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Rail to the Rescue

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Rail to the Rescue

As a leading (and sometimes lagging) indicator, rail is chugging along. BNSF Railway alone has moved 93% more metallic ores (ultimately to China) this year over last, which means themanufacturing machine is cranking up.

 
Roger Staubach and Terry Darrow

We learned the rail news at the Jones Lang LaSalle 2011Transportation Summit on Thursday after chatting briefly with JLL'sRoger Staubach (exec chairman for the Americas) and JLL managing director Terry Darrow. You may recall that Roger played football for the US Naval Academy (and some NFL team) and wound up as a naval supply officer largely because his MOS (for non-military types, that's the type of job you can pick) was limited because he's color blind (which he blamed for his NFLinterceptions). But, he says he learned the importance of supply chain and logistics during his time in DaNang.

erry Darrow, Vann Cunningham, Dick Metzler and  Joe Goode.

Terry, BNSF?s Vann Cunningham, Greatwide Logistics? Dick Metzler, and American Airlines cargo?s Joe Goode. Vann says the railroad hit its lowest level of traffic in 15 years when the economy bottomed out in March 2010. Now, it's seeing increased volume on the national system. Last week, there were double-digit increasesin intermodal use (the first time that's happened since 2008). That10.7% increase means the US is seeing consumption return, he says. The need to move materials drives the demand industry: ?We can adjust our fleet accordingly. At one point, we had 600 miles of equipment lined up; it's all just about back into service now.?

Vann Cunningham

The rail industry is investing $10B to $12B in capital expenditures this year and BNSF plans to do about $3.2B. One of the regional benefits of the money is to increase the lift potential at Alliancefrom the current 600,000 lifts to (eventually) 2 million. Vann says BNSF has 10 corporate strategic initiatives, including land acquisitions and dispositions to set up its growth for the next 50 years. (It owns property in South Dallas at the logistics hub but has no immediate plans for it.) In terms of acquisition, BNSF "acquired about $200M of Greenfield potential industrial sites last year; and we don't see anyone else making that kind of a bet," Vann says.