CSX Transportation is reviewing shipper files to help businesses move freight from trucks to trains, a strategy that benefits the railroad as the trucking market tightens. Maryclare Kenney, the company’s SVP and chief commercial officer, said the railroad will look at truckload files confidentially and show shippers where intermodal lanes are available. This approach aims to make shippers feel more comfortable shifting cargo during a time of high rates and limited capacity.
High diesel prices and a shortage of truck drivers are driving the change. According to the U.S. Energy Information Administration, diesel fuel was $6.28 per gallon as of October 19, up from $2.66 the previous year. Norfolk Southern and Union Pacific have also reported increased business from similar shifts, with Union Pacific citing fuel savings as a key factor for its success.
CSX is seeing the strongest results with certain commodities. Chemical volumes rose 7% year-over-year in the third quarter due to truck-to-rail conversions, and waste and petroleum products offer further opportunities. Forest products have high truck utilization, yet demand has not yet improved despite the railroad’s efforts to capture market share in that sector.
CSX Transportation is working closely with shippers to capture truck-to-rail conversion opportunities, Maryclare Kenney, SVP and chief commercial officer, said in a Q3 earnings call. The railroad is reviewing shipper truckload files to provide service and cost comparisons for intermodal opportunities. “We’ll look at their truckload file confidentially for them. We’ll evaluate the truckload file and show them where there’s lanes that are opportunities for intermodal conversion and then give them visibility to what service looks like in those lanes,” Kenney told analysts. The fuel savings for shippers from using rail is enabling Union Pacific to win more business, EVP and CFO Jennifer Hamann said on the railroad’s Q3 earnings call last week.
