intermodal origin drayage rail linehaul destination drayage billing processes tofc vs cofc...
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Intermodal
Origin Drayage
Rail Linehaul
Destination Drayage
Billing Processes
TOFC vs COFC
Complexity of Operations
Intermodal
Where Does Intermodal Work?
Intermodal Terminal
BLinehaul
If you are outside the circle, the distance to the terminal makes it cheaper to ship directly to the receiver via truck
Intermodal Terminal
A
Shipper of Origin Shipper of Destination
Intermodal
Original Intermodal terminals were known as “Circus Ramps,” and they are still frequently referred to as “Ramps”
IntermodalBNSF Intermodal Yard in Chicago
IntermodalBNSF Intermodal Yard in Chicago
Intermodal
Shipment Boxes
Chassis
Intermodal Rail Cars
Lifts, Cranes & Packers
Hostlers
Intermodal Equipment
Intermodal
Shipment Boxes
Containers Do not have attached chassisDesigned to be picked up and placed on rail cars and chassis Typically 20, 40, 45, 48, 53 ocean and domestic
Trailers Actual motor carrier trailer with built-in chassisVirtually any motor carrier trailer, 28-53 feet, including refrigerated
Intermodal Equipment
Intermodal
Intermodal EquipmentTypical Container without Chassis
Intermodal
Intermodal EquipmentTypical Intermodal Container Chassis
Intermodal28’ UPS Trailer on Typical Flat Car
Intermodal
Well Cars
Allows doublestacking of containers
Articulated version has 3 to 5 cars permanently joined to form one unit which can carry up to 12 containers
Intermodal Rail Cars
Intermodal Equipment
IntermodalIntermodal Well Cars
IntermodalIntermodal Well Cars
IntermodalDouble Stacked Containers in Well Cars
IntermodalDouble Stacked Containers in Well Cars
Intermodal
Conventional
Designed to carry containers or trailers
Can carry two trailers up to 40 feet in length.
Doublestacking not possible
Spine cars
Same capabilities as conventional cars
Less weight for better fuel economy
Intermodal Rail Cars
Intermodal Equipment
Intermodal
Intermodal Equipment
Conventional Intermodal Flat Car with Trailer
IntermodalIntermodal Spine Cars
IntermodalIntermodal Spine Car Connections
IntermodalArticulated Spine Car with Fifth
Wheel and Shared Trucks
Intermodal
Intermodal Equipment
Intermodal Spine Car with Two 20’ Containers
Intermodal
Intermodal Spine Car with 53’ Trailer
Intermodal Equipment
Intermodal
Terminal Equipment
Lifts, Cranes & Packers Designed to move containers from chassis to flat car or vice versa
or trailers from ground to flat car and vice versa
Hostlers - A truck tractor designed for managing containers and trailers within the terminal
Intermodal Equipment
IntermodalStraddle Crane
IntermodalStraddle Crane Loading Spine Cars
IntermodalStraddle Crane Loading Well Cars
IntermodalStraddle Crane?
IntermodalAlternative Mobile Lift
IntermodalAlternative Immobile Lift
Intermodal
Realizing Intermodal Potential: A Total Cost Approach
Intermodal GrowthImpediments to GrowthTotal Cost AnalysisExamplesPotential for GrowthConclusions
Intermodal
Intermodal GrowthImpediments to GrowthTotal Cost AnalysisExamplesPotential for GrowthConclusions
Realizing Intermodal Potential: A Total Cost Approach
Intermodal
Intermodal Growth
Fastest growing segment of the railroad industry
3 million trailers and containers in 1980 vs 8.1 million in 1996
More than 17% of rail revenues, 2nd only to coal at 22%
Containers account for more than 60% of intermodal volume vs 40% ten years ago
Still, enormous untapped potential
Intermodal
Percentage GrowthYear Total Trailers Containers Difference Total Trailers Containers1990 6,206,782 3,451,953 2,754,829 697,124 3.66 -1.27 10.591991 6,246,134 3,201,560 3,044,574 156,986 0.63 -7.25 10.521992 6,627,841 3,264,597 3,363,244 -98,647 6.11 1.97 10.471993 7,150,457 3,458,406 3,692,051 -233,645 7.89 5.94 9.781994 8,128,228 3,752,502 4,375,726 -623,224 13.67 8.50 18.521995 7,936,172 3,492,463 4,443,709 -951,246 -2.36 -6.93 1.551996 8,143,258 3,302,128 4,841,130 -1,539,002 2.61 -5.45 8.941997 8,695,860 3,453,081 5,242,779 -1,789,698 6.79 4.57 8.301998 8,772,663 3,353,032 5,419,631 -2,066,599 0.88 -2.90 3.371999 9,041,771 3,298,024 5,743,747 -2,445,723 3.07 -1.64 5.982000 9,554,184 3,219,183 6,335,001 -3,115,818 5.67 -2.39 10.292001 10,265,761 2,413,933 7,851,828 -5,437,895 -0.71 -8.65 2.022002 11,191,142 2,344,130 8,847,012 -6,502,882 9.01 -2.89 12.672003 11,903,121 2,400,558 9,502,563 -7,102,005 6.36 2.41 7.412004 12,923,036 2,639,545 10,283,491 -7,643,946 8.57 9.96 8.22 2005 13,641,872 2,584,262 11,057,610 -8,473,348 5.56 -2.09 7.53 2006 14,234,074 2,432,928 11,801,146 -9,368,218 4.34 -5.86 6.72 2007 14,078,952 2,145,466 11,933,486 -9,788,020 -1.09 -11.82 1.12 2008 13,659,495 2,060,399 11,599,096 -9,538,697 -2.98 -3.96 -2.80
Growth in Domestic Intermodal Traffic: 1988-2003
Intermodal
U.S. Domestic Intermodal Traffic Growth 1988-2008
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
Intermodal
Realizing Intermodal Potential: A Total Cost Approach
Intermodal GrowthImpediments to GrowthTotal Cost AnalysisExamplesPotential for GrowthConclusions
Intermodal
Impediments to Intermodal Growth
Lack of availability of IRT service Use by mainly larger shippers Shippers concern for service Lack of knowledge about IRT by potential users Poor perceptions in the minds of many usersTransit-time disadvantage of IRT vis-a-vis MC options Complexity, coordination, and image due to
the multi-party nature of IRT
Source: Harper and Evers, Transportation Journal, (Spring, 1993), pp. 31-45.
Intermodal
9
2
8
1011
8
8
4
6
5
9
11
7
3
3
Intermodal Ramp Closings by Region:1990-1997
Intermodal
Type Number Percent Amount PercentA = Airport related 14 27.45 134.0 30.67F = Freeway related 18 35.29 124.0 28.38FT= Highway access to transit 4 7.84 37.9 8.67G = Grade separation 8 15.69 86.1 19.71IM= Intermodal freight related 5 9.80 39.0 8.93N = Needs/corridor studies 2 3.92 15.9 3.64
Total 51 100.00 436.9 100.00
Priority Intermodal Projects In ISTEA
“The purpose of this section is to provide for the construction of innovative intermodal projects”
Intermodal
Shippers Perceptions
Survey of Manufacturers, Wholesalers, and Retailers in Arkansas, Missouri, and OklahomaSample size = 277
Importance of transit time reliability (TTR) 4.3*Measurement of transit time reliability 57.3%Use of TTR to aid in selecting carriers 13.1%Use of TTR to compute inventory costs 0.0%
* Scale of 1 to 5, 5 = Very Important
Shippers perceive IM service to be poor, but few actuallymeasure it and/or compare total cost of IM to other options
Intermodal
Realizing Intermodal Potential: A Total Cost Approach
Intermodal GrowthImpediments to GrowthTotal Cost AnalysisExamples Potential for GrowthConclusions
Intermodal
Total Cost = OC + CC
OC = Order Placement Cost = A(R/Q)CC = Inventory Carrying Cost = 1/2(QVW)
Where:Q = Optimal Order Quantity (EOQ)A = Cost of placing an orderR = Annual Rate of useV = Value per unitW = Carrying cost as a percentage of average value of inventory
Determining EOQ
Q* = 2ARVWEOQ =
Source: Coyle, John J., Edward J. Bardi, and C. John Langley, Jr., The Management of Business Logistics, 6th edition (St. Paul, MN: West Publishing, 1996).
Intermodal
Total Cost = OC + CC + Tr + PC + It + SS + Other
Where:OC = Order Placement CostCC = Inventory Carrying CostTr = Transportation CostPC = Product CostIt = Inventory in Transit CostSS = Safety Stock Cost
Total Cost Analysis
Intermodal
Total Cost = OC + CC + Tr + PC + It + SS + Other
OC = A(R/Q)CC = 1/2(QVW)Tr = rRwt/100PC = VRIt = iVRt/365SS = BVWWhere:
Q, R, A, V, W = As previously definedr = Transportation rate per 100 pounds (CWT)wt = Weight per uniti = Interest rate or cost of capitalt = Lead time in daysB = Buffer of inventory to prevent stockouts
Total Cost Analysis
IntermodalComputing Safety Stocks
Where:SDt = Units of Safety Stock required to satisfy
68 percent of sales levels during lead timet = Average delivery timeSt = Standard Deviation of delivery timeD2 = Average DemandSD = Standard Deviation of Demand
SDt = (t)(SD)2 + (D)2 (St)2
Intermodal
Realizing Intermodal Potential: A Total Cost Approach
Intermodal GrowthImpediments to GrowthTotal Cost AnalysisExamples Potential for GrowthConclusions
Intermodal
Annual Use = 100,000 unitsCost to place orders = $30.00 Carrying cost = 20 %Interest expense = 10 %Service Level = 97.5 % Variation in Daily Sales = +/- 10 %Distance = 1000 miles
Impact of Transit Time on Intermodal ShippersExamples
Basic Assumptions:
Rate/Mile Transit Time MC = $1.20 3 days +/- 1 dayIM = 1.00 5 days +/- 2 days
Intermodal
800 3,750 120,000 150,000 123,288 166,831563,869
800 3,750 120,000 125,000 205,479 330,816785,045
Order Order Carrying Transport Inventory Safety TotalMode Quantity Cost Cost Cost In Transit Stock Cost
MCIM
Impact of Transit Time on Intermodal ShippersExtreme Value Goods
Computers
Specific Assumptions:
Weight per unit = 50 lbsValue per unit = $1500.00Value per pound = $30.00Economic Order Quantity = 141Shipments per year @ EOQ= 707
Intermodal
800 3,750 28,000 150,000 28,767 38,927249,444
800 3,750 28,000 125,000 47,945 77,190281,885
Order Order Carrying Transport Inventory Safety TotalMode Quantity Cost Cost Cost In Transit Stock Cost
MCIM
Impact of Transit Time on Intermodal ShippersHigh Value Goods
Televisions
Specific Assumptions:
Weight per unit = 50 lbsValue per unit = $350.00Value per pound = $7.00Economic Order Quantity = 293Shipments per year @ EOQ= 342
Intermodal
1,333 2,250 20,000 90,000 12,329 16,683141,262
1,333 2,250 20,000 75,000 20,548 33,082150,879
Order Order Carrying Transport Inventory Safety TotalMode Quantity Cost Cost Cost In Transit Stock Cost
MCIM
Impact of Transit Time on Intermodal ShippersHigh Value GoodsMicrowave Ovens
Specific Assumptions:
Weight per unit = 30 lbsValue per unit = $150.00Value per pound = $5.00Economic Order Quantity = 447Shipments per year @ EOQ= 224
Intermodal
400 7,500 10,000 300,000 20,548 27,805365,853
400 7,500 10,000 250,000 34,247 55,136356,882
Order Order Carrying Transport Inventory Safety TotalMode Quantity Cost Cost Cost In Transit Stock Cost
MCIM
Impact of Transit Time on Intermodal ShippersMedium Value Goods
Mattress and Box Springs
Specific Assumptions:
Weight per unit = 100 lbsValue per unit = $250.00Value per pound = $2.50Economic Order Quantity = 346Shipments per year @ EOQ= 289
Intermodal
4,000 750 8,000 30,000 1,644 2,22442,6184,000 750 8,000 25,000 2,740 4,411
40,901
Order Order Carrying Transport Inventory Safety TotalMode Quantity Cost Cost Cost In Transit Stock Cost
MCIM
Impact of Transit Time on Intermodal ShippersMedium Value Goods
Lamps
Specific Assumptions:
Weight per unit = 10 lbsValue per unit = $20.00Value per pound = $2.00Economic Order Quantity = 1225Shipments per year @ EOQ= 82
Intermodal
1,600 1,875 6,400 75,000 3,288 4,44991,0121,600 1,875 6,400 62,500 5,479 8,822
85,076
Order Order Carrying Transport Inventory Safety TotalMode Quantity Cost Cost Cost In Transit Stock Cost
MCIM
Impact of Transit Time on Intermodal ShippersMedium Value Goods
Insect Spray
Specific Assumptions:
Weight per unit = 25 lbsValue per unit = $40.00Value per pound = $1.60Economic Order Quantity = 866Shipments per year @ EOQ= 115
Intermodal
160 18,750 8,000 750,000 41,096 55,610873,456
160 18,750 8,000 625,000 68,493 110,272830,515
Order Order Carrying Transport Inventory Safety TotalMode Quantity Cost Cost Cost In Transit Stock Cost
MCIM
Impact of Transit Time on Intermodal ShippersMedium Value GoodsKitchen Appliances
Specific Assumptions:
Weight per unit = 250 lbsValue per unit = $500.00Value per pound = $2.00Economic Order Quantity = 245Shipments per year @ EOQ= 408
Intermodal
4,000 750 2,000 30,000 411 55633,7174,000 750 2,000 25,000 685 1,103
29,538
Order Order Carrying Transport Inventory Safety TotalMode Quantity Cost Cost Cost In Transit Stock Cost
MCIM
Impact of Transit Time on Intermodal ShippersLow Value Goods
Empty Cases of Glass Containers
Specific Assumptions:
Weight per unit = 10 lbsValue per unit = $5.00Value per pound = $.50Economic Order Quantity = 2450Shipments per year @ EOQ= 41
Intermodal
800 3,750 2,000 150,000 2,055 2,781160,585
800 3,750 2,000 125,000 3,425 5,514139,688
Order Order Carrying Transport Inventory Safety TotalMode Quantity Cost Cost Cost In Transit Stock Cost
MCIM
Impact of Transit Time on Intermodal ShippersLow Value Goods
Xerox Paper
Specific Assumptions:
Weight per unit = 50 lbsValue per unit = $25.00Value per pound = $.50Economic Order Quantity = 1095Shipments per year @ EOQ= 91
Intermodal
800 3,750 2,000 150,000 2,055 2,781160,585
800 3,750 2,000 125,000 3,425 5,514139,688
Order Order Carrying Transport Inventory Safety TotalMode Quantity Cost Cost Cost In Transit Stock Cost
MCIM
Impact of Transit Time on Intermodal ShippersLow Value Goods
Xerox Paper
Specific Assumptions:
Weight per unit = 50 lbsValue per unit = $25.00Value per pound = $.50Economic Order Quantity = 1095Shipments per year @ EOQ= 91
Intermodal
Realizing Intermodal Potential: A Total Cost Approach
Intermodal GrowthImpediments to GrowthTotal Cost AnalysisExamples Potential for GrowthConclusions
Intermodal
SCTG Description Value % RR % MC % IM % Othr
0 All commodities 0.31 38.4 38.5 2.1 21.038 Precision instruments 26.87 0.0 60.2 0.0 39.837 Transportation equipment 11.79 31.1 52.5 2.0 14.421 Pharmaceutical products 11.34 0.0 76.7 0.4 22.935 Electronic and electrical equip 10.98 2.2 80.2 2.7 14.9 9 Tobacco products 6.83 0.0 92.1 0.0 7.934 Machinery 4.18 3.9 80.5 5.9 9.730 Textiles, leather, and articles 4.13 2.2 83.1 0.0 14.736 Motorized vehicles (incl. parts) 2.91 25.3 55.5 10.0 9.239 Furniture, mattresses, lighting 2.44 1.8 88.4 2.7 7.140 Misc. manufactured products 1.87 4.4 75.3 1.4 18.929 Printed products 1.67 0.7 76.3 1.6 21.4 5 Meat, fish, seafood, preparations 1.16 2.8 92.3 0.3 4.623 Chemical products etc. 1.14 15.3 72.4 7.6 4.724 Plastics and rubber 1.07 32.0 59.6 4.2 4.233 Articles of base metal 1.07 11.6 72.7 0.9 14.843 Mixed freight 1.04 0.0 92.6 1.5 5.9
Intermodal PotentialTon-Mile Market Shares by SCTG and Value
Intermodal
SCTG Description Value % RR % MC % IM % Othr
28 Paper or paperboard articles 0.67 5.8 84.3 2.8 7.1 8 Alcoholic beverages 0.54 39.6 49.6 8.2 2.6 6 Milled grain and bakery products 0.53 33.5 59.6 3.0 3.9 1 Live animals and live fish 0.52 0.0 94.6 0.0 5.4 7 Prepared foodstuffs, fats and oils 0.44 27.0 63.5 3.9 5.632 Base metal, primary/semifinished 0.43 30.9 57.5 1.2 10.427 Pulp, newsprint, paper,etc. 0.35 42.3 52.3 3.0 2.420 Basic chemicals 0.27 50.8 24.7 1.3 23.2 3 Other agricultural products 0.25 18.7 41.0 1.8 38.526 Wood products 0.19 36.7 53.9 3.3 6.1 4 Animal feed and animal products 0.15 28.9 57.1 4.2 9.818 Fuel oils0.10 9.1 25.8 0.0 65.141 Waste and scrap 0.09 32.5 49.1 2.1 16.310 Monumental or building stone 0.09 4.4 87.1 0.0 8.519 Coal and petroleum products 0.08 35.6 28.5 0.0 35.9
Intermodal PotentialTon-Mile Market Shares by SCTG and Value
Intermodal
SCTG Description Value % RR % MC % IM % Othr
19 Coal and petroleum products 0.08 35.6 28.5 0.0 35.922 Fertilizers 0.08 55.4 23.4 0.0 21.214 Metallic ores and concentrates 0.07 33.6 4.6 0.4 61.4 2 Cereal grains 0.06 58.0 9.1 0.4 32.531 Nonmetallic mineral products 0.06 15.4 69.7 1.8 13.113 Nonmetallic minerals 0.02 39.3 31.2 0.0 29.525 Logs and other wood in the rough 0.02 0.0 75.3 1.9 22.815 Coal 0.01 81.0 1.7 0.0 17.317 Gasoline and aviation turbine fuel 0.01 2.1 21.5 0.0 76.411 Natural sands 0.00 18.9 67.2 0.0 13.912 Gravel and crushed stone 0.00 11.8 62.8 0.8 24.6
Intermodal PotentialTon-Mile Market Shares by SCTG and Value
IntermodalRealizing Intermodal Potential:
A Total Cost Approach
Intermodal GrowthImpediments to GrowthTotal Cost AnalysisExamples Potential for GrowthConclusions
Intermodal
Conclusions
Intermodal Rail-Truck (IRT) has been growing rapidlyHowever, it is barely 2% of the ton-mile market shareIRT offers many advantagesMany impediments to realizing growth potentialOne major problem is shipper perceptions of IRT serviceRelated is that shippers do not actually measure cost of serviceRate advantage may more than offset costs of poor service Shippers should use total costs to select shipment mode