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1 Mar 2010 at 3:00am
Intermodal freight volumes showed their first year-over-year gain in 15 months during December as the U.S. economy improved, raising hopes for a resurgence, said the latest Intermodal Association of North America market report.
1 Mar 2010 at 2:45am
The lengthy and ongoing truck sales drought caused America's Class 8 truck fleet to contract 2.1% during the fourth quarter, the first such decline since the third quarter of 2008, according to the year-end report on commercial vehicle registrations by R.L. Polk & Co.
1 Mar 2010 at 2:30am
The U.S. Senate last week passed legislation that would extend current highway legislation and transfer $20 billion to the Highway Trust Fund, but a key legislator reportedly said the Senate bill would not pass the House of Representatives, which already has approved a broader, more expensive measure.
10 Mar 2010 at 5:56am
After 45 years in its previous facility, American Airlines Cargo has opened its newly relocated cargo terminal at John F Kennedy International Airport (JFK) in New York.
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10 Mar 2010 at 5:55am
DHL Express Sri Lanka has opened its new airside gateway facility inside the Bandaranaike International Airport, Katunayake - Terminal 3.
10 Mar 2010 at 5:53am
Kenco Logistic Services (KLS), through its wholly owned subsidiary Kal-Serv, has announced the formation of Team 3 Logistics - a joint venture with Schnellecke of America.
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10 Mar 2010 at 5:53am
US-based BDP International has established a new joint venture company in India with local company Unique Global Logistics.
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10 Mar 2010 at 5:52am
Samsung appoints CEVA in Italy; Louis Vuitton selects Kuehne + Nagel in Japan; Odyssey Logistics & Technology expands its work for W R Grace & Co; RockTenn renews Transplace's contract; and Coyne Airways is appointed RUS Aviation's exclusive sales agent in the UK & Ireland.
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9 Mar 2010 at 5:36am
eyefortransport has now compiled the 2010 Logistics CIO Report, based on the results of its annual survey, which had an overwhelming response this year of more than 150 executives in supply chain and transport & logistics fields.
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9 Mar 2010 at 5:33am
Deutsche Post DHL generated underlying EBIT of '1.47 billion in the full year 2009, exceeding its November forecast of at least '1.35 billion.
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9 Mar 2010 at 5:00am
FreightScan has formed a strategic partnership with Swissport International to enable the aviation ground services provider to install automated dimensioning systems in facilities across its global network and offer a premium level of cargo handling services to airlines.
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9 Mar 2010 at 4:52am
TNT Hoau, TNT's road distribution arm in China, has completed its nationwide day-definite road distribution network, extending coverage to Chengdu, Chongquing, Zhengzhou, Xian, Yantai and Xiamen.
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9 Mar 2010 at 4:51am
To support airlines and help them recover from the severe downturn of traffic worldwide, Athens International Airport has announced that pricing of all airport charges will remain unchanged throughout 2010.
10 Mar 2010 at 10:53am
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10 Mar 2010 at 11:19am
The United States Department of Transportation's Bureau of Transportation Statistics (BTS)...
9 Mar 2010 at 12:24pm
Survey of trucking executives finds optimism in the...
5 Mar 2010 at 12:59pm
A group of 56 members of Congress this week penned a letter to United States Trade...
5 Mar 2010 at 10:20am
Vote is similar to Senate one earlier this week, with some differences regarding how...
4 Mar 2010 at 1:35pm
Data released today by the Association of American Railroads indicated that weekly carload...
3 Mar 2010 at 1:42pm
Old Dominion Freight Line (ODFL) said today it has opened a new, state-of-the-art warehouse...
3 Mar 2010 at 12:34pm
Trade using surface transportation between the United States and its North American Free Trade...
3 Mar 2010 at 9:59am
The United States Senate passed a vote to extend federal highway and transit funding-and other...
2 Mar 2010 at 1:50pm
A Reuters report published this week indicates that less-than-truckload transportation services...
2 Mar 2010 at 10:51am
Following its January announcement that it planned to acquire Bright Truck Leasing and Bright...
6 Mar 2010 at 6:25am
The Intermodal sector faced many of the same challenges as other segments of the transportation industry during the recession and suffered some decreases in business in 2009. Toby Kolstad, President of Rail Theory Forecasts in Portland, Oregon attributed the volume declines to two factors. 'About 70 percent of the downturn in business is attributed to the drop in imports and the other 30 percent is due to the drop in domestic sales. I don't see the traffic picking up substantially in the future because I think retail sales of goods will continue to lag. There is just too much unemployment, debt and an overall feeling of loss of wealth.' He forecasts that intermodal volumes will return to pre-recession levels by 2014.
Against this backdrop of discouraging news, the rails are not standing still. In fact, there has been a flurry of developments over the past several months that demonstrate that the industry is still vibrant and poised for growth.
Major Truckers and IMC's restructure their Partnerships with the Rails
J.B. Hunt, once America's largest truckload carriers now generates significantly more business from its intermodal business. For the past 20 years, Hunt has had an alliance with BNSF Railway, the largest intermodal railway. With the largest fleet of domestic 53-foot intermodal containers, estimated at 41,000 boxes, Hunt has been achieving consistent growth in its western USA intermodal business. Late last year it signed an agreement with Norfolk Southern Railway to grow its eastern USA business.
Schneider National, one of its major competitors, has partnered with CSX, NS's leading competitor in the east. Schneider is focusing on the Chicago-Florida, Chicago-Northeast and St. Louis-Northeast routes.
UP last year renegotiated a long-term space and pricing contract with Pacer International, a large freight management company that allowed the railroad to directly take over more domestic business. Before that it lured Hub Group, another large IMC, to shift much of its western-U.S. traffic onto UP from rival BNSF Railway.
Expanded Rail Corridors to Take Advantage of the Widening of the Panama Canal
The western rails have served as the land bridge for Panama Canal traffic. CSX and Norfolk Southern are positioning themselves to capitalize on what they hope will be a shift of customers to east coast ports as the Panama Canal is widened by 2015. This is resulting in a set of upgrades and intermodal expansion to facilitate the movement of containers through east coast ports. This eastern development is expected to pave the way for double-stack trains along these corridors.
The Heartland Corridor is being implemented to increase double-stack intermodal traffic from the port of Virginia, the deepest east coast port, into the Midwest, primarily Columbus and Chicago. Several railroads have plans to invest in intermodal facilities in Memphis to facilitate traffic along the Norfolk Southern Crescent Corridor, a high-speed route between the South and Northeast which boasts the ability to take 880,000 long-haul trucks off the busy commercial corridor annually.
CSX Corp. recently received $98 million in federal stimulus funds toward its goal of increasing the use of double-stack trains to move freight from mid-Atlantic ports to Midwestern markets. The $842 million public-private partnership, known as National Gateway, involves upgrading existing track, modifying bridges and raising tunnel clearances along three major CSX routes -- the I-95 corridor between North Carolina and Baltimore, I-70/I-76 between Washington and northwest Ohio via Pittsburgh, and the company's Carolina Corridor between Wilmington, N.C., and Charlotte, N.C. -- to accommodate the taller freight cars. One such train can carry the load of more than 280 trucks. In Virginia, the project would take an estimated 1 million trucks off I-81 in its first 10 years -- far less than Norfolk Sothern's Crescent Corridor plan.
Prince Rupert offers Shortest Transit Times from the Far East
Much has been written about the Port of Prince Rupert on the west coast of British Columbia. The port that in conjunction with CN Rail links the Far East to the heartland of the United States remains a key component of NASCO (North American Super Corridor). Container volumes are projected to grow from 500,000 TEU's to 2 million per annum.
The Move to Jumbo Containers
CSX Transportation in the eastern United States and Union Pacific Railroad in the West will soon be jointly marketing a domestic intermodal service in jumbo-sized containers. Dubbed UMAX, the service will give customers single-bill interline routing on more than 600 traffic lanes, and the railroads are backing it up with 20,000 of the big 53-foot boxes. The carriers said UMAX begins operating March 29, with door-to-door service that will be competitive with trucks by combining short-haul trucking with long-distance rail.
The Warren Buffet Factor
Warren Buffet has a reputation as a benevolent investor who allows the leadership teams in his companies to run their businesses, unless they falter. Some experts believe that he will maintain this 'hands off' approach while others foresee him trying to move BNSF, his largest investment ever, in some new directions. Specifically, there are those who believe that by removing the focus on quarterly returns, this may allow the company to change its large network in ways that produce faster growth (e.g. take more freight off the road, sign contracts with ocean carriers). He may also look at a merger with Norfolk Southern in which he already has a stake and invest in dual power locomotive cars that are not currently used in the United States. Certainly if fuel costs begin to rise significantly over time, the BNSF would be uniquely positioned to divert business from road to rail.
Don't Forget About Mexico
The Kansas City Southern Railway is focusing on the Kansas City to Mexico corridor and the Rosenberg (Houston) to Mexico City corridor. New intermodal terminals are planned for Toluca, Mexico and Rosenberg, Texas. Mexico is also looking for significant container growth at the ports of Lazaro Cardenas and Manzanillo.
Transloading
This continues to be an option in certain situations where it becomes economically viable to utilize the domestic intermodal rail network and take advantage of opportunities to pool freight to specific destinations.
If they build It, will they come'
Taken collectively, these activities paint a picture of a mature industry that is in the process of revitalization. One would think that these new offerings would be warmly received by shippers. However, customers of Canada largest railways have issued a damning review of the quality of service they have received in recent years. The findings are part of the federal government's ongoing Rail Freight Service Review process which could potentially lead to greater regulation of the rail industry in Canada after the recommendations of the commission are given to Parliament in the fall.
Some of the initial findings contained in a survey of 269 shippers across the country chastise Canadian National Railway Co. and Canadian Pacific Railway Ltd. for unsatisfactory service. Only about 17% of those surveyed said they have a high level of satisfaction in the service they have received from either CN or CP. Typically, such customer satisfaction surveys elicit a response in the 50% to 70% range, said Andrew Ennis, who conducted the survey by NRG Research Group on behalf of the federal government. Moreover, 62% of those surveyed said they had suffered significant financial losses sometimes in the millions, as a result, Mr. Ennis added. Terminal operators, port authorities and shipping lines have also reported concerns about the level of service they have received from the rails.
Most shippers in North America are captive to one or two railways in their market areas so there are not a lot of options. While shippers do not want to see the government take over the railways again or heavily regulate them, they would like some measures implemented to balance the playing field, said Bob Ballantyne, President of the Canadian Industrial Transportation Association, the main shipper lobby group. Shippers would like to see some sort of financial penalties made available if rail cars show up late, like the demurrage fees the railways charge shippers. With all the exciting changes taking place in the intermodal transportation arena, the railways would be advised to upgrade their customer service to reap the full rewards from their new intermodal products and services.
27 Feb 2010 at 8:13am
Last year was a disaster for the LTL segment of the freight industry. As business volumes contracted and YRC, one of the industry giants, teetered on the brink of bankruptcy, many LTL carriers sacrificed their pricing discipline in the hopes of gaining market share and driving YRC off the LTL road. Rather than reducing capacity to meet demand, a number of carriers used price as a weapon to increase volumes. Ultimately this strategy failed with the LTL sector posting the largest year/year decline in rate levels.
The North American economy is improving in 2010 but very slowly. YRC, with its debt for equity swap, has a new lease on life. This has driven many LTL carriers back to their board rooms in an effort to revise their strategies and rebuild their tattered financial statements. The broad outlines of these new strategies are now starting to take shape.
Douglas W. Stotlar, president and CEO of LTL carrier Con-way described his company's strategy as follows. 'Our focus is on driving efficiencies into the network, building volume and improving yield.' This is likely a theme to be repeated by many LTL carriers this year. Here is what Con-way and some other leading LTL carriers are doing.
Matching Supply to the Reduced Demand
Con-way Freight is approaching the task of building network efficiency with a broad re-engineering of its network, slicing transit times between 460 destinations by reducing handling, and, in turn, building the density on its shortest, most direct routes that truckers say is critical to profit.
Faster Service to Expanded Service Areas, including Canada
Cross-border freight between Canada and the United States has long been one of the most profitable segments of the LTL industry. Holland, a YRC regional carrier, announced the availability of its enhanced next-day service reach between Toronto, Canada, and seven markets in the Midwest and reduced transit times on an additional five lanes in and out of Toronto for enhanced two-day service.
Holland is claiming that these service improvements give them the largest next-day footprint between Toronto and the Midwest, including new next-day service with Chicago, Joliet and Wheeling, Ill., Cincinnati; Huntington, W.Va., and Indianapolis. With its expanded next-day service footprint, the company can also deliver enhanced two-day service to Joplin, Springfield and Kansas City, Mo., Memphis, Tenn., and Worthington, Minn., shaving a day off transit times to these markets.
UPS Freight is speeding freight across the Canadian border by stretching its two-day delivery network from Toronto and Montreal as far south as St. Louis, Mo., and Atlanta. The new two-day transit times include Montreal to Milwaukee, Rockford, Ill., and St. Louis. Also, Toronto now provides two-day service to key markets in Georgia and North and South Carolina to include Atlanta, Augusta, Charlotte, Charleston and Savannah.
Pricing Precision
Across the LTL industry, carriers are retreating from rate discounting that slashed profits last year, signalling a truce, at least, in the industry's rate wars as they try to build a more profitable business. For Con-way, that means pruning unprofitable business from its books, customer by customer.
LTL carriers are also seeking general rate increases (GRI's) on their non-contracted business. Con-way and FedEx have both signalled that they are seeking rate increases of 5.9 percent while Old Dominion is asking for 4.4 percent. Con-way has indicated that their GRI, implemented on Jan. 4 has held 'pretty well.' The GRI applies to about 30 percent of Con-way Freight's customer base. 'We've seen volume maintained at 2009 levels for that segment, and we have not been negotiating price with that segment of customer,' stated John Labrie, President of Con-way Freight. For the other 70 percent, 'We're going through the book of business account by account.'
Bolstering Sales Teams
Con-way Freight is starting 2010 by strengthening its sales organization by appointing five sales managers ' including three recruited from rival YRC Worldwide ' to lead new regions in the South, Mid-Atlantic, and Mid¬west and Great Plains states. UPS Freight named Allan Robison, former president of Canadian carrier YRC Reimer, Vice President of Sales in Canada.
Improving Asset Utilization
One of the unique elements of LTL operations is the requirement to have geographically dispersed freight terminals. Rather than just use these facilities for local cross-dock and distribution, LTL carriers in 2010 are seeking to make better use of their assets. Carriers such as Midwest Motor Express and New England Motor Freight are making their terminals into bonded warehouses and receiving container loads of freight from overseas which they can strip and load into their LTL peddle runs.
Evolution of 3PL Services
Most LTL carriers have seen the 3PL industry become the point of contact with many of their clients. This has caused a number of companies to expand their skill sets, service portfolios and information processing capabilities. These skills and tools are allowing them to provide a more holistic logistics plan for their customers. Some LTL carriers have begun to gain recognition for their enhanced IT capabilities. Con-way Freight, YRC, Old Dominion and Pitt Ohio Express all made the 2009 Information Week 500 list.
Going Global
Con-way has been one of the leaders forming alliances with APL Logistics and TNT Express. The APL partnership focuses on inbound ocean freight from Asia to the United States while the TNT alliance is geared to streamlining combined air and ground logistics between the European Union and the U.S.
Clearly the LTL industry is going back to the basics in an effort to improve profits. Cost decreases, rate increases, improving the sales force, transit time improvements and new service offerings are some of the tools being employed to improve financial performance in 2010.
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