Peter Bradley is an award-winning career journalist with more than three decades of experience in both newspapers and national business magazines. His credentials include seven years as the transportation and supply chain editor at Purchasing Magazine and six years as the chief editor of Logistics Management.
Up in Prince Rupert, on British Columbia's Pacific Coast, developers are putting the finishing touches on the new Fairview Container Terminal. When it opens in October, it will offer importers a new point of entry into North America through a deep-water port that officials say is the continent's closest port to Asia.
Logistics service providers are already lining up to get in on the action. In May, COSCO Container Lines Americas Inc. signed on as the first steamship line to serve the new container terminal. But the driving force behind the development has been the Canadian National Railway (CN), which began drawing up plans in 2004 for a high-speed rail intermodal service from Prince Rupert to the U.S. heartland. CN says it will offer a service between Prince Rupert and Memphis, Tenn., for example, that features a 117-hour transit time.
Some 2,900 miles to the south, in Lazaro Cardenas, Mexico, a similar story is unfolding. Lazaro Cardenas is in the midst of a multiphase port expansion project aimed at boosting its container-ship capacity. Though the project's first phase has yet to be completed, the rail link is already in place. In June 2006, the Kansas City Southern railroad launched a daily intermodal service from the port to markets in the southeastern United States.
Similar developments are taking place along the U.S. East Coast. In February, the Union Pacific (UP) and Norfolk Southern (NS) launched a joint cross-country intermodal service from the East Coast container ports served by the NS—including Savannah, Ga.; Charleston, S.C.; and Jacksonville, Fla.—to Los Angeles. The Norfolk Southern has also begun work on a high-speed rail line (the "Heartland Corridor") that will move double-stacked containers from shipyards at Hampton Roads, Va., to the Midwest.
Whether they're located along the Atlantic or the Pacific, all of these ports—and the railroads that serve them—have their eye on the same prize: a share of the booming U.S.-Asian trade. Historically, Asian imports have entered the country through the ports of Los Angeles and Long Beach, where they were loaded onto trucks or trains that fanned out to destinations across the continent. But recent capacity and congestion problems at those ports have led importers and ocean carriers to seek alternatives—alternatives the railroads are eager to provide. Hoping to appeal to shippers frustrated by backups at the Southern California ports, they're out promoting their inland transportation services on the basis of convenience and speed. Carey Treadwell of Mallory Alexander International Logistics, a third-party service provider, notes that using the Port of Prince Rupert, for example, could cut 100-plus hours in transit time from the Asian port to the U.S. destination over shipments entering the country through Los Angeles or Long Beach.
A mixed track record
No doubt about it, the rails are riding high these days, their optimism fueled by booming global trade and shifting market dynamics on the domestic front. The same market forces that conspired to create a "perfect storm" for truckers (rising fuel costs, increasing highway congestion, and an intractable shortage of overthe- road drivers, to name a few) created favorable trade winds for the rails, allowing them to recapture some of the ground freight they had given up for lost.
As a result, intermodal volumes have marched steadily upward for the past few years. Last year was no exception. The major U.S. railroads handled nearly 12.3 million intermodal loadings in 2006, according to the Association of American Railroads. That was up 5 percent over 2005 levels; it was also an all-time high.
Demand for intermodal service will only grow if imports continue to flood into North America as predicted. Speaking at the Warehousing Education and Research Council's annual conference in April, J. Van Cunningham, assistant vice president of e-business for the Burlington Northern Santa Fe (BNSF), told his audience that the industry is projecting annual growth rates of 7 percent for several years to come. "That means we will double our volume every 10 years," he said.
But many question whether the railroads are up to the task. Despite billions in capital spending each year, rail capacity has been nearly as taxed as highway capacity. And there's little prospect of relief anytime soon.
Cunningham of the BNSF agrees that relief will be hard to come by. Adding capacity presents an enormous challenge for the railroads, he told session attendees. One problem is that the places where additional infrastructure is needed most are the places least likely to have space available: fast-growing metropolitan areas. Another difficulty is cost. A new intermodal facility can cost $200 million and a mile of track, $1 million. And even if a railroad manages to secure both the space and the funds, the lengthy approval and construction processes all but guarantee that it will be a long time before any rail project has much effect on the capacity shortage.
Getting better all the time?
Still, the outlook isn't all gloom and doom. At least one observer insists that rail intermodal service is improving. At another session at the Warehousing Education and Research Council's conference, Jim Gaw told his audience that service has become more predictable and, thanks to the railroads' ongoing investments, will continue to improve. Gaw is executive vice president of sales for the Hub Group, a major intermodal marketing company.
In his talk, Gaw offered a detailed rundown on the investments being made by the nation's largest rail carriers: the Burlington Northern Santa Fe, the Union Pacific, the Norfolk Southern, and CSX Intermodal, as well as a large intermodal wholesaler, Pacer International.
As for the BNSF, Gaw noted that the railroad improved train velocity by 7 percent last year and is looking to boost velocity again this year. In addition to building intermodal facilities in Seattle, Chicago, Los Angeles, and Memphis, the BNSF has nearly completed double tracking its transcontinental network. (The double tracking is aimed at improving both velocity and capacity.) Gaw, who noted that the "BNSF has consistently been the best service provider in the western part of the country," added that the rail will make another $2.6 billion capital investment in its system this year.
Like the BNSF, the Union Pacific has been digging deep into its pockets to fund system improvements. The UP is making capital investments of $3.2 billion this year, Gaw reported. Though the UP still lags behind the BNSF in service, Gaw expects performance to improve as the railroad finishes double-tracking its Sunset Route between southern California and Texas over the next two years.
Though it's not spending at the same level as the BNSF and the UP, the Norfolk Southern will also put some money into its system this year, with $1.3 billion in capital investments. Among other initiatives, the railroad (which Gaw calls the top performer in the East) has begun work on its Heartland Corridor project, which will enable doublestacked international maritime and domestic containers to be transported by rail between Hampton Roads, Va., and the Midwest by raising bridge and tunnel clearances and modifying other overhead obstructions. That project, which is expected to be completed in 2009, should add capacity, improve service, and reduce transit times to the Midwest by a day.
To the south, CSX Intermodal is pouring $1.4 billion into capital investments this year. "It is working hard at rationalizing its network," Gaw said. "It is focusing on adding capacity through greater efficiency. The trend line is improving."
Gaw also reported that Pacer International, which operates largely on the CSX and the UP lines, was working to address service shortfalls. Noting that the wholesaler has 27,000 domestic containers in service, Gaw reported that Pacer was focusing on better utilization this year, which means more capacity. He conceded, however, that its performance left room for improvement. Though Pacer's on-time performance record has gotten better, he said, "it is not where it needs to be."
Asleep at the switch?
As for the future, at least one advocate of intermodal transportation says a little help from the government would go a long way toward resolving some of the sticky infrastructure issues. In a March speech at the National Press Club in Washington, D.C., Gil Carmichael argued that public officials sat on the sidelines throughout the intermodal revolution that has taken place over the past quarter century, letting private investors shoulder the load. Carmichael, who is senior chairman of the University of Denver's Intermodal Transportation Institute and a former U.S. Federal Railroad Administrator, thinks it's now time for the government to step up and invest in intermodal connectors—linkages among the surface modes and connections at public ports, terminals, and the new "logistics centers."
But Carmichael worries that policy makers still do not understand the importance of intermodal and the steps they must take to ensure its success. The problem is rooted in the government's organizational structure, he explained. "By tradition, government agencies concentrate on each mode's infrastructure. Highway agencies build and maintain roads. Airport authorities build and maintain airports," he said, according to the prepared text of the speech. "Our 'infrastructure mentality' also causes government to view the modes in isolation, yet the intermodal system prospers by efficiently unifying them horizontally."
In his address, Carmichael lamented the general ignorance about freight transportation in general and in government, and the implications for public policy. "Among public officials at all levels of government—including many people in transportation agencies—the ignorance of freight transportation is almost universal," he said. "Some regional planning agencies have written transportation plans [that] devote more attention to bicycle paths than to freight transportation. … Ignorance about freight leads to bad decisions and missed opportunities. Nearly all recent progress and innovation in U.S. transportation … [is] attributable to action and investment by the private sector—not government."
Carmichael urged support of the railroads' proposal to Congress for a 25-percent tax credit for railroad capital investment. He argued that the current rate of capital investments by railroads to expand capacity and enhance intermodal service—some $5 billion to $8 billion a year— was inadequate, and that the tax credit would encourage additional spending. That spending could make an enormous difference in the intermodal freight picture, he added. "The huge North American rail system has been single-tracked in the last 30 years. This right-of-way is probably carrying only 25 percent of its capacity. If we go back to double- or triple-tracking, grade separation, and GPS, it would equal three times more capacity—and this right-ofway already is in place and paid for!"
Carmichael conceded, however, that he doesn't expect to
see much leadership on freight transportation issues from
Congress. "Congress still operates as if this were the 1950s,"
he complained. "Members talk intermodal but vote for traditional highway projects."
Nearly one-third of American consumers have increased their secondhand purchases in the past year, revealing a jump in “recommerce” according to a buyer survey from ShipStation, a provider of web-based shipping and order fulfillment solutions.
The number comes from a survey of 500 U.S. consumers showing that nearly one in four (23%) Americans lack confidence in making purchases over $200 in the next six months. Due to economic uncertainty, savvy shoppers are looking for ways to save money without sacrificing quality or style, the research found.
Younger shoppers are leading the charge in that trend, with 59% of Gen Z and 48% of Millennials buying pre-owned items weekly or monthly. That rate makes Gen Z nearly twice as likely to buy second hand compared to older generations.
The primary reason that shoppers say they have increased their recommerce habits is lower prices (74%), followed by the thrill of finding unique or rare items (38%) and getting higher quality for a lower price (28%). Only 14% of Americans cite environmental concerns as a primary reason they shop second-hand.
Despite the challenge of adjusting to the new pattern, recommerce represents a strategic opportunity for businesses to capture today’s budget-minded shoppers and foster long-term loyalty, Austin, Texas-based ShipStation said.
For example, retailers don’t have to sell used goods to capitalize on the secondhand boom. Instead, they can offer trade-in programs swapping discounts or store credit for shoppers’ old items. And they can improve product discoverability to help customers—particularly older generations—find what they’re looking for.
Other ways for retailers to connect with recommerce shoppers are to improve shipping practices. According to ShipStation:
70% of shoppers won’t return to a brand if shipping is too expensive.
51% of consumers are turned off by late deliveries
40% of shoppers won’t return to a retailer again if the packaging is bad.
The “CMA CGM Startup Awards”—created in collaboration with BFM Business and La Tribune—will identify the best innovations to accelerate its transformation, the French company said.
Specifically, the company will select the best startup among the applicants, with clear industry transformation objectives focused on environmental performance, competitiveness, and quality of life at work in each of the three areas:
Shipping: Enabling safer, more efficient, and sustainable navigation through innovative technological solutions.
Logistics: Reinventing the global supply chain with smart and sustainable logistics solutions.
Media: Transform content creation, and customer engagement with innovative media technologies and strategies.
Three winners will be selected during a final event organized on November 15 at the Orange Vélodrome Stadium in Marseille, during the 2nd Artificial Intelligence Marseille (AIM) forum organized by La Tribune and BFM Business. The selection will be made by a jury chaired by Rodolphe Saadé, Chairman and CEO of the Group, and including members of the executive committee representing the various sectors of CMA CGM.
The global air cargo market’s hot summer of double-digit demand growth continued in August with average spot rates showing their largest year-on-year jump with a 24% increase, according to the latest weekly analysis by Xeneta.
Xeneta cited two reasons to explain the increase. First, Global average air cargo spot rates reached $2.68 per kg in August due to continuing supply and demand imbalance. That came as August's global cargo supply grew at its slowest ratio in 2024 to-date at 2% year-on-year, while global cargo demand continued its double-digit growth, rising +11%.
The second reason for higher rates was an ocean-to-air shift in freight volumes due to Red Sea disruptions and e-commerce demand.
Those factors could soon be amplified as e-commerce shows continued strong growth approaching the hotly anticipated winter peak season. E-commerce and low-value goods exports from China in the first seven months of 2024 increased 30% year-on-year, including shipments to Europe and the US rising 38% and 30% growth respectively, Xeneta said.
“Typically, air cargo market performance in August tends to follow the July trend. But another month of double-digit demand growth and the strongest rate growths of the year means there was definitely no summer slack season in 2024,” Niall van de Wouw, Xeneta’s chief airfreight officer, said in a release.
“Rates we saw bottoming out in late July started picking up again in mid-August. This is too short a period to call a season. This has been a busy summer, and now we’re at the threshold of Q4, it will be interesting to see what will happen and if all the anticipation of a red-hot peak season materializes,” van de Wouw said.
The report cites data showing that there are approximately 1.7 million workers missing from the post-pandemic workforce and that 38% of small firms are unable to fill open positions. At the same time, the “skills gap” in the workforce is accelerating as automation and AI create significant shifts in how work is performed.
That information comes from the “2024 Labor Day Report” released by Littler’s Workplace Policy Institute (WPI), the firm’s government relations and public policy arm.
“We continue to see a labor shortage and an urgent need to upskill the current workforce to adapt to the new world of work,” said Michael Lotito, Littler shareholder and co-chair of WPI. “As corporate executives and business leaders look to the future, they are focused on realizing the many benefits of AI to streamline operations and guide strategic decision-making, while cultivating a talent pipeline that can support this growth.”
But while the need is clear, solutions may be complicated by public policy changes such as the upcoming U.S. general election and the proliferation of employment-related legislation at the state and local levels amid Congressional gridlock.
“We are heading into a contentious election that has already proven to be unpredictable and is poised to create even more uncertainty for employers, no matter the outcome,” Shannon Meade, WPI’s executive director, said in a release. “At the same time, the growing patchwork of state and local requirements across the U.S. is exacerbating compliance challenges for companies. That, coupled with looming changes following several Supreme Court decisions that have the potential to upend rulemaking, gives C-suite executives much to contend with in planning their workforce-related strategies.”
Stax Engineering, the venture-backed startup that provides smokestack emissions reduction services for maritime ships, will service all vessels from Toyota Motor North America Inc. visiting the Toyota Berth at the Port of Long Beach, according to a new five-year deal announced today.
Beginning in 2025 to coincide with new California Air Resources Board (CARB) standards, STAX will become the first and only emissions control provider to service roll-on/roll-off (ro-ros) vessels in the state of California, the company said.
Stax has rapidly grown since its launch in the first quarter of this year, supported in part by a $40 million funding round from investors, announced in July. It now holds exclusive service agreements at California ports including Los Angeles, Long Beach, Hueneme, Benicia, Richmond, and Oakland. The firm has also partnered with individual companies like NYK Line, Hyundai GLOVIS, Equilon Enterprises LLC d/b/a Shell Oil Products US (Shell), and now Toyota.
Stax says it offers an alternative to shore power with land- and barge-based, mobile emissions capture and control technology for shipping terminal and fleet operators without the need for retrofits.
In the case of this latest deal, the Toyota Long Beach Vehicle Distribution Center imports about 200,000 vehicles each year on ro-ro vessels. Stax will keep those ships green with its flexible exhaust capture system, which attaches to all vessel classes without modification to remove 99% of emitted particulate matter (PM) and 95% of emitted oxides of nitrogen (NOx). Over the lifetime of this new agreement with Toyota, Stax estimated the service will account for approximately 3,700 hours and more than 47 tons of emissions controlled.
“We set out to provide an emissions capture and control solution that was reliable, easily accessible, and cost-effective. As we begin to service Toyota, we’re confident that we can meet the needs of the full breadth of the maritime industry, furthering our impact on the local air quality, public health, and environment,” Mike Walker, CEO of Stax, said in a release. “Continuing to establish strong partnerships will help build momentum for and trust in our technology as we expand beyond the state of California.”