NS, UP Changing Some Interline Intermodal Service

Norfolk Southern and Union Pacific on July 1 will change some interline intermodal service lanes.

The carriers said the changes come on the heels of other changes made earlier this year that dropped nearly 500 low-volume lanes.

The latest service changes will drop westbound interline intermodal service in 78 lanes and make terminal changes for a dozen other origin-destination pairs.

Among the changes are dropping domestic service between the Industry Terminal near Los Angeles and Toledo, Ohio; Buffalo, New York; and Taylor, Pennsylvania.

NS and UP plan to consolidate domestic service at higher-volume destinations. The overall goal is to favor high-density routes that support steel wheel interchange in Chicago and Memphis, Tennessee.

The changes are limited to domestic origins on UP and international origins on NS.

NS also said it plans to discontinue international intermodal service between Detroit and Baltimore.

In a service advisory sent to shippers, UP said the changes seek to reduce transit times and improve customer experience.

CSX-BNSF to Launch Ohio-LA Container Service

CSX and BNSF said this week they will begin a container service between Los Angeles and Ohio that will use the Northwest Ohio Intermodal Terminal in North Baltimore.

The service will begin on Oct. 29 and originate trains five days a week in each direction.

On BNSF, the containers will move via the Southern Transcon route west of Chicago.

“Customers who take advantage of this new service can reach key markets within the fast-growing Ohio Valley region,” said BNSF Group Vice President Consumer Products Tom Williams in a statement. “Our new Ohio intermodal service will create an efficient, direct service from the West Coast.”

CSX said it will work with NorthPoint Development to construct a 500-acre logistics park adjacent to North Baltimore facility and is expanding eastern access to the facility through new service to and from the Port of New York and New Jersey.

This will involve international traffic that will be trucked from North Baltimore to destinations in southern Michigan, western Ohio, and Indiana.

The logistics park will include traditional warehousing and distribution capabilities, as well as services such as a container yard and equipment storage, export container stuffing, and transload and break-bulk resources, all within a heavy-haul local corridor.

The North Baltimore facility was opened in June 2011. At the time, CSX operated it on a hub and spoke model in which containers from various locations throughout the CSX network were routed there to be interchanged.

The hub and spoke approach was intended to help build traffic density in low-density intermodal markets.

That model was dropped last year when CSX ended the hub and spoke intermodal operating model. At the time, CSX officials said sorting containers in North Baltimore added transit time to traffic that is price- and service-sensitive.

Instead, CSX said it would focus on point-to-point intermodal service in high-volume markets.

The BNSF-CSX agreement means that containers will no longer be trucked across Chicago but instead will move through the city by rail.

Intermodal analyst Larry Gross told Trains magazine that BNSF is trading the cost of trucking containers in Chicago for extended drayage from North Baltimore to destinations that include Detroit, Cleveland, Columbus, Cincinnati and Louisville.

Gross said there is not much drayage capacity at present in North Baltimore, which means the new service is likely initially to appeal to national trucking companies such as J.B. Hunt and Schneider National, which have their own drivers.

“It’s not like drayage capacity will magically appear,” Gross said, but added that he expects local drayage capacity to develop as intermodal volume increases in North Baltimore.

The logistics park CSX plans to develop in North Baltimore will offer opportunities for backhaul moves of agricultural products to Asia.

The park will be similar to logistics parks that BNSF has near its intermodal facilities in Joliet, Illinois; Oklahoma City; Kansas City; and Alliance, Texas.

In the short term, CSX said the number of trains serving the North Baltimore facility won’t change, but is expected to grow over time.

The service that starts on Oct. 29 will use existing intermodal trains that BNSF and CSX interchange in Chicago.

CP Contract to Affect Ohio Valley Market

Canadian Pacific doesn’t own a foot of track in Ohio and the Port of Vancouver, British Columbia, is thousands of miles away, but the Buckeye State looks to benefit from a recent contract that CP reached that will increase its share of intermodal traffic in Vancouver.

CP will begin hauling starting April 1, about 85 percent of the Ocean Network Express traffic passing through the Port of Vancouver.

How does that affect Ohio? It will boost traffic in the Ohio Valley intermodal partnership that CP has with the Chicago, Fort Wayne & Eastern and Indiana & Ohio.

Ocean Network Express is a consortium of shipping companies K-Line, MOL, and NYK.

Canadian National has 70 percent of the container traffic moving through the Port of Vancouver, but CN officials say they will have to turn away some business due to capacity constraints.

International intermodal traffic moving on CN has experienced faster-than-expected growth and increases in traffic in frac sand, grain, and other commodities have left CN congested, particularly in Western Canada.

CP said the agreement with Ocean Network Express is worth $80 million annually over the three-year contract.

Interestingly, CP is gaining back traffic it walked away from when E. Hunter Harrison was CEO of CP because he thought domestic intermodal traffic was more profitable.

But now CP says its costs are similar to those of CN, which puts it in a position to vie for lower-margin international intermodal traffic.