Daily delivery on expedited trains

Two factors govern successful longhaul movement of produce — reliable on-time pick-up and delivery, and consistent, verifiable temperature control in transit. In recent years, railroads have taken a hard look at their service levels and concluded that making and keeping delivery schedule promises is the best way to attract shippers of high-value, time-sensitive freight. With improved rail service, intermodal carriers such as Alliance Shippers have expanded, seeking a larger share of the perishable market.

Alliance Shippers, with principal offices in Englewood Cliffs, New Jersey, and Orland Park, Illinois, is one of the oldest in a new breed of rail intermodal carriers. The company was founded in 1977, a time when government regulation of transportation was under active consideration. Airline deregulation came first followed by highway carriers in 1980, and finally rail intermodal traffic was deregulated in 1983.

The term in use at the time of Alliance's founding was Plan III Piggyback, denoting service provided by a carrier with no direct financial ties to the railroads offering the line haul transportation. At its founding, Alliance was a carrier of dry freight intent on using the existing rail network between Chicago and New York. In its first year of operation, Alliance moved 3,500 loads and generated $3.9 million in revenue. The company now moves almost 500,000 loads annually, generating roughly $800 million with an operation that is still dominated by dry freight with perishables contributing about $110 million to the annual total.

1,500 trailer reefer fleet

After hauling dry freight for quite a while, Alliance expanded into perishables in 1989, starting the operation with 465 trailers, says Ed Wright, vice-president/protective service division. By 2004, the fleet had expanded to about 700 trailers in an operation running across the long lane from California and the Pacific Northwest to Chicago. The big push for expanded refrigerated service began in 2004; since then, Alliance has purchased 1,000 new 53-ft refrigerated trailers. After retiring some of the older trailers, the fleet leveled out at 1,500 refrigerated trailers.

An additional 200 53-ft trailers are scheduled for delivery in the first quarter 2007 to replace the last 48-ft reefer vans in regular service. The 48-footers will be placed in a dedicated fleet that does not require them to operate in California, or they will be retired. When the 200 new trailers are delivered, the entire Alliance fleet will be compliant with the California Air Resources Board emission standards for refrigeration unit engines through the year 2010, Wright says. In fact, all but 300 Alliance trailers will be compliant with the rules through the year 2012.

Now the largest provider of refrigerated intermodal transportation, Alliance provides daily service from Arizona, California, Oregon, and Washington to points in the Midwest and East through Chicago, says Doug Lawson, director of operations for the protective service division. From California, Alliance moves trailers to Chicago on Burlington Northern Santa Fe trains that originate in Fresno, San Bernardino, Stockton, and Los Angeles (to a lesser extent, Lawson says). In Chicago, trailers move by highway into the Ohio Valley or get trucked across town to other rail ramps for movement to Baltimore, Boston, Harrisburg and central Pennsylvania, New York, or Philadelphia. In addition to these existing destinations, Alliance is beginning to develop Charlotte as a new market, he says. Typically, connecting rail lines east of Chicago are the CSX and Norfolk Southern.

Refrigerated freight both ways

Alliance has a significant investment in its refrigerated equipment, so every attempt is made to load it with fresh or frozen product on every trip lane, Wright says. For instance, Alliance handles a relatively large volume of ice cream. This and other westbound frozen or perishable loads make a significant contribution to a company that once regularly repositioned empty trailers from the East Coast to Chicago for a subsequent westbound revenue load. While produce certainly makes up the majority of freight moving out of California, the company hauls frozen foods eastbound as well.

In a typical year, Alliance has its hands full with produce of the West Coast in July and August, Lawson says. However, the harvest has been smaller in 2006, because crops were damaged by the strong summer heat wave. When trucking capacity gets tight at peak harvest time, Alliance offers an especially competitive alternative to highway transportation, he says.

Rail intermodal service may not be to the liking of every customer, but it certainly meets the needs of those whose business is repetitive enough to make use of the schedules. In addition, rail service is less subject to constraint from lack of drivers, Wright says. “At a recent meeting, I heard a representative from Global Insights note that highway trucking is currently about 20,000 drivers a year short and that the driver shortage could reach as high as 111,000 unfilled jobs by 2014,” he says.

Schedules competitive to highway

“The schedules for intermodal service and a solo highway driver are almost identical,” Lawson says. “Using the expedited BNSF trains into Chicago, we provide third afternoon freight availability. A driving team can cut that delivery time, but teams are not as numerous as solo drivers. Our big sales point is that rail service (barring an unavoidable train delay or track maintenance) is extremely consistent; for example, transit time from San Bernardino to Chicago is 64 hours from the delivery cutoff deadline at origin to trailer availability at the other end. In addition, rail intermodal service is almost immune to driver problems, because the hauls are short and drivers get home almost every night.”

Arranging drayage to move loaded trailers from shipper locations to the originating rail ramp and from the destination ramp to receivers is an Alliance responsibility. The process is completely transparent to shippers and receivers with Alliance handling all transactions, Wright says. The company maintains contracts with about 25 drayage firms and uses a core group of six drayage companies for the majority of its terminal area transportation.

Unlike highway drivers, the local cartage drivers contracted by Alliance typically want shorter hauls. If a load requires more than one stop to pick up freight, the drayage driver wants the stops close together so that the load can be assembled and moved to the rail ramp quickly. Typically, drayage drivers want to make at least two full trips a day. Shippers on the California central coast around Salinas use rail service from Fresno, 120 miles from Salinas. That is a fairly congested trip, because the only route across the mountains into the central valley is Pacheco Pass. Trailers must be at the rail yard by 11 pm to ensure loading on that night's train.

Two factors help guarantee consistency of service, Wright says. The first is that Alliance trailers move on an expedited train providing daily service into Chicago. The second is that refrigerated trailers have priority over other trailers in most instances. That said, no carrier has assigned slots on a train, he notes, but capacity is not an issue, because the railroads will always load a reefer.

Although the expedited trains run on a tight schedule, neither the BNSF nor any other railroad will guarantee service. Nor will they pay freight claims that result from delivery delays.

Multiple pricing points

Like highway carriers, Alliance uses more than one criterion to price its services. With big, regular customers, freight usually moves at contract rates, which may be adjustable to factor in demand for seasonal peaks. At times of highest demand, the company also runs freight priced on the spot market. In either instance, the rate is almost always lower than highway rates, Lawson says. The final price for a load often depends on drayage costs required at each end.

“The perception is that rail intermodal service should always be considerably less costly than highway service,” Wright says. “While usually the case, that is not always true. For instance, we face most of the same costs that highway carriers face, excluding fuel and drivers. We have a state-of-the art fleet with trailers that cost more than comparable highway trailers. Trailers are more heavily insulated than most highway trailers and must be reinforced to withstand the rigors of rail yard handling. In addition, trailers and refrigeration units are equipped with sophisticated tracking and temperature monitoring systems. We have a lot of capital invested in our ability to provide a tightly scheduled, premium temperature-controlled service.”

Expensive trailer components

Even the interior of Alliance trailers costs more than that of most highway trailers. Equipment built by Wabash National uses Bulitex liner panels from US Liner. Trailers from Utility Trailer Manufacturing are lined with ArmorTuf from Crane Composites, a company formerly known as Kemlite. At the rear, sidewalls carry three rows of logistics tracks extending from the rear door inward for 15 ft.

Other high cost items include lift pads along the lower side rails and bumpers along the upper rails. For rail use, refrigeration units need 110-gallon fuel tanks, and the units are protected by custom bumpers that extend in front of the unit case.

At the top of the special equipment list is StarTrak, a remote tracking, monitoring, and control system installed on all the oldest Alliance trailers and refrigeration units. When new trailers are delivered in 2007, all Alliance equipment in regular service will have tracking capability.

StarTrak is vital to the operation, because it provides a link to equipment that is out of contact with company personnel for extended periods once the train leaves the station, Lawson says. Alliance tenders fully fueled and serviced trailers to the BNSF and relies on StarTrak to monitor location and unit condition. In addition to tracking with the global positioning system, StarTrak maintains a complete record of unit fuel capacity, thermostat set point, evaporator exit air temperature, and return air temperature. Sensors record all door openings.

Remote control refrigeration

If any of the preset parameters for a load are out of range, StarTrak immediately sends an alarm to Alliance. Thermostat setting and unit operating mode can be reset remotely if the unit is running. When a unit stops in transit (almost never, Lawson says), the Carrier Transicold XTC Ultima refrigeration systems immediately begin a restart sequence. “After a 15-minute interval for the unit to cool down and reset its electronics, the unit will attempt to restart automatically,” he says. “If the first restart attempt is not successful, the unit will attempt to restart three times. Each time the unit goes through the restart sequence, it has StarTrak send a unit shutdown alarm.”

All is not lost if a unit fails to restart successfully. The first layer of protection is the trailer itself, which, with 2½ inches of insulation, is built to hold temperature for a reasonable period without active refrigeration. The second failsafe factor is that the train keeps moving, either toward an en route inspection point or Chicago with help already notified and ready to move at either location. “The railroad won't stop a train to let us service or repair a unit, but they do have one short inspection stop about halfway through the trip,” Wright says. “If a problem occurs in the first half of a trip, we have a window of about half an hour to correct it when the train stops for inspection in Belen, New Mexico, about 50 miles south of Albuquerque. We retain an inspection agency that can put personnel aboard the train for a few minutes when necessary. With the data from StarTrak, we already know what the problem is based on fault codes transmitted from the unit.”

Tracking activity continues after trailers leave railroad custody. “We've found the tracking capability especially useful for trailers that continue east of Chicago and deliver to produce terminal markets,” Lawson says. “Our trailers have a tendency to become mobile warehouses at some locations. We watch carefully to make sure that trailers return to service in a timely manner.”

Short drayage at destination

Getting trailers back in service after deliveries from the Chicago rail ramp is easier, Lawson says. If the delivery is in metropolitan Chicago, the receiver usually finishes with the trailer in a day. Those customers receive so much freight on a regular basis that the drayman delivering a load usually comes back with an empty trailer from a previous delivery. Trailers destined for points farther out in the Ohio Valley are normally gone for two or three days.

Tracking the entire fleet helps improve trailer utilization, one of the most important metrics for an intermodal operator. The goal at Alliance is 12 complete round trips per trailer per year; reality at present is more like 10 to 11 trips per year. Addition of the 200 new trailers earlier in 2006 actually reduced the utilization slightly, Wright says.

With its current level of utilization, Alliance can place 60 trailers a day on trains bound from the West Coast to Chicago. “When we move 350 eastbound loads a week, we consider that we are operating at full capacity,” Lawson says.

Alliance is not the only user of detailed data transmitted by StarTrak. Customers have access to it as well through a tracking function on the Alliance web site. Shippers can access real-time data on trailer location and load condition. Information is available by load number or trailer number. For performance monitoring, the web site maintains three years of load information, Wright says.

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