LOGISTICS OFFICIALS CITE INTERMODAL IMPROVEMENT

LOGISTICS OFFICIALS CITE INTERMODAL IMPROVEMENT

Top logistics officials from two large intermodal shippers believe the industry has turned the corner to improve service reliability and value provided, but still needs wider exposure and better equipment to further boost its marketability.

Those were the key messages from the shipper community to attendees of the Intermodal Association of North America's fall meeting here.To buttress the point about intermodal's reliability, Tom Myers, assistant vice president of traffic and transportation at Service Merchandise Inc. in Brentwood, Tenn., said on-time performance for the company's 9,000 annual shipments was 98.8 percent so far this year.

That percentage puts intermodal on a par with motor carrier competition, though the few available measures of overall intermodal service reliability fall more in the low 90 percent range.

"Service Merchandise has been an advocate of intermodal in word and deed," he added.

However, he noted that many colleagues in the shipper community who are not averse to using intermodal need to plan better to capture the mode's inherent cost advantages.

Tom Pasqualini, director of distribution services for Sweetheart Cup Co. in Owings Mills, Md., agreed that intermodal was providing reliable service, but he reported a higher success rate in converting customers to intermodal.

Key elements in making that happen, he said, are educating customers and getting warehouse managers to buy into the idea of expediting intermodal shipments.

Mr. Pasqualini's focus on communications was shared by Mr. Myers, who saw effective communication between shippers, intermediaries and carriers as a positive value for intermodal service.

While both had kind words for intermodal service, Mr. Pasqualini made it clear that Sweetheart had some severe concerns about equipment condition and utilization.

"Some of the trailers we are using are disgusting," he said, criticizing the age and condition of the vehicles. "Someone has to belly up to replace these trailers."

He said Sweetheart was insisting on improving utilization of equipment that hauls its products and offered to take an active role in making better use of assets to encourage capacity suppliers to take the plunge and acquire more boxes.

With that offer to make better use of assets, though, was a qualifier - that Sweetheart deserved better rates than companies that used intermodal as a "warehouse on wheels" and did not turn assets as quickly.

To back up how much Sweetheart emphasizes equipment control, he said some equipment the company uses in a triangular service between Baltimore, Atlanta and Chicago had been loaded only by Sweetheart for seven months.

That approach to box management amounts to captive asset management, he said. That approach flies in the face of free-running equipment pools that have been a standard equipment supply source for many years.

Mr. Pasqualini added that Sweetheart was turning to intermodal for inbound shipments of raw paper that are moving too slowly and unreliably in boxcars.