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October 15 2018

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48 The Journal of Commerce | October 15 2018 Surface Transportation Cincinnati, and the Northeast. But I just haven't seen it yet this year," Roy said. Equipment fluctuates between tight and loose based on when trains move containers. Union Pacific, for example, has been reallocating boxes as much as possible, according to Ron MacDonald, senior vice presi- dent of Cornerstone Systems. "Back in July, UP stopped taking new [mutual commitment program] accounts. Anything new had to be transactional," he said. "They are also policing the current MCPs [annual shipper contracts] and if you aren't meeting your commit- ted volume, they're canceling the agreements. This allows UP to have available equipment for its [core] customers." Three major intermodal trucking providers — J.B. Hunt Transporta- tion, Schneider National, and Hub Group — have declared Southern and Northern California con- strained. Smaller drayage providers that serve the ports of Los Angeles and Long Beach and haul 53-foot domestic boxes, continue to be available. Conditions are changing rapidly, however, according to Jason Hilsen- beck, founder of LoadMatch and "If you had asked me a few days ago, I would have said things were not busy. But [LoadMatch's] activity has picked up within the last 48 hours. I feel like things are starting to turn," he said at the end of September. "I don't know whether this is end-of-quarter business or whether this will be a month-long trend. Everywhere else [outside of California] things are still loose." If activity is truly heating up in California, expect drayage, chassis, and container availability to dwindle soon in the Midwest, Southeast, and Northeast as those trains arrive and cargo is delivered to shippers. "I would say the push started in mid-September [the week of the 17th] … I think October is going to be really crazy. The boxes are here in L.A. and Lathrop, so UP is ready to go," said Robb Johnson, an agency owner with Re-Trans in Brentwood, California. JOC email: twitter: arijashe by the day, according to intermodal marketing companies. It will be diffi- cult to find containers and draymen for a few days, then all of a sudden capacity will be available again. "I'm not seeing any major metro areas really hurting right now in the eastern US," said Drew Roy, director of intermodal operations at Scott Logistics. "Chicago is in decent shape, the Northeast is in decent shape, Atlanta is OK, Dallas is OK." Some Jersey tightness He said there has been some drayage tightness in New Jersey, and difficulty finding 40-and 53-foot containers in Dallas, but conditions are manageable. "In a typical year, you will see it get worse and worse each week in September. You'll feel drayage getting really tight in Chicago, in June. They were preparing for a surge of cargo movement in July. There was a belief that the inter- modal peak season would start earlier than in 2017 for several reasons. First, intermodal volume rose more than 6 percent in the first four months of this year, an unprecedented situation prompting shippers to scramble for equipment in a typically slow season. Second, domestic container provid- ers were tapped out on peak-season contracts in July, whereas usually it doesn't happen until August or September. Third, Union Pacific Rail- road declared Southern California, Northern California, Seattle, and the Texas cities of El Paso, Laredo, and San Antonio as constrained on July 29, triggering contractual limits on cargo tendered by shippers. However, the motto so far this year is "expect the unexpected." "I wish I had tea leaves to look for, but there are so many anomalies happening this year," said Shelli Aus- tin, president of Intek Freight and Logistics. " There are no tea leaves this year. If you asked me earlier this year, I would have thought peak would be here already. This has been one of the most unusual years I can ever recall." There have been spurts and stops $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000 $5,500 $6,000 Jan- 17 Feb-17 Mar-17 Apr-17 May- 17 Jun- 17 Jul-17 Aug- 17 Sep- 17 Oct-17 Nov- 17 Dec- 17 Jan- 18 Feb-18 Mar-18 Apr-18 May- 18 Jun- 18 Jul-18 Aug- 18 Sep- 18 LA-Chicago LA-Dallas Domestic US intermodal spot rates out of Los Angeles sink Source: Intek Freight & Logistics © 2018 IHS Markit Door-to-door spot rate per 53-foot intermodal unit "In a typical year, you will see it get worse and worse each week in September .... But I just haven't seen it yet this year."

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