John D. Boyd | Aug 31, 2009 12:34PM EDT
What’s in a name? Union Pacific Railroad thinks a more direct branding plan can help it boost revenue by putting more used cars on its trains.
Changing the name of both a subsidiary and a Web site to “ShipCarsNow” from their previous, less focused name “Insight Network Transportation,” UP wants to do for the used-car market in cross-country shipments what the rail industry already does for new-car hauls.
“Nearly 20,000 U.S. auto dealers already receive new vehicle shipments from manufacturers by an efficient intermodal rail and truck network,” the carrier said in a statement explaining why it was adopting a hard-to-miss brand name.
“Until now, this network has not been readily available to used car shippers. ShipCarsNow was formed by Union Pacific to open up this robust transportation network to the remarketing and fleet industries.”
If it works, it can make a permanent change in the way used cars are shipped. Often, dealers either pay drivers to move used cars from one market to another, or consolidate a number of them onto mult-level trailers for trucks to pull down the highways.
UP’s plan, though, could patch together a network of large dealerships, and in effect make a market by growing the volume of this business. UP calls this an intermodal service, in that it combines long-haul rail and short-haul truck delivery.
The plan could also take advantage of unused “auto rack” railcars that may be sitting idle, after the new-vehicle market in North America lost a large part of its business in 2008 and 2009. Even with auto plants starting to rev back up, forecasts are that yearly production may remain below previous levels for years to come.
During this recession, UP has already built up other lines of business that normally go by truck, sometimes by targeting what railroads used to call project cargoes. For instance, the carrier has taken some market share from trucks in cross-country hauls of components for wind energy towers.
Jeff Grandstaff, general manager of ShipCarsNow, said that unit “integrates rail and truck transport, providing our customers more options. The economics and value of rail means auto traders can buy and sell cars over longer distances and still maintain strong profit margins.”
Under its previous name, the used-car unit was formed in 2006 to apply the intermodal auto shipping model to the new-car services offered by UP’s Insight Network Logistics subsidiary.
UP says at its used-vehicle Web site customers can get freight price quotes with estimated transit times, place orders and track shipments.
Contact John D. Boyd at jboyd@joc.com.
