Tag Archives: intermodal

Leaf Logistics launches multi-shipper dedicated fleets

Leaf Logistics, an innovative truckload freight platform, has a unique recipe for reducing unloaded miles and matching carriers with driver-friendly routes, called Flex Fleets. It coordinates truckload freight between shippers and logistics service providers (LSPs) like trucking firms and freight brokers. The concept is that LSPs act as dedicated carriers over a short time for packages of loads from different shippers, but on approximately the same route. The claim is that users can experience a 75% or more reduction in slack or empty travel time for trucks.

I interviewed Anshu Prasad, CEO of Leaf, for some perspective on how the new Flex Fleets system works. The essence is an analytical system that compiles load histories from all the shippers who sign up, projects them to the future, and builds blocks of future loads from one node to another. Leaf Logistics calls this a route.

The image below shows the historical traffic by day on a specific route (think LA to PHX, for instance), with a moving average trend. The green bars display a way to ‘chunk’ the demand into blocks that would make attractive short-term contracts for a haulier. These are called Flex Contracts. Thus from about June 10 to July 15, there is a base volume of 3 loads a day to be handled by a dedicated contract.

That contract is much easier to digest for the LSP. It also assures shippers whose loads are in the block that there is a ‘dedicated’ resource to handle that base load. It’s much easier to create a Flex Contract; no long-term commitment, prices somewhere between spot and negotiated prices, and more flexibility for both parties. As you can see there’s a dip anticipated just after that block, and perhaps the shippers would not want 3 trucks per day available.

What’s in it for LSPs? Their alternative is to try selling dedicated services to many shippers to fill out schedules on a route, but there is a long sales cycle with each shipper, and some shippers would be bound to attract bids from others, breaking your grip. Traditional contracts are typically for longer periods, partly because they are hard to negotiate. And through Leaf, management is easier. Leaf estimates that an average of 20 or more ‘touches’ via EDI, email or calls can be reduced to under 5 using Flex.

Leaf’s Adapt data analysis constructs multi-shipper routes, and the LSP chooses a Flex Contract for such a route. The route can reduce unloaded miles and assure drivers they can fulfill them on time. It’s an advantage if an LSP wants to give drivers a ‘home life’. Quality of life is becoming an essential factor to keep drivers on board and happy. And eliminating unloaded miles and gaps in rolling service is huge; it’s the largest capacity loss in trucking logistics today.

Flex Fleets operates only with truckload (TL) shipments today, the largest segment of trucking. They have about 400 shippers enrolled; the shippers need to disclose historical data on their traffic lanes to Flex, though not to each other. Flex uses the traffic gathered to compute its route blocks. It’s a reasonable compromise with information that is not that useful for competition in reality. Flex is now in trials including reefer traffic.

Leaf usually enrolls the shippers’ preferred trucking vendors, so shippers do not need to worry about qualifying trucking firms again. The LSPs like it, because they get the Flex Fleets benefits of guaranteed loads in a workable pattern over a longer time horizon. Of course, all the carriers are insured. If something happens on a route, like an accident, weather, or carrier no-show, Leaf makes good on the route with a failover plan to ensure completion.

I asked Anshu if there was a plan to introduce Leaf’s concepts into container drayage, an area plagued with turnover, contracting issues, and driver exploitation. Anshu wants to test and refine the Flex concepts first before trying that difficult area. Drayage is an area with many owner-operators. The Leaf system does not have owner-operators as carriers. If one wants to participate, she could sign up with a trucker or broker who joins. Anshu says studies have shown that many full-truckload owner-operators work that way, possibly up to 70%.

Everyone benefits from the Flex Fleets idea to induce cooperative behavior on the part of shippers and LSPs. The shorter duration contract— a month to a year— with fewer conditions is easier to accept or say no to.

  • Shippers benefit from dedicated and scalable capacity, without having to purchase or lease their own fleet — currently, they commit to fleets for years and have to pay for maintenance, regardless of utilization. Flex Fleets save shippers up to 30% on their line haul costs.
  • Carriers benefit from consistent business and preferable freight, eliminating driver downtime and fleet empty miles — 40% of all trucks on the road today ride empty. Tender rejections drop from 30% to 0. 
  • Brokers benefit from enabling drivers to accurately predict their earnings, work from a preferred domicile, maximize their number of paid miles driven and return home each night for an improved quality of life on and off the road. For instance, Sage Freight has seen driver turnover drop from 75% to 15% or less on dedicated freight. 
  • Everyone benefits from reducing emissions by eliminating empty miles and delays. ESG ratings are improved in the fastest way for truckload haulage.

We have been saying for years that logistics is the only place in business where cooperation is routine. But in truckload, it hasn’t been. We need intelligent systems, like Leaf’s Flex Fleets, to identify how it can be made routine and easy.

Anshu indicates that he and his leadership team, some of whom worked together previously, have a long-term commitment to their business idea. That’s why they are growing deliberately with tested concepts, and why they have not sought large venture investments like many young logistics software firms. Instead, they want persistent solutions to the problem of cooperation that will capture the next-generation logistics information market.

And they’ll be helping truckers with some of their most intractable problems.


The worst January for US intermodal for ten years, and no sign of relief

It’s no wonder that US intermodal traffic is declining. Poor service from the railroads has made using any system that involves a transfer an invitation to delays. And shippers can’t afford delays.

Companies offering intermodal container service don’t have enough pull with the railroads in the US to get highly regular service. And now that container rates are dropping fast, shippers won’t pay an excessive amount for the service. So the large rails don’t feel any obligation to serve them well.

Will the major rail lines make any adjustments? My guess is they will be dragged kicking and screaming to provide more reliable service. The fuss they are making over simply making regular deliveries of feed grains to major customers, and the resistance to reciprocal switching, and the labor difficulties they are experiencing show that they don’t feel that customer service is top of their mind.

Why not? Recently I read a book about Charles Lowell, a young man from Massachusetts who fought in the Civil War. Before the war, and after graduating first in his class from Harvard, he worked as an agent in Iowa for a firm building railways west in that state. Each time they completed 25 miles of railway, the firm got a large new swath of land from the US government. The firm had to survey the land, decide on their route through it, and sell the land they didn’t need to fund the next 25 miles. They sold the land to migrants, from the east or from other countries, who were moving west to obtain cheap land for farms and businesses, their piece of the American Dream. There was a lot of graft in these land dealings. But Lowell insisted that his firm sell at a fair price and not engage in special deals with investors speculating on the land. His reason was interesting and farsighted.

Lowell believed that the railroad needed customers, and that was what he was creating by selling them land.

Today’s railroad executives don’t seem to think they need customers.

There are plenty of reasons to use intermodal for container shipment. It reduces emissions. It could be faster. It could require fewer transloads. (Most US truck traffic from ports is transloaded to 53-foot truck chassis before a cross-country trip). And it could be safer, and cheaper, or at least no higher in price, for the shipper. Rail lines could participate in this effort to reduce pollution while making the business profitable for them by operating their lines efficiently to accommodate it. But it does require them to serve their customers, those who want to ship on intermodal.

Too bad rails can’t seem to focus on the advantages it offers and shape their business around it. It would save the hassle of government regulation forcing them to accommodate it.

By Ian Putzger, Americas correspondent 10/02/2023

The worst January for US intermodal for ten years, and no sign of relief – The Loadstar

Biden climate blueprint promotes modal shift away from trucks

Building on the idea that maritime and rail generate less carbon than trucks, the blueprint for decarbonization suggests shifting transport to those means.

That’s easier said than done. The EU has been working hard for some years on a modal shift to river and rail transport for cargo inside Europe. They have actually had some success— a few percent improvement.

But the geography of the EU is a lot more conducive to waterborne transport of cargoes. There there are quite a few navigable rivers going inland from the coast where the ports are. Many EU ports have set up ‘inland ports’, large distribution areas inland that often can be reached by barge, to offload container cargoes and get them ready for distribution. This foresighted policy offers many advantages, both from an ESG standpoint, and for reducing congestion at the ocean ports. But the US has only one large river, the Mississippi, navigable for a long distance into the heartland, in a land mass much larger. Smaller rivers on the East Coast don’t go as far.

However, particularly on the Mississippi, there is a lot of potential for more barge traffic. I also suspect that maritime transport could be used along the coasts for some kinds of moves, particularly movements of products like refinery outputs, that might travel by truck otherwise.

So there is rail. The EU has a problem with rail; most rail is state-owned, and is oriented around passenger travel, not freight. And rail lines in Europe are not all compatible; not only are their practices disparate, but the physical equipment isn’t even compatible at some borders. That adds transfer delays as well as simple handling delays to transport. The EU will have a much harder and more costly time increasing rail cargo percentages.

In the US, we have seven Class I rail firms, all private, that crisscross the country and offer cargo service. Rail can provide the backbone of distribution from ports to the hinterland. But will it? Rail firms are all private, not public; they are currently focused on their most profitable segments, and have engaged in rampant cost-cutting. Sometimes, it’s referred to as PSR (precision scheduled railroading), but quite often it is more closely allied with old-fashioned cuts driven by short-term accounting. The recent reductions in staffing are claimed to result from PSR, but in fact, simply serve to reduce operating costs and improve operating ratios. They may result in reduced safety, as some of the claims in front of the STB put forward. And the popular step of running really long trains to save labor costs reduces flexibility and adjustability of rail traffic to support less predictable loads. These moves by private firms greatly increase the complexity of carrying out the proposed modal shift in the US.

But certainly a modal shift will reduce carbon output. And there is actually a lot that a government push could accomplish. Some of these things are:

  • Infrastructure improvements for inland maritime operations;
  • Streamlining projects for on-dock rail at ports large and small;
  • Inducing rail lines to improve their rail yards and lines to support a more flexible cargo mix and customer set;
  • Driving rail common carrier rules that will induce or force rail lines to accommodate cargoes from a broader set of customers, even though the traffic will not be as profitable as long steady coal or grain trains.
  • Keeping pressure on the rail lines to serve a broad base of customers, particularly intermodal (container on flat car or trailer on flat car). A move to transport this type of cargo long distances to inland container terminals would help with emissions and get trucks off the major interstates.
  • Supporting inland terminals and distribution points that are rail connected.

There are probably more, and Pete Buttigieg and the President’s commission on supply chain probably are thinking of them.

The biggest problem is how to get private industry and investors on board to finance and support the projects.

US National Blueprint for Decarbonization

John Gallagher·Tuesday, January 10, 2023

Biden climate blueprint promotes modal shift away from trucks – FreightWaves