modal corridor by allowing two trains to operate over it at
the same time, Lange says.
HURDLES TO CLEAR
But with the opportunity come challenges. To be “
truck-competitive”—which railroads define as competing with a
solo driver on short and long hauls—railroads have to
ensure their own networks, as well as those of the draymen
responsible for bringing goods to the intermodal ramp and
then taking them off at destination, are synchronized to
deliver what trucks already do: a flexible, reliable service,
albeit at higher prices than intermodal.
Many short- to intermediate-distance segments are located in what are known as “secondary markets” that lie outside of the railroads’ primary corridors. It is in these lanes
that the rails’ intermodal efforts have been hurt by a lack of
significant traffic density and a less-robust infrastructure
relative to their primary corridors.
David Howland, vice president of land transport services
for third-party logistics giant APL Logistics, says intermodal
service in the secondary markets—he cites the Ohio
Valley–Kansas City corridor as an example—still needs work
and will require significant investment by industry, government, and private sources to get up to speed. Howland adds,
however, that the railroads are doing a better job than ever
before in meeting their intermodal commitments.
Gloeb of UP says the railroad is committed to the sec-
ondary markets and is addressing the concerns over service
inconsistency. “The 11 million highway conversion truck-
load opportunities [for] Union Pacific include secondary
markets that we are targeting,” he says. Rutherford of CSX
says its new Northwest Ohio hub will serve as a critical con-
duit to its secondary corridors.
ble for bringing goods from intermodal ramps to the
stores. Since the draymen had other customers to serve
and other deliveries to make, the Container Store wouldn’t have full control over the drayage operations’ routing
and scheduling. “We couldn’t be sure if we would be first
on the list, or second or third on the list,” said Sangalli.
After some initial hiccups, Hunt and Container Store
worked out a plan where Container Store’s deliveries
would essentially be given “seniority” status. This eventually resulted in the same drivers making the same deliveries to the same stores. While deliveries vary depending on
the individual store, a store receives, on average, three
truckloads per week.
Sangalli acknowledges that Container Store’s network
is well suited for domestic intermodal. Its retail outlets are
located in densely populated urban and suburban areas
that have robust rail connections. In addition, the distances between its DC and its stores are long enough to
make intermodal work. By contrast, many retailers have
multiple regional distribution facilities located within 200
to 300 miles of stores, distances more cost-effectively
served by truck.
Still, Sangalli said intermodal could work well even for
those retailers with greater network density than the
Container Store has. “It comes down to attention to
detail, and paying close attention to the performance of
a specific market’s draymen,” he said.
That’s not to say the Container Store is going wholly over
to intermodal, however. Sangalli said it would be impossible to switch the retailer’s entire outbound network to
intermodal service. Container Store has 10 stores in Texas,
all of which, given their proximity to the DC, must be
served by truck. Its New York City facility has complex delivery requirements that are more suitable for direct delivery
by truck than through a rail-dray network, Sangalli said.
Regardless, Sangalli said that intermodal has become a
permanent part of the company’s outbound distribution
strategy and that he will continue to expand its role even at
non-traditional distances. “If intermodal works, we will use
it and not let distance be a determining factor,” he said.
