Intermodal & Special Carriers

Intermodal & Special Carriers

Intermodal Transportation • Involves the use of 2 or modes of transportation in moving cargo from origin to destination. • Relies primarily upon the use of containerization • Involves the use of standardized box dimensions, hold down devices, & related items. • Allows the same container to be used by water, rail, & motor carriers. • Combines the advantages & disadvantages of each transportation mode used • Motor freight is the most common mode used

Piggyback • Includes the movement of motor carrier trailers on rail flatcars (TOFC) • Typical trailer ranges in length from 28 to 53 feet • Most flatcars can handle up to 2 trailers 40 feet in length • Trailers loaded by driving, crane hoisting, or fork-lift hoisting • And the movement of water carrier containers on flatcars (COFC) • Container come in 2 standard lengths • TEU (20 feet equivalent units) • FEU (40 feet equivalent units) • Typically loaded by crane hoisting • Normally transported on a doublestack car

Piggyback • Water containers may be transported by motor freight carriers • May be loaded on a flatbed trailer (up to 2 FEUs) • RoadRailer® is a new innovation that allows the attachment of special wheel sets • Use of the RoadRailer® allows containers to be used interchangeably with motor & rail freight

Air Intermodal • Standard, rectangular, 40 foot box not used to aircraft limitations • Rather, special containers used • 20 feet long • Roughly 6 feet wide • Rounded top to accommodate aircraft shape • Hydraulic handling equipment used for loading/unloading

Special Carriers • Surface Freight Forwarders • Air Freight Forwarders • Freight Brokers • Shippers’ Associations • Shippers’ Agents & Consolidators • Owner-Operators • Express Services & Courier Services • Household Goods Industry

Surface Freight Forwarders • Recognized as a “carrier” by their customers • Recognized as a “shipper” by the firm providing the transportation services • Now exempt from economic regulation • Must register with the DOT and maintain minimum cargo insurance • Defined as an entity that • offers itself to the general public to provide transportation for compensation in the ordinary course of its business (other than a rail, motor, or water carrier) • And that assumes the responsibility for the transportation from place of receipt (origin) to destination • And that uses the services of another mode • Air freight forwarders are specifically exempted from this definition

Surface Freight Forwarders • Forwarders consolidate small shipments into TL or full carloads • Typically provide local pickup & delivery • Must issue a bill of lading to the shipper • This makes the forwarder responsible for the shipment. • Thus, must maintain liability & cargo insurance • Insurance policy must be on file with the STB • Freight Forwarder Act of 1986 • Removed economic regulation of industry • Allowed it to begin again competing with LTL carriers

Air Freight Forwarders • Operate much in the same way as surface forwarders • Primarily use services of major passenger & freight airlines for long-haul service • Generally used by shippers with high-product-dollar value, high time-sensitivity value, or both. • Allow airlines to focus on terminal-to-terminal service • Provide speed of service • Provide single-carrier, full door-to-door service • Extremely high rates (offset to some extent by 2nd or 3rd day shipment)

Freight Brokers • Function as middlemen between shippers & carriers • Defined as an entity (other than a motor carrier, agent, or employee) that as a principal or agent • Sells, offers for sale, negotiates for, or holds itself out by solicitation, advertisement, or otherwise selling, providing, or arranging • For transportation by motor carrier • Typically represent carriers and seek freight on their behalf • May also represent shippers by seeking carriers • Can provide intermodal services, warehousing, & cross docking • Must post a $10,000 surety bond • Broker bills the shipper & pays the trucker • Bond pays the lost revenue in the event broker fails to do this

Freight Brokers • Differences from freight forwarders • Do not issue bills of lading • Are not required to maintain cargo liability insurance • Most brokers do carry cargo insurance to protect their customers • Represented by the Transportation Intermediaries Association • Services Offered: • Arrangement of service • Verification of trucker’s insurance & safety ratings • Verification of equipment condition • Negotiation of freight transportation prices • Consolidation of LTL and warehousing • Aid truckers in obtaining insurance

Shippers’ Associations • Nonprofit cooperative consolidators • Nonprofit distributors of shipments owned or shipped by member firms • Purpose is to consolidate shipments for line haul • Provide most of the services offered by for-profit freight forwarders • Typically provide by service and lower total transportation costs

Shippers’ Agents & Consolidators • Intermodal Marketing Companies (IMC) • Facilitate or arrange transportation only • Assume little or no legal liability • Legal shipping arrangement is between the shipper & the long-haul carrier • Freight charge payment made to the agent who then pays the carrier • As the name implies, primary role is managing shippers’ intermodal operations

Owner-Operators • Any person who owns or leases a truck & trailer • Who makes his/her equipment & driving services available to for-hire carriers • Essentially, a trucking “free agent” • Typically used on an overflow basis, or • When special-commodity carriers lack the special equipment necessary to haul booked freight

Express & Courier Services • Started by offering fast, door-to-door service for small high-value goods & documents • Have moved aggressively into the LTL market • Typically provide both air & surface transportation

Household Goods Industry • Consists of group of motor carriers specifically organized for the movement of the household goods of people or organizations. • Typically called “van lines” • Charges • Based on weight • Plus additional fees for weekend work, movement of special items (large, heavy, fragile, etc) • Additional fees may increase charges by up to 50% • Industry regulated by the Household Goods Transportation Act of 1980

Household Goods Industry • Central franchise firms • Provide central dispatch to coordinate efficient flow of vehicles • Receive 10% of revenue distribution • Local agencies • Provide terminals for local customer contact & warehouses • Generally provide packing services, pickup vehicles, un/loading labor, & local delivery • Pickup agencies receive 25% of revenue distribution • Delivery agencies receive 15% of revenue distribution • Over-the-road vehicles • Vehicles used to move the household goods that are owned & operated by the local agencies • If local agency vehicles used, receive 50% of revenue distribution • Owner-operators • Provide the vehicles (50% of revenue distribution) • Load, haul, & unload shipments arranged by local agencies & coordinated by the central franchise firms

Household Goods Transportation Act of 1980 • Provides STB with greater jurisdiction over agents & parent firms • Does allow some flexibility in pricing & in services offered • Discounts for seniors • Limited time promotions allowing reduced or free services • Charges by cube rather than weight • Space reservations • Customer allowed to choose levels of service • Binding estimates • Guaranteed delivery dates • Full-value insurance • Volume discounts on line-haul rates & on accessorial services

Intermodal & Special Carriers