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Truck, rail sectors look at economy for the long haul

Keywords: Tags  Association of American Railroads, Edward R. Hamberger, freight transportation

The Association of American Railroads (AAR) announced earlier this year that the nation’s major railroads are expected to invest a record $13 billion in 2012 to expand, upgrade and enhance the nation’s freight rail network. The railroads also expect to hire more than 15,000 employees this year, replacing retiring workers and adding new positions nationwide.

“Unlike trucks, barges or airlines, America’s freight railroads operate on infrastructure they own, build and maintain themselves so taxpayers don’t have to. And this year, they’re investing at a record rate to meet the demands of the recovering economy,” said Edward R. Hamberger, AAR president and chief executive officer. “These investments help businesses get their goods to market more efficiently and affordably so they too can innovate, invest and hire. That’s how freight rail spurs the American economy and supports jobs all across the country.”

Investments in privately owned freight rail networks have reached record levels in the past three years, with hundreds of infrastructure projects—including work on intermodal terminals that facilitate truck-to-train freight transport; new track, bridges and tunnels; modernized safety equipment; and new locomotives and rail cars—under way nationwide, Hamberger said. In recent years, railroads have been spending about 17 percent of their annual revenue on capital expenditures vs. 3 percent by the average U.S. manufacturer.

On the trucking side, year-to-date tonnage has risen 3.8 percent from 2011, according to the American Trucking Associations (ATA). However, the ATA’s advanced seasonally adjusted For-Hire Truck Tonnage Index fell 1.1 percent in April—the most recent month for which official figures were available—after increasing 0.6 percent in March.

“While just one month, the April decrease matches with an economy that is likely to grow slightly slower in the second quarter than in the first quarter,” said ATA chief economist Bob Costello. He said the industry shouldn’t expect the growth rate it has seen over the past couple of years, when tonnage increased 5.8 percent in both 2010 and 2011, calling annualized growth in the 3- to 3.9-percent range “more likely.”

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