INTERMODAL COMPANIES SCRAMBLE FOR EQUIPMENT

INTERMODAL COMPANIES SCRAMBLE FOR EQUIPMENT

The busy fall shipping season has sent intermodal companies on a mad dash to scoop up trailers, containers, trucks and railcars anywhere they can find them to meet volume levels that are setting records every week.

With marketing companies hearing from customers that have not inquired about intermodal service for 20 years, the Association of American Railroads reported last week that shipments hit an all-time high of 154,806 loads.J.B. Hunt Transport, which led the motor carrier industry's rush to intermodal service with its agreement placing trailers on the Atchison, Topeka and Santa Fe Railway, has shifted some business the Santa Fe has been unable to handle because of terminal congestion and lack of flatcars to the Union Pacific Railroad.

This is the first time J.B. Hunt has acknowledged shifting freight to the UP since entering its agreement with the Santa Fe in 1990.

Equipment imbalances are so bad that one Western railroad moved a trainload of empties last week from the Pacific Northwest to Memphis, a distance of about 2,500 miles, to accommodate westbound loads.

Industry officials said the turmoil is caused by the traditional fall peak shipping season, a lack of intermodal cars and boxes, lingering effects on equipment management resulting from several waves of flooding, and a truck driver shortage that continues to feed intermodal as much freight as it can handle.

"Everything's awful," said Tom Finkbiner, vice president of intermodal for Norfolk Southern. "We don't have enough cars or trailers. And it'll get worse before it gets better."

Gary Harper, president of Galaxy Transportation in Chicago, agreed. "We're not even wound up yet," he said, claiming that he could handle 30 percent more business than the company has now.

Tom Hardin, president of the Hub Group in Lombard, Ill., estimates that the company could handle another 15 percent to 20 percent more business this fall than last year. Other intermodal marketers report similar growth.

"If one railroad has capacity problems, we have no choice but to use another railroad as a backup," said Tom Williams, J.B. Hunt's vice president of intermodal. "We talked to Santa Fe ahead of time. We have to protect the customers. In the past, when we had a lot of drivers, we had a fallback. We don't have that now."

Steve Mitchell, Santa Fe's vice president responsible for Hunt's service, said some Hunt loads were shifted to UP because of track repairs in the Los Angeles terminal and equipment imbalances that hit at the height of the fall shipping season.

Santa Fe could end up moving as many as 140,000 loads for Hunt, industry officials said. The freight shifted to UP was apparently less than 100 loads a week.

This year's surge is good news for intermodal's steady customers, who are at the head of the line when scarce equipment is doled out.

"The shortage ought to force railroads to take a look at the cost of doing business with various customers, particularly those that only use railroads during the peak season," Mr. Finkbiner said, targeting shippers who only use intermodal at peak times as less likely to get freight moved.

The unexpected 7 percent increase in trailer business also is causing headaches.

Recent intermodal fleet additions stressed adding double-stack capacity

because many industry officials thought trailer business would fade slowly, Mr. Finkbiner said.