Not long ago the argument against intermodal transport focused on slow and unreliable service. Today that has dramatically changed. Not only does intermodal transportation allow shippers to combine the long-haul efficiencies of rail with the flexibility of short-haul trucks to achieve cost-effective, efficient and reliable freight transport.
As a result, today nearly 25 million containers and trailers are being moved by intermodal transportation, including shipments of electronics, mail, food, paper products, clothes, appliances, textiles and auto parts. In fact, intermodal is growing faster than any other mode of transportation. The Association of American Railroads (AAR) reported intermodal setting a new record in August with traffic totaling 1,031,179 containers and trailers, up 4.4 percent (43,398 units) compared with August 2012. The weekly average of 257,795 units in August 2013 was the highest weekly average for any month in history.
CSX & National Gateway
Melanie Cost, CSX spokesperson, describes CSX’s investments in intermodal as investments in partnerships with trucking companies, beneficial cargo owners, third-party logistics firms and other business partners. In fact, intermodal shipments now represent 38 percent of CSX’s portfolio by volume.
Over the past five years, CSX has invested more than $500 million to expand and enhance its intermodal network. This year CSX affiliate CSX lntermodal Terminals, Inc. completed expansions of the Worcester, MA and Columbus, Ohio facilities. Expansions are under way in Atlanta, GA and Louisville, KY.
CSX Intermodal Terminals also is developing new facilities, including the Valleyfield Terminal in Montreal.
“The Valleyfield facility will offer shippers unique access to key Canadian distribution and consumption markets,” Cost says. Terminal development projects feature cutting-edge technologies to improve operational efficiencies and environmentally-friendly design elements that help lower emissions. “The anticipated intermodal market opportunity in the East represents 9 million loads that could efficiently shift from truck to rail,” she adds.
To capitalize on that opportunity, CSX is investing in its highway-to-rail (H2R) conversion initiative, working closely with business partners and channel partners, including trucking companies, to market the compelling value of intermodal to customers who could benefit from the switch.
“CSX offers a complimentary H2R freight analysis for customers and channel partners utilizing the company’s propriety H2R Optimizer,” she reports. “Of the truck freight analyzed using the H2R Optimizer, CSX has found that 14 percent is sub-optimized based on modal selection.”
Significant infrastructure development is needed and underway at East Coast and Gulf ports, and efficient rail connectivity will be a key factor to meeting increased demand. Consequently, CSX is working with ports up and down the East Coast and in the Gulf as they expand and improve their infrastructure in advance of the expansion of the Panama Canal. These efforts include port dredging, investing in on-dock terminals and ensuring efficient connectivity to key points within the state and along the coast.
“To connect with those facilities, CSX is building the intermodal network of the future,” Cost says. “CSX’s network strategy enables overall intermodal growth and drives highway-to-rail conversions. CSX intermodal network is designed to provide shippers a strong, reliable service product in lanes between major markets through key corridors. Shippers can experience increased flexibility and reliability, access to mid-tier markets, and truck-like network connectivity as a result of CSX’s unique hub-and-spoke approach.”
CSX has made significant investments in serving new and expanded terminals, as well as the $850 million National Gateway, a public-private partnership to double-stack clear several key CSX freight rail corridors between Mid-Atlantic ports and consumption centers and the Midwest.
“The National Gateway provides more than $10 billion in public benefits in the route’s first 30 years of operations,” Cost says. “That’s $36 in public benefits for every $1 of public money invested – and will create more than 50,000 jobs. “
The National Gateway recently announced completion of the clearances in Phase One of the project, between existing terminals in Chambersburg, PA and a state-of-the-art hub facility in Northwest Ohio. The $175 million Northwest Ohio Terminal opened in February 2011. The facility employs nearly 300 full-time employees and spans 500 acres in southern Wood County, Ohio.
The terminal handles more than 30 trains per day and handles hundreds of thousands of containers per year containing anything that can be bought at your local retailer – from household electronic equipment to clothing and other consumer products. The terminal features state-of-the-art ultra-efficient cranes that reduce energy consumption, improve efficiency and significantly reduce emissions.
The inauguration of Norfolk Southern’s Domestic Intermodal service in early 2013 represents the largest expansion of the NS Intermodal service in over a decade. This expansion includes new terminals in Birmingham, AL and Greencastle, PA, a major component of the railroad’s $2.5 billion Crescent Corridor project.
Consequently, the Crescent Corridor now offers service in over 30 new intermodal lanes between the Northeast and Southeast, as well as interline services with Union Pacific (Los Angeles) and Kansas City Southern Railway (Dallas and Mexico). The goal of the Corridor is to remove several hundreds of thousands of truckloads from the interstate highways by facilitating 28 trains daily.
Located off I-81 between Chambersburg, PA and Hagerstown, MD, Greencastle offers fast service to and from Birmingham and Rossville, plus Dallas and Mexico with KCS. The 200-acre, $97 million Franklin County Regional Intermodal Facility in the south central portion of the Keystone State connects central Pennsylvania, western Maryland, and northern Virginia to domestic and world markets.
The Birmingham Intermodal Facility at McCalla, AL, provides additional terminal capacity, improved highway access, and more efficient train services to the Birmingham region. NS offers the only intermodal service for Domestic containers and trailers at Birmingham, with service to and from the Northeast, plus Dallas and Mexico with KCS.
“We are about to complete Phase One of the Crescent Corridor project, which consists primarily of new intermodal yards at strategic points in our intermodal network, with new facilities near Memphis, TN; Birmingham, AL; Hagerstown, MD, and Charlotte, NC,” reports Robin C. Chapman, NS spokesperson. “All, but Charlotte, are now in operation, and Charlotte will come on line by the end of 2013.”
According to Chapman, these facilities improve the railroad’s capacity to handle larger volumes of intermodal freight in a corridor that is currently underserved by rail and thus offers significant growth potential in this market.
“While the Crescent Corridor’s primary focus is domestic freight, the capacity expansion and improved flow of freight through our network benefits the ports we serve to the extent that the ocean carriers need efficient rail access to inland destinations,” Chapman explains.
In addition to the Crescent Corridor, NS completed its Heartland Corridor project in 2010. The Heartland Corridor was a $190 million public-private partnership among Norfolk Southern, the Federal Highway Administration, and three US states to improve railroad freight operations.
“The Heartland Corridor was specifically developed for international intermodal traffic,” Chapman explains. “This involved the raising of vertical clearances in 28 tunnels and 24 overhead obstructions through Virginia, West Virginia and Ohio to allow the passage of double-stack container trains on a high-capacity route between the Port of Virginia and the Midwest, shortening previous transit times by more than 200 miles and one day, and offering ocean carriers faster, more efficient access to the American heartland.”
Approximately 5.7 miles of tunnels were modified. Today the new, shorter routing reduces travel times from the Norfolk ports to Chicago by one to three days total.
An important element of the Corridor was the development of inland terminals for Norfolk Southern, such as Rickenbacker terminal in Ohio. Particularly key, the Heartland Corridor helped to demonstrate that the inland port concept is no longer seen as a retrofit strategy for overburdened corridors, but can be an integral part of the corridor planning process from the start.
The most important element to making all elements of the intermodal transport component work, however, is the working relationship between all providers in the transportation chain. Today Norfolk Southern partners with truckload companies for long-distance, intercity movement of containers and trailers.
“This combines the speed and convenience of door-to-door pick-up and delivery of trucking with the economic and environmental advantages of rail,” Chapman says. “The advantage to shippers is the speed and convenience of trucking for pick-up and delivery combined with the economic and environmental advantages of rail. By contracting with a motor carrier that partners with a railroad, shippers get one-stop shopping, with door-to-door shipment on one invoice.”
To gain further efficiencies, in January NS began rolling out its R3 initiative (the right lane, right car and right unit) to optimize the movements of trailers, and international and domestic containers and to ensure that trains departing an intermodal terminal are headed to the correct destinations, moving freight loaded on the most optimal rail cars and transporting the proper containers or trailers to enhance capacity and increase asset utilization.
The initiative establishes a standard process — tailored to a terminal’s size and layout — for loading and building outbound intermodal trains.
BNSF Intermodal Improvements
BNSF Railway collaborates with its partners to find the optimal solution in supply chain needs.
“For domestic shipments that means finding the right combination of truck and rail,” says Katie Farmer, BNSF group vice president, Consumer Products. “We continually work together with our trucking partners to ensure the most efficient and cost-effective solutions.”
Its efforts have paid off. Last year BNSF had 110 different shippers analyze its Over the Road flows and look for conversion opportunities by using BNSF’s Intermodal Advisor tool.
“We looked at five million moves and determined that one million of them fit our existing intermodal network,” Farmer says. Of those one million loads, 400,000 or 40 percent of them would generate on average savings of 10-15 percent.”
As a result, to date, BNSF has converted over 110,000 of those shipments to intermodal.
In addition, BNSF’s Load and Ride Solutions (LARS) team works to help customers find cost-effective methods for safe loading and lading securement to ensure shipments move damage free.
“BNSF has processes in place to help our customers with their loading and shipment safety needs, ” she says. “We monitor all shipments during train and yard handling to promote safe and incident-free movement.”
Meanwhile, BNSF has been on a roll to improve and expand its intermodal capabilities. To date, BNSF has 30 intermodal facilities nationwide with over 12 million in container/trailer lift capacity.
“We have the highest capacity intermodal routes in the world with more double and triple tracked corridors than any other railway,” Farmer states. “We have over 25 million TEU combined capacity between our Southern California and Pacific Northwest ports.”
By combining the major corridors of the great northern, the I-80, the Transcon and the mid-continent corridor and the right combination of interline service and truck, BNSF executives contend that the railroad can offer the flexibility of reaching the widest range of U.S. markets.
Each year BNSF has been investing significantly in capital commitments to enhance and improve its network. Since 2000, BNSF has invested more than $42 billion in infrastructure, equipment and technology, including a record $4.3 billion in 2013.
Going forward, BNSF’s expansion and efficiency projects will be primarily focused on capacity expansion, including intermodal terminal expansion, such as the completion of BNSF’s Kansas City Intermodal Facility, and other terminal improvements to enhance productivity and velocity while providing the most environmental preferred form of land transportation.
Those projects include employing fuel-efficient fleets of road locomotives, which gives BNSF trains the capability of moving one ton of freight, on average, almost 500 miles on a single gallon of diesel fuel.
“Multiply that by the equivalent of 280 trucks on a large doublestack intermodal train and it’s easy to see why shipping by rail is the most fuel efficient and environmentally preferred form of land transportation,” she says.
Other improvements include the use of wide-span electric cranes at BNSF’s Memphis Intermodal Facility, and Seattle International Gateway Intermodal Facility. These will also be employed at the Kansas City Intermodal Facility, which is scheduled to open this fall. The electric cranes produce zero emissions on-site and significantly reduce the number of trucks needed to move containers within the rail yard.
“These cranes also generate electricity while they work, which recharges internal batteries and conserves electricity,” Farmer reports. “BNSF was the first U.S. railroad to use these systems.”
Automated gates are used at nine of BNSF’s intermodal facilities. Digital cameras record images of containers, chassis, tractors and unit numbers as they enter those facilities. In addition, drivers are identified using a biometric system. These new gates have increased facility throughput and reduced truck-idling time and air emissions by 50 percent.
BNSF’s intermodal facilities factor into more efficient operations at seaports. According to Farmer, BNSF offers comprehensive single and joint services to its international customers through close collaboration with shippers, ocean carriers and its port partners.
“BNSF seamlessly connects imports and exports through its network of high speed corridors and intermodal facilities,” she says. “We work with on-dock facilities that load directly to BNSF intermodal trains or dray to a nearby intermodal facility. BNSF offers on-dock or near-dock services at Los Angeles, Long Beach, Oakland, Portland, Seattle and Tacoma.”
With a strong presence at major West Coast ports, BNSF plays a vital role in international trade. For example, the U.S. West Coast ports handle the greatest number of vessel calls weekly from Asia and BNSF.
BNSF offers its international customers multiple levels of service, based on whether customers want faster transit times or greater cost savings. BNSF’s Intermodal On-Dock Expedited service leads the industry in international intermodal service, with transit times 1 to 2 days less than the standard intermodal service.
“It also allows ocean carriers to move 250 FEUs on a single train, thus receiving faster transit from the pier to a single inland destination,” Farmer says. “For example, BNSF can transport customer’s containers on the 2,065-mile journey from Ports of LA/Long Beach to Logistics Park Chicago in just 87 hours. We also offer the fastest international intermodal service, BNSF Flagship, serving major inland markets like Chicago, Memphis and the Ohio Valley.”
Giving BNSF customers an advantage, the railroad provides customers with direct access to some of the country’s biggest and fastest-growing inland markets, including Dallas/Fort Worth, Kansas City, Chicago, Memphis, and Atlanta.
“We are the only railway to offer direct service between the West Coast and Atlanta,” she says. BNSF’s Transconroute is double-tracked from Los Angeles to Chicago, and triple-tracked in key areas to increase capacity and service options to markets including Memphis, Chicago, Kansas City and Atlanta.
“BNSF works closely with ocean carriers to create innovative solutions to meet shippers’ needs,” Farmer adds. “Currently, import volumes to the U.S. outpace exports by a nearly 2-to-1 ratio. BNSF’s innovative “Match Back” program for international shippers is designed to help our ocean carrier partners address that 2 to 1 imbalance by finding more markets to offset container repositioning costs.”
The “Match Back” program loads those containers with commodities like grain, cotton and recycled paper. Recently, BNSF identified increased demand opportunities for high protein products in Southeast Asia and collaborated with an ocean carrier to match the opportunity to their surplus equipment areas and cost reduction goals. The result was five double stack trains with over 200 loads each loaded back west to the ports for export.