A Bright Spot in Transportation
Posted on Jan 25, 2008 - 12:54am by Wayne Weisser in Trucking
There’s no argument that Railroads can ship freight cheaper and some freight moves better by rail than by truck. Bulk commodities like coal, oil and even large quantities of grain. Actually, large quantities of anything can move better by rail. Part of the problem is the railroads are suffering some of same problems as trucking, its infrastructure is old and they have a driver shortage! And until recently rails had too much freight and trucking was taking up the slack.
Eric’s Freightdawg blog points this out
All Michael Ward (CSX CEO) had to say was “another great quarter and another great year”.
It’s good to be a railroad. But some things still move better by truck, like produce and… not much else. Thanks to Intermodal, anything that can be loaded into a trailer, can be loaded onto a train.
But you have to get that trailer from the train yard to the store. Werner and other companies are figuring that out. From Trucks at Work blog
“By far, the most challenged of our asset-based divisions in 2007 was our medium-to-long-haul Van fleet, which is our irregular route, 48-state, solo driver fleet,” the carrier continued. “While the current weakness in freight volumes can be attributed to recent trends, freight volumes over the past decade in the medium-to-long-haul Van fleet have been affected by several factors.”
Those factors include:
- The continuing decline in length of haul due to the regionalization of freight by the big box retailers.
- The rapid growth of imported products shipped through ports using ocean containers that carry goods intact into the domestic U.S. Although a very high percentage of these ocean containers are currently transported empty back to the ports, this cost structure is beginning to change as railroad and ocean carrier contracts are renewed. This change could lead to more transload opportunities from the ports if freight shifts away from intact container shipments to truckload trailer shipments.
- Growth within the intermodal sector.
Thanks to the loss of manufacturing jobs we’ve outsourced our entire economy so the only thing that’s needed are a few delivery trucks. The entire article is worth a read and actually shows Werner as being pretty smart in the different ways they’re using their fleet. If nothing else, Werner is adapting to the changing way that things are being shipped.
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the way things change this happened before an the same thing that happened before will happen again the rail will out grow the rails an start loosing things.things will go back too trucks until it starts all over again
Maybe I’m just looking at this whole change in the face of trucking in a far too optimistic way but, even though it seems that demand for long-haul trucking services will probably continue to diminish, it seems that short-haul trucking could well offer increased opportunity. For as long as I’ve been in this business I’ve accepted, as fact, that good short-haul jobs are few and far between; the potential is upon us for this to change.
Lot’s of people, myself included, would probably be perfectly happy sleeping at home every, or at least most, nights. Of course, for this to happen, the “good job” part of it, that is, short-haul freight rates need to improve to the point that companies and O/O’s can be profitable without cutting costs at the expense of safety and benefits.
With the development of Super Corridors, and trends in general, eventually bringing an increase in containerized freight being moved by rail into specific geographic regions, and needing to be moved from railhead to ultimate customer, an opportunity exists to shape new rates and tariffs that’ll support “good local trucking jobs”.
Still, this part of the Werner statement can’t be ignored:
“(The) cost structure is beginning to change as railroad and ocean carrier contracts are renewed. This change could lead to more transload opportunities from the ports if freight shifts away from intact container shipments to truckload trailer shipments.”
I suspect, but don’t know for sure, that trans-load shipments, while likely still subject to new port fees/taxes might serve to circumvent the requirement that trucks servicing the ports of L.A. and Long Beach meet restrictive environmental regulations.
These regs are going to result in far higher per-shipment rates, for a number of reasons, and it’s POSSIBLE that trans-loading shipments might result in enough competition to keep container freight rates from escalating too far. Don’t know; just a guess.
The Trans-load part is very vague, probably for a reason though because things are going to change, but no one knows exactly how. They are leaning toward more rail but railroads had problems with capacity and infrastructure a few years ago and that overflowed to trucking. If they take this time to fix those problems, the next boom may not benefit long haul trucking as much as it did last time.
It could go either way, if the short haul jobs increase, you’re going to have a ton of long haul drivers looking for work and that’s tempting to employers to lower the wages.
over capacity is right now holding down pay an untill the co.’s learn that they need to slim down the size of the fleet an let o/o take the overflow pay will go down an stay down. I have seen something that would teach me better but they let pass. I watch one of the lager company’s get an award for best carrier an then have the contract cut because someone else would haul for less an then they had to go back an try to get the freight back cause they have too many trucks
It’s true that changes like this will likely lead to long-haul drivers looking for work and a larger supply of qualified drivers could lead to a situation in which drivers pay doesn’t meet the “good job” threshold. The key there, though, is “qualified”. If I were the one hiring drivers for my new inter-modal service I wouldn’t give a second look to anyone lacking a HazMat endorsement with current 49 CFR 172.704 HazMat certification. Depending on the location, tanker and doubles endorsements, with any applicable certifications might also be a requirement.
The fact that containerized freight includes a wide variety of substances, packaged in a variety of ways, I don’t see any chance that the HazMat, and probably the tanker, requirements be met by any prospective driver. This alone will reduce the supply.
Additionally, because of security concerns, deeper background checks than those required for a HazMat endorsement might be required at the “inland ports” envisioned in the Super Corridors. I know this to be the case at the Port of Anchorage and I can imagine that it’s more likely security concerns will be of higher, rather than diminishing, importance in the future. All this further limits the pool of “qualified” candidates.
This isn’t pie-in-the-sky stuff. Other than the doubles endorsement and certification, and that’s required in some situations, every other qualification I mentioned is currently required by every carrier contracted to haul freight in and out of the Port of Anchorage, unless they’re hauling their own freight; even then it’s required on a situational basis.
I’m not normally what you’d call a “big union supporter” but, in this case, there might be good reasons to get the various applicable unions involved. Just a thought.
I think Hazmat style driver verification should be on all CDL’s. It was a hassle and it costs money, but I have no problem with doing it. They need to tune the system a little, for example there was a fireworks hauler there that was on his 5th agency to go through the same process.
I have never been asked to produce my CDL when picking up hazmat. I’m hoping that more hazardous loads do require you to produce it. The fact you have the ability to a haul a massive amount of anything should require some background checking.
I just found your blog while researching the potential ‘strike’ and stumbled upon this article.
It’s nice to see due credit given to the rails, and intermodal, in such a way as not to disparage.
My position with one of the ‘Big 4′ rail intermodal companies is to formulate and implement a strategy to grow our business through partnerships with motor carriers. Trust me…we aren’t fools, we know darned well that we cannot succeed without the truckers and now we realize that, to some degree, the inverse is true as well. By offering trucking companies the ability to say ‘Yes’ to freight that they might previously turned away due to lack of infrastructure or because they simply do not want to send a driver into a backhaul market just to dead-head him home, we can help to expand a small local or regional carrier into larger markets. Even more, during the hustle and bustle of the busy season, we can help to service the less time-sensitive freight freeing the truckers to allocate their resources where they are most needed.
Companies such as J.B. Hunt, Werner, Schneider and Swift have become heavy users of intermodal, but smaller companies such as Marten Transportation, U.S. Xpress, and Arnold Transportation are using it as well. In addition, our company contracts with 400 owner-operators who provide dray service to and from our terminals on a daily basis.
I could not empathize more with the challenges the that trucking industry now faces; rising fuel costs, increased regulation, H.O.S. changes, competition from cross-boarder trucking, tolls, taxes….the list goes on and on. And, to top it off, what appears to be a general lack of respect for the crucial service performed by truck drivers.
My paycheck comes from trying to find ways to make my company more profitable, but the personal satisfaction comes from developing ways to do so that will benefit an industry and individuals with whom I have a personal history.
Hang in there, and know that there are an awful lot of us out here rooting for your success.