Archive for May, 2010

TMS Mobile Applications Get Us Closer to Meeting the Rubber on the Road

Sunday, May 23rd, 2010

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Top Five Benefits of ISO Tank Containers vs. OTR Tank Truck

Wednesday, May 19th, 2010

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

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

  1. Greener. The International Tank Container Organisation reported that intermodal tank containers leave a carbon footprint that is almost 50 per cent less than that of an equivalent drummed shipment on certain long-haul routes.  Using intermodal transportation also saves fuel and reduces CO2 emissions by up to 70%, especially on hauls over 950 miles.  This may be a major factor to consider as chemical shippers must find ways to reduce carbon footprint to meet future government mandates.
  2. Safer. On long hauls, OTR tank trucks often must travel through bad weather, causing unsafe driving conditions that lead to accidents and delays.  Vehicles often park at unsecured rest stops and have the potential for mechanical breakdowns. Shipping freight via intermodal using ISO tank containers eliminates these issues.   As containers are marked with a unique BIC code, they can be easily ID’d and tracked.  And even heavy ISO tank containers are unlikely to cause mechanical failure on trains and ships and are safer when in transit.
  3. Cheaper. Using ISO tank containers via intermodal as a mode of transportation instead of OTR can also help save 20 – 30% in transportation costs, depending on distance and volume of freight.
  4. Easy Storage. While ISO tank containers can easily be stored at the consignee, OTR tank trucks often must be returned to their point of origin, which for long hauls may be thousands of miles away. Delivering an ISO tank via intermodal to a consignee is generally a local delivery. No driver layovers!
  5. Greater Flexibility. If the customer decides at the last minute that they want to delay a freight delivery for a couple of days, tanks can be left at a local storage yard. If the load came via OTR truck, the customer would have to take delivery on the scheduled date. Also, as previously noted, one container can transport the same freight by ship, truck and train as part of a single journey without unloading.

Higher Ocean Carrier Rates/Unreliable Service Will Challenge

Wednesday, May 5th, 2010

Last year, ocean freight rates increased dramatically as ocean carriers tried to recover from devastating profit loss.   As carriers reduced capacity by taking vessels out of service, space on existing vessels became very limited.  As a result, shippers had to pay rates higher than contracted to move cargo.  Ocean freight contracts signed in 2009 essentially became worthless.

Market indicators predict that ocean freight rates will continue to rise in 2010.  While capacity is expected to increase slightly, carriers will add capacity only if they see sustained market growth.  Equipment shortages will also challenge shippers, especially those located in Midland America.  That’s because carriers continue to find it more economical to return empty containers to Asia and pick up new cargo rather than allowing those containers to move inland.

In addition to higher rates, carrier on-time performance created problems for shippers in 2009 with on-time delivery reported at a dismal 55%!  Most delays can be explained by service changes and slow steaming as carriers looked to conserve fuel. Continued poor on-time carrier performance may lead to increased inventory or stock outs as variability in delivery increases over the year.

So, for 2010, how will shippers react?  Will they sign long-term contracts or just extend current contracts until the market stabilizes?  Will carriers, again, continue to increase rates or will competitive forces stabilize rates?  My bet is rates will rise and 2010 will again be a year of challenge.