Weak Economy Slows Cargo, Idles Railcars
Those of you who subscribe to the lrc-general mailing list will have seen this already: thank you Richard Campbell for posting it.
As some of you may know I have a harmless obsession – I like to watch trains, and take their pictures. And one of the places I go to do that around here is Deltaport. And I have been noticing recently that it has been very quiet. I usually like to take pictures of trains as I think shots of empty railroad tracks are less interesting. Though there are people who do that too.
But you cannot extrapolate a trend from a few anecdotes. But this is actual data
Texas-based BNSF Railway, a division of Burlington Northern Santa Fe Corp., has parked upward of 1,000 cars in Montana alone, spokesman Gus Melonas said. More are parked in other parts of the company’s 32,000-mile system, which operates in 28 states and two Canadian provinces.
They decline to provide a figure for the whole system citing reasons of confidentiality. But the truckers are not so reticent.
One of the nation’s leading trucking companies, Schneider National in Green Bay, Wis., says it believes a freight recession began about 20 months ago, well before signs of a downturn closed in on consumers.
“We have been in a freight recession longer than people have been expressing deep concern about the economy,” said Bill Matheson, Schneider’s president for intermodal transportation.
or the ports
In January, Long Beach posted a decrease of about 12 percent in overall volume compared to January 2007
The trajectory of ever increasing imports into North America was never going to be sustainable, but the extent and speed with which things have turned around seems to have taken the province of BC by surprise. The Gateway program is still steaming along with no slackening of its pace. Despite increasing concerns about the impacts on the environment and local communities Gordon and Kevin are determined to press on regardless. But as we also know the justification for both port expansion and the associated road program was never really very well thought through. It was simple opportunism, not long range planning at all. And the road expansion appealed to other groups. I think that for a while there a lot of people thought that the apparent economic case – more trade means growth and jobs – was good cover for what they really wanted. Freeways and suburban development. Business as usual. And I think that cover has been blown.
And I have no doubt at all that when confronted with this story their reaction will be that it is a cyclical effect. The recession, they will say, will be temporary, and when things turn around we will be in a stronger position to compete. Except that this is no ordinary recession, and more than one commentator is drawing comparisons with 1931. And I suspect that as usual the US response to difficult times will be to retreat back into protectionism.
There is also another effect of the credit crunch that is more direct in its impact. It is becoming increasingly difficult to finance P3s. Because the organisations that were really keen on such things were once awash with funds. They had these wonderful new financial instruments, which looked a bit complicated, but people thought were backed by real estate. Securitised mortgages – and lots of them, thanks to the removal of federal oversight of the financial community and exactly the same type of instrument by the way that caused the 1931 collapse. That is when the recession started. Not the 1929 Wall Street crash. The banking crisis which looks the same as the one the US has now. When people could not make their mortgage payments and the banks foreclosed and then found the properties they had repossessed were unsaleable. Which meant the value of the paper they had been flogging was now impossible to determine.
So how long before the penny drops in Victoria?