As systemic driver shortages and electronic logging data requirements result in the tightening of trucking supply and therefore trucking price increases, domestic and international cargo owners are starting to look more closely at rail options. This is the case not only for shipments travelling more than 500 miles, but even for shorter distances where rail was once viewed as uncompetitive. Except in high density, long haul rail corridors, ex. Los Angeles to Chicago, there are both opportunities and challenges that require intense logistics management in order to create rail competitiveness, particularly along shorter distances and in less dense corridors. As the problems associated with trucking persist in the US and become more challenging for shippers, we're confident that expanded rail route/products will be offered to meet the need. In California for example, with the added complication of the State's increasing focus on environmental stewardship and reduction in greenhouse gases, we foresee expanded opportunities for market-to-seaport rail logistics. Our 2,000 acre Mid-California International Trade District project is designed to act as an inland port asset to seaports in Los Angeles - handling inbound cargo for inbound distribution and industrial supply chains, and outbound cargo from the massive agribusiness base and from manufacturing. We believe that there are similar opportunities in other strategic settings.
Common wisdom holds that the container shipping revolution was launched in 1956 when industry pioneer Malcolm Maclean decided to ship domestic trailers from Houston to Port Newark aboard the Ideal X, a converted tanker vessel. The modern US interstate highway system was in its infancy at the time, and trucking delays led this industry innovator to create a more cost-and time efficient “mousetrap”. In the intervening 62 years both the US interstate highway system and the container shipping industry have arguably both become victims of their own success, particularly when it comes to “last mile” delivery of international and domestic cargo between metropolitan areas and load center ports along the increasingly congested I-95 and I-5 corridors on the East and West coasts of the US.
In 2016 direct intermodal import rail routings declined, while total imports grew. This is termed by some in the logistics industry as the “Divergence of 2016”. Specifically, last year saw imports into the US grew by approximately 2%, all-water services to the US grew 4%, and direct import intermodal rail routings declined by .02%. Transloading, or transferring the contents of 40-foot marine containers to 53-foot domestic truck trailers or domestic rail containers for inland routing at or near the import port, has increased.
The South Coast Air Quality Management District (SCAQMD) has proposed new fees on containers moved through California seaports. On March 3, the SCAQMD adopted a “comprehensive clean air blueprint” that it said would improve the health and lives of all residents across its region by reducing ozone and particulate matter emissions as required by the federal Clean Air Act.