Two of the country's major railroads, Union Pacific Corp. and Burlington Northern Santa Fe Corp., are raising their rates amid swelling demand from customers shipping wares for the holiday shopping season.
The hikes start Aug. 17 and apply mostly to Asian goods that travel by a combination of rail and truck from the West Coast.
Omaha-based Union Pacific, the nation's No. 1 railroad by sales, boosted eastbound rates by as much as 9.5% for a Los Angeles-to-Chicago container, and Fort Worth-based Burlington Northern, which carries the most freight, is boosting prices 6.6% on the route.
Jack Koraleski, Union Pacific's executive vice president for marketing and sales, warned of an "anything but typical" year. June's volume matched last year's peak season volume, and demand continues to rise. He predicted record levels of cargo for this peak season.
Union Pacific, which cut its second-quarter earnings forecast because of major congestion -- particularly in Southern California -- is adding 5,000 workers as well as new locomotives and freight cars.
Union Pacific spokesman John Bromley said the rate increase was "slightly higher" than last year's peak season hike, but declined to elaborate.
Burlington Northern spokesman Richard Russack linked the increases to the peak cargo-shipping season and said they affected only eastbound trailers and containers. Such increases have happened before but are not necessarily annual, he said.
Shares of Burlington Northern dropped $1.09 to $33.53. Union Pacific declined 71 cents to $57.59. Both trade on the New York Stock Exchange.