UPS and Amazon both have those kinds of things in there contracts for intermodal movements. I’ve noticed one thing interesting especially considering the size of Salt Lake City and even with Union Pacific being the only direct railroad connection to there with intermodal service. There’s no Amazon containers ever shipped there. The biggest team route for Amazon contractors is Chicago to Salt Lake City. Just why is that the UP couldn’t make the delivery demands on that route. It’s just an observation from my times at Rochelle were the BNSF is full of Amazon containers but never seeing anything on the UP. We all know that JB won’t ship on UP based on their contract with BNSF.
As to the NS Chicago to Charlotte run. Right now even the OTR industry is struggling to service that route due to the loss of interstate 40 in the NC TN border area. They think they’re about to get it reopened and another section collapses on them. It’s a total mess right now through there. There’s talk about literally building bridges to bypass the washed out areas its that bad. As they can’t get stabilized fills to rebuild.
Nice to see this discussion continuing. Obviously the holiday season has ended. The Fostoria Cam has experienced some issues this weekend so I havent observed 28N in a few days. Last Wednesday there were 154 units with 2 UPS, 26 Amazon and 2 ABF. The rest were containers, primarily JBH. Thursday had 134 ttl with 0 UPS, 23 Amazons and 1 ABF. I include ABF as LTL carriers are similar to the UPS/Amazon in service.
BTW, Thursday is usually a zero UPS day on 28N…yes I observe that closely!
Good point about the N. Carolina I 40 issues which may have spiked the volumes. But going back to my records in July 28 N was regularly running 140 - 160units daily.
NS has obviously built this train around the UPS sort requirements and has done a good job…or else UPS realizes the difficulty in a Chicago - Charlotte/Greensboro lane.
BTW, CSX runs a Chicago Baltimore UPS train. Today’s had 1 motor, 1 UPS container and 3 total loads. The last month or so CSX has added auto racks, usually 5-10 to the train and typical container loads is 50+.
Obviously today’s 3 loads is a massive money loser, and overall the I18 doesnt look too promising. It took the business from NS which used to run the UPS Baltimore train but the changeover was in July or sometime this summer.
One wonders…did NS finally say no or did UPS require another option?
UP ships some Amazon here on their ZG2SC train, but I think it’s easier for Amazon to low ball the dozens of carriers that go between the two cities. There are also some coming on the ZDVLB, but most of those continue to Long Beach.
Interesting development with UPS. Last week, CEO Carol Tome indicated that UPS plans to wean itself off of 12% of their revenue over the next 2 years…reducing the amount of Amazon package business handled. Amazon is already handling more package business than UPS. Tome indicated the Amazon business is not profitable.
So, with that in mind, I turned attention to today’s favorite train, 28N. Today’s train had 5 UPS containers/trailers and 20 Amazon units, all containers.
One must wonder, is UPS’s decision warrented? Hard to say as I do not have data on the pricing for Amazon. Of the 12% revenue, what volume does that entail? Probably will never know. I am not going to dig thru 10Ks to try and figure it out.
One must also wonder about what will happen if (or when) Amazon turns its system on to business to business package handling. Those deliveries now are probably 90% plus to residential addresses (yes some are shipped to customers at work), but what if Amazon loads those empty vans with business parcels? It would be quite an investment in operations, but I wouldnt put it past them.
It’s likely the commoditization of intermodal containerized freight I’ve seen before – Amazon minimizes its shipping charge, but still prices to make a profit, and so there are inadequate margins for CSX if there are any kind of ‘speed costs’ such as higher over-the-road speed. At the commoditized rock-bottom price, there’s even less contribution to profitability.
The CEO is definitely doing this for a reason. If she is saying that the Amazon business is not profitable, I would have no reason to question her. It really depends on what the contract would state regarding UPS and Amazon.
UPS heck most OTR industry carriers anymore are done dealing with Amazon and their bull. Amazon has driven off all the megas and most of the larger midsized carriers really don’t want to deal with them. It goes to how they handle delivery to the fulfillment centers. You see if you bring in a full trailer of say diapers Amazon only pulls off what they need and refuses to release the truck. They are getting hammered by all the industry groups for detention issues.
The change from intermodal as a better or faster method of freight handling to “intermodal” as facilitating least-cost operation, like coal in unit trains.
I did not see that change coming, although I could probably have predicted it once stack-train equipment got costed down and some types became obsolescent.
Correct me if I am wrong, but not every shipment, nor every intermodal train needs to be a “faster” or “better” method, particularly faster. There are priority intermodal trains scheduled and those run based on customer’s schedules. Mostly those handle UPS, Fedx, or LTL carriers. Those trains, such as the 28N we are discussing run on pretty tight and reliable schedules.
On the same line thru Fostoria which I observe, NS runs two other pairs - 258/259 and 272/273. The 258/259 pair runs from Kansas City to St. Louis to Decatur, Il and then Harrisburg, Pa. Pickups are made at St. Louis and Decatur. A few years ago ADM, the giant agribusiness opened an intermodal facility, primarily for export of their products.
The 258/259 pair will be a mixture of international and domestic containers…no trailers to speak of. It is heavy with JPHunt. Today’s 258 had 210 containers, of which 99 by my count were JPH. It had a block of 17 international containers at the head end. My guess is those were ADM’s for Europe.
Their 272/273 pair run from Landers Yard Chicago to Norfolk, Va. That train might work Columbus, Oh, but not really sure. It also carries domestics and internationals. Today’s had 171 containers with 110 JBH’s and a block of about 50 internationals at the head end.
Note that NS also runs a daily pair of Chicago to Columbus, Oh trains 266/267 and another Norfolk pair 276/277.
I believe the intermodal trains serve a market and do not try to be everything to everyone.
Oh, by the way, CSX runs a daily Chicago to Baltimore hot rocket, possibly primarily for UPS. Today’s I18 had 15 containers, 3 of which were marked as UPS. No way that train is a money maker.
Ed