We have all heard that a large number of customers pulled business from CSX and gave it to ORT or NS. I am curious as to how much, as a percentage of business they had before EHH, was lost. Was it 30% of the pre-EHH level? Was it more, less?
The real truth will be difficult to discern. CSX has some of the best ‘figuring liars’ in the business and will present figures to support whatever spin top management wants to present.
Losing business in this market? Anything with wheels and a motor should be turning a big profit right now.
Unless you’ve convinced (or is that deluded?) yourself that most of the business out there isn’t worth having.
Balt, CSX doesn’t have a corner on the spinmeisters. I think all the class one’s, with maybe the exception of BNSF, who have to answer to activist investors know how to talk up less is more. As long as they can squeeze out more pennies on the same or declining level of business and keep profits up, they are happy.
It’s when the gravy train (pun intended) eventually runs out of steam that everyone will by crying. Except those activist investor types. They’ll have moved on to some other company or industry.
Jeff
For sure!
DAT is a service that provides information to truckers and about trucking. I read what they will let me have for free. (Hey, I was in marketing and I learned to keep up with what the competition was doing.)
In the US the average dry van spot rate for the week ended 12/30/2017 was $2.11 per mile. That’s an increase of $0.38/mile (22%) from a year earlier. Can you say “BOOM”? The average reefer spot rate for the same week was $2.46 per mile. That’s an increase of $0.47/mile (23.6%) from a year earlier.
DAT also does a “Loads per Truck” ratio. It’s off the chart with many more loads needing trucks.
This is all good for rail intermodal and that business is indeed also booming. More business at higher rates was a great Christmas present.
What’s going on? Well, for one thing the economy is growing much faster than it has done for a while. If the freight demand curve shifts then freight rates go up. Second, we just don’t know how much capacity the electronic log mandate (effective more or less on 12/18/2017) took out of trucking. It probably reduced trucking capacity somewhat by stricter enforcement of trucker’s hours of service rules. How much, I cannot quantify.
Anyway, we seem to be looking at increased demand for freight movement with some unquantifiable decrease in trucking supply. This forces truck rates up and diverts some amount of freight to rail.
HAPPY NEW YEAR!
Indeed greyhounds… its both good and bad. While the rates are way up the bad news is that shippers are looking at their options, and everything is on the table. It really gives me no great pleasure to jack up my own rates; however, not doing so in the short term would drive my own suppliers into the hands of my competition. Some customers get that… others don’t. If there ever was a time for innovation in this business, this is it. Ultimately the spoils (long term anyway) will go to those who look at this situation and try to figure a way out of it that doesn’t involve simply handing the customer a huge rate increase. Rail is certainly going to be a key part of that…containers, boxcars, revitalizing sidings and team tracks… all of it. Our customers are frustrated across the board… and I’m not talking about only CSX’s customers. They’re all on the brink…angry, frustrated… lookin for help.
Unless a railroad has taken itself out of the intermodal business, which I understand CSX has. [sigh]
For the best data, wait about a year and look at the annual R-1 report that has to be filed with the STB. Falsifying that data could lead to an extended stay in substandard Federal housing (credit the late Tom Clancy for that turn of phrase).
- PDN.
Paul, can you elaborate on that a slight amount?
Original post:
“We have all heard that a large number of customers pulled business from CSX and gave it to ORT or NS. I am curious as to how much, as a percentage of business they had before EHH, was lost. Was it 30% of the pre-EHH level? Was it more, less?”
Less.
The full 52 week, quarterly, and weekly reports of the individual Class 1s are in:
2017 vs. 2016
Intermodal CSX NS
Containers +2.4% +4.3%
Trailers -4.4% +16.9%
Total +2.2% +5.3%
Carload CSX NS
Mdse. -3.0% +0.5%
Coal +4.6% +16.6%
Total -1.4% +4.5%
No particularly dramatic, i.e., “30%", shifts a
[quote user=“466lex”]
The full 52 week, quarterly, and weekly reports of the individual Class 1s are in: 2017 vs. 2016 Intermodal CSX NS Containers +2.4% +4.3% Trailers -4.4% +16.9% Total +2.2% +5.3% Carload CSX NS Mdse. -3.0% +0.5% Coal +4.6% +16.6% Total -1.4% +4.5% No particularly dramatic, i.e., “30%", shifts are evident, but it does appear that NS may have taken most of the traditionally anemic eastern Carload growth. Coal performance is hard to interpret without specific utility and export market dynamics information. To me, the clearest loss for CSX is in the service-sensitive (but least profitable) intermodal trailer segment. Perhaps some UPS shifts, and preference of OTR truckers for NS, given the widely pu
466lex and Don Oltmann did a better job above based on actual data than I could. I do see that container volumes appear to have increased.
I was thinking of the downgrading of North Baltimore hub to just block-swapping, cessation of development of other hubs, withdrawal from the Quebec terminal, withdrawal from the Howard St. tunnel clearance improvements, and just my memory of anecdotal reports elsewhere. I’d be happy to be proven wrong about what appears to be CSX’s retrenchment from what I think you and I agree is the most significant multi-modal market out there, domestic containerization moves.
- PDN.
Mostly antedotal info here:
-
My son in 3PL says “it is a mess” right now. Doesnt even want to discuss the problems with me. If he doesnt want to talk to me about his work problems, it is a mess.
-
Legit trucking companies are doing very well with rates, as Greyhound pointed out. Two major trailer manufacturers told me “trucking companies are making very good money” and are buying big amounts of trailers. Problem with trailer manufacturers is labor…they cannot find people to work in factories.
-
Working at home has huge advantages. One is that I have the Chesterton web cam and scanner on and watch the parade of NS trains. Very obvious is the increase in intermodal traffic, particularly the trailer business. NS still runs a decent amount of TOFC…kinda fun to see the old “piggyback” trains, although they are mixed in with double stacks. Anyway, a year ago their Chicago - Croxton priority trains 20E and 20k were solid with 20E typically having 80-120 units and 20k about 40-70 units.
Today’s 20E has 103 and 20k was only 48. But yesterday 20K had 110 and on Wednesday had 134. Business has spiked for the 20k, which typically has refer trailers (Marten, Alliance, Navajo, etc) as a big portion of the business.
Lot more trailers on the NS these days. It will be interesting to see if that sticks or goes away as CSX re-evaluates and the trucking industry stabilizes (they will).
What I would really like to do is go watch the CSX Q010 and see how their loads compare vs a few years ago. That train would typically have 50 - 75 UPS trailers/containers per day.
NS seems very fluid these days, even with the East Coast weather. Amtrak, has been extremely late this week, #49 has been running about 3-4 hours tardy.
Ed
As information, DAT reports that spot motor freight rates surged some more for the week ending 1/6/2018.
On a nationwide average spot dry van rates went up to $2.30/mile. +$0.19/mile or 9%. In a week! Simlilar spot reefer rates went up to $2.71/mile. +$0.25/mile or 10.2% in a week.
DAT cites weather factors (I guess it’s hard to keep trucks moving in a “Bomb Cyclone”, whatever that is.) and electronic logs for the tight supply of trucks. The tight supply forces rates up.
The bad weather will go away. The electronic logs won’t go away. We live in interesting times.