The following article is from The Wall Street Journal for Monday, 2-23-09. Thanks to Alan, one of our regular readers, for bringing it to our attention.
For a video version of this story, click on the link below. http://online.wsj.com/article/SB123535033769344811.html#articleTabs%3Dvideo
For further data on the slowdown in rail freight activity, see our posting below on Saturday, 2-21-09, Weekly Rail Carloading Report. Then follow the link there to the Railfax web site for graphs and tables with more detail.
The Wall Street Journal
FEBRUARY 23, 2009
Miles of Idled Boxcars Leave Towns Singing the Freight-Train Blues
As Slumping Railroads Run Out of Parking, an Indiana Hamlet Is Divided by Wall of Cars
By ALEX ROTH
NEW CASTLE, Ind. -- Folks here figured the mile-long stretch of a hundred-plus yellow rail cars, which divides this small town like a graffiti-covered wall, would leave soon after it arrived.
That was a year ago.
"They stayed and they stayed and they stayed," says Bruce Atkinson, a local resident. "Then more moved in."
Tens of thousands of boxcars are sitting idle all over the country, parked indefinitely by railroads whose freight volumes have plummeted along with the economy. And residents of the communities stuck with these newly immobile objects, like the people of New Castle, are hopping mad about it.
Before February 2008, boxcars were a fleeting sight in this hamlet of 17,500 people 50 miles east of Indianapolis. For decades, no more than one or two trains a day traveled down the sleepy short-haul line that cuts through town.
Then rail cars -- 20-foot-tall yellow behemoths covered with the sort of spray-painted artwork once associated with New York City subway cars -- started rolling in by the dozens and grinding to a halt.
Now an elementary-school playground sits only feet from a line of rail cars covered with curse words. Someone with a paintball gun opened fire on one of the cars but missed, pelting a house instead. The looming cars have been blamed for casting shadows over homes that sit as close as 10 feet from the tracks. One woman says the lack of sunlight has turned her backyard into a mud pit.
One of the more visible manifestations of the global recession is the idling of vehicles used to move everything from scrap metal produced in the U.S. to sneakers made in China. Ocean-shipping companies have taken scores of ships out of service, anchoring them in or near ports around the world. The parking lots of trucking companies are clogged with trailers that in better times were rolling on highways.
Railroads, which have seen shipping volumes drop by double-digit percentages in recent months, face a particularly vexing problem. The nation's five largest railroads have put more than 30% of their boxcars -- 206,000 in all -- into storage, according to the Association of American Railroads. Placed end-to-end, the cars would stretch from New York to Salt Lake City.
The railroads simply don't have enough space in their yards to store all the idled cars. So they look for convenient, out-of-the-way places to park them -- usually dormant tracks and rail sidings that are rarely used.
In December, residents in southern New Jersey were confused by the sight of a two-mile-long line of rail cars resting on a largely unused rail line in Cape May County. Some of the cars were parked only a few feet from houses. Rumors began spreading that the cars were tankers filled with hazardous materials. The mayors of two local townships assured the public that the cars were empty and posed no danger.
In December, Union Pacific Corp. parked a three-mile-long string of cars in the small town of Thornton, Colo. After staring at the idled cars for a month or so, local residents revolted. The railroad eventually agreed to move the cars to a less-populated area.
Dennis Duffy, Union Pacific's executive vice president of operations, says that in a healthy economy, the railroad might have 5,000 to 8,000 cars in storage. At the moment, it has 48,000 idle cars, he says, forcing it to come up with "unconventional solutions." It has parked them on 60 sidings around the country.
Few places, if any, have been forced to endure this spectacle for as long as New Castle, a town of 10 square miles surrounded by sprawling farmland. Scenes from the basketball movie "Hoosiers" were filmed at a high-school gym a few miles down the road.
'Parking All Over Us'
For decades, New Castle was a Chrysler factory town. But in 2002, the auto maker sold its massive machine shop to a new company that immediately slashed wages. Now, New Castle is feeling the full impact of the recession. Unemployment in the county recently reached 9.3%, the highest figure since 1994. A large clothing store, one of the anchors of a nearby mall, is going out of business.
The small rail line running through town is available for rail-car storage in part because one of the railroad's customers, Visteon Corp., a major Ford Motor Co. auto-parts supplier, recently closed a nearby plant.
"This town is hurting already," says Cathy Hamilton, a former high-school principal who runs a consulting company. "Why would you add to the pain by parking all over us?"
Oradean Logan, 70 years old, who lives in a house next to the tracks, recalls waking up one morning more than a year ago to the sight of several graffiti-covered boxcars outside her window. The cars blocked her view, preventing her from seeing the house of her 83-year-old legally blind sister, who lives alone on the other side of the tracks.
"I didn't think much about it because I thought they'd move 'em," she says. "Then they just kept sitting there."
Days turned into weeks, then weeks into months. Children were spotted climbing to the top of the boxcars with their skateboards. Sherry Coffey, whose home was blasted by paintball-gun pellets, says she assumes the unknown shooter was aiming for the rail cars, not her house, which sits less than 30 feet away.
Residents complained, but were frustrated to learn that the railroad has every right to keep the cars on its tracks, according to a spokesman for the Federal Railroad Administration. "The bottom line is they're rail cars sitting on a railroad," says New Castle Mayor Jim Small. "The two sort of go together."
Spencer Wendelin, an executive with the C&NC Railroad, which owns the tracks, declined to say how much rent the railroad collects for storing the cars, or who owns them. He has little sympathy for the angry residents.
"The railroad, I'll guarantee you, was there a long time before they bought their houses," he says.
Turning to YouTube
A few months ago, Mr. Atkinson, who works for the county and has lived in the area his entire life, became so enraged he began posting YouTube videos of the graffiti-strewn cars to try to draw attention to the situation. "Block after block, lovely yellow cars," he says in one of the videos, shortly before the camera pans to a rail car painted with a picture of a marijuana leaf. "Can you imagine living next to those?"
Lately some folks have begun to worry that some of the rail cars appear to be listing and might tip over. Mr. Wendelin, the railroad executive, dismisses the fears as "completely unfounded concerns, based on both history and physics."
Ms. Logan's legally blind sister, Estelle Teel, says it's not uncommon to hear young people banging on the rail cars with sticks in the middle of the night, just outside her bedroom window. "It's kind of scary when you live alone," she says.
Folks who want the cars to be on their way, however, shouldn't get their hopes up. Mr. Wendelin won't predict how long the rail cars will remain in New Castle. "If you can tell me when the economy's going to turn around, then I can give you an answer to that question."