Rail Freight

As Jeff Berman recently reported in our 2015 Rail/Intermodal Roundtable, the many service performance issues that faced the nation’s rail networks over this past winter and into early spring are clearly on the mend—and that’s great news for shippers heading into the peak season.

Faced with service issues and declining performance metrics, rail and intermodal providers are keeping investment levels at record highs as they continue to work through the current challenges to get back to pre-recession performance levels.

Even casual observers of the freight transportation market are finding it difficult to avoid the success that the rail intermodal sector is experiencing. In fact, most of America is catching sporadic television advertising showcasing the sustainability and productivity benefits the mode offers U.S. business—Union Pacific’s well-produced spot caught my eye during a recent broadcast of a baseball game.

The Americas are seeing old rules of thumb fall to the wayside in intermodal freight movements as new services and new levels of activity are reached. Shippers should take note as carriers are adjusting to a higher level of intermodal commerce.

U.S. Carloads were up 9.2 percent at 252,100, and intermodal at 181,238 containers and trailers saw a 5.4 percent annual gain.

The global economic recovery moves sluggishly forward, while the domestic picture has brightened considerably. Our leading market analysts explain how shippers should ready themselves for sustainable demand and plan for incremental rate hikes.

Over the past 20 years, we’ve heard extensive discussion about the “Railroad Renaissance,” a historical metaphor referring to the period between the Middle Ages and the Modern Era.

BNSF said that its 2015 capital expenditures will be allocated towards various areas of its business, including maintenance and expansion of the railroad to meet the expected demand for freight rail service, with 2015 representing the third straight year BNSF has invested a record annual capital expenditures investment.

Once again, major shippers are asking the U.S. Congress and the Surface Transportation Board to help them counterbalance the rail industry juggernaut with easily accessible rate reasonableness testing and service regulation (Senate Bill 2777).

Through record-high investments and a sharp focus on service, rail and intermodal providers are still delivering on their service promise to shippers—and doing it with improved efficiency, say LM readers.

Rollercoaster demand levels and uneven freight volumes in 2013 created havoc in one of the more complicated years on record. In 2014, shippers will need to manage with all the savvy and experience that they can muster to get the capacity they need at a rate that’s fair.

While there are currently more good signs than bad regarding the economy, it’s safe to say that we may need to “curb our enthusiasm,” as comedian Larry David may observe, until we see more sustained signs of growth and improvement. That is, of course, unless you follow the railroad and intermodal sectors.

Intermodal volumes saw their single highest week ever at 270,243 containers and trailers and were up 6.3 percent annually.

Through record-high investments and a keen focus on service, rail and intermodal providers are still delivering on their service promise to shippers—and doing it with improved efficiency. Our panel of top analysts takes a deep dive into what railroads are doing to stay lean and powerful during these still uncertain times.

In casual conversation with friends, it surprises me how many myths still exist around moving freight by rail. “It must be slow, unmanageable, old fashioned.” Rail seems to conjure memories of pillows of steam hovering over charming brick stations, or lonely whistles heard from a distant train snaking through the countryside.