Interesting article on Reuters regarding the growth of intermodal shipping amongst the railroads. Fuel prices and trucking capacity issues are pushing freight onto the railroads:
“Rising costs on the truckload side because of increasing capacity scarcity, higher fuel prices, highway congestion, the increased (trucking) regulatory environment all help promote conversion from truck to rail,”
This got me thinking a little bit. Why don’t the railroads view themselves as full-on logistics companies like UPS, FedEx, and DHL? These logistics companies are also shipping companies… but they transport goods from start to finish. All three of these logistics companies operate their own trucking companies, airlines, and distribution centers. They have mastered the transportation of goods.
When it comes to intermodal the railroads do heavy lifting, but what if they tried to offer a service to also cover the “last mile” of shipping? BNSF ships a good amount for UPS, JB Hunt, Xtra Intermodal, etc. and lets them handle the “last mile”. Is there no money to be made off that last mile? What efficiencies could be brought to the transportation of freight if a railroad like BNSF purchased JB Hunt and provided integrated “door-to-door” service?
It seems like Union Pacific almost gets it:
“We see a possible 11 million truckloads of opportunity, meaning 11 million truckloads we could potentially convert from highway to Union Pacific,” spokesman Thomas Lange said.
The railroad recently bought 5,000 shipping containers, boosting its fleet 9 percent,
Why stop there? Don’t just buy shipping containers. Buy the tractors and trailers and finish the job? Provide fully integrated logistics. I’m sure they’ve looked at this. What am I missing?