Subscribe to our free, weekly email newsletter!


Intermodal is part of the plan for FedEx Freight

By Jeff Berman, Group News Editor
January 31, 2011

When FedEx announced it was redesigning its network structure for its less-than-truckload (LTL) network, FedEx Freight, last September, which officially went live today, there was one small detail regarding this news that flew somewhat under the radar.

That detail was that the company said it planned to be more active on the intermodal side.

FedEx LTL has used railroad services to a minor extent in the past, primarily with its former National group (with today’s kickoff of the FedEx Freight network integration, the former National and Regional groups have been replaced by the Priority and Economy groups as part of an effort to offer shippers different types of service based on speed of delivery and price).

The news of FedEx turning to intermodal in a meaningful way came out last week during Class I railroad carrier Norfolk Southern’s fourth quarter earnings call. NS Chief Marketing Officer Donald Seale said on a conference call that NS was selected as the primary eastern rail carrier for FedEx as it launches its new intermodal service.

“FedEx will systematically use rail intermodal service for the first time in its nearly 40-year history when it rolls out its revamped less than truckload operation,” said Seale. We are very excited about this developing opportunity and look forward to a long and successful partnership with FedEx.”

FedEx Freight CEO Bill Logue told LM that while FedEx Freight has not been a huge railroad user in the past with its National group, the company’s former Regional group did not. Logue’s predecessor Doug Duncan stated numerous times in the past that railroad service could, at times, often be less reliable than desired for moving regional freight.

But with ten new dual hubs serving FedEx Freight on both the Priority and Economy side, Logue said that as these networks put a high amount of volume into these hubs, FedEx Freight has worked with railroad carriers to design a network that provides origin-to-destination pairings to provide linehaul movements for its Economy service.

“We did not consider any lane that we felt would jeopardize our product offering in the marketplace,” said Logue. “We know that we were very comfortable with the lanes we have picked for rail partnership…from all of our meetings with our rail providers, and the lanes we have picked will support our network viabilities.”

Logue said that when determining when and how to leverage the railroads, FedEx Freight matched up loads with the dual-use hubs and heavy-volume lanes, coupled with the modeling the company has done with various railroads, which he sad has set the company up for a situation, where FedEx Freight is “more than comfortable” with the fact that these select pairings will be successful. He also noted that FedEx Freight has a railroad oversight group that manages these processes.

“At the end of the day, [intermodal] represents a single-digit percentage of our total linehaul in terms of total ‘all up’ miles,” said Logue.

While the partnership between FedEx and NS is public knowledge, Logue declined to address whom the primary west coast rail partner will be for FedEx, but an industry source told LM that it is likely Burlington Northern Santa Fe.

Logue said that FedEx Freight plans on working with multiple railroad carriers, but he added that the company will not articulate or spell out which vendors we will use in certain lanes.

“It will be clear when people see trains with FedEx trailers as to whom those [railroad] partners are,” said Logue.

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Earlier today, the United States Senate signed off on a six-year surface transportation authorization, according to various media reports. The bill, entitled the Developing a Reliable and Innovative Vision for the Economy (DRIVE) Act, passed by a 65-34 margin and comes at a time, when the most recent extension for surface transportation funding expires tomorrow, July 31.

Demand for the $500 million in available funding for the United States Department of Transportation’s TIGER (Transportation Investment Generating Economic Recovery) competitive grant program was easily trumped, with applications for the seventh round of TIGER grants coming in at $9.8 billion, or nearly twenty times the available amount, DOT said this week.

Global logistics managers will be tracking the progress of the controversial Trans-Pacific Partnership (TPP) talks in Maui, Hawaii this week, as negotiating parties hope to finalize the agreement.

As has been noted in recent coverage on this site in regards to Peak Season, one underlying theme has been, and remains, how Peak Season is not what it used to be. That is not to say there will not be any Peak Season-related activity. Make no mistake, there will be and things driving it from the seasonal nature of business activity and cargo flows to higher demand and increased e-commerce activity, among others.

UPS Access Point locations serve as a replacement delivery address when consumers are not at home to receive a package or when consumers want a delivery to go somewhere other than their residence.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA