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Soft Economy Means Hard Savings

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"That's really where a lot of the intermodal growth is coming from," says Schneider's [Steve Van Kirk]. "They used to say 'just move it to the warehouse and from there 111 load it onto a truck, instead of the raiL'" Now, he says, customers are willing to let them ship it directly to a customer. "It will be cheaper and on time."

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									Soft Economy Means
Hard Savings
G d       f d
Good news for domestic shippers in a bad economy.
                   ti hi        i b d                                                   B Y    B R I A N     S C H I A V O




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         obless claims reach a 16-year high.”      all domestic volume was up an impressive 6.7         modals to see double digit increases in their
         “The Dow Jones Industrial Average         percent. The soft market, it seems, is causing       own reefer businesses.
         drops another 500 points.” “Con-          companies to reconsider transitioning their             “At this point, there really are no large over-
         gress refuses to bail out the faltering   highway freight to intermodal shipping.              the-road reefer carries like there is in the dry
auto industry.”                                       “There are a number of reasons to do so,”         freight arena, where you have large carriers
   Over and over again corporations are bom-       says Steve Branscum, group vice president            like J.B. Hunt and U.S. Express—there are
barded with sour news regarding the U.S.           of consumer products for the Burlington              smaller players, but we are taking business
economy and how a long and sustained reces-        Northern and Santa Fe Railroad (BNSF), Fort          from all of them,” says BNSF’s Branscum.
sion is imminent.                                  Worth, TX. “Among them are highway con-
   However, amid the cries of economic di-         gestion, driver recruiting problems, the fact        Fueling The Fire
saster, there is some good news, at least for      that consumers are eating in more and even              Another reason that companies are switch-
shippers in the food and beverage industry.        the environment. Companies are looking for           ing to intermodal is the high cost of fuel.
This is a great time for domestic intermodal       ways to reduce their carbon footprints.”                “What we’re hearing from our customers
shipping, as well as for companies that export        Another reason is diminishing capacity on         now is that a combination of high fuel costs
their goods overseas.                              the part of truckload carriers. As the economy       and less demand for their products is forcing
   According to the Intermodal Association of      continues to tighten, more and more trucking         them to look at intermodal as an alternative
North America (IANA), domestic intermodal          companies are realizing that they can’t turn a       to over-the-road shipping,” says Steve Weiby,
shipping had its best performance this quar-       profit and are closing their doors.                   vice president of transportation for C.H. Rob-
ter since the second quarter of 2004. This was        “The shippers we’re dealing with, huge            inson Worldwide Inc., a third-party logistics
lead by a strong 10.5 percent rise in domes-       Fortune 500 companies, are reducing their            company located in Eden Prairie, MN. “They
tic containers, which according to the IANA,       carriers to a level they can manage,” says Rich      can save money in longer haul lanes on fuel
made this quarter
								
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