When it comes to intermodal operations, Jon Urban, Executive VP of Operations at ContainerPort Group, Inc. is quite literally in the middle of it all – both in terms of operations and the country itself. ContainerPort (CPG) is based in Cleveland while Urban is based in Chicago. CPG has a wide range of services that include trucking and terminal operations with a focus on international freight. It is also worth noting that CPG is part of the Cleveland-based transportation conglomerate, World Group, which includes a number of complimentary companies to CPG, such as World Shipping, Inc., UWL, World Distribution and Services.
For CPG the container drayage segment of intermodal – moving freight in and out of terminals – is one of the main lines of business and the company has a sizeable reach. As Urban, who oversees all the trucking and field operations for CPG, explained in an interview with the AJOT, “Basically if you draw a line right down the middle of the United States, we have every major city east of there. Currently, asset-wise, we go about as far west as Kansas City to Dallas, so right in the middle of the United States. We’ve got 27 ContainerPort locations, but also, we have nine Middle Bay Transportation [agency brand] locations. We’ve currently got three Bristol Transportation locations. We’ve got five Dedicated locations. There’s well over 40, probably closer to 50 site locations that are managed by ContainerPort operations.”
CPG largely deploys the “owner-operator” or “independent operator” model, so keeping a steady stable of drivers is a key component of the operation. And over the last two years, as the country was coming out of the COVID-19 pandemic, pent-up demand and snarls in the supply chain put pressure on seating drivers. When asked about the current driving situation and what it looked like going forward, Urban was candid saying, “We had a difficult end of ‘21 and early ‘22. However, we have made some significant adjustments and improvements in our recruiting departments… We’ve actually netted over 300 independent contractors, up since April of this year…we’re approaching 1,500, and we’ve had some rapid growth over the past two quarters... in January, we were about 1,100 trucks…spot rates were up across the nation. The capacity was tight. So, independent contractors took the risk to go out and get their own authority and try to start their own companies. We saw a lot of that.
As stock market rates kind of fell and the market started to self-correct, we saw a lot of those drivers returning. We saw a lot of new drivers head in our direction. In my opinion, when the market softens, independent contractors tend to flock toward more stable companies. In a softer market [drivers tend to move] to a larger organization, the peaks and valleys aren’t as significant. Really, the bigger, larger organizations have a bigger customer base and more contracted business… That’s all aiding in our success over the past two quarters. I mean, we’ve really put a big emphasis on driver experience from the first contact to the application process to onboarding, and quarterly business reviews with our independent contractors. We view them as partners. That’s really helped with our turnover.”
The Impact of Congestion on the Supply Chain
One trucking problem in the Eastern half of the country that seems to never go away is congestion. With many of the intermodal terminals located in urban areas, getting in and out of the terminals is a challenge for truckers. “The congestion lately has had a significant impact on our ability to service our customers. The big issue now is truck parking. For over the road, that’s a significant issue. Per the ATA and ATRI, the average time looking for a spot to park is over 54 minutes for a driver,” Urban said. And the impacts of the wait-times ripple through the entire process. As Urban notes, “54 minutes… So, that severely impacts the hours of service. I mean, a driver can legally drive 11 hours a day per DOC regulation. That is about 10% of their time spent looking for parking. And that’s just on average. I mean, they might have to spend two hours looking for parking. That’s a significant impact. If you look more specifically at our [trucking] business, it’s more the congestion and chassis shortage [see “Made To Roll” chassis story.] It is also congestion at the ports, rails, and depots. If you think about it, a driver leaves our yard and has to go pick up a chassis. They might wait an hour and a half to go pick up a chassis, right? Then they get to the port, and they’ve got another hour, hour-and-a-half to get the container off there on a good day. Then you go to the customer, and you got two hours of waiting at the customer’s facilities. Then once you’re done with the customer, you come back and need to lift off the container and return it. That’s another hour. You’re almost looking at seven and eight hours of just pure waiting in order to move one shipment.”
Urban added another way of looking at it is a driver is putting in “11 hours driving, 14 hours on duty. So, when they’re sitting and running at the customer, that’s considered on duty, not driving. They’re putting in 14 hours total, 11 hours total drive time.”
The New Marketplace
A new marketplace has emerged in this post-pandemic economy. “Peak Season” isn’t quite the same as new sourcing and changes in purchasing have altered traditional delivery patterns. Urban thinks “a lot of people were trying to play the stock market race when it comes to bigger holdings compared to ocean freight. Those [ocean freight] rates have been falling. So, I think people were kind of holding off in a way to see if the lines would give them some additional capacity at a lower rate. Then others, as you said, they’ve flooded the market with inventory, not knowing. With the supply chain issues and delays of late, they wanted to make sure their product was here….” And “we’re seeing inventory bloating across the different markets and commodities as well. One of the positive things about our [ContainerPort] business and our business mix is we really try to focus on the commodities that aren’t affected by market swings. We have a varied business mix, but specifically, chemicals, and food additives, resins that are not really impacted by market swings.” While this doesn’t mean ContainerPort is ignoring the more volatile retail sector, the mix enables the company to be “nimble” in their operational approach with commodities that are more stable in their demand cycles.
ContainerPort, is also adapting to the new marketplace through technology. As Urban explains, “ContainerPort Group is in a really unique spot right now. We are continuing to invest in our business technology lines. We have a new driver app that we’ve put out to the market called DrayPal. We are investing in, what we call, operations to help... The network team, help us with individual term on freight mixes. They help us focus on our strategic accounts. When we have a department that focuses on our top 50 customers, they each have a single point of contact and support. It’s to help to support our vision as being a national drayage carrier.”
