July/August 2018
Intermodal: ‘Great Solution’ for Export Expert
Voice of the Shipper Series
For Greg Oberting, CEO of Interstate Commodities Inc., intermodal represents a "great solution" for containerized exports, typically bound for Southeast Asia.
Oberting, whose family grain trading business was founded more than seven decades ago in rural Indiana, outlined for Intermodal Insights how intermodal fits into the company’s business strategy, which targets the door-to-port market. Interstate’s story, a departure from the focus on import and domestic container moves, illustrates how intermodal can fit into a wide variety of customer needs.
"The intermodal solution is much more strategic and sustainable for our purposes," said Oberting, compared with alternative methods for shipping grain and other products by a combination of rail and/or truck for the land portion and bulk vessels for the ocean export segment. "Intermodal is a great solution for a targeted supply chain."
Interstate emerged from the family business that was focused on commodities trading to become a logistics business, which now includes status as a non-vessel operating common carrier in order to facilitate international intermodal moves.
Full Range of Logistics Services
"We are functioning on multiple levels," Oberting said.
Over a five-year period, the company has developed intermodal services that include trucking, rail, chassis, terminal and container depot components. The business is large enough to support ownership of 1,000 chassis dedicated for its own use.
Services are initiated often by repositioning empty containers to locations, mostly in rural areas, where products such as soybeans, sorghum and distilled dried grains, known as DDGs, are loaded before highway moves are made to an intermodal facility. In addition to moving agricultural commodities, Interstate also serves customers that ship plastic resins, animal hides and other products.
Today, Interstate operates a ramp at Fremont, Nebraska, near Omaha, with plans to expand to a facility in Texas and two others in the Western U.S. The Fremont location’s business volume is large enough to load about two trains per week of export box freight.
"We developed vertical solutions as we transitioned from being a [beneficial cargo owner]. Now we are doing virtually the same thing as a service provider that we were previously doing as a trading firm," Oberting said. In fact, before Interstate was formed, business was brisk enough to total 100,000 twenty-foot equivalent units annually. Today the load counts are almost the same, he said.
In conversation, Oberting frequently uses the word sustainable to describe both Interstate’s business model and the underlying, strong supply of equipment from international trade flows, where import moves consistently exceed exports. Oberting expects imports will increase 8 percent year-over-year, which should guarantee that an adequate equipment supply will continue.
While business is strong, Oberting does have one concern about the broader, international logistics picture. "We are monitoring the stability of the current steamship lines, as well as the continued consolidation within that industry. We’d like to see some stabilization."
In general, however, Oberting is enthusiastic. "We are excited about the growth opportunities we have with our current footprint, and the projects we have under development," he noted.
