Ryder Plans to Divert More Shipments to Rail

Ryder Plans to Divert More Shipments to Rail

Ryder System says it plans to take more of the shipments it sends to trucks under the company's outsourced logistics operations and divert them to intermodal freight rail. 

“One of our strategies is to convert truck traffic, especially intra-company truck traffic, to intermodal,” said Tim Podvin, general manager of global transportation procurement for Ryder System. “We’re always looking for an opportunity.”

In recent months, the Ryder Supply Chain Solutions division of the $5.1 billion company has been increasing its use of intermodal rail, as truck pricing climbs higher. Ryder spends about $1 billion a year on truckload transportation, Podvin said.

Ryder System’s net profit leaped 34.2 percent year-over-year to $40 million in the second quarter, as revenue climbed 18.1 percent to $1.5 billion. The company’s Supply Chain Solutions business raised revenue 26 percent to $389.6 million.

Transportation intermediaries such as Ryder and its shipper customers are shifting freight from all-truck modes to intermodal at the fastest pace in years, according to a survey by the Wolfe Trahan investment research group.

Those shippers are reacting to tight capacity and higher rates. “Overall costs are definitely up this year,” said Podvin. “Truckload line-haul rates are up a fair amount,” he said. “We’ve done a good job mitigating increases for our customers.”

In moving freight to rail, Ryder must balance lower pricing with longer transit times, said Podvin. Typically the shift adds one to two days to a shipment. “If we can live with that extra time, and save some money, that’s obviously our end goal.”

Contact William B. Cassidy at wcassidy@joc.com. Follow him on Twitter at @wbcassidy_joc