Intermodal Transportation: The evolution from an afterthought to the main feature

Transcription

1 Intermodal Transportation: The evolution from an afterthought to the main feature August 21, 2014 TRANS-SOLUTIONS, INC. ENGINEERED ANSWERS TO THE HIGH COST OF LOGISTICS

2 Title: Giles Taylor President and Founder Giles Taylor is founder and President of Transsolutions, a transportation consulting firm specializing in package freight and modeling. Giles started Trans-solutions, Inc. in 1998 to help companies improve their transportation operations and lower costs. Trans-solutions has completed a multitude of projects that include all modes and methods of transportation with spend from $1m to $150mm. Giles has over 25 years of experience of engineering, directing, and optimizing distribution and transportation systems. He brings to clients his hands-on knowledge of best practices in managing staff and operations in distribution centers, transportation departments, in-house fleets, and customer service centers. Trans-solutions are transportation engineers. Company: Trans-Solutions Inc. gtaylor@trans-solutions.com

3 Intermodal Transportation: The evolution from an afterthought to the main feature August 21, 2014 TRANS-SOLUTIONS, INC. ENGINEERED ANSWERS TO THE HIGH COST OF LOGISTICS

4 Agenda 4 History of intermodal freight How does IMDL fit in the scheme of transportation operations? Intermodal justification Who are the players? Where it works, where it doesn t Pricing The future of intermodal

5 Intermodal 5 The transportation of freight in a container that works across multiple modes (rail, ocean, surface).

6 The History of Intermodal Freight 6 Predates rail use in transporting coal via waterways Rail massive expansion in mid 1800, replaces canal transport as main method of moving commercial goods Nationalized early Still a monopoly In the 1950 s, freight was mostly break bulk (ex. oil) Got its jumpstart from department of defense WWII standardization of containers to move military goods In the 1960 s, container shipping became popular McLean s renamed Sea-Land Service broke into biz - Vietnam Integrated into SC by 1980 s, but challenges with MTs & coordination with railroads Key drivers - Int l distribution, new technology, better managing MTs & capital ($bil) GPS, tracking technologies, CSX, UP, JB Hunt, PACER, etc. Sustainability on the agenda

7 Intermodal as a Strategic Advantage 7 ~ 25 million containers & trailers move via IMDL The fasting growing mode of transportation 10.2 yr. over yr. gain in container volume. 6+ quarters of 10%+ increase Intermodal Association of North America s (IANA) for % shippers shifted some business to intermodal 57.7% of others in survey anticipate shifting some freight in future State of the Industry Report published this April by NASSTRAC

8 Intermodal as a Strategic Advantage 8 Driver shortages Increase fuel prices New hour of service rules Truck capacity Declining road infrastructure Faster

9 Intermodal Justification 9 It might be this simple. If you can give up a day or two of service to save money, use it. If green initiatives are a big part of your strategy, use it. If you are worried about truck capacity, use it. If you have a drop trailer strategy, use it. More efficient Less damages and claims Lower cost Greener

10 Expansion in IMDL terminals 10 A lot of investment is going into intermodal transfer stations Established Centers UP - CenterPoint Intermodal Center, Joliet, IL facility - Wal-Mart BSNF CenterPoint Intermodal Center, Elwood, IL - Home Depot CN RidgePort Logistics Center, Memphis, TN - Nike New Centers NS Heartland-Gateway, Wayne County, WV CSX - Florida East Coast Railway (FEC), Port Everglades, FL & Port of Miami, FL KS & BNSF NEOSHO (MO, OK, KS, AR), Noeosho, MO

11 IMDL has its challenges too 11 Inland terminals: Inland facilities such as Chicago, Columbus, Cleveland, Kansas City, Omaha, Detroit and St Louis, are still experiencing significant truck shortages and delays at the Rail terminals. Units arriving these locations can anticipate 24 to 48 hour delays from the time the units actually arrive to the time they are made available for pick up. Also truckers are now advising that they are booked out 2 to 3 days in advance. Long Beach and LAX: Carriers are still experiencing significant congestion at the majority of ports in the LAX and Long Beach area. In addition, as we continue to face significant shortages of chassis in the area, we are diligently working with all of our drayman in an effort to expedite the turn times of long dwelling equipment sitting idle at those warehouses in Long Beach and LAX. Productivity in and out of terminals remains fluid during non peak hours. While there has been significant improvements in moving units via rail in and out of the ports, we are still seeing some rail delays on the East and West bound movement of traffic. The Union Pacific is incurring track delays as well engine shortages in the region. Everyone should anticipated 24 to 48 hour delays from normal departures. Oakland: The Oakland Terminal remains congested, but we are seeing improvements with units moving in and out of the area. There still remains a shortage of truckers in the area, and local deliveries are still being delayed by 2 days due to this shortage. Tacoma: The Tacoma operations remain congested and have encountered additional volume disruptions. We are further experiencing UPRR delays from their departure. Because of power shortages by the UPRR we are now anticipating 48 hour delays for units that will be arriving over the next 3 to 4 days. Vancouver: Congestion in Vancouver continues due to overall volumes. In addition, we are being advised that traffic bound for the U.S is further causing congestion issues on both the CP and CN. At this time traffic bound for the U.S is anticipated to be delayed by 3 days. The gate operation continues to be challenging for truckers as they try to exercise their ability to obtain night gate appointments which have been limited the past several evenings. At this time we are anticipating a 24 hour delay in delivering cargo from the terminal. Savannah: Operations at the port have improved, however, we are continually encountering shortages in truck power in this area too. Local deliveries have been delayed by 3 to 4 days due to the backlog the truckers are experiencing. Norfolk: Norfolk Terminal operations continue to challenge drayman in the area. The terminal fluidity is causing our drayman long delays, which in turn results in missed appointments. We ve addressed the significant delays with senior management at the port and they have indicated changes will be made to ease the situation. Additionally, the ports will remain open on Saturdays for cargo pick up and deliver. Wilmington: We are experiencing a shortage of truckers in the area, but we are seeing an improvement over the past two weeks. Charleston: Operations are fluid today in Charleston. New York: New York is reporting limited congestion at the Maher terminal this week, however, the gates have been heavy this week and are anticipated to remain congested for the next few weeks. - Hellman Worldwide Logistics

12 Who Are The Players? 12 Who do I contact for intermodal pricing Seems like everyone and anyone today Many Third Party Logistic Providers have rates with rail carriers Top ISP/ IMC: PACER, JB Hunt, CH Robinson, The HUB Group, Triple Crown, Schneider, CSX Intermodal, IDS, Coyote, Echo,.

13 Selecting an ISP/ IMC 13 Price Pricing is negotiable Service (days in transit) Not every ISP has the same time in transit Assets Some ISP own the containers Financial Stability Due diligence Technology This could be your piece of mind

14 Where it works/ Where it doesn t 14 Works Longhaul, > 800 mi Port to Ramp O/D pair railhead match Less urgent freight Doesn t Shorthaul, < 600 mi Time sensitive freight Certain appointed fgt Cold chain

15 Pricing 15 Typically cost/ mile or spot Fuel Surcharge, either per mile of percent of freight Similar accessorials to TL Savings are usually from lower FSC, but not always

16 The Future of Intermodal 16 It depends Money typically causes change, sometimes service, green rarely in US Scenarios OTR capacity shrinks severely and IMDL pricing goes up substantially Some large rail accidents ISP/ IMC don t make investment in assets The cost of fuel drops significantly US companies start a green love fest OTR capacity grows

17 17 Some Statistics

18 2014 Rail Scorecard 18

19 19 Bryant - Supply Chain Management Summit

20 20 Bryant - Supply Chain Management Summit

21 21 Bryant - Supply Chain Management Summit

22 Reference documents/ Sources Info 22 Rail/Intermodal: Going above and beyond on the rails _rails Intermodal Association of North America (IANA) Interesting charts and whitepapers Journal of Commerce (JOC) The Association of American Railroads (AAR)

23 23 Thank You