Are shippers and carriers dealing with capacity issues effectively enough?

The shipper and motor carrier executives participating in our first annual Issues Roundtable, sponsored by Shaw Tracking, had much to say about the growing use of intermodal transportation and a variety of other issues critical to effective transportation practices. Over the next few weeks we will share their insights with you.

Participating in the Issues Roundtable were Serge Gagnon; President, XTL Group of Companies; Rob Penner, Vice President, Operations, Bison Transport; Dan Einwechter, President, Challenger Motor Freight; Julie Tanguay; President, L.E. Walker Transport; Neil McKenna Director, Transportation Operations, Canadian Tire Retail; and Bob Ballantyne, President, Canadian Industrial Transportation Association. Lou Smyrlis, Editorial Director of BIG Transportation Media, moderated the roundtable.

In this installment of the Shipper-Carrier Roundtable we look at our panelists’ views on the efficiencies provided by intermodal alliances.

Smyrlis: As shippers and carriers, are we dealing with capacity issues effectively enough? One of the approaches to solving capacity issues for truck transportation has been to move freight longer distances using intermodal services. Based on its performance the last few years, is the Canadian intermodal networks capacity strong enough and is its service record good enough to be a viable long-term capacity alternative?

McKenna: We move a lot through the intermodal channel. Its an important channel in Canada for moving freight long distances. Its still the most economical way to do it. There will still be freight that will have to move over the road for shippers that want it there faster and are willing to pay for it. But the fact that intermodal is growing is at least telling you service is going in the right direction and that some of the challenges that intermodal faces, such as the imbalance of freight moving across the country, are being addressed.

Smyrlis: What challenges are the carriers finding in working with rail. Is it easy enough to work with rail?

Penner: We just got into the intermodal game and its a real learning experience. They are hard to work with because you have to commit and weve had occasions where weve sent empty boxes or paid for reservations that werent met. They hold all the cards right now. They are not a capacity alternative; they are a capacity supplement because you still have to get the stuff on and off the rail. The demand for expedited has moved up a lot recently. If people have the luxury of time, intermodal is a logical, viable option but it still needs to get to and from the railhead and intermodal still has its challenges such as congested ports, which require trucks to bail out the service end of it.

Ballantyne: We at CITA have been doing benchmarking with our members on all modes of transport and on the service side, theyve certainly indicated that the on-time delivery performance from intermodal is not so good, so thats a concern. The other factor with intermodal is the capacity problem with rail. The railways seem to be somewhat uncertain about where to invest their dollars to deal with capacity, whether its focusing more on their bulk commodities or intermodal operations. From time to time there are comments from the railways that their rate of return on the intermodal operations leaves something to be desired so they seem to be somewhat ambivalent about investing on the intermodal.