Railroads Showing Strong Growth, Paper Says
Freight railroads are benefitting from high diesel fuel prices, truck driver shortages and a growing “green” movement, the Washington Post reported Monday.
Rail profits have doubled industry-wide since 2003, and stock prices have soared, the Post said in a front-page story. The value of the largest U.S. freight railroad, Union Pacific Corp., has tripled since 2001.
Railroads will spend about $10 billion this year to add new track, build switchyards and terminals and open tunnels, and rail tonnage will rise nearly 90% by 2035, the Post said, citing the Department of Transportation.
Major railroads laid off 4,700 workers in 2002, while in 2006 they hired more than 5,000 workers. Rail growth is being driven in part by growing global trade and rising fuel costs that are hurting the trucking industry, the paper reported.
Last Tuesday, eastern freight railroad CSX Corp. reported a record first-quarter profit, while on Friday, the stock price of giant Burlington Northern Santa Fe Corp., which operates in the West, hit an all-time high, the Post said.
The companies are attracting the attention of big investors such as Berkshire Hathaway Chairman Warren Buffett, who is now BNSF’s largest shareholder, with more than 18% of its stock, the paper said.
The rail industry estimates that it will take about $148 billion to expand track. Of that, railroads will contribute $96 billion, while the rest would have to come from the federal government and the states, the Post reported.
