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February 17 2020

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10 The Journal of Commerce | Februar y 17 2020 Cover Story destinations deeper into the interior. In 2019, 32.9 percent of laden US container imports from Asia went to the East Coast, an increase of 1.6 percentage points from 2018, while the Gulf Coast's share rose 0.7 points to 4.8 percent. That increase came at the expense of ports on the West Coast, which saw their share fall to 62 percent last year from 64.1 percent in 2018, according to PIERS, a sister product of The Journal of Commerce within IHS Markit. Because intermodal is used more on the West Coast, a coastal shift in volume correlates with the falling percentage of ocean boxes placed on trains, known as inland point inter- modal (IPI). Between 2011 and 2019, the intermodal rail-to-import TEU ratio dropped in concert with the coastal shift. For each TEU in a port, 0.69 TEU went on the rails in 2011. That number dropped to 0.64 last year, representing approximately 1 million fewer IPI moves, according to an analysis of Intermodal Association of North America (IANA) data from Larry Gross, president of Gross Trans- portation Consulting. Only two ports grew the percent- age of their overall volumes traveling by rail in 2019 — Savannah and Charleston — and each did so largely because of increased tra c to inland ports within their states, rather than a signifi cant surge in cargo going to the Midwest. Charleston's rail share rose to 24.8 per- cent of pier containers, compared with AFTER ATTRACTING THEIR largest share of Asian imports to the United States in four years in 2019, East Coast ports hope to continue deepening their reach inland toward the Midwest in the coming year. That won't be an easy feat. Even if the top US East Coast ports attract enough volume and make their on- and o -dock rail connections hum, it's ultimately up to the container lines and railroads, on behalf of their ben- efi cial cargo owner (BCO) customers, to determine whether it's prudent to build more intermodal train lines reach- ing deeper into the interior. Ocean carriers, BCOs, and rail- roads face geographic challenges on the East Coast that make intermodal less appealing than it might be oth- erwise. A move from Los Angeles to Chicago, for example, is more than twice the distance from Savannah to Chicago. Longer lengths of haul allow railroads to cover fi xed costs with a lower per-mile price, which generally saves shippers money compared with truckload. Conversely, while it's not unusual for intermodal rates to be more than 20 percent lower than trucks on hauls of 2,000 miles or greater, it's quite common for truck and intermodal rates to be much closer for hauls under 1,200 miles. Nonetheless, East Coast ports have been able to increase their inter- modal rail volumes, and new projects will improve their ability to attract more cargo and shipments headed for US East Coast ports investing to capture more intermodal cargo By Ari Ashe and Hugh R. Morley "We all know transit times 'on paper' and 'in reality' aren't the same. If they were, there wouldn't be so much cargo going through the Panama Canal to the East Coast."

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