Freight News:
Rail industry wants to keep infrastructure, capacity projects on track
The issues that are before the Surface Transportation Board — reciprocal switching and proposed acquisitions — are important to rail shippers and the broader industry in 2022.
But the allocation of federal grants for infrastructure projects, regulatory discussions on crew staffing and automated track inspections, and efforts to relieve supply chain congestion, especially at the ports, also are weighing on the minds of those representing rail and intermodal interests.
“The freight rail industry remains focused on providing reliable, safe service to customers as the nation works to restore the supply chain,” said Jessica Kahanek, spokesperson for the Association of American Railroads. President Joe Biden’s “administration has been and should continue to bring the right people together to find solutions and drive action across the logistics chain.”
Regulatory matters before STB, the Federal Railroad Administration and other government agencies are among the prominent issues facing the industry in 2022. Train crew size mandates, reciprocal switching and potential increases in truck size and weight are issues that the rail industry is keeping track of this year.
“For short lines to play our role in the supply chain, help with the environment and improve safety in the transportation system by taking trucks off the road, we need to not be unnecessarily hindered by prescriptive regulations that would limit our innovations and flexibility,” said Chuck Baker, president of the American Short Line and Regional Rail Association (ASLRRA).
Said Kahanek, “AAR and its members continue to urge policymakers against mid-crisis regulations that would undermine fluidity of the network, such as forced access, and trigger significant, unintended consequences.”
But there are other matters beyond regulatory ones that the rail industry would like to see progress and continued support on in 2022.
For starters, the freight rail industry will continue to tout the environmental benefits of freight rail and compare those benefits against trucks. Also expect the freight rail industry to expand sustainability programs, especially those aimed at reducing the fuel emissions of locomotives.
“We’ll continue to tell our story and spread the gospel about the environmental benefits of freight rail. That permeates across all our issues, whether as a reason to support programs like CRISI [a federal grant program] or as a reason not to hamper freight rail with unnecessary regulations,” Baker said.
The industry will also be watching how public-private partnerships and publicly funded projects benefit freight rail. For example, just this week Alabama announced plans to build out a freight corridor to the Port of Mobile that will also receive support from Norfolk Southern (NYSE: NSC), while the U.S. Maritime Administration recently awarded over $241 million in grants supporting port projects aimed at improving freight flows, including the on-dock rail project at the Port of Long Beach.
“With the signing of the bipartisan infrastructure package, freight railroads look forward to working with federal partners at USDOT on projects that enhance long-term competitiveness and bolster safety,” Kahanek said. “Technology has created significant, demonstrated safety gains and the industry must be able to continue building on those successes.”
Said Baker, “As an association we’ll be focused on the annual appropriations process to support additional discretionary investment on top of the amounts guaranteed in [infrastructure package]. There is no shortage of needs and opportunities out there for short lines!”
Intermodal interests seek to keep freight moving in 2022
Intermodal companies are also eyeing pending regulations and federal and state mandates in 2022.
Regulatory activity at STB and the Federal Maritime Commission, the status of the Ocean Shipping Reform Act of 2021 and independent contractor/employee classifications — including the outcome of the California Trucking Association’s filing with the U.S. Supreme Court — are among the regulatory issues that intermodal interests are keeping an eye on in 2022, according to Joni Casey, president and CEO of the Intermodal Association of North America.
Other issues are an ongoing need for data standards and freight visibility, which could assist with supply chain challenges, and ensuring intermodal equipment capacity, Casey said.
TRAC Intermodal President Daniel Walsh said there are three areas TRAC is watching this year: chassis procurement and manufacturing, levels of consumer spending and chassis dwell times. Chassis dwell times consist of the time period in which a container and chassis are out on the street without returning to port.
“Gaining access to chassis parts has also been a challenge due to supply limitations, shipping delays and regular COVID-19-related shutdowns, which curtail work crews and limit production,” Walsh said.
Access to new chassis and reducing chassis dwell times weighed on intermodal companies in 2021, as the lack of available chassis exacerbated supply chain congestion and lengthened dwell times at inland terminals. To relieve these constraints, stakeholders have been seeking to invest in chassis and encourage efficient turnaround times.
“With countervailing and antidumping duties on chassis from China firmly in place, one of the areas TRAC is closely monitoring is how well [intermodal equipment providers] and certain ports are able to fulfill orders for new chassis from both overseas and domestic manufacturers,” Walsh said. “Early signs indicate ongoing challenges as the manufacturers struggle to deliver new assets on time, as specified and at the agreed cost.”
Meanwhile, street dwell times have increased from three to five days in pre-pandemic times to 10 or more days, according to Walsh, due in part to a lack of available chassis.
“We have numerous initiatives underway to address this with our customers and we will track the effectiveness of all of those in 2022,” Walsh said.
As for consumer spending levels, Walsh expects them to remain brisk.
“We will keep a watchful eye on the impact the latest virus variants have on e-commerce spending trends should consumers retreat again from retail stores, restaurants, travel destinations, etc.,” Walsh said. “COVID-19 has accelerated the adoption of e-commerce among consumers, who enjoy the ease of buying, the speed of delivery and other benefits and conveniences. E-commerce is here to stay, and I think we’ll see consistent growth for years to come.”
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Editor: Joanna Marsh