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Even as shippers boost their demands for on-time delivery at rock-bottom rates, they seem less concerned about how the freight actually gets there. Chances are, they don't realize how many parties are involved in the intermodal handoff--ocean carriers, railroads, truckers, freight forwarders, non-vessel operating common carriers, and shippers' agents, also known as intermodal marketing companies (IMCs).
Often, one or more of those parties is invisible to the underlying customer. Railroads, indispensable to intermodal service, rarely make contact with the actual shipper. Over the years, they have shed themselves of their retail marketing departments. "Their assets are limited," says Jay Hirst, vice president of traffic with Alliance Shippers, an IMC. "And they're not going to put a lot of money into non-returnable assets."
The railroads' day-to-day customers are ocean carriers and shippers' agents, who together play the role of retailer. "Most of our business is with steamship lines quoting (inland) rates," says Phil Modica, managing director of international sales with the Sana Fe Railway.
Often, a railroad will limit its role to providing tracks, power and crew. The ocean carrier will form a subsidiary whose job it is to organize and operate double-stack container trains deep into the North American interior.
It may even solicit domestic freight to fill marine containers headed back to a port. MOL Intermodal, Inc., the inland division of Japan's Mitsui O.S.K. Lines, Ltd., has watched its domestic loads grow from 6,000 units in 1989, to more than 40,000 units last year, according to vice president-operations Don Licata.
Shippers' agents also vie for domestic backhauls, providing yet another layer between shippers and railroads. "I tell my customers, 'If you had to talk to the railroads, you probably wouldn't give us the business," says Jeffrey R. Brashares, president of intermodal third party with Rail Van, Inc.
SECOND THOUGHTS
Ocean carriers have been the prime "bundlers" of international transportation for more than a decade. Third parties, not railroads, were the victims. "We lost our participation in international in the 1980s," says George W. Francis, vice president of Bay Area Piggyback.
Now, the lines are having second thoughts about their heavy involvement in intermodal. With a handful of exceptions, they're finding door-to-door service much harder to sustain than they originally thought.
In the transatlantic trades,...