DC Velocity - May 2014

newsworthy

Toyota Material Handling North America President and CEO Brett Wood has been appointed to serve on the 2014–2015 Manufacturers Board of Advisors of the Material Handling Equipment Distributors Association and to the 2014–2015 Board of Governors for MHI. … John Olakowksi, an executive with a background in food and beverage production engineering and supply chain solutions, has joined Power Automation Systems (PAS) to assist customers in the food and beverage industry with their warehouse management needs. The company has also hired

Mark Schmidt as an account manager. … Rick Fox, president and CEO of Fox IV Technologies Inc., will be a keynote speaker at the Australian Institute of Packaging’s National Conference. … Red Arrow Logistics, a logistics and transportation company, has named Garrett Bradham vice president of global markets and Eileen Murche vice president for business development. … Juan Arroyo has joined Fortna as vice president, sales, to grow its expanding business in Mexico. … Material handling company Intelligrated has added three new people to its Brazilian office: Eduardo Tedesco as general director, Ricardo Viana as senior sales engineer, and Claudio Meirelles as operations manager. … Jessica Cohen and Kendall Kellaway have been promoted to director of business development positions at RoadOne IntermodaLogistics, an intermodal, distribution, and logistics services company. … Hytrol Conveyor Co. Inc., an automated material handling solutions company, has hired Charlie Clay as its new manager of safety and environment.

newsmakers

FOX

The third-party logistics service provider (3PL) Transplace plans to expand its rail intermodal offerings in the U.S.-Mexico market to give customers an alternative to road transportation services that are increasingly plagued by border congestion and equipment imbalances, according to the executive heading its Mexican operation.

Troy Ryley, Transplace’s managing director–Transplace Mexico, said recently that the company is “seriously considering a more aggressive approach” to growing its intermodal business between the two countries. Ryley would not offer details but said an announcement should be made in the coming weeks.

Transplace’s transborder traffic moves almost exclusively by truck, with only about 1 percent of its mix shipped via rail, according to Ryley. However, increased road volumes in the booming trade lane combined with inadequate capacity on busy northbound routes have intermediaries like Transplace seeking other options for at least part of their customers’ transportation needs.

Normally, two tractor-trailers move northbound for every one that heads south. However, this year, the imbalance has been aggravated by bad winter weather that has curtailed supply and by an ongoing drought in California that has increased U.S. demand for Mexican products, Ryley said.

Both forces have created a “peak season” effect several months early and made the search for supply a major headache in key origin markets like Monterrey and Guadalajara, Mexico, Ryley said. At times, the capacity ratio has been as pronounced as 5 to 1, he said. In one instance, 300 fully loaded trailers sat at Laredo, Texas, for an extended period waiting for rigs to haul them, he added.

Ryley said he expects the imbalance to persist as long as the U.S. economy continues its recovery.

The U.S.-Mexican rail market is controlled by two companies: Ferromex, which is about one-quarter controlled by U.S. railroad Union Pacific Corp., and Kansas City Southern de México, owned by U.S. rail Kansas City Southern Railway. Until the mid-1990s, the Mexican rail system was a ward of the state, and over the years, its infrastructure had fallen into disrepair. Starting in 1995, however, the Mexican government began pri-vatizing the industry and awarding concessions to encourage companies to invest in modernization projects. The nation’s network is today in far better shape and is capable of efficiently handling much more traffic than currently moves over it, Ryley said.

The groundwork for Transplace’s intermodal expansion was laid in October 2011, when it acquired Celtic International, a Chicago-based intermodal marketing and truck brokerage company that serves the United States, Mexico, and Canada. The transaction was financed in part by CI Capital, a New York private equity firm that owns Transplace.

About 10 percent of Transplace’s total revenue, estimated at more than $1 billion a year, is generated by business that touches Mexico. Of that, 80 percent is cross-border with the remainder being intra-Mexican traffic, according to Ryley. Transplace entered the Mexican market about six years ago.