When Is Intermodal a Good Way to Go?
“What risk?” protested two railroaders on a panel of logisticians discussing truck-rail movement of containers and piggyback trailers.
Almost no risk, responded two users of rail service, who said that all the horror stories you may have heard are out of date.
To be sure, the best service is found in the high-volume lanes, while in many other lanes there is no service at all. Railroads need volume and long distance to make their services pay, and their users know it.
To draw a clearer picture, he said 3% of Kraft’s refrigerated goods and 31% of its plant-to-plant movements go intermodal. In traffic lanes where intermodal is effective, he said, 55% of his shipments ride the rails for at least part of the way.
It’s no surprise that motor carriers are quicker in shorter hauls, and that rail catches up in distances requiring four and five days of transit time. Trucks are still better if freight needs to get there the morning of the fourth or fifth day. Yet intermodal ought to be looked at if afternoon deliveries are sufficient, Mr. Hurckes said.
Kraft enjoys “excellent, dependable service” from intermodal providers and “equipment is there most of the time you need it,” he said.
Breakage? “Let me tell you, that’s improved,” he continued, because the railroads have changed equipment to reduce sway and other causes of in-transit damage to cargo.
He also said bottom-line savings of $100 to $500 per load, compared with over-the-road trucking, are typical.
The downsides of intermodal are slower speed — especially compared trucking service by driving teams — and the greater inventories that ride in the containers or “pigs,” which sometimes take longer to get there, according to Mr. Hurckes.
Many of Schneider TruckRail’s potential customers are reluctant to rely on rail service, said Frederick Richardson, vice president of the intermodal arm of Schneider National Inc.
He said 60% of them “refuse conversion” because of negative stories they’ve heard, and another 25% believe their customers need the faster service that an all-truck movement can deliver.
But careful quizzing may reveal that receivers actually don’t want the typical early morning deliveries associated with trucking. And don’t forget the long waits to unload that many truck drivers endure. In those cases, Mr. Richardson said, “we can save (shippers) money” with intermodal.
He cited savings over all-truck haulage at 10% to 25%, but said it can be much more with longer distances.
As for swiftness, he said studies show that low average speeds of trains are comparable to the 21-mph average that a solo driver does on a long haul.
After such testimony, the representatives of Burlington Northern Santa Fe and CSX Intermodal could have stayed seated. But both explained how their giant railroads are improving service through expansions of track capacity and purchases of equipment.
Steve Rampkin, vice president of intermodal for BNSF, said his company acknowledges the problems with its own merger and has sympathy for Union Pacific’s indigestion from gulping down Southern Pacific.
CSX has learned from those mistakes and promises not to botch things as it takes over 42% of Conrail, said Peter Rutski, vice president of business planning for CSX Intermodal.
He said the Conrail acquisition will let CSX intermodal service the routes between the Midwest and Memphis, Tenn.; Florida and the Midwest; Atlanta and northern New Jersey, also known as the “I-85 route”; and Miami and northern New Jersey, the
I-95 route.”
