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Domestic Freight Traffic Will Increase 67% and General Cargo 113%

Fuel surcharges are contributing to record pricing on all transportation methods.

U.S. freight traffic is going to continue to increase, further pressuring the roads, rails and waterways, states Ken Eriksen, vice president-transportation, Informa Econmics, speaking to the U.S. Grains Council's 46th Board of Delegates' Meeting last week.

Eriksen forecasted domestic freight traffic will increase 67% and general cargo 113%. These increases will intensify existing highway congestion at a time when rail mileage is decreasing and rail capacity is constrained by tunnel clearance, single track bridges and other infrastructure concerns.

Additional concerns with rail traffic include a slowing of the average train speed and rise in the terminal dwell time. Barges remain the most fuel-efficient transportation method, followed by rail and then truck. However, the barge fleet is aging rapidly - many should have been retired, but have remained in service, which will lead to a swell of retiring barges as traffic continues to build.

Meanwhile, fuel surcharges are contributing to record pricing on all transportation methods. Eriksen also notes that ocean freight is a rising wave with larger and larger ships coming on line, including a 96,000 TEU (20 feet equivalent units) containership.

Compared to the U.S. transportation system, he says the system in South America is highway-dependant, although there have been some efforts to expand river navigation and improve rail service. In China, the entire freight infrastructure is in need of improvement, Eriksen observes.

The current capacity crunch on the U.S. transportation system will continue, he concludes, while fuel prices will remain volatile and freight prices stay strong. Although containerization and Water Resources Development Act will offer some relief, consolidation of shipments will be the watchword.

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