Eric Joiner's Freightdawg.com - The Logistics and Supply Chain Blog!

CSX: Tomorrow Moves Project

One of the cool things about Freightdawg is that I get to meet a lot of people in our industry.   This includes the PR and marketing folks at various transportation companies.   I have followed CSX Railroad for some time, not only for their transportation services in the US, but also their very forward thinking marketing on the Green value of railroad shipping. 

 CSX may be the vanguard for the industry on this topic.  At least they have made the effort to spend the money to advertise on TV, Internet and in print on the economic and environmental aspects of rail transportation.  Every railroad from short line to class 1 benefits from that message.  

I was recently invited by CSX to participate as a judge in a very cool contest called the "How Tomorrow Moves" project.   This contest awarded prizes to contestants who best described  CSX's message of how to protect the environment.  Winning contestants would win $5000.00.  Not bad for a 200 word submission!   

Thousands of entries were ranked by followers of CSX on Facebook.   Finalists were then reviewed by a team of judges composed of various industry and media representatives.   Some good ideas were suggested from the contestants and two lucky winners will be selected.  Here is the video CSX used to introduce the contest, which closed May 13th. 

While the contest was cool, what I really liked was that CSX continues to promote not only their marketing message but uses it to promote ideas that go beyond railroading. 

"When CSX launched this campaign around the environment, I really questioned how this effort would help CSX move freight.  

Over time I've reckoned there are a few ways. " 

First, it raises the image of railroads as a viable domestic long haul transportation option vs trucks.  I think many younger people simply do not think about railroads.  Main stream passenger services are largely a thing of the past, so unless you have specific interest to do so,  rail isn't the first way most young professional transportation people think to move cargo. 

Second, I think the green aspect raises the profile of the railroad as an important societal infrastructure component.  This impacts government and political opinion over whether the railroad is a nuisance or a vital, economic and environmental asset to a community.  Trains moving on rail lines near your home could be seen as noisy, dirty and potentially dangerous.  However, when considering they take many, many trucks off the roads every time they move a train,  the trade off begins to have balance.   Considering that alternatives to foreign oil such as coal and ethanol move primarily by rail, the railroad now becomes an important national asset.  

By raising the positive aspects of rail freight transportation, CSX is doing a great thing for the industry.  Why would a politician vote against rail transportation or right-of-way when such vital interests are being raised to the public?    Voters are being educated here.   Given that, this whole message becomes strategic to CSX and the industry. 

By connecting with the public in new media like Facebook,  CSX is attracting the attention of young people.  Transportation is an asset heavy business with relatively few people in it given the size of the businesses involved.   When I started at United States Lines in the early 1980's,  graduates from ivy league schools interviewed with shipping companies.  Not so much any more.  That stopped being cool in the mid 80's when everybody who looked good in a pinstripe suit figured they could be a stockbroker during the Reagan years.   Reconnecting youth, particularly net savvy young people with brains to transportation is a way to bring new talent to the industry at a time when we need it.  

Lastly,  investors look at the media as well as the general public. CSX stock has climbed steadily since the 2009 economic crisis.  I think there is good reason for this.  The rails move the base commodities that power our country and many exports.   Warren Buffet thought railroads a good enough idea that he bought one.  Moreover, he decided to vertically integrate by buying a rail tank car manufacturing company.  If you are an old technology company wanting to impress a new technology investor base, why not use a forward thinking message like the environment to communicate that CSX stock is a good buy?  

All I know is that if I had bought CSX stock when I started in this business (stock in the single dollars) to now (stock in the 80 dollar range), I wouldn't be sitting in Atlanta.  I'd be in the Bahamas posting this! 

This second video is available on the CSX web site, but I think communicates the green value of rail transportation well.

Eric

Japan Radiation Threat Causes Cargo Screening and altered Operations

Everyone is watching and reading the News about the terrible after effects of the earthquake and Tsunami that hit Northern Japan and the subsequent explosive impact on several Japanese nuclear power reactors.  

As the Japanese struggle with the health and safety of their own people,  foreign governments including the United States are carefully watching cargoes and people transiting or originating from Japan.   So far, the US Customs and Border Protection (CBP) department issued the following statement on March 16th, 2011. 

"U.S. Customs and Border Protection (CBP) is monitoring developments in Japan carefully and is specifically assessing the potential for radiological contamination associated with the ongoing impact of the earthquake and tsunami to Japan's nuclear facilities. Out of an abundance of caution, CBP has issued field guidance reiterating its operational protocols and directing field personnel to specifically monitor maritime and air traffic from Japan. 

No aircraft entering the United States today tested positive for radiation at harmful levels.

To address radiological and nuclear risks, CBP employs several types of radiation detection equipment in its operations at both air and sea ports, and uses this equipment, along with specific operational protocols, to resolve any security or safety risks that are identified with inbound travelers and cargo.  In the air environment, CBP frontline personnel are equipped with Personal Radiation Detectors (PRDs) that can detect the presence of radiological materials, and all airports have more sensitive Radiation Isotope Identification Devices (RIIDs) to determine both the presence and type of radiation encountered. Travelers who manifest signs of radiation sickness are referred to health authorities and provided appropriate treatment.

At seaports, and in its international mail and express consignment facilities, CBP continues to use sensitive, large-scale Radiation Portal Monitors (RPM) and scans all maritime cargo and express consignment and mail arriving from Japan. CBP maintains similar protocols for identifying and resolving radiation alarms in these operations and will deny entry to contaminated cargo and mail. 

CBP will continue to evaluate the potential risks posed by radiation contamination on inbound travelers and cargo and will adjust its detection and response protocols, in coordination with its interagency partners, as developments warrant."

While the US government has discouraged citizens from visiting Japan, so far no passengers or luggage have shown signs of radioactive contamination.   Airlines are taking a wait and see attitude toward servicing Japanese airports.  Delta Airlines as an example is still servicing Narita airport but at present has ceased flights to Haneda.    Lufthansa however has not resumed flights to Narita so far.   Express carriers are continuing to serve Japan at varying levels with FedEx, DHL and UPS all making service announcements on their web sites.

Major container terminals are presently working at normal capacity, however port closures over the past weekend have caused congestion and backlogs.  It remains to be seen if the ports are impacted as days go on by lack of diesel fuel and gasoline, as well as inability of workers to get to work due to power and public transport disruptions.  Services to Sendai, Hachinohe, and Onahama have been suspended by some carriers including Maersk.   NYK Line, a leading Japanese flag carrier meanwhile has offered its services to the Japanese government not only in moving relief supplies, but in providing service vessels to serve as offshore staging platforms for helicopters and relief supplies. 

I left a week ago to go to China for business. What the heck happened with Gas Prices?

I left a week ago to go to China for business. Gas near me in the Atlanta area was $3.10 a gallon at the time. One week later, today...its $3.45 a gallon. Its enough to make one seriously pissed off. I've always suspected the oil companies of price gouging. How can the price of oil go up 1.00 a barrel on Tuesday and have it show up in the price at the pump on Wednesday?

Well, there is apparently a lot more to it that that, though the net effect is about the same. Check this good article out on how gasoline prices work.

http://news.yahoo.com/s/ap/20110307/ap_on_bi_ge/us_pricing_gas

In the meantime, check out one of my favorite sites, gasbuddy.com to find the lowest prices in your area.  For those of you who like me, find Twitter only marginally useful, one of the better ways it can be used is to share immediate gas price changes amongst local peers.

Fuel prices are going to rapidly show up in transportation emergency surcharges and later in the prices of goods.  Look first for these to show in the price of food.   

Somebody settle Libya and the folks in Egypt down because its making my veggies too expensive.

 

Holy Containership Batman!! Maersk Triple-E vessels Announced.

Maersk Line is once again leading the container industry with the order of 10 18,000 TEU vessels designed as Triple-E class ships.  Triple-E stands for Energy efficiency, Economy of scale and the Environment.   These ships will be built in Korea and set for delivery between 2013 and 2015.   They will ply the Asia - Europe trades.   Only Rotterdam, Felixstowe and Bremerhaven have ports deep enough to accommodate ships of this size, which will be bigger than an aircraft carrier.   At well over a billion dollars, its the worlds biggest container ship order ever.  

Maersk used to build all their ships in their own shipyards in Odense, Denmark.  No more,  The Danes finally threw in the flag in 2009 realizing that vessels could be built cheaper in Asia.  Daewoo Shipbuilding will construct the 3E ships.  

These ships are said to be quite green ecologically.  Maersk says the Triple-E class vessels will reduce CO₂ emissions by more than 50% per container moved, compared to the industry average. 

 

The size of these ships to an old steamboater like me is mind blowing.   I started at United States Lines in 1983 back when USL was touting their then new 4400 TEU "Econoships" which were built to travel around the world in an eastbound direction.  

Those vessels failed for a variety of reasons, not the least of which was container repositioning back to westbound origins, USL's newcomer status in the Europe-Asia market, old closed FEFC conference system, limited port calls in Europe and the advent of cheap oil in the early 80's.  It was the cheap oil that killed the deal in reality though.  These were ships that were ahead of their time, being built for slow steaming and economical container movement.   While considered small by today's standards, the USL ships would have been right at home in today's economic environment.

The Maersk Triple E ships are the USL Econoships idea writ large.   Designed for massive container movement, Maersk claims these ships will move a load from Asia to Europe at 30% less cost than current vessels, which are already massive in scale.   I remember when I thought Emma Maersk was huge...at a mere 11000 TEU.    What will be interesting will be to see what the load factors are on the eastbound voyages back to Asia.   I suspect a lot of empty containers will be the main business and a very cheap rate on a revenue load.   NVOCC's will love these ships because there is NO way Maersk is filling these ships up without help from the major NVOCC's. 

The ships this class of vessels will replace won't be going away.  The classes represented by Regina Maersk and Emma Maersk at 7000 and 11000 TEU's will have to go somewhere. The Triple-E's will have swallowed one of each.   I suspect that will be the eastbound transpacific trades.   This could easily bring major new capacity and rate compression to this and other global markets as the big ships cascade to the lesser trades unless Maersk takes a new view about vessel sharing.

Check out Maersk's web site specifically made for the Triple-E Class.   

worldslargestship.com.

Eric

Green Packing Materials

Packing materials used in both freight and express parcel movement are both expensive to produce and eat lots of petro resources.  Not exactly green materials.   

ZDNet has a great video on some new developments in creating biodegradable packaging for ecommerce uses as well as some interesting information on how bio materials are making their way into plastics used in everyday items up to and including automobiles.

Check this link out to the ZDNet site.

BNSF introduces Carbon Footprint Estimator

CSX has made a big deal about the greenness of rail transportation for awhile now, advertising the economic value of rail vs truck transportation.  BNSF has gotten into the act now with a new tool for estimating carbon savings on specific routes and rail consists.   The tool they developed is a bit more sophisticated than a similar tool that CSX put out several months ago.    Check the BNSF tool out here.

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BNSF Runs the Ethanol Express

Burlington Northern Santa Fe Railroad moves a lot of ethanol. With major track ownership in the US midwest, BNSF is a prime mover of corn and corn related products. Unit trains of ethanol move to market regularly with BNSF operating a key unit train to Dallas called the Ethanol Express.

Warren Buffet has invested a lot of money in BNSF as well as other railroad assets such as Union Tank Car. (UTLX).

BNSF Expands Ethanol Express to Dallas/Fort Worth FORT WORTH, Texas and OKLAHOMA CITY, Okla., Oct. 9, 2008: BNSF Railway Co. today announced that it will begin delivering unit trains to Musket Corporation's newest ethanol storage terminal on Nov. 1. With storage capacity of 10 million gallons, the Dallas/Fort Worth Musket Ethanol Terminal is one of the area's largest ethanol storage facilities and is designed to meet the daily needs of the Dallas/Fort Worth Metroplex. Located in the Mark IV industrial area in North Fort Worth, the facility maintains its own rail spur and is designed to completely unload a unit train of 95 cars every 24 hours. Tank cars are drained via an underground piping system and ethanol is pumped directly into the four storage tanks. The ethanol can then be pumped directly into trucks for local distribution. The new facility will receive shipments exclusively from BNSF Railway's Ethanol Express a 95-car unit train service specifically created to move ethanol from a single origin or gathering place to a single destination. The Ethanol Express will save ethanol producers and end-users time and money through increased fleet utilization, lower inventory carrying costs, and logistics coordination and support each and every day around the clock. BNSF moves more than 370 million gallons of ethanol per year through the Ethanol Express program.

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CSX Trip: Windy City Follow Up!

On October 7th, I and a number of other bloggers had a unique chance to visit with CSX Railroad management in Chicago. CSX invited a number of social media folks to come to Chicago to see their newest genset locomotive technology, as well as to provide access to CSX's communications and operations staffs.   About 15 people from sites such as Ars Technica, mattgoesgreen.com, ecollo.com, travel, trains and other things and others visited the CSXT intermodal railyard and got schooled on both Chicago local operations and how railroads work. I was the only logistics geek there, but that's good for freightdawg.com!

CSX is spending considerable money on establishing their brand and their mode of transportation as an efficient and eco-friendly way to transport goods.   That's not a touchy-feely thing as much as a solid approach to new media as part of a multi-media advertising campaign.  CSX advertisements directly claim that rail transportation is an efficient and environmentally friendly way to move goods.

By inviting professional and industry related bloggers to come see for themselves, CSX is underscoring their branding while providing legitimacy to their environmental investments.    Bloggers are usually good at unvarnished opinion. CSX has provided key bloggers with direct access to their communications teams for information when needed, as well as taking influential bloggers on site to see how the business operates.   This a very sophisticated approach for an old school transport mode and shows tremendous understanding of how Internet social media works.

Check out this link to mattgoesgreen.com and the pics and video Matt Trachtenberg took.    Personally, I got to meet some new and very smart people who are covering the Green side of business today. A very nice way to spend 2 days of vacation time!

Eric

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Green Communication: CSX Gets it.

I'm amazed. A Class 1 freight railroad is actively advertising in the United States on radio, the internet and in print media. When I first saw this it drew my immediate curiosity. My initial thought was "Who will read this stuff then act on it in a way that generates revenue for the railroad?"

How many housewives buy rail traffic?  Who is the target audience? Whatever the reason, I paid attention because something unusual was happening in the executive suite of an old school transportation business. I just didn't know what it was.

Then I got an email. 

CSX was inviting ME to come to Chicago to attend a conference as well as to see their latest ecological and energy efficient equipment and operations.

The conference is the EPA Climate Leaders Conference in Chicago next week. CSX Railroad is investing heavily in communicating it's biggest value proposition. Railroads are both clean technology and the most efficient way to move product to market.

Railroads compete mainly against trucks. The bigger the load and the longer the haul, the more railroads present value to shippers. CSX has produced an on-line carbon calculator to allow shippers to compare distance and load vs. mode of transportation to determine transport efficiency.

CSX gets both its value proposition to freight shippers, but also to environmental groups.   I got invited to join a group of bloggers from a broad spectrum of interests.  These include transportation, technology, the environment and current events/news. Blogger attendees will tour the Chicago rail yard, see CSX's latest GenSet Locomotive, and attend a dinner meeting with senior CSX executives.  Other on-line attendees include Ars Technica, Trains For America and Green Living.

CSX's communications and marketing teams are carving a new branding niche.  Not only are they investing in traditional media to send their message, they are investing in both traditional and new on-line media. Lets face it, anybody with an audience can influence stock prices. Bloggers have a role in this.

CSX has really gone cutting edge in addressing this market by educating bloggers on what they are doing.  If bloggers from a wide range of interests consider railroads an efficient transport medium, then the public perception of railroads will change.  BNSF, NS and others owe CSX a debt here I think!

For an old school transportation medium, I congratulate CSX on how well it understands the branding opportunity that the net and industry bloggers offer. I've spent 25 years in the transportation business working with heavy iron in modes ranging from containerships to B747's.

I'm looking forward to some steel wheel love.

Eric

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Where Ships go to Die.

This is an interesting video that appeared on the American television show "60 Minutes" back in 2006.  It shows how old merchant vessels are beached and cut up in Bangladesh.  Ship breaking is a dirty, filthy job, done by the poorest of the poor. Conditions are somewhat improved now thanks to this story, but this is how the vessels of commerce go to die in the east.

These old ships are filled with asbestos, chemicals, fuel and other contaminants that just wind up on the beach and in the ocean. This struck me as a sharp contrast to the conversion of the American aircraft carrier USS Oriskany, which was so carefully sanitized prior to sinking as a man-made reef and diving attraction.

Somehow, I dont think the 11,000 TEU, 170,000 metric ton, M/V Emma Maersk will be driven on any beach when her trading days are over.

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