Remember the story of "The Little Engine That Could"? By sheer determination, it managed to haul its load up a towering hill. It's a good bet that more than one shipper is thinking about that childhood favorite these days, wishing that real-life railroads, too, could overcome their service woes with positive thinking.

Unfortunately, it will take a lot more than strength of will to solve their problems. "Railroads are close to capacity," says consultant William J. Rennicke, managing director of Mercer Management Consulting Inc. "There's only so much you can squeeze through the pipe."

In other words, American railroads will have to make enormous structural changes in order to deal with the rising tide of shipments that's developed over the past two years.

That's likely to remain a problem as freight volumes continue to swell. The Association of American Railroads (AAR) reports that in 2004, U.S. railroads handled a record 17,423,309 carloads, up 2.9 percent from 2003, and 10,993,662 intermodal loadings of trailers and containers, 10.4 percent more than the previous year. Data for the first five months of 2005 show no sign of a letup. AAR members reported moving 7,174,250 carloads for that period, a 2 percent increase from the same period last year, and 4,559,923 intermodal units, up 6.8 percent.

All those additional boxcars and containers have been clogging up the tracks. In an effort to tackle the problem of rail congestion, Surface Transportation Board Chairman Roger Nober last year asked Class I railroad executives to develop plans for corrective action.

The carriers responded by offering to hire extra crews and lay more track. Norfolk Southern hired 1,600 more conductors and 330 engineers. BNSF said it would extend train lengths by 10 percent, while Union Pacific installed a second set of tracks along a key route from El Paso, Texas, to Los Angeles. Those efforts continue. "As the summer goes on, you'll see a completion of a number of capital improvement projects, which means you can raise the speed of trains back up," says Union Pacific spokesman Mark Davis.

Despite the railroads' concerted actions, shippers say they've seen little improvement in service. Many are still finding it difficult to obtain equipment to handle their loads, and those who do get cars complain about slow delivery times. Mike Grisso, executive director of the Alliance for Rail Competition, says some of his members have had to pay a premium for special trains to move their goods to market.

Service woes cut across the entire spectrum of American business. Rail shippers of all types of commodities—coal, chemicals, plastic, paper, and grain—are all suffering at the moment.

Still, many shippers recognize that the situation could have been even bleaker, and they applaud rail carriers for taking action. "The problem would be worse if the railroads hadn't done what they did," says Curt Warfel, president of the North American Rail Shippers Association and logistics manager at Eka Chemicals in Marietta, Ga.

All that hiring and track construction, though, clearly wasn't enough. As the peak shipping season approaches, some shippers are trying some positive thinking of their own. Says Whiteside: "The one prayer everyone has is that things will get better."