Total official questions use of railroad profits

28 September 2007 02:48  [Source: ICIS news]

SCOTTSDALE, Arizona (ICIS news)--US railroads are making profits, but whether they were investing enough of those profits in badly needed capacity expansions was debatable, a logistics manager with Total Petrochemicals said late on Thursday.

Railroads are ploughing some of their profits into infrastructure improvements, “but very selectively”, said Allen Cast, category manager for Class 1 railroads for Total.

Cast was speaking at the one-day LogiChem Transportation Management Summit on US railroad trends.

Railroads were largely exempt from federal monopoly restrictions in 1980 in an effort to help their survival, he said.

The railroads are now thriving, but also using much of their profits to buy back stock and increase stock dividend rates, Cast said.

Chemical manufacturers and other industries have called for Congress to roll back the anti-monopoly exemptions, saying railroads have charged excessive prices amid declining services.

Cast said the number of railroad miles in the US has greatly fallen during the past 80 years, while congestion has increased. The average train speed has declined since 2001, he said.

However, the average freight tonnage per car has fallen to 61 short tonnes in 2005 from 65 short tonnes in 1995, he said.

On the other hand, railroad safety has increased during the past few years, with 3.07 accidents per million rail miles travelled in 2007, compared with 4.48 accidents per 1m rail miles travelled in 2003, he added.

By: Brian Ford
+1 713 525 2653

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