A Renewed Focus on
Carload Freight Traffic?

By Kevin Ruble
TRA Board Member

For many years, rail shippers and shortline railroads alike have reported that the real growth potential for railroading was in traditional carload freight. Class I railroads have focused their resources on unit coal, grain, intermodal and automotive traffic, while “loose car” railroading has suffered. Discussion with these same shippers and shortlines indicate a high level of latent demand for carload rail freight, but not the highly unreliable product presented by the railroad industry today. Indeed, many shortline railroads formed from Class I line divestitures see a significant first-year increase in carload traffic for this very reason. Yet long-term, this traffic is often at risk due to service failures beyond the shortline’s interchange point with its Class I partner and therefore, beyond its control.

One bright spot on the horizon is Burlington Northern Santa Fe, where chairman Matt Rose recently announced a restructuring of BNSF’s complex carload network. While BNSF handles carload freight between 13,400 origination and destination points (or “O/D pairs”), fully 90 percent moves between just 5,000 of those points. Now, if it were not for its common carrier obligation to the public, BNSF could merely rationalize its network to contain only those 5,000 O/D pairs and that would be the end of it.
But railroads are chartered as common carriers to serve the public interest, so BNSF is exploring how to continue to handle all of this freight while focusing on what it does best – moving trainloads of freight between highly efficient terminals. This may involve opportunities for BNSF’s shortline partners. As Rose recently stated, “We run unit trains to/from high throughput terminals and carload traffic over high speed, high volume main lines and through automated, state-of-the-art classification terminals. Our short line partners can potentially do most everything else.”

Is this the dawning of a new day of cooperation and true competition in the railroad industry? Time will tell. But BNSF’s Matt Rose is certainly talking the right talk.

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Kevin Ruble is a member of the Texas Rail Advocates board of directors and principal of TranSolutions, Inc., a leading consulting firm to the shortline and regional rail industry.