today.
Among those who were onto the trend early on was super-investor Warren Buffett, who bought stock in a number of railroads, concentrating mostly on BNSF.
Railroads haven’t just been sitting around waiting for fuel costs to bring customers to them. They have been innovating — making freight cars of lighter materials and speeding the loading and unloading of freight cars with intermodal shipping containers that can be lifted by crane from a ship to a train and from a train to a truck.
They also have been lengthening sidings to handle the longer trains that have become common and adding more double and even triple track to keep trains moving in two directions without time spent parked on passing sidings.
As traffic between Topeka and Kansas City has increased, the Union Pacific has been considering adding a third track. Mark Davis, UP director of corporate relations and media, said the idea is still under consideration, but no decision has been made, yet. A lot of the company’s track-laying effort has gone into second and third tracks in areas of Nebraska.
Forsberg said BNSF is within a year or two of having double track all the way from Chicago to Los Angeles. Only about 50 miles of single track remain on that route.
Some trains are moving truck trailers even more efficiently by eliminating the flat car altogether. A unit amounting to a set of railroad wheels mounted under a truck trailer has eliminated a lot of weight.
A BNSF document shows that a train can haul nearly 780 tons a mile on one gallon of fuel. That makes a train two to four times more efficient than a truck, Forsberg said.
He said one of the new 10,000-foot-long intermodal trains can carry more than 300 double-stacked shipping containers. That means shipping them from Los Angeles to Chicago can take more than 300 trucks off the highways, reducing congestion and the need for frequent repairs on the roads.
Another way of increasing efficiency is running longer trains. Forsberg said a decade ago a train that was 5,000 to 6,000 feet long — about a mile — was considered a long train. Now trains often are 8,000 to 10,000 feet long — nearly two miles.
Longer trains are difficult to accelerate without coming uncoupled somewhere along their length, so an increasingly common sight is a locomotive or two at the back of the train. The engineer up front has the capacity to control the throttles on the pushing locomotives at the back.
But even with the longer trains, the railroads are having to run more frequent trains, too.
UP’s Davis said Topeka sees 65 trains a day headed east toward Kansas City. Two thirds are coming from the northwest (coal trains from Wyoming, for example) through Marysville. The rest come from the west through Salina and from the southwest through Herrington.
“Sixty-five a day — that’s a heavy route,” Davis said.
Much of the coal is delivered to southern Illinois where it is transferred to barges to carry it to the Tennessee Valley Authority.