Subscribe to our free, weekly email newsletter!


Moore on Pricing: Who’s your DIM?

By Peter Moore, Partner at Supply Chain Visions
October 01, 2013

What’s a dim? It’s your domestic intermodal manager. If you don’t have one you might need one soon. Or better yet, you might want to consider a cross-functional team knowledgeable on domestic intermodal management.   

If you ship truckloads around the country—mid or long distances, say over 500 miles—then there’s a railroad rep looking to capture your freight. Many logistics management staff grew up with truckload and less-than-truckload training and experience.

However, if intermodal was used, it was delegated to the single brand truckload providers who quietly used rail for long hauls without telling the shipper or the intermodal marketing companies (IMC) who handled this little understood mode. 

With all due respect to my truckload carrier and IMC colleagues, shippers need to gear up their knowledge for increased rail use due to changes in the transportation market. If you’re not already concerned about driver shortages, fuel costs, and highway tolls, then let’s look at five other factors. 

1) On-shoring: The movement of manufacturing back to the U.S. continues, and we’re moving toward energy independence within 10 years, according to the Department of Energy. With the aid of robotics and smarter processes, the U.S. is gaining in production volume. This is not just true of automobile manufacturing, but also appliances and electronics. This means more domestic shipping over longer distances, and how these routes—highway and rail—affect your shipment corridors is going to be vital intelligence for your team.

2) New routes: From the widening of the Panama Canal to new rail access in Los Angeles, to higher clearances in the Northeast, the railroads are expanding capacity wherever possible. This means new competition for your freight. 

3) New terminals: A new, huge intermodal yard in Indianapolis means faster, smoother service. New rail-highway transloading facilities in the East and Southwest opened to handle fracking chemicals and minerals means more options for domestic bulk shippers. Ask your service representative about some of these new infrastructure improvements and what they might mean for improved service.

4) Carbon footprint: Intermodal means more on rail and water, and this means your company gets to brag about reducing your carbon footprint in logistics—a message that is appearing in more and more annual reports. How can your domestic intermodal management plan affect the company’s public profile and bottom line?

5) New technology: At trade shows and through webcasts produced by Logistics Management, shippers are hearing about new transportation management systems (TMS) that can select multi-modal solutions for domestic and international freight plans. These are only going to get more sophisticated, so you need to pick a system provider and work with them to find a multi-modal planning solution for your supply chain. While searching, look at cloud-based TMS solutions that will be faster to adapt to changes and reduce your dependency on corporate IT resources. 

So how do we develop domestic intermodal management expertise? First assess your team’s current knowledge of current and future intermodal market trends. Are you paying for a third party to contract for intermodal when you could deal directly with providers? Is this fee justified by innovation, technologies, or consolidation leverage? If so, fine. But shippers still need to learn more about how the intermodal works. Do you understand which intermodal terminals are key to moving your freight and are they handling volumes well? What are the long-term plans for these facilities? 

If your team is in need of more knowledge, get it. There are books, seminars, and free advice at conferences and trade shows that can help get your team up to speed on domestic intermodal. The return on your investment is both leverage and innovative ideas to get improved cost and service.

About the Author

Peter Moore
Partner at Supply Chain Visions

Peter Moore is a partner at Supply Chain Visions, Member of the Program Faculty at the University of Tennessee Center for Executive Education and Adjunct professor at The University of South Carolina Beaufort.  Peter can be reached at .(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

FTR says both spot rates and contract rates are heading up in a full capacity environment and with the fall shipping season rapidly approaching, it explained conditions for shippers could further deteriorate.

Read how others are using Business Process Management to achieve ERP success with Microsoft Dynamics AX. Download the free white paper now.

Now that Congress has issued another highway funding Band-Aid – a $10.9 billion highway bill through next May that former Transportation Secretary Ray LaHood blasted as “totally inadequate” – what can we expect as the infamously do-nothing 113th Congress winds down in the next month before taking yet another recess to prep for the mid-term elections?

Seasonally-adjusted (SA) for-hire truck tonnage in July headed up 1.3 percent on the heels of a 0.8 percent increase in June. The ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment, was 133.3 in July, which outpaced June’s 132.3 by 0.8 percent, and was up 2.8 percent annually.

Volumes for the month of July at the Port of Long Beach (POLB) and the Port of Los Angeles (POLA) were mixed, according to data recently issued by the ports. Unlike May and June, which saw higher than usual seasonal volumes, due to the West Coast port labor situation, July was down as retailers had completed filling inventories for back-to-school shopping.

Article Topics

Columns · October 2013 · Intermodal · All topics

Comments

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


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA