Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
The nation's leading shipper group said today it has asked the federal agency overseeing the nation's railroads to adopt new rules governing the practice of "reciprocal switching." Under reciprocal switching, a railroad, for a fee, transports the cars of one of its competitor and gives a shipper that is "captive" to one railroad for its traffic access to another that might not otherwise reach its facilities.
In a petition filed with the Surface Transportation Board (STB), the National Industrial Transportation League (NITL) asked the agency to require each of the four "Class I" carriers—industry lingo for the nation's four largest rails—to enter into "competitive switching agreements" whenever a shipper or a group of shippers can demonstrate that certain "operating conditions exist" to justify the arrangement.
According to the petition, shippers or their advocates must prove that a shipper's or receiver's
facilities:
are served by only one Class I carrier,
have no effective intermodal competition for the rail movements, and
have an already existing "working interchange" (or the potential develop one) with two class I carriers within a reasonable distance of the shipper's facilities.
The NITL proposal adds that a competitive switching agreement will not occur if either rail carrier can establish that the arrangement is either not feasible, unsafe, or would unduly hamper the ability of the carrier(s) to serve its shippers. The rail industry has 20 days to comment on the NITL proposal. The STB then has up to five months to determine if it will open up a rulemaking proceeding.
The proposal comes after two days of hearings late last month in Washington, DC, over rail competition issues. So-called "captive shippers" argued at the hearing—as they have for many years—that they are being victimized by monopolistic practices by the railroads that have led to inconsistent service and skyrocketing prices. They have asked Congress or the STB to reform the industry's practices.
Railroads argue that shippers generally have competitive service options for most of their traffic, that shippers have adequate redress before the STB, and that a move toward reciprocal switching would degrade service and add costs that will eventually be borne by shippers.
In a statement, NITL President J. Bruce Carlton said the proposal is not intended to re-regulate the rail industry but to restore balance between railroads and captive shippers. "The new approach we are seeking would be a first step toward correcting that imbalance," said Carlton. He added that, "no shipper has ever succeeded in gaining access to a competitive rail line in today's regulatory framework." Officials at the Association of American Railroads were unavailable for comment.
The hearings came amid a continued push by Sen. Jay Rockefeller, (D-W.Va.) to pass legislation calling for significant rail reform. Rail interests have called Rockefeller's actions tantamount to re-regulating the industry.
Despite his powerful position as chairman of the Senate Commerce Committee, Rockefeller acknowledged at the STB hearing that his efforts have scant support among other lawmakers and instead implored the STB to take action.
In a research note, Ed Wolfe, a long-time transport analyst and head of New York investment firm Wolfe Trahan, said an agency mandate of reciprocal switching would lead to an increase in competition, which would negatively affect rail pricing and margins over the long term.
Wolfe said, however, that reciprocal switching would be a better alternative for the rails than "bottleneck pricing," which would force the railroads to lower their rates especially on high-margin coal shipments.
The number of container ships waiting outside U.S. East and Gulf Coast ports has swelled from just three vessels on Sunday to 54 on Thursday as a dockworker strike has swiftly halted bustling container traffic at some of the nation’s business facilities, according to analysis by Everstream Analytics.
As of Thursday morning, the two ports with the biggest traffic jams are Savannah (15 ships) and New York (14), followed by single-digit numbers at Mobile, Charleston, Houston, Philadelphia, Norfolk, Baltimore, and Miami, Everstream said.
The impact of that clogged flow of goods will depend on how long the strike lasts, analysts with Moody’s said. The firm’s Moody’s Analytics division estimates the strike will cause a daily hit to the U.S. economy of at least $500 million in the coming days. But that impact will jump to $2 billion per day if the strike persists for several weeks.
The immediate cost of the strike can be seen in rising surcharges and rerouting delays, which can be absorbed by most enterprise-scale companies but hit small and medium-sized businesses particularly hard, a report from Container xChange says.
“The timing of this strike is especially challenging as we are in our traditional peak season. While many pulled forward shipments earlier this year to mitigate risks, stockpiled inventories will only cushion businesses for so long. If the strike continues for an extended period, we could see significant strain on container availability and shipping schedules,” Christian Roeloffs, cofounder and CEO of Container xChange, said in a release.
“For small and medium-sized container traders, this could result in skyrocketing logistics costs and delays, making it harder to secure containers. The longer the disruption lasts, the more difficult it will be for these businesses to keep pace with market demands,” Roeloffs said.
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
National nonprofit Wreaths Across America (WAA) kicked off its 2024 season this week with a call for volunteers. The group, which honors U.S. military veterans through a range of civic outreach programs, is seeking trucking companies and professional drivers to help deliver wreaths to cemeteries across the country for its annual wreath-laying ceremony, December 14.
“Wreaths Across America relies on the transportation industry to move the mission. The Honor Fleet, composed of dedicated carriers, professional drivers, and other transportation partners, guarantees the delivery of millions of sponsored veterans’ wreaths to their destination each year,” Courtney George, WAA’s director of trucking and industry relations, said in a statement Tuesday. “Transportation partners benefit from driver retention and recruitment, employee engagement, positive brand exposure, and the opportunity to give back to their community’s veterans and military families.”
WAA delivers wreaths to more than 4,500 locations nationwide, and as of this week had added more than 20 loads to be delivered this season. The wreaths are donated by sponsors from across the country, delivered by truckers, and laid at the graves of veterans by WAA volunteers.
Wreaths Across America
Transportation companies interested in joining the Honor Fleet can visit the WAA website to find an open lane or contact the WAA transportation team at trucking@wreathsacrossamerica.org for more information.