What Makes U.S. Shipping So Difficult | CNBC Marathon

CNBC Marathon reviews why the U.S. shipping industry is such a conundrum.

First, CNBC explores how freight railroads became so profitable and how the industry plans to evolve to stay on top. The United States lags behind the rest of the world when it comes to passenger trains but when it comes to the freight railroad the U.S. is dominating. The U.S. freight rail network operates over 140,000 miles of privately-owned track in every state except Hawaii, according to the Association of American Railroads. It moves one-third of all U.S. exports and roughly 40% of long distance freight volume.

Next, CNBC takes a look at American ports. The Port of Los Angeles, the busiest port in North America, saw record volume in 2021. Imports including furniture, car parts and apparel surged to a record 5.5 million TEU's in 2021, a 13% increase from the previous high in 2018. A TEU or twenty-foot equivalent unit is the industry standard to measure cargo capacity for ships and terminals. One 20 ft container can hold about 400 flat-screen TVs. But along with that volume came an array of headwinds impacting everyone from retail stores and large manufacturers to portside communities.

Lastly, CNBC reviews why the U.S. and Canada haven’t done more claim the Arctic regions available for shipping. Two of the largest shippers in the world, MSC and Maersk, told CNBC they’ve decided not to ship in the Arctic. MSC cited both environmental degradation and unpredictability issues, among other considerations. Others, though, argue global environmental conditions could improve, with reduced carbon emissions from shorter transits. Arctic sea lanes might be ice-free in the summertime by 2035, according to scientists. That could mean faster global shipping times, and Russia and China are already taking the lead on their side of the frozen North. So why aren't the U.S. and Canada doing more? “It’s really a question of saving shipping cost-saving time versus that lack of predictability,” Gabriella Gricius from the North American and Arctic Defense and Security Network told CNBC.

CNBC Marathon brings together the best of CNBC’s coverage on the U.S. shipping industry.

Chapters:
00:00 Introduction
00:50 Why U.S. Freight Trains Are So Much Better Than Passenger Rail (Published Feb. 2022)
15:49 Why U.S. Ports Are Some The Least Efficient In The World (Published Feb. 2022)
30:17 Should The Arctic Be Open For Shipping (Published Feb. 2022)

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What Makes U.S. Shipping So Difficult | CNBC Marathon

[DieselDucy]

As a locomotive engineer for a class one railroad. I will say the working conditions at train companies in the USA are HORRIBLE! We are FORCED to drive trains dead tired. Punished if we try to take any time off work, including being HARASSED for taking FMLA leave.

[alexsteven.m]

.With inflation running at a four-decade high, a Recession is now the ‘most likely outcome for the economy. How can I grow my portfolio to outpace inflation and maintain a successful long-term strategy? I have been reading of investors making about $250k profit in this current crashing market, and I need ideas on how to achieve similar profits.

[CoachZed]

nice to see that the railroads are the most profitable they've been in history, yet their employees are striking because of how poorly they've been treated. It used to be that the railroad was one of the best jobs you could get, now its not much better than working fast food

[cqd-tvzi]

Why bother automating trains? It takes two men (one engineer, one conductor) to drive the train, which moves 200 trucks worth of goods. The rail needs one man per 100 containers, where the truck needs one man per each container, thus the saving will be minimal. Plus, many local yards still use manual rail switches, they are not going to update the entire system just for ‘automatic’ trains.

[stacyjaye]

I'm a former teamster, and I am Union to my bone. But I can't back people that are against technology, like trying to save Coal jobs, for being against automation. Time marches on, folks. Lead, follow, or get the hell out of the way.

[jonathonwood]

Funny how they always say they are short on the labor side, it's not a people problem, if companies would pay better they would attract more people.

[Parker]

The freight train industry lobby is very very powerful. They have also been successful in shaping public opinion. People don't even think about passenger trains when thinking about travel. This is something that did not happen on accident. A lot of work on money has gone into people having that view in their heads.

[gaslitworldf.melissab]

That the carrying capacity is so much greater for trains should urge us to support trains. I do wish more trains offered passenger travel. I really prefer trains to airplanes and freeways. It's far more relaxing and you have space around you - even in regularly priced seats.

[hungcapitalll]

Nationalize trains. Nationalize trains.
Nationalize certain trains/tations routes for trade.

[MrJimmy-flbn]

I like the idea of different RR companies being able to use track from a different company as long the as Company that owns the track doesn’t change an outrageous price and treats all traffic equally on the track and everyone operates safely.

[MinhLe-vjij]

Very informative presentation, we learn a lot from watching this program. Thank you for making it available to all of us. Again, thank you.

[keiththoma]

We need STB to be more aggressive on making sure the freight rail industry is investing in improving the network and better compete with trucking. Every additional rail car is 1 to 2 trucks not on roads/highways.

[austinhernandez]

Most rail tracks are private. That's the problem. Could you imagine all of our roads being private and semi trucks having to drive on them? Well that's how it is for railroads.

[jamisonmunn]

There is only one reason why shipping the in USA sucks. . . Nothing is made here. Every city and town should be making something and that would help immensely.

[danielfields]

It's a shame, that we don't have high speed rail.

[EyeTech]

just think about an 8000 mile journey for a box of shoes costing less than a chicken nugget, is unintentionally hilarious.

[paladinsorcerer]

I support dock workers and I support avoiding automation of ports. I can live if my stuff from China gets here a bit later than expected, if it means that vitally important workers have a good paying job. If the workers can upskill and save themselves physical labor, then I support that, but not at the expense of too many layoffs.

[maxheadrom]

You can't compare only cost reduction between trucks and automated trucks - you need to show a comparison between trucks (automated or not) and rail. The reason rail is more economic comes from the characteristics of the wheels and the demands for the tracks. Metal on metal is more economic than rubber on road - and a lot less polutant. Tracks also require ramps to be 1/10 of road ramps - that's the main reason a rail track is more expensive than a road to built. Once built, however, you can get things working much closer to the optimum conditions.

People may not be aware of this but tire dust is an important polutant and contributes to global warming. Tires produce rubber dust of different dimensions and some of that dust (I don't know the percentage) is part of what is called "dark aerosol". These particles raise to the upper atmosphere and because of a phenomenon cause by Earth's rotation fly to the north and south pole. The dust from the Northern Hemisphere goes to the North pole and vice-versa. That dark aerosol than falls over the snow and ice in the arctic and make it grey. Being grey it absorbs more heat from sunlight and melt faster - the first water from that melting snow/ice is black, btw, because of the dark particles. Dark water will also heat faster under the sunlight and the whole things will make ice/show to melt faster. Once Ice is melted, surfaces with a much greater hability to absorb energy from the sunlight are exposed. And that's how your car tires are an important cause of Global Warming. Automated trucks and cars are a really bad idea. More rail is an excellent idea.

[Mrpm]

Rails need to be separated from carriers and they need to provide equal access to all carriers. This will improve competition. Currently it's pretty much an oligopoly.

[louminatti]

expand capacity and nationalize the rails themselves. end the monopoly.