CSX Transportation says it is working with shippers in the trucking industry in hopes of converting some of their freight from the highway to the railroad.
CSX had their Q3 earnings call on October 21st, where they discussed how the railroad benefits from a strained trucking industry amidst high diesel prices and reduced trucking availability.
“Reduced trucking availability, high truck rates and elevated diesel costs continue to benefit our intermodal segment,” said Maryclare Kenney, Senior VP & Chief Commercial Officer as CSX. “Conversions from the highway remains strong.”
“We’re working closely hand in hand with our channel partners and then to our national accounts team directly with shippers to look at opportunities for truck conversion. Truck capacity has obviously tightened pretty significantly over the course of the last couple of quarters. And we have customers that are existing customers today. They’re continuing to look to rail to move more of their business to an intermodal solution because of what they’re seeing in the truck market,” she continued.
According to the call, CSX even has a consulting program where a team will evaluate a shippers current use of semi trucks and outline how they might use the railroad instead.
“We do have a national accounts program from an intermodal perspective where we engage directly with the shipper. 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,” Kenney said.
The company does employ some truck drivers for drayage purposes, and is looking to hire more, but did reference the alleged driver shortage in the call.
“I think the area that we’re keeping the most focused on right now is the drayage driver…. There’s been an effort in terms of recruiting additional drivers… Obviously, driver capacity is challenging over the road. The benefit on the drayage side is it’s a more efficient move. You can make more turns in a given day. And so I think there’s more opportunity there as we go forward.”
“So we’re very optimistic about the opportunities that are — that continue to be in front of us as we close out this year and go into next year on the domestic intermodal side… our focus will remain on consistent execution, winning business from the highway and ensuring that our pricing reflects the quality of the service we provide.”
This is not the first time in recent history the railroad has attempted to convert freight away from the trucking industry. Just last year, Union Pacific announced plans to become “truck competitive” with the launch of an intermodal service from Chicago to Southern California.
