A leading food ingredient company gets on board with intermodal for outstanding results.
A leading food ingredient company “LFIC” was looking to reduce transportation costs in its nondairy creamer product line; however, the company needed a sustainable solution that provided timely, reliable service and safe, secure transport. Yusen Logistics recommended that its customer explore the option of highway to intermodal rail (H2R) conversion to meet its requirements.
Initially, Yusen Logistics’ customers had limited experience with intermodal, and had some concerns converting their traditional truck lanes. After using truck for nearly 20 years, the LFIC and its customers were accustomed to truck transit and service levels. When considering the incorporation of intermodal rail into its supply chain, not only did it need to internally test and endorse intermodal, but also needed to convince its customers to accommodate a new modal selection. Yusen Logistics worked to minimize apprehensions and correct misunderstandings by demonstrating the value of intermodal rail.
With the involvement of CSXT Intermodal, Yusen Logistics successfully helped its customer overcome these challenges and concerns. By converting from highway to intermodal rail, the LFIC was able to reduce its transportation costs, and secure reliable box capacity, all while meeting internal and customer supply chain requirements.
Constructing A Solution:
One of the LFIC’s primary concerns was product protection while in transit, due to the sensitive packaging of nondairy creamer. Yusen Logistics worked with a CSXT Intermodal representative and a third-party dunnage expert, bringing them to meet the LFIC on-site to understand the packaging and shipping requirements for the nondairy creamer product line. After the on-site assessment, CSXT load engineers designed a loading pattern so that the customer could move the product via intermodal rail safely and securely. Together, Yusen Logistics and CSXT Intermodal were able to develop a customized loading solution to meet the LFIC’s shipping requirements.
In response to the LFIC’s other concern, Yusen Logistics demonstrated that intermodal rail could meet the transit requirements of its customers’ supply chain. The high service reliability and predictably of an intermodal solution would allow the LFIC to effectively incorporate intermodal without compromising product delivery to its end customer.
A few test shipments proved intermodal as a viable and predictable transportation solution that would reduce the LFIC’s landed cost on the product by fifty percent.*
“Shippers who use intermodal in the current marketplace – different than some historical experiences – find that the product offers very high service reliability and a good door-to-door experience – very comparable to truck.”
By converting to intermodal rail, Yusen Logistics’ customer was able to achieve transportation cost savings with a sustainable, reliable and secure transportation solution. The LFIC has also enjoyed other benefits as a result of H2R conversion, including additional access to consistent capacity and rate stability. Before converting, the LFIC had to source specialized equipment, making access to capacity problematic, and often incurring additional expense. The shipper was able to rely on committed capacity at a consistent rate level sourced from a single provider for maximizing operational efficiency.
Yusen Logistics noted some key takeaways from the experience, for instance, that success in conversion requires a truly collaborative partnership with both the shipper and rail carrier. Yusen Logistics developed a deliberate and planned approach, leveraging the experience and expertise of the shipper, provider and rail carrier. The Yusen Logistics, CSXT Intermodal and shipper’s partnership resulted in a successful highway to intermodal rail conversion process.
After this successful intermodal conversion for direct-to-customer shipments, Yusen Logistics will assist the LFIC in finding more savings opportunities through H2R conversion, including plant-to-plant moves.
Yusen Logistics encourages all customers to review their shipping network on a regular basis to ensure that they are taking advantage of all H2R opportunities to maximize cost savings and access to scalable capacity, while reducing carbon footprint. Intermodal service offerings continue to expand as the rail industry, including CSXT, is investing in its intermodal network, providing shippers with increased market reach and flexibility.
“The service reliability on the railroads has done nothing but improve over the past few years and is very close to on-time reliability when compared to truck.” — Mike Liantonio,
* Savings are a result of the LFIC both moving away from specialized trailer equipment to standard equipment as well as changing modes to intermodal rail.
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