THE HUGE GROWTH in Asian trade is the biggest economic phenomenon to hit North American railroading for many years. With the revenue windfall credited for almost single-handedly making the US Class Is a 'buy' recommendation in the stock market, it has revitalised the industry by its sheer overwhelming numbers.
How big? Two figures clearly illustrate the impact. Slightly over 20 years ago, the USA imported goods worth less than $4bn a year from China. In 2005, the volume had risen to just under $250bn. And the numbers just keep on rising.
Every Pacific coast port from British Columbia to Mexico has either been, or is in the process of being, transformed into part of a seamless logistics chain. Imported goods of every shape, size and description carry labels, embossings and stamps saying Made in China, Japan, Taiwan, the Philippines, Singapore, Hong Kong, Vietnam, Indonesia or Malaysia.
The seemingly endless flow of huge container ships waiting impatiently outside the breakwaters of a dozen west coast ports seems to grow day by day, in an attempt to quench the seemingly-endless consumer demand for a huge range of commodities, many of which were once manufactured locally.
Deep in their holds and stacked high on their decks are containers of every colour and nationality. Inside those containers is almost every commodity imaginable. The list seems endless; computers, telephones, furniture, toys, clothing, shoes, food, cars and car parts, glassware, household appliances, paper clips, pens, hammers, nails, light bulbs, cameras and televisions.
Among the railroads, the biggest US beneficiaries have been BNSF Railway and Union Pacific, and their main interchange partners Norfolk Southern, CSX and Kansas City Southern.
Whilst the railroad logistics planners did see the tidal wave of imports on the horizon, the operators have been faced with a Herculean effort to try and keep the rail network moving. In 2003 and 2004, the US west coast ports were almost gridlocked by the influx of containers. Three years later, with construction crews both at the ports and on the railroads working seven days a week to add capacity, the situation has eased.
The three largest ports - Los Angeles/ Long Beach, Oakland and Seattle/Tacoma - are constantly expanding, opening new unloading facilities and docks as fast as they can be built. But the ports are dependent upon getting the traffic away, and this in turn is putting more pressure on the rail infrastructure. The big railroads are investing huge sums on double- and triple-tracking key sections of their primary east-west routes.
And the railroads are not just waiting for the Asian traffic to come to them. In April BNSF became the first US Class I to open an office in China, and the others can be expected to follow suit.
The biggest two container ports by volume lie adjacent to each other in San Pedro Bay, 50 km south of the city of Los Angeles itself. The Port of Los Angeles lies on one side of the bay and the Port of Long Beach on the other.
The Port of Los Angeles is the busiest in the USA, and the eighth busiest container port in the world, handling about 7