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The Relationship Between Technology & Intermodal Capacity

The Relationship Between Technology & Intermodal Capacity

In a world where operations don’t have an option to slow down, capacity concerns are issues that will always be a burden in the back of any operator’s mind. Whether you’re running a rail, port or even distribution center, capacity options are vital to keeping operations running–and efficiently. The last thing you want to see is a competitor taking the business you could’ve easily handled, but didn’t, all due to capacity restraints. Even worse, capacity restraints you didn’t anticipate, leaving your company seeming to look unprepared. Not only that, it ultimately tells prospective, lifelong customers that proactivity doesn’t exist in the company strategy and day-to-day operations. Proactivity is equally important as visibility.

These two features are complementing elements to operational success, but it’s nearly impossible to tap into their potential the old-fashioned way. The good news is there are options in the form of technology and innovation that stay one step ahead of you–meaning you have a system completely capable of updating you on what’s going on and what needs to be addressed, all at the click of a button while taking the stress off you. Insight given from leaders in transportation all share a common theme: visibility is key.

“There is not any difference in the requirements for [handling] truckload versus intermodal in today’s market,” InTek Freight and Logistics President Shelli Austin recently told Intermodal Insights. “It’s now falling into the need for visibility and on-time service. Before, it was the deferred ‘it will get there when it gets there’ type of freight. All successful 3PLs need to have the same real-time information for intermodal that they do for [over-the-road] freight.”

“3PLs are being asked to do more multi-leg management, particularly of drayage at both origin and destination,” says Tommy Barnes, president of project44, which bills itself as the world’s leading advanced visibility platform for 3PLs and shippers. “It is a little bit harder, but they are providing a lot more value to customers.”

Automation continues to make news headlines with its unmatched ability to seamlessly connect almost every aspect of each industry, including intermodal transportation. The main takeaway from automation integration is the level of visibility and connectivity provided among workers and companies that partner for the bigger picture. This shows customers the level of expertise and preparedness your company provides for their needs, ultimately creating competitive advantage and ensuring business keeps moving. The theme of the solution in demand is an increase in more accurate information.

“The key technology for the intermodal product is the ability to capture real-time drayage information at pickup and delivery,” Austin noted in the article. “It is easy to get the information once the container is in the possession of the rail lines. The challenge is grabbing the information from all the different truckers that can and will be used to create capacity for these moves.”

With that being said, blockchain technology continues to provide the solutions, information and visibility necessary for providers and terminal operators to ensure the measures needed are in place to avoid operational hiccups such as terminal overload and miscommunication.

More recently, Kalmar Global announced how it would provide its SmartPower rubber-tyred gantry cranes (RTGs) to Norfolk Southern in an effort to extend capacity efforts through its integrated system.

Norfolk serves as a transportation industry leader, boasting 19,500 route miles in 23 states. The company can also brag about an extensive network at every major container port in the eastern United States. Kalmar’s SmartPower RTGs were specifically chosen to improve capacity at Norfolk’s intermodal terminals in Chicago and Rossville in Memphis, Tennessee.

“We are very pleased to be able to continue our collaboration with Norfolk Southern and to support them with the optimization of their intermodal operations,” says Troy Thompson, vice president of Sales at Kalmar Americas. “The proven Kalmar SmartPower RTG provides the perfect balance between productivity and cost efficiency in a variety of container-handling applications.”

Whether it’s partnering with a company that knows what it takes to keep capacity issues minimal or implementing a technology platform—or both—the bottom line is to ensure visibility, ability and operations are not compromised. In a C.H. Robinson blog, author Phil Shook, the director of Intermodal, explains that intermodal shipping will play a role in driving business growth for American railroads, citing that “the 70 intermodal ramps continue to expand.” With this expansion will nonetheless come capacity concerns, providing even more of a reason to invest in automated technology that can keep up with rapid expansion and demand without falling behind.

In his post, Shook makes a fantastic consideration by adding that, “Knowing exactly where a shipment is in transit has quickly become the expectation rather than exception. Companies and consumers expect near real-time notifications about every step of a product’s journey—including facility and town names. And just like the truckload sector, intermodal providers are working hard to deliver.”

This snippet from his blog reiterates the need for an uncompromising level of knowledge from when and where the next load is going. Because the market and its ever-evolving nature continues more demand, it’s imperative to invest in an all-in-one transportation management system that goes beyond what an average TMS provides. Why? Your business simply cannot afford to not have a reliable TMS in place. If you’re lucky enough to find a provider that can not only provide a robust TMS but also integrate new levels of technology, even better, albeit difficult to come across.

Beyond your company’s terminal capacity management, technology integration is now the new standard to global operations. Customer demands will continue to rise, at times becoming more complex and challenging than before. Consider the missing elements in your operations strategy that ultimately hinder providing the very best to customers. Additionally, don’t forget to thoroughly educate and inform employees of changes to come, showing them how to work smarter and not harder. Through this level of anticipation, proactivity and integration, you will foster an environment that motivates instead of overwhelming.

intermodal

HOW TO BE AN INTERMODAL SHIPPER OF CHOICE

Fluctuating capacity and freight rates along with increased focus on efficiency and sustainability have led to substantial growth in the intermodal market in recent years. As more companies now compete for intermodal capacity at competitive rates, it is important for shippers to set themselves apart from the competition by being attractive partners to their intermodal carriers. 

By being a “shipper of choice” and implementing flexible and efficient practices, companies can build collaborative, mutually beneficial relationships with their intermodal carriers. This better positions them to secure capacity at stable, competitive pricing and enhance service levels and improve overall performance. 

Why It’s Important to be an “Intermodal Shipper of Choice” 

While being a “shipper of choice” has been a hot topic in recent years, the focus has primarily been placed on over-the-road shipping. And while there are many similarities between the two modes, there are also some nuances that must be considered to be an “intermodal shipper of choice” in particular. 

First, because loads are tied to the equipment instead of to an individual driver, there must be an equal (if not greater) focus on equipment management and efficiency in addition to driver efficiency. By placing equal focus on implementing “carrier-friendly” tactics for intermodal freight, shippers can strengthen carrier relationships and better control costs. This, in turn, ensures enhanced intermodal service performance–increasing the ROI of utilizing the mode.

Here are some strategies organizations can use to become an intermodal shipper of choice:

Engage in annual renewals with incumbent carriers rather than annual RFPs. While annual RFPs can yield savings, they also increase uncertainty and risk for both shippers and carriers. By focusing on long-term commitments with incumbent carriers through annual renewals, shippers and their core carriers can continuously foster a relationship of mutual trust and ongoing success. Through this relationship, the carrier and its drivers become intimately familiar with the shipper’s network, freight and business, and the shipper gets to know the carrier’s operations and the drivers responsible for picking up and delivering their loads.

Accurately forecast freight volumes. The ability to forecast freight volumes and seasonal swings allows shippers and carriers to proactively plan (and reposition) equipment and drivers to provide adequate capacity. Sharing this information not only helps provide more consistent service but can be beneficial for both sides on an ongoing basis. 

Consistent freight volumes. Having consistent volume spread out throughout the week, month or year makes appointment scheduling and equipment planning easier for the carrier. And if shippers do ship heavier at certain times, it is important to set and manage expectations with carriers. 

Equipment pool requirements in line with volume. Pool requirements that are in line with volume allow shippers to turn boxes on a regular basis and keep loads moving at a consistent pace. This helps maximize equipment utilization while minimizing equipment costs.

Inbound and outbound volume. Setting consistent inbound and outbound volume out of facilities allows drivers to pick up loads immediately following a drop-off. This reduces empty miles and improves both driver and equipment utilization. These efficiencies will ultimately result in better rates from carriers. 

Utilize drop and hook freight capabilities. Drivers want to be able to get in and out of a facility in an efficient manner, at any time. Drop and hook freight capabilities create load flexibility, reducing congestion in the yard and maximizing driver utilization by minimizing detention time. 

Flexible pick-up and delivery appointments. For customers that require pick-up and delivery appointments, it is important to make them as flexible as possible. This drives further efficiencies for both the carrier and the shipper.

Reasonable payment terms. Shippers should have timely freight payment terms (often 30 days or fewer) and keep to those terms. It is also important to have a system in place to quickly resolve any discrepancies.

Provide driver amenities at the facilities. By providing driver amenities at their facilities (such as bathrooms or waiting lounges), shippers help make the pick-up and delivery process easier and more comfortable. These simple comforts show that the shipper views the carrier (and its drivers) as a valuable part of their operations versus a commodity. 

Utilize facilities in close proximity to intermodal terminals. Facilities that are located near intermodal rail terminals allow rail to be a more competitive option for a shipper. While this is not always possible, shippers looking to build new facilities should consider placing them near rail ramps in order to take advantage of more intermodal opportunities. 

Intermodal Presents Significant Opportunity for Shippers

Intermodal continues to be a cost-effective, efficient and sustainable way to move freight and should be a key piece of any strategic modal mix. And as more shippers compete for capacity and competitive rates, it’s important for shippers to best position themselves to be attractive partners to intermodal carriers. This will allow them to better take advantage of intermodal while helping to control costs and enhance service performance. 

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Doug Punzel is president of Celtic Intermodal, Transplace’s intermodal business unit. David Marsh serves as Celtic Intermodal’s chief operating officer and helps oversee all daily operations. 

Topics of discussion included: terminal overload and new technologies to increase throughput; tightened trucking capacity; needs of shippers and adaptive change in the supply chain

IANA Intermodal Expo 2018: Key takeaways and discussion topics

Beautiful Long Beach, California was the setting for IANA’s (Intermodal Association of North America) annual expo, the IANA Intermodal Expo 2018. Over 2,000 representatives from the intermodal and transportation communities touched down to present, converse, debate and exchange ideas surrounding trends and issues shaping the future of the larger intermodal supply chain community.

We had the pleasure of exhibiting and attending with those 2,000 plus attendees, and this year’s expo was chalk full of over 60 industry experts and a staggering 125 plus exhibitors showcasing some of the most technologically advanced products and services the intermodal industry has seen.

Day 1:

The morning of Day 1 kicked off with Bill Strauss, senior economist and adviser with the Federal Reserve Bank of Chicago. Mr. Strauss managed to bring an initial, collective smile to the room, noting that the 2018 expo is meeting at a time of strong economic growth. Consumer spending and GDP are up, the economy has been growing at an average annual rate of 2.3 percent (since 2009), and if this continues through July of next year new records will likely be reached.

The intermodal industry numbers support Mr. Strauss, as intermodal volumes were up 7 percent (as of August 2018) compared to last year with the third-party logistics sector also expanding – global estimates peg the market to reach $968 billion this year, compared to $869 billion last year.

IANA is a “connecting force” for the intermodal freight sector, bringing together the most relevant (and up and coming) players via the creation of spaces, such as the Intermodal Expo, to stay informed, drive industry success and strengthen the broader community. IANA members count on a wealth of resources, but most important, access to relevant trends that are shaping the sector at breakneck speeds.

Day 2:

A handful of truly remarkable innovations were on-hand at this year’s expo. A recurring issue year in and year out is terminal overload. Moderated by Taso Zografos, Principal at ZDEVCO, the panel, “Intermodal Terminal Overload: How Can Technology Help?” brought together a handful of expert panelists on the issue where autonomous vehicles, automated stacking cranes and similar “smart equipment” was presented. Warehouses, marine terminals and rail ramps are fantastic for “smart equipment” due to little vehicle traffic and confined areas. The next challenge however will be rolling this out to harbor drayage and the open road. As Wade Long, regional vice president of Volvo Trucks astutely noted, heavy-duty diesel trucks, many operated by living, breathing drivers, will still be around for at least the next 50 years.

Another recurring theme throughout the two-day event was productivity, especially in a time of truck driver shortages. This has been a troubling point for some time, where a shortage of drivers produces bottlenecks throughout the supply chain thus hampering productivity at a macro level. Larry Gross, president of Gross Transportation Consulting, moderated an engaging panel surrounding this very issue. Driver productivity has been on the decline, and Phil Shook, director of intermodal for C.H. Robinson, communicated it best noting that the industry standard used to be 500 miles per driver, and that has now dipped into the 400s. The room agreed that getting an extra half-a-load per driver per day is the proverbial Holy Grail.

Next year’s expo will be held September 15-17, 2019 in that same jewel beside the bay – Long Beach, California. Pack your swim-trunks, this is an expo you don’t want to miss! Register to exhibit before space fills up or if you are just looking to attend, registration opens up in March of 2019.