As the holiday season progresses, the focus of shippers is shifting towards the upcoming year. The preparation for 2024 involves finalizing transportation partnerships, with a notable interest in rail as a preferred option, a shift from the traditional choices of previous years.
Embracing Service, Sustainability, and Technology
In 2024, significant advancements are expected in three key areas: service, sustainability, and technology. Rail transportation is at the forefront of these improvements, presenting itself as an increasingly viable and cost-effective choice for shippers.
Kevin Boone, CSX Executive Vice President and Chief Commercial Officer, highlights that the environmental benefits of rail, enhanced supply chain transparency, and innovative service solutions are driving growth in rail’s market share against trucking. Despite the current soft truck rates dampening some conversion opportunities, the improving conditions are favorable for shippers to consider rail for better supply chain economics.
Service Level Improvements in Rail
Service improvements are anticipated to continue in 2024, driven by a mix of economic factors and new market solutions. The easing of pandemic-related supply chain congestion, coupled with service enhancements by companies like CSX, is reshaping the transportation landscape.
These service advancements in rail are opening new avenues for shippers, especially those who previously favored other transportation modes due to perceived inefficiencies in rail. Boone points out that improved customer service platforms and more attractive service options in rail are overcoming past barriers, making it a more economically appealing choice.
CSX, in particular, has witnessed significant service gains, with its end-of-2023 performance nearing record levels. These include novel service solutions that offer added value and comprehensive dock-to-dock transportation products.
Prioritizing Environmental Sustainability
In 2024, environmental responsibility will be a key consideration for shippers. The focus will be on meeting sustainability goals, adhering to government guidelines, and catering to the environmental awareness of customers.
Rail emerges as a more environmentally friendly alternative to trucking, primarily due to its higher fuel efficiency. Boone mentions that the rail industry’s value proposition has been bolstered by growing sustainability concerns across various sectors. Rail is approximately four times more fuel-efficient than long-haul trucking, as per the Association of American Railroads. CSX has committed to reducing its greenhouse gas emissions significantly by 2030, reflecting its dedication to sustainable growth.
Leveraging Technology for Enhanced Operations
The advancements in service and sustainability are closely tied to technological progress. Investments in technology are pivotal in achieving more efficient and cleaner operations while enhancing supply chain transparency.
CSX’s commitment to technology is evident in its various initiatives, ranging from train inspection portals to the development of hydrogen locomotives and exploring alternative fuels. This focus on technology ensures that rail remains a competitive and attractive option for shippers in the future.
Planning Beyond 2024: Long-Term Growth Strategies
Shippers are not just focusing on the immediate year but are also looking ahead to formulate long-term growth strategies. Many companies planning new or expanded facilities are strategically opting for rail-served sites.
To support this, CSX has developed CSX Select Site, a comprehensive platform to assist companies in finding suitable rail-served locations. This initiative has been successful in attracting significant projects to CSX-served sites, laying the groundwork for sustained rail growth in the future.