Insights - October 2016 - 9

EXPO - from page 7 growth for the East Coast, but we've also said that the pendulum has been swinging for over 10 years." He added that, "Growth will continue to come through the West Coast and East Coast." Wheeled or Grounded Containers The waters aren't just choppy because of Hanjin-created congestion in terminals. Marine and intermodal terminals are looking longer term to support better flows for operations and information. As testament to the importance of these issues, the Wheeled to Grounded panel drew a full room of attendees looking for solutions. "We've struggled with chassis for years.One solution not fully explored is grounded." - Wilby Whitt, president, CSX Intermodal Terminals, Inc. The demands of terminal operations have "put us on a path to automation," said Wilby Whitt, president of CSX Intermodal Terminals, Inc. "We've struggled with chassis for years. One solution not fully explored is grounded," he added. The transition will be incremental, noted Brant Ring of BNSF Railway, but as the railroads wrestle with the right investments in facilities, he continued, "We need to invest ahead of demand." Alongside this transition, according to Whitt, "The missing link is the connection to the customer - communication." Dr. Felix Kasiske of Hamburg Port Consulting responded that, "Information is available, but it is not communicated to the railroad." Adding to the complexity, Jussi Suhonen, sales director at Konecranes, noted that dwell times at marine terminals increase due to customs clearance, but this also allows more time for communication flows to catch up. The panel found consensus in the difficulty change presented, but Ring noted this is an opportunity where IANA can help facilitate the conversation. Voice of the Customer From the shippers' perspective, the goals of improving operations and communications are in line with their top priority, better service. Shippers on the Voice of the Customer panel clearly wanted to increase their use of intermodal. Service will clearly make or break that decision. With service expectations high, Denis Marion, director of transportation in the U.S. for LG, said he plans to shift more freight to intermodal. "Anything that is long haul is going by intermodal, except for time sensitive shipments." But, he said, railroads need to become more transparent and offer real-time reports of transit times. Railroad-driven service failures have resulted in fines up to $10,000 from his company's customers, and those can't be passed back to the railroads. He also expressed frustration with detention charges, which drive up costs, making it harder for him to sell intermodal to his upper management. "We believe shipping intermodal is the way to go, both today and in the future," Ben Ball, director of transportation service for the carpet manufacturer Shaw Industries, joined in. He stressed that railroads need to be more nimble in responding to the e-commerce revolution, which is reshaping the entire supply chain. Although Shaw is a B2B company, this is now a major part of its growth strategy, Ball said, noting that his company recently hired its first e-commerce manager. Shelli Austin, president of IDS Transportation Services, was also supportive. "I'm very much impressed by the improvement in rail service, which is now pretty close to truckload." The gray area is drayage, which needs to become more sophisticated, she said. "With the demands of Just-in-Time we may need to pay these people to deliver the product when you have a delivery window of only 15 minutes." Rise of E-Commerce The Rise of E-Commerce panel looked at the role of intermodal in this high service category with Tom Sanderson, CEO of Transplace, declaring, "I am very bullish on intermodal." Although e-commerce depends on having more distribution centers spread out in areas not directly served by coastal and even inland ports, the rising price of trucking services is making intermodal more attractive. As evidence, Sanderson pointed out that Amazon already is a huge user of intermodal. Steven Van Kirk, executive vice president of intermodal for Swift Transportation Services, said intermodal enjoys unique advantages, but warned that the industry will need to embrace innovative change if it expects to grow its share of the business. "Intermodal is the low-cost solution to delivering to all of these DCs," Van Kirk said. While all retailers have e-commerce strategies, they are all different and change all the time. "It is not a cookie-cutter approach," he said. "We are mode agnostic; it depends on the market," declared Kenneth Buenker, vice president of corporate transportation services for UPS, one of the carriers most heavily involved in e-commerce. He also expects UPS will increase its use of intermodal in e-commerce, observing that "rail sits in the middle of every market we serve." The Regulatory Report There was widespread fear of the impact of the Safety of Life at Sea - SOLAS - weighing requirements, a topic of discussion for the legislative and regulatory panel geared towards business. These turned out to be wildly exaggerated, according to participants Robert Cannizzaro and Jason Craig. "It was similar to Y2K in that it came and went without much of an impact on freight flow," said Cannizzaro, vice president of Hamburg Sud North America. "The difference is that EXPO - continued on page 11 October 2016 | Intermodal Insights 9

Table of Contents for the Digital Edition of Insights - October 2016