Rails Coax Brokers, Shippers to Fill Trains Via Intermodal
Each rail executive outlined the advantages of using door-to-door intermodal, meaning that the railroads arranged drayage on both ends of the move, saving brokers of the time and cost of finding local truckers, in an effort to make the rail move as easy to arrange as truckload.
Even though the rails arrange door-to-door trucking, the drayage portion still can create headaches, several officials said.
Austin said that long drayage moves, such as 250 miles, can raise the cost of intermodal and “defeat the purpose of the cheap” rail move.
Drayage, “at the end of the day, is the dark period,” where brokers can’t get immediate information about shipment locations, Kirchhoefer said.
She added, however, that UP’s draymen are required to report in every 30 or 60 minutes and that the railroad was planning to add more information technology to improve that process.
Another variable is different rail pricing and capacity strategies.
Norfolk Southern will provide equipment for brokers at peak periods when trucks may be scarce, based on usage throughout the year, but rates may change, Niness said.
On the other hand, CSX’s Parsons-Dicks said her railroad will commit to rates year-round, but equipment at peak periods is doled out on a first-come, first-served basis.
UP also sets its equipment allocation and rates on overall usage, Kirchhoefer said.
Still another variable is actually moving a load.
Niness said that to get a confirmed price, a broker has to provide a Department of Transportation number to demonstrate that he or she is not a shipper.
“We don’t let people shop our rates,” Parsons-Dicks said. “They have to go through the credit [review] process.”
UP has the same policy as CSX, Kirchhoefer said.
While pricing and capacity strategies varied, all three railroad representatives said it was simple for brokers to do business with railroads and that they could move their first load within a day after initial contact. Each carrier also has Web-based rate quote tools.
Austin also said that the railroads could help themselves by having more consistent fuel surcharge programs and better tools for brokers to know which routes are conducive to rail.
Shawn Rorie, president of BAT Logistics, recommended truck/rail moves, saying, “All I have to do is train our folks as to how to sell intermodal. I don’t have to train them on managing drayage.”
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