DC Velocity - February 2015

42 DC VELOCITY FEBRUARY 2015 www.dcvelocity.com
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WANTED: A LITTLE CLARITY

Perhaps the biggest challenge for users will be to gain clarity from rail operations people as to when the trains will consistently run on time. According to an intermodal user who asked not to be identified, shippers have been told to re-evaluate their 2015 growth plans because the system in its current state can’t handle any growth. The user said there is no accountability at the railroads for the erratic performance, adding that operations people are focused on process, not results.

At this time, all shippers seem to be certain of is that their 2015 rates will increase over 2014’s by mid- to high-single-digit levels, the executive said in mid-December. “They’re terrified” about the situation, the executive added.

The railroads said the unknowable of first-quarter weather will play a huge role in setting the timetable for back-to-normal service. For example, CSX Corp., the Jacksonville, Fla.-based Eastern railroad, expects to see improvements sometime in the second quarter, according to Melanie Cost, a CSX spokeswoman. The timing will largely depend on the weather, she added.

Ted Prince, a long-time intermodal consultant and chief
operating officer of Tiger Cool Express LLC, an Overland
Park, Kan.-based company that uses refrigerated inter-
modal services to move produce eastbound off the West
Coast, argued that the problems facing intermodal are
more secular. The carriers focus too much on optimizing
their individual networks, he said, and lose sight of the fact
that intermodal is one national and global system where a
yank on one strand sets the whole ball to unraveling. Clair
of Zubrod/Clair countered that each railroad is account-
able to its owners and its customers, and must develop and
execute its individual strategy accordingly.

The railroads are doing what they can. CSX has developed an intermodal hub in the northwest Ohio town of North Baltimore. Western-originating freight headed to destinations east of Ohio is interchanged to CSX at Chicago, then brought to the hub and placed on CSX trains that move the goods to their destinations. The network is being expanded this year to handle 1 million “lifts,” according to Cost; one lift is equal to one container being placed on or taken off a railcar. In its first year in 2011, the hub handled 600,000 annual lifts. CSX has added 250 intermodal lanes since the hub opened, she said.

The hub has been hailed by some as the future of intermodal. Instead of Chicago-bound freight’s being drayed across town to one of several of CSX’s Chicago ramps, the volume flows through in a pure rail-to-rail interchange from Chicago to the Ohio hub. The operation is aimed at avoiding the time-consuming dray at Chicago, thus expediting the discharge of freight from the region.

The hub-and-spoke–like model is “anathema” to traditional linear rail structures, Prince said. However, it offers an innovative way to increase geographic scope and freight density, while easing the pressure on Chicago, he added. Larry Gross, a principal at consultancy FTR Associates specializing in intermodal, called it a “bold experiment” in developing sorting facilities to connect the growing number of Eastern rail facilities. The key to the project’s long-term success, Gross said, is to ensure that the benefits of strengthening the network and boosting the density and train size on each of the spokes outweigh the cost and service impacts of sorting containers mid-route.

BNSF, meanwhile, has virtually completed a 10-year, $3 billion initiative to “double-track” its transcontinental route connecting Southern California to the Midwest, according to Katie Farmer, the railroad’s group vice president for consumer products. The railroad has launched projects to expand line capacity in the corridor; those efforts will be highly visible throughout 2015, Farmer said in a mid-December e-mail.

A rail-to-rail interchange with CSX that recently opened at Bedford Park, Ill., a small industrial city just southwest of Chicago, has streamlined the handover process between the two rails, easing congestion and boosting on-time metrics along BNSF’s transcontinental main line, Farmer said.

Yet in a sign that BNSF has a ways to go, Farmer said the railroad remains “challenged” east and west of Fargo, N.D., due to line capacity projects that require trains to slow down through the respective construction areas. ;