- THE MAGAZINE
Few companies have the product density to reach the 10 to 12 pounds per cubic foot that optimizes a standard U.S. 53-foot trailer. Even when the product diversity might achieve a mixed load capable of full trailer utilization, those goods would need to be co-located, and even then they are subject to the vagaries of an order mix that may not call for that optimal blend of freight. A 60-foot, high-capacity rail boxcar only multiplies the problem. The boxcar is capable of five times the weight and double the cubic capacity of a standard trailer.
Transportation planning for a mix of trailer and boxcar moves, among specific origin-destination pairs, with a limited freight mix, quickly becomes a mathematical challenge for even the best optimization tools.
Dal-Tile Corp., a division of Mohawk Industries Inc., manufactures and distributes ceramic tile and natural stone products, and knows the problem only too well. Its roughly 11,000 truckloads of product shipped from Mexico to the U.S. in 2011 approached the U.S. legal weight limit while using only 20 percent of the cubic capacity of the trailers. Working with Transplace, Dal-Tile developed a profile of the types of products that could be combined with its shipments to produce a more optimal load. That profile included product type, value, density and the distribution network and shipping lanes for any potential partner company.
The effort yielded a diverse mix of companies, including Whirlpool Corp., Grupo Convermex S.A. de C.V., and Werner Co.
Whirlpool had nearly the exact opposite problem of Dal-Tile. Its intermodal shipments from Mexico were using approximately 20 percent of the weight limit for the over-the-road/intermodal shipments in a particular lane that matched a Dal-Tile lane. Co-loading a boxcar for the 2,000 mile long haul moves achieved 70 to 80 percent capacity utilization. When base costs and fuel surcharges were shared based on each shipper’s freight, the result was a lower per-unit cost and a reduction in transportation capacity needed.
The mode change and co-loading program took some careful load planning to avoid negating these benefits. Dal-Tile needed an effective blocking and tie-down process to secure its product and Whirlpool’s products required addition of airbags as void filler. Dal-Tile reports that, not only has it not experienced any significant product damage since the co-loading program began, that was not the case prior to the program.
In addition to reduced damage and lower costs as a result of the mode shift, Dal-Tile and its co-loading partners realize resource and fuel reductions that improve their carbon footprint. Those costs have been reduced by 20 to 30 percent consistently and, along with the freight cost savings, are expected to expand as the co-loading concept is expanded. Annualizing those initial results suggests savings of over 160,000 gallons of diesel fuel and an equivalent reduction in emissions, such as nitrous oxide.
Dal-Tile’s co-load with Grupo Convermex, a maker of paper and plastic cups, plates, dishes and utensils, was estimated to save the equivalent of emissions generated by burning over 20,000 gallons of diesel fuel. Combined, these two projects eliminated the annual consumption of more than 180,000 gallons of diesel fuel, without sacrificing product service.
These results would sound impressive in a domestic supply chain, but this whole process was taking place between plants in Mexico and distribution networks in the U.S. Despite the benefits of the North American Free Trade Agreement, there is still an international border in the middle of these traffic lanes. When Dal-Tile and Transplace initially contacted the Mexican customs authorities, customs officials thought the project was “too ambitious.”
While the work necessary to gain acceptance of the concept with the potential co-loading partners was taking place, details had to be addressed on each co-loading opportunity relative to how the shipments would be assembled, loaded, block and braced as well as the issues of first-mile and last-mile handling. Transportation rates and fuel surcharges needed to be calculated, along with other costs, and all of those costs and savings had to be assigned equitably among the co-load partners.
All of the operational and engineering details of loading also had to be worked out to optimize the load without creating damage or other problems between the products that would be sharing space during the transportation leg.
A similar level of detail was needed on documentation for Mexican and U.S. customs and border officials. Though the products and the players were “known,” the mixed loads from multiple consignors to multiple consignees had to be properly documented to avoid delays or additional costs at the border.
As the alliance partners describe it, collaborative transportation management and co-loading has been around for more than a decade, but it can be hard to do it successfully. With the diversity of the products and the companies involved and the added element of the cross-border moves, this alliance had its share of complexities — yet the process was a success on the first attempt.