Commerce Express Weekly Road Map:
May 2nd, 2023
Keeping you informed on the latest news/insights in our industry.
Commerce Express Blog
The floodwaters of COVID-era circumstances have mostly receded on the shores of supply chains. However, despite market conditions at a lower tide, waves will crash in from time to time. A reminder that the last two years wasn’t a blip of blunders that the industry has now waded past, but rather a preamble to post-pandemic logistics.
Trucking Update
$160 Million in Federal Funds Aimed at Reducing Truck Pollution at U.S. Ports
The Federal Highway Administration (FHWA) has rolled out a grant program, the Reduction of Truck Emissions at Port Facilities, that is a five year, $400 million program from the infrastructure bill that was signed into law in 2021.
The FHWA plans to open the application process for $160 million in federal funds via the program for fiscal years 2022 and 2023. This funding will go towards projects that will help reduce emissions from idling trucks.
Southwest U.S. Freight Outlook
Truck freight shipments in the Southwest rose 5 percent sequentially in the first quarter and 14 percent year-over-year – according to data from U.S. Banks first quarter freight payment index.
As reports show, the Southwest was the only area where volumes and spending both increased.
These increases are largely due to the growing truck-transported trade with Mexico and more activity at the Port of Houston.
Additionally, the largest U.S. land port, Laredo (located in Texas), saw more than 7 percent increase in truck traffic, based off preliminary data. In addition, Port Houston saw total volumes handled in January and February up on a year-on-year basis, before falling in March.
Trucking Companies Will Be Required by NS to Make Appointments at Memphis Terminal
In an attempt to move cargo faster, Norfolk Southern’s Memphis terminal will require trucking companies to make appointments when retrieving and dropping off ocean containers.
This is expected to begin this Wednesday, the railroad stated.
The appointment window is an hour long but has a 30 minute grace period on each side. Meaning, if a trucking company schedules an appointment for 2pm, the driver will be able to arrive between 1:30pm and 2:30pm.
Additionally, this appointment system is expected to be introduced at the NS terminal in Austell, Georgia (just outside Atlanta), before the end of this year.
Did You Know: Railroads and Unions Continue to Ratify Labor Agreements
Norfolk Southern and the SMART-TD recently reached a scheduling agreement for train conductors. Not all of the details are currently available, which still needs to be ratified by union members, but some provisions include:
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- Technology driven enhancements that will help assist in scheduling and weekly assignments
- Up to seven days of paid sick leave
- When away from home, employees will receive an increase in reimbursement for meals, plus additional compensation
- Tools and work-rule changes that provide employees more transparency and flexibility
Rail Update
California Air Resources Board Passes Rule to Cut Locomotives’ Emissions Significantly
The California Air Resources Board (CARB) has passed new regulations, which they say is in an effort to reduce the emissions of locomotives operating throughout California.
Both passenger and freight locomotives in California will need to move away from diesel locomotives and towards “zero-emission configurations,” which CARB defines as a zero-emission locomotive or zero-emission capable locomotive.
Two notable deadlines for these rules, which go into effect in 2024:
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- Switch, industrial and passenger locomotives built in 2030 or after will need to operate in zero-emissions configurations. Locomotives built in 2035 for freight linehaul operations will need to comply with the zero-emissions configurations
- Locomotive idling will be limited to 30 minutes, except for certain circumstances including maintaining air brake pressure or providing heat or cooling to the locomotive cab. Additionally, locomotives that operate in California will be required to register with CARB and report annually their activity, emission levels and idling data.
Union Pacific Making ‘Significant Progress’ Regarding Their Embargo Use
Last year, the Surface Transportation Board required Union Pacific to explain their reasons for their significant use of embargoes and just recently UP provided an update on their progress on embargoes, inventory management and system fluidity.
In their report, UP details the ‘significant progress’ the Class I railroad has made, including:
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- Seeing a 65 percent reduction in customer embargoes when comparing January through April year-over-year data
- UP is averaging less than five embargoes a week and in the last eight weeks have been averaging four per week
- Customers are now able to view data impacting their shipments via enhanced Shipment Management Tools that provides customers with more information to effectively manage their inbound inventory pipeline
- Any new serving yard or congestion embargoes that are issued by UP now have a 30-day expiration, instead of the Railinc default of one year
Weekly Rail Traffic for the Week Ending April 22nd, 2023
- Total U.S. weekly rail traffic was 480,457 carloads and intermodal units, down 3.5 percent compared to the same time last year – per the AAR. Additionally, U.S. weekly intermodal volume was down 10.8 percent compared to the same time last week.
- North American rail volume for the first 16 weeks of this year was down 3.8 percent compared to last year.
- Canadian railroads reported a 0.5 percent increase on cumulative rail traffic volume of carloads, containers and trailers for the first 16 weeks of this year. While railroads in Mexico reported a 2.4 percent increase for that same period.
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