Rail freight is experiencing industry-wide logistical setbacks due to underdeveloped infrastructure — here’s how to remain profitable anyway.
Earlier this year, the Department of Transportation’s Surface Transportation Board (STB) told Class I railroads that they have become “increasingly concerned about the overall state of rail service.” Among other reasons, STB cited declining service standards, rising dwell times, and generally poor performance metrics as causes for their concern, with many of these issues stemming from infrastructural problems in Class I railroads. Put simply, disruptions in service are affecting the country’s entire rail network.
Research suggests that these types of incidents are regularly plaguing rail freight in the U.S. In fact, the STB found that the average number of cars in revenue service that have not moved in 48 hours or more has increased in recent years. While Class I railroads work to surmount the issues facing them and develop proactive shipping strategies so that they can better navigate infrastructural challenges, it’s up to shippers and their business partners to solve logistical issues in order to avoid wider supply chain disruption.
Issues of Infrastructure
As the industry works to address these issues, the STB has requested written responses from carriers in order to gain greater visibility into issues afflicting their networks. It also asked them to outline their most pressing service quality problems, including locomotive availability, employee resources, and local service performance.
A number of common themes colored these responses, with many complaints citing winter weather conditions on main lines and frequent congestion in key corridors as the culprits of systemic delays. Many carriers also said that issues with electronic logging devices (ELD) for motor carriers frequently cut long-haul dray capacity.
For organizations as complex as Class I railroads, a single misstep can have much greater repercussions. Hiccups at any one point of rail logistics’ procedural steps — assembling crews, prepping rail cars, determining and maintaining terminal and line haul capacity — can cause the whole system to experience major disruptions. What’s more, the North American rail network is highly interconnected — and that means that service issues are rarely isolated incidents.
In turn, these systemic problems can have an effect on shipping throughout the country. According to data from the Association of American Railroads, Class I rail freight accounts for some 69% of rail freight mileage in the country, and 94% of all rail freight revenue. As a result, a problem at one point in the rail freight network is likely to have a ripple effect felt across the nation — logistically and economically.
Solutions for Shippers
Infrastructural issues throughout Class I systems pose problems for shippers who rely on rail freight service, from supply chain disruption to rising costs. That’s why shippers need to work with highly experienced domestic transportation partners who can navigate the ins and outs of an increasingly complex rail freight landscape.
With more than 20 years of industry experience under our belt, Primary Freight has the requisite experience, infrastructure, and partnerships in place to help you maintain delivery deadlines and remain profitable. We work closely with your team to create custom solutions, designed around your unique goals and budgetary considerations. The rail freight marketplace may be experiencing logistical setbacks, but that doesn’t mean your business has to.
Get in touch to learn more about how we can help drive your business forward — (800) 635-0013.