Rail services have not risen to meet the challenges on the current supply chain horizon. They have not met the needs of their employees or their customers. Scaling back on staff, equipment, and maintenance, they made a conscious choice only to meet the needs of their investors. This has caused poor service, defined by delay after delay. For example, earlier this year, BNSF was reporting to the Surface Transportation Board (STB) only an estimated 60% on-time performance. It’s no wonder that even with spot rates dropping that, smaller intermodal providers are worried about losing business to trucking. With the possibility of a rail strike looming dark, these concerns weigh heavy.
However, rail services are aware of where they’ve failed and they’re admitting to their shortfalls and looking at how to improve. Union Pacific Railroad’s Vice President of Premium Marketing and Sales, Kari Kirchhoefer, said, “Our goal is to be consistent and reliable, and we’ve not performed at that level this year, but the good news is it is improving.”
The key for smaller IMCs in this fraught time comes down to planning. Utilizing rail services simply takes longer. Analysts say that for the rail option to be effective, shipments need to be within twenty-four hours of when expected. Otherwise, it will result in not only storage fees, if there is any storage available, as there is a massive shortage of warehousing, but also client dissatisfaction. Buffer days must be included in planning. Because of equipment shortages, late trains could also mean missed appointments for transport with no other available options for days or weeks. This all means IMCs must have access to a diverse portfolio of resources to be able to handle multiple scenarios for their clients. A lot of smaller IMCs don’t have those resources and to stay competitive will need outside-the-box thinking.
RS Express is a full-service, global logistics provider. We have a diverse portfolio of resources and an expert staff to take your logistics strategy to the next level, even in this new, challenging landscape. Reach out to us today to see what we can do together.