Midwest Association of Rail Shippers (MARS) Summer Meeting 2012 Event Takeaways

Last week Nexus was in attendance at the 239th meeting of the Midwest Association of Rail Shippers.  It was held July 9-10 at the Grand Geneva Resort in Lake Geneva, WI.  As always, this year’s summer meeting was extremely well organized and informative.  We especially enjoyed the presentations made by Benjamin Hartford, Senior Research Analyst of R.W. Baird, TTX and Toyota, and the GoRail State Director, Larry Lloyd.

Subject to our interpretation of the content, and our bias as a 3PL providing warehousing, transloading, and multimodal transportation solutions, our key takeaways were as follows: 

  • Automotive and retail markets are showing considerable growth and are outperforming the broader market.  The housing market rebound has been slow but trending in a positive direction.
  • Consumers are less leveraged which has created a stronger US consumer.  Though consumer confidence is shaky right now, a stronger consumer will eventually support demand that will drive the movement of freight.
  • The intermodal market is growing considerably; the trucking market is near saturation with driver and equipment capacity, which will continue to advance the utilization of intermodal and rail modes.  
  • Transloading will become more and more important as companies try to leverage intermodal and rail modes of transportation but don’t have the facility or network infrastructure to support it with their own sidings, facilities, etc.  This was encouraging to us 3rd party logistics providers whose warehouses are strategically rail served and close to intermodal yards.  Nexus has even introduced a modest drayage service offering on its private fleet in the Chicago market to support growing intermodal transloading demand.
  • Inventories across all industries are being kept extremely lean which will create a pressing need for businesses to move freight to meet any significant pickup in consumer demand.  It will create the need for expedited services and other network optimization strategies (i.e., hub-and-spoke, regional warehousing, etc.) that may create shifts that provide opportunities for logistics providers.
  • With the renaissance of US manufacturing taking place, more manufacturing is taking place domestically and in Mexico which is significantly changing freight patterns across the country.  The balancing of global trade that continues to increase the need for US transportation and logistics services domestically.
  • CREATE funding has been approved – this is going to be hugely significant in preparing Chicago for the increased rail traffic that it will see in the years ahead.

In summary, while we all hold on tightly in the face of a new election, economic uncertainty, and an intensely hot summer that has plagued the Eastern Corn Belt, there are still many reasons to be optimistic and braced for growth.  As a Midwest-based logistics provider with almost one million square feet of rail-served warehouse space proximate to major Chicago intermodal yards, Nexus is at the ready to respond to increased demand for multimodal warehousing and transportation solutions that leverage rail and intermodal capabilities.