(The following story by Bennett Hall appeared on the Democrat-Herald website on March 31, 2009.)
ALBANY, Ore. — The Portland & Western Railroad is once again sending cars down a disused set of tracks between Corvallis and Monroe, but that doesn’t mean it plans to reopen the Bailey Branch, which it shut down in 2007 amid safety concerns and falling freight volumes.
Instead, it’s using the embargoed 23-mile branch line as a place to park empty cars while it waits out the recession.
“At last count, I think we had somewhere between 250 and 260 cars down there,” said John J. Speight, vice president for sales and marketing of the Portland & Western, a Salem-based shortline operator.
“They’re all empty.”
Some of the cars are the P&W’s own centerbeams, big flatcars used for hauling lumber. Most, however, are covered hopper cars designed to transport grain. Those are owned by the Union Pacific.
“The Union Pacific asked if we could store some grain cars for them because the grain market is down,” Speight said. “The Portland & Western has centerbeam cars down there because of the lumber market.”
Until recently, long strings of railcars were a sign of prosperity, as bustling railroads shipped freight back and forth across a country of eager consumers. Now, as often as not, they’re a mark of hard times, empty vessels with nothing to haul.
The Association of American Railroads estimates that 450,000 railcars currently stand idle on branch lines, sidings and switching yards around the United States — more than a quarter of the national pool of 1.6 million.
“Freight volume is a huge predictor of the economic health of the country,” said Kelly Donley, a spokeswoman for the association.
And volume is down. According to the association’s latest tally, freight carloads on U.S. railroads were off 15.6 percent for the first 11 weeks of this year, continuing a tumble that began in the final quarter of 2008. Of the 19 major commodities tracked by the group, only four posted shipment increases last year — only two in the fourth quarter.
The good news, Donley says, is that the railroads easily could bring all those sidelined cars back into service quickly if demand improves.
“When this economy rebounds, they want to be positioned to go out and get the business that’s out there,” she said. “There’s billions being invested in infrastructure maintenance and expansion, even in this business climate, because the railroads want to make smart long-term business decisions.”
In the meantime, however, railroads are hurting. And, if anything, shortlines are feeling the pain even more than the big national rail companies.
“Their business is down at least 20 percent, from what I’m hearing through the grapevine,” said Bob Melbo, a rail planner with the Oregon Department of Transportation.
That’s one reason small regional railroads such as the Portland & Western are storing empty cars for bigger lines and independent freight companies: they get paid.
The storage fees aren’t large — typically around a dollar per car each day, Melbo estimated — but at least it’s revenue coming in rather than expenses going out.
“It’s a way to make a little money in otherwise hard times,” Melbo said. “Anybody who’s got any empty track is eagerly trying to rent it out.”
Speight declined to say how much, if anything, the Portland & Western is charging to store cars for the Union Pacific. But he did say he’s running out of places to put them.
“We’re talking about storing another 100” (on the Bailey Branch), he said. “We’ve got about four miles of cars up on the Astoria line, near a station called Wauna. I’ve about run out of space.”
There’s no way to tell how long the cars will remain in storage, Speight said.
But he added that the economy — and especially the commodities market — is cyclical. Sooner or later, demand will recover, and those freight cars will start rolling again.
“When people start building houses, we start shipping lumber,” he said. “It’s as simple as that.”