Inefficient Intermodal Terminals Slowing Supply Chain, Execs Say

FORT LAUDERDALE, Fla. — Efforts to improve intermodal productivity continue to be frustrated by inefficient terminal operations that punish truckers.

That urgent theme ran through the Intermodal Expo here last week, where industry leaders groped for fresh approaches to driver, chassis, maintenance and operational challenges that arise inside intermodal terminals.

“Improving the overall efficiency in turn times [for truckers] is the key” to boosting efficiency, said Hans Stig Moller, president of XPO Drayage, a unit of XPO Logistics, adding it can still take six hours for a trucker to get through a port terminal.

XPO ranks No. 12 on the Transport Topics Top 50 list of the largest logistics companies in North America.

“Look at how much time is being wasted,” said Steve Sperbeck, general manager of drayage fleet Empire Logistics, who said turn times at some New York-New Jersey port terminals can top three hours.

Delays are the biggest reason for driver turnover at Empire, he said, as drivers make just one or two trips a day, not the four or five needed to make a better living.

“Nobody wants to sit around, even though we pay them,” said David Manning, president of drayage fleet owner TCW Inc., and an American Trucking Associations vice chairman. “[Drivers] aren’t used to delays they see in intermodal, so some of them leave.”

“Drayage drivers are under siege,” said Curtis Whalen, executive director of ATA’s Intermodal Motor Carriers Conference. “Their working environment and compensation must be addressed and improved or the system will not be able to sustain current or future freight demands.”

Moller explained how issues unfold.

An importer can use as many as nine companies to move cargo, each with their own rules for using the equipment once it hits the port terminal.

Truckers must evaluate each ocean carrier’s rules and match up with both chassis and containers that may be covered by separate agreements as they deploy equipment, Moller said.

He and Tim Phillips, president of Universal Intermodal Services, illustrated how such operational complexity hurts financially. They said a drayage move’s profitability is wiped out by a $100 charge for a “flip,” industry jargon for moving a container from one chassis to another.

Ron Faherty, president of ARL Transport, said terminal delays should be “easy, soft targets” for productivity improvements.

He also said the efficiencies of intermodal water and rail service evaporate if customers’ deliveries are disrupted by terminal delays.

Larger forces trigger terminal delays, others said.

“The supply chain doesn’t begin and end with chassis supply in terminals,” said Noel Hacegaba, chief commercial officer at the Port of Long Beach, California. “We have to look at the larger supply chain. We are still trying to get the kinks out.”

Said Bethann Rooney, assistant director of the port commerce department at the Port Authority of New York and New Jersey: “Terminals are the ones that take the blame. This is a supply chain issue upstream and downstream.”

Thom Albrecht, an analyst at BB&T Capital Markets, linked terminal difficulties to ocean carriers’ ever-larger ships. He said those carriers “never ask; they just do it” when they send bigger ships into ports, creating a landside mess.

“The rest of us have to deal with it,” he said. “[Ocean carriers] get all the savings, and the ports have to deal with the problems.”

Several speakers specified consequences.

Moller’s fleet spent $1.3 million on repairs, mostly tires, to chassis that were defective when they left the terminal. The easiest improvement, he said, would be to replace commonly used, blowout-prone bias ply tires with radials used everywhere else in trucking.

“Time is money, but no one wants to hear it. In some cities, we have drivers sitting for half a mile waiting to get into the port,” Faherty said, which subjects truckers to tickets from police for blocking traffic.

Locating a shipment can waste time, too.

Darren Edwards, a Chicago area driver for Schneider, said it sometimes takes almost two hours to find a shipment. That’s a significant delay for Edwards, whose target is an hour or less per crosstown run.

Truckers with a hazardous materials load can spend up to 90 minutes submitting paperwork at a rail terminal, Edwards added.

Paperwork problems arise, several speakers said, when printers at automated terminal gates run out of paper needed for a pickup or drop-off.

Several speakers emphasized still broader implications.

Labor organizers who are trying to convert independent contractor drivers into employees and potential union members capitalize on delays and inefficiencies to recruit workers, Faherty said.

Drayage operators also identified a long-term limitation linked to technology.

Robert Curry, president of California Multimodal, and Phillips observed that potential truck productivity improvements such as platooning won’t work in port and rail terminals because there isn’t enough space.