Supply Chain Dive: Kansas City Southern taps tech platform to boost transloading visibility

KCS (1)

Dive Brief:

  • Kansas City Southern is working with technology platform Commtrex to allow companies to more easily find and request transloading services within its commodity shipping network in the U.S. and Mexico, the railroad announced Monday.
  • Shippers can use the Commtrex platform to search for KCS transloading centers by location, commodities handled and the services provided. They can send a request to learn more, and will then be connected to the railroad to get an offer and discuss terms.
  • The new partnership will help "customers identify transload locations in competitive markets and secure shipping locations in Mexico - one of the fastest emerging logistics markets today," Mike Naatz, KCS executive vice president and chief marketing officer, said in the statement.


Dive Insight:

A growth in rail traffic and snarls within the global supply chain have KCS looking to enhance the visibility and connectivity of its transloading network, which includes over 100 facilities across 19 U.S. and Mexican states.

The new deal with Commtrex comes as the railroad is taking steps to enhance service ahead of an expected jump in rail volume as demand for goods and raw materials continue to increase. KCS saw volumes recover from a pandemic-fueled drop in demand in the second quarter, with U.S. volumes rising 31% in the second quarter and cross-border volumes jumping 42%, according to a July earnings call.

CEO Pat Ottensmeyer said during the earnings call the railroad expects volumes to rise even further and is taking steps to boost service beyond technology.

KCS has "proactively added crew starts and hired additional crews in the transportation and mechanical areas," he said. "All of this is to support our service recovery and to be prepared for volume growth, we see for the rest of the year and beyond."

Rail traffic overall remained above 2020 levels, and total combined U.S. traffic in the first 40 weeks of 2021 was 8.7% higher than last year, according to the American Association of Railroads. Metals, coal, and forest products have seen the largest jump in shipping volume, with metallic ores & metal shipments up 27.2%.

Other railroads are also taking steps to speed up services for shippers ahead of an expected boost in volume. Union Pacific recently announced it's testing a system at its Chicago intermodal terminal allowing truck drivers to use an app to find and pick up their loads.

KCS' partnership with Commtrex will specifically give shippers the ability to more easily transport goods by rail from Mexico, which is particularly important for auto companies as they look to source parts while adhering to the US-Mexico-Canada Agreement. While the chip shortage has hurt the volume of auto shipments coming out of Mexico, KCS executives said in the July earnings call they expect to see explosive growth next year as supply constraints ease.

"We think this is going to begin to really deliver some outsize growth for us late in the year and into 2022," said CFO Mike Upchurch.