Traffic World


Photograph of John Gallagher
John Gallagher
Associate Editor
Truck to Rail

Intermodal service improvements bring new business to three logistics companies

Vexure QD TransPlace

If you're a third-party logistics company, transportation broker or shipper and are looking to ship by intermodal for the first time, logistics company Vexure has a deal for you: great service for a premium price.

Through Vexure subsidiary TRT Carriers Inc., whose services are ideal for those looking to the transportation spot market, the goal isn't to sell cheap. It's to sell value. "We're a niche provider, we sell a premium service to our customers," said Vexure President and COO Tom Piatak. "Our goal is the ability to say 'yes' more often to our customers' freight." Executing that philosophy has translated into quantifiable results. TRT started out in 2002 with zero revenue; by the end of the year it had generated $10 million.

. . . More

Tampa, Fla.-based Quality Distribution is perhaps best known for its liquid bulk subsidiary Quality Carriers Inc. and is heavily into trucks. But that may change soon, as Quality Distribution CEO Thomas Finkbiner is looking seriously at intermodal.

"We're trying to expand the use of tank containers in our business," Finkbiner said. "In talking to our customers and looking at their needs, we think it makes sense to switch from truck to intermodal."

Third-party logistics provider Transplace, which formed in 2000 by combining the logistics subsidiaries of six publicly held trucking companies, generated roughly $2 billion in freight business in 2002 - and $90 million of it was intermodal business. The reason: intermodal transportation, has provided consistency and reliability over the last two years, says Transplace Chairman, President and CEO Jun-Sheng Li.

"On-time performance has increased dramatically in the last couple of years, I'd say by about 10 percent, depending on the lane," Li said. "For many lanes, intermodal service is very close to truckload service. That's why we've been adding a lot of freight to intermodal."

. . . More

Quality Distribution operates approximately 3,800 tractors and 7,800 trailers through Quality Carriers and Quebec-based Levy Transport. Quality Distribution also operates specialized dry bulk hauling, tank cleaning and freight brokerage.

But delving into intermodal - an area in which Finkbiner is quite familiar, as the past head of Norfolk Southern's intermodal division - would be largely for the company's liquid bulk business.

The company already does approximately $6 million in intermodal business through the leasing of International Standards Organization containers, in addition to approximately $450 million in line-haul business and $50 million in rail-to-truck transloading. But the 100 to 150 containers and chassis that are leased are under contract to a single customer; Finkbiner wants to do more.

In terms of equipment, "there are manufacturers in Korea and South America that are offering excellent deals," Finkbiner said. "It's cheaper by a large margin to buy an ISO container and chassis than it is to buy a tank trailer. When you do the research and find these things out, it makes sense to consider them as a business strategy."

Before actually investing in their own equipment, Finkbiner notes, the likely scenario would be to increase the number under lease. "We're definitely pushing the idea of switching from rail to intermodal to our customers," he said. "Some have embraced the idea and some haven't. So depending on how well this goes, it will determine if we will ultimately make the decision to purchase. But that's not something that's in our 2003 capital budget."

Whether or not his company does commit financially to intermodal, Finkbiner stresses it will not have a bearing on its relationship with the railroads, some of which operate their own bulk intermodal services. "We are the largest user of Bulktainer (a Union Pacific Railroad subsidiary). We'd use them first. We have a very lucrative relationship with them and are not interested in changing that," he said.

Finkbiner also noted there isn't a danger of taking bulk business away from the railroads. "For shippers looking at the rate differentials, there's nothing out there that says it makes sense to go from rail car to ISO container," he noted. "But there's a lot of incentive to go from long-haul truck to ISO. I see the market going in that direction, not the other way. I look at the railroads as partners, not as competition."

 

 

 

 

 


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