What happened to BNSF’s empties?
A maritime industry executive on Wednesday questioned the assertion by BNSF Railway that it is experiencing some volume and revenue decline this year because it is returning fewer empty ocean containers back to West coast ports.
Matt Rose, BNSF’s chairman and chief executive officer, said at the Bear Stearns transportation conference on Tuesday in New York that the western railroad was experiencing some intermodal volume and revenue decline because strong export demand to Europe was siphoning off available equipment through East coast ports.
Ocean carriers, however, have very limited capability to move boxes from the United States to Europe and back to Asia in a round-the-world fashion, responded William Rooney, managing director for North and South America at Hanjin Shipping, on the second day of the conference in New York.
Containers have to move back and forth in specific lanes for carriers to optimize their efficiency, he said. Vessel operators need consistent flows of containers in each direction to balance equipment with demand on those lanes and match vessel capacity, Rooney said.
Ed Wolfe, Bear Stearns analyst and conference organizer, said the empties that BNSF alleges it is losing are not showing up in the intermodal volume figures for East Coast railroads CSX and Norfolk Southern.
John Lanigan, chief marketing officer for BNSF, said that implies that most of the containers are being trucked to East Coast ports. The length of haul from the Ohio Valley, and points further east where the containers are getting loaded to the ports, is short enough to justify truck transport, he said.