Digital Edition

March 2 2020

Issue link: https://jocdigital.uberflip.com/i/1212645

Contents of this Issue

Navigation

Page 106 of 119

March 2 2020 | The Journal of Commerce 103 www.joc.com Surface Transportation of logistic provider TransX and the intermodal division of H&R Trans- port Ltd. will allow it to deepen its reach into the consumer economy by leveraging its rail network to consolidate more shipments into intermodal loads. CN's smaller rival, Canadian Pacific Railway (CP), aims to for several rounds and be close to the [bid] deadline before CSX becomes aggressive," the Southeast-based IMC added. CSX is placing an emphasis on where the freight is coming from, according to the Midwest IMC exec- utive. CSX will be more aggressive if it's a truck conversion than a switch from Norfolk Southern, he said. "If they can convert the freight from the highway and give the ship- per a positive experience, then the freight tends to be more sticky," the source said. "If you are switching between railroads because of price, they know they're a dollar away from losing your business again." NS has not been as aggressive as CSX, each of the IMCs conceded. "NS seems to be lagging behind CSX right now in terms of reducing rates. But if the market heated up, I think NS would be more likely to hold its rates and CSX would be the first ones to raise them," said an IMC executive based in the South. However, the source also praised NS for developing a new phone app to track containers, providing more accurate transit times, and improving communication on the status of cargo. UP 'talking the talk' It's difficult to gauge BNSF's posture because its domestic volume primarily is sold through J.B. Hunt and Schneider, two publicly traded companies that haven't provided with IMCs, also known as channel partners, discussing what rates would secure volume, according to the six IMCs. CSX's intermodal volume fell nearly 8 percent in 2019, but volumes are flat through the first seven weeks of this year, according to AAR. "Nobody is going to drop price just to drop price, but if you have a good business reason, a reasonable rate, and committed volume, CSX has been willing to work with us to make things happen," said an IMC executive based in the Midwest. "The first rate CSX offers won't be flat or down. You have to go back Diverging tracks Canadian rails take different approaches to attracting domestic intermodal By Mark Szakonyi much color on 2020 contract rates. Darren Field, J.B. Hunt's exec- utive vice president of intermodal, said on a Jan. 17 earnings call that it was too early to determine the direction of contract rates, but that trucking would continue to apply pressure to the East Coast railroads. Competitor UP has talked about being conciliatory, but the six IMCs differed on whether UP's actions are consistent with its words. One of the Midwest IMC executives said they've seen a "kinder, gentler UP" during this year's negotiations. "UP talks the talk, but we're still waiting to see what they do," the IMC executive based in the South said. A California-based IMC owner said UP initially proposed a 10 percent rate hike last year, but only a 2 to 3 percent increase this year, which shows the railroad has listened to IMCs. "They told us to bring any and all opportunities to them. They said they'll be flexible on a case-by-case basis and prioritize committed vol- ume for shippers on an MCP," the source said, referring to UP's mutual commitment program for medium and large shippers. He also applauded UP's decision to shift some lanes to Lathrop from Oakland, which he said will save his shippers money on drayage rates from Fresno and Modesto. JOC email: ari.ashe@ihsmarkit.com twitter: @arijashe THE TWO LARGEST Canadian freight railroads are taking different tracks to a shared goal: growing their domestic intermodal volumes by more directly serving small and medium-sized cargo owners that tend to deal with interme- diaries or wholesalers. Canadian National Railway (CN) is betting that its 2019 acquisitions Shutterstock.com Total US intermodal volume fell 4.2 percent in 2019, driven by a 6.1 percent drop in domestic shipments, according to IANA. Miune / Shutterstock.com

Articles in this issue

Links on this page

Archives of this issue

view archives of Digital Edition - March 2 2020