Railroads Investing in More Upgrades, Journal Reports

U.S. railroads are making big investments in their networks, having spending $10 billion to expand tracks, build freight yards and buy locomotives since 2000, and are planning an additional $12 billion in upgrades, the Wall Street Journal reported Wednesday.

The buildup comes as the railroads more consumer goods, many of which come from Asia into U.S. ports, and new higher volume routes, or corridors, often serve the South, where the rail system is less developed, the paper said in a front-page story.

The railroads are pumping some of their profits back into their infrastructure, Charles “Wick” Moorman, chief executive officer of eastern freight rail line Norfolk Southern Corp., told the Journal.

Trucking accounted for 82% of the U.S. truck-rail intercity-freight spending in 2004, up from 78% in 1990, the Journal said, citing the Eno Transportation Foundation, a research organization in Washington, D.C.

But trucking companies, such as J.B. Hunt Transport Services, are using more railroads for the long-haul part of some trips because it is cheaper, the Journal reported.

Burlington Northern Santa Fe Corp. was the first to pursue the strategy of building a high-capacity corridor setting out in the 1990s to complete a second set of tracks on its Chicago-Los Angeles Transcon line, the Journal said.

Union Pacific Corp., which was plagued with freight jams and service breakdowns during a surge of Asian imports several years ago, hired thousands of new train crew members and has since launched a massive track-installation program across the Southwest, upgrading its Sunset Route from Los Angeles to El Paso, Texas, the paper reported.