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September 2009

Rail News: Rail Industry Trends

A matter of adjustment before the non-flood (Pat Foran, Context, September 2009)


Like their counterparts at railroads of every size, fiscal shape and focus, the executive team at Union Pacific Railroad continues to make operational adjustments so that North America's largest freight road will be ready to roll once the economy rebounds, as Managing Editor Jeff Stagl reports in this month's cover story. Just when a rebound might occur, how noticeable it'll be when it does and what the economic landscape will look like, post-recovery, were still any forecaster's guess as we went to press in early September. When the economy does pick up, UP President and Chief Executive Officer Jim Young's hunch is that it'll be "a trickle and not a flood," as he told Stagl. The keys, he added, are jobs and consumer confidence.

Some not-bad news regarding the latter: The Consumer Confidence Index, which had declined in June and July, appeared to be "back on the mend" in August, said Lynn Franco, director of The Conference Board Consumer Research Center. A survey of 5,000 U.S. households, The Conference Board's Consumer Confidence Index stood at 54.1 as of August 18, up from 47.4 in July, according to a statement issued Aug. 25. The Conference Board's Present Situation Index increased slightly during the same period, from 23.3 to 24.9, "mainly the result of an improvement in consumers' assessment of the job market," Franco said. And consumers' appraisal of the job market in August was "favorable" — respondents saying jobs were "hard to get" decreased to 45.1 percent (from 48.5 percent), while those who believed jobs were "plentiful" increased to 4.2 percent (from 3.7 percent).

Surveys and sentiment notwithstanding, railroads could use a traffic boost, and soon. Freight volumes still are way off last year's pace — 16 percent declines for both carload and intermodal during the week ending Aug. 22, although the total traffic recorded was the highest since early March, according to Association of American Railroads data.

In the meantime, UP and the rest of the rail realm will continue to gear up for the non-flood to come. How they'll adjust their 2010 capex plans remains to be seen, but the "Presume we'll be spending less" rumblings were getting louder as summer waned. Expect similarly caution-colored sentiments to continue through an adjustment-full fall.

Wal-Mart execs to speak at RailTrends '09

A programming update: Two Wal-Mart Transportation logistics leaders — Kelly Abney, vice president of corporate transportation, and Greg Forbis, senior director of general merchandise traffic — will deliver a presentation on Oct. 7 at RailTrends 2009. Presented by Progressive Railroading and transportation consultant Tony Hatch, RailTrends will be held Oct. 6-7 at the Affinia Manhattan in New York City. "Wal-Mart is the largest shipper and also the most innovative — from package sizing to enforcing "green" supply chains from their suppliers, Wal-Mart is the "Big Kahuna" now and tomorrow," notes Hatch in his event preview.

Other speakers include CN President and CEO E. Hunter Harrison, who'll receive Progressive Railroading's first-ever "Railroad Innovator Award;" new FRA Administrator Joe Szabo; STB member Francis Mulvey; Watco Cos. Inc. CEO Rick Webb; Norfolk Southern Corp. EVP of Planning and Chief Information Officer Deborah Butler; Kansas City Southern EVP of Sales and Marketing Patrick Ottensmeyer; and, if they can get out of D.C., U.S. Rep. James Oberstar, who chairs the House Transportation & Infrastructure Committee, and U.S. Rep. John Mica, ranking member of the T&I Committee.

Click here for the complete agenda or to register.

Wanted: 'Shirts for Soldiers'

Rich Zemencik's many friends and former colleagues frequently regale each other with tales of the Z-Man's thoughtfulness. Now, they have an opportunity to include themselves in the "thoughtfulness" conversation.

Progressive Railroading's former associate publisher, Zemencik is asking railroaders, suppliers, consultants and contractors to donate "excess new golf shirts and hats" that he'll send to armed services personnel who've been wounded and are undergoing rehabilitation. "You can send one or dozens of extra shirts, baseball hats or golf balls, and all will be distributed at either Fort Bragg, N.C., or Walter Reed Medical Center in Washington, D.C.," he says.

Send packages to: Rich Zemencik (Shirts For Soldiers), 50 Devon Drive, Pinehurst, NC 28374. Questions? Call Rich at 412-217-6867 or email him.



Pat Foran, Editor



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