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.
If E. Hunter Harrison, CEO of Canadian Pacific Railway, wants to steer his unprecedented $28.4 billion transcontinental merger proposal with Norfolk Southern Corp. through a phalanx of hostile shippers, skeptical U.S. and Canadian regulators, fellow railroaders who view him with a mix of awe and concern, and a chilly Norfolk Southern board, he will have to step into the shoes of the shippers. That, it appears, is what Harrison plans to do.
As part of the unsolicited stock-and-cash offer, made public Tuesday evening after more than a week of speculation, Calgary, Alberta-based CP has proposed that, should the combined company fail to provide adequate service or offer competitive rates, it would allow another railroad to operate from a point of connection over the combined company's tracks and into its terminals. In addition, shippers of the combined company, which would constitute the continent's largest rail network, could decide where their freight could interline with another railroad along that carrier's network. CP also said it would end a practice in the U.S. under which an origin railroad dictates where it interchanges a customer's freight with another carrier, even if other interchange points are more advantageous to the shipper. The practice is illegal in Canada.
The combined two-part proposal is a "new approach" to track and terminal access "that will change the status quo in U.S. rail transportation," CP said in a statement last night. The first part "provides an unprecedented alternative" to shippers, who've long complained about the inability to access another railroad if they felt their primary carrier offered inferior service, was gouging them on rates, or a combination of the two.
It is also, on the face of it, an attempt to win over aggrieved shippers and to mollify regulators on both sides of the border that must approve the deal. U.S. regulators have watched the country's rail industry shrink to four east-west "Class I" carriers since it was deregulated in 1980. The Surface Transportation Board (STB), the U.S. agency that oversees the remnants of rail regulation, has shown little appetite to approve any further consolidation. A proposed 1999 combination of Montreal-based Canadian National Railway Co. and Fort Worth, Texas-based BNSF Railway Co. was scrapped the following year after a federal appeals court upheld the STB's authority to impose strict merger guidelines after a decade of subpar rail service. There has not been a merger proposal of Class I carriers since. (In a sad historical irony, Linda J. Morgan, who headed the STB during that time and who later sat on CP's board, died Nov. 7 at 63 after a long battle with cancer.)
Shippers, for their part, have groused for more than a decade about the railroads using their geographic leverage to drive up rates, deliver inconsistent service, and block the use of any alternatives. Many shippers, because of their location, commodity type, or both, are "captive" to the railroads, and in a lot of cases, to just one.
LOOKS FAMILIAR?
Shrewdly, CP crafted the proposal to resemble what the National Industrial Transportation League, a group of industrial shippers that are heavy rail users, has sought since it first proposed to the STB "reciprocal switching" rules in July 2011. Under reciprocal switching, a railroad, for a fee, moves a car between its interchange tracks and a customer's private or assigned siding on another railroad for loading and unloading freight. The NIT League proposal allows a captive shipper or receiver to gain access to a second rail carrier if the customer's facility is located within a 30-mile radius of an interchange where regular switching occurs. Only true captive customers could qualify, and the switch would not occur if the affected railroad proved the practice would be unsafe or if it were unfeasible or harmful to existing rail service, under the group's proposal. The proposal would provide badly needed relief to captive shippers and save customers between $900 million and $1.2 billion a year in freight costs, the group said. The entire rail industry opposes the measure, claiming it would raise costs and herald a new era of reregulation.
The proposal has languished at the agency for nearly four and a half years, with only a docket number (Ex Parte 711) assigned to it as any indication of regulatory movement. Bruce J. Carlton, the League's president, was at the group's annual meeting in New Orleans and unavailable for immediate comment.
Anthony B. Hatch, a long-time rail consultant who runs his own firm, called the CP competitive-access proposal a "whopper," especially since shippers are not known to be Harrison's most fervent supporters. In fashioning the proposal, Harrison also effectively thumbed his nose at the rail industry, something that hardly surprised Hatch since Harrison, who was coaxed out of retirement in 2012 to turn around a then-struggling CP, has achieved almost mythical status and is at a point in his life where he doesn't care what his peers think of him, his strategy, or his tactics. In a note issued last night, Hatch wondered if Harrison was "trading shipper favor for railroad enmity."
Still, Hatch, who opposes further industry consolidation because the costs and service distractions outweigh any benefits, said the access proposal doesn't really address the core issues confronting the rails in general, and Norfolk-based NS in particular. In fact, during the late-2013-to-mid-2014 time period, when rail service suffered greatly under the brunt of severe winter storms and a tough rebound, additional access "would have been, to say the least, counterproductive" because more assets potentially in play in a congested region would ultimately lead to more service problems, he said.
Hatch questioned the need to layer even more complexity on an increasingly service-intensive business that has finally gotten back on its feet. He added that it might be difficult to sort out just who, or what mechanism, would be used to determine how bad service would have to get, or how high rates would have to rise, before a customer of the combined entity could opt for another carrier. (A CP spokesman said it's too early in the process to have settled on a formula). Hatch also doubted that the access language would solve NS' problems, such as a secular and dramatic decline in coal demand that has hurt its revenues as well as those of its eastern rail counterpart, CSX Corp.
LONG ODDS
John G. Larkin, transport analyst for investment firm Stifel, forecast a one-to-three chance that the merger will be consummated. Despite CP's "innovative solution" to try to win over regulators, a still-fragile economy and the fresh memories of service dysfunction will make the STB reluctant to approve such a large-scale transaction. Larkin added that a successful merger would trigger a new and rapid consolidation cycle in the U.S. and Canada that would winnow the number of Class I rails from six to three. "Three megamergers would be more likely to disrupt service than the one proposed by CP," Larkin wrote.
Despite the long odds, it may be unwise to underestimate Harrison. In October 2014, following CP's decision to terminate merger talks with CSX after just three or four meetings, Harrison continued to push for further consolidation as the only logical way to sustainably resolve congestion problems that will only worsen as demand grows. Harrison told analysts that CP looked at CSX and NS, adding that there was little difference between the two. He claimed to be "not obsessed with some transcontinental merger," nor focused on his ego or his legacy. A merger with CSX would have combined two great complimentary systems, and would have eased the pressure at Chicago because of CSX's interest in a connecting railroad that would have allowed CP to bypass the city, Harrison said at the time. Left unsaid were his thoughts about NS.
NS' board has, for all intents and purposes, rejected the proposal, although it officially said it would evaluate it. NS stock closed today at $92.49 a share, up $5.52 a share from its Nov. 17 closing price. While a nice one-day pop, the increase was relatively modest given the deal's enormity, and indicates that CP may need to up the ante. However, if NS opposes a higher bid, it's hard to believe that Harrison, having gone this far and with so much at stake, won't go directly to NS' shareholders in a hostile move. In his corner—presumably—will be William A. Ackman, the activist investor instrumental in removing CP's then-CEO and six board members in 2012 and bringing in Harrison to run the railroad. Ackman's company, New York-based Pershing Square Capital Management L.P., is CP's largest shareholder.
Harrison may claim that ego and legacy are not involved. But at 71, he has the chance to create the continent's first transcontinental rail merger and offer shippers the potential to have their goods moved from Florida's northern tip to Canada's westernmost reaches, all on a single line. Even if the world is stacked against him, it would be hard to imagine him walking away from the opportunity to make history.
Warehouse automation orders declined by 3% in 2024, according to a February report from market research firm Interact Analysis. The company said the decline was due to economic, political, and market-specific challenges, including persistently high interest rates in many regions and the residual effects of an oversupply of warehouses built during the Covid-19 pandemic.
The research also found that increasing competition from Chinese vendors is expected to drive down prices and slow revenue growth over the report’s forecast period to 2030.
Global macro-economic factors such as high interest rates, political uncertainty around elections, and the Chinese real estate crisis have “significantly impacted sales cycles, slowing the pace of orders,” according to the report.
Despite the decline, analysts said growth is expected to pick up from 2025, which they said they anticipate will mark a year of slow recovery for the sector. Pre-pandemic growth levels are expected to return in 2026, with long-term expansion projected at a compound annual growth rate (CAGR) of 8% between 2024 and 2030.
The analysis also found two market segments that are bucking the trend: durable manufacturing and food & beverage industries continued to spend on automation during the downturn. Warehouse automation revenues in food & beverage, in particular, were bolstered by cold-chain automation, as well as by large-scale projects from consumer-packaged goods (CPG) manufacturers. The sectors registered the highest growth in warehouse automation revenues between 2022 and 2024, with increases of 11% (durable manufacturing) and 10% (food & beverage), according to the research.
The Swedish supply chain software company Kodiak Hub is expanding into the U.S. market, backed by a $6 million venture capital boost for its supplier relationship management (SRM) platform.
The Stockholm-based company says its move could help U.S. companies build resilient, sustainable supply chains amid growing pressure from regulatory changes, emerging tariffs, and increasing demands for supply chain transparency.
According to the company, its platform gives procurement teams a 360-degree view of supplier risk, resiliency, and performance, helping them to make smarter decisions faster. Kodiak Hub says its artificial intelligence (AI) based tech has helped users to reduce supplier onboarding times by 80%, improve supplier engagement by 90%, achieve 7-10% cost savings on total spend, and save approximately 10 hours per week by automating certain SRM tasks.
The Swedish venture capital firm Oxx had a similar message when it announced in November that it would back Kodiak Hub with new funding. Oxx says that Kodiak Hub is a better tool for chief procurement officers (CPOs) and strategic sourcing managers than existing software platforms like Excel sheets, enterprise resource planning (ERP) systems, or Procure-to-Pay suites.
“As demand for transparency and fair-trade practices grows, organizations must strengthen their supply chains to protect their reputation, profitability, and long-term trust,” Malin Schmidt, founder & CEO of Kodiak Hub, said in a release. “By embedding AI-driven insights directly into procurement workflows, our platform helps procurement teams anticipate these risks and unlock major opportunities for growth.”
Here's our monthly roundup of some of the charitable works and donations by companies in the material handling and logistics space.
For the sixth consecutive year, dedicated contract carriage and freight management services provider Transervice Logistics Inc. collected books, CDs, DVDs, and magazines for Book Fairies, a nonprofit book donation organization in the New York Tri-State area. Transervice employees broke their own in-house record last year by donating 13 boxes of print and video assets to children in under-resourced communities on Long Island and the five boroughs of New York City.
Logistics real estate investment and development firm Dermody Properties has recognized eight community organizations in markets where it operates with its 2024 Annual Thanksgiving Capstone awards. The organizations, which included food banks and disaster relief agencies, received a combined $85,000 in awards ranging from $5,000 to $25,000.
Prime Inc. truck driver Dee Sova has donated $5,000 to Harmony House, an organization that provides shelter and support services to domestic violence survivors in Springfield, Missouri. The donation follows Sova's selection as the 2024 recipient of the Trucking Cares Foundation's John Lex Premier Achievement Award, which was accompanied by a $5,000 check to be given in her name to a charity of her choice.
Employees of dedicated contract carrier Lily Transportation donated dog food and supplies to a local animal shelter at a holiday event held at the company's Fort Worth, Texas, location. The event, which benefited City of Saginaw (Texas) Animal Services, was coordinated by "Lily Paws," a dedicated committee within Lily Transportation that focuses on improving the lives of shelter dogs nationwide.
Freight transportation conglomerate Averitt has continued its support of military service members by participating in the "10,000 for the Troops" card collection program organized by radio station New Country 96.3 KSCS in Dallas/Fort Worth. In 2024, Averitt associates collected and shipped more than 18,000 holiday cards to troops overseas. Contributions included cards from 17 different Averitt facilities, primarily in Texas, along with 4,000 cards from the company's corporate office in Cookeville, Tennessee.
Electric vehicle (EV) sales have seen slow and steady growth, as the vehicles continue to gain converts among consumers and delivery fleet operators alike. But a consistent frustration for drivers has been pulling up to a charging station only to find that the charger has been intentionally broken or disabled.
To address that threat, the EV charging solution provider ChargePoint has launched two products to combat charger vandalism.
The first is a cut-resistant charging cable that's designed to deter theft. The cable, which incorporates what the manufacturer calls "novel cut-resistant materials," is substantially more difficult for would-be vandals to cut but is still flexible enough for drivers to maneuver comfortably, the California firm said. ChargePoint intends to make its cut-resistant cables available for all of its commercial and fleet charging stations, and, starting in the middle of the year, will license the cable design to other charging station manufacturers as part of an industrywide effort to combat cable theft and vandalism.
The second product, ChargePoint Protect, is an alarm system that detects charging cable tampering in real time and literally sounds the alarm using the charger's existing speakers, screens, and lighting system. It also sends SMS or email messages to ChargePoint customers notifying them that the system's alarm has been triggered.
ChargePoint says it expects these two new solutions, when combined, will benefit charging station owners by reducing station repair costs associated with vandalism and EV drivers by ensuring they can trust charging stations to work when and where they need them.
New Jersey is home to the most congested freight bottleneck in the country for the seventh straight year, according to research from the American Transportation Research Institute (ATRI), released today.
ATRI’s annual list of the Top 100 Truck Bottlenecks aims to highlight the nation’s most congested highways and help local, state, and federal governments target funding to areas most in need of relief. The data show ways to reduce chokepoints, lower emissions, and drive economic growth, according to the researchers.
The 2025 Top Truck Bottleneck List measures the level of truck-involved congestion at more than 325 locations on the national highway system. The analysis is based on an extensive database of freight truck GPS data and uses several customized software applications and analysis methods, along with terabytes of data from trucking operations, to produce a congestion impact ranking for each location. The bottleneck locations detailed in the latest ATRI list represent the top 100 congested locations, although ATRI continuously monitors more than 325 freight-critical locations, the group said.
For the seventh straight year, the intersection of I-95 and State Route 4 near the George Washington Bridge in Fort Lee, New Jersey, is the top freight bottleneck in the country. The remaining top 10 bottlenecks include: Chicago, I-294 at I-290/I-88; Houston, I-45 at I-69/US 59; Atlanta, I-285 at I-85 (North); Nashville: I-24/I-40 at I-440 (East); Atlanta: I-75 at I-285 (North); Los Angeles, SR 60 at SR 57; Cincinnati, I-71 at I-75; Houston, I-10 at I-45; and Atlanta, I-20 at I-285 (West).
ATRI’s analysis, which utilized data from 2024, found that traffic conditions continue to deteriorate from recent years, partly due to work zones resulting from increased infrastructure investment. Average rush hour truck speeds were 34.2 miles per hour (MPH), down 3% from the previous year. Among the top 10 locations, average rush hour truck speeds were 29.7 MPH.
In addition to squandering time and money, these delays also waste fuel—with trucks burning an estimated 6.4 billion gallons of diesel fuel and producing more than 65 million metric tons of additional carbon emissions while stuck in traffic jams, according to ATRI.
On a positive note, ATRI said its analysis helps quantify the value of infrastructure investment, pointing to improvements at Chicago’s Jane Byrne Interchange as an example. Once the number one truck bottleneck in the country for three years in a row, the recently constructed interchange saw rush hour truck speeds improve by nearly 25% after construction was completed, according to the report.
“Delays inflicted on truckers by congestion are the equivalent of 436,000 drivers sitting idle for an entire year,” ATRI President and COO Rebecca Brewster said in a statement announcing the findings. “These metrics are getting worse, but the good news is that states do not need to accept the status quo. Illinois was once home to the top bottleneck in the country, but following a sustained effort to expand capacity, the Jane Byrne Interchange in Chicago no longer ranks in the top 10. This data gives policymakers a road map to reduce chokepoints, lower emissions, and drive economic growth.”