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Show Your Drivers You Care! Put a Healthy Trucking Kiosk in Your Terminal

If your actions inspire others to dream more, learn more, do more and become more, you are a leader.

– John Quincy Adams

Shippers Turning from Trains to Trucks?

North America’s railroads have laid off thousands of workers, cut hundreds of millions of dollars from capital spending programs and stored tens of thousands of idle freight cars. Just like motor carriers, they’ve done everything they can to cut costs. However, rail carriers have hiked rates and are enjoying a sizable net income gain.

In 2008, the four largest railroads in the United States generated $7.5 billion in net income, a 16 percent increase over the previous year. The rail industry, according to one consultant, learned its lesson from past downturns, when it cut rates to lure shippers but also undermined profitability. But now rail shippers are feeling the squeeze, and many are angered by increasing rail charges.

The director of Consumers United for Rail Equity suggests that “the railroads are exploiting their monopoly power,” and some shippers have said that contracted prices have jumped anywhere from 10 percent to double what they were in past years. Railroads insist their pricing structure is fair and suggest that operational improvements, including faster trains and shorter waits at terminals, are key reasons for their success.

Although rail has gained market share at the expense of truckers, that may begin to change. There is already evidence that some frustrated shippers are yanking a portion of their business off the railroads in favor of trucks.

Source: Roemer Report. Used with permission.

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