DC Velocity - February 2012

newsworthy

capacity for the foreseeable future. This comes after a near 20-percent reduction in fleet capacity during the recession.

For the past half-year, carriers have been consistent in their refrain that, without a significant bump in rates to offset higher operating and investment costs, the most they can do is replace aging equipment—as opposed to expanding their fleets.

“Carriers tell us that rates are not covering investment risks nor are they close to covering the cost of the record prices of new trucks,” said Richard Mikes, a TCP partner and survey co-coordinator.

As the supply chain grapples with tight capacity, demand remains solid. TransCore reported about 60 million postings on load boards in 2011, the second-busiest year since it began keeping records in 1996. Only 2005, a period of relatively strong economic growth fueled by a credit and housing bubble, saw more postings, TransCore said.

Based on conversations with shippers and intermediaries over firming freight demand, TransCore analysts surmise that the nation’s gross domestic product may grow at a 3- to 4-percent clip in 2012, faster than the 1- to 2-per- cent growth rate many analysts and economists expect. ;

—Mark Solomon

accolades

Full-service transportation provider Averitt Express has earned Walmart’s 2011 Regional LTL Carrier of the Year Award. Walmart says it chose Averitt for its “overall dedication to customer service, operational excellence, and ability to provide creative solutions to complex supply chain [problems].” … Global supply chain optimization software specialist Manhattan Associates Inc. has been named Best IT Supply Chain Solution Provider in Asia by a panel of independent industry experts from the Global Supply Chain Council. The successful deployment of Manhattan’s warehouse management system by Sinopharm, China’s largest pharmaceuticals distributor, was a key factor in helping Manhattan win the CHaINA award for the second time. … ES3’s direct-to-store (D2S) program has been selected as the winner of the 2011 Supply Chain Innovation Award by the Council of Supply Chain Management Professionals (CSCMP). ES3’s D2S program provides for the daily delivery of items housed at its York, Pa., mixing center, which combines goods from over 60 manufacturers, direct to retail stores—eliminating the retail warehouse and a leg of transportation. The program features SSI Schaefer’s SCP case pick solution to handle slow-mover case selection.

Schneider, CSX sign multiyear
extension for intermodal service

Truckload and logistics giant Schneider National Inc. has signed a multiyear agreement with Eastern railroad CSX Transportation to expand their intermodal transportation partnership in the heavily congested Eastern region of the United States.

The agreement “sets the stage for sustained, long-term service within the Eastern United States as Schneider’s intermodal freight volumes continue to increase,” Green Bay, Wis.-based Schneider said in a statement.

Schneider said the agreement, which builds on a
partnership first reached in 2008, would open up
more Eastern points on CSX’s network for
Schneider to serve. In the statement, Schneider said
the expanded agreement would offer its customers
“capacity, operational interfaces, and access to
preferential loading in some circumstances that
will increase accessibility and efficiency of rail
moves.”
“We’re recommitting the expertise of one of the
nation’s major railroads and one of the largest
intermodal providers at a time when truckload
capacity is getting tighter and shippers need cre-
ative new solutions to move freight,” said Bill
Matheson, president of Schneider’s intermodal
services unit, in the statement.

“The current economic conditions and business environment tell us there will be more interest than ever in finding cost-effective, reliable modes for moving freight,” added Bill Clement, vice pres-ident-intermodal for CSX Transportation.

Schneider said the agreement would expand capacity in East Coast and Midwest markets, where shippers are expected to struggle to procure over-the-road trucking space due to a shortage of qualified truck drivers.

The agreement is another step in a grand plan by the nation’s five major railroads to convert over-the-road freight of virtually any length of haul to domestic intermodal service. Jacksonville, Fla.-based CSX told analysts in mid-2011 that of the 14 million truckloads that move in the Eastern United States each year, about 5. 1 million have already been converted to intermodal, leaving a potential market of somewhere around 9 million.