(The following appeared on the Fort Worth Star-Telegram website on March 11, 2009.)
FORT WORTH, Texas — Freight shipments on Union Pacific Railroad are down 15 percent in the first quarter from last year, a sure sign of the slumping U.S. economy.
Rail shipments began declining in the spring of last year, Union Pacific Chairman Jim Young said Tuesday in a meeting with the Star-Telegram, with all six of the company’s business sectors posting double-digit declines.
“We’re a barometer of the economy,” Young said, noting that the railroad carries raw materials for industry and finished goods for consumers.
The railroad began to see traffic drop in the second quarter of 2008, after a record first quarter, then began idling unneeded locomotives and rail cars. Union Pacific has 1,800 locomotives and 48,000 cars in storage awaiting an economic rebound and increased freight shipments.
“I wish I could tell you I see it rebounding. I think it’s flattening out,” Young said.
Most industries have low inventories of raw materials and components on hand, Young said.
“If you get any kick [in spring demand], you’re going to see production pick up pretty quick,” he said. “The next few weeks are going to be key.”
The Omaha, Neb.-based railroad runs about 500,000 cars of freight through the Dallas-Fort Worth area annually, 20 percent of it loaded or unloaded for local industries.
General Motors’ Arlington truck-assembly plant is a major Union Pacific customer, receiving components and shipping finished vehicles.
Despite the economic downturn, Union Pacific will spend $2.8 billion on capital expenses this year, much of it for new and refurbished track and other facilities.
The railroad plans to spend $45 million to $50 million on its south Fort Worth switching facility, including a new bridge over the Trinity River and new tracks, as part of the Southwest Parkway project.