Supply Chain Trends in Intermodal

Transcription

1 Supply Chain Trends in Intermodal Ken Miller VP Operations 1

2 SERVICE REVIEW: MARKET SHARE Market overview (segment specific) Market size: $12 Billion Capacity: 205, foot Containers Industry outlook: Growing at > 7% Our position 25 28% of overall market (revenue and/or capacity) Opportunities Highway Conversion Customer Deliveries New Services Canada/Mexico/Eastern Network Expansion Roadblocks Market Share Competitor Actions 2

3 Intermodal Rail Carrier Industry Comparison INTERMODAL VOLUME 2011 SALES APPROACH EQUIPMENT OWNER Type CAPACITY LARGEST SEGMENT by volume 4.5 M BNSF & Motor Carriers Motor Carriers Trailers & Containers Unlimited Intermodal 3.3 M IMC Rail Owned Containers Limited by fleet size Industrial Products 2.3 M IMC & Motor Carriers Rail Owned Containers Limited by fleet size Industrial Products 3.2 M IMC & Motor Carriers Rail Owned Containers Limited by fleet size Coal 3

4 Estimated 53 Domestic Container Fleet by Owner North American 53' Domestic Container Fleet Size by Owner JBH UMAX EMHU Hub Pacer Schneider Swift CN UPS CSX Crowley COFC Logistics APL Logistics CH Robinson Trailerbridge Universal Logistics Dart USA Truck Matson Marten KCS 8,500 5,000 5,000 4,100 2,000 2,000 1,000 1, ,600 18,000 22,900 31,000 31,000 60,000 Total Fleet Size 205,000 10,000 20,000 30,000 40,000 50,000 60,000 70,000 4

5 Who are the players? Union Pacific Based Providers Hub Group (Red, White, or Green Containers) EMP Rail Owned Equipment (White or Green Containers) UMAX (Blue Containers / Yellow and White Lettering) PACER (Blue Containers) 100 s of IMC Competitors (Intermodal Marketing Company) Largest Mexico Presence BNSF Based Providers Schneider Swift First Priority is Highway Conversion 5

6 Supply Chain Opportunities Transportation is generally the greatest cost in the supply chain. 50% LOGISTICS COST BREAKDOWN Focus on Transportation Collaboration to reduce costs and increase capacity. 22% 10% 8% 4% 3% 2% 1% Transportation Inventory Labor Customer Rent Admin Supplies Other Source: Establish, Inc/Herbert W. Davis and Company 2006 Database 6

7 Today s Supply Chain Landscape Shippers are looking for partners with flexible, comprehensive, value added solutions Steadily increasing freight demand Truckload capacity continues to tighten Supply/demand balance becoming an issue Intermodal volumes continue to rise and take highway share Diesel prices remain elevated CONFIDENTIAL 7

8 Top Supply Chain Challenges (Next 2 5 Years) Tightening driver market Government regulations CSA EOBR mandates Hours of Service CARB Aging equipment leads to replacement at higher cost basis Highway infrastructure congestion and deterioration Access to capital Fuel Managing Budgets CONFIDENTIAL 8

9 Fuel is Gaining Executive Visibility in Freight Costs $5.00 RECESSION $4.50 $4.127/gal 3/31/2012 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $ Jan 1995 Jul 1995 Jan 1996 Jul 1996 Jan 1997 Jul 1997 Jan 1998 Jul 1998 Jan 1999 Jul 1999 Jan 2000 Jul 2000 Jan 2001 Jul 2001 Jan 2002 Jul 2002 Jan 2003 Jul 2003 Jan 2004 Jul 2004 Jan 2005 Jul 2005 Jan 2006 Jul 2006 Jan 2007 Jul 2007 Jan 2008 Jul 2008 Jan 2009 Jul 2009 Jan 2010 Jul 2010 Jan 2011 Jul 2011 Jan 2012 Source: U.S. Dept. of Energy (EIA)

10 Intermodal Remains Attractive 1.30 Yearly Intermodal Traffic Totals Millions JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Source: IANA Intermodal Market Trends and Statistics 10

11 Intermodal Benefits Are Driving Change Shippers, Carriers, Environment Economical Expanding capacity Greener shipping Less congestion Better jobs CONFIDENTIAL 11

12 What Freight Moves Intermodal Today? Types of Intermodal Shipments Import shipments Inbound to DC and Outbound to Store Consolidation Temp Controlled Flatbed CONFIDENTIAL 12

13 So Why Hasn t More Freight Been Converted? Some Shippers Say I had a bad experience with Intermodal 15 years ago. Shipping requirements won t allow Intermodal. Intermodal transit is slow and variable. Won t work for my customers. CONFIDENTIAL 13