Moore on Pricing: Who’s your DIM?
October 01, 2013 - LM Editorial
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.
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