Irked scrap shippers ask railroads to remedy capacity, cost woes

Oct 20, 2006 | 10:44 AM | Michael Marley

The nation's railroads continue to treat their gondola fleets as poor, unwanted relatives when they parcel out the funds for new equipment each year, scrap industry transport managers say, but that is not the sole problem that scrap shippers face.

Choke points and shipping bottlenecks are becoming more common complaints, according to Steve Hirsch, associate counsel and director of state and local programs for the Institute of Scrap Recycling Industries (ISRI). "Part of that problem is the increase in demand for rail transport," he said.

The railroads have made improvements in scheduling and have worked to free up some lines, but a number of shippers said they are not happy with how the additional service has become available.

Charles Hunter, director of transportation for PSC Metals Inc., Cleveland, said the increase in the availability of routes and equipment has not come through expansions of rail lines or additional rolling stock. Instead, he said higher freight rates have discouraged smaller companies from using the railroads. Hunter said he disagrees with this approach because it also has raised the costs of shipping by rail for him and other larger rail users.

"There are some increases in the train velocity, but they still have some choke points," he said. "They bought capacity by increasing rates and driving less profitable marginal business off their lines. Trains are running faster and cars are flowing better, but they still have bottlenecks."....