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Trucking Spot Rate Downturn

Private trucking and logistics executives say that spot-market demand has turned soft this month and that the contractual rate increases they have been seeking are cracking, according to a report on the livetradingnews.com website.

It is “a clear deterioration from the insight we gained as recently as a couple of weeks ago” the executives said in an industry report.

The increasingly poor outlook suggests the market is adjusting to the stockpile of inventory that piled up earlier in the year as a result of the West Coast port labor dispute.

“People over-ordered … when they were not sure if they would be able to get goods through the ports,” said FedEx Corp. CEO Fred Smith.

After this year, Warren Buffett’s BNSF Railway Co. will be more than 99% finished with a 2nd, parallel line to its 2,200-mile Los Angeles-to-Chicago route.

Doubling up will create a rail superhighway speeding deliveries of toys, electronics, autos and other goods, because trains will not have to yield to each other on sidings as they do on single tracks.

The goal: help the unit of Buffett’s Berkshire Hathaway Inc. take cargo now going by road.

“If the rails can improve the reliability of the transit time,” a shipping consultant said, “it helps them compete with the trucks.”

Garnering consumer products and other freight from big rig trucking is more crucial than ever.

Coal, once a pillar of US rail traffic, is fading as utilities burn cheaper and cleaner natural gas. Average weekly coal carloads are down 20% from 5 years earlier, according to the data.

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