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                Logistically Minded: Rail freight rebounds spectacularly despite Hurricane Harvey
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                <h1>
                    Logistically Minded: Rail freight rebounds spectacularly despite Hurricane Harvey
                    
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                                            <a rel="author" href="/editors/aburt/">
                                                Andy Burt
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                                                Kate Patrick
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                        <h4 class="hide-small byline-show-large">Published</h4>
                        <span>Oct. 27, 2017</span>
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<h3>In case you missed it:</h3>
<ul>
<li><a href="https://www.supplychaindive.com/news/dcli-trac-intermodal-acquisition-chassis-fleet/508244/" target="_blank">DCLI acqiured TRAC's chassis fleet</a>, bringing DCLI's total fleet to more than 216,000 just in time for peak season. That's a boon for DCLI when so many ports have been struggling with chassis shortages lately.</li>
<li>Artificial intelligence (AI) is the new standard for supply chain technology. If you aren't implementing it, you're behind. Read more <a href="https://www.supplychaindive.com/news/supply-chain-tech-standard-cognitive-ai-software/507802/" target="_blank">here.</a></li>
<li>One big takeaway from the APICS 2017 conference in San Antonio is that <a href="https://www.supplychaindive.com/news/supply-chain-sales-operations-hostess-AI-predictive-analytics/507954/" target="_blank">supply chain and S&amp;OP departments should be working together as a coordinated unit.</a> If not, that increases the likelihood of longer lead times, longer inventory turn, inefficient inventory management and inaccurate forecasting for new products.</li>
</ul>
<h3>Market Snapshot</h3>
<p>It was a big news week for the supply chain sector, but some of the biggest news centered on rail freight's dramatic rebound from Hurricanes Harvey and Irma. According to the Railway Supply Institute and as reported by The Wall Street Journal, third quarter railcar orders increased 57% YoY, and Union Pacific's third quarter earnings beat expectations despite the havoc wreaked by Harvey, <a href="https://www.reuters.com/article/us-union-pacific-results/union-pacific-profit-beats-estimates-despite-harvey-impact-idUSKBN1CV1VQ?mod=djemlogistics" target="_blank">according to Reuters</a>, with freight revenue rising 4% YoY and industrial product volume rising 15% YoY.</p>
<p>Not to be outdone, <a href="https://www.reuters.com/article/us-norfolk-southern-results/norfolk-southern-third-quarter-profit-rises-but-shares-fall-idUSKBN1CU2AW?mod=djemlogistics" target="_blank">Norfolk Southern also beat</a> third quarter expectations and net income increased 10% YoY. That's impressive given that Union Pacific <a href="https://www.supplychaindive.com/news/hurricane-Harvey-FedEx-UPS-Houston-Texas-oil-industry-Valero-leak/504357/" target="_blank">suspended service</a> due to Hurricane Harvey and also had to deal with flooded tracks before getting down to the afflicted areas. Investors expected hefty losses for freight, but because rail has rebounded so fast, the Harvey recovery may be much <a href="https://www.supplychaindive.com/news/Harvey-gas-supply-chain-prices-transportation/503709/" target="_blank">quicker than originally anticipated.</a></p>
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<p>But that's not all we heard regarding post-Harvey this week: <a href="https://blogs.wsj.com/economics/2017/10/23/florida-texas-lose-135000-jobs-but-are-set-for-a-rally/" target="_blank">The Wall Street Journal reported</a> that Florida and Texas together lost 135,000 jobs due to hurricane trauma, but because peak season is about to start, analysts expect those lost jobs to be regained. Since the overall unemployment rate declined 4.2% in September, <a href="https://www.bls.gov/news.release/pdf/empsit.pdf" target="_blank">according to the Bureau of Labor Statistics</a>, the job market may not be that dire for Florida and Texas, especially as supply chains and freight continue to spring back.</p>
<h3 class="standard-heading">Technically Speaking</h3>
<p>Isuzu Motors plans to launch a series of electric trucks in 2018, primarily for trash collection, according to the <a href="https://asia.nikkei.com/Business/Companies/Isuzu-to-get-serious-about-electric-trucks?mod=djemlogistics" target="_blank">Nikkei Asian Review</a>. We may need to get used to the idea of China pulling ahead in the EV race. After all, T<a href="https://www.wsj.com/articles/tesla-strikes-deal-with-shanghai-to-build-factory-in-china-1508670181?mod=djemlogistics&amp;mg=prod/accounts-wsj" target="_blank">esla just announced plans</a> to build a new gigafactory in China, and it's no secret that the Chinese government offers subsidies to the EV market as part of its green initiative to reduce emissions.</p>
<p>China is very aggressive about sustainability, maybe even more so than Europe, and they've got good reason: Pollution in the country's urban areas have been at toxic levels for years. It's no wonder the Chinese government is pushing to go fully electric and will pay businesses to do it.</p>
<p>In other news, MasterCard has dipped into blockchain for cross-border payments in an effort to make financial transactions more secure. That's one of the primary uses for blockchain right now, and it was heavily discussed at the CSCMP EDGE 2017 conference in Atlanta this year.</p>
<h3 class="standard-heading">Mergers &amp; Analysis</h3>
<p><span>In a slow week for deals that register within the supply chain landscape, </span><a href="https://www.supplychaindive.com/news/dcli-trac-intermodal-acquisition-chassis-fleet/508244/" target="_blank">DCLI's announced acquisition of TRAC Intermodal</a><span> was the high point. The deal adds 72,000 chassis to DCLI's fleet, bringing their grand total to over 216,000. Integration of the two companies will be key at a time when chassis companies are seeking higher profit margins in the middle of a supply crunch, hindered by natural disasters like Hurricane Harvey and the systematic risk inherent in the commercial uptick of the holiday season. </span></p>
<div>General Electric Co. is looking to <a href="https://www.wsj.com/articles/ge-explores-exiting-from-the-railroad-business-1509031146" target="_blank">potentially sell its GE Transportation </a>division, the home of its railroad business, in order to pivot away from the troubled railroad industry. The divestiture could possibly be a part of the company's plan to shed $20 billion in business lines, and the operations, which primarily produce diesel-powered locomotives and rail equipment, could be one of the ones to go.</div>
<div> </div>
<div>Finally, U.S. regulators have approved the <a href="https://www.supplychaindive.com/news/us-anti-trust-regulators-COSCO-OOIL-merger-conslidation-ocean-shipping/508154/" target="_blank">merger between COSCO Shipping and Orient Overseas</a> by allowing the objection period to pass. The merger, which would result in COSCO owning 90.1% of OOIL, has only the European Union's approval remaining to complete the final hurdle.</div>

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