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Focus: Transportation Management

Feature Article from Our Transportation Management Subject Area - See All
 

From SCDigest's On-Target E-Magazine

- Oct. 12, 2015-

 

Supply Chain News: BNSF About Three Bridges Away from Completing Parallel Track from Los Angeles to Chicago

 

Goal to is Take More Market Share from Trucks in Face of Sharp Declines in Coal Shipments; Other Carriers in Midst of Similar Projects

 

 

SCDigest Editorial Staff

 

BNSF Railway has its own idea of how to run a better railroad: just build a second track.

The rail carrier, acquired by Warren Buffet's Berkshire Hathaway in 2009, is not far from completing a second parallel track running 2200 miles between Los Angeles and Chicago - a move that could change the dynamics in the US freight sector.

SCDigest Says:

startUS rail carriers need to grab more market share from trucking to offset the steep declines in shipments of coal, which continue to fall sharply.
 
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The new track will bring a number of improvements to the popular rail service that moves containers from the ports of LA and Long Beach to the heartland, where they are generally moved then by truck to locations in the Midwest and even East Coast.

There is also some traffic back from Chicago to the West Coast, and when trains must pass, one must pull over on to side rails awaiting the other train to pass. Removing that constraint, experts say, will increase average train speeds, reduce total transit time, allow BNSF to move longer trains, and improve reliability.

And all that in turn may lead even more importers to decide that using rail out of Southern California is a better option than trucking the freight.

A BNSF train now can make the Los Angeles to Chicago run in 64 hours. Completing the twin-tracking will reduce that by as much as three hours, and be more reliable.

But the BNSF move is just part of a larger strategy by rail carriers to increase their share of long haul moves in the US via intermodal transport, generally meaning a combination of rail and truck transport, with the long haul being made via rail and the short hauls on either side transported by truck.

The analysts at FTR Transportation Intelligence estimate that rail has only about a 19% share of the 71 million trailer loads that travel 550 miles or more, generally considered the distance break point where intermodal can be competitive in price and service. So, there are billions of dollars of freight traffic potentially up for grabs - huge stakes for both truckers and rail carriers, with as much as $100 billion in freight spend potentially contested.

BNSF is not far from done with its second track on the LA to Chicago route. At the end of October, BNSF will have just seven more miles of line to build out of the 2200 total miles, though those seven miles involve three expensive bridge crossings that may not be completed until at least 2017.



(Transportation Management Article Continued Below)

 
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BNSF a few months ago said that "We anticipate completion of the Pecos River Bridge near Ft. Sumner, New Mexico in 2016. Besides the Pecos River section, the two other single-line segments are the Salt Fork River Bridge on the Panhandle sub in Oklahoma and the Missouri River Bridge on the Marceline sub in Missouri."

But BNSF is not the only rail carrier with similar ideas and investments. CSX, for example, is revamping a tunnel near Washington DC with twin tracks and enough height to handle two containers stacked atop one another. In the West, Union Pacific Corp. is laying a second track on its 760-mile line between Los Angeles and El Paso, Texas, and has just about 150 miles to go.

“We have significant opportunities to convert” truck cargo to rail, Katie Farmer, chief of BNSF's consumer group, told Bloomberg.com last week. “We've really narrowed the gap now between what was traditionally rail service and over-the-road trucking.”

And BNSF has a real advantage over Union Pacific in moving containers eastward from Southern California, having by far the most direct route.

It is interesting to note, however, that after a number of years of fast growth, intermodal traffic is up just 2.3% in 2015, according to the Association of American Railroads. That compares with a gain of 3.3% through August in the American Trucking Associations' Freight Tonnage Index, implying trucking is gain share over rail.

US rail carriers need to grab more market share from trucking to offset the steep declines in shipments of coal, which continue to fall sharply from what has traditionally been a large source of rail carrier carload volumes.


What are your thoughts on the impact of the second BNSF track. Do you see rail/intermodal gaining share from trucking over the next 10 years? Let us know your thoughts at the Feedback button (for email) or section (for web form) below.

 


   
 

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