Digital Edition

June 09, 2014

Issue link:

Contents of this Issue


Page 51 of 87

SURFACE & DOMESTIC TRANSPORTATION TRUCKING | RAIL | INTERMODAL | AIR & EXPEDITED | DISTRIBUTION 52 THE JOURNAL OF COMMERCE JUNE 9.2014 By Mark Szakonyi U.S. INTERMODAL SERVICE doesn't appear to have improved significantly since severe winter weather and rising traffic crippled most rail networks and disrupted shipper supply chains in the first four months of the year. Indeed, just as some railroads were mak- ing incremental improvements to service and digging out from the lingering winter cargo backlog, they got hit with a surge in volume as importers accelerated shipments ahead of the June 30 expiration of the West Coast longshore labor contract, said Larry Gross, a senior consultant at research firm FTR Associates. But if volume growth is any indication, shippers aren't upset enough about the lack of improvement in average intermodal train speeds — an indicator of overall service — to shift loads back to the highway. Intermo- dal volume in April jumped more than 10 percent year-over-year, with international traffic rocketing up 11.5 percent and domes- tic volume rising 9 percent, Gross said, quoting Intermodal Association of North America statistics. The international spurt — which reverses a months-long trend in which domestic traffic propped up overall intermodal growth — is a strong indica- tion that shippers are accelerating imports to avoid potential disruption during con- tract talks between West Coast waterfront employers and the International Longshore and Warehouse Union. About half of the 100 shippers surveyed by Wolfe Research in March and April said they have sped up inbound shipments ahead of the expiration of the contract between the ILWU and Pacific Maritime Association. Opinion within the industry is divided about whether the ILWU will slow or halt imports amid contract negotiations, although nego- tiations started on a positive note in May. The surge in volume from the U.S. West Coast has wiped out improvements the railroads had made in increasing intermo- dal train speeds. Intermodal train speeds on a four-week average were 29.2 mph in the week ending May 16, compared with a 31.2-mph average in the same period last year, Gross said. The statistics include train speeds for all the U.S. and Canadian Class I railroads except Canadian Pacific Railway. CN appears to be an exception, how- ever. Average CN intermodal train speeds have increased steadily since late April, with average speeds at 30.6 miles per hour in the week ending May 23, the most recent statistics available via the Association of American Railroads. Falling intermodal train speeds and a rise in dwell times at railyards suggest increased schedule unreliability, said Jason Kuehn, associate partner at New York- based transportation consulting firm Oliver Wyman. Average dwell times among the seven Class I railroads have fluctuated for some while remaining generally consistent for others. However, because their time- sensitive nature warrants a preference for intermodal trains and because dwell time sta- tistics include carloads, it's difficult to decipher just how reliable intermodal networks are. Kuehn said intermodal service is generally improving, but there have been backward steps along the way. BNSF Railway and CSX Transportation have suffered the largest declines in inter - modal train speeds, Gross said. The average BNSF intermodal train moved at 29.8 mph in the week ending May 16, follow- ing a decrease in speeds in the previous three weeks, accord- ing to Association of American Railroads statistics. The aver- age CSX intermodal train in the week ending May 16 moved at 26 mph, the slowest pace since mid-April. Congestion on BNSF's northern cor- ridor, resulting from increased shipments to and from the Bakken shale region and healthy grain exports, likely contributed to the slower train speeds. CSX and BNSF also may be experiencing more severe upticks in intermodal and carload cargo than their Class I counterparts. Coal vol- umes, for example, have risen steadily as utilities restock their inventories following the winter. Slightly slower intermoda l t ra ins shouldn't wreak havoc on shippers' supply chains as long as carriers inform their cus- tomers — accurately — about when to expect their goods. Besides, the difference in train VOLUME SURGE TAXES INTERMODAL RAILS Shippers accelerate shipments in advance of June 30 expiration of West Coast's ILWU contract Shippers prize reliability over pure speed.

Articles in this issue

Links on this page

Archives of this issue

view archives of Digital Edition - June 09, 2014