Western Railroad Discussion > More Intermodal Opportunity

Interesting article in the latest Logistics Management; see:

http://logisticsmgmt.com/article/driving_globalsupplychain_part2


Note comments from Rite Aid:

Wilson Lester, senior vice president of supply chain at drugstore chain Rite Aid, understands this dichotomy. Not only does intermodal transportation support Rite Aid’s sustainability objectives, but it also offers a portfolio of other transportation alternatives.

“We are impressed with the significant improvement in the reliability of intermodal services,” says Lester. “The ‘radius of performance acceptability’ has grown from moves over 700 miles—mainly coast to coast—to shorter haul moves of 50 percent that distance.” Lester adds that Rite Aid is currently looking to expand it intermodal options to over 500 domestic lanes. “Additionally, our import deconsolidation centers are playing an increasingly responsible role in our domestic freight program,” he says.

Are the railroads capable of keeping pace with the terminal investments in critical markets where land is constrained and expensive, including areas such as LA Basin, Seattle/Tacoma, Newark/New Jersey, Chicago, etc, to realize the potential?

Interesting for sure.
So to translate, would they be utilizing lanes to transport goods in non-Rite-Aid trailers/containers to distribution centers? I'm assuming this means they contract out with other carriers to get freight to centers, rather than use their own marked "Rite-Aid" equipment. (?)

I don't think it's an issue of if the railroads can build the necessary intermodal terminals. I know it's an issue of whether they will be allowed to build them. The railroads are financially healthy and can invest where investment is justified.

They've certainly built or enlarged IM facilities where possible and justified. CSX at N. Baltimore, BNSF logistic parks near Joliet, IL and Kansas City, the UP near El Paso, and FEC/NS at Titusville, FL are but a few examples. As the cited article says, the competitive mileage for intermodal movement vis a vis truck has decreased to around 500 miles. There is no reason the decrease has to stop at 500 miles.

But the problem is terminal capacity. (see Fred Frailey's article in December Trains.) The railroads can build such capacity, it's just a question if they will be allowed by governments and NIMBYS to build it.

BNSF has been trying to build the Southern California International Gateway for almost 10 years. It would reduce truck traffic on the freeways and reduce emissions. It's being blocked by the government.

The UP tried to put a new IM terminal in West Chicago on unused airport land. Blocked. So they went a little further west to Maple Grove, IL and tried to build there. Blocked again. Finally, they built it in Rochelle, IL. But that's to far from Chicago to work well. (The UP was able to build a new IM facility near the BNSF logistics park at Joliet, IL. Chicago now handles more containers than any US seaport.)

People want the benefits of a good economy, but they don't want to allow anything that is necessary for a good economy.