Surface Transportation
Domestic container volumes out of the Southwest , including Southern California , rose by double-digit percentages in July and August , according to IANA , which hasn ’ t yet released regional breakdowns for September .
J . B . Hunt reported double-digit percentage volume growth out of Southern California in the third quarter versus 5 % growth nationally .
J . B . Hunt and its competitors , Hub Group , Schneider National , STG Logistics , Swift Intermodal and non-asset partners of Union Pacific Railroad ( UP ), enacted surcharges in Los Angeles on some shippers who moved significantly more product in August and September .
“ Maintaining service during periods of stronger demand supports the case for intermodal growth .”
Some surcharges are more than $ 1,000 per container , but they only apply when a shipper exceeds its weekly contractual volume allotment .
CSX Transportation provided more evidence of an eastto-west shift in domestic intermodal in the third quarter . The railroad reported that while all intermodal volume rose 3 %, domestic volume was “ relatively ” flat , although the company doesn ’ t break out ocean and domestic containers in its earnings report .
“ There was talk of [ pulling volumes ] forward , [ but ] we ’ re not hearing about that as much ,” Kevin Boone , CSX ’ s chief commercial officer , said in an Oct . 16 earnings call .
“ We expect , hopefully , a more normalized peak season , but that ’ s a watch item for us .”
Service holding up
In general , domestic intermodal service has remained consistent , unlike international . The Pacific Merchant Shipper Association ( PMSA ) reported that dwell times for rail-bound containers at the ports of Los Angeles and Long Beach rose to 9.25 days on average in September , the highest since October 2022 .
UP has struggled with delays on domestic and international intermodal in Tacoma this year . There have also been minor complaints in the market about “ miss-outs ” or “ leave-behinds ” of domestic containers in Southern California , akin to “ rolled ” cargo in ocean transportation , when a container is bumped to the next vessel departure .
The complaints , however , have been sporadic and not disruptive to operations , domestic intermodal providers tell the Journal of Commerce . They say the railroads generally do an effective job moving 53-foot domestic containers .
Field said this peak season is one of those “ prove it ” moments for J . B . Hunt and its rail partners to demonstrate they can handle an upswing in volumes while maintaining reliable service .
“ Maintaining service during periods of stronger demand like we are experiencing today supports the case for intermodal growth and additional conversion from over-the-road freight ,” he said . “ We ’ re very encouraged by acknowledgement from the customers that the service quality has earned intermodal a new seat at the table at many of those shippers , and that ’ s beginning to play out .”
email : ari . ashe @ spglobal . com
CSX and CPKC are acquiring 144 miles of rail lines connecting Burkeville , Ala ., with Meridian , Miss . Ian Dewar Photography / Shutterstock . com it lags truckload services , which take three to four days .
“ We ’ ve got some track work that needs to be done on the Meridian & Bigbee tracks , but once that ’ s taken care of in Q1 , we ’ ll be looking to be single-truck competitive on transits ,” Wahba said at the event .
He declined to discuss pricing while transit times remain longer than trucking alternatives .
According to the Journal of Commerce Intermodal Savings Index , truckload rates are equal to or cheaper than intermodal rail on many lanes between Texas and Southern states such as Florida or Georgia . Trucks also avoid the potential delays that can occur when two railroads interchange freight .
The CPKC-CSX route will compete with a Union Pacific route connecting to the Southeast through Memphis with CSX and Norfolk Southern Railway that was launched in October 2023 .
Intermodal between Mexico and the US has underperformed the larger intermodal market , although that has largely been attributed to a weak market for auto shipments .
email : ari . ashe @ spglobal . com www . joc . com November 4 , 2024 | Journal of Commerce 29