By William DiBenedetto, CBN Feature Editor
The impact of globalization tends to focus thinking about supply chains mainly on ocean transportation over long distances, but the interaction of the water, air, rail and trucking modes are what makes the modern supply chain tick.
The Intermodal Association of North America defines intermodal as the "transfer of products involving multiple modes of transportation — truck, railroad or ocean carrier."
A new study from Transport Market Research Reports, "Intermodal Freight Transportation Market 2015-2019," says the global intermodal freight transportation market will grow at a compound annual growth rate of 17.4 percent through 2019. "Companies are relying more on intermodals for the shipment of automotive parts, consumer goods, and heavy vehicles," the study notes. "Though there are many reasons for the increased use of intermodals, the main reasons are efficiency, low cost, and environmental impact."
The intermodal freight transportation industry is also introducing major technological advances such as information and communications technology (ICT), computerized vehicle routing, active traffic management, and online freight exchange.
Rail is the most important and common mode of intermodal transport for freight, the study says — with approximately 41 percent of total intermodal freight transported by this mode.
Some recent rail developments of note:
- Canadian National Railway plans to spend $409.45 million to upgrade the safety of a feeder network in the western portion of Canada. A series of accidents has increased the focus on CN’s safety record, and CEO Claude Mongeau also said the spending is necessary to prepare for an expected increase in volume on the railroad’s feeder network.
CN also plans to build a $206.7 million intermodal and logistics hub adjacent to its main line in the Town of Milton, Ont., about 30 miles west of Toronto. Milton has ready access to major highways reaching key industrial and commercial areas in the Greater Toronto and Hamilton Area. Intermodal is one of the railroad’s fastest growing business segments and its largest single business unit, with 2014 revenues topping $2.2 billion.
- Dubai’s DP World intends to purchase the Port of Prince Rupert’s Fairview Container Terminal from Deutsche Bank for $580 million. The transaction is expected to close in the second half of this year. Fairview is the first dedicated intermodal (ship-to-rail) container terminal in North America.
"Fairview Container Terminal offers the fastest
access for vessels traveling between Asia and North America," said DP World CEO Mohammed Sharaf. "The terminal also offers the highest productivity rates on the West Coast and an efficient rail link to the hinterland," he continued, noting DP will conduct a feasibility study to increase the terminal’s capacity to 2.45 million TEUs. The agreement is subject to Canadian regulatory approvals.
A few weeks prior to the DP World announcement, Maher Terminals Holding Corp., had said it planned to expand FCT to more than 1.3 million TEUs annually, from the current annual container-handling capacity of approximately 850,000 TEUs.
- BNSF is facing a lawsuit for damages of up to $41 million for abruptly changing the Cold Train perishables rail service at the Port of Quincy, WA.
Steven Lawson, former president and CEO of Cold Train, and Mike Lerner, former managing member of the company, said they had to shut down the rail service because BNSF failed to meet its promise for 72-hour delivery times. The case was filed last month in federal court in Spokane, WA. The complaint alleges that the 72-hour "on-time percentage" steadily dropped from 92 percent in August 2013 to 3 percent in April 2014.
Lawson and Lerner contend BNSF’s scheduling issues — allegedly favoring oil and coal over fresh produce — resulted in Cold Train losing most of its fresh produce business, including apples, onions, pears, potatoes, carrots and cherries, which was more than 70 percent of the company’s business.
"The shutdown of Cold Train was caused by a significant slowdown in BNSF’s service schedules on its northern corridor line beginning in the fall of 2013 because of increased rail congestion as a result of BNSF hauling larger volumes of oil and coal from the Northern Plains region," they charged.
"Any suggestion that BNSF would intentionally seek to cause harm to any customer runs completely contrary to how BNSF conducts business," BNSF communications director Amy Casas said.
Rail’s advantages include cost-effectiveness, ease of tracking, fewer idle periods, door-to-door delivery, quicker delivery, safety of cargo, and the ability to use different routes.
Next, the air cargo role in the supply chain