Shouldn't you be transloading? (page 3)
-- Logistics Management, 5/1/2005
| Page 3 of 3 Tension Brewing Although growing demand for transload services has been beneficial for all involved, it's also creating some tension between the railroads and the transload service providers. Over the past two decades, railroads encouraged independent companies to get into the transload business by offering partnership arrangements to warehouse and trucking operators, and this proved mutually profitable for all concerned. "Historically, the transload companies were virtually created by the railroads, who realized they could attract new business by offering a trucking tie-in to their depots and providing customers with information about this network," explains TDA's Schlaeger. Recently, however, some railroads have begun building their own transload centers. One example is Canadian National, which owns and operates some transloading facilities while continuing to work with independent service providers. According to Reardon, CN has invested heavily in transloading infrastructure because the practice offers a significant growth opportunity. "Over the past three years, with more plants and receivers cropping up all over the place and no one industry confined to any one area, we have been establishing more multi-commodity transloading facilities to be able to handle virtually any kind of product," he says. The move by CN and other railroads to provide transload services to shippers effectively puts them in competition with their partners, and the independents are concerned about the potential effects on their business. Regardless of how that situation may shake out, though, transloading is likely to see accelerating growth over the next few years, thanks in large measure to driver and equipment shortages, record fuel costs, and increasing demand for shipping capacity as the North American economy continues to expand. Ancon Marine's Wink believes that transloading service providers are up to the task. "The transloading industry has matured over the past decade," she says, "and it is now uniquely positioned to provide multimodal solutions as well as both handling product and stocking inventory to properly serve both the marketplace and the customer base."
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