Supply-chain woes stemming from COVID-19’s economic rebound have been thoroughly scrutinized in the past year, specifically the interwovenness of intermodal container rail shipments and its role in the supply chain. Trains’ Bill Stephens summarized the topic as part of 2021’s year-end countdown of major stories: “News Wire Top 10, No. 3, a snarled supply chain,” Dec. 29, 2021.
One opportunity that has sprung from supply chain unknowns is renewed interest in the boxcar. As truck drivers flock to lucrative opportunities where logistics companies are paying high wages to move goods, some shippers can’t find drivers and are leaning on the reliable boxcar. This is exacerbated by higher freight rates and fuel costs that continue to rise in a transportation environment still relatively flush with uncertainty.
According to DAT Freight & Analytics trendlines for December 2021, van load-to-truck rates were up 35% year-over-year, flatbed load-to-truck up 27%, and fuel prices up nearly 41%. December capacity was particularly constrained as a result of expected holiday orders, further influencing escalated prices.
For shippers with the versatility to choose between trucks and railcars, this invites reconsideration of the benefits of the boxcar. Truckers were successful in pulling volume from railroads when U.S. highways were built, but periodic trucking capacity constraints may boost the rail option. Also, the move to Precision Scheduled Railroading has set rigorous railroad operating metrics that focus on delivery timeliness and reliability, which may bolster the shippers’ case for rail.
While these circumstances may aid interest in the boxcar, there is reason to wonder of these railcars will still be around in a few years.