Dive Brief:
- Canadian National Railway Co. (CN) and Norfolk Southern Corp. (NS) will interchange rail cars outside of Chicago in a concerted move to ease the rampant congestion common at the busy hub, The Wall Street Journal reported last week. The move is intended to save at least two days of valuable travel time for the railroads.
- The Belt Railway Co. maintains 265 miles of tracks around the Chicago area, switching close to one million cars each year, which results in Chicago being North America's busiest interchange. To railroad executives, it's a pain point that commonly causes delays.
- Norfolk and CN intend to enact the handoffs at Norfolk’s Elkhart, Indiana rail terminal, avoiding Chicago. Trains heading westbound will be managed by CN, which will push it through a bypass near but not through Chicago.
Dive Insight:
The North American rail industry is alive and well.
Recent months have revealed historic intermodal traffic highs, with August reports of 1,401,081 containers and trailers moved (up 5.6% from August 2016). Further good news for the industry is the strong rebound made by rail traffic after Hurricane Harvey, with third quarter railcar orders increasing 57% YoY. Even rail worker unions report success, with labor contented by wage increases for the six unions representing the nation's 30 railroads.
Rail news has recently been consumed by the fortunes (and misfortunes) of CSX, leaving many in the dark about the health of the industry as a whole. Norfolk Southern's decision to move in a service friendly direction could be seen as a bid to gain even more business as problems continue to circulate within CSX. Whether we see additional cooperative agreements between other lines is exciting to contemplate, as transport as a whole potentially shifts more toward collectives than discrete operators.
