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RAIL TRANSPORT Intermodal is moving fast and steel wheels are rolling hot

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The North American steel industry might decry imports, but don't expect to hear any anti-import rhetoric from the railroad industry.

Perhaps more than any other factor, imports have helped drive profits and shipments to record levels in recent years, railroad industry sources said. And many believe they are responsible for much of the industry's long-term optimism.

"From tennis shoes to television sets . . . there's been a fairly significant sea change where manufacturing is moving offshore, and the goods that Americans desire are coming back to us in containers," said a spokesman for Jacksonville, Fla.,-based CSX Corp.

Railroad companies ship many of those imported goods to population centers around the country. And while overall rail shipments might have declined recently, almost no one expects imports to fall significantly in the long term.

"Things that are shipped into Los Angeles have to be moved to interior areas. And things that are made in industrial areas in the interior have to make it to port," said a spokesman for the Association of American Railroads. "Last year was probably the best year in the recent history of the railroad industry."

Besides global trade, increased reliance on coal as an energy source in the United States also is driving business, sources said. And the long distances traveled and heavy volumes carried by today's trains mean more spending on longer rail segments capable of carrying heavier loads. "Your typical coal car holds 100 tons. You think of a train being 80 cars long; that's a lot tonnage," the CSX spokesman said.

Railroads also are investing heavily in "long-passing sidings," new tracks that parallel existing routes and act almost like a passing lane on highways. The sidings allow faster-moving container trains, for example, to pass slower, heavier coal trains without either having to stop.

High fuel prices, crowded highways and a shortage of skilled truck drivers also are pushing more tonnage away from trucks and onto railcars, railroad sources said. Trains get better gas mileage simply because steel wheels on steel rails have a lower coefficient of friction than tires on the road, they said. "As fuel prices go up, this provides railroads with a bit of a cost advantage over highways," the Association of American Railroads spokesman said. "And some (trucking) companies report more than 100-percent turnover in drivers each year."

But the trucking and railroad industries aren't always competitors, sources said. Railroads are increasingly being used for long-distance travel from ports to distribution centers, while some trucking companies are focusing their business more on the final 100 to 200 miles of the journey to local consumers. This "intermodal" traffic is the fastest-growing segment of the rail business.

"There's a lot of business for both of us," the CSX spokesman said.


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