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