Weekly Rail Report Makes It Clear, This Is Not 2009 All Over Again [View article]
This does not provide a complete picture. The increase in rail traffic is not symptomatic of improvement in overall economy. For that we should see an improvement across all modes.
What we're observing here is mode conversion. Companies, in their efforts to contain costs, are willing to downgrade service - that is - adding more lead time in their supply chains. Rather than paying a premium for Air shipments, they are willing to move things by ground (TL/LTL), and now are further downgrading service to cheaper inter-modal options that usually have even longer lead times. Hence, the increase in rail traffic.
To be fair, trucking traffic has increased lately, but to confirm that the economy is improving, we need to see an improvement in total traffic across all modes. Request the author to present a complete picture.
Weekly Rail Report Makes It Clear, This Is Not 2009 All Over Again [View article]
What we're observing here is mode conversion. Companies, in their efforts to contain costs, are willing to downgrade service - that is - adding more lead time in their supply chains. Rather than paying a premium for Air shipments, they are willing to move things by ground (TL/LTL), and now are further downgrading service to cheaper inter-modal options that usually have even longer lead times. Hence, the increase in rail traffic.
To be fair, trucking traffic has increased lately, but to confirm that the economy is improving, we need to see an improvement in total traffic across all modes. Request the author to present a complete picture.