I attended this FTR’s Transportation Intelligence webinar on 12/10/15 moderated by Jonathan Starks, Director Transportation Analysis and presented by Larry Gross, Intermodal and Rail Expert.
4 Lessons Learned in 2015:
- Keep an eye on Washington Regulations will continue to play a large role in the transport world.
- Things can turn on a dime be agile and stay up to date on the industry dynamics
- The system is fragile and slow to recover plan for the unexpected
- Nothing lasts forever, even long standing assumptions are at risk.
Keep eye on Washington example recently passed Transportation bill:
- 5 years of funding at 15% higher levels than previous transportation bill. Question , where will funding come from
- This is not a highway bill, it is much broader
- Bill has a larger freight component
- CSA scores will be removed from public view pending completion of reforms
- Small test od under 21 year old drivers, veterans only.
- Way opened for hair follicle drug testing
- Separates Amtrak Northeast Corridor from the National network which will NEC profits to be reinvested only in the northeast lines.
- Streamlines permitting process for rail projects.
Things can turn on a dime 4 examples:
- After strong 2013 and 2014, year over year North America total carloads 4 week moving average is down 10% 2015 vs. 2014.
- Decline is coal cars shipped is down approx. 20% year over year.
- For Oct. 2015, Active Truck Utilization (Truck fleet in use vs. active trucks available ) was at 96%. Historical average is at 90%. Anything over 90% is a surplus market. Quite a change from 4th quarter of 2014.
- Truckload spot market rates well below 2014 levels starting in Jan. 2015
The system is fragile and slow to recover Example:
- From 2000 to 2009, 4 week average train speeds were 23.5MPH. In the spring of 2015 finally saw improvement to 24.0MPH . The network is now performing but took a long time to recover
Nothing lasts forever example
- Domestic inter-modal y/y change. From 2009 to 2014, CAGR(compound annual growth rate) was 7.8%. YTD Oct. 2015, 3.3%. Abundance of trucks, lower OTR fuel surcharges, problems in the inter-modal network caused a mode shift for some shippers back to highway.
Another excellent webinar by FTR, I would encourage shippers to take a look at their suite of offerings in 2016. It will be a good investment.