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:

  1. Keep an eye on Washington Regulations will continue to play a large role in the transport world.
  2. Things can turn on a dime be agile and stay up to date on the industry dynamics
  3. The system is fragile and slow to recover plan for the unexpected
  4. Nothing lasts forever, even long standing assumptions are at risk.

Keep eye on Washington  example recently passed Transportation bill:

  1. 5 years of funding at 15% higher levels than previous transportation bill.  Question , where will funding come from
  2. This is not a highway bill, it is much broader
  3. Bill has a larger freight component
  4. CSA scores will be removed from public view pending completion of reforms
  5. Small test od under 21 year old drivers, veterans only.
  6. Way opened for hair follicle drug testing
  7. Separates Amtrak Northeast Corridor from the National network which will NEC  profits to be reinvested only in the northeast lines.
  8. Streamlines permitting process for rail projects.

Things can turn on a dime 4 examples:

  1. After strong 2013 and 2014, year over year North America total carloads 4 week moving average is down 10% 2015 vs. 2014.
  2. Decline is coal cars shipped is down approx. 20% year over year.
  3. 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.
  4. Truckload spot market rates well below 2014 levels starting in Jan. 2015

The system is fragile and slow to recover Example:

  1. 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

  1. 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.

 


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