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Next Generation Intermodal
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Question and Answer
Is your company using intermodal?
A. Import freight only
B. Inbound to DC
C. DC to DC transfers
D. All of the Above
E. What is Intermodal?
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Who is Using Intermodal Today?
The leading value retailer And, time‐sensitive shippers
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What is Intermodal?
The combination of rail, truck and sea transportation into a single cost-saving solution
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What is an intermodal lift?
State of the art lift equipment adds reliability and speed to your supply chain.
WATCHVIDEO
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U.S. Rail Intermodal Growth
Source: Journal of Commerce 2008; American Association of Railroads
US Rail Intermodal Traffic 1980 – 2010
1980 200720042001199819951992198919861983
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0
2
4
6
8
10
MillionsUNITS
YEAR
2009
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Supply Chain Strategic Advantage
Source: Establish, Inc/Herbert W. Davis and Company 2006 Database
LOGISTICS COST BREAKDOWN
50%
22%
10%8%
4%3% 2% 1%
Transportation Inventory Labor Customer Rent Admin Supplies Other
Transportation is generally the greatest cost in the supply chain.
Focus on Transportation Collaboration to reduce costs and increase capacity.
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Intermodal Benefits
Shippers and carriers benefit when converting over‐the‐road freight to intermodal.
15‐20% more transportation savings
Increased capacity
Greener way to ship
ShippersReduces operating costs & fuel
Reduces capital need
Reduces impact of CSA and Hours of Service regulation
Carriers
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Question and Answer
In your estimation, what is the potential growth of intermodal transportation in the next 10 years?
A. Less than 10%
B. 11‐25%
C. 25‐50%
D. Greater than 50%
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Significant Opportunity for Further Conversion
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6
4
2BNSF
MillionsUNITS
Current IMDL
3.5 M
UP
OTR that fits IMDL
Converting additional 7‐11 million units will save shippers $3-5 billion while securing additional capacity.
11 M
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Why Hasn’t More Savings Been Realized?
“We tried that once in
1989.”“Multi‐stop freight won’t work with intermodal.”
“That’s for railroads, not
trucking companies.”
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Gen 1INTERMODAL
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Gen 1 Characteristics
Emphasis on lowest cost and fewest dray miles without consideration to rail provider, train frequency and expedited service.
Limited communication between shipper’s transportation group and its carriers.
Gen 1 - Bid
Gen 1 - Communication
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Gen 1 Example | Southern Cal to North Carolina
Use an interline intermodal service to get as close to your door as possible
Memphis Charlotte
Origin pickup Truck to LA Ramp 8 hrs
Rail Route BNSF – Memphis CSX – Charlotte 157 hrs
Destination Dray Truck to Door 6 hrs
Total 7 days
Atlanta
BNSF
CSX
Rail Miles 3,377
Truck Miles 100
Rail Interchangesor train changes 2
Estimated Savings versus OTR 20%
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Gen 1 Characteristics
Gen 1 ‐ TMS SystemsNot able to differentiate intermodal service levels when system allows for one mode per lane
Gen 1 ‐ Pickup/Delivery RequirementsApply standard rules around pickup delivery times and transit requirements
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Gen 1 Freight Types
Inbound TransconLong Haul
Poor collaboration limits intermodal to only a few freight types.
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Gen 1 Intermodal Networks
Norfolk Southern
CSXBNSF
Union Pacific
In Gen 1 Intermodal, there is little emphasis on which rail carriers and ramps used
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Gen 2INTERMODAL
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The Power of Collaboration
“Although we were new, we worked with JB Hunt and BNSF Railway, two of the best in the
business”
Jeff Brady, Outbound Transportation Manager,
PETCO
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Gen 2 Intermodal Leverages Density
OHIO VALLEY PENNSYLVANIA
MIAMI
NEW YORK
PACIFIC NORTHWEST
NORTHERN CALIFORNIA
FRESNO
SOUTHERN CALIFORNIA
DENVER
DFW
MEMPHIS
CHICAGO
ATLANTA
KANSAS CITY
ST PAUL
Next Generation Intermodal capitalizes on high‐density lanes with non‐stop train service.
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Gen 2 Bids
Best Intermodal price with corresponding service
Best Intermodal service with corresponding price
Request rail carriers, rail ramps, service levels and frequency of service
Allow Intermodal bids for all lanes
Gen 2 Bids consider multiple service options.
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Question and Answer
You’re shipping a full truckload from Los Angeles to Charlotte, North Carolina. How many intermodal options are available?
A. 1
B. 2
C. 3
D. 4
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Gen 2 Example | Southern Cal to North Carolina
Use a single premium(value) intermodal service plus a dray to get faster more reliable service.
Rail Miles 2,567
Truck Miles 353 Rail Interchangesor train changes 0Estimated savings versus OTR 15‐20%
Atlanta
CharlotteStandard
Rail
Truck
Origin pickup Truck to LA Ramp 8 hrs
Rail Route BNSF – Atlanta (premium) 107 hrs
Destination Dray Truck to Door 10 hrs
Total 5 ½ days
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Gen 2 Example | Southern Cal to North Carolina
Use a single expeditedintermodal service plus a dray to get faster more reliable service.
Rail Miles 2,567
Truck Miles 353 Rail Interchangesor train changes 0Estimated savings versus OTR 5‐15%
Origin pickup Truck to LA Ramp 8 hrs
Rail Route BNSF – Atlanta (Expedited) 90 hours
Destination Dray Truck to Door 10 hrs
Total 4 ½ days
Atlanta
Charlotte
Rail
Truck
Expedited
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Gen 2 Example | Southern Cal to North Carolina
Use a single expedited intermodal service plus a dray to get faster more reliable service.
Rail Miles 2,090
Truck Miles 670Rail Interchangesor train changes 0
Estimated savings versus OTR 5‐10%
Memphis
Rail
Truck
CharlotteExpedited
Origin pickup Truck to LA Ramp 8 hrs
Rail Route BNSF – Memphis (Expedited) 80 hours
Destination Dray Truck to Door 14 hrs
Total 4 ¼ days
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Recap - Intermodal Transit Solutions
2,090 670 4 ¼ days 5% ‐ 10%
2,567 353 4 ½ days 5% ‐ 15%
2,567 353 5 ½ days 15% ‐ 20%
3,377 100 7 days 20%
There are a variety of Intermodal Solutions from Southern California to North Carolina.
ROUTE RAIL MILES TRUCK MILES TRANSIT SAVINGS
NOTE: Single driver transit from LA to Charlotte is 4‐5 days
BNSF (Expedited) to Memphis + Truck
BNSF (Expedited) to Atlanta + Truck
BNSF (Standard) to Atlanta + Truck
BNSF to Memphis – CSX to Charlotte + Truck
INTERMODALGen 2
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Gen 2 TMS & Bid Characteristics
Intermodal TMS CapabilitiesAllow for OTR and Intermodal solutions in each lane
Accommodate multiple Intermodal service levels in each lane
Transit and Pickup and Delivery Requirements
Communicate specific pickup and delivery requirements for each lane
Assign pick‐up and delivery requirements customized for each DC
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Midwest to Southern California
When you consider frequency, it’s clear ‐Memphis and Kansas City offer more options to Southern California.
St Louis to So Cal
KC to So Cal
Memphis to So Cal
Memphis
Kansas CitySt. Louis
Rail
Truck
Hub
Origin
Southern California
Dray to Hub Premium Rail Expedited Rail Frequency
100 4.8 days Not Available 3 days/week
200 2.8 days 2.4 days 5 ‐ 6 days/week
200 3.7 days 3.4 days 6 days/week
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Question and Answer
What’s the best way to drive collaboration in the Transportation space?
A. Collaborate through carriers
B. Collaborate through carriers and intermediaries
C. Collaborate directly with Carriers and Railways
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Best in Class Collaboration
Carrier Shipper BNSF
Reconsiders shipping requirements to allow for
more capacity and cost‐saving service
Provides analysis on the best lanes for conversionBroadens TMS to provide
optimal solutions for all customer needs
We each have a role to play.
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Collaborative Successes!
Shippers have saved $40 million and locked in long‐term capacity while converting over 50,000 OTR loads to intermodal.
WESTERN U.S.Non Fits
EASTERN U.S.
BNSF SYSTEM FITS
Jan 2010 through April 2011