Morning Reads – Thursday, March 8, 2018

Your mention of Chattanooga highlights a relevant point. Motor carriers are generally superior for transporting containized freight originating or terminating less than 250 miles from a port. Here’s a crude thumbnail explanation. The standard workday is 8 hours and truck drivers driving time is limited by regulation. Entering-being loaded or unloaded-leaving a port can easily run a couple of hours. There’s pick-up/drop-off terminal time at the rail terminal end of the trip too. 250 miles at an average 45 mph travel speed is over 5-1/2 hours. It adds up to a driver-day. Go over that and it’s overtime. Exceed 500 mile range and it can’t reliably occur with one driver, even with overtime. The freight via highway arrives 250 miles away ten hours after it’s available—the same day if the trip begins in the morning.

Using rail say in connection with importation, the container doesn’t leave the rail yard on average for say eight hours after it’s available at the port—trains are leaving port rail yards on the order of four times a day. Two hundred fifty miles by rail requires over 12 hours including train assembly and disassembly at each end. Then there’s unloading and pick time up, and highway transportation from rail terminal to final destination.

Truck haul from rail terminal to final destination, or origin to rail terminal, greatly influences the economy. A couple hours time collectively picking up and dropping off at the rail terminal and a couple hours drive is a half driver-day, so total time via rail approaches two days. Plus an additional transportation mode has been added. Instead of port to truck or vice versa, it’s port-rail-truck or truck-rail-port. My SWAG rule of thumb is the likelihood of trouble varies with the square of the changes in mode-transfers. Double the change in modes and there’s four times the likelihood something “happens”. A more direct transfer example is the SWAG that a checked airline bag is four times less likely to arrive on time with a plane change than a direct flight..

The math is easy. The half-driver day saved by the rail move is not more than offset by lesser rail freight charge and the expense of the transportation taking a day longer. It may not even be a full half driver-day savings since there is logistics in arranging a compeimentary other half of the day work for the driver. An example of an expense of the transportation taking longer is having to have more inventory in a pipeline that is moving slower.

Back to the 500 mile number—by highway it requires two driver days. But rail still requires only one-half driver day, and now three days travel 50% longer than the two days by highway (instead of the 100% time longer at 250 miles, two days vs one). Plus the railroad’s expenses decrease more rapidly with distance than trucks, especially when fuel expense is relatively high.

Note there are no intermodal yards on Atlanta’s southside handling port traffic. Trucks are simply cheaper. Note the warehousing on Atlanta’s south side about fits the 250 mile one day truck range to or from the port. Rail starts to become economical when freight transportation involves the expense of movement through Atlanta.

Relatively few of the total containers that arrive or leave through Georgia ports terminate or originate in Chicago or the Ohio Valley. International container traffic to or from Chicago and Ohio Valley moves through other ports. Very crudely the shorter than land segment the more economical the movement. Lots of particular circumstances distort that generality; port efficiency, capacity, economy and general access, proximity to high service quality rail corridor (an example being NS’ Crescent Corridor—though it’s mainly a domestic freight corridor—http://www.nscorp.com/content/nscorp/en/shipping-options/corridors/crescent-corridor.htmle.ant , etc.

Domestic containers are another story. There’s much more domestic traffic between Georgia and Florida and Chicago and the Ohio Valley than international port traffic to or from those places and Georgia Ports.

I’ll speculate that on the order of one-half of all Savannah Port container traffic originates or terminate in Georgia, Alabama or eastern Tennessee. That’s a point you’re making describing the warehouses near the port serving Georgia or an even broader region.

The container of athletic shoes manufactured in China ended up in Memphis, but not until after it was stored at a Savannah area warehouse for a short while making the warehouse the terminus of the trip. The Savannah-Memphis segment was a separate domestic trip.

To put a point on it, less than one-quarter of the containers leave or enter the port via rail.