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Next Generation Intermodal

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Question and Answer

Is your company using intermodal?

A. Import freight only

B. Inbound to DC

C. DC to DC transfers

D. All of the Above

E. What is Intermodal?

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Who is Using Intermodal Today?

The leading value retailer And, time‐sensitive shippers

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What is Intermodal?

The combination of rail, truck and sea transportation into a single cost-saving solution

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What is an intermodal lift?

State of the art lift equipment adds reliability and speed to your supply chain.

WATCHVIDEO

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U.S. Rail Intermodal Growth

Source: Journal of Commerce 2008; American Association of Railroads

US Rail Intermodal Traffic 1980 – 2010

1980 200720042001199819951992198919861983

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0

2

4

6

8

10

MillionsUNITS

YEAR

2009

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Supply Chain Strategic Advantage

Source: Establish, Inc/Herbert W. Davis and Company 2006 Database

LOGISTICS COST BREAKDOWN

50%

22%

10%8%

4%3% 2% 1%

Transportation Inventory Labor Customer Rent Admin Supplies Other

Transportation is generally the greatest cost in the supply chain. 

Focus on Transportation Collaboration to reduce costs and increase capacity.

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Intermodal Benefits

Shippers and carriers benefit when converting over‐the‐road freight to intermodal.

15‐20% more transportation savings

Increased capacity

Greener way to ship

ShippersReduces operating costs & fuel

Reduces capital need

Reduces impact of CSA and Hours of Service regulation

Carriers

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Question and Answer

In your estimation, what is the potential growth of intermodal transportation in the next 10 years?

A. Less than 10%

B. 11‐25%

C. 25‐50%

D. Greater than 50%

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Significant Opportunity for Further Conversion

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8

6

4

2BNSF

MillionsUNITS

Current IMDL

3.5 M

UP

OTR that fits IMDL

Converting additional 7‐11 million units will save shippers $3-5 billion while securing additional capacity.

11 M

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Why Hasn’t More Savings Been Realized?

“We tried that once in 

1989.”“Multi‐stop freight won’t work with intermodal.”

“That’s for railroads, not 

trucking companies.”

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Gen 1INTERMODAL

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Gen 1 Characteristics

Emphasis on lowest cost and fewest dray miles without consideration to rail provider, train frequency and expedited service.

Limited communication between shipper’s transportation group and its carriers.

Gen 1 - Bid

Gen 1 - Communication

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Gen 1 Example | Southern Cal to North Carolina

Use an interline intermodal service to get as close to your door as possible

Memphis Charlotte

Origin pickup Truck to LA Ramp 8 hrs

Rail Route BNSF – Memphis CSX – Charlotte 157 hrs

Destination Dray Truck to Door 6 hrs

Total 7 days

Atlanta

BNSF

CSX

Rail Miles 3,377 

Truck Miles  100

Rail Interchangesor train changes   2

Estimated Savings versus OTR 20%

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Gen 1 Characteristics

Gen 1 ‐ TMS SystemsNot able to differentiate intermodal service levels when system allows for one mode per lane

Gen 1 ‐ Pickup/Delivery RequirementsApply standard rules around pickup delivery times and transit requirements

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Gen 1 Freight Types

Inbound TransconLong Haul

Poor collaboration limits intermodal to only a few freight types.

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Gen 1 Intermodal Networks

Norfolk Southern

CSXBNSF

Union Pacific

In Gen 1 Intermodal, there is little emphasis on which rail carriers and ramps used

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Gen 2INTERMODAL

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The Power of Collaboration

“Although we were new, we worked with JB Hunt and BNSF Railway, two of the best in the

business”

Jeff Brady, Outbound Transportation Manager,

PETCO

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Gen 2 Intermodal Leverages Density

OHIO VALLEY PENNSYLVANIA

MIAMI

NEW YORK

PACIFIC NORTHWEST

NORTHERN CALIFORNIA

FRESNO

SOUTHERN CALIFORNIA

DENVER

DFW

MEMPHIS

CHICAGO

ATLANTA

KANSAS CITY

ST PAUL

Next Generation Intermodal capitalizes on high‐density lanes with non‐stop train service.

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Gen 2 Bids

Best Intermodal price with corresponding service 

Best Intermodal service with corresponding price 

Request rail carriers, rail ramps, service levels and frequency of service

Allow Intermodal bids for all lanes

Gen 2 Bids consider multiple service options.

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Question and Answer

You’re shipping a full truckload from Los Angeles to Charlotte, North Carolina. How many intermodal options are available?

A. 1

B. 2

C. 3

D. 4

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Gen 2 Example | Southern Cal to North Carolina

Use a single premium(value) intermodal service plus a dray to get faster more reliable service.

Rail Miles  2,567

Truck Miles  353 Rail Interchangesor train changes   0Estimated savings versus OTR 15‐20%

Atlanta

CharlotteStandard

Rail

Truck

Origin pickup Truck to LA Ramp 8 hrs

Rail Route BNSF – Atlanta (premium) 107 hrs 

Destination Dray Truck to Door 10 hrs

Total 5 ½ days

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Gen 2 Example | Southern Cal to North Carolina

Use a single expeditedintermodal service plus a dray to get faster more reliable service.

Rail Miles  2,567

Truck Miles  353 Rail Interchangesor train changes   0Estimated savings versus OTR 5‐15%

Origin pickup Truck to LA Ramp 8 hrs

Rail Route BNSF – Atlanta (Expedited) 90 hours

Destination Dray Truck to Door 10 hrs

Total 4 ½ days

Atlanta

Charlotte

Rail

Truck

Expedited

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Gen 2 Example | Southern Cal to North Carolina

Use a single expedited intermodal service plus a dray to get faster more reliable service.

Rail Miles  2,090

Truck Miles  670Rail Interchangesor train changes   0

Estimated savings versus OTR 5‐10%

Memphis

Rail

Truck

CharlotteExpedited

Origin pickup Truck to LA Ramp 8 hrs

Rail Route BNSF – Memphis (Expedited) 80 hours 

Destination Dray Truck to Door 14 hrs

Total 4 ¼ days

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Recap - Intermodal Transit Solutions

2,090 670 4 ¼ days 5% ‐ 10%

2,567  353 4 ½ days 5% ‐ 15%

2,567 353 5 ½ days 15% ‐ 20%

3,377 100 7 days 20%

There are a variety of Intermodal Solutions from Southern California to North Carolina.

ROUTE RAIL MILES TRUCK MILES  TRANSIT   SAVINGS

NOTE: Single driver transit from LA to Charlotte is 4‐5 days

BNSF (Expedited) to Memphis + Truck

BNSF (Expedited) to Atlanta + Truck

BNSF (Standard) to Atlanta + Truck

BNSF to Memphis – CSX to Charlotte + Truck

INTERMODALGen 2

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Gen 2 TMS & Bid Characteristics

Intermodal TMS CapabilitiesAllow for OTR and Intermodal solutions in each lane

Accommodate multiple Intermodal service levels in each lane

Transit and Pickup and Delivery Requirements

Communicate specific pickup and delivery requirements for each lane

Assign pick‐up and delivery requirements customized for each DC 

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Midwest to Southern California

When you consider frequency, it’s clear ‐Memphis and Kansas City offer more options to Southern California.

St Louis to So Cal

KC to So Cal

Memphis to So Cal

Memphis

Kansas CitySt. Louis

Rail

Truck

Hub

Origin

Southern California

Dray to Hub Premium Rail  Expedited Rail  Frequency

100 4.8 days Not Available 3 days/week

200 2.8 days 2.4 days 5 ‐ 6 days/week

200 3.7 days 3.4 days 6 days/week

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Question and Answer

What’s the best way to drive collaboration in the Transportation space?

A. Collaborate through carriers

B. Collaborate through carriers and intermediaries

C. Collaborate directly with Carriers and Railways

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Best in Class Collaboration

Carrier Shipper BNSF

Reconsiders shipping requirements to allow for 

more capacity and cost‐saving service

Provides analysis on the best lanes for conversionBroadens TMS to provide 

optimal solutions for all customer needs

We each have a role to play.

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Collaborative Successes!

Shippers have saved $40 million and locked in long‐term capacity while converting over 50,000 OTR loads to intermodal. 

WESTERN U.S.Non Fits 

EASTERN U.S.

BNSF SYSTEM FITS

Jan 2010 through April 2011