APL renews intermodal contract with Union Pacific

Container shipping carrier APL, a subsidiary of NOL Group, said today that it has renewed its contract with class I railroad carrier Union Pacific for intermodal services.

Financial terms and length of the contract were not disclosed.

NOL officials said that the contract between the companies is a long-term agreement at competitive market rates, adding that it encompasses the intermodal operations of APL, as well as those of APL Logistics’ auto-related activities in North America.

They added that UP transports containerized cargo for APL from the ports of Los Angeles, Seattle, and Oakland and reaches major inland APL hubs, including Chicago, Memphis, and Columbus, Ohio.

APL owns and operates marine terminals in Los Angeles, Oakland and Seattle and has more than 80 intermodal container yards in the cities and markets that it serves in the U.S.  Most are contracted with third parties, with APL owning its facilities in Chicago, South Kearny and Atlanta.

“APL is Union Pacific’s largest intermodal customer and we have been APL’s lead intermodal provider since the 1980s,” said John Kaiser, UP’s vice president and general manager – Intermodal. “The combination of APL’s premier west coast port capabilities and Union Pacific’s unmatched intermodal market coverage allows APL to provide its customers with comprehensive, fast and reliable products.   We look forward to continuing to collaborate with APL to provide industry leading inland supply chain logistics services for years to come.”

In July 2011, APL purchased 43 acres of space from CenterPoint Properties within the CenterPoint Intermodal Center, the largest inland port in the United States.
APL spokesperson Pam Pung told LM at that time that that the driver for this purchase was that APL wanted be closer to the international rail terminals in the logistics park as well as the growing customer base in that area.

“A search for a suitable location for the facility began once it became apparent that both major western railroads [BNSF and Union Pacific] would have their terminals located in the CenterPoint Intermodal Center,” said Pung.

As reported by LM, intermodal has remained resilient in the face of economic ebbs and flows in recent years. This has been exemplified by how intermodal has been viewed by shippers as a cost-effective alternative to over-the-road trucking services due to high fuel prices, coupled with trading off significant fuel savings for longer transit times; and continued investments by railroads in their networks to improve service and handle more capacity in the future.

What’s more, domestic intermodal in particular, is increasingly becoming more capable of handling lanes which are considered one-day trips, and that various truckload shippers are working in tandem with railroads on developing intermodal corridors and terminals, according to industry stakeholders.

For the full year 2011, the Intermodal Association of North America (IANA) reported total loadings were up 4.9 percent annually at 14,071,525.

Leading the charge for these full-year numbers was domestic containers posting a 9.6 percent gain at 4,926,185. One of the main drivers for sustained domestic growth, which LM has reported on, is largely due to an aggressive approach towards intermodal by motor carriers to moving freight on the railroads. The main drivers for this are improving service and reliability, service integrity, and transit times that match up well with what supply chain managers want and expect.