Monthly Archives: July 2013

Container Freight Volume Increases Reflect Retail Optimism

Investors who are looking for early clues to the performance of retail stocks have been encouraged by recent growth in the amount of goods being transported in the US by road and rail. Based on marked increases in the volume of freight, investors see this as an important metric for gauging retail sales for the coming holiday season, as the major stores across the country stock their inventories for the end-of-year sales that they are forecasting.According to figures released by the Association of American Railroads, intermodal freight volumes spiked by 4% during the first two weeks of August this year. This amounts to 260,000 units, an increase of 6.1% on the same time last year. Overall, rail traffic was up by 2.7% during this period, with a 0.5% fall in bulk cargo and a significant dip of 11.4% in grain shipments. This underscores the importance of intermodal freight to the viability of the rail networks as more containerized freight is being transported across continental America, due to the increased efficiency resulting from upgrades to the network in recent years. Investors are looking to the increases in containerized freight as an indication of increased consumer demand with 72% of the cargo… read more »

China Opens More Intermodal Connections with the West

German rail operator, Deutsche Bahn AG, has extended its reach into an area that is currently being dominated by the giants of shipping like A.P. and Moeller-Maersk, with the inaugural freight train trip on its newly opened Hamburg to Zhengzhou line. The train delivered 51 containers after crossing two continents, traveling through China, Kazakhstan, Russia, Belarus, Poland and finally, Germany on its 10,214 km journey. Most significantly, the trip covered the distance in only 15 days, around half of the time that the same trip from Zhengzhou to Hamburg takes by sea.This first trip was organized by the Zhengzhou International Land Port Development and Construction Co. in conjunction with DB Schenker and is intended to take advantage in the recent shift of production intensive industries to the Chinese hinterland where they are more accessible to Western connected transport networks. This latest freight route builds upon those that have already been established to transport goods for the automotive and electronics industries. DB Shenker is an Eastern branch of Deutsche Bahn with 45 offices and 5,000 employees that is focused specifically on the German-Chinese trade route. Currently there is $87 billion in exports from Germany to China annually, with $77 billion going… read more »

Container Ship Fleets Continue to Expand in Spite of Oversupply Warnings

The world’s fleet of container ships has expanded quickly in the past few years, and now the supply of shipping outstrips the amount of cargo that is destined for the seaways. A large part of the reason for this is the over-estimation of the potential growth in demand for global container shipping that was widely predicted prior to the 2008 Global Financial Crisis (GFC.) Another contributing factor has been the move by many sea freight lines to move to larger ships with a massive capacity. Since the GFC, the capacity of the average container ship has increased by 27%. At the same time, a shrinking global economy saw a decline in demand, and the lower cost per ton that is on offer from these bigger ships has squeezed many of the smaller ships off the sea lanes, and concentrated the transport of containerized cargo into fewer hands. The dominance of the biggest companies in the industry looks set to continue as three of the largest lines in the world, Maersk, CMA CGM and Mediterranean, have formed a coalition to work together to reduce costs and integrate their services more efficiently. In the challenging fiscal climate of the current global economic… read more »

Georgia Governor Signs Off on Inland Intermodal Port

Cordele Intermodal Services (CIS) has entered into a deal with the State of Georgia to ensure a 200-mile rail link between the Port of Cordele and the Garden City Terminal that is operated by the Georgia Port Authority (GPA). Georgia Governor Nathan Deal signed off on the agreement early in July, and was upbeat about the prospects for local growth that would result from the plan. At the signing, he defined the benefits of the deal, saying, “By more efficiently connecting businesses in this region to the global marketplace through our deep-water ports, the Cordele Inland Port is now part of that broader effort, supporting jobs and future development”. The new partnership provides 38 weekly shipping services that will connect Cordele with the world market. This is expected to significantly expand the exposure that Georgia businesses can expect, with the increased freight efficiency that will result from the development of the rail link. The CIS facility is located conveniently close to several main arteries including Interstate Highway 75, as well as Georgia Highways 280 and 300 which makes it an excellent location for the creation of a rail-to-road terminus that could potentially give the Southern states greater access to the… read more »

CSX Invests in Expanding its Intermodal Future

One of the biggest players in the rail freight game in America, CSX has its eye firmly fixed on taking advantage of the contemporary shift from truck to rail. Increasing fuel prices and governmental pressure to significantly reduce carbon emissions has seen many logistics handlers looking for more cost effective ways to move their goods around the country. At the moment the lion’s share of freight is still transported on American roads, but recent redevelopments of the intermodal rail networks are beginning to challenge that supremacy. Looking to the future, CSX understands that as fuel costs continue to rise, there will be a point at which truck transport is no longer cost effective for many types of cargo, and will naturally shift to the less expensive, environmentally-friendlier rail networks. At the same time, CSX understands that trucks aren’t going to disappear overnight like the dinosaurs, and they have implemented plans to better integrate the use of rail in conjunction with trucks, by investing in the highway to rail infrastructure that makes train transport a viable option for moving freight quickly and efficiently. They have also made moves to increase the capacity of their terminals, to enable them to handle larger… read more »

Do Obama’s New Fuel Standards Overlook the Obvious?

President Obama’s ambitious Climate Action Plan has focused on increasing the efficiency and reducing the carbon emissions of heavy duty vehicles (HDV,) and while this is a laudable goal, it has many in the logistics industry wondering whether it is achievable. It has also been criticized by the intermodal freight industry for overlooking an obvious solution to the fuel efficiency of transporting cargo across the United States- the intermodal rail networks. Currently, the vast majority of freight in America travels by truck, and although there have been significant strides towards improving the fuel efficiency of that transport sector, these measures are already producing almost the maximum amount of improvement in the energy consumption of transporting cargo across the country. A recent study by the American Council for an Energy Efficient Economy found that the strategies that have been employed by trucking companies to date, like optimizing load weights, reducing speeds and improvements in freight system efficiency, have contributed significantly to the more efficient trucking of cargo, but still fall well short of the 50% improvement in fuel efficiency that has been targeted by the Presidential Climate Action Plan. While the improvements to the fuel efficiency of HDV are approaching the… read more »

The Port of Tacoma is Ready for the Intermodal Future

The Port of Tacoma has been investing in the development of its infrastructure since the 1980s, when it first moved towards becoming an intermodal hub. In the intervening decades, much of that infrastructure has needed remodeling and renovation, never more so than at the present, as there is a global effort to develop a worldwide intermodal network. In order to keep pace with these global developments, the Port of Tacoma has initiated a low key program of updates and renovations of its facilities, intended to make it a competitive hub for years to come. The core of these renovations revolves around the increasing sizes of the container ships that regularly travel the seaways. Whereas the ships that visited the port thirty years ago were usually 16 containers wide, modern freighters are commonly 24 containers wide. This has necessitated the installation of larger container cranes, for loading and unloading the larger ships that will be visiting the port in the years to come. At the same time, they are continuing to develop their sister facilities at Sitcum Waterway that handles break bulk cargo, which has increased by 68% in the past year, outstripping the expectations for growth in the next decade.… read more »