In a quick note, with a “Short Line Update” coming ASAP (thanks NEARS!) as a preview for the might, mighty short line (ASLRRA) virtual convention (presentations starting 10/5, or the week of the National League Division Series.
ANOTHER Mea Culpa, 2 weeks in a row: I seem to have jinxed myself as I made another error last week, writing that LA/LB had grown its share to 54%; LA/LB has indeed grown it’s share but the numbers I was using(54%) represent the entire west coast (including fast-growing BC). And, in fact, Intermodal guru Larry Gross wrote that he was of the opinion that west coast share recapture was indeed a temporary (“need for speed”) shelf re-stocking….but I believe that for some segments of the IM world, the “need for speed” (as demonstrated in this recovery) will continue to be a factor.
Intermodal volume rebounded from Labor day, and as LG points out, seems to be a +4=5% YOY range, but within that he sees international taking the lead back from Domestic (which includes a big boost from LA/LB transloads); Larry also points out that “normally” the seasonal peak would be showing wind-down signs in the next few weeks. But was it normal? For August, IANA reports overall NA/IM loads -2.7%, with TOFC +3% and Dom/Con +4% and international -9%. But Domestic may be running into some equipment shortages, and the trade rebound strength has surprised all economists….Chinese outbound TEUs grew 10% YOY last month.
Also of note, Logistics Management Magazine reports that e-commerce transport spend was 6.3% rail/IM in 2018 – but up to 7.7% this year. Rails can play in the new sandbox – and in it, they must….
Some news catch-up:
- Trucking technology – news every day
- Nikola – oof. Founder/CEO Trevor Milton: double-oof. In hard news, the EV truck maker (?) announced it was outsourcing it's Class 8 batteries, and that my old friend and colleague (Thank You, Paine Webber) Steve Girsky will slide over to become Chairman. Steve was the esteemed auto analyst at PW (etc) then later a CFO and board member at GM, and the architect of the GM-Nikola relationship, whose news was the high-point for the latter coming a day before the short-seller report on the gravity-driven truck. Steve brings instant credibility to Nikola; his peerless reputation will not, one hopes, be damaged by what has looked like great HBO documentary material (a la Theranos) over the last week….
- Daimler hopes to have a C-8 EV (via hydrogen fuel cell) truck in test-mode in 2023 with a ~621-mile range….
- On Tesla’s Battery Day: “One thing is sure: Elon will announce something big – which is nowhere near ready for prime time” – Bob Lutz; the FT reports that the next 5-10 years will show only incremental gains in battery technology and quotes an analyst saying that Tesla’s AV technology “has been all hype and very little reality” (meanwhile Consumer Reports said that drivers shouldn’t rely on Tesla’s Driver Assist to….”add safety”!). Suicide IS painless….
- I had a great, fascinating, often over-my-head conversation with the CIO of Uber Freight – one thing I learned is that their technology is following one of the Matt Rose Maxims (chase the biggest market) but could be well applied to both carload and intermodal rail freight….
- FedEx ups their visibility game (but do remember, they run a closed-loop with “empties” piled on a store shelf) - We await a rail response (stay tuned….)
- NEARS (North East Association of Rail Shippers) is this week – with archived presentations! Note some highlights include Tom Tisa of CSX, David Fink of Pan Am Railway (as well as a CP discussion of their eastern short line acquisition of the former CMQ), KSU CEO, and last years RT19 Innovator of the Year Pat Ottensmeyer, the (public) return of Michael Rutherford, Martin Lew of Commtrex, Chuck Baker of the ASLRRA, and the “Jason & Tony Show” yesterday afternoon (“Let’s go to the videotape!”)
- Thursday at 2 pm was also Brookfield Infrastructure Partners' annual investor day presentation – hopefully this year they don’t refer to their GWR acquisition as a “utility”!
- October 8 is the U-Delaware/Cal State Fresno Webinar on “Rail Industry Growth” that I am also participating in….see attached for the agenda
- American Farm Journal reported over the weekend that the win for ethanol – and therefore corn (in getting so far 54/68 refinery waiver applications denied) – was likely to be balanced by a “win” for oil – They also reported it was likely that there will be more soybean and corn sold this fall than stored (relative to last year’s momentum for storage/deferred sales known as “Delayed Pricing”). That’s good for rail transport this fall/winter….