From SCDigest's On-Target E-Magazine
- Oct. 30, 2013 -
Logistics News: GE Lighting Brightens Its Logistics Scene with Intermodal
Service Concerns a Thing of the Past, David Slates Says; a Four-Step Plan to Get There
SCDigest Editorial Staff
Intermodal transport has in general been growing faster than just about any other transportation mode, but has a lot of room to grow even more.
That was clearly the message during a presentation on intermodal by Amy Rice of rail carrier CSX and David Slates of GE Lighting, at the CSCMP conference in Denver last week.
SCDigest Says: |
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| Slates added that there are big opportunities to link inbound and outbound moves by sharing equipment like containers and chassis, either with other units within your own company or with trading partners. |
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What Do You Say?
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Rice said CSX has built a tool that analyzes a company's truckload shipments and looks for opportunities where intermodal might be a good option. Across more than 100 shippers, Rice said that on average 14% of those truckload moves are either an excellent or good fit for a switch to intermodal, with additional moves not included in the 14% also being potential candidates.
While the data might be seen as self-serving, SCDigest editor Dan Gilmore talked to Rice about how the tool works, and believes this is a pretty accurate assessment.
So, is that 14% of current truckload shipments sort of the ceiling for where the intermodal industry can grow? No, said Rice, because as intermodal networks improve, additional track is built, etc., new current truckload moves will emerge as good candidates. The industry has been steadily pushing down the minimum miles for which intermodal may make sense for a shipper.
GE's Slates said that within all of GE, growth in use of intermodal has been strong, but that there is still a long way to go. In 2012, GE spent about $70 million on intermodal transport, versus some $400 million on straight truckload. While a substantial portion of that current truckload spend could probably be converted to intermodal, and more will be, some business units or pockets of logistics operations are still resistant to the change, for a variety of reasons.
That's not true at GE Lighting, where intermodal growth was 25% from 2010 to 2012.
Why the aggressive switch to intermodal? Slates cited a number of factors:
Cost: Intermodal can often reduce shipping costs more than 30%.
Capacity: At certain times of the year, obtaining needed truckload capacity can be challenging. Intermodal rarely has capacity constraints, Slates noted.
Environment: Use of intermodal substantially reduces CO2 emissions for a given move.
Competitiveness: GE Lighting belies it will gain the advantage if it gains the benefits of intermodal earlier than its rivals do.
"You don't want to be at the end of the line on this transition," Slates said.
Of course, one barrier to greater adoption of intermodal are concerns about service, but Slates said that while these worriers may have been valid even 5-6 years ago, "Those days are long gone. Service is simply no longer a factor."
(Transportation Management Article Continued Below)
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Total transit time: six days - and rarely is there any deviation from that. That intermodal transit time is just one day more than the five days it takes to move a container from the West coast to Tennessee via truck, Slates said, and that the trucking move today actually has more variability.
