Tuesday, September 28, 2010

Trucking, Rail, and other options

In the US, most goods move by truck, rail, or some combination of the two.  It's the most economical option, but for a lot of destinations truck is the only option for final delivery.

LTL: Less than Truck Load - anything from one pallet up to half a truck
FTL: Full Truck Load
Multi-Modal: a shipment that moves one more than one mode of transportation

Rail movements are usually containers, bulk commodities, or sometimes cars.  The days of the boxcar are long gone, but rail moves a lot of freight.  Depending on the routing, your UPS ground package might go on the rail for a couple days.  We're used to containers being used for ocean freight, but there are also containers that are used exclusively for domestic freight.  They can be lifted off their chassis and set on a rail car.

A slight digression - did you know that an ocean container usually has three modes and at least 6 lifts between shipper load and delivery?  An empty container will be delivered by truck on a chassis (the chassis is usually rented from the rail yard), and returned by truck to the yard when it's full.  In the Twin Cities, that means either the BN yard in the Midway area of St. Paul or the CP yard in Northeast Minneapolis.  Once the container gets to the yard, it's lifted off the truck chassis and put on a rail car for its journey to the west coast.  Most of the Pacific ports don't have direct rail service, so the container will be unloaded at another yard and put on a truck chassis again.  From there it gos to the port where it's either consolidated with other containers for the vessel or loaded directly.  This process repeats when it reaches the destination port.

Rail can be booked directly or through a forwarder.  If it's an ocean container, your forwarder will take care of all parts of the booking.  Large shippers (companies like Weyerhauser and Cargill) book direct with the rail companies.  Smaller shippers can book through a forwarder or other broker.

What are your options for trucking?  It depends on how much you're shipping.  LTL is relatively consolidated but FTL is a very fragmented industry.  A lot of the drivers are owner-operators, a lot of the companies are small outfits.

If you want to move a couple pallets (I use the words pallet and skid interchangeably, as far as I can tell there isn't a difference), there are local, regional, and national companies that can take care of it.  Local courier services run dock trucks and they're usually good value.  Regional LTL companies tend to be less expensive than national companies, but their service areas are limited.  YRC and FedEx Freight are two of my favorite national LTL companies in terms of customer service and cost.  These companies also do residential deliveries (if you order furniture online, they're the carrier if it's too big for UPS).  They have trucks with lift gates and also offer different service levels.  Always check service options with customer service or on their website and specify what you want.

More than half a truck (12+ pallets or 26 feet), you're going to need a full truck.  Some companies run their own fleets (Walmart), but outside vendors are the norm.  This is a situation where a freight forwarder probably isn't going to save you money.  Find a truck broker you trust, it'll be worth the time to develop the relationship.  Truck brokers may have access to company-owned trucks, and they work with owner-operators.  They also track drivers' safety records and make sure they meet minimum insurance requirements.

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