Intermodal freight industry reflects on investing in resilience
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LONG BEACH, Calif .– The intermodal freight industry is debating how much it should invest in infrastructure and other spending to build resilience in the face of disruptive shocks such as the COVID-19 pandemic.
Panelists who addressed the issue at the Intermodal Association of North America’s Intermodal Expo here on September 14 debated whether adding overcapacity to the system would sacrifice l effectiveness in the face of the competitive threat of trucking.
“All of our collective effort here is really designed to make the intermodal product as competitive as possible in the truck,” said Adriene Bailey, surface transportation partner at consulting firm Oliver Wyman and panel moderator.
The industry’s problem with the availability of chassis for trucks to move containers left panelists divided over the extent of the problem and the solution needed.
Acors (Jerry Hirsch for transportation topics)
Duke Acors, director of strategic operations for the Georgia Ports Authority, said the problem starts with too many containers sitting on the chassis for too long before unloading. This keeps the equipment out of service for days at a time. Collectively, the intermodal freight industry needs to improve turnaround times.
“I’m not sure if you threw 5,000 more frames in the pool it would make a difference,” Acors said. “The entire supply chain needs to be assessed.
But Mike Burton, president of C&K Trucking, said the industry’s inability to smoothly absorb the increase in intermodal freight begins with a lack of the right chassis types in the places most needed.
“All we’re focusing on is what we can do to get more chassis,” Burton said. “Having to run around town to find a chassis kills our productivity and causes a number of delays. “
Panelists agreed that the industry maintains sufficient resilience for weather events, work stoppages and the types of shocks that typically last 30 to 60 days.
But with the pandemic and the subsequent unexpected increase in freight passing through the nation’s ports, “we’re now coming out of a year, 14 months or so that we’ve struggled. Every stakeholder is in trouble and no one is happy with their service, ”said Jay Strongosky, Director of International Sales at CSX Transportation.
At the start of the pandemic, companies quickly downsized, fearing a deep recession. But when freight volume exploded, they found themselves understaffed and are now striving to increase hiring, he said.
CSX, for example, hired 300 conductors this year, more than it hired in the past two years combined.
Historically, the Georgia Ports Authority has tried to prepare for fluctuations in activity by setting its capacity 20% above demand, Acors said.
“Well last year we went up 20% so we’re going to have to re-evaluate,” Acors said.
The port is ramping up infrastructure projects and has one that will increase the capacity of twenty equivalent feet (TEUs) of 650,000 at its Savannah facility, he said.
Burton (Jerry Hirsch for transportation topics)
The panelist said these types of improvements are safe, as they will help meet increased demand, whether it happens in a year or over a longer period.
The question, Burton said, is whether the industry should take a similar approach to UPS Inc., which is starting to stockpile hardware well in advance of the holiday shopping season so it doesn’t get caught in the dark. lacking.
Such an approach devotes capital to the capacity of rainy days. But the pandemic and the freight boom are much different from a recurring busy season or periodic weather event, Burton said.
“The pandemic is like a century-old flood. As a group, we don’t solve it. Customers are not satisfied at all levels. We are broken and I don’t know if we can fix it, ”he said.
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