Rail, Road, and Intermodal Freight

Rail, Road, and Intermodal Freight

The Chartered Institute of Logistics and Transport in the UK – Gatwick Group meeting 2017

If the members of the Gatwick Group were unsure of what IntelliTrans and its parent company Roper Technologies Inc. actually did and where they fitted into our logistics and transport scene, James Reading their Account Director for the UK and Europe, soon put matters to rights during his presentation in February.  He started off by placing IntelliTrans, with its headquarters in Atlanta Georgia (the ‘freight capital’ of the USA) in the context of its American parent company, before explaining where his own field of responsibility fitted in.  IntelliTrans was founded in 1992 and acquired by Roper in 2006.  In the USA, 46% of the freight miles are handled by rail and, for goods with a low product cost and high volume, the freight costs are critical.  The parent company covers a wide range of activities from industrial technology, energy systems and controls, traffic and toll systems, to medical imaging and freight analysis.  RF technology is at the heart of much of what the company does, with its use for scanning vehicles on toll roads and for tracking every railway wagon in the USA.  The transport management systems and software services supplied by IntelliTrans fit very well into this overall picture.

The company’s European arm is responsible for transport, warehousing, procurement and automation technology.  Its offering is centered on ‘software as a service’ and covers areas as diverse as depot management, yard management and the monitoring and refilling of storage tanks and silos.

James Reading covered the UK rail freight business, which he said was in the middle of a process of substantial change, in some detail.  Traditional sources of traffic, primarily coal, are declining rapidly and rail’s overall contribution to freight movement is quite small, particularly by comparison with the United States.  However, at a time of increased environmental awareness it has to be recognised that rail produces 76% less carbon than road transport and that one freight train can take the equivalent of between 43 and 76 lorries off the road.  Rail freight volumes, other than for coal, increased by 58% between 1994/95 and 2015/16 and the rail operators are clearly both commercial and customer focused.  At the same time developments in the road freight industry should lead to a reduction in its carbon footprint.  Waitrose is introducing a fleet of CNG powered vehicles and Mercedes-Benz Trucks are launching a small series of all-electric heavy duty trucks, while vehicle platooning trials hold out the prospect of a 20% reduction in fuel costs due to improved aerodynamics.  Other challenges such as the shortage of lorry drivers and the high proportion that have been recruited from Eastern Europe in recent years still remain.

On the UK rail scene, freight volumes are holding up well, despite the reduction in coal and steel traffic, and substantial investment is taking place to support growth alongside the creation of more capacity in the network, including the planned construction of HS2.  There is an opportunity to grow aggregate traffic, including two way loading in some cases and, despite intermodal traffic through the Channel Tunnel having been hit by the migrant crisis, there is confidence that it will grow again in the future.  The arrival of a through freight train from China in January (an 18 day and 7,456-mile journey) points the way to the development of a link that would be both quicker than the seaborne alternative and cheaper than air transport.

The market is changing however, with the growth of internet shopping and next-day deliveries taking place alongside an increasing awareness of the need for carbon reduction.  Price sensitivity remains.  Road transport benefits from long-standing customer confidence, its high efficiency, well organised trunk network, flexibility and its ability to tailor loads to vehicle size.  In addition, chilled and frozen movements are important.  However, major food retailers, such as Tesco and Sainsbury’s, now see rail as an option, while shared trains are starting to be considered and deep sea multimodal freight can be well suited to rail in the right circumstances.  To increase rail’s share further, network capacity will need to be increased and the average speed of freight trains (reported to be less than 30 MPH) will need to be raised.  In addition, the main logistics consumers and providers and 3 PL planning teams will need to be given increased confidence in this mode.  Intermodal rail has, however, doubled in the last ten years with services to the UK main deep sea ports, 33 trains per day serving Felixstowe, 18 from Southampton and 8 from London Gateway currently.

James Reading explained how the GVP multi-modal transportation management software brought all the elements of ‘track and trace’, analysis, monitoring, management intervention and performance reporting together.  The example of IntelliTrans’ current work tracking 50,000 shipments each year for automotive companies with North American assembly plants was examined as was the role of the GVP iCargo Control Tower journey planning and booking system.  This latter system books shipments from origin to destination across different transport modes and compares journey options to permit a choice based on price, transit time and carbon footprint.  The detail behind these packages was particularly impressive covering everything from GPS position updates and Proof of Delivery to the scoring and evaluation of carriers against a range of standard criteria.  Multi-modal journey selection was a particularly impressive capability.

The discussion which following the presentation covered such matters as the differences of approach between British and continental rail freight operators; the potential for distributing beer by rail and the scope for rail to capitalise on the delays frequently found on the road network at present. The Chairman closed the meeting by proposing a vote of thanks that was warmly supported by all present and by presenting James Reading with a well-earned Speaker’s Certificate.

Freight Brokers vs. Shipper’s Agents

Freight Brokers vs. Shipper’s Agents

Transportation Services in the Age of Transparency

Brokers have their place in every shipper’s roster of available carriers and capacity. Brokers often fill the need for infrequent, one-off, unusual, and complex transportation services.  If a shipper doesn’t have the time or the means to find asset-based carriers to haul their business, brokers can help—but there is a cost.

All shippers need a broker strategy. At a minimum, a shipper should have relationships with at least 1-5 brokers, have contracts in place with them, and have rates established where possible.  Shippers need to be careful to work out liability, payment terms, accessorials, and required minimum carrier quality standards in advance with their broker partners so they are protected from unforeseen and uncontrollable circumstances that may occur with their shipments.

Brokers are needed in the transportation marketplace. They fill the gaps between shippers and owner-operators and draymen, assist resource and technology-constrained shippers and trucking companies, help with capacity shortfalls, and innately provide transportation management outsourcing.

Brokers are in business for the same reason as everyone else – to make money. They earn their income by making connections and by knowing their market as well or better than anyone else.  Brokers live and die by information.  They use arbitrage and leverage between available truckload capacity and shipper demand.  When there are plenty of trucks around, brokers keep their fees to a minimum and work hard to put available capacity together with shipper needs.  When capacity is tight, everyone’s rates go up and their fees are higher because of the more difficult work in securing capacity and to increase their margins over time —sometimes resulting in significant markups over the actual cost of the truck.  It doesn’t take long for them to cover enough shipments to make a profit that offsets any losses or break-even shipments they covered when trucks were plentiful.  What’s interesting here is that these capacity tightening’s are often quite seasonal and occur with regularity—barring catastrophic events like hurricanes, major storms, etc.—yet, shippers always seem willing to pay the premium when capacity tightens.  Brokers can usually be assured that they will be able to make most of their annual profits come Produce Season, Fall Peak, and other regularly occurring surges of demand.

What makes a shippers’ agent different from a broker?

A shipper’s agent acts as an extension of your staff. Like your employees, they are measured by a combination of service, cost, and quality of work.  However, the shipper’s agent model minimizes your fixed costs, allowing you to not have to make difficult staffing decisions in either good times (difficulty in finding personnel) or bad times.  The transparency that is possible with this model also allows you to see exactly how well your partner is doing in terms of providing the shipper’s agent services, and potentially allows you to change the level of services provided without having to make a technology change.

A company like ours, IntelliTrans, augments the shipper-broker-carrier relationship and provides complete transparency. Transparency to rates, pricing, capacity, and throughout the entire supply chain.  We provide accurate, easy-to-access metrics, and we give our customers a clear picture of their freight in the marketplace.  Our pricing is tied to services provided and value delivered and is on a per-shipment basis, making it purely transactional—if your shipment volumes fall, so do your costs for the service.  Our success is enabled by our team of career professionals, using honed business processes, and the robust performance of our Transportation Management System, CarrierPoint, that provides the underlying infrastructure we use to perform these services.

You can rest assured that we work hard to manage your freight regardless of the season or state of capacity in the market. Rather than take advantage of limited truckload supply, we work on your behalf to keep your costs as low as possible by making sure we effectively manage the commitments you have in place with your carriers and avoiding having to pay higher fees during periods of high demand and low supply as much as possible.

IntelliTrans is looking to form long-term trusted partnerships with our customers and earn our fees based on the quality of services we provide and our ability to innovate. You can depend on us to come up with creative, technology backed solutions to your freight challenges.

Shipper's Agent

IntelliTrans – A Partner In The iCargo Project

IntelliTrans – A Partner In The iCargo Project

WHAT’S ICARGO?

A project where IntelliTrans and other partners are helping to build an open, affordable information architecture that allows real world objects, existing systems, and new applications to efficiently co-operate, enabling more cost effective and lower-CO2 logistics through improved synchronisation and load factors across all transport modes.

The iCargo project aims at advancing and extending the use of ICT to support new logistics services that:

  • Synchronize vehicle movements and logistics operations across various modes and actors to lower CO2 emissions
  • Adapt to changing conditions through dynamic planning methods involving intelligent cargo, vehicle and infrastructure systems and
  • Combine services, resources and information from different stakeholders, taking part in an open freight management ecosystem.

What this means for our customers is that they will have a seamless process for booking the optimal multi-modal route for their orders, taking into account cost, transit time, and carbon footprint reduction.

To learn more please see our iCargo presentation.

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