Digital Edition

April 29 2019

Issue link:

Contents of this Issue


Page 31 of 47

32 The Journal of Commerce | April 29 2019 Surface Transportation PRECISION SCHEDULED RAILROADING (PSR) has been successful in Canada, but shippers and analysts say the verdict isn't in yet about whether it works in the US. The true judge of PSR is whether trains are faster, service is consistent, assets utilization is high, and there is a plan for severe weather. But bene- ficial cargo owners (BCOs) attending the recent North East Association of Rail Shippers (NEARS) conference in Baltimore aren't convinced US rail- roads have reached those standards. PSR was introduced in the US when E. Hunter Harrison, who pioneered the model with Canadian railroads a decade earlier, was named CEO of CSX Transportation in 2017. Harrison's operating philosophy is widely credited for turning around Canadian National Railway and Canadian Pacific Railway, both of which lagged their US competitors in terms of performance and profits. But when CSX rolled out PSR, ser- vice and communication was poor in a rushed implementation, and angry shippers persuaded the Surface Transportation Board (STB) to inter- vene. Service has since improved. Union Pacific Railroad, Norfolk Southern Railway, and Kansas City Southern Railway are also in the midst of a transition to a PSR operating model. The STB said it will be paying close attention to prevent another disruption. PSR networks operate more like passenger trains, buses, and airlines than traditional freight rail services. In those examples, travelers must arrive by a specific time, and the pilot, conductor, or driver won't delay departure, even for a ticketed passenger. In PSR networks, BCOs also must adhere to a strict schedule. A SHIFT OF US truck drivers from small to large motor carriers could make it easier for large shippers to find capacity and keep downward pressure on spot truck pricing. According to data collected by the US Federal Motor Carrier Safety Administra- tion (FMCSA) in a monthly survey that supports its motor carrier Compliance, Safety, Accountability (CSA) program, the smallest trucking companies — those with only one to six vehicles — lost more than 5,000 drivers between Jan. 10 and Feb. 9, and followed that drop with another loss of 187 drivers between Feb. 10 and March 9. Trucking companies with 100 to 500 vehicles added 5,158 drivers from Jan. 10 through Feb. 9, while carriers with more than 500 trucks gained 5,909 drivers, the same survey data show, according to third-party logistics company Tucker Com- pany Worldwide and affiliated risk manage- ment firm, which collect and analyze the FMCSA data. Such sudden changes aren't unusual, according to Jeffrey Tucker, CEO of both companies, but given the timing, the recent movement could suggest something more than a short-term correction. Could a turning point in the market be pushing independent owner-operators and truckers at smaller companies to seek a safe harbor with a larger carrier? "That would be my knee-jerk reaction," Tucker told The Jour- nal of Commerce. Spot market truck rates began tumbling last summer and now are down about 13 percent from a year ago, on average. Truck drivers dependent on the spot market likely are seeking shelter from the pricing storm. "When the spot market dries up, and it's harder to find the next profitable load, you see drivers begin to seek shelter in the larger fleets," Tucker said. But two months don't necessarily make a trend, he pointed out. "If we see a couple [more] months like this, we might have a trend." In the eight years his companies have been tracking the CSA survey data, the total number of truck drivers has declined 17 times, including two back-to-back drops in October and November 2017, when the Trucking | Rail | Intermodal | Air & Expedited | Distribution Measuring PSR success BCOs mixed on results and value of precision scheduled railroading in US By Ari Ashe Safety in numbers Government data show a shi in drivers to bigger trucking companies By William B. Cassidy Railroads need to "maintain open lines of communication" with shippers and keep enough capacity in the network. "When the spot market dries up, and it's harder to find the next profitable load, you see drivers begin to seek shelter in the larger fleets."

Articles in this issue

Links on this page

Archives of this issue

view archives of Digital Edition - April 29 2019