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dc_velocity_anzeige_multiflex2_2018_4c_3-3_8x4-7_8_en.indd 1 30.04.2018 09:57: 35
billions to expand and automate its domestic package-sort-ing hubs, giving it the ability to build loads more efficiently,
according to the source. This could make additional sleeper
teams valuable for increased point-to-point and hub bypass
routings, the source added.
UPS has traditionally been one of the railroads’ most
lucrative intermodal customers. It has also been one of
the most demanding. For its premiums, UPS has expected
“priority” service on train loading, arrival, and unloading.
That has not always come to pass, however. Rail reliability,
though it has notably improved through the years, has not
always been consistent. The notorious Chicago chokepoint,
where all North American railroads converge, has long
been a burr in the saddles of UPS and many rail customers.
Taking no chances, UPS would position its ground fleet
almost at the railhead in order to be first in line for unloading. Many are the anecdotes of intermodal executives getting earfuls from UPS over service delays that would throw
its highly calibrated network out of kilter.
UPS’s frustration with rail service has been amplified
in recent years as e-commerce delivery requirements put
greater stress on provider networks and as Memphis,
Tenn.-based FedEx Corp., UPS’s chief rival, touts faster
ground transit times in many U.S. lanes. In an environment
with less margin for delivery error, UPS may feel it needs
to boost its reliance on teams that can travel as far as 1,000
miles so it maintains better control over its deliveries and
feels more confident about hitting its transit times.
“Railroads, on their best day, are competitive with sin-gle-driver trucks,” said Ted Prince, chief operating officer
of Tiger Cool Express LLC, an Overland Park, Kan.-based
provider of temperature-controlled intermodal service
for produce and food products. Prince said the contract
language is UPS’s form of tough love, noting the company
values its rail alliances and wants the railroads to “get back
to where they used to be.”
THE AMAZON EFFECT (REDUX, REDUX)
The railroads can ill afford to lose a meaningful volume
of UPS business. Not only is the traffic abundant and
profitable, but UPS’s consummate operating knowledge is
an important tool in helping the railroads improve their
network flow. The latter factor could be crucial as Amazon.
com Inc. becomes a more prominent intermodal user—
one with the potential to replace UPS in the pantheon of
high-volume users. The Seattle-based e-tailer is investing
billions of dollars to develop a transport and logistics network, and intermodal is seen as a key element of that strategy. However, Amazon is still climbing the logistics learning
curve, and its relative lack of operating acumen, combined
