Commerce Express Weekly Road Map:
March 21st, 2023
Keeping you informed on the latest news/insights in our industry.
Commerce Express Blog
Rail’s history of mergers and takeovers can be likened to a game of agar.io. Over time, the biggest railroads became bigger by absorbing any smaller ones in their sight.
Now, rail’s regulatory guru, the Surface Transportation Board (STB), has okayed another merger for an industry that stakeholders already feel lacks competitive variety.
Last Wednesday (March 15), the federal board approved Canadian Pacific’s plans to merge with Kansas City Southern. As early as April 14, the former can begin taking control of the latter.
Inland Market Updates and Insights
Northeast United States: USEC volumes are expected to build through the end of the first quarters, after a recent leap in March.
West and Gulf Coast: LA/LB seeing some congestion, with wait times 2+ hours. Oakland is running smoothly; both shifts open and operational.
Central United States: Most inland terminals are performing well. Columbus, OH and Kansas City continue to experience some chassis shortages.
Other insights: Less than truckload capacity remains easily accessible throughout the first quarter. And, Tractors and trailers remain available, but at high costs.
Truck Safety Coalition Calls on the DOT to Take Steps to Improve Safety
Last Tuesday, a group of truck safety advocates sent a letter to the Transportation Secretary, asking the government to take more steps to help prevent “hazmat crashes, save lives, protect communities, and put public safety ahead of corporate profits.”
Some of the actions the truck safety groups are calling for:
- Mandated speed limiters on all commercial motor vehicles
- Automatic emergency braking be required on all commercial motor vehicles
- Hours-of-service rule needs to be reformed and restored
- New entrant carrier proficiency exam
- Obstructive sleep apnea rulemaking to be reinstituted
Part of the reason for this letter was due to the February derailment in Ohio.
New Export Facility at the Port of Milwaukee is Critical for Trucking
The new $40 million agricultural maritime export facility will be crucial for trucking as it will help in the transport of Wisconsin-grown agricultural products from regional farmers, growers and producers to markets.
This facility will be able to handle various agricultural commodities via truck, rail and international vessels, while also handling exports of Wisconsin-grown soybeans, corn and grain – per Transport Topics.
Did You Know: Freight Volumes Dropped in February
Freight volume has dropped in February, which also caused spot rates to dip.
The average van load-to-truck ratio fell from 3.0 to 2.5 – which means there were 2.5 loads for every van posted to the DAT One marketplace last month.
That ratio was 13.7 back in February last year.
Canadian Pacific and Kansas City Southern Merger Has Been Approved
The Surface Transportation Board approved the merger last Wednesday, which paves the way for the first single-line railroad linking the U.S., Mexico and Canada.
The merger company, which will now be called Canadian Pacific Kansas City (CPKC), is anticipated to begin operating around April 14th.
Rail shippers will be keeping their eye on this merger to see if any benefits, enhanced competition or more options will come from it.
CP and KCS will announce more details on the creation of the CPKC system in the next few days.
Check out our blog for more information on this merger.
Total U.S. Rail Traffic for the Week Ending March 11th, 2023
Total U.S. weekly rail traffic was 458,629 carloads and intermodal units, which was down 7.6 percent compared to the same time last year – per data from the Association of American Railroads.
Additionally, for the first 10 weeks of this year, U.S. railroads have reported a total volume of 2,296,099 carloads, which is just down narrowly at 0.1 percent from the same time last year. While intermodal units were down 9 percent compared to the same period last year.
Motor vehicles and parts, non-metallic minerals, and farm products (excluding grain and food) all posted increases compared to the same timeframe last year. Chemicals, grain, and metallic ores and metals all saw decreases.