Schneider and CSX ink a new rail service contract

Truckload carrier Schneider National and Class I railroad carrier CSX said yesterday they have reached a new multiyear agreement in which CSX will continue to be one of Schneider’s main rail providers, continuing to position Schneider’s ability to serve the Eastern United States for intermodal services.

The relationship between Schneider and CSX goes back to 2008, when CSX became Schneider’s primary Eastern rail provider, and in 2012 they announced a multi-year agreement for CSX to continue to serve as one of Schneider’s primary rail providers.

Schneider officials said that since they inked that deal in 2008, they have collaborated to deliver what they call “truck-like” service for shippers. And they added that this pairing provides Schneider’s customers with “capacity and operational interfaces that are designed to increase accessibility and efficiency of all rail moves,” along with “capital investments that CSX has made in projects such as the Northwest Ohio Intermodal Terminal [that] have improved its infrastructure and facilitated expended service offerings to the most Eastern origins and destinations.”

Schneider officials said in an S-1 filing with the United States Securities and Exchange Commission that it is one of the largest intermodal providers in North America by revenue and are well-positioned for future growth in intermodal freight through its nationwide network and company container model.

“Our long-standing railroad relationships with BNSF Railway, CSX Transportation, Canadian National Railway, Kansas City Southern Railway and other regional rail carriers, such as Florida East Coast Railway, provide rail access nationwide,” it said. “Our customers value our intermodal network over IMCs due to our consistent access to capacity through our company assets and high-quality drayage services that provide a larger geographic reach around intermodal terminals. We are in the process of converting from our rented chassis model to a company-owned chassis model. This conversion will lower our all-in chassis operating costs, improve service reliability, as well as increase driver efficiency and satisfaction, by increasing our control over the chassis operations of our intermodal business. We expect to complete our conversion to a company-owned chassis fleet by December 2017. We believe that our balanced network and large base of company assets provide a significant competitive advantage that would be difficult for other carriers to replicate.”

CSX believes intermodal is a critical solution for supply chain optimization as it provides shippers with access to scalable capacity and sustainable savings,

“There is significant opportunity to optimize modal selection and convert freight from highway to rail in the Eastern U.S.,” said Dean Piacente, vice president-intermodal of CSX Transportation, in a statement.  “CSX continues to invest in the intermodal growth opportunity, and we are excited to extend our relationship with Schneider as they truly are a premier intermodal provider. CSX and Schneider share a strong commitment to safety and customer service and to enhancing supply chain solutions for shippers. Renewing our relationship with Schneider is one of the many driving forces behind our Service Excellence initiative within the CSX of Tomorrow strategy.”

While volume trends of the tracks and highways remains somewhat uneven, domestic intermodal remains fairly consistent.

The gains in domestic intermodal reflect, in some ways, a continuation of the shipper community being willing to utilize it. What’s more, there is more interest by the rails and intermodal providers like Schneider working to create more solutions and lanes to service intermodal. And the rails have invested in their infrastructure and service levels to do that, with those types of increased capabilities driving intermodal growth levels.