CSX Follows NS With CMH Investment

This article appeared in the Columbus Dispatch this morning. Check out the investment numbers and also the amount of warehouse&distribution space currently in the Columbus area...along with the growth estimates. The question for me is this...Where are we going to get the people to staff these facilities?

Have a great weekend!

Each morning, dozens of steel truck trailers filled with goods arrive on flatbed rail cars at the CSX intermodal terminal on the West Side.

One by one, the trailers are hoisted off the track and onto truck chassis by a side loader. Semi tractors then hitch up to the trailers and carry the goods to their final destinations.

Scott Movshin, who manages the operation at 2351 Westbelt Dr., looks up at one 40-foot steel box as it is wiggled into place.

"Retail goods, production parts for appliances, auto parts, you name it. How’s it all getting there? In these boxes."

CSX has a grand plan for these containers, one that local business advocates say will bolster central Ohio’s already strong position as a distribution hub. CSX wants to close its overloaded West Side terminal and build a $113 million facility at its South Side rail yard, a "port" of sorts that the company says will reopen long-closed rail links and enhance others.

CSX says the plan, being hammered out at the company’s Jacksonville, Fla., headquarters, would create hundreds of jobs at its rail yard and at spin-off businesses taking advantage of the increase in distribution activity.

Columbus businesses and the Ohio Rail Development Commission are backing the idea, helping the railroad tap federal and state dollars to make it happen. CSX spokesman Dan Murphy said the cost is unknown, although the company last year asked ODOT for $43 million.

That request of ODOT’s Transportation Review Advisory Council was denied. Now, the railroad is preparing a terminal-layout plan showing how the project might be financed.

The terminal construction would require paving about 80 percent of its 136-acre compound near the southeast corner of Groveport Road and Parsons Avenue. CSX would move Sills Park, a 23-acre ball-field complex run by the Columbus Recreation and Parks Department.

"It could be a really big project," said John Ness, president of ODW Logistics, 1580 Williams Rd., near the CSX rail yard. "It’s good for the city to try to revitalize the south end of town."

Ness thinks the CSX facility, similar in concept to Norfolk Southern’s 300-acre intermodal facility near Rickenbacker Airport, would solidify the city’s reputation as an international distribution center.

At intermodal yards, shipping containers can be moved back and forth from railroad cars to tractor-trailer trucks.

"We compete with Indianapolis in logistics, and they’ve got a significant FedEx hub at their airport that has no equivalent in Columbus," Ness said. "If we have a new intermodal yard, with Norfolk Southern and CSX, we can service much more of the New York and New Jersey market and the (Florida) market."

Those areas include major ports through which many overseas goods enter the country.

Central Ohio is a major player in the distribution industry. There are 35 million square feet of industrial development under roof in the Rickenbacker area. The Columbus Regional Airport Authority said that space could double in the future as rail yards are expanded and improved.

The Norfolk Southern yard would create an estimated 20,000 jobs, the authority said.

And last year, the Marion Intermodal Center opened, increasing distribution between that city and Kansas City, Mo. The center is a collaboration involving Schneider National trucking company, CSX Intermodal and the Kansas City Southern railroad.

Columbus officials are expecting job growth to come from the CSX yard because it would be so much bigger than the current one. Movshin said it would be busier simply because it would have more rail lines.

Movshin said there would be little comparison between the company’s current rail yard and the one it’s planning. The West Side facility is on 16.5 acres and handles about 125,000 loads per year. Cargo can be loaded only from the track that abuts the paved yard. There are only two lines at the West Side facility, and they’re not long enough to keep up with demand, Movshin said.

The new yard would be designed to handle 500,000 loads annually, opening it up to CSX markets in Florida and to Portsmouth, Va. Movshin said it also would increase the railroad’s business between New York and Columbus.

"We’re over capacity (on the West Side)," he said. "We need to construct a large facility in Columbus to handle demand."

The Ohio Rail Development Commission is sponsoring the concept for CSX. The Columbus Chamber is backing the idea, as is the Columbus-Franklin County Finance Authority.

The rail commission has been trying to identify state or federal funding sources for the project, Assistant Director Matthew Dietrich said.

"This is a huge project," Dietrich said. "If we can’t bite the whole apple at once, how can we phase it in? "

CSX’s plans come during a railroad renaissance. Demand for railroad traffic is increasing as gasoline prices continue to rise, highways become overcrowded and freight volumes increase.

"We have to invest to stay ahead of demand in global shipping," CSX lobbyist Nick Zimmers said. "In the past, railroads basically went their own way when it came to financing infrastructure projects."

The trend is not lost on investors: Warren Buffett’s Berkshire Hathaway recently filed with the Securities and Exchange Commission to buy nearly 11 percent of Burlington Northern Santa Fe, one of the country’s two major railroads west of the Mississippi River.

CSX also plans to expand operations in northwestern Ohio, Florida, Georgia and Pennsylvania.

Movshin and others at CSX say it’s time to strike now.

"If you’re not in position now, you’re too late," Movshin said. "That’s the position all railroads are taking."

LTL ROI PDQ via NMFC & FAK

How efficient are you at less-than-truckload (LTL) shipping? The solution to reducing freight costs and lag times could lie right at your own docks. Here are 10 tips to maximize your LTL efficiency:



1. Accurate information is key. When obtaining price quotes for upcoming shipments or bidding out future business, it is always important to know how much weight you will be shipping and the number of pallets your product will move on. Having this information will save you money and help you stay one step ahead of your competition.

2. Ship out of areas close to major metropolitan areas. Chicago, Los Angeles, and Philadelphia have a substantial concentration of LTL trucking firms and terminals. Generally, the farther you are from these areas, the more expensive your freight charges will be. The likelihood that your freight will be delayed also increases.

3. Use third parties (of course). If you ship out of multiple locations, third parties may save you time and money, especially if you move more than four pallets or LTL shipments weighing more than 5,000 pounds. Brokers use independent trucking companies throughout the country that often look for extra freight to fill out their trailers. These trailers are already heading to where the broker's customer is shipping, so they usually offer savings on this available space. The broker will then pass these savings on to the customer. Not only is it more cost effective, but transit time is usually faster because there is less handling.


4. Be flexible with time. This should be obvious, but the more time you can give a carrier to move your product, the more money you'll save.

5. Max out your pallets. If you can consolidate your product on fewer pallets without sacrificing its integrity, you can often save money when shipping through third parties.


6. Consolidate orders. If you know you will have multiple orders going to the same location, try shipping them at the same time. Brokers can pass savings on to their customers when they ship multiple orders to the same general location, even if you cannot put them on one bill of lading (BOL). Standard common carriers sometimes bill customers on each BOL even if the freight is destined for the same place.

7. Do not idly accept annual rate increases from common carriers. When rate increases are unavoidable, try to offset them by having your commodity reclassified to a lower National Motor Freight Classification (NMFC) class, freight-all-kinds (FAK). Get a 4Pl to manage the network!

8. Know the carriers and agents who are handling your shipments. Most LTL carriers do not service the entire country. They "service" those areas outside the range of their own equipment by securing agents based in those areas. Make sure you know these agents and they know you. If your less-than-truckload carrier uses multiple terminals, get the telephone numbers and names of those people who are accountable at each facility. Re-evaluate your dock procedures.

9. Get your freight ready prior to the driver's arrival and if possible, devote one or more dock doors to LTL pickups and deliveries. Coordinate a pickup system with your LTL provider to eliminate delays. LTL carriers assign multiple pickups to each driver and sometimes instruct drivers to leave after 15 to 20 minutes with or without your freight. By having an efficient loading system, both parties come out ahead.

10. Take the time to learn about the industry, and recognize trends. LTL shipments account for the majority of revenue generated by the transportation industry as a whole. Invest resources in making sure that your staff is knowledgeable about LTL practices and procedures. Also, stay abreast of mergers, acquisitions, and closings as these events can dramatically affect your service and pricing.

Communicate, collaborate, share, and be ready to take some risks as well...

3PL Market Leaders Continue Growth

The market for third-party logistics grew at double-digit rates domestically and internationally in 2006, according to a just-released study.

Much of the international growth was due to rising economies in China and the Asian Pacific region. Domestic growth in the United States was slower than last year because of a slowdown in freight movement but still hit record dollar values, said Armstrong & Associates in their “U.S. and Global Third-Party Logistics (3PL) Market Analysis”.

Third-party logistics gross revenues for the United States hit $113.6 billion, a 9.5-percent increase and an historic high. Net revenues were $53.1 billion. Pre-tax margin was 8.6 percent and net income margin in relation to net revenue was 5.4 percent. Margins for the year were down slightly due to the fourth quarter economic slowdown, the report found.

Armstrong & Associates estimates the global 3PL market at $391 billion. European 3PL revenues are estimated at $139 billion.

Net revenue in the United States for international transportation management, including freight forwarding and global supply chain management, increased 17.7 percent. Top players were Kuehne & Nagel, Expeditors International, DHL Worldwide and APL, all with net income margins of 10 percent or greater compared to net revenue.

Net revenue for domestic transportation management, including freight brokerage, rose by 12 percent. Gross revenues were $33.8 billion. Revenue for BAX Global, BNSF Railway, C.H. Robinson, Meridian IQ and NFI grew by more than 20 percent. At Hub Group, Penske Corp., Ryder and Werner Transportation, revenue grew by 10 percent or more. After-tax net margin for domestic transportation management was 11.1 percent, according to the report.

Domestic transportation management net revenue growth slipped from 18 percent in 2005 and net income margin dropped by 1 percent. The researcher attributed the changes to the economic slowdown but said they are only temporary and have no significant long term importance for key players.

Well...I better put down the coffee and get my game face on...cause it has to be ABC time! Always Be Closing boys

I'm on it!

Newgistics Makes A Move In Mississauga

Newgistics Inc., a supplier of returns management software, on Monday announced the acquisition of Logistics Management, Inc., a provider of transportation brokerage services optimized for less-than-truckload shipping based in Mississauga, Ontario.

Newgistics, based in Austin, Texas, will leverage LMI’s transportation management capabilities to expand the set of services it offers beyond Newgistics’ traditional business of returns management. Incorporated in 1982, Logistics Management provides freight cost containment services to manufacturers, distributors and associations.

Hmmm...any thoughts on why they bought LMI? Maybe some GTA target accounts? Keep an eye out...

Retailers predict record container volumes...maybe...

Retailers and large importers are being urged to plan ahead for their logistics needs as this year's peak shipping season is shaping up to be the busiest ever.

”This is going to be a very busy summer at the ports and it's important to keep those goods moving toward the store shelves,” said Eric Autor, vice president and international trade counsel at the National Retail Federation.

Autor’s comments came as the retail organization and the economic consulting firm Global Insight released the April Port Tracker, which forecasts monthly container flows at the top North American ports. The publication stated that container volumes are increasing rapidly and in July the United States will set a new monthly record for containerized imports, surpassing the previous record set in October, 2006 during the height of the peak season.

Container volumes will continue to build after July, most likely spiking in August and then again in October as retailers stock their shelves with merchandise for the holiday shopping season.

Despite the strong growth in cargo volumes, though, the port, rail and trucking industries appear prepared to handle the traffic without any serious congestion problems. Global Insight said U.S. ports are currently congestion-free and service levels in the rail and truck industries are adequate.

The ports will release their March container volumes soon, and Global Insight projects that they will show an increase of 4.7 percent compared to March, 2006. Volumes will continue to build, with July expected to show an increase of 11.4 percent from the year-ago month.

Growth at U.S. ports will be somewhat uneven through August, with Los Angeles-Long Beach and New York-New Jersey projected to experience the fastest growth.

Weather-related problems affected rail performance during the winter months, but soft traffic volumes reduced pressure on the rail network. Rail performance will return to previous levels as the weather improves across the country.

The port trucking industry has performed well throughout the winter months. Diesel fuel prices remain high, however, and implementation of the federal Transportation Worker Identification Credential program is scheduled to take place later this year. Truckers will have to pay fees to secure their TWIC cards, and eventually the background checks and proof of legal residency requirements in the program could reduce the driver pool.

Vancouver, Canada, has been the only North American port to experience congestion and delays this year. Weather-related problems this winter and a strike by Canadian National Railway workers caused lingering congestion problems at Canada's busiest port. Global Insight projects that the port will be back to normal by the end of April.


Any thoughts on the peak season this year? My guess is that it is going to be light/smooth transportation and port operations in North America this season...unless we get a major strike or an act of god situation...