Rail data shows reality of current supply chain

Data from ITS Logistics shows this frightening freight reality.

The tapering down in freight volumes has impacted not only the railroads but trucking, as well. This has created a truck driver dislocation for some. In response to the decrease in West Coast freight, ITS told American Shipper the company is “rebalancing” its workforce — moving away from California and moving to areas where there is growth.

“We are actively hiring in Texas and the Midwest to respond to the increasing need to move containers coming into Houston, Southeast and Midwest,” said Paul Brashier, vice president of drayage and intermodal at ITS Logistics. “Trucking is needed for both container pickup at the ocean terminals and rail ramps. We’ve also seen an increase in containers traveling inland into Chicago, Dallas and Atlanta.”

This chart from ITS Logistics for April shows the current reality of freight demand.

Not only can you track the rail freight migration out of the East Coast and Gulf ports with this chart, you can also see how this diversion has impacted inland rail flows. Inland rail originating from the West is down as a result of the precipitous drop in Pacific Ocean region flows. The pipes of trade do not lie when it comes to telling the story of freight. The noise of historic volumes masking the decline in freight is over.

“East Coast and Gulf ramp and terminal investment into infrastructure continues to seriously eclipse their west coast counterparts,” Brashier said. “The superior private / public partnership in these regions have led to investment and modernization into the surrounding commercial real estate, terminal footprints, equipment and ramps to handle larger volumes of container traffic supporting existing BCO’s.”

Brashier said they are also seeing a significant uptick of new industries starting operations in those regions.

Drilling down into the Atlantic Ocean region data, you can see the increase in volumes out of the Ports of Savannah and Baltimore, which have been in a race of rail expansion. While the Port of New York and New Jersey dominates the field, the uptick in demand for Savannah and Baltimore is there.

Normally, efficiency is a key strategy when revenues are declining, but with precision railroading under the microscope, extending the lengths of trains is not a solution.

While there is uncertainty as to how much trade will go back to the West Coast once a deal between the Pacific Maritime Association and the International Longshore and Warehouse Union is signed, the one thing you can bank on is the flow of trade has thinned out. Until then, we’ll just have to watch the pattern of trade diversion.