Transportation Management Focus: You Move It, We Write About It  
 
 

-February 17 , 2010 -

Transportation News of the Week: Refrigerated Rail, YRC, MIT, More



New Refrigerated Rail Service from Northwest to Chicago; YRC Buys More Time – Will Competitors Stop Deep Discounting? New MIT Green Logistics Consortium; TL Spot Market Freight Up 54% in January


 
 


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The new Cold Trains will use 53-foot containers, said to be the first time this sized containers will be used in the US.

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Below is a round-up of the top stories in logistics and transportation management for the week:


New Refrigerated Rail Service from Northwest to Midwest Announced


A new refrigerated rail service from Washington to suburban Chicago was announced last week, offering faster and cheaper transport than trucks, the company says.


The “Cold Train,” will be operated by Overland Park, Kan.-based Rail Logistics LC, and run from a newly constructed intermodal yard in Quincy, Washington to the western Chicago suburb of Cicero.
According to a Rail Logistics executive, the Cold Train will cover the 1900 mile trip in three days – one half day faster that truck carriage, and have a cost about 10% cheaper than trucking the goods.


The service is largely targeted to moving Washington’s extensive fruit and potato production from the Northwest to Midwest markets. Rail Logistics says there are already several cold storage facilities nearby to the Quincy rail head.


The Cold Trains will be the second dedicated rail service from Washington state, Several years ago, Railex launched train service from Walla Walla, WA to Rotterdam, NY. Walla Walla is about 150 miles southeast of Quincy.


Produce shipped on the Cold Trains will move in new 53-foot refrigerated containers, which provide approximately about 33% greater capacity than do standard 40-foot containers used for both land and sea shipping. Rail Logistics ordered 70 of the new containers to be built especially for the Cold Trains, and says this will be the first use of 53-foot containers in the US.

YRC Worldwide Again Makes Financial Move, Said to be Solvent at Least Though Year’s End


Less-than-Truckload (LTL) giant YRC Worldwide late last week announced yet another deal aimed at improving its financial condition.


The trucker said it was selling $70 million dollars in notes convertible into stock at a later date to a group of investors, and using those proceeds to pay off other notes that were coming do. The new notes have a lower interest level, and give the struggling company some breathing room to continue to navigate its way out of its financial hole.


RW Baird analyst Jon Langenfeld said in a note that the deal, which ensures YRC’s survival for the remainder of the year at least, would benefit the entire industry because it probably will end attempts by competitors to drive the company out of business with deep price cuts, which hurt profit margins.


Nevertheless, YRC’s stock price tumbled on the news, falling more than 30% last week, with investors probably worried about the dilutive effects on the stock price from the convertible nature of the notes. That undid all the gains YRC’s stock had recently seen after some other financial moves to shore up its balance sheet and income statement late in 2009. The stock is trading at about 55 cents per share as this article was written.


MIT Forms New Green Supply Chain Consortium


MIT university recently announced it was forming a new industry consortium to advance the cause of Sustainable supply chains.
The Leaders in Environmental Assessment and Performance (LEAP) research consortium will be officially launched at a March 25 event at MIT, and will address sustainability issues in relation to the key areas of energy, transportation, packaging/waste materials, natural resources, greenhouse gases, and water.

 

(Transportation Management Article - Continued Below)

 
     
 
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Chiquita Brands was a partner with MIT in forming the concept for the consortium. Lockheed Martin will also be one of the founding members.

 

Member companies are expected to including a financial commitment, in-kind resources, thought leadership, and active participation.

 

Spot Truckload Market Shows Signs of Rising Demand

Freight availability on the spot market rose by 54 percent in January versus one year ago, according to the TransCore North America Freight Index. That marked the fourth consecutive month of improvement on a year-over-year basis – albeit against very week comparisons in late 2008 and early 2009. The TransCore North America Freight Index measures truckload freight volume found on several of its load matching web sites.

As expected, the year-over-year rise was accompanies by a sharp dip in January versus December, but that 38 percent decline can be attributed to December’s unusually high level of spot freight availability rather than unseasonal weakness in January.

The bottom line: shippers should be aware that the vast over capacity in the market may be leveling off at least, and carriers can take some solace the worst may finally be behind them.

 

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