Intermodal Business There for the Taking if Railroads Can Resolve Staffing, Service Issues

Class 1 railroad executives and industry observers say there is plenty of intermodal business out there for the taking.

The Intermodal Association of North America projects that domestic container volume will increase this year by 6.4 percent when compared to 2021 traffic.

But an analysis published on the website of Progressive Railroading found that landing that business will require the carriers to hire and train new operating personnel, solve equipment availability issues, and offer better and more consistent service.

The trade magazine’s analysis found that railroads are making some progress in addressing these issues, have a ways to go and it remains to be seen if the carriers can capture the volume growth that IANA predicts is out there.

Shippers also face issues stemming from higher fuel prices and railroads taking steps to limit congestion on their busiest routes.

These development could play out in adverse ways for shippers as they are gearing up for their peak season later this year. They also could play out during a time when consumer demand for retail goods is strong.

Working in favor of railroads is the fact that for now they are enjoying an economic advantage over trucks due to the latter having to grapple with driver shortages, tight capacity and higher fuel prices.

In some instances, railroads have developed alliances with trucking companies, ocean ports and shippers to better understand supply chain changes.

As has been the case for several months, railroads must deal with equipment imbalances that stem from containers not being unloaded promptly and returned for terminals.

This is being caused by, among other things, understaffed warehouses and distribution centers.

In particular this has led to a chassis shortage that industry observers expect to last into 2023.

A chassis is used to transport containers among ports, rail yards, container depots and shipper facilities. 

The challenge for the Class 1 railroads is taking steps to overcome these issues so that they can tap into the business that is available if they can handle it.

“It’s an exciting time in intermodal,” said CSX Vice President of Intermodal and Automotive Maryclare Kenney. “There are opportunities out there. Demand is strong for the intermodal product.” 

Figures provided by IANA show Class 1 intermodal volume in the first quarter of this year fell 6.6 percent.

The trade association expects intermodal volume to be up 1 percent for all of 2022 buoyed by additional container capacity service routes and increasing staff in the intermodal sector.

Those interviewed by Progressive Railroading all agree that a key to railroads realizing intermodal traffic gains is hiring additional operating personnel.

CSX, for example, has 6,700 train and engine workers but needs 300 more. In a normal year its T&E worker attrition rate is 7 percent. But of late it has risen to 10 percent.

Another key is providing more consistent service, a factor over which railroads have more control.

NS recently began implementing a new operating plan that focused on improving its intermodal operations.

The carrier is revamping intermodal operations to make them more consistent by balancing the flow of shipments through terminals, intermediate yards and the overall network.

It is seeking to eliminate choke points, reduce how much freight is handled en route and changing train schedules to improve and speed up network velocity.

CSX officials say they have reduced dwell time in recent months so that on-time intermodal performance has reached the low 90 percent range as opposed to 87 percent in the first quarter of this year.

The carrier is seeking to get that on-time percentage into the high 90s range.

The article can be read at–67015

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