A new “horizontal” approach to freight

Executives from the Intermodal Transportation Institute said the freight industry has to rethink productivity and profits and start adopting a horizontal, rather than vertical, view of transportation.

Executives from the Intermodal Transportation Institute said the freight industry has to rethink productivity and profits and start adopting a horizontal, rather than vertical, view of transportation.

“Especially in trucking, freight movements are all conceived vertically ‑ where the truck starts, refuels and stops,” Tom Finkbiner, chairman of the Intermodal Transportation Institute (ITI) at the University of Denver told FleetOwner here at a meeting of the group’s board of directors.

“What we need to do, and this is for all modes, is to think horizontally: How do we get the freight from origination to destination in the most efficient way possible, regardless of mode,” he explained.

“In transportation, we are still all trained to think of modes separately – airways, highways, rail lines and ocean lanes,” added Gil Carmichael, ITI’s senior chairman. “Now we really need to focus on how to use all modes together, in one global network, to move cargo in the most efficient and profitable manner possible.”

Finkbiner and Carmichael understand how difficult this transformation in thinking can be, as both are longtime veterans of the freight industry. Finkbiner spent six years as CEO of trucking firm Quality Distribution, following stints as vp-intermodal for railroad Norfolk Southern and vp-marketing for North American Van Lines. Carmichael is a former Federal Railway Administrator who spent many years developing transportation projects as part of his real estate business.

Both recognize that the key to changing our thinking about transportation is to concentrate on a scientific analysis of freight chokepoints, rather than creating public policy initiatives.

“The problem with policy is that so much of it is subjective and open to political interpretation,” said Finkbiner. “Science, on the other hand, quantifies the problems and tells you what the best solution is: and in the high capital/low margin world of freight companies, following ‘best practices’ is the difference between success and failure, profit and loss.”

That’s why the ITI is so focused on developing an educational curriculum that addresses the need to examine the freight world from a scientific perspective, said Carmichael. The goal is to find the best way to move freight because the scale of cargo transportation is so much larger today.

“We’re also talking about the global movement of goods here – you can’t really think in terms of a U.S. or North American transportation system anymore,” he noted. “Freight is coming from all over the world into U.S. ports and then onto trains and trucks, with the same occurring in reverse. It’s a much larger system we have to think about, and it’s why we need to change our thinking so we can better manage it.”

To comment on this article, write to Sean Kilcarr at [email protected]

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