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Railroads Work to Reduce Delays

Railroads looking to slash service delays are adding in locomotives and reopening shuttered “hump” yards, according to The Wall Street Journal (subscription). 

What’s going on: In recent years, rail companies had increased efficiency by using fewer trains and keeping them to tight schedules. However, they are now beginning to reopen humps—artificially hilly areas where trains are broken down, reassembled and directed to new locations.

  • In the past few weeks, several companies have reopened their humps, whose absence had “made railroads more vulnerable to service disruptions, which have increased during the pandemic amid a shortage of workers.”
  • Labor conflicts at rail carriers and broader shipping supply chain disruptions have meant “erratic service levels” for consumers and rail customers.

The benefits: “A hump yard can process more cars with the automation of switches, and at Bellevue, [Ohio,] the yard crew can now handle around 1,900 cars daily, up from 1,200. This eases switching operations in other yards, allowing workers there to be redeployed to operating trains instead.”

Capacity, not demand: “‘Right now, railroads are constrained by capacity, not by weak demand. Investors would not be upset with railroads adding more resources, as long as this capacity gap persists,’” Susquehanna International Group research analyst Bascome Majors told the Journal.

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