Florida East Coast Railway plans to expand the reach of its intermodal business in 2012, adding a second drayage “relay” station in Georgia and strengthening its partnerships with large U.S. truckload carriers, President and CEO Jim Hertwig said.
A new relay station in Valdosta or Tifton, Ga., will complement an existing trailer drayage facility in Savannah and offer shippers — as distant as the Ohio Valley — two-day truck and intermodal service to South Florida, Hertwig said in an interview.
Trailers dropped at FECR relay stations are hauled by the railroad to Jacksonville and shipped south on flatcars. Empty trailers are returned to the depots the same way, saving truckload carriers costly deadhead backhauls from South Florida.
“We think of ourselves as the trucking company’s owner-operator in Florida,” said Hertwig, who worked for motor carriers such as Con-way and Landstar System before switching to rail. “All we are is an extension of their network.”
The truck-rail exchange can give shippers a 10-hour advantage over traditional over-the-road transport, he said. The trailer dropped at a relay stays in motion. “That load gets delivered while the original driver is still in bed,” he said.
Increased intermodal volume and stronger pricing pushed the Florida railroad’s operating revenue up 5.5 percent in the first nine months of 2011 to $156.7 million. Intermodal loads represented 81 percent of FECR’s volume in that period.
In the third quarter of 2011, intermodal revenue surged 13.8 percent at FECR to $31.8 million, or 67 percent of its total freight revenue, on a 1.8 percent increase in volume. Average revenue per intermodal unit increased 12 percent to $392.
Intermodal volume for major U.S. railroads soared 22.9 percent year-over-year in the week ending Dec. 24, including a 24.7 percent increase in intermodal containers, a sign businesses were moving to replenish lean inventories heading into 2012.