Rail/Intermodal
Carload and intermodal traffic behaved seasonally in the latest week, dented by the Memorial Day holiday. Loadings for intermodal and carload each declined in line with seasonal expectations, with only a few exceptions like coal where volumes held steady.
Carload volumes likely will rebound quickly from the holiday decline as the underlying economy is in a slow growth pattern. Even in the holiday-shortened week, economically sensitive freight volumes outperformed the overall carload result. Grain volumes have steadily declined since the start of the year, though there is hope for stabilization as the year moves along. Coal continues to be steady despite the presence of stiff economic headwinds.
Intermodal traffic may not bounce back as quickly and sharply as usual because of labor disruptions at ocean terminals by the International Longshore and Warehouse Union. The union has periodically disrupted terminals along the west coast since June 2. It is uncertain how long this will continue but media outlets report the resumption of a queue of vessels beginning to form off the coast of Southern California. A lack of container availability at terminals could lead to lower available volumes for railroads to move inland.
West Coast dock workers have worked without a contract for nearly a year, and the saber-rattling has ramped up in recent months. Before the stoppages around Memorial Day, many workers did not report to work around the Easter holiday.
Public indications of progress in resolving the dispute have been limited, and it is unlikely the recent job actions have been helpful in moving the ball forward toward an agreement. Shippers likely will intensify efforts to shift cargo away from the west coast to avoid having their goods caught up in the crossfire.
Pennsylvania Dispute Resolved
A group of agricultural shippers in Pennsylvania resolved their dispute with Amtrak and Norfolk Southern over a proposed six-week suspension of rail service to their facilities. Kellogg and several other shippers filed before the Surface Transportation Board after they were notified by NS that they would lose fright rail service for six weeks because of a track work project on Amtrak’s Keystone Corridor near Lancaster, Pennsylvania, that would eliminate their ability to be served by the freight railroad.
Amtrak claimed in filings before the board that the shutdown was necessary to complete the track work in a timely and efficient fashion while maintaining passenger rail service through the area. Terms of the settlement agreement were not released, but for the shippers to seek dismissal, it would be assumed that freight service will continue or one of the railroads will reimburse for any additional costs incurred by the shippers if the shutdown does happen and sever access to their facilities.
