ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, July 5, 1996 TAG: 9607050087
SECTION: BUSINESS PAGE: A-5 EDITION: METRO
SOURCE: Los Angeles Times
IMPROVEMENTS, mergers and partnerships help rail services retain 40 percent of the industry despite an increase in highways and airports.
In an era of speedy jet planes and endless superhighways, the chugging locomotive resembles an industrial-age dinosaur lumbering across the landscape.
But the nation's railroads are far from extinct, even after losing much of their business to truckers and other rivals. Trains still carry nearly 40 percent of the freight that moves between the nation's cities, and serve as a crucial link between West Coast ports and markets to the east.
The federal government's decision Wednesday to approve the $5.4 billion merger of Union Pacific and Southern Pacific railroads could help the industry compete even more effectively with trucks and planes, according to supporters of the deal. Union Pacific, one of the nation's most admired lines, has pledged to spend heavily to improve service at Southern Pacific, the biggest railroad in Southern California.
``The railroads are making inroads ... in everything from auto parts to consumer electronics,'' said railroad industry analyst James M. Higgins of Donaldson, Lufkin & Jenrette Securities Corp. ``In things like carrying bulk commodities, they are the only game around.''
While railroads have been on the rebound in recent years, their economic importance has shrunk dramatically over the decades. The power and arrogance of the nation's railroad barons were in part responsible for the passage of the nation's laws against business monopolies. In 1929, railroads carried almost 75 percent of the goods shipped in this country, according to the Eno Foundation for Transportation.
But the growth of the nation's network of highways, pipelines and airports has stolen much of the traffic and profits from railroads, which were slow to invest and improve service.
The past decade, however, has seen sharp improvements in rail service as many lines have cut operating costs, invested heavily in new track and equipment and won new customers with improved delivery schedules.
``The long-haul truckers had taken a lot of their business,'' Higgins said. ``Now that shift [in power] seems to be going in the other direction.''
In fact, many railroads have teamed up or acquired trucking companies to handle the growing volume of containerized cargo that moves seamlessly between train, trucks and ships.
Rail carriers also hope to capitalize on the growth in trade related to the North American Free Trade Agreement.
LENGTH: Medium: 52 linesby CNB