If you regularly ship railcars you’ve probably noticed slower transit times this year. Rail carriers experienced difficult weather over the winter, then they had equipment shortages, and then higher traffic volumes. At the recent Midwest Association of Rail Shippers summer meeting, everyone on the shippers’ panel talked about how the slow transit times are hurting their business. All of the railroad executives started their speeches by acknowledging that rail performance has been poor. As I listened to shippers and railroads it reminded me of the volume run-up in 2004 – 2008 when there was constant discussion of congestion, delays, and network capacity. That was also a time when the railroads pushed through strong rate increases.
RSI’s railcar tracking software can measure dwell times at the classification yards. We’re seeing a dwell times of up to a week at a number of yards. Some of this congestion will be resolved as improvements are made. For instance, the Norfolk Southern will complete a $160 MM expansion of the Bellevue, OH yard at the end of the year. However, some of the congestion is because of volume growth in different commodities and geographic areas and shipments going through those areas are going to be stuck with reduced service levels for the foreseable future. Given this new normal, some shippers will need to make changes as they review their cycle times and business needs.
In the months ahead it will be important to have clear reporting on your rail fleet cycle times, where delays are occuring, and cars that require expediting. Contact us to learn more about our railcar management software or fleet management services.