(The following story by John D. Boyd appeared on the Journal of Commerce website on June 8, 2010.)
WASHINGTON, D.C. — Owners of railcars across North America pulled only 747 cars of all types out of storage and activated them for revenue service during May, a time when intermodal volume was still surging but many carload traffic categories weakened from April.
The Association of American Railroads said all types of car owners across the continent – railroads, fleet leasing firms and freight shippers that buy equipment for their own cargoes – had 368,343 railcars in storage as of June 1.
That compares with 369,090 stored railcars on May 1, after car owners cleared 18,000 in April for revenue service plus what some industry officials say is very limited scrapping of old cars. During March, owners brought 31,000 cars out of storage, the AAR said.
The reduction of just 747 idled cars in May is “the smallest decline in cars in storage since December,” the AAR said in a monthly activity report. On June 1, 23.8 percent of the continent’s railcar fleet was still stored on sidings or in rail yards, the same percentage as one month earlier.
The sharp slowdown in railcar activation comes while intermodal freight volume on U.S. railroads in May reached its strongest level since October 2008 hit. But bulk commodity and equipment carloads skidded to their weakest average levels of this spring; those carloadings use up the greatest variety of freight cars, and they generate more rail freight volume than intermodal traffic.
The latest job figures also show a fuzzy picture for freight demand, as trucking added the most jobs so far this year but railroads slowed their hiring levels from April. Overall, the nation’s private sector hiring slowed significantly in May when adjusted for normal seasonal economic patterns.
This year began with 28.2 percent of the continent’s railcar fleet parked, or 439,631 units. Peak car storage during the 2008-2009 recession reached 31.9 percent of the car fleet in June and July 2009, when parked units topped 500,000. About 134,000 have come out of storage in the last 11 months, according to AAR reports.
The trade group counts cars as “stored” if they have not had a revenue load for at least 60 days. Industry consultant FTR Associates also estimates the number of railcars that are underutilized but are moving through the rail system, and says those probably totaled more than 100,000 at the end of the first quarter in addition to those that were idled.