Loads of New Responsibilities Present Challenges for Inland Terminals

Posted : 01/10/13 9:31 AM

Inland port terminals diversify the US supply chain when it comes to global trade. The escalation of e-commerce sales is impacting Intermodal logistics and taxing ground shipping of companies such as FedEx and UPS. The dedicated railway-to-maritime port component of inland ports alleviates the over-the-road capacity strain on these companies when accessing inbound shipments. With the resurgence and growth of the railroad industry giving rise to augmented rail-to-rail and Intermodal (rail-to-truck) freight capacity systems, dry port terminals have facilitated the circumvention of rising diesel fuel prices and downsizing in the trucking/carrier industry over recent years. Over the last five years, truck carriers such as J. B. Hunt, Werner Enterprises and CRST/Malone (Cedar Rapids Steel Transport’s flatbed division) have cut over-the-road capacity to 15 percent from a previous 12 percent cutback. According to Logistics Management’s September 2012 online issue, price trends for trucking carrier industry specialized services, such as LTL or less-than-truckload, general freight, tanker and other specialized freight services, are declining, down 9 percent just in June and July. Rail industry prices in the first seven months of 2012, conversely, were up 4.9 percent, 2 percent over trucking industry prices for the first 2012 quarter. Rail-to-rail freight shipping is gaining a slight edge over intermodal freight movement, and BNSF (Burlington/Northern/Santa Fe) Railway Co. has taken advantage of this upswing by upgrading its Alliance Global Logistics Hub Intermodal yard in the late ’90s, envisioning the attraction of major retailers to set up distribution centers in the logistics hub of Alliance’s Texas inland port. True to forecast, retail giant JC Penny, consolidating its East/West coast operations, set up a 1.1 million square foot retail distribution center on site. JC Penny’s Alliance, Texas distribution center went fully operational in January 2001. The continued development of US inland port logistics infrastructure must be lockstep with the commercial demands of retail industry giants such as Wal-Mart and Lowes, as well as maintain a competitive edge globally. On the heels of the clerical workers’ strike at US West Coast ports of Long Beach, California and Los Angeles, the maritime labor insurance contracts for the US Gulf and East Coasts’ longshoremen workforce will end Dec. 29. If the labor insurance contract issues are not settled with the longshoremen and port operators, a workforce on strike may be imminent. By year’s end swiftly approaching, an impending strike could have a morbid impact on commerce for major ports throughout the country and bring adversity in all aspects of the global supply chain, from re-routing and hoarding of commodities and services price hedging and inventory depletion.