Slow pace of rail recovery stirs fear of future woes
Although Berkshire Hathaway's BNSF Railway Co is spending a record $5 billion this year, its performance lagged those of competitors last quarter. BNSF trains traveled 11 percent slower than year-ago speeds, and stayed at terminals for 18 percent longer.
In recent years, BNSF accounted for some 50 percent of the entire rail industry's volume growth, analysts said. The company says it handles up to 15 percent of U.S. intercity freight.
BNSF declined to respond to Reuters' questions about its performance metrics. The Fort Worth, Texas-based railway has said it is working closely with shippers to clear backlogs and adding track, locomotives and crews.
Kansas City Southern and Norfolk Southern did not respond to requests for comment. CSX said it was investing in strategic capacity additions and was adding train crews and locomotives to restore performance and support growth. Union Pacific CEO Jack Koraleski told Reuters that the railroad's performance has been improving even as volumes have been increasing, adding that it has worked hard to address disruptions and customer issues.
In the United States, more than 40 percent of goods, valued at more than $550 billion, are shipped by railroad each year on some 140,000 miles of track. Canada's 30,100 miles of track carry half of the country's export goods.
Frozen transportation links contributed to a nearly 3 percent contraction in the U.S. economy during the first quarter, the New York Federal Reserve said last week.
Lawmakers and the $395 billion agricultural industry fear that trains may fail to clear last year's record-breaking crops in the Midwestern U.S. Farm Belt, which could strand part of this summer's grain harvest.
"We're sounding the alarms right now," North Dakota Senator Heidi Heitkamp told Reuters. "We believe the 2014 crop could be taken off the fields and there won't be any place to store it, because of the lack of ability to move product by rail."
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