Intermodal 101 - Transportation Center

Intermodal 101,201,301 And
A Review Of The Current
Issues And Trends
Sandhouse Gang Presentation
Northwestern University
May 07, 2013
Ron Sucik
1
RSE Consulting
ACKNOWLEDGEMENTS


This will be a collection of information
related to the issues and trends that affect
the movement of containerized goods into
and throughout North America.
It will consist of a collection of slides I have
created for many of my past presentations
but will also include more recent informatin
and slides created by some of my friends in
the industry which includes ACT Research,
The Hub Group, IMS Worldwide, the JOC and
Tony Hatch.
Ron Sucik
RSE Consulting
What is the origin of my cargo? Should I go Panama or Suez?
What size ship should I use?
What port can handle the ship?
Narvik, Norway
Prince Rupert, Canada
Los Angeles
Punto Colonet
New York
Norfolk
Savannah
HOUSTON
Vostochny, Russia
Sydney NS
Rotterdam, Netherlands
North China
Hong Kong, China
Bombay
Lazaro Cardenas
Singapore
3
Ron Sucik
RSE Consulting
Shanghi – North American Ports
Prince Rupert 4678 Nautical Mi.
Vancouver 4873 Nautical Mi.
LA/LB 5633 Nautical Mi.
Lazaro Cardenas 6587 Nautical Mi.
Hong Kong – North American Ports
Prince Rupert 5335 Nautical Mi.
Vancouver 5535 Nautical Mi.
LA/LB 6289 Nautical Mi.
Lazaro Cardenas 7246 Nautical Mi.
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Ron Sucik
RSE Consulting
HOW DOES IT GET THERE?
Prince
Rupert
Vancouver
Seattle/
Tacoma
Chicago
Cent. PA
NY/NJ
Kansas
City
Columbus
Oakland
Norfolk
Memphis
Dallas/
FW
Los Angeles /
Long Beach
Atlanta
Savannah /
Charleston
Jacksonville
Houston
Lazaro
Cardenas
Mexico
City
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Ron Sucik
RSE Consulting
What Makes A Location More Favorable

Large population or consumption centers
•

Deep water for ports
•

(LALB, Norfolk and PANYNJ)
Nearby Rail or Highway infrastructure
•

(Prince Rupert, LALB, Norfolk and Lazaro Cardenas)
Port infrastructure
•

(LALB, NYC, Florida and the Southeast)
(LALB, PANYNJ, Norfolk and the PNW-Vancouver, Seatle & Tacoma)
Space and/or Central Location for Dist.
Complexes
•
(Chicago, St. Louis, Columbus, SEUS including Charleston, Savannah &
Jacksonville)
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Ron Sucik
RSE Consulting
Ports of Los Angeles & Long Beach
MSC/Zim –
171 acres
TRAPAC –
173 acres
China Shipping –
75 acres
CUT –
108 acres
P&O/NL –
84 acres
YML –
186 acres
YTI – 185 acres
Matson – 70
acres
Hanjin –
375 acres
LBCT101 acres
ITS
246 acres
Evergreen –
205 acres
PCT-237
acres
APL –
292 acres
Port of LB
APM – 484 acres
Port of LA
7
Ron Sucik
RSE Consulting
Rail Intermodal Facilities at West Coast Ports
Port
Max. Number of
Stack Trains On
Spot at On-Dock or
Near-Dock
Terminals
Max. Number of
Stack Trains On
Spot at Off-Dock
Terminals
18
1
4
2
5
4
4
20
8
At Oakland
1
0
At Seattle
4
3
8
LA/Long Beach
San Francisco
Oakland
Portland
Tacoma
Seattle
Vancouver, BC
Subtotal, NonSPB Ports
Total
26
27
8
POLA/POLB Transportation Study (6/2001)
Ron Sucik
RSE Consulting
U.S. Port Working Depths
Depths at Mean Low Water (MLW)











U.S. East Coast
Boston
NY/NJ
Philadelphia
Baltimore
Norfolk
Wilmington
Charleston
Savannah
Jacksonville
Miami
MLW
38’
43’
38’
40’
48’
42’
47’
42’
38’
39’
U.S. Gulf
Houston
New Orleans
U.S. West Coast
LA/LB
Oakland
Portland
Seattle/Tacoma
MLW
40’
35’
MLW
50’
50’
35’
50’
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Ron Sucik
RSE Consulting
West Coast Alternatives

What about Prince Rupert

What about Punta Colonet
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Ron Sucik
RSE Consulting
Closest Route from Asia
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Ron Sucik
RSE Consulting
Ron Sucik
RSE Consulting
1997 Import TEUs
West Coast
83.25%
LA/LB, Oakland, Seattle, Tacoma, Vancouver
East Coast
Gulf Coast
16.75%
.25%
NY/NJ/N. East
7.97%
South East
8.53%
2011 Import TEUs
West Coast
71.4%
LA/LB, Oakland, Seattle, Tacoma, Vancouver
East Coast
28.6%
Gulf Coast
NY, NJ, N. East
South East
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Ron Sucik
RSE Consulting
Events Contributing to AWEC Migration
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RSE Consulting
Continuing the Migration
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RSE Consulting
U.S. Population Concentration - 2004
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Ron Sucik
RSE Consulting
Selected States Population Change Compared to United
States Population Change 1990 to 2000
30%
26%
23%
25%
20%
15%
24%
2 1%
15%
13 %
14 %
10%
5%
0%
United California
States
Ron Sucik
Texas
North
South Georgia
Carolina Carolina
Florida
RSE Consulting
Ports LA/LB To Transloaders
To Regional DC’s - 2001
Inland Rail Intact – 65.0%
Rail Transloaded – 35.0%
Ron Sucik
18
RSE Consulting
Hub & Spoke Concept With
Logistic Parks - 2005
Inland Rail Intact – 66.5%
Rail Transloaded – 33.5%
Ron Sucik
19
RSE Consulting
Population density makes intermodal rail an
essential part of freight movement
2006 Population

Chicago

New York
Eastern U.S. region holds
66% of the U.S.
population
Approximately 75% of
U.S. consumption takes
place in the East
St Louis
Projected population growth will
increase volume and capacity
requirements
Memphis
Charleston
Jacksonville
Population in Major Metropolitan Areas
GT 10,000,000
5,000,000 – 10,000,000
2,500,000 – 5,000,000
New Orleans
1,500,000 – 2,500,000
Miami
1,000,000 – 1,500,000
Source: Global Insight
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Ron Sucik
RSE Consulting
East Coast-West Coast TEU
cost line equilibrium
Megapolitans
Cascadia
+38%
Great Lakes
Horseshoe +10%
Atlantic
Seaboard
+12%
z
Norcal
+35%
Southland
+35%
I-35 Corridor
+40%
Valley of
the Sun
+81%
Gulf Coast
Belt +31%
Sources: Population, employment, and real estate growth forecasts by
Robert Lang and Arthur Nelson of the Metropolitan Institute at Virginia Tech
and Phil Hopkins of Global Insight; Business 2.0, November 2005
I-85 Corridor
+35%
Southern
Florida
+52%
21
NS Corridor Projects
Mechanicville
Ayer
Detroit
Bethlehem
Chicago
Harrisburg
NY/NJ
Philadelphia
Columbus
Cincinnati
Pritchard
Lynchburg
Roanoke
Norfolk
Ron Sucik
Charlotte
Memphis
Birmingham
Atlanta
Shreveport
Meridian
Jacksonville
New Orleans
Titusville
22
23
24
Emma Maersk 14000 TEU Vessel
So Which U.S. Port Can Handle the Emma Class Vessels?
25
Ron Sucik
RSE Consulting
22 Containers Across Requires
Newer Larger Cranes
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Ron Sucik
RSE Consulting
Ocean Carrier Vessel Size and Capacity

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
Total of available container capacity over the 10
million TEU mark in 2007. The top 20 (by
capacity) steamship companies reached
10,099,145 TEU by May 6, 2008.
AXS-Alphaliner reported container fleet net
increase of 6% in 2012 to 16.335 million TEU’s.
Fleet expected to increase 9.8% in 2013 while
demand for vessel space will be 4-6% mostly
8,000+ TEU, many 12,000+ TEU.
5% of fleet idled at beginning of 2013.
Ron Sucik
27
RSE Consulting
Singapore Harbor Feb 2009
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Ron Sucik
RSE Consulting
What About All Those Empty
Containers In China?
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Ron Sucik
RSE Consulting
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Canal Routes



Success of AWEC services brought
substantial volume to Panama Canal. This
long term trade’s internal growth may use
up much of capacity provided by 3rd set of
lock.
Suez route SE Asia and EC US provides
opportunity to fill VLCS with Mediterranean
traffic and transshipment hubs. These
intermediate stops affect transit times.
Speculation importers might forgive slow
transit for slow selling merchandise but
trend so far has been to keep inventories
lean in times of trouble.
Ron Sucik
31
RSE Consulting
Panama Canal Today
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Ron Sucik
RSE Consulting
3,500 TEU Vessel in Panama
Canal
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Ron Sucik
RSE Consulting
Panama Canal Expansion Project
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RSE Consulting
June 6, 1944
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Ron Sucik
RSE Consulting
SEPT 10, 2004
Sept. 10, 2004
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Ron Sucik
RSE Consulting
Deja Vu All Over Again
November 2012
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Ron Sucik
RSE Consulting
Countdown To Disruption ???




December 28th the ILA and USMX once again averted East
Coast port disruption by extending the negotiations
extension Feb 6.
Undisclosed agreement on container royalties reached but
ILA walks out on discussions Jan. 8th. They later agree to
return to the negotiations Jan. 15th.
Lunar New Year is Feb. 10th. With the two week shut down
of manufacturing in China there is a surge of traffic
preceding this date to restock inventory and bring in spring
products.
There is a higher probability of East Coast import traffic
moving inland by motor carrier than on the West Coast.
Any disruption will be more greatly felt by East Coast
motor carriers.
Ron Sucik
38
RSE Consulting
Total Intermodal Loadings
16.0
15.5
14.8
15.0
14.2
Millions
14.0
14.1
13.7
13.6
13.4
12.9
13.0
11.7
11.9
12.0
11.2
11.0
10.3 10.2
10.0
'00
'01
'02
'03
'04
'05
'06
'07
'08
'09
10
11
Source: IANA Intermodal Market Trends & Statistics
Ron Sucik
12
39
RSE Consulting
U.S. Class I Intermodal Growth
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Ron Sucik
RSE Consulting
Breakdown Of Intermodal Traffic
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Ron Sucik
RSE Consulting
ON DOCK RAIL
Near Dock Staging Area – Port of LA
42
Ron Sucik
Slide Courtesy POLA
RSE Consulting
ARRIVE BY RAIL AND SHUTTLE TO THE DC
43
Ron Sucik
RSE Consulting
OUT THE PORT GATE
TO THE TRANSLOADER OR OTR
44
Ron Sucik
RSE Consulting
Transloaders Near LA/LB
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Ron Sucik
RSE Consulting
Inland Empire of Ontario
California
46
Ron Sucik
RSE Consulting
TRANSLOADING REACHING
NEW HIGHS
Source TTX, IANS, Piers
47
Ron Sucik
RSE Consulting
Cross-Dock Operation at Cal Cartage
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Ron Sucik
RSE Consulting
Packing a 53 ft Domestic Container
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Ron Sucik
RSE Consulting
Which Retailers Will Transload?




Variance in the nbr. of stores and the amts. of vol. retailers
might have which leads to variety of different logistic
chains in the system.
Some retailers have the volume to move intact and
distribute from inland Logistic Parks.
Others will find transloading is driven by their product
density
Some retailers with small enough volumes will consider
transloading in China in order to drop-ship the containers
directly to their stores with the correct product mixes.
50
Ron Sucik
RSE Consulting
Alameda Corridor
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Ron Sucik
RSE Consulting
Alameda Corridor Looks Like
A Giant Zipper From The Air
52
Ron Sucik
RSE Consulting
Leaving The Port And Entering
The Alameda Corridor
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Ron Sucik
RSE Consulting
Alameda Trench is 25 ft.
Below Grade
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Ron Sucik
RSE Consulting
Alameda Corridor
55
Ron Sucik
RSE Consulting
AFTER THE TRANSLOAD
DO YOU GO BACK TO THE RAIL-------- OR OVER THE ROAD
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Ron Sucik
RSE Consulting
CLASS I CAPEX SUPPORTS
EXPANSION OF RAIL VOLUMES
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CONTINUED POSITIVE NEWS FOR
INTERMODAL

Dollar value of intermodal $11-$12 Billion Ind.

Trucking is over $500 Billion.

Possibly another $10 Billion Trucking to Convert.

Some Shippers increasing Inmdl Spending 10-15%

25% increase in Domestic Containers.

Truck fleets not increasing at rate of loads.
58
Ron Sucik
RSE Consulting
More People – More Freight
Americans require a freight system that moves 40 tons of freight per person annually.
With current population growth projections, we are looking at moving 4 Billion more
tons of freight in the next 40 years.
59
Ron Sucik
SOURCE: U.S. CENSUS BUREAU; FRA’S NATIONAL RAIL PLAN
RSE Consulting
Chronic Problem
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Ron Sucik
RSE Consulting
Class 8 Truck Population
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Ron Sucik
RSE Consulting
RISING FUEL COSTS ($500 WORTH OF FUEL)
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Service Improvements
Investments by the railroads are resulting in significant improvement in overall
service and transit.
INTERMODAL SERVICE IMPROVEMENTS
140
129
110
106
97
97
100
90
83
80
55
81
69
68
60
87
85
53
52
12%
25%
35%
19%
7%
55%
20
7%
40
8%
TRANSIT IN HOURS
120
120
ATLANTA
TO
LOS ANGELES
ATLANTA
TO
CHICAGO
JACKSONVILLE
TO
CHICAGO
LOS ANGELES
TO
DALLAS
STOCKTON
TO
CHICAGO
CHICAGO
TO
JACKSONVILLE
ATLANTA
TO
KANSAS CITY
CHARLOTTE
TO
CHICAGO
0
2007
63
2011
Modal Shift Opportunity
With improvements in service and facilities, Intermodal is becoming more
competitive in shorter distances, absorbing more of the projected growth in
freight.
64
Ron Sucik
SOURCE: FRA’S NATIONAL RAIL PLAN
RSE Consulting
Rails Are Poised To Capture
Additional Market Share

Fed Regs will bite into truck capacity second half of year
giving shippers incentive to shift more loads to rail.

HOS effect in July cost 3% to 5% productivity.

Truckload capacity hit four year load.

Higher costs focus trucks on shorter length of haul.


Trucking companies adopting regional business models
focused on dedicated relationships vs. scattering trucks.
Potential market for longer than 550 mi. is 45 million lds/yr
as rail infrastructure expands and railroads capture
65
multistop business they currently can’t serve.
Ron Sucik
RSE Consulting
Q: Will It continue?
Crescent Corridor – Faster, more TRUCK
Competitive
•
•
•
New terminals form the cornerstone
of this project
• Memphis (2012)
• Birmingham (2012)
• Greencastle (2012)
• Charlotte (Early 2013)
Expansion
• Harrisburg
• Rutherford
Memphis to Harrisburg transit
• Today – 71 hours
• Target (Day 1) – 37 hours
•
Truck – 34 hours
MEMPHIS TO HARRISBURG TRANSIT: ESTIMATED HOURS CUTOFF TO NOTIFY
Ron Sucik
RSE Consulting
Domestic Intermodal Volume
Domestic Intermodal volume continued its trend over prior
year levels in 2012. Full year 2012 represented nearly a 6%
increase over 2011.
DOMESTIC INTERMODAL VOLUME
700,000
650,000
14%
12.9%
12%
10.2%
10.0%
10%
8.9%
8.5%
600,000
8%
6.7%
6.2%
6.3%
550,000
6%
4.6%
3.5%
4%
500,000
2%
1.7%
450,000
0%
-0.4%
400,000
-2%
JAN
FEB
MAR
APR
% CHANGE
67
MAY
JUN
2009
SOURCE: INTERMODAL ASSOCIATION OF NORTH AMERICA
JUL
2010
AUG
2011
SEP
OCT
2012
NOV
DEC
68
69
Raildeck Container
70
Temp-Controlled Intermodal
Container
On1Flat Car (COFC)
- Phase
• C.R. England now operates 300 reefer containers
(introduced in late 2010)
• Entire fleet of lightweight daycabs has been purchased
71
72
Top Three Truckload Carriers Own
39% of U.S. Domestic Containers
Ron Sucik
RSE Consulting
RSE
Consulting
WWW.STOUGHTONTRAILERS.COM
74
WHAT TO TAKE HOME

Domestic container loadings still carry the day.

RR service and infrastructure improvements.

Truck capacity & drivers remain tight.

Over 215,000 DomCons now in fleet.

FMCSA denies ATA request to delay HOS.

Denial will cost transportation industry $320
million to prepare for something that may be
overruled after court hearing.
75
Ron Sucik
RSE Consulting
Thank You For Your Time
Ron Sucik
RSE Consulting
76