Outsourced Logistics

Excerpt from ChemLogix Chemical Transportation and Logistics Blog http://blog.chemlogix.com/ Written by Stephen Hamilton

Intermodal transportation is a hot topic these days as chemical shippers look for ways to reduce costs, carbon footprint and freight safety concerns. When considering the merits of intermodal transportation, chemical shippers should also consider the benefits offered by ISO tank containers associated with this mode of transportation. While Over The Road (OTR) tank trucks still dominate the roadways in transporting liquid chemical freight, ISO tank containers are becoming more widely used as shippers convert to intermodal to transport freight through a combination of truck, rail and sea.

The following are major benefits that ISO tank containers offer over OTR tank trucks in the transport of freight: 

1. 1. Greener.  The International Tank Container Organisation reported that intermodal tank containers leave a carbon footprint that is almost 50 per cent less than that of an equivalent drummed shipment on certain long-haul routes.  Using intermodal transportation also saves fuel and reduces CO2 emissions by up to 70%, especially on hauls over 150 miles.  This may be a major factor to consider as chemical shippers must find ways to reduce carbon footprint to meet future government mandates. 


2. 2. Safer. On long hauls, OTR tank trucks often must travel through bad weather, causing unsafe driving conditions that lead to accidents and delays.  Vehicles often park at unsecured rest stops and have the potential for mechanical breakdowns. Shipping freight via intermodal using ISO tank containers eliminates these issues.   As containers are marked with a unique BIC code, they can be easily ID’d and tracked.  And even heavy ISO tank containers are unlikely to cause mechanical failure on trains and ships and are safer when in transit.   


3. 3. Cheaper. Using ISO tank containers via intermodal as a mode of transportation instead of OTR can also help save 20 – 30% in transportation costs, depending on distance and volume of freight.   


4. 4. Easy Storage.  While ISO tank containers can easily be stored at the consignee, OTR tank trucks often must be returned to their point of origin, which for long hauls may be thousands of miles away. Delivering an ISO tank via intermodal to a consignee is generally a local delivery. No driver layovers!    


5. 5. Greater Flexibility. If the customer decides at the last minute that they want to delay a freight delivery for a couple of days, tanks can be left at a local storage yard. If the load came via OTR truck, the customer would have to take delivery on the scheduled date. Also, as previously noted, one container can transport the same freight by ship, truck and train as part of a single journey without unloading.  

Written by Stephen Hamilton, ChemLogix, Global www.chemlogix.com

As companies evaluate new ways to reduce freight costs as well as their carbon footprint, alternative transportation mode options should be considered when moving freight long distances. While trucking remains the most dominant mode of shipping product domestically, intermodal freight transport offers opportunities for freight savings and reduced emissions, especially when transporting products over distances of 500 miles or more.

Intermodal shipping is the process wherein multiple modes of transportation partner to provide integrated door-to-door services. For example, trucks are used to deliver goods from a warehouse or manufacturing facility to a train depot and from a train stop to a final customer locale while freight trains are used to transport the cargo the longest distance over high-volume rail corridors. Optimizing the relative strengths and efficiencies of each transport method, intermodal can help reduce cargo handling, damage and loss, enabling freight to be transported more securely and at lower overall costs.

Also, the U.S. Environmental Protection Agency (EPA) reports that for shipments over 1,000 miles, using intermodal transport can cut fuel use and greenhouse gas emissions by as much as 65%, relative to truck transport alone. A truck transporting 40,000 lbs from Boston to Los Angeles produces approximately 4.35 tons of carbon emissions. The same 40,000 pounds shipped via intermodal rail produces only 1.75 tons of carbon emissions.

Intermodal transportation can, in essence, help reduce a company’s carbon footprint. The EPA estimates that every ton-mile of freight that moves by rail instead of by highway can reduce greenhouse emissions by two-thirds. This is important as companies work to reduce their carbon footprint to comply with environmental regulations and meet their own corporate sustainability goals.

As the volume of inbound cargo, especially from Asia, continues to increase, intermodal offers an alternative to the highways. For shipments across the border, intermodal can help reduce border congestion and pollution, especially when transporting U.S. freight into Mexico. As paperwork can be submitted electronically and approved prior to trains reaching the border, inbound shipments can cross into Mexico without stopping at border crossings, eliminating the time associated with customs and freight clearance. And once a shipment is underway, all movement can be tracked by a third party until it reaches its final destination.

How to Ship Intermodal

As intermodal can be implemented for bulk commodities in tank containers as well as traditional packaged freight in box containers, a variety of goods can be transported using this transportation mode. A chemical company, for example, can deliver product in ISO tanks by truck to a rail terminal, where freight is transferred to railcar and processed for delivery to a final destination. An investigation commissioned by the International Tank Container Organization into the environmental performance of intermodal tank containers reveals that the tank container leaves a carbon footprint that is almost 50% less than that of an equivalent drummed shipment on certain long-haul routes.

Rail carriers in the U.S. and neighboring countries have worked to upgrade equipment, improve shipping schedules, reduce loading and unloading times, and increase the number of lanes to support multiple delivery locations. The U.S. intermodal rail system extends throughout the United States, touching every major port with some coast-to-coast service offerings that are faster than truck. Mexico has a good rail system extending across most of the country, with well-established rail connections at the U.S. border. Canada has two major railroads that run coast-to-coast: the CN and the CP.

Is Intermodal Right For You?

To determine if intermodal transportation is an option for your enterprise, business unit leaders should collaborate with their logisticsgroup or third-party consultants to evaluate supply chain economics and cycle times. Typically, the longer the haul, the more cost-effective intermodal transportation becomes over alternative freight shipment modes. However, modified lead times, resulting in new re-ordering points, may be trade-offs that must be considered with your customer base.

It typically takes eight days to cross the country using intermodal methods. Rail transit time to transport chemical products from Chicago to Mexico City is about four to six days.

The EPA reports that the economic benefits of intermodal ground freight service are maximized over long hauls, where the fuel and cost savings from the rail segment of the trip can be high enough to recoup the extra fuel and handling costs to transport and transfer trailers and containers between trains and trucks.

Typically, shipping liquid bulk products via intermodal can save shippers upwards of 40% vs. over-the-road tank trucks. As an example, a chemical manufacturer in South Carolina that ships bulk chemicals to the Pacific Northwest is reportedly saving approximately $4,000 per load by sending the product in intermodal ISO tanks instead of going in the traditional tank truck over the road for the full passage.

WEBER DISTRIBUTION OPENS A NEW FACILITY IN STOCKTON, CALIFORNIA

The facility offers expanded service to the confectionary, food, beverage, retail and CPG industries

SANTA FE SPRINGS, California – As part of its growing network, Weber Distribution, a leading third party logistics and supply chain management provider, announced today that it has opened a new facility in Stockton, California, the key hub location for Northern California.

At the facility, Weber is servicing its expanding base of food, confectionary, beverage, CPG and retail customers. The facility provides LTL, truckload, storage and value-added services for all of Northern California and Nevada ranging from Fresno to Redding and San Francisco to Reno.

The Stockton facility was custom-built for Weber and is divided into temperature-controlled and dry storage and offers a variety of services, including order processing, label generation, inventory control, routing guide compliance, and pick & pack. Weber has closed its facility in Lodi, California and has moved its customers to Stockton to service the growing region.

Located between the 99 and the main West Coast Interstate I-5, the City of Stockton is one of California’s fastest growing cities.

Stockton is 60 miles east of the San Francisco Bay Area, 83 miles east of San Francisco, and 45 miles south of Sacramento.

“We are excited about expanding our presence in Northern California to meet our customers’ growing need for warehousing space, distribution and value added services,” said Bill Butler, Weber’s president and CEO. “We are dedicated to delivering the best possible logistics services and this new facility is a clear indication of our commitment to our customers.”

Weber’s Stockton facility is using Zethcon’s WMS, the leading provider of 3PL software, and the latest TMS to track the real-time movement of products and offer real time web visibility.

About Weber Distribution

Weber Distribution has evolved into a nationwide provider of logistics solutions. Weber’s expertise includes non-asset freight management, asset-based LTL and TL services, including temperature-controlled, dedicated and shared warehousing, distribution, cross-docking/pool distribution, transloading, network optimization modeling and analysis, retail compliance, order fulfillment, material handling, supply chain management, real estate development, and personnel staffing.

Weber specializes in providing its clients with unique logistics solutions primarily to these vertical markets:

-Import

-Retail

-Food & Beverage

-Consumer Packaged Goods

-Chemical/Specialty Products

-Paper

Weber serves many well-known and respected companies such as Walmart, Target, Safeway, General Mills, Hershey, Nestlé, Applica Consumer Products, California Innovations, Scholastic Books, and PPG Industries. As a result of its on-going innovation, experience and dedication, Weber has been the recipient of numerous industry awards,

including:

-100 Great Supply Chain Partners

-Inbound Logistics’ Top 100 3PLs

-Logistics Management’s Top 50 3PLs

-The Los Angeles Business Journal’s Top 100 Privately-Held Companies -Food Logistics Magazine’s Top 70 3PLs -Food Logistics Magazine’s FL100 listing of the top technology solution and service providers to the food industry.

Chemical shippers contract 3PLs to gain additional resources, technology and assets unavailable in their own logistic departments to optimize and automate supply chain operations.  More than vendors who merely provide certain contract services, 3PLs should serve as long-term partners in helping customers effectively manage their supply chain processes.  Here are five key benefits that chemical shippers should derive from their business relationship with a 3PL:

1. Ongoing cost reduction/containment strategies

Going beyond the terms of a contract to manage specific freight activities on a monthly or cost-per-transaction basis, 3PLs should proactively present cost management ideas as part of their services.  After becoming familiar with customer operations, 3PLs should be able to identify areas in the supply chain where costs can be contained.  Ideas can range from optimizing weight per shipment through load consolidation, spot bidding on more cost effective carrier lanes or even initiating a freight reduction project to reduce inbound transportation costs.

2.Access to best-in-class transportation management technology

Incorporating the latest transportation management technology to optimize supply chain operations was typically not an option for small- to mid-size shippers who could not afford the upfront investment or ongoing maintenance.  3PLs now offer best-in-class transportation management technology that does not require large investments in hardware, software or even additional personnel.  On demand transportation management systems can be connected to customers’ existing ERP systems in as little as 6 months.  Customers should seek additional capabilities such as online RFQ tools and global order tracking.  Most recently, ChemLogix began offering its customers an iPhone® application as part of its TMS capabilities that gives users mobile access to shipment data on iPhones.

3. Ensure Orderly Review Process

Rather than wait for problems to arise, a 3PL should lead a periodic review of supply chain processes with appropriate personnel to discuss new transportation solutions, specific cost reduction ideas, service levels, and any issues that the client may have with current operations. By reviewing data pertinent to different supply chain elements such as on-time deliveries, costs, customer service issues, etc., the 3PL can discuss which objectives have been met, if there are any problem areas and set new goals for the next operating period. 

4. On-line Visibility to Freight Activity

In addition to automating many processes, a 3PL should give customers online, real-time visibility to supply chain operations including freight, invoices, routing guides, carrier service records and more. With visibility to in-transit data, shippers can determine at any point during the supply chain process if shipments will be delivered on time and when to notify plants and customers of impending deliveries and shipments.  Should shipments be late, automatic email alerts can sent to customer service reps so that they can proactively make arrangements with their own customers.

5. Support in Boardroom Discusses

Getting the funds from executives to implement and/or expand transportation services and systems sometimes takes the assistance of 3PLs who can provide detailed explanations of the long-term benefits of specific supply chain strategies.  Experienced in providing transportation solutions to customers in the same industry but with varying scenarios, 3PLs can readily provide informed answers to the questions posed by executives and give examples of the successes and pitfalls associated with certain actions.  3PLs, essentially, become a part of the logistics team when presenting ideas and updates to the board room.

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