Steel’s sights on rail as concessions beefed up

Dec 30, 2008 | 10:41 AM | Scott Robertson

Class 1 railroads have been offering more concessions to shippers in recent months as they battle for market share amid falling freight levels, a move that has some steel companies considering moving more product via rail than in the past.

But while rail access is better, due in part to a lack of shipments from other industries resulting from the global financial crunch, the problem for steelmakers is that they don't have much opportunity to take advantage of the situation. Steel demand likewise has fallen, so steelmakers have little to put on the rails.

Adam Parr, manager of public policy at the Steel Manufacturers Association (SMA), Washington, said a recent meeting of the group's transportation committee served to crystallize the situation.

"Coming out of that meeting, I'd say more of our members were saying they were moving a portion of their shipments to rail," he said. "There was sentiment of more use of rail and a little less of shipment by truck and waterway. I would call it a slight movement to rail. The problem, though, is there is not a lot of product to move right now."....