(The following story by C. Benjamin Ford appeared on the Maryland Business Gazette website on October 23, 2009.)
GAITHERSBURG, Md. — Judging from the increased freight traffic on Maryland’s highways and rail lines, the economy appears to be on the right track.
Investment legend Warren Buffett recently told CNBC that the two most reliable indicators of an impending recovery were freight being hauled by tractor-trailer trucks and by trains, said Holly Arthur, assistant vice president of media and public relations for the Association of American Railroads in Washington, D.C.
“It’s trending back,” Arthur said of freight traffic. “We’re watching closely. It’s still wait-and-see because it’s still down considerably.”
The association, which tracks rail traffic, reported freight carloads were down 14.2 percent last month from September 2008. But traffic in September was the highest since last November and has steadily climbed each month, she said.
Freight traffic is believed to be growing partly because retailers are restocking shelves for the upcoming holiday season. The association’s report was released Thursday.
CSX, which owns most of the rail lines through Maryland, said the volume of freight has increased each quarter this year, but the third quarter was still down about 15 percent from the same period in 2008.
CSX “expects a slow, gradual recovery as traffic volume increases over time,” said spokesman Robert Sullivan. “We’ll continue to focus on keeping the costs low. We’ll continue to consolidate shipments on fewer trains.”
Louis Campion, senior vice president of the Maryland Motor Truck Association, said trucking companies in the state say they are seeing business pick up after more than a year.
“That is, they do feel like they’ve hit bottom, and it’s starting to turn,” Campion said. “The experience we’ve gotten over the past couple of months is the decline has stopped and seen a slight uptick.”
Some of the freight hauling will vary by sector. Home construction is still in a slump, so haulers specializing in lumber and other homebuilding materials continue to be off, he said.
But freight hauling from the Port of Baltimore and from manufacturing sites has begun to pick up, he said.
And though many trucking companies continued to layoff drivers throughout the summer, “that may be a short-sighted approach,” Campion said.
“You’re losing your institutional knowledge if you’re laying off, and when the bounce does come back, the demand for qualified labor is going to be higher than ever,” he added.
The Maryland Motor Truck Association represents about 950 members, mostly motor carrier companies that employ more than 148,000 drivers, office staff and trucking equipment suppliers, he said.
“For the carriers who survive, they’ll be well positioned,” Campion said.
“The data in the October report gives us some indication that better things may be on the horizon,” said John Gray, the association’s senior vice president of policy and economics. “While some of this activity is seasonal, railroads have taken more than 15,000 cars out of storage between Sept. 1 and Oct. 1. However, we must continue to wait and see.”