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April 27 2020

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32 The Journal of Commerce | April 27 2020 www.joc.com Surface Transportation NORTH AMERICAN INTERMODAL rail volumes fell to the lowest point in nearly a decade at the beginning of April, underscoring the dramatic fall-off in containerized imports and slowing growth in the shipment of trailers and domestic containers. Intermodal shipment volume declined 15 percent year over year to 339,125 containers and trailers in the week ending March 27 (Week 13), the worst final week of a first quarter since 2013, according to a Journal of Commerce analysis of data from the Association of AS SUDDENLY AS they rose last month, US spot market truck rates fell in April, dragged down as shipments of everything except essential freight have decreased. The trend is evident in data from DAT Solutions and in freight lanes where pricing is tracked by The Journal of Commerce. Third-party logistics pro- viders confirm the drop and say they expect it to continue. At least 46 states and the Dis- trict of Columbia have ordered non-essential businesses to close in an attempt to slow the spread of the coronavirus disease 2019 American Railroads and BNSF Railway. With BNSF's intermodal data not yet available for the week ending April 3 (Week 14) at press time, volume that week would be the weakest in North America since 2013 in a best-case scenario and the lowest since the Great Recession of 2008–09 in a worst-case scenario. The decline in volumes is contributing to a deep financial hit to Class I railroads, which Amit Mehotra, rail industry analyst with Deutsche Bank, reckons will cost the industry some $9 billion in revenue, including intermodal and railcar business, and $4.7 billion in profits this year. He estimates vol- ume across all commodity groups will drop 14 percent year over year in 2020, "roughly consistent with broad-based volume declines endured during the financial crisis in 2009, and significantly worse than declines observed between 2014 and 2016 [the last freight recession]." With US imports from Asia plummeting to the lowest level in seven years in March and US (COVID-19), reducing the flow of non-essential goods to and from factories and to brick-and-mortar stores. The impact of those clos- ings is being felt and is likely to be amplified in coming weeks, logistics executives say. "We're seeing opportunities for freight to nosedive," Jeff Tucker, CEO of third-party logistics provider (3PL) Tucker Company Worldwide, told The Journal of Commerce. "It's going to be trench warfare for the next few weeks and maybe even months. Those folks who had expo- sure to non-essential freight, they're desperate at this stage, whether they're brokers or carriers." truckload rates falling to February levels, reflecting slowing demand, there's little hope among analysts and intermodal marketing compa- nies (IMCs) of a short-term rebound. "The unprecedented shutdown of businesses is going to last through Dry van spot rates fell sig- nificantly in April, conceding all the gains of March, according to a Journal of Commerce analysis of pricing in a sample of roughly 200 top US freight lanes. Data from digital broker Loadsmart shows the unweighted average dry-van spot rate on these lanes fell to $1.83 per mile in the first two weeks of April, after surging to $1.94 per mile in March amid panic buying. The Loadsmart data doesn't represent actual transactions, but rather a guaranteed quote of what a shipper would pay, all-in, captured on a biweekly basis. Shrinking loads In the week ending April 4, DAT Solutions saw spot market loads and rates decrease, with pricing rising on only a handful of lanes, according to DAT analyst Peggy Dorf. Most lanes saw rates slide, and some slid far. The average dry van rate from Seattle to Salt Lake City fell 21 cents per mile, Off track North American intermodal volumes plunge to near- decade low By Ari Ashe Into reverse US spot truckload rates begin April in freefall By Ari Ashe "It's going to be trench warfare for the next few weeks, maybe even months." Trucking | Rail | Intermodal | Air & Expedited | Distribution

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