Schneider National said efforts to improve its network positions the company to capitalize on improving market conditions as capacity constraints mount, executives noted during a call with analysts Oct. 29.
The latest sign of Schneider’s network enhancement and the potential new business it creates is its shift away from CSX to Norfolk Southern as its primary Eastern U.S. rail carrier beginning Jan. 1. With the possible merger between Norfolk Southern and Union Pacific, it opens doors to pursue new freight and convert truckload shipments to intermodal, Schneider President and CEO Jim Filter said on the call.
Filter noted should the merger between the railroads proceed, it’s expected to be “strategically beneficial for our organization.” Union Pacific became the carrier’s primary West Coast rail partner in January 2023, following the end of its contract with BNSF.
Filter did not disclose the length of the carrier’s agreement with Norfolk Southern, noting it was “confidential.”
He pointed to the company's intermodal segment growth following its decision in 2023 to partner with Canadian Pacific Kansas City, which expanded its intermodal service between the Upper Midwest and Mexico. Filter said its arrangement with CPKC has led to improved service, speed, reliability and cost on that lane.
Filter said the company tried assorted options to grow its business between Upper Midwest and Mexico until it moved to the CPKC. That partnership has now seen 19 consecutive quarters of growth, he said.
Another competitive advantage Schneider brings to its partnership with Norfolk Southern is the carrier owns its containers, chassis and has its own drayage drivers, Filter said. The company has also provided intermodal services for 35 years, which is another draw for shippers.
“We’ve been doing this for a long time,” he said. “Customers are looking at that, our history, our ability to execute and financial stability as a real differentiator.”
Schneider reported Q3 intermodal revenue, excluding fuel surcharge, of $287.7 million, a 2% or $6.3 million year- over-year increase. The carrier credited the increase to improved revenue per order and better freight mix.
Now aligning with Norfolk Southern, the company is aiming to position itself to convert over-the-road freight better than its competitors, Filter said.
“When we look at the number of terminals, where they're operating at, where the population centers are in the U.S. and where we're moving towards, the NS gives us a really great option there going forward,” he said.
