NS and LCL freight
Norfolk Southern experiments with long-ignored small-lot freight
NORFOLK SOUTHERN IS DIPPING
into a market railroads abandoned decades ago: Expedited less-than-carload service.
NS launched the door-todoor service in July as an experiment in the ChicagoAtlanta-Miami corridor. Trucks pick up small loads and deliver them to a rail-served warehouse, where the shipments are cross-docked into waiting boxcars. The boxcars then move in intermodal trains. The process is reversed at the destination, with trucks making the lastmile delivery.
“Your granddad would have called it head-end freight a long time ago,” Ed Elkins, NS vice president of industrial products, told the Midwest Association of Rail Shippers. “What that is, is boxcars with pallets of freight moving inside for various customers.”
The Thoroughbred Freight Transfer service combines the capacity of boxcars with the predictability of intermodal service. “This is very, very promising,” Elkins says.
“We’re expanding this network as we speak, and I think you’ll see more nodes going forward,” Elkins says. “Again, it’s still an experiment. It’s small. But in railroad terms, this is about as exotic as it gets for a new product.”
The boxcars ride NS intermodal trains 215/216 between Chicago and Atlanta, connecting with trains 209/214 between Atlanta and Jacksonville. In Jacksonville, the cars are interchanged with regional Florida East Coast to reach Miami.
Locals deliver the loaded boxcars to intermodal terminals from nearby rail-served warehouses. The service runs out of Chicago via the former Nickel Plate Road main line to Fort Wayne, then the New Castle District to the Cincinnati area, and on to Atlanta and Jacksonville.
The Thoroughbred Freight Transfer service puts NS in direct competition with lessthan-truckload carriers. “It’s really an old product ... a long
time ago railroads did all kinds of this business. Millions of carloads of this business,” Elkins says. “The key is, can we find a niche that delivers value to customers that they’re willing to pay for, that solves their problems. And in the current environment, where there’s not a great deal of excess capacity on the highway, this is an experiment that’s very interesting to us.”
The LCL test service is part of Norfolk Southern’s broader effort to convert highway traffic to rail. Some freight has a natural preference for a particular mode, Elkins says. Bulk traffic, like coal, wants to move by rail or barge. At the other end of the spectrum, time-sensitive freight like groceries or fresh flowers want to move by truck. “Between those two extremes, there’s a different world of freight, and that different world of freight does not have a particular preference for mode. What it does have is a preference for performance,” Elkins says of so-called flexible freight.
The flexible freight world is about twice as big as the freight market that must move by either rail or truck. And it’s growing twice as fast, Elkins says. “The prize should be how do we deliver value to those customers that are modally agnostic,” he says.
NS has an experimental mindset and a willingness to fail when it tries new ways to tap the flexible freight market. “We think experimentation is incredibly important,” Elkins says. He adds: “If you’re not failing, you’re not trying.”
Todd Tranausky, a rail and intermodal analyst with freight forecasting firm FTR Transportation Intelligence, says the success of Thoroughbred Freight Transfer will hinge on service. “The concept and initiative to go after jump-ball freight and bring it onto rail is good and is the kind of ingenuity that has been lacking in the carload space as an industry for some time,” he says. “But the idea’s success will ultimately come down to how carriers execute on service delivery.”
Boxcars may play more of a role in the coming years, as pandemic-related disruptions revealed the weakness of relying solely on just-in-time supply chains. Shippers want the resilience that can come with multiple options, Elkins says. That includes warehouses that are served by rail, intermodal, and truck. NS plans to develop warehouse capacity along Interstate 75 outside of Atlanta, as well as near Greensboro, N.C., to provide shippers with more flexibility.