According to 3PL provider IDS, U.S. railroads are getting more competitive with trucking companies by lowering domestic intermodal spot rates across many of the major lanes. The strategy may be working as several Class I railroads, especially BNSF, have seen strong growth in the first months of 2016. Shelli Austin, president of IDS transportation, tells JOC.com, “Some of the rail lines, not all, are reducing rates to try and increase the volumes during this time that the capacity is so loose.” At the same time, intermodal companies and the truckload market are trying to be competitive with pricing as well, so the railroads will have to remain vigilant. Austin summarizes by stating, “It will be interesting to see how long these [rates] stay low and how many more rail lines will follow.” Watchful shippers stand to benefit from these industry dynamics with lower freight costs.
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