Transmodal Rail Operations and the Thruport Concept

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Transmodal Rail Operations and the Thruport
Concept

• Jean-Paul Rodrigue, Hofstra University, New York
• John Zumerchik, Mi-Jack Products Inc.
• Theres no business like flow business

Email ecojpr_at_hofstra.edu Paper available
at http//people.hofstra.edu/faculty/Jean-paul_Ro
drigue
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Integrated Transport Systems From Fragmentation
to Coordination
Factor Cause Consequence
Technology Containerization IT Modal and intermodal innovations Tracking shipments and managing fleets
Capital investments Returns on investments Highs costs and long amortization Improve utilization to lessen capital costs
Alliances and M A Deregulation Easier contractual agreements joint ownership
Commodity chains Globalization Coordination of transportation and production (integrated demand)
Networks Consolidation and interconnection Multiplying effect
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Value Per Ton of U.S. Freight Shipments by
Transportation Mode, 2002
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Integrated Transport Systems

• Resurgence in rail transportation (competitive
  advantages)
• Substantial growth in international trade
• Particularly imports from Asia (China).
• Interface between global supply chains and
  national distribution national gateways.
• Growth in long distance shipments at the
  international and national levels.
• Rail productivity
• Decrease in rail freight rates (35 decline
  between 1980 and 2000).
• Increase in trucking transport costs (wages,
  fuel, insurance, congestion).
• Capacity constraints at gateways
• Containerization growing rapidly.
• Large volumes at gateways create capacity
  constraints.
• Intermodal rail offers a shipping alternative to
  the capacity constraints of trucking.

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Cargo Handled by the Top 5 US Container Ports,
1984-2005 (in TEUs)
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Freight in North America Between a Gateway and a
Hard Place Major Maritime and Land Gateways, 2004
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Integrated Transport Systems

• Transshipments
• Between (intermodal) modes and within
  (transmodal) modes.
• Benefits accrued at the terminals.
• ITS expanded the demands on intermodal and
  trans-modal transportation alike.
• Trans-modal component of growing importance.
• The geography of transshipments
• Connect different parts of the transport system
  (ITS).
• Enabling different freight markets and forwarders
  to better interact.
• Conventionally at load break locations gateways.
• Now at logistically suitable locations (plus
  added value).

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Time Dependant Transport Transshipment Flows
Integrated Freight Transport System Integrated Freight Transport System
Intermodal operations Transmodal operations
Road DCs / CD
Rail Thruport
Maritime Ship-to-ship
Intermodal Terminal
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Transmodal Transportation

• Why transmodal shipments take place?
• Market fragmentation.
• Supply chain fragmentation.
• Ownership fragmentation.
• Requirements for a high throughput trans-modal
  facility
• Thruport concept
• Coined by an intermodal equipment manufacturer
  (Mi-Jack).
• Seamless transfer of freight.
• Reduce handling and the number of container
  movements.
• Analogy with air transport hubs
• Consolidation and redistribution.
• Passengers reposition themselves.

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Transmodal Transportation and Market Fragmentation

• Market fragmentation
• Mainly retail / consumption related.
• National distribution and global production.
• Single origin through a gateway and several
  destinations (DC).
• Thruport reconcile the high volume requirements
  of markets with the time sensitive requirements
  of distribution.

Thruport
Markets
Gateway
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Transmodal Transportation and Supply Chain
Fragmentation

• Supply Chain fragmentation
• Contemporary supply chains involve a complex
  sequence of trips.
• Specialization and comparative advantages.
• Different stages (parts, manufacturing,
  distribution) each of which could use a
  Thruport.
• Potential Thruport impact on the locational
  behavior of production and distribution
  activities.

Thruport
1
4
1
4
2
3
3
2
4
4
Distribution
Parts raw materials
1
2
3
4
Customers
Manufacturing
Supply Chain
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Transmodal Transportation and Ownership
Fragmentation

• Ownership fragmentation
• Rail companies have their facilities and
  customers.
• They have their own markets along the segments
  they control.
• Interchange is the major problem.
• The Thruport creates multiplying effects.
• The distribution potential of each operator is
  expanded.
• Network alliances like in the airline industry
  (constrained by the spatial fixity of rail
  networks).

Gateway
D
C
Thruport
A
B
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13.98 M TEU
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Transmodal Transportation and Ownership
Fragmentation

• Local Rail Terminals Location
• Fragmentation at transmodal Interchange.
• Requires cross-town hauling of containers between
  terminals.
• Takes place within a metropolitan area.
• Contributes to congestion.
• Negative feedback undermines the reliability of
  the transport chain.
• The construction of new terminal facilities in
  suburban areas exacerbate the problem.

Metropolitan Area
CBD
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Sequence of Transmodal Rail Container Operations
Before and After Thruport
Rail terminal
Inbound Storage Yard
Rail terminal
Outbound Storage Yard
Cross-town
Container
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1
4
6
2
5
3
Rail Operator A (inbound)
Rail Operator B (outbound)
Thruport
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Chassis brought trackside of inbound operator A.
2
Container unloaded from the train and loaded on
chassis.
Chassis/container brought to the outbound
storage yard of the inbound terminal operator A
for delivery to outbound rail operator B.
3
4
Cross-town operations.
Outbound rail operator B picks up the
container/chassis at the storage area and brings
it trackside for outbound loading.
5
6
Crane unloads container from the chassis and
loads into the double stacked car.
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After the container is loaded on to the double
stacked car, chassis removed from trackside and
stored in an empty chassis area.
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The Thruport Concept

• Characteristics
• Neutral facility (preferably)
• Joint venture (rail companies, terminal
  operators).
• A local consortium?
• Location and setting
• At the junction of long distance rail corridors.
• Linear structure of about 2.25 miles (3.6 km) in
  length.
• Minimal interface with trucking (could be a road
  / rail facility).
• A Thruport does not necessarily require to be
  located nearby a metropolitan area.
• Performance
• No container truck chassis and hostlers required.
• About 250 containers per hour (4,500 per day).

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Mi-Jack Stack-Packer (Thruport Terminal)
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The Thruport Concept

• Thruport implementation stages
• Impossible to fully reconcile rail distribution
  strategies
• Different carriers having their own schedules and
  frequency of service.
• Long distances involved.
• Possibilities of disruptions.
• Uncertainties inherent to freight distribution.
• A buffer of temporary container storage will
  always be required, even at a Thruport.
• First stage
• Temporary buffer due to the lack of
  synchronization of unit trains.
• Some carriers experiment with synchronized
  services.
• Second stage
• The Thruport becomes part of the operational
  planning of rail carriers.
• Thruport shuttles unit trains assembled
  specifically at major gateways for transmodal
  operations.

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Potential Impacts of a Thruport System
Derived efficiencies Substitution effect
Nature Transmodal operations Modal shift to rail
Scale Micro (metropolitan area city logistics) Macro (national commodity chains)
Thruport effect Direct (transmodal benefits) less short distance trucking Indirect (supply chain management) less long distance trucking
Potential modal shift 20-40 (depending on local rail terminal locations and configurations) 10-20 (depending on the level of market, supply chain and ownership fragmentation) 30 to 60 million reduction in tractor trailer originations.
Potential energy savings 25,000 to 50,000 barrels of diesel per year for a large terminal (e.g. Chicago) 60 to 120 million barrels of diesel per year (United States)
Potential time savings About 1 day (30 to 50) of transmodal operations (from 1 to 2 days currently) Less uncertainties About 2 days for landbridge shipments (from 5 days currently, including time savings from derived efficiencies)
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Costs/ Benefits

• Costs
• Construction costs are expected to range from
  400 to 500 million.
• Benefits
• Shippers Savings
• Labor Productivity
• Energy Consumption
• Emission Reductions/Health Care
• Congestion
• Rail Capacity

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Quantifying Benefits Will Require Baseline
Terminal Performance Metrics?

• Transmodal performance metrics
• The benefits of the Thruport would be more
  quantifiable.
• Indicators
• Percentage of TEU volume that is interchange.
• Average throughput velocity
• rubber tire interchange
• steel wheel interchange
• Average time in-terminal for dredgeman
• peak
• off-peak

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Temperature-Sensitive Freight
Although there is a shortage of active
temperature controlled containers, passive
protection has proven to be a highly effective
alternative in reliable freight transport
corridors, and a major cost saver for companies
making the modal shift to rail Food Paints Be
er Adhesives Wine Chemicals Confectionary
Coatings
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Environmental Impacts
Real estate 97 acres, far less than the 1200 acres needed for Global III in Rochelle, IL.
Concrete Only 7040 cu. ft., far less than the 45,000 cu. ft. used to build Global III.
Pavement Minimal since traffic mostly sits on the rails.
Roadway Access Minimal beyond employee access.
Drainage More crushed limestone less pavement and concrete.
Noise Coupling and decoupling of cars will be minimal, and sound level drops off quickly for crane's warning "point source" alarms.
Storage No need for chassis storage and container storage yard.
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Conclusion Towards a 100 per barrel Logistics?

• The Thruport concept and Inland Freight
  Distribution
• Containerization insured a global freight
  distribution market.
• Rail bound to play a greater role a continental
  ITS strategy.
• Reduce congestion for all modes by exploiting
  their comparative advantages.
• The Thruport would service a niche market
  (transcontinental containerized freight
  distribution).
• 100 per barrel logistics may be upon us.
• Thruport could mitigate energy cost increases.
• Unique opportunity to build more efficient
  intermodal relationships between rail and truck
  transport systems.

In the 20th Century, it was said, distance was
conquered. In the 21st Century, distance shall
have her revenge, and the world will become a
much bigger place.