Second quarter 2022
Making Sense of Service Metrics
As a key supply chain participant, intermodal's multiple providers and cargo interactions both create a complex network and trigger a wide range of statistics to measure freight movement.
This article assesses how well statistics measure intermodal performance, a daunting task given factors such as drayage industry fragmentation, and inconsistent reporting of information. For example, some railroads disclose trip plan performance, and some ports report container dwell time. Others don't. The accompanying article provides more details about volume and cargo flow trends.
"The current available metrics are of what I call the 'candle in a dark room' variety," says Larry Gross, who heads Gross Trans-portation Consulting. "They are better than wandering around in the pitch black but not sufficiently bright to be particularly useful."
A particular gap is information about intermodal's door-to-door performance.
"Existing intermodal service metrics generally don't provide this information," Gross says. "In order to succeed, intermodal doesn't need to be as fast as truck. The provision of meaningful service metrics on a comparable basis to truck is a necessary prerequisite in this regard."
Kristy Knichel, chief executive of Knichel Logistics, identified identical priorities from a 3PL's perspective.
"On-time pick-up at the shipper and on-time delivery at the receiver are really the only metrics that matter to the end customer," she says.
"Ultimately, it comes down to being able to provide predictable and consistent information that can be provided to end-users within a centralized platform, and on a real-time basis to allow the users to make the proper decisions for their business."
Gerry Bisaillon, a senior vice president at Remprex LLC, says metrics help to reduce or eliminate embellished anecdotes, and use data and facts to measure and communicate the performance.
Let's take a more detailed look at intermodal metrics, starting with railroads, which report average weekly train speeds to the Surface Transportation Board.
Railroads
"Average train speed is a symptom of a service problem, but is never the causal element," said the Association of American Railroads in a statement.
"The most reliable indicator within the STB data for understanding both the timing and the depth of the problem is the average time spent in yards. Service problems almost always start in yards and cannot be solved until yards are operating smoothly."
"As to what is slowing those speeds down, it is usually trains being delayed along the main line by the need to either wait for an available time slot to enter a terminal, or waiting to meet or pass other trains that have been delayed by terminal activity in one form or another," AAR added.
The trade association at April STB hearings emphasized steps that are being taken to enhance service, such as hiring new workers, relocation incentives, payments to refer a friend, repositioning crews and deploying additional power.
Terminals
Terminals have been prominent in media reports about supply chain congestion, with a particular focus on Southern California ports, where more than 100 vessels waited at anchor at one point in 2021 to be unloaded. By early May, that number was steadily whittled down to 15 according to the Port of Los Angeles.
Los Angeles port statistics show that in 2019 containers took 3.6 days from vessel discharge to outgate, climbed to 6.9 days this past year and improved to 5.8 days so far in 2022. Other ports that disclose such data report similar improvement this year.
Todd Tranausky, vice president of rail and intermodal at FTR Transportation Intelligence, says better metrics for inland terminal dwell time would be valuable.
Knichel underscored terminals' importance. "The terminal ultimately determines if the entire intermodal process will be a success or not. There are many times a train will arrive early enough for an on-time final delivery. Does the inbound train get spotted per plan? Is the container unloaded and available for a drayman to pick-up and outgate?"
Bisaillon says metrics can provide a baseline and transparency for terminal performance.
He also cited two terminal-related situations that aren't measured effectively. They are compressed demand on terminal equipment and trucker on-time arrival at facilities where reservations are used.
"Many un-metered terminals with free flow experience periods of high compression where volumes are high during certain peak hours," he says. "This can stress terminal fluidity as machine capacity is generally finite. If too many trucks come in to be served in a period of time, there will be congestion and traffic queues, creating even slower performance."
Bisaillon also stressed another terminal factor – infrastructure condition.
"Terminals with large potholes, misaligned parking stalls, and poor lighting, signage or directions can all impact performance. There usually aren't metrics around this, and perhaps there should be," he says, because they slow operations, create safety hazards and contribute to high turnover.
In addition, poor infrastructure damages equipment and impacts machine uptime.
Terminals
As Bisaillon, Knichel and Gross noted, truck activity inside terminals is a critical factor in successful operations.
Motor carriers' terminal time is measured across the intermodal industry. For example, Southern California ports' average trucker turn time was 90 minutes in the first quarter, trailing the lowest average monthly terminal time in 2021 of 74 minutes.
Matt Schrap, chief executive of the Harbor Trucking Association, explained how those statistics vary widely among terminals and miss important aspects that matter to motor carriers. This year, total time from gate arrival to departure at individual area port terminals ranges from 37 minutes to more than two hours.
"While turn times tell a story on productivity and velocity, they do not highlight the on-going challenges with appointment availability, empty return restrictions and chassis capacity. We need to take a holistic approach to understanding all these issues and produce industry wide solutions," Schrap says. "If we improve on and address the operational challenges, we will see more efficiency and ideally faster turn times with the capacity we have today."
Trucking
Drayage activity outside the terminal presents an even greater challenge.
The Uniform Intermodal Interchange and Facilities Access Agreement's trucking participants now top 10,000, nearly 50% above 2014. In barely two years, more than 2,200 UIIA motor carriers were added.
Drayage.com publishes a demand index for motor carrier service, which has doubled on a nationwide basis in the past year, and risen far faster in areas such as Southern California.
"The fragmentation of the drayage industry makes it difficult to develop an industrywide metric that could be tracked and agreed upon by all the stakeholders in that part of the chain, not to mention the question of who would pay to put the technology in place to measure those data points," Tranausky says.
Different Approaches
Given all the complexity, fragmentation and other factors, there are questions about creating new metrics.
Bisaillon doubted the value and usefulness of a single new metric, and says it would be "myopic" to try to set a single, industry-wide performance standard because that word has such different meaning to workers in departments such as finance, mechanical, operations and safety.
Gross points out the definition issue as well.
"To be useful, a metric needs to be well-defined," he says. "On-time" is measured as of what point in the process? And what is your definition of 'on-time'? Arrival to the minute, the hour, or the day promised?"
Says Bisaillon, "Many companies are developing larger equations, which are being used to incent performance, not by focusing on one or two traditional metrics, but to roll up the important metrics and weight them for the purposes of establishing performance in many different areas."
Tranausky says, "There certainly is an opportunity for technology providers in this space, and there are several firms active in the space today that are working on refining and scaling technology to provide more real-time, independent, third-party visibility platforms for shippers."
