A staggering 30% of U.S. rail cars are idle

Posted Feb 24th 2009 10:30AM by Connie Madon
Filed under: Bad News, Products and Services, Industry, Recession

The only trains that are running at full capacity are the train sets in your basements. The real trains that move a substantial portion of our goods are in second gear. The Association of American Railroads estimates that 30% of their boxcars -- 206,000 -- have been placed in storage. Put end to end these cars would stretch from New York to Salt Lake City.

The cars are hiding in small towns throughout the country.

New Castle, Indiana has a mile long stretch of about a hundred rail cars.
A small New Jersey town found a two mile line of rail cars resting on an unused rail line in Cape May, New Jersey.
In December Union Pacific Corp (NYSE: UNP) parked a three mile long string of cars in the small town of Thornton, Colorado.

Dennis Duffy, Union Pacific executive vice president, said that in normal times the railroad would have from 5,000 to 8,000 cars in storage. Now it has 48,000 cars being parked on 60 rail sidings around the country.

The small town of New Castle, Indiana had seen a dramatic change in the past few years. It was a Chrysler factory town and also had auto supply companies like Visteon, a major Ford Motor Company (NYSE: F) supplier. This plant recently closed.

Residents of the town have become so enraged by the long string of idle rail cars that one resident went on YouTube with videos of the graffiti -- strewn cars.

There is no way of knowing what is inside all of these cars, whether they contain real freight or are just idle waiting to be put back in use.

The main thing that hits home is the sheer number of idle cars. In effect, it means that 30% of our merchandise normally moved by rail is idle. This is a staggering amount.

Do you believe that our freight will start moving again?

The first YouTube video (below) is from five months ago, this is the recent one: Yellow Train Cars In Winter