The investment and marketing of transload facilities: a statistical evaluation

IMPORTANCE OF THE ISSUE Intermodal and multimodal have long involved the combining of ideas already in existence. For example, the container concept dates back to early Roman days. Jack White of the Smithsonian has thoroughly researched the roots of containerization, probing back as far as Circus Maximus in Roman times. His conclusion is that the barrel is the oldest form of containerization, a type of container which is still in use today (White 1988). Early interest in the use of containers--as documented by the Liverpool & Manchester Railroad in 1830--came about because of the large amount of labor involved with moving bulk materials such as coal and grains. Containerization of commodities enabled the effective movement of freight, and quickly led to further innovations in combining modes to move products. The need for effective transportation still exists today as the marketplace becomes increasingly global. Furthermore, many shippers and carriers are finding that responsive, cost efficient, door-to-door service often involves multimodalism. The ability to provide different means of transporting a product from origin to destination has never been more important to industry. The role and nature of transportation is changing as shippers become more sophisticated and involved in the modal choice process. Trends in supply chain management are forcing warehouse managers to rethink their operations in order to find ways to "flow" inventory more efficiently and effectively. Transportation options, such as intermodalism, are an increasingly important component of supply chain strategy (Osswald 1985). While piggyback, trailer-on-flatcar (TOFC), and container-on-flatcar (COPC) have become the predominant way in which intermodalism is operationalized, logistic ally-linked transportation can involve multiple-modal partners in a movement without a container or other device to define the practice. Transloading involves both the modal change as well as the container change. As a growing portion of intermodalism, transloading is playing a vital role due to its inherent advantages and characteristics. Previous research examined the operations of a number of southeast transload centers and included interviews with a number of the customers (Jennings 1994). The research findings indicated that transload: * Provides more economical transportation under certain conditions, * Allows access to different modes of transportation, * Creates the ability to attract new or increased volumes of business or new suppliers, * Provides service flexibility, * Acts as a temporary warehouse for the product, * Increases the feasibility and viability for various distribution activities to be contracted out, * Enables the consolidation of shipments for at least part of the delivery movement, and * Promotes larger volume movement in some lanes as needed. TRANSLOAD MARKETING CONCEPTS Much like the first 50 years of consumer goods manufacturing, the basic strategy of selling transportation in the past involved market aggregation. Using this principle, carriers attempted to appeal to as many potential customers as possible and relied upon high levels of traffic to maintain relatively low prices. Market aggregation is a suitable and appropriate practice only where the total market has few differences in customer needs or desires. The technique is also appropriate where it is operationally difficult to develop distinct products or marketing actions to reach different customer segments. However, few markets, and customers, are actually suitable for such treatment. In theory and concept, the practice of transload is no different. Many of the companies which provide transload services readily admit that they entered the market almost by accident. A number started as a contractor for a single company and then expanded their services along similar product lines to attract and serve additional customers. …