Intermodal: Schneider National's votes of confidence

By Jeff Stagl, Managing Editor

Schneider National Intermodal has established two “firsts.” Last month, the company chose its first-ever primary East and West Class I carriers. And earlier this year, the Schneider National Inc. subsidiary began using a standard container for the first time since launching intermodal operations in 1992.

Schneider National Intermodal reached multi-year agreements with CSX Intermodal and BNSF Railway Co. to primarily provide rail service in the East and West, respectively.

The deals will help the intermodal firm consolidate its railroad network and simplify container/trailer pool operations.

“We saw efficiencies with CSXI and BNSF based on connections to our centers and customer base,” says Schneider National Inc. Vice President of Rail Management Dave Howland.

In certain lanes, the company will continue to use Norfolk Southern Railway, Union Pacific Railroad and Kansas City Southern as primary carriers, he says.

“Obviously, the other Class Is are disappointed, but they understand that these new agreements aren’t for forever,” says Howland. “We will continue to build relationships with all the Class Is.”

In spring 2007, Schneider National Intermodal began analyzing operations with all five Class Is, including transit times, customer service and underlying prices. The company also determined whether to shift its intermodal operations — which account for a quarter of Schneider National Inc.’s business — to containers only.

A trucking and logistics service provider, Schneider National began handling trailers in 1992, and containers and trailers in 1999.

“We want to get to a single container fleet to simplify container pools and improve network management,” says Howland, adding that the company should reach that goal by mid-year.

However, it’s been a difficult strategy to execute.

“With trailers, you can use them on any railroad and move them to any place,” he says. “With container chassis, they need to go back to origin and you don’t want two sets of equipment to operate, but otherwise you get empty chassis moving around.”

Schneider National Intermodal plans to continue offering trailer-on-flat-car service for customers who prefer premium, faster intermodal transit. The company currently offers dedicated intermodal rail service between Marion, Ohio, and Kansas City, Mo.; TruckRail and TruckRail Express container services; and the Mexico Express intermodal service.