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Caution rules when it comes to changing methods

Jun 30, 2014 | 08:00 PM | Myra Pinkham

Rail-truck intermodal freight transportation has experienced significant growth, but U.S. steelmakers remain wary of utilizing this mode of transportation for their products.

Class 1 railroads saw their second-largest intermodal volumes ever in April, according to Dan Keen, an economist with the Washington-based Association of American Railroads (AAR). Given the recent growth trend, Keen expects annual volumes to set a record this year.

U.S. intermodal rail volumes for the first 20 weeks of this year totaled slightly more than 5 million intermodal trailers and containers, up 5.5 percent from the same period in 2013. Keen said there is no way to determine how much steel was in those containers, although he believes that a “good chunk” of the contents were consumer goods, automotive parts and grain.

While transporting steel intermodally could increase transportation flexibility and efficiency for domestic steelmakers and their customers, as well as offer cost savings to companies now using solely trucks, Christopher Plummer, managing director of West Chester, Pa.-based Metal Strategies Inc., said that it continues to be a slow process for companies to make the conversion, given that intermodal containers have greater size and weight limitations than conventional rail cars and flatbed trucks.

But companies are now more willing to move steel intermodally than in the past, according to Mike Moss, vice president of supply chain operations at Cranberry Township, Pa.-based PLS Logistics Services Inc., especially after this year’s brutal winter, which played havoc with truck traffic and caused major disruptions at many railyards. “This past year has taught a lot of companies that they need to explore more options than just truck, truck, truck, truck,” he said.

The move to intermodal transportation varies by product, however. Some companies have tried to put steel coils into intermodal containers, but that generally cannot be done in a safe manner without specially designed sleds, decks, racks or pallets, according to Charles Clowdis, managing director of global trade and transportation at IHS Economics.

Moss agreed that some products just don’t do well intermodally. While securement is always an issue, he said that steel products that can be easily dividedÑsuch as short sheet, bar products and shorter-length tubular productsÑare less problematic. “You just can’t move a 60,000-pound coil in an intermodal container,” given that ocean containers generally have about a 40,000-pound limit, he said, although it is possible to transport smaller coils intermodally if the correct equipment is used.

It also is difficult to move oil country tubular goods in ocean containers because they tend to be big and bulky and are difficult to work with, according to Paul D. Sever, executive vice president and general manager of Orland Park, Ill.-based CMI Logistics LLC.

“Rail intermodal is a great opportunity, especially for those types of steel that make sense to be moved that way,” Clowdis said. “Rail has always been an efficient, practical way to move steel to inland manufacturers.”

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