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	<title>intermodal Archives - DG&amp;A Freight Consultants</title>
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		<title>Create a Robust Routing Guide at the Completion of a Freight Bid</title>
		<link>https://www.dantranscon.com/create-a-robust-routing-guide-at-the-completion-of-a-freight-bid/</link>
		
		<dc:creator><![CDATA[Dan Goodwill]]></dc:creator>
		<pubDate>Fri, 26 Jul 2024 13:54:53 +0000</pubDate>
				<category><![CDATA[Best Practices in Freight Management]]></category>
		<category><![CDATA[Freight Bids]]></category>
		<category><![CDATA[Freight Cost Savings]]></category>
		<category><![CDATA[Freight]]></category>
		<category><![CDATA[freight bid]]></category>
		<category><![CDATA[freight cost savings]]></category>
		<category><![CDATA[freight costs]]></category>
		<category><![CDATA[Freight Management]]></category>
		<category><![CDATA[freight rates,]]></category>
		<category><![CDATA[freight RFP]]></category>
		<category><![CDATA[freight transportation]]></category>
		<category><![CDATA[intermodal]]></category>
		<category><![CDATA[LTL]]></category>
		<category><![CDATA[Transportation]]></category>
		<category><![CDATA[Truckload]]></category>
		<guid isPermaLink="false">https://www.dantranscon.com/?p=2171</guid>

					<description><![CDATA[<p>After the final round of freight bids have been submitted and analyzed, it is time to prepare a routing guide.   This important document contains the preferred carriers by mode, by lane, and their approved rates.  The contents of a routing guide can be entered into a shipper’s TMS system to guide the carrier selection process.  [&#8230;]</p>
<p>The post <a href="https://www.dantranscon.com/create-a-robust-routing-guide-at-the-completion-of-a-freight-bid/">Create a Robust Routing Guide at the Completion of a Freight Bid</a> appeared first on <a href="https://www.dantranscon.com">DG&amp;A Freight Consultants</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p>After the final round of freight bids have been submitted and analyzed, it is time to prepare a routing guide.   This important document contains the preferred carriers by mode, by lane, and their approved rates.  The contents of a routing guide can be entered into a shipper’s TMS system to guide the carrier selection process.  The approved carrier bid rates can be matched against the rates charged in the carrier invoices, to control freight expenses.</p>
<p>A routing guide is essentially a spreadsheet that varies from company to company, based on the number of modes and carriers needed to move the shipper’s freight.  The routing guide is typically organized by origin point to geographic regions (e.g. Northeast, Midwest, Western Canada etc.), and to destination states and provinces, in alphabetic order (e.g. Alabama, Colorado, Delaware etc.).</p>
<p><strong>Bid Awards</strong></p>
<p>Carriers listed in a routing guide are selected from the following categories of bidders.</p>
<ul>
<li>Top Performers</li>
<li>Above Average or Average Carriers</li>
<li>New Carriers</li>
<li>Low Ranked Carriers</li>
</ul>
<p>Shippers typically allocate their business first to the Top Performers.  Business is awarded to carriers that display consistent on-time service, reliable customer service, flexibility, collaboration, strong reporting tools and competitive rates.  It has been our experience that wise shippers reward their top carriers, with their priority lanes, even at a slight premium on price.</p>
<p>The next tranche of volumes by lane can go to a combination of the Above Average, Average and New Carriers.  This will be based on performance, the rankings from the carrier questionnaires, and the rankings based on price.</p>
<p>Carriers that rank Low in performance, capabilities and rates often need to be replaced.  Some carriers will conclude that their removal from the routing guide is based on price.  The truth is that at this stage in the process, many shippers have been waiting for the final bid results so they can replace their weakest performers.  Making these changes help them upgrade the quality of their transportation network.  While price is always an issue, these decisions often come down to quality.</p>
<p><strong>Backup Carriers</strong></p>
<p>Shippers always need to reinforce their supply chains by creating and executing a strong back up plan.  Carriers come and go.  Some transport companies falter while others upgrade their fleets and human resources and thereby improve their capabilities and performance.  Every manufacturer or distributor needs to ensure that they can move their goods to market, even if a carrier goes on strike, suffers an environmental event, is short of equipment on a specific day, or goes out of business.</p>
<p>An effective routing guide displays the shipper’s core and backup carriers on every lane.  To ensure these carriers are committed to the business, it is important to supply backup providers with a meaningful and consistent volume of business.  In the case of an emergency, you want these carriers to step in and provide the same level of service that your customers are receiving today.</p>
<p><strong>Maintaining Routing Guide Compliance</strong></p>
<p>The routing guide is a blueprint to run your freight operations.  It is a practical document that reflects what each carrier does best, the volumes they are able to handle effectively, and the rates they charge.  The contents of the routing guide should be communicated to everyone who has responsibility for tendering freight.  There is a requirement to establish compliance guidelines, so the designated carriers are used on the right lanes.  Tracking mechanisms need to be established and monitored on a timely (e.g. daily, weekly, monthly) basis to minimize off plan spend.  Corrective action should be taken whenever non-compliance is identified.  Maintaining routing guide compliance ensures that the cost savings achieved during the bid process are realized.</p>
<p>&nbsp;</p>
<p>To stay up to date on <strong>Best Practices in Freight Management</strong>, follow me on <strong>X</strong> (formerly Twitter)<strong> @DanGoodwill</strong> and join the <strong>Freight Management Best Practices</strong> group on <strong>LinkedIn</strong>. If you are looking for ways to improve the effectiveness of your freight management processes or to save money on freight, contact me at dan@dantranscon.com.</p>
<p>&nbsp;</p>
<p>The post <a href="https://www.dantranscon.com/create-a-robust-routing-guide-at-the-completion-of-a-freight-bid/">Create a Robust Routing Guide at the Completion of a Freight Bid</a> appeared first on <a href="https://www.dantranscon.com">DG&amp;A Freight Consultants</a>.</p>
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		<item>
		<title>How Frequently Should a Company Conduct a Freight Bid?</title>
		<link>https://www.dantranscon.com/how-frequently-should-a-company-conduct-a-freight-bid/</link>
		
		<dc:creator><![CDATA[Dan Goodwill]]></dc:creator>
		<pubDate>Fri, 14 Jun 2024 18:01:54 +0000</pubDate>
				<category><![CDATA[Best Practices in Freight Management]]></category>
		<category><![CDATA[Freight Bids]]></category>
		<category><![CDATA[Freight Cost Savings]]></category>
		<category><![CDATA[financial management]]></category>
		<category><![CDATA[Freight]]></category>
		<category><![CDATA[freight agreements]]></category>
		<category><![CDATA[freight bid]]></category>
		<category><![CDATA[Freight contracts]]></category>
		<category><![CDATA[freight cost savings]]></category>
		<category><![CDATA[freight costs]]></category>
		<category><![CDATA[Freight Management]]></category>
		<category><![CDATA[freight rates,]]></category>
		<category><![CDATA[freight RFP]]></category>
		<category><![CDATA[freight transportation]]></category>
		<category><![CDATA[intermodal]]></category>
		<category><![CDATA[LTL]]></category>
		<category><![CDATA[RFP]]></category>
		<category><![CDATA[Transportation]]></category>
		<category><![CDATA[Truckload]]></category>
		<guid isPermaLink="false">https://www.dantranscon.com/?p=2111</guid>

					<description><![CDATA[<p>This is one of the most frequently asked questions we receive from our shipper clients.  Here is our perspective. The Forces that Shape our Views on this Subject For 20 years, during my early years in the transportation industry, I led asset-based carriers and non-asset-based freight broker organizations.  My colleagues and I were on the [&#8230;]</p>
<p>The post <a href="https://www.dantranscon.com/how-frequently-should-a-company-conduct-a-freight-bid/">How Frequently Should a Company Conduct a Freight Bid?</a> appeared first on <a href="https://www.dantranscon.com">DG&amp;A Freight Consultants</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p>This is one of the most frequently asked questions we receive from our shipper clients.  Here is our perspective.</p>
<p><strong>The Forces that Shape our Views on this Subject</strong></p>
<p>For 20 years, during my early years in the transportation industry, I led asset-based carriers and non-asset-based freight broker organizations.  My colleagues and I were on the receiving end of many shipper freight bids.</p>
<p>For the past 20 years my associates and I have been conducting freight bids for shippers.  From time to time, we have been asked to help carriers respond to complex bids</p>
<p>We know that many carriers view freight bids as dreaded adversarial exercises.  This view has arisen since some shippers have used freight bids as transactional tools to take advantage of carriers when they have leverage.  We have seen shippers conduct bids on a quarterly basis to exploit the market dynamics.</p>
<p>We have also seen carriers take advantage of their leverage when the market is more favorable to them.  As Covid concerns created a capacity shortage in 2021 &#8211; 22, we saw carriers take large rate increases, without negotiation.  This has resulted in a certain level of skepticism about the integrity of the bid process.</p>
<p><strong>Shipper – Carrier Relationships</strong></p>
<p>From our many years in the business, we believe we have a full understanding of the needs of both parties.  We recognize that shippers and carriers need each other.  Shippers need reliable carriers to provide consistent, cost competitive service from their vendors to their manufacturing plants and from these plants to their customers.  Carriers require shippers with consistent volumes, at profitable rates, so they can run sustainable businesses.  In other words, these relationships are essential to the success of both parties.  So why aren’t all shipper-carrier relationships effective?</p>
<p><strong>Why Some Shipper – Carrier Relationships Fail?</strong></p>
<p>With shippers under pressure to keep transportation costs low (to maximize profits), there are situations where transportation managers will do end runs on their core carriers to secure lower rates.  Carriers will also do end runs by supplying their limited fleet equipment to more profitable customers (e.g. higher revenue per mile and/or with better paying backhaul).  Some carriers will offer low rates to secure a block of business and then try to raise the rates to bring them to profitable levels.</p>
<p>Businesses are dynamic organizations.  As they evolve, there are times when the two parties drift apart as their needs change.  There are times when carrier service levels decline.  There are times when the volume of business between the parties is so minimal that a transactional rather than strategic relationship is quite satisfactory.</p>
<p>However, when significant volumes of freight are being tendered and transported by designated carriers, that have a material impact on a shipper’s business, there is a requirement to solidify these relationships, to the benefit of both parties. These relationships must be managed and nurtured.</p>
<p><strong>What do Shippers and Carriers Need to Do to Create a Strategic Partnership?</strong></p>
<p>These are the key attributes make these alliances work.</p>
<ul>
<li>Trust</li>
<li>Open and honest information sharing</li>
<li>In depth understanding of each other’s needs and requirements</li>
<li>Shipper partners receive priority access to equipment</li>
<li>Carrier partners receive right of first refusal on loads that fit within their networks</li>
<li>Contracts with COLA increases on an annual basis, or rate sheets with GRI rate increase discussions, so there is a commitment to make these partnerships work over a multi-year period.</li>
</ul>
<p>Creating these types of partnerships takes time, commitment and effort.  Quality committed carriers become an extension of the shipper’s company.  They elevate the level of service a shipper’s customers receive.  In our view. The results are worth the effort.</p>
<p><strong>Summary</strong></p>
<p>Bids work for shippers with multi-million-dollar freight spends that consistently allocate volumes to a list of qualified carriers.  Bids work for carriers that receive consistent volumes of freight on their major traffic lanes.  Bids work when both parties commit to a strategic relationship.  For shippers that establish contractual multi-year relationships with their core carriers, a bid every 2 – 3 years works well.</p>
<p>A comprehensive, professional bid typically requires some level of work over a 3-to-5-month period.  Working on a bid takes time away from the transportation management team’s normal day-today duties.   It has been our experience that there are many benefits to this approach as there are with creating and maintaining the company’s other major business relationships.  We encourage shippers, with significant freight volumes, to take advantage of the benefits that accrue from a well executed freight bid.</p>
<p>&nbsp;</p>
<p>To stay up to date on <strong>Best Practices in Freight Management</strong>, follow me on <strong>X</strong> (formerly Twitter)<strong> @DanGoodwill</strong> and join the <strong>Freight Management Best Practices</strong> group on <strong>LinkedIn</strong>. If you are looking for ways to improve the effectiveness of your freight management processes or to save money on freight, contact me at dan@dantranscon.com.</p>
<p>&nbsp;</p>
<p>The post <a href="https://www.dantranscon.com/how-frequently-should-a-company-conduct-a-freight-bid/">How Frequently Should a Company Conduct a Freight Bid?</a> appeared first on <a href="https://www.dantranscon.com">DG&amp;A Freight Consultants</a>.</p>
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		<item>
		<title>Conducting a Freight Bid – Should We Do It Ourselves or Seek Outside Help?</title>
		<link>https://www.dantranscon.com/conducting-a-freight-bid-should-we-do-it-ourselves-or-seek-outside-help/</link>
		
		<dc:creator><![CDATA[Dan Goodwill]]></dc:creator>
		<pubDate>Fri, 07 Jun 2024 19:16:11 +0000</pubDate>
				<category><![CDATA[Best Practices in Freight Management]]></category>
		<category><![CDATA[Freight Bids]]></category>
		<category><![CDATA[Freight Cost Savings]]></category>
		<category><![CDATA[Freight Rate Pricing]]></category>
		<category><![CDATA[Intermodal]]></category>
		<category><![CDATA[LTL Freight]]></category>
		<category><![CDATA[Truckload Transportation]]></category>
		<category><![CDATA[Uncategorized]]></category>
		<category><![CDATA[Finance and Transportation]]></category>
		<category><![CDATA[financial management]]></category>
		<category><![CDATA[freight bid]]></category>
		<category><![CDATA[freight costs]]></category>
		<category><![CDATA[Freight Management]]></category>
		<category><![CDATA[freight rates,]]></category>
		<category><![CDATA[freight RFP]]></category>
		<category><![CDATA[freight transportation]]></category>
		<category><![CDATA[intermodal]]></category>
		<category><![CDATA[LTL]]></category>
		<category><![CDATA[Truckload]]></category>
		<guid isPermaLink="false">https://www.dantranscon.com/?p=2106</guid>

					<description><![CDATA[<p>As outlined in previous blogs, most companies conduct a freight bid to achieve certain objectives.  These may include saving money on shipping costs, upgrading the quality of their carriers, and/or improving service.  Success can be measured in terms of a reduction in freight expenses, higher on-time service, greater customer satisfaction, or other metrics. To achieve [&#8230;]</p>
<p>The post <a href="https://www.dantranscon.com/conducting-a-freight-bid-should-we-do-it-ourselves-or-seek-outside-help/">Conducting a Freight Bid – Should We Do It Ourselves or Seek Outside Help?</a> appeared first on <a href="https://www.dantranscon.com">DG&amp;A Freight Consultants</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p>As outlined in previous blogs, most companies conduct a freight bid to achieve certain objectives.  These may include saving money on shipping costs, upgrading the quality of their carriers, and/or improving service.  Success can be measured in terms of a reduction in freight expenses, higher on-time service, greater customer satisfaction, or other metrics.</p>
<p>To achieve quantifiable improvements, the project team must have the skills and resources to effectively plan and execute a project of this nature.  Companies conduct these projects either internally or externally depending on whether they are equipped to do so.</p>
<p>It has been our experience that some companies attain less than optimum results by not fully appreciating what is involved in conducting a successful freight bid.  Here are some items to consider.</p>
<ol>
<li><strong>Quality Data</strong></li>
</ol>
<p>To prepare competitive rates, carriers need to be supplied with complete, accurate data on their shippers’ lanes, volumes, and modes.  Six months to a year of detailed shipping data is typically the minimum requirement.  A failure to provide carriers with quality data during the bid process can result in unscheduled rate increases or a need to find alternate carriers.</p>
<ol start="2">
<li><strong>Extensive Database of Carriers</strong></li>
</ol>
<p>One of the mistakes we have seen some shippers make is to continually contact the same carriers every year.  This limits opportunities to identify potentially superior partners and reduces the prospects of securing more competitive pricing.  It is essential that each shipper cast a wide net to secure asset and non-asset-based companies that can meet their needs.</p>
<ol start="3">
<li><strong>Effective Data Analysis Tools</strong></li>
</ol>
<p>There is a considerable amount of data transmission during a bid.  There is also a requirement to be able to create the data templates, and to upload, analyze and massage the data; there is a requirement to rank the carrier rates and other data elements in an expeditious manner, under varying geographically scenarios.  Some shippers don’t have the analytical tools to perform these tasks in a timely manner.</p>
<ol start="4">
<li><strong>Adequate Freight Transportation Knowledge</strong></li>
</ol>
<p>Shippers need to understand the range of options available to move their freight.  As the years go by, shipping patterns and volumes may evolve.  Shippers may be able to consolidate volumes at origin or deconsolidate partial or full loads at destination.  For some lanes, intermodal shipping may be a cost-effective option to over the road shipping.</p>
<p>Transportation Managers also need to have a solid grasp of the additional services that may be triggering accessorial charges. They need to be able to assess if there are some supply chain deficiencies that are causing detention charges or late deliveries, before putting their freight out for bid.</p>
<ol start="5">
<li><strong>Carrier Management and Negotiating Skills</strong></li>
</ol>
<p>In every bid, there is a requirement to do a “deep dive” into the operations of at least some new and existing carriers, to evaluate opportunities for improvement and to see if they are a fit with the company’s operations.  There is a necessity to conduct thoughtful discussions with each carrier to look for situations where service improvements can be made and where leveraging volumes can lead to further cost savings.  There is also a prerequisite to discuss and negotiate all aspects of freight pricing in a meaningful way.</p>
<ol start="6">
<li><strong>Post-Bid Compliance Skills</strong></li>
</ol>
<p>Many shippers operate under the belief that once the bidding process is complete, the project is over.  It isn’t.  The effective execution of a bid is essential to achieving the project’s objectives.  For certain carriers, it may be beneficial to sign contractual agreements with measurable expectations, and progressive discipline clauses, to ensure compliance and performance.  A set of KPIs, scorecards, a routing guide, and scheduled carrier meetings, are also essential to manage the carrier compliance process.</p>
<p>To conduct a successful bid, to effectively manage and control freight transportation expenses, each manufacturer and distributor needs to evaluate if they have the skills and resources internally or seek outside assistance.  If not, there are a range of options available to them.</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>To stay up to date on <strong>Best Practices in Freight Management</strong>, follow me on <strong>X</strong> (formerly Twitter)<strong> @DanGoodwill</strong> and join the <strong>Freight Management Best Practices</strong> group on <strong>LinkedIn</strong>. If you are looking for ways to improve the effectiveness of your freight management processes, to save money on freight, or to conduct a freight bid, contact me at dan@dantranscon.com.</p>
<p>The post <a href="https://www.dantranscon.com/conducting-a-freight-bid-should-we-do-it-ourselves-or-seek-outside-help/">Conducting a Freight Bid – Should We Do It Ourselves or Seek Outside Help?</a> appeared first on <a href="https://www.dantranscon.com">DG&amp;A Freight Consultants</a>.</p>
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		<item>
		<title>This may be a Pivot Point for the Intermodal Business</title>
		<link>https://www.dantranscon.com/this-may-be-a-pivot-point-for-intermodal-service/</link>
		
		<dc:creator><![CDATA[Dan Goodwill]]></dc:creator>
		<pubDate>Sun, 05 Nov 2017 22:15:58 +0000</pubDate>
				<category><![CDATA[Intermodal]]></category>
		<category><![CDATA[capacity shortage]]></category>
		<category><![CDATA[intermodal]]></category>
		<category><![CDATA[Rail]]></category>
		<category><![CDATA[truck driver]]></category>
		<category><![CDATA[Trucking]]></category>
		<guid isPermaLink="false">https://www.dantranscon.com/this-may-be-a-pivot-point-for-intermodal-service/</guid>

					<description><![CDATA[<p>Periodically, business conditions change. These changes can have positive or negative effects on certain sectors of the freight transportation industry. Intermodal transportation uses at least two modes of transportation (i.e. road, rail) to move freight. The intermodal option works best when the rail service provider has terminals within a fifty-mile radius of the origin and [&#8230;]</p>
<p>The post <a href="https://www.dantranscon.com/this-may-be-a-pivot-point-for-intermodal-service/">This may be a Pivot Point for the Intermodal Business</a> appeared first on <a href="https://www.dantranscon.com">DG&amp;A Freight Consultants</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p style="text-align: center;"><img decoding="async" title="b2ap3_thumbnail_dreamstime_m_52127653_20171105-172208_1.jpg" src="https://www.dantranscon.com/wp-content/uploads/2017/11/b2ap3_thumbnail_dreamstime_m_52127653_20171105-172208_1.jpg" alt="b2ap3_thumbnail_dreamstime_m_52127653_20171105-172208_1.jpg"></p>
<p>Periodically, business conditions change. These changes can have positive or negative effects on certain sectors of the freight transportation industry.</p>
<p>Intermodal transportation uses at least two modes of transportation (i.e. road, rail) to move freight. The intermodal option works best when the rail service provider has terminals within a fifty-mile radius of the origin and destination points and on major long haul (i.e. over 1000 mile) lanes. While intermodal volumes have grown over the past couple of decades, this business remains a niche market. The typical road/rail combo service is usually a few days longer than over the road transportation, but it is normally priced a few percentage points below truck service. This may be a pivot point for intermodal. Here’s why.</p>
<p><strong>The US and Canadian Domestic Intermodal Freight Markets </strong></p>
<p>Two hurricanes in the southern US and solid economic conditions in Canada and United States have been driving a tightening of trucking capacity. As it tightens, intermodal service can be an option on some freight shipping corridors. Shippers often look to intermodal service for lower freight costs. As truck capacity shrinks and spot market rates rise, this may create an impetus for shippers to migrate some traffic from road to rail.</p>
<p>Another facilitating factor is the US federal government mandate that truckers must install electronic logging devices (ELDs) by December of this year. There is a concern that the ELD requirement, which forces carriers to monitor their hours of operation more precisely, may push certain truckers out of the market.</p>
<p>The availability of truck drivers must also be considered in the road/intermodal trade-off. According to a recent report by The National Transportation Institute, driver turnover (which is currently around 100% per annum in the United States) will likely continue to grow for the balance of 2017 and into 2018. Driver supply will continue to decrease. Construction, a longtime competitor for labor talent has a growing gap between hiring needs and hiring results. Demand for repairs and construction of homes and infrastructure in the southern US, skyrocketed after Hurricane Harvey and Irma.</p>
<p>Housing build times are stretching out by months due to the labor shortage. Hourly rates for laborers and semi-skilled workers are increasing rapidly. Wages for truck drivers have not kept pace with wage increases in other industries. Wage increases for truck drivers require freight rate increases, a non-starter for many shippers.</p>
<p>Intermodal service has improved over the past 5 to 6 years. The rails have increased double tracking in some areas, added or expanded terminals and implemented technologies such as automated gate technologies to improve network efficiencies.</p>
<p>In Canada, intermodal service has long been popular on LTL and truckload traffic between Canada’s major cities in Central, Eastern and Western Canada. Long distances and low population density have made intermodal transportation very attractive for trans-Canada freight.</p>
<p>Since the United States is so much more heavily populated than Canada, intermodal service is more popular for truckload shipments, primarily dry van loads on long haul corridors.</p>
<p>Recently, intermodal has become an option for temperature-controlled shipments of fresh produce, frozen food, and pharmaceutical products, both domestically within the United States and on cross-border shipments. For companies that employ telematics equipment, they can monitor their shipments while in transit and adjust temperatures, as required.</p>
<p><strong>International Intermodal Traffic </strong></p>
<p>There are two components to North American international intermodal traffic, offshore shipments, and NAFTA cross-border freight. One of the growth areas for intermodal has been international traffic through the US and Canadian ports on the west and east coasts. In addition, there are now direct links between the Port of Saint John, New Brunswick and Boston, Mass. along with the connection between Prince Rupert, BC via Chicago, Ill to the heartland of the United States. In some cases, shipments are transloaded onto domestic intermodal containers or trailers for delivery to their ultimate destination.&nbsp;&nbsp;Cross-border intermodal services between Canada and the United States have expanded over the past decade.</p>
<p>President Trump has made it clear that he does not see value in multilateral (Win/Win) free trade agreements. Rather, he prefers bilateral (Win/Lose) trade agreements where he can use his negotiating/bullying skills to strike more favorable deals for the United States and to reduce trade imbalances. To highlight this view, one of Mr. Trump’s first acts as president was to withdraw from the Trans Pacific Partnership (TPP) Agreement. This trade agreement was intended to reduce trade barriers among the 12 signatories.</p>
<p>Similarly, the Trump administration’s tough talk on the North Agreement Free Trade Agreement may ultimately diminish the flow of intermodal containers between America and its two NAFTA partners. Canada is the largest export market for 34 US states. The US is Canada’s largest trading partner.</p>
<p>The three NAFTA countries just completed round 4 of a 6-round negotiation process. The demands coming from America’s negotiators suggest that the negotiation process is a charade and that president Trump intends to intimidate Canada and Mexico into accepting some very unfavorable trade terms or the US will walk away from the agreement. Certainly Canada has been looking for alternate trading partners for several years.</p>
<p>If these trade deals fail, will the manufacturing return to the United States? Will Americans be able to afford goods made with a much higher US labor content? Is Make American Great Again a viable strategy?</p>
<p>President Trump’s current trip to Asia may provide some further clues on America’s trade policies. This long trip will provide him with an audience with several key leaders in the region. He is being presented with an excellent opportunity to create a rapport with these leaders and improve trade. This could clearly be a potential pivot point for trade and for international intermodal shipments.</p>
<p>To sum up, the two hurricanes that hit mainland USA, the ELD mandate, solid economic growth, a shortage of truck drivers and the low wages for the position may conspire to trigger a “perfect storm” for domestic intermodal revenue growth.</p>
<p>International intermodal shipments are clearly a question mark. A withdrawal from the TPP and a pullout from NAFTA, while helping increase some domestic road and rail volumes would likely have an overall negative impact on the economies of the three NAFTA countries and on freight volumes. If a satisfactory re-negotiation of NAFTA takes place, watch for a surge in intermodal volumes. We will find out soon if this is a positive or negative pivot point for intermodal traffic.</p>
<p>&nbsp;</p>
<p>To stay up to date on <strong>Best Practices in Freight Management</strong>, follow me on <strong>Twitter @DanGoodwill</strong>, join the <strong>Freight Management Best Practices</strong> group on <strong>LinkedIn</strong> and subscribe to <strong>Dan’s Transportation Newspaper</strong> (http://paper.li/DanGoodwill/1342211466).</p>
<p>The post <a href="https://www.dantranscon.com/this-may-be-a-pivot-point-for-intermodal-service/">This may be a Pivot Point for the Intermodal Business</a> appeared first on <a href="https://www.dantranscon.com">DG&amp;A Freight Consultants</a>.</p>
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		<title>Understanding the Canadian Freight Market – Part 4 – Cross-Border Freight Transportation</title>
		<link>https://www.dantranscon.com/understanding-the-canadian-freight-market-part-4-cross-border-freight-transportation/</link>
		
		<dc:creator><![CDATA[Dan Goodwill]]></dc:creator>
		<pubDate>Fri, 29 Jul 2016 18:34:04 +0000</pubDate>
				<category><![CDATA[NAFTA]]></category>
		<category><![CDATA[Canadian freight market]]></category>
		<category><![CDATA[Canadian truckers]]></category>
		<category><![CDATA[intermodal]]></category>
		<category><![CDATA[LTL]]></category>
		<category><![CDATA[Truckload]]></category>
		<guid isPermaLink="false">https://www.dantranscon.com/understanding-the-canadian-freight-market-part-4-cross-border-freight-transportation/</guid>

					<description><![CDATA[<p>The last blog in this series examined road and rail transportation within Canada; this blog will focus cross-border freight transportation. Please note that there are a set of processes and procedures (http://www.dantranscon.com/index.php/blog?view=entry&#38;id=241 ) that must be followed in order to move goods successfully between the United States and Canada. Please refer to the second blog [&#8230;]</p>
<p>The post <a href="https://www.dantranscon.com/understanding-the-canadian-freight-market-part-4-cross-border-freight-transportation/">Understanding the Canadian Freight Market – Part 4 – Cross-Border Freight Transportation</a> appeared first on <a href="https://www.dantranscon.com">DG&amp;A Freight Consultants</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p style="text-align: center;"><img fetchpriority="high" decoding="async" title="b2ap3_thumbnail_trucks_-ambassador_bridge.jpg" src="https://www.dantranscon.com/wp-content/uploads/2016/07/b2ap3_thumbnail_trucks_-ambassador_bridge.jpg" alt="b2ap3_thumbnail_trucks_-ambassador_bridge.jpg" width="464" height="348"></p>
<p style="text-align: justify;">The last blog in this series examined road and rail transportation within Canada; this blog will focus cross-border freight transportation. Please note that there are a set of processes and procedures (http://www.dantranscon.com/index.php/blog?view=entry&amp;id=241 ) that must be followed in order to move goods successfully between the United States and Canada. Please refer to the second blog in this series for details.</p>
<p><strong>LTL Service </strong></p>
<p>It should first be noted that only a small number of American LTL carriers have a network of terminals across Canada. Con-Way, FedEx Freight, YRC Reimer and ABF service the major points in Central and Western Canada. They work with interline carriers to service the remaining points in each province and territory. There are no Canadian LTL carriers that have extensive LTL networks in the United States. While some Canadian LTL carriers have terminals in selected US locations (i.e. Chicago, Los Angeles), most LTL carriers work with partners on the other side of the border.</p>
<p>The following chart displays the logos of some of the major LTL carriers that service the cross-border freight market.</p>
<p><img decoding="async" style="display: block; margin-left: auto; margin-right: auto;" title="b2ap3_thumbnail_Cross-Border-LTL-Carriers.jpg" src="https://www.dantranscon.com/wp-content/uploads/2016/07/b2ap3_thumbnail_Cross-Border-LTL-Carriers.jpg" alt="b2ap3_thumbnail_Cross-Border-LTL-Carriers.jpg" width="516" height="290"></p>
<p>&nbsp;The following is a list of some of the more well-known LTL carrier partnerships.</p>
<p>o R &amp; L Carriers partners with Day &amp; Ross</p>
<p>o Estes Express partners with TST Overland Express</p>
<p>o Old Dominion partners with Speedy Transport</p>
<p>o Canadian Freightways and Kingsway Transport are part of the Reliance Network (Averitt, Pitt-Ohio, Lakeville)</p>
<p>o A Duie Pyle partners with Midland and Concord Transportation</p>
<p>o New England Motor Freight has just partnered with Dicom Freight</p>
<p>Some carriers form marketing partnerships with their cross-border carrier or carriers; others are operating partnerships. When carriers form true marketing partnerships, there are annual and/or regular sales training meetings for the respective sales teams, sales lead exchanges and computer system integration. In the case of operating partnerships, they are designed to exchange freight on certain moves. In these situations, Canadian and American carriers may actually use different partners on various freight moves.</p>
<p>The following charts display some marketing partnerships that have been in place for some time. In the case of regional LTL carriers in both countries, some are part of extended partner networks that serve large geographical areas (i.e. Reliance Network) while others may serve limited geographic areas.</p>
<p><img decoding="async" style="display: block; margin-left: auto; margin-right: auto;" title="b2ap3_thumbnail_Midlands-Transport-Partners.jpg" src="https://www.dantranscon.com/wp-content/uploads/2016/07/b2ap3_thumbnail_Midlands-Transport-Partners.jpg" alt="b2ap3_thumbnail_Midlands-Transport-Partners.jpg" width="566" height="327"></p>
<p>&nbsp;</p>
<p><img loading="lazy" decoding="async" style="display: block; margin-left: auto; margin-right: auto;" title="b2ap3_thumbnail_The-Reliance-Network.jpg" src="https://www.dantranscon.com/wp-content/uploads/2016/07/b2ap3_thumbnail_The-Reliance-Network.jpg" alt="b2ap3_thumbnail_The-Reliance-Network.jpg" width="695" height="396"></p>
<p>Since the cost of establishing an extensive American LTL network is prohibitive for most Canadian carriers, some companies choose to operate with a skeleton group of US-based terminals or without any US terminals. These partial truckload carriers serve designated areas of the United States (i.e. northeast, Carolinas/Georgia) and move multi pallet, quarter load, half load or full load shipments.</p>
<p><strong>Truckload Transportation </strong></p>
<p>Truckload freight moves between the countries via road and rail. The chart below displays the names of some of the major cross-border truckload carriers.</p>
<p><img loading="lazy" decoding="async" style="display: block; margin-left: auto; margin-right: auto;" title="b2ap3_thumbnail_Cross-Border-Truckload-Carriers.jpg" src="https://www.dantranscon.com/wp-content/uploads/2016/07/b2ap3_thumbnail_Cross-Border-Truckload-Carriers.jpg" alt="b2ap3_thumbnail_Cross-Border-Truckload-Carriers.jpg" width="574" height="337"></p>
<p>Note that the chart displays a range of American and Canadian truckload companies. Shippers need to check on the preferred service areas for the truckload carriers that they select. It is common for many carriers to have more freight density in certain geographic areas and less in others.</p>
<p>The railways and intermodal marketing companies can arrange for the movement of cross-border carload and/or intermodal transportation. As on domestic shipments, intermodal transportation is most cost effective on lengths of haul 750 to 1000 miles or more. The two class 1 Canadian railways work with the major class 1 railways in the United States to perform cross-border rail transportation for the points they don’t serve on a direct basis. For more information on Canada’s two major railways, see the previous blog.</p>
<p>As outlined in the first blog in this series, Canada is large land mass with limited population. As a result, Canada’s two class 1 railways, along with the country’s short line carriers, play a very important role in meeting the needs of Canada’s freight industry.</p>
<p><strong>Small Parcel Carriers </strong></p>
<p>The major American and Canadian small parcel carriers service the cross-border market. The chart below contains the major players in this segment.</p>
<p><img loading="lazy" decoding="async" style="display: block; margin-left: auto; margin-right: auto;" title="b2ap3_thumbnail_Cross-Border-Courier-Companies.jpg" src="https://www.dantranscon.com/wp-content/uploads/2016/07/b2ap3_thumbnail_Cross-Border-Courier-Companies.jpg" alt="b2ap3_thumbnail_Cross-Border-Courier-Companies.jpg" width="549" height="310"></p>
<p><strong>Canadian Ports</strong></p>
<p>Canada’s National Ports System consists of 18 ports that handle 50% of the country’s shipping volumes. The Great Lakes/St. Lawrence inland waterway system from the Atlantic Ocean to the heartland of the United States is an important trade corridor that serves 15 major international ports and 50 regional ports on both sides of the Canada/U.S. border. Port Metro Vancouver, Montreal, Halifax and Prince Rupert, BC are the top 4 Canadian ports. The ports connect with major rail and road networks to facilitate the movement of freight between the countries.</p>
<p><strong>Consulting and Freight Management Companies </strong></p>
<p>For shippers that need assistance moving freight between the countries, they can use the services of consulting companies like ours or contract with a freight management company. These companies vary in capabilities and resources. The chart below displays some companies that have offices in Canada. Shippers need to do their due diligence to select companies that match up with their requirements.</p>
<p><img loading="lazy" decoding="async" style="display: block; margin-left: auto; margin-right: auto;" title="b2ap3_thumbnail_Freight-Management-Companies.jpg" src="https://www.dantranscon.com/wp-content/uploads/2016/07/b2ap3_thumbnail_Freight-Management-Companies.jpg" alt="b2ap3_thumbnail_Freight-Management-Companies.jpg" width="590" height="327"></p>
<p><strong>Pricing Issues</strong></p>
<p>Small parcel pricing in Canada is similar to the US in the sense that there are rates for various time specific services. Cross-border LTL rates may be based on the National Motor Freight Classification (NMFC) system that is still widely employed in America or pallet rates that are tied to commodity and density (pounds per cubic foot). Truckload rates are similar (i.e. flat rate, rate per mile) in structure to American rates.</p>
<p>Fuel surcharges are different in Canada. The Freight Carriers Association fuel surcharge formulas, the industry standard, are published weekly. Fuel surcharges vary by mode and by whether the freight is moving domestically within Canada or cross-border. Note that for larger shippers, it is reasonable to negotiate a discount off the published fuel surcharge.</p>
<p>&nbsp;</p>
<p>If you need assistance in serving the Canadian or cross-border market, contact me at <strong>dan@dantranscon.com</strong>. To stay up to date on <strong>Best Practices in Freight Management</strong>, follow me on <strong>Twitter @DanGoodwill,</strong> join the<strong> Freight Management Best Practices</strong> group on <strong>LinkedIn</strong> and subscribe to <strong>Dan’s Transportation Newspaper</strong> (http://paper.li/DanGoodwill/1342211466). To learn more about the Canadian freight market, come to the <strong>2016 Surface Transportation Summit</strong> (www.surfacetransportationsummit.com ) on October 13.</p>
<p>The post <a href="https://www.dantranscon.com/understanding-the-canadian-freight-market-part-4-cross-border-freight-transportation/">Understanding the Canadian Freight Market – Part 4 – Cross-Border Freight Transportation</a> appeared first on <a href="https://www.dantranscon.com">DG&amp;A Freight Consultants</a>.</p>
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		<title>Understanding the Canadian Freight Market – Part 3 – Intra-Canada Freight Transportation</title>
		<link>https://www.dantranscon.com/understanding-the-canadian-freight-market-part-3-intra-canada-freight-transportation/</link>
		
		<dc:creator><![CDATA[Dan Goodwill]]></dc:creator>
		<pubDate>Fri, 22 Jul 2016 20:08:42 +0000</pubDate>
				<category><![CDATA[Best Practices in Freight Management]]></category>
		<category><![CDATA[Canadian freight market]]></category>
		<category><![CDATA[Canadian truckers]]></category>
		<category><![CDATA[intermodal]]></category>
		<category><![CDATA[LTL]]></category>
		<category><![CDATA[Truckload]]></category>
		<guid isPermaLink="false">https://www.dantranscon.com/understanding-the-canadian-freight-market-part-3-intra-canada-freight-transportation/</guid>

					<description><![CDATA[<p>This blog will focus on road and rail transportation within Canada; the next blog will look at cross-border freight transportation. Rail Transportation As outlined in the first blog in this series, Canada is large land mass with limited population. As a result, Canada’s two class 1 railways, along with the country’s short line carriers, play [&#8230;]</p>
<p>The post <a href="https://www.dantranscon.com/understanding-the-canadian-freight-market-part-3-intra-canada-freight-transportation/">Understanding the Canadian Freight Market – Part 3 – Intra-Canada Freight Transportation</a> appeared first on <a href="https://www.dantranscon.com">DG&amp;A Freight Consultants</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p style="text-align: center;"><img decoding="async" title="b2ap3_thumbnail_dreamstime_xl_9042412.jpg" src="https://www.dantranscon.com/wp-content/uploads/2016/07/b2ap3_thumbnail_dreamstime_xl_9042412.jpg" alt="b2ap3_thumbnail_dreamstime_xl_9042412.jpg"></p>
<p>This blog will focus on road and rail transportation within Canada; the next blog will look at cross-border freight transportation.</p>
<p><strong>Rail Transportation </strong></p>
<p>As outlined in the first blog in this series, Canada is large land mass with limited population. As a result, Canada’s two class 1 railways, along with the country’s short line carriers, play a very important role in meeting the needs of Canada’s freight industry. The networks of Canada’s two major railways, CN and CP, appear below.</p>
<p>CN Rail is a tri-coastal railway. It connects Canada’s major ports in Eastern Canada to the ports of Vancouver and Prince Rupert, BC, and the major cities in between and then goes through Chicago, IL all the way down to New Orleans, LA on the Gulf of Mexico. CN connects to the major American class 1 railways to supply cross-border service for the points that it does not serve on a direct basis.</p>
<p style="text-align: justify;">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<strong> &nbsp; CN Rail Network</strong></p>
<p><img decoding="async" style="display: block; margin-left: auto; margin-right: auto;" title="b2ap3_thumbnail_CN-Rail-Network_20160722-161800_1.jpg" src="https://www.dantranscon.com/wp-content/uploads/2016/07/b2ap3_thumbnail_CN-Rail-Network_20160722-161800_1.jpg" alt="b2ap3_thumbnail_CN-Rail-Network_20160722-161800_1.jpg"></p>
<p>&nbsp;</p>
<p>CP Rail connects Central Canada to Western Canada. It links through to Atlantic Canada on an interline basis. It also serves certain US markets in the northern and northeastern USA. Like CN, it has interline arrangements with the American class 1 railways to prove cross-border service.</p>
<p style="text-align: justify;">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; <strong>CP Rail Network</strong></p>
<p><img loading="lazy" decoding="async" style="display: block; margin-left: auto; margin-right: auto;" title="b2ap3_thumbnail_CP-Rail-Network_20160722-161955_1.jpg" src="https://www.dantranscon.com/wp-content/uploads/2016/07/b2ap3_thumbnail_CP-Rail-Network_20160722-161955_1.jpg" alt="b2ap3_thumbnail_CP-Rail-Network_20160722-161955_1.jpg" width="501" height="199"></p>
<p>The two railways have truly national networks that link Canada in a unique way. They supply a range of equipment &#8211; &#8211; &#8211; grain cars, tanker cars, pulp and paper cars, domestic and international containers &#8211; &#8211; &#8211; to meet the needs of a broad range of industries in Canada. They move carloads, full container loads and LTL loads for shippers and freight forwarding companies. Both companies have gone through major management transformations over the past twenty years and are lean, efficient operations. Shippers wishing to serve the Canadian market must consider how to make best use of rail service in their operations.</p>
<p><strong>LTL Service </strong></p>
<p>The US market is served by a number of national LTL carriers that have operations throughout the United States. It also has a number of high quality regional carriers that serve a block of states in various parts of America. The Canadian market is somewhat different.</p>
<p>Day &amp; Ross is the only LTL carrier that has operations in all 10 provinces and has a national network. However, Day &amp; Ross only serves Western Canada via an over the road service. Manitoulin Transport also has an extensive LTL network but works with a partner carrier in Atlantic Canada. The TransForce Group has the largest stable of LTL carriers, with multiple carriers serving specific geographic regions. However, it does not have one national LTL network and works with a partner in Atlantic Canada. Shippers seeking to pick up and/or deliver LTL freight within Canada must be fully aware of their vendor and customer locations and pull together the appropriate mix of LTL carriers to meet their requirements. As highlighted in the first blog in this series, Canada is made up of a group of regions. Each region is served by a unique set of LTL carriers.</p>
<p>The chart below displays some of the major LTL players serving Atlantic Canada. It should be noted that the Armour Transportation Group is an independent company and not affiliated with any specific Canadian or US carrier. They have one of the more extensive terminal networks in Atlantic Canada. As a result, they are the pick-up and distribution LTL agent for over 20 Canadian and US carriers. Day &amp; Ross and Midland Transport, each part of major Canadian conglomerates, also have extensive terminal networks in the region and have partnerships with specific American carriers. The other carriers in the chart offer service between Central and Atlantic Canada and serve mostly the larger urban areas in the four provinces.</p>
<p><img decoding="async" style="display: block; margin-left: auto; margin-right: auto;" title="b2ap3_thumbnail_Atlantic-Canada-LTL-Carriers_20160722-162122_1.jpg" src="https://www.dantranscon.com/wp-content/uploads/2016/07/b2ap3_thumbnail_Atlantic-Canada-LTL-Carriers_20160722-162122_1.jpg" alt="b2ap3_thumbnail_Atlantic-Canada-LTL-Carriers_20160722-162122_1.jpg"></p>
<p>The province of Quebec is another distinct market. Some companies serve only the major cities, Montreal and Quebec City, or specific regions in the province, while others have more extensive networks. TST Overland Express and Kingsway Transport are both TransForce companies. Most of the other companies, excluding Day &amp; Ross, Midland and Manitoulin, are independent, family run businesses. Shippers seeking to serve customers in Quebec should verify the scope of their carriers’ networks and the service levels to your customer locations.</p>
<p><img decoding="async" style="display: block; margin-left: auto; margin-right: auto;" title="b2ap3_thumbnail_Quebec-LTL-Carriers_20160722-162211_1.jpg" src="https://www.dantranscon.com/wp-content/uploads/2016/07/b2ap3_thumbnail_Quebec-LTL-Carriers_20160722-162211_1.jpg" alt="b2ap3_thumbnail_Quebec-LTL-Carriers_20160722-162211_1.jpg"></p>
<p>Ontario is the largest market in Canada and is well served by a range of LTL carriers. Most LTL carriers have good coverage of the key markets (i.e. Toronto, Hamilton, London, Kitchener/Cambridge, Waterloo). Shippers need to check on coverage and service levels to the Niagara Region/Buffalo, NY, Windsor/Detroit, MI, Eastern Ontario (i.e. Belleville to Cornwall and Ottawa) and Northern Ontario (i.e. Thunder Bay, Sudbury etc.).</p>
<p><img decoding="async" style="display: block; margin-left: auto; margin-right: auto;" title="b2ap3_thumbnail_Ontario-LTL-Carriers_20160722-162301_1.jpg" src="https://www.dantranscon.com/wp-content/uploads/2016/07/b2ap3_thumbnail_Ontario-LTL-Carriers_20160722-162301_1.jpg" alt="b2ap3_thumbnail_Ontario-LTL-Carriers_20160722-162301_1.jpg"></p>
<p>Western Canada consists of four provinces (Manitoba, Saskatchewan, Alberta and British Columbia) and three territories. There are three levels of service from Central Canada to the Western Provinces. They are intermodal service, regular over the road service and expedited (team driver) service. Note that each service has its own rate schedule and transit times. Some carriers only offer one level of service while others offer multiple levels of service. For some shippers, having multiple service levels is an important consideration selecting an LTL carrier. It is also worth noting that some carriers only serve the major cities (i.e. Calgary, Edmonton) but do not go directly to the smaller locations. Some of the major carriers appear in the chart below.</p>
<p><img decoding="async" style="display: block; margin-left: auto; margin-right: auto;" title="b2ap3_thumbnail_Western-Canada-LTL-Carriers_20160722-162403_1.jpg" src="https://www.dantranscon.com/wp-content/uploads/2016/07/b2ap3_thumbnail_Western-Canada-LTL-Carriers_20160722-162403_1.jpg" alt="b2ap3_thumbnail_Western-Canada-LTL-Carriers_20160722-162403_1.jpg"></p>
<p>There are several small regional LTL carriers that serve specific areas within one or more western provinces. Shippers should check on the location of their vendors and customers in creating their Western Canada LTL network. For shippers that can utilize intermodal service, they should pay attention to service days and ship consolidated LTL shipments (i.e. consolidate LTL shipments from Toronto to Vancouver on Wednesday, Thursday and Friday and move them on Fridays) to minimize shipping costs.</p>
<p><strong>Truckload Service </strong></p>
<p>There are truckload carriers of all sizes and quality levels in Canada. Most Canadian truckload carriers focus on specific geographical areas (i.e. Windsor to Quebec City corridor, Atlantic Canada &#8211; northeastern USA – Central Canada triangle). Shippers need to do their due diligence on their truckload carriers and make a determination as to which ones have the coverage, service, capacity and rates to meet their specific needs. Shippers should be aware that American truckload carriers without proper operating authorities are not permitted to move truckload shipments within Canada. This is known as cabotage. Below are a number of major Canadian truckload carriers that provide at least dry van truckload service.</p>
<p><img decoding="async" style="display: block; margin-left: auto; margin-right: auto;" title="b2ap3_thumbnail_Domestic-Truckload-Carriers_20160722-162509_1.jpg" src="https://www.dantranscon.com/wp-content/uploads/2016/07/b2ap3_thumbnail_Domestic-Truckload-Carriers_20160722-162509_1.jpg" alt="b2ap3_thumbnail_Domestic-Truckload-Carriers_20160722-162509_1.jpg"></p>
<p>Some of these companies and a variety of other Canadian carriers provide refrigerated, bulk and/or heavy haul services. Most major truckload carriers provide both domestic and cross-border services.</p>
<p><strong>Small Parcel Carriers </strong></p>
<p>Some small parcel carriers service specific areas within Canada (i.e. Midland serves Central and Atlantic Canada, Dicom serves Quebec and Ontario). Some carriers focus on heavier weight parcels (i.e. Nationex), health care products (i.e. ATS), pre-8:00 AM deliveries (i.e. Cardinal) or same day service (I.e. Dynamex). Purolator, Canada’s largest national small parcel carrier competes with FedEx, DHL and UPS in Canada for domestic Canada courier shippers.</p>
<p><img decoding="async" style="display: block; margin-left: auto; margin-right: auto;" title="b2ap3_thumbnail_Domestic-Courier-Companies_20160722-162553_1.jpg" src="https://www.dantranscon.com/wp-content/uploads/2016/07/b2ap3_thumbnail_Domestic-Courier-Companies_20160722-162553_1.jpg" alt="b2ap3_thumbnail_Domestic-Courier-Companies_20160722-162553_1.jpg"></p>
<p><strong>Pricing Issues</strong></p>
<p>Small parcel pricing in Canada is similar to the US in the sense that there are rates for various time specific services. LTL pricing is different. Canada does not use the National Motor Freight Classification (NMFC) system that is still widely employed in America. Canadian LTL rates are based on commodity and density (pounds per cubic foot). Truckload rates are similar (i.e. flat rate, rate per mile) in structure to American rates.</p>
<p>Fuel surcharges are different in Canada. The Freight Carriers Association fuel surcharge formulas, the industry standard, are published weekly. Fuel surcharges vary by mode and whether the freight is moving domestically within Canada or cross-border. Note that for larger shippers, it is reasonable to negotiate a discount off the published fuel surcharge.</p>
<p>&nbsp;</p>
<p>If you need assistance in serving the Canadian or cross-border market, contact me at dan@dantranscon.com. To stay up to date on <strong>Best Practices in Freight Management</strong>, follow me on <strong>Twitter @DanGoodwill</strong>, join the <strong>Freight Management Best Practices</strong> group on <strong>LinkedIn</strong> and subscribe to <strong>Dan’s Transportation Newspaper</strong> (http://paper.li/DanGoodwill/1342211466). To learn more about the Canadian freight market, come to the <strong>2016 Surface Transportation Summit</strong> (www.surfacetransportationsummit.com ) on October 13 (#sts16).</p>
<p>The post <a href="https://www.dantranscon.com/understanding-the-canadian-freight-market-part-3-intra-canada-freight-transportation/">Understanding the Canadian Freight Market – Part 3 – Intra-Canada Freight Transportation</a> appeared first on <a href="https://www.dantranscon.com">DG&amp;A Freight Consultants</a>.</p>
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		<title>Crafting an Effective Intermodal Utilization Strategy</title>
		<link>https://www.dantranscon.com/crafting-an-effective-intermodal-utilization-strategy/</link>
		
		<dc:creator><![CDATA[Dan Goodwill]]></dc:creator>
		<pubDate>Fri, 06 May 2016 20:01:21 +0000</pubDate>
				<category><![CDATA[Intermodal]]></category>
		<category><![CDATA[Freight]]></category>
		<category><![CDATA[freight cost savings]]></category>
		<category><![CDATA[freight transportation]]></category>
		<category><![CDATA[intermodal]]></category>
		<category><![CDATA[Rail]]></category>
		<guid isPermaLink="false">https://www.dantranscon.com/crafting-an-effective-intermodal-utilization-strategy/</guid>

					<description><![CDATA[<p>Back in the 90s, I had the privilege of leading Canada’s largest Intermodal Marketing Company. Since that time, I have been a big supporter of this service. In our consulting work with shippers, we are often struck by the fact that this service remains undervalued and underutilized. The purpose of this blog is to challenge [&#8230;]</p>
<p>The post <a href="https://www.dantranscon.com/crafting-an-effective-intermodal-utilization-strategy/">Crafting an Effective Intermodal Utilization Strategy</a> appeared first on <a href="https://www.dantranscon.com">DG&amp;A Freight Consultants</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p><img loading="lazy" decoding="async" style="display: block; margin-left: auto; margin-right: auto;" title="b2ap3_thumbnail_dreamstime_m_52127653.jpg" src="https://www.dantranscon.com/wp-content/uploads/2016/05/b2ap3_thumbnail_dreamstime_m_52127653.jpg" alt="b2ap3_thumbnail_dreamstime_m_52127653.jpg" width="503" height="253"></p>
<p>Back in the 90s, I had the privilege of leading Canada’s largest Intermodal Marketing Company. Since that time, I have been a big supporter of this service. In our consulting work with shippers, we are often struck by the fact that this service remains undervalued and underutilized. The purpose of this blog is to challenge shippers to revisit and rethink their company’s intermodal activity and help them craft an effective plan within their supply chain strategy.</p>
<p>While intermodal service provides various benefits, the top advantage is that on longer lengths of haul (i.e. over 1000 miles), it typically costs less than over the road truckload service. While transit times are longer in some (but not all) instances, the economies of moving multiple containers on an intermodal train usually provide shippers with a cost advantage. When compared to truck transport, lower fuel surcharges and less exposure to driver shortages are also beneficial.</p>
<p>Over the past decade, all of the class 1 railroads in North America have invested heavily in their Intermodal terminal network and service offerings. As an example, a few years ago, CN Rail built a rail facility in Prince Rupert, British Columbia, the closest North American port to Asia. That port allows for the movement of intermodal containers on a single-line CN train from Prince Rupert across Canada or through Chicago as far south as New Orleans, LA. Here are a few steps to consider in preparing an effective intermodal strategy.</p>
<p><strong>Step 1 – Revisit your vendor and customer service requirements </strong></p>
<p>Every shipper should revisit their inbound and outbound supply chains, as a minimum, on an annual basis. Using a map that displays vendor and customer locations, and annual freight volumes, each shipper should make a determination as to where Intermodal service can fit within their business. Start with all moves that are 500 miles or more in length. In our discussions with customers, the most frequently mentioned impediment to increased Intermodal utilization is service consistency or transit times. This should trigger a set of questions.</p>
<p>If inbound products are going into inventory, why is intermodal service not viable? If the products are needed on a timely basis, can orders be placed earlier? Similarly on the customer delivery side, when was the last time Sales spoke to customers about delivery cycles? Would it make business sense to send full truckloads of product via Intermodal service to a DC in the customer’s area? Can some customers place their orders earlier or place larger orders so full container intermodal service can be provided? Don’t overlook opportunities to create round trips, where possible.</p>
<p>In Canada, intermodal LTL service is very well accepted to and from Central Canada and Western Canada and Atlantic Canada. Make sure you evaluate both less than truckload and truckload conversion opportunities. As part of this exercise, push back and challenge the responses you receive from the naysayers. The deliverable out of this task should be a grid that displays potential intermodal/over the road trade-offs.</p>
<p><strong>Step 2 – Perform Due Diligence </strong></p>
<p>Search out and interview the intermodal service providers in your area. If there aren’t too many in your area, do a Google search. Invite them to meet with you, preferably in person, explain the evaluation you are performing and ask them to provide an overview of the services that they provide. Query them on whether they have their own assets (containers and chassis) or not. IMCs with assets should receive priority. Ask them to supply you with transit times and rates on all of the lanes in your grid. If you are conducting an annual bid, ask for IMCs, LTL and truckload carriers to submit quotes on multiple services (if they offer more than one). This will allow you to draw meaningful comparisons on rates and transit times.</p>
<p><strong>Step 3 &#8211; Understand where Intermodal Service Fits Best </strong></p>
<p>Armed with this data, you are able to go back to Sales or Purchasing and present them with the potential cost savings of making a switch. When we perform this process for our clients and present the data to their leadership team, they are often surprised by the potential savings. This serves as a strong motivator for them to challenge their management teams to improve their bottom lines.</p>
<p><strong>Step 4 – Create and Implement your Intermodal Negotiating Strategy </strong></p>
<p>Use your shipping data and the IMC overviews to lever your volumes as effectively as possible. To get an IMC’s attention, you need to present them with significant load volumes. They won’t get to excited if you only have onesies or twosies to offer. Any time you make a change, run a trial. You will need to prove that the IMC can supply the promised service levels. You will also need buy-in from the vendor or customer. Often they will be waiting for the service provider to fail. Before making a full conversion, monitor pick-up and delivery performance and transit times. When you see the consistency and your customers are happy, you are then ready to make the switch.</p>
<p><strong>Step 5 – Plan Ahead </strong></p>
<p>As you progress through this exercise, you will learn the jargon and business of Intermodal service and become familiar with drayage, asset versus non-asset based providers, chassis etc. This should stimulate thought about how your business could possibly change or evolve in the future. Think about where the closest intermodal terminals are located. Think about whether or not your company is planning to consolidate factories or warehouses and where these are located vis-à-vis intermodal facilities. In other words, as you progress with your utilization and familiarity with the service, you can begin thinking about how intermodal service can be an even more pivotal part of your supply chain strategy. Perform this exercise annually to ensure you optimize on where intermodal services (and other services) fit best within your company.</p>
<p>&nbsp;</p>
<p>In you need help in performing this type of assessment, contact <strong>dan@dantranscon.com</strong>. To stay up to date on<strong> Best Practices in Freight Management</strong>, follow me on<strong> Twitter @DanGoodwill, </strong>join the<strong> Freight Management Best Practices </strong>group on<strong> LinkedIn</strong> and subscribe to <strong>Dan’s Transportation Newspaper</strong> (http://paper.li/DanGoodwill/1342211466).</p>
<p>The post <a href="https://www.dantranscon.com/crafting-an-effective-intermodal-utilization-strategy/">Crafting an Effective Intermodal Utilization Strategy</a> appeared first on <a href="https://www.dantranscon.com">DG&amp;A Freight Consultants</a>.</p>
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		<title>Best Practices in Intermodal Transportation</title>
		<link>https://www.dantranscon.com/best-practices-in-intermodal-transportation/</link>
		
		<dc:creator><![CDATA[Dan Goodwill]]></dc:creator>
		<pubDate>Wed, 05 Mar 2014 22:39:31 +0000</pubDate>
				<category><![CDATA[Intermodal]]></category>
		<category><![CDATA[Business Strategy]]></category>
		<category><![CDATA[capacity shortages]]></category>
		<category><![CDATA[Freight]]></category>
		<category><![CDATA[intermodal]]></category>
		<category><![CDATA[Rail]]></category>
		<guid isPermaLink="false">https://www.dantranscon.com/best-practices-in-intermodal-transportation/</guid>

					<description><![CDATA[<p>The term intermodal refers to moving a container or trailer by more than one mode of transportation—generally truck plus rail, ocean plus rail, ocean plus truck, or all three modes. Some recent freight industry trends—such as long-haul trucking capacity shortages, higher fuel costs, and a drive to reduce environmental impact—have sparked new interest in intermodal, [&#8230;]</p>
<p>The post <a href="https://www.dantranscon.com/best-practices-in-intermodal-transportation/">Best Practices in Intermodal Transportation</a> appeared first on <a href="https://www.dantranscon.com">DG&amp;A Freight Consultants</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p>The term intermodal refers to moving a container or trailer by more than one mode of transportation—generally truck plus rail, ocean plus rail, ocean plus truck, or all three modes. Some recent freight industry trends—such as long-haul trucking capacity shortages, higher fuel costs, and a drive to reduce environmental impact—have sparked new interest in intermodal, especially pairing truck and rail as an alternative to over-the-road (OTR) trucking for domestic moves. For many years, shippers were reluctant to use Intermodal service. Memories of poor service, of containers or trailers stuck in a rail yard, coupled with the speed and flexibility of using over the road service on shorter distances, inhibited intermodal growth. That seems to be changing.</p>
<p>The American Association of Railroads is reporting record intermodal volumes in some months. Truck capacity and driver shortages, the investments made by the major railways on many key business corridors, the increasing use of Intermodal long haul service by truckers, along with improved technology are fueling a so-called “rail renaissance.” &#8220;Domestic intermodal is growing much faster than almost any other area of the U.S. economy or industry,&#8221; says Scott Webb, senior vice president at NFI Intermodal, a carrier based in Cherry Hill, N.J.</p>
<p>What are some Best Practices that shippers and Logistics Service Providers can follow to take advantage of Intermodal service? Here are a few tips.</p>
<p><strong>1. Educate yourself on how Intermodal service can benefit your company</strong></p>
<p>Identify the railroads, drayage companies and IMCs (Intermodal Marketing Companies) that service your lanes of traffic. Learn about chassis, trailers and containers and the size and number of the containers (e.g. 20 foot, 40 foot and/or 53 foot) available in your area. Educate yourself on the head haul and back haul requirements of the intermodal providers serving your traffic corridors. Compare the transit times and costs against the over the road options across all lanes. Find out about their closest rail terminal and its hours of operation. Examine the length of haul on your major lanes and the hours of service it will take a driver to move your loads. Will an OTR driver hit the maximum hours of service in a day on some key corridors and then have to take a ”time out?” Would you be able to obtain essentially the same transit time by switching to intermodal service that can be competitive on lanes as short as 450 miles? If you are an import/export shipper, learn more about the locations of ports that serve your major locations. Meet with representatives of these companies, take some terminal tours and review your operational requirements with them. Find out what they can do for you.</p>
<p><strong>2. Study the service levels and transit times on different days of the week</strong></p>
<p>A shipment that departs by truck on a Monday may arrive at destination on Wednesday or Thursday. That same shipment that leaves on a Wednesday or Thursday may arrive at destination on the weekend. If the shipment goes via rail, it may arrive on Monday. In other words, it will be delivered on the same day as the over the road shipment and at a lower cost.</p>
<p><strong>3. Look for consolidation/deconsolidation opportunities </strong></p>
<p>If you are moving multiple LTL shipments each week on various days of the week, look at opportunities to consolidate these shipments and take advantage of the rail option. Your shipments, if consolidated and shipped via Intermodal service may arrive on the same day as truck service and save you money. If you are importing containers from Asia, there may be a possibility of trans-loading the freight from 40 foot containers at a port into 53 foot domestic containers.</p>
<p><strong>4. Ask about Expedited Intermodal Service </strong></p>
<p>On some heavy volume corridors (e.g. Chicago – Los Angeles), the rail service is very comparable with truck service. In fact, some truckers use the rails to provide their line haul service on this and other corridors. Expedited rail service can be the same or one day longer than over the road truck service. Examine the possibility of taking advantage of standard or expedited intermodal service, where it is available.</p>
<p><strong>5. Consider Moving Factories and DCs closer to Rail Terminal</strong>s</p>
<p>The six Class I railroads—BNSF, UP, CSX Corp., Norfolk Southern Corp., and the U.S. operations of Canadian National Inc. and Canadian Pacific Corp.—operate 164 intermodal facilities in the U.S. and 19 in Canada. Locating close to a rail facility can reduce drayage miles, drayage time and drayage costs. Transportation accounts for 40 to 50 percent of a company&#8217;s supply chain costs. By contrast, real estate represents between 4 and 5 percent. The cost of a dray can run as high as $1.75 a mile. A user who negotiated a good deal on the land will find those savings eaten up quickly with each mile they are away from the yard. As you design your supply chain, do your due diligence on real estate and transportation costs.</p>
<p><strong>6. Don’t forget about the NAFTA Corridors </strong></p>
<p>Intermodal service is available between the three NAFTA countries. The major railroads serving Canada and Mexico have invested heavily in moving freight from offshore (e.g. Prince Rupert, Lazaro Cardenas) and cross-border. Check out the services and transit times that are available on your cross-border movements.</p>
<p><strong>7. Put your toe in the water </strong></p>
<p>The best way to learn about a service is to try it. Move some trial shipments via Intermodal service to test the claims of the IMCs and railroads. Speak with your vendors and clients to obtain their input and feedback. Track the on-time service reports that these companies can supply to you. As you gain confidence in the service and start benefitting from the cost savings, look for more conversion opportunities.</p>
<p>There are millions of loads that move over the road in North America that are potential conversion opportunities for Intermodal service. The rails have invested heavily in expanding double stack corridors and are open for business. If you haven’t tried Intermodal service, now is the time.</p>
<p>&nbsp;</p>
<p>To learn more about Best Practices in Transportation, <strong>join the Best Practices in Transportation group on LinkedIn</strong> (http://www.linkedin.com/groups?gid=4357309&amp;mostPopular=&amp;trk=tyah&amp;trkInfo=tas%3Afreight%20management%20best%2Cidx%3A1-1-1)</p>
<p>The post <a href="https://www.dantranscon.com/best-practices-in-intermodal-transportation/">Best Practices in Intermodal Transportation</a> appeared first on <a href="https://www.dantranscon.com">DG&amp;A Freight Consultants</a>.</p>
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		<title>What were the Biggest Freight Transportation Stories of 2013? / What will be the Top Trends in 2014?</title>
		<link>https://www.dantranscon.com/what-were-the-biggest-freight-transportation-stories-of-2013-what-will-be-the-top-trends-in-2014/</link>
		
		<dc:creator><![CDATA[Dan Goodwill]]></dc:creator>
		<pubDate>Sat, 02 Nov 2013 19:13:08 +0000</pubDate>
				<category><![CDATA[Transportation Year in Review]]></category>
		<category><![CDATA[2014 economic forecast]]></category>
		<category><![CDATA[2014 freight forecast]]></category>
		<category><![CDATA[2014 freight volumes]]></category>
		<category><![CDATA[Broker]]></category>
		<category><![CDATA[capacity shortages]]></category>
		<category><![CDATA[Carriers]]></category>
		<category><![CDATA[Consulting]]></category>
		<category><![CDATA[CSA]]></category>
		<category><![CDATA[Dan Goodwill]]></category>
		<category><![CDATA[Dedicated Trucking]]></category>
		<category><![CDATA[Distribution]]></category>
		<category><![CDATA[driver]]></category>
		<category><![CDATA[driver shortages]]></category>
		<category><![CDATA[Facebook]]></category>
		<category><![CDATA[Freight]]></category>
		<category><![CDATA[Freight Capacity]]></category>
		<category><![CDATA[Freight Management]]></category>
		<category><![CDATA[freight rate increases]]></category>
		<category><![CDATA[freight rates,]]></category>
		<category><![CDATA[home delibery]]></category>
		<category><![CDATA[Horizontal Supply Chain Collaboration]]></category>
		<category><![CDATA[intermodal]]></category>
		<category><![CDATA[LinkedIn]]></category>
		<category><![CDATA[LTL]]></category>
		<category><![CDATA[Map-21]]></category>
		<category><![CDATA[peak season]]></category>
		<category><![CDATA[Shipper]]></category>
		<category><![CDATA[Social Media]]></category>
		<category><![CDATA[Social Media in Transportation]]></category>
		<category><![CDATA[TMS]]></category>
		<category><![CDATA[Transportation]]></category>
		<category><![CDATA[Transportation service]]></category>
		<category><![CDATA[truck driver]]></category>
		<category><![CDATA[Truckload]]></category>
		<category><![CDATA[Twitter]]></category>
		<category><![CDATA[US Economy]]></category>
		<category><![CDATA[US Housing Market]]></category>
		<category><![CDATA[US Manufacturing]]></category>
		<category><![CDATA[Warehousing]]></category>
		<guid isPermaLink="false">https://www.dantranscon.com/what-were-the-biggest-freight-transportation-stories-of-2013-what-will-be-the-top-trends-in-2014/</guid>

					<description><![CDATA[<p>At the end of each year, I like to take stock of the major freight transportation stories of the past twelve months and look ahead to the trends that will drive the industry in the coming year.  The two blogs that I write are prepared from my perspective as a consultant to shippers and carriers. [&#8230;]</p>
<p>The post <a href="https://www.dantranscon.com/what-were-the-biggest-freight-transportation-stories-of-2013-what-will-be-the-top-trends-in-2014/">What were the Biggest Freight Transportation Stories of 2013? / What will be the Top Trends in 2014?</a> appeared first on <a href="https://www.dantranscon.com">DG&amp;A Freight Consultants</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p>At the end of each year, I like to take stock of the major freight transportation stories of the past twelve months and look ahead to the trends that will drive the industry in the coming year.  The two blogs that I write are prepared from my perspective as a consultant to shippers and carriers.</p>
<p>This year I would like to hear from you.  Those of you who follow this blog observe trends in your segment of the industry.  Please take a minute to share them with me.  Please post them on this blog or send a private e mail to <a href="mailto:dan@dantranscon.com">dan@dantranscon.com</a>. </p>
<p>Please feel free to select any major trend or trends that are having or will have a major impact on our industry, whether regulatory, economic, technological, demographic, consumer behavior, environmental, modal shifts or business strategy.</p>
<p>To broaden the range of inputs and perspectives, I will also post this request on Facebook, LinkedIn and Twitter.  In the coming weeks I will be preparing my two lists.  The lists will include a blend of my observations and yours.  Look for these two blogs in mid-December.  Thank you to those of you who take the time to share your observations with me.</p>
<p> </p>
<p> </p>
<p> </p>
<p>To stay up to date on the latest developments in the Transportation Industry, you can subscribe to Dan’s Transportation Newspaper that is published 365 days a year. Subscriptions are free.  Click on this link to subscribe. <a href="http://paper.li/DanGoodwill/1342211466">http://paper.li/DanGoodwill/1342211466</a>   </p>
<p>The post <a href="https://www.dantranscon.com/what-were-the-biggest-freight-transportation-stories-of-2013-what-will-be-the-top-trends-in-2014/">What were the Biggest Freight Transportation Stories of 2013? / What will be the Top Trends in 2014?</a> appeared first on <a href="https://www.dantranscon.com">DG&amp;A Freight Consultants</a>.</p>
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		<title>CN Rail and CP Rail – Canada’s two “Precision” Railroads set to Power its Economy</title>
		<link>https://www.dantranscon.com/cn-rail-and-cp-rail-canadas-two-precision-railroads-set-to-power-its-economy/</link>
		
		<dc:creator><![CDATA[Dan Goodwill]]></dc:creator>
		<pubDate>Fri, 09 Nov 2012 19:17:02 +0000</pubDate>
				<category><![CDATA[Rail]]></category>
		<category><![CDATA[CITA Shipper Pulse Survey]]></category>
		<category><![CDATA[CN Rail]]></category>
		<category><![CDATA[CP Rail]]></category>
		<category><![CDATA[Freight]]></category>
		<category><![CDATA[intermodal]]></category>
		<category><![CDATA[NAFTA]]></category>
		<category><![CDATA[Railway Association of Canada]]></category>
		<category><![CDATA[Transportation]]></category>
		<guid isPermaLink="false">https://www.dantranscon.com/cn-rail-and-cp-rail-canadas-two-precision-railroads-set-to-power-its-economy/</guid>

					<description><![CDATA[<p>Pierre Berton, the late, famous Canadian author noted in his book, “The Last Spike,” that CP Rail has held a respected place in the country’s history.  He wrote that “no other private company, with the single exception of Hudson’s Bay Company, has had such an influence on the destinies of the nation.” For most of [&#8230;]</p>
<p>The post <a href="https://www.dantranscon.com/cn-rail-and-cp-rail-canadas-two-precision-railroads-set-to-power-its-economy/">CN Rail and CP Rail – Canada’s two “Precision” Railroads set to Power its Economy</a> appeared first on <a href="https://www.dantranscon.com">DG&amp;A Freight Consultants</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p><span style="font-size: 12pt;">Pierre Berton, the late, famous Canadian author noted in his book, “The Last Spike,” that CP Rail has held a respected place in the country’s history.  He wrote that “no other private company, with the single exception of Hudson’s Bay Company, has had such an influence on the destinies of the nation.” For most of the past 15 years, CP Rail faced stiff competition from CN Rail as Paul Tellier and Hunter Harrison led the company’s move from a bloated government run enterprise to a highly profitable public company.  In fact CN’s operating ratio of 61.3 is not only the best among the major North American railroads, it is one of the best of any company in the transportation industry.</span></p>
<p><span style="font-size: 12pt;">The fact that CP Rail lagged so far behind CN Rail and the other class 1 railways in North America led the activist investor Bill Ackman, of Pershing Square Capital, to launch his “palace revolt” proxy battle that resulted in the replacement of CP’s former President with Hunter Harrison, whom he brought out of retirement to drive the railway’s profit improvement.</span></p>
<p><span style="font-size: 12pt;">As we pass through the last quarter of this year, Canada’s two largest railroads are heading down separate tracks.  With an operating ratio is the low 80’s, Mr. Harrison has embarked on a series of actions to reduce costs through improved asset utilization.  This is another way of saying that CP Rail is planning to move its equipment more quickly and efficiently, to become Canada’s second “precision” railroad.   It is seeking to accomplish this by undertaking a series of initiatives.  These include:</span></p>
<ul>
<li><span style="font-size: 12pt;">Building trains at CP’s intermodal terminal in Vancouver with blocks of cars for long haul destinations. This reduces stops and streamlines connections.</span></li>
<li><span style="font-size: 12pt;">Increasing average train lengths to 7,000 to 12,000 feet</span></li>
<li><span style="font-size: 12pt;">Speeding up the fueling of trains</span></li>
<li><span style="font-size: 12pt;">Improving daily scheduling</span></li>
<li><span style="font-size: 12pt;">Investing $1.2 billion in 2012 and $1 billion in 2013 on key infrastructure projects</span></li>
<li><span style="font-size: 12pt;">Working with customers at both ends to improve coordination</span></li>
</ul>
<p><span style="font-size: 12pt;">The net result of these changes is that CP Rail now provides 4 day transit times between Vancouver and Chicago and Toronto.  These changes represent half of the transcontinental trains that CP launches daily across its network.  Mr. Harrison is not expecting an overnight drop in the company’s operating ratio.  He told Bloomberg News that he is targeting about 65 percent in the next four years.</span></p>
<p><span style="font-size: 12pt;">Shippers appear to be taking notice of improved service on both major Canadian railways.  </span></p>
<p><span style="font-size: 12pt; color: windowtext;">In the 2011 Canadian Industrial Transportation Association Shippers’ Pulse Survey, the respondents gave the railways’ intermodal service a 78 percent favourable rating as compared to 82 percent for LTL and 84.5 percent for truckload.  Carload service was ranked at 70 percent.  These scores are 45 percent better than the ratings in 2009.  The railways’ quality rankings were also up 22 percent as compared to 2010.  </span></p>
<p><span style="color: windowtext; font-size: 12pt;">The railways offer three primary types of services to its customers &#8211; &#8211; unit trains, carload service and intermodal.  Both railroads are positioned to capitalize on trade between NAFTA partners but also trade with Asia and Europe.  Michael Bourque, President and CEO, Railway Association of Canada, highlighted in his presentation at the 2012 Surface Transportation Summit that </span><span style="color: windowtext; font-size: 12pt;">Oil, LNG, shale development (sand, steel pipe, chemicals) are now moving by rail.  This is not just a stop gap measure.  There are many long term contracts now in place alongside pipeline shipments.  The railways can supply capacity and service to a variety of industries.</span></p>
<p><span style="font-size: 12pt;">CN Rail, that already climbed the efficiency mountain under Hunter Harrison, is seeking profit growth from these specific opportunities.  CN is enjoying steady growth through the Port of Prince Rupert, BC, the closest North American port to the Asian market.  The 13% year/year growth in intermodal traffic through this port is helping drive CN’s intermodal volume increase. </span></p>
<p><span style="font-size: 12pt;">It is also planning to capitalize on the boom in commodities, namely iron ore.  It is expecting to invest $3 to $6 billion on infrastructure to service the mines in Sept-Iles, Quebec, on the Gulf of St. Lawrence, in northern Quebec.  Iron ore exports are expected to rise more than 35 percent as China seeks to diversify its sourcing of this key steelmaking ingredient.</span></p>
<p><span style="font-size: 12pt;">With such a high profile and well publicized change in leadership, everyone is expecting big things from Hunter Harrison and CP Rail.  As rail speeds and efficiencies improve, this will open up a larger share of the truck market for conversion to rail service.  With rail being such an energy efficient alternative to road transportation, on longer lengths of haul, we should expect an ongoing series of sales and operations initiatives as both Canadian railways look to capitalize on these opportunities and spur growth in the Canadian economy.</span></p>
<p>The post <a href="https://www.dantranscon.com/cn-rail-and-cp-rail-canadas-two-precision-railroads-set-to-power-its-economy/">CN Rail and CP Rail – Canada’s two “Precision” Railroads set to Power its Economy</a> appeared first on <a href="https://www.dantranscon.com">DG&amp;A Freight Consultants</a>.</p>
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