ISSN 1052-7524

Proceedings of the Transportation Research Forum

Volume 7 1993

35th TRF Annual Forum New York, New York

October 14-16, 1993 High Speed Rail and Freight Railroads 107

Developments in Intermodal Equipment'

Dean Wise, Moderator Vice President Mercer Management Consulting

This panel topic is developments in double-stack — and talk about some of i ntermodal equipment. My name is the new developments. Dean Wise. I am a Vice President with Mercer Management Consulting based in Our speakers today are going to cover Boston. the view from the leasing industry. Charlie Wilmot is going to go first. Thinking back on this subject, one of the Then we are going to move to one of the first conferences I went to after I joined innovators in equipment, Larry Gross, Mercer (formerly Temple, Barker & who is President of RoadRailer. Then Sloan) was a conference where the we are going to go to the crazy idea edge subject was also intermodal equipment. by hearing from Dick Sherid, who is This was in 1982 or 1983. Back then, a with CSX. He is going to talk about the lead discussion was on whether we really Iron Highway, which is an idea that has needed to go from a 40-foot intermodal been around but that I think most trailer to a 45-foot trailer. people still aren't quite tuned in to.

At the time, the motor carrier industry Our first speaker, Charlie Wilmot, is Was starting to standardize it at 48, so Vice President at XTRA Corporation. some people were saying,the competitors XTRA is one of the two leading leasing are already out eight feet and we are companies that provide intermodal thinking, do we need to go another five. trailers and containers. About a year The answer was, maybe the shippers ago Charlie was with Strict Corp., where don't need it, but you sure better provide he was President ofStrict Industries. At that extra five feet for flexibility and for that time, XTRA and Strict merged and those that do need it, and because the XTRA's stock was at about 22. Charlie competitors are doing it. tells me that today it is at about 44, so he has already had an impact in his first Lver since that time, I've realized that year. That kind of raises the sights for intermodal equipment is never standing next year a little bit. Charlie is going to Still. One thing you may notice from the talk about the overall fabric of trailer Program is that we don't have anyone and container supply for intermodal, here talking about double-stack. Five which is somewhat unique, but also Years ago this entire session would have again, changing rapidly and never been about double-stack. But, it has standing still. moved so fast in the industry that we Want to go beyond what is now basically Our next speaker is Larry Gross. Larry assumed to be one of the standards — is President of RoadRailer Corp. Larry

1 A grant from the UPS Foundation helped make this session Possible. 108 Proceedings of TRF, Vol. 7, 1993 has been in the RoadRailer business for modal,which rents and leases piggyback intermodal ten years, at least. It is one of the most trailers, otherwise known as innovative pieces of technology to come trailers, domestic containers, chassis, along in transportation, and he is going and the like, to railroads, steamship to tell us where it has been and where it operators, and so on. is going. On the intermodal side of our business, Our third speaker was to be Jim Taylor, our piggyback fleet represents about General Manager of Iron Highway. Jim 35% of the total piggyback trailers in was not able to make it, but we are railroad intermodal, and our domestic fortunate to have someone who has been containers represent about 25% ofall the involved with this whole technology for domestic containers currently in service. an even longer period of time — since it was a gleam within the inventor's eye Suffice it to say that we are heavily about six years ago, to today where it invested in the intermodal industry — has been tested at the test track in an industry which is, by all measures, Colorado. Dick Sherid is going to tell us growing at the rate of about 7% a year about this technology called the Iron in intermodal loadings, and an industrY Highway. You will find this quite that we feel still has tremendous room intriguing and it is a very interesting for increased growth and that we find application. very exciting.

I'm going to begin my talk with a Charlie Wilmot review of the growth and changes that Vice President have taken place, and the size and XTRA Corporation make-up of the so-called intermodal box fleet over the last five or six years. Before I begin on the subject of Then I'll focus more closely on the intermodal equipment technology, I'll domestic container and piggyback give those of you who may not be sectors of that marketplace. familiar with XTRA a little bit of a background. XTRA is a New York Stock Next, I'll review a couple of highlights Exchange company. We are one of 20 from a survey of truck trailer companies that make up the Dow Jones manufacturers that we recently finished. transportation index. Today we are That survey produced some interesting exclusively in the truck trailer, information that I think will provide a container, and chassis leasing business good comparison to the happenings in throughout . We have intermodal. about 130,000 trailers and pieces of equipment that represent a value of Finally, we will wrap up with my gazing approximately $1.0 billion. into my crystal ball and trying to find some kind of profound observations We market these products through two about where we are headed in the principal operating subsidiaries. The future. first is XTRA Lease, which leases and rents highway trailers to highway Basically what this first slide shows is truckers, private carriers, and the like, the total size and consist of fleet through approximately 86 locations in from 1988 through 1990 to 1993. When the United States, Canada, and Mexico. I say box fleet, I mean total number of The second subsidiary is XTRA Inter- containers and trailers in the so-called Developments in Intermodal Equipment 109

intermodal pool. We've been conducting Here I have isolated the domestic an inventory of this equipment since containers from the other products, and 1988 on an annual basis and more you can see that the population of recently twice a year in order to capture domestic containers has steadily the fast-changing patterns taking place increased since 1988 at a pace of in the intermodal box fleet. approximately 20% per annum. And, we have projected a significant increase in First of all, the total size of the fleet in the size of this fleet over the next two 1988 was 125,000 vehicles, and was years. This increase includes both first again 125,000 in 1990. Only when we generation domestic containers, which get to 1993 do we see an increase in the are typically 107 inches in height on the size of the fleet to 129,500 vehicles. inside and 48-feet long, as well as so- called second generation containers, the In point of fact, our surveys show that likes of which J.B. Hunt is currently the size of the fleet at 125,000 vehicles building and adding to his fleet. continued through the fall of 1992. In Other words, there was effectively no We at XTRA have some specific concerns Change in the overall size of the fleet for about the technology that is being a five-year period of time, until the first employed in the Hunt boxes, but six months of 1993, according to our generally speaking, we are very surveys, which we regard as fairly optimistic about the changes that have accurate. been made and the efforts that are being made to design a viable second What has changed rather dramatically generation box. We have based our Within this same time frame is the prediction for the increase in the size of consist of the boxes in service within the the fleet on those encouraging signs. fleet. Although there were different size trailers, effectively speaking, 95% of the This increase, although it is obviously universe in 1988 was trailers. When you dramatic in terms of the population of get to 1990, there are changes in the the fleet, may be somewhat misleading numbers and percentages ofthe different because it is not necessarily increases to size trailers. But the container fleet had the dedicated intermodal box fleet. A lot grown to about 17% of the fleet at that of these boxes will be added by truckload time. By 1993, the size of the fleet has carriers who will be using them expanded,but the percentage ofdomestic predominantly on the highway. containers within the fleet has grown to about 27%. We will see a lot less intermodal usage on rail than would a typical box in the In 1988,containers and trailers, both 48. fleet that was developing from 1988 to foot in length, which happens to be the 1993. I've got a problem in doing my way we counted them that year, surveys in years going forward because represented about 12,000 vehicles. I don't know exactly how to count About 8,000 of them in that year were Hunt's box versus a box which spends its containers and about 4,000 were 48-foot entire life cycling through the trailers. As you can see, the 48-foot intermodal system. So, it may be trailer population increased to about 7% somewhat misleading, but it clearly is a in 1990 and since then has increased to strong sign for growth in the area of about 13% in our total current inventory. domestic containers. 110 Proceedings of TRF, Vol. 7, 1993

Let's look now at the other even larger over the next couple of years, unless the segment of the intermodal box fleet and industry is unsuccessful in bringing to that is the trailer side. In 1988, 1990, the fold a truly competitive second and 1993, the trailer fleet was definitely generation container. In that case, it is the dominant portion of the intermodal possible, if not likely, that the 20 to 25 box fleet and continues to be so. truckload carriers who are developing their intermodal programs today may While the domestic container inventory opt to tender their own 48- and 53-foot has been growing at a rate of about 20% highway trailers rather than take the per year, there has been attrition in the plunge with domestic containers. trailer fleet as owners of trailers have retired older and less productive units. This slide shows results from our recent However, with the sudden and survey of truck trailer manufacturing significant increase in demand for trends. I wanted you to see this, lest equipment that began last year, the there be any skeptics among you that trailer fleet seems to have bottomed out. believe that the rest of the trucking In fact, we are projecting an increase in transportation business is not headed the trailer fleet of about 5,000 to 6,000 toward the 53-foot trailer. If you units over the next year. This prediction combine our survey results with the assumes that business levels will Truck Trailer Manufacturing Associa- continue to make it difficult for trailer tion's tallies going back to 1980, the 53- owners to capture units that might foot trailer is fast becoming the standard otherwise be scheduled for retirement. throughout North America.

Although the number of 48-foot This summer, when Ontario allowed piggyback trailers has increased 53's, it was one of the last major significantly over the last five years, economic areas of North America other they are still only about 13% of the total than Mexico to allow 53's. This slide box fleet. The additional units that we hopefully will be your wake-up call in project being added to the fleet over the terms of the debate between 48- and 53- next year are going to be almost foot equipment. As you can see from the exclusively 45-foot 102 equipment as trend lines, 53's are very much here to opposed to 48-foot equipment. The stay. logical question here would be, why 45's instead of 48's or 53's. 48's are clearly Here then is my forecast for the future the standard and 53's are increasingly of intermodal equipment technology — becoming the standard through the rest the development of RoadRailer and Iron of the North American transportation Highway notwithstanding. First, there sector. still are and will continue to be vital markets for both trailers and containers I believe the best answer for that is that in intermodal for the foreseeable future. the largest portion of the intermodal rail car fleet still cannot handle 48-foot In both cases, however, they must be trailers efficiently, and the motivation improved products over and above those for railroads to make their operations that are available today. They must be more efficient outweighs their competitive in weight and dimension to motivation to be 100% market competi- any alternative offered on the highway. tive with trailer sizes. Given the trend They must offer good prospects for toward domestic containers, I don't reasonable financial service life. They expect this philosophy to change much must contribute to improved intermodal Developments in Intermodal Equipment 111

efficiency, not detract from it. They look at those two technologies. First, a must minimize the unmanageable detour. capital cost ofjust whimsically retooling the entire current intermodal system. This chart shows some of the major events that have occurred since the We at XTRA believe that both truck and dawn of the 90's. How many of these rail programs are headed in that events would have been predicted if we direction and it is really very exciting to had sat here even four or five years ago be a part of it. and tried to make predictions? I think the message of that is the quote, "The inevitable never happens. It is the Larry Gross unexpected always." So, as we look at President some of the predictions we are making RoadRailer Corp. now, mine included,for what is going to be happening in our little segment or I'd like to tell you a little bit about the intermodal segment, you need to RoadRailer. We are a division of treat them with a grain of salt. Change Wabash National Corporation, which is is inevitable but it is usually not what the second largest trailer manufacturer you think is going to happen. in the country. We have been the second largest since about the middle of 1991. Having done that, I will bravely sail Wabash National will build about 20,000 forth into the unknown and make a few trailers this year. predictions, not so much toward the intermodal side as the over-the-road side. We are second only to Great Dane in Charlie already alluded to the 53-foot, Production. We have a full product line and we, from the manufacturing side, of trailers, including 53-foot plate vans, are certainly in accord with that — the 28-foot pups for the LTL business, flat 53-foot trailer is dominant, certainly for trailers, intermodal equipment of all the full truckload segment, at this time. types — a full product line, including domestic containers that I will tell you The second item is what we call plate about, in addition to the RoadRailer wall construction, which is a type of product line. construction for the trailer where, instead of having a plywood interior We are excited to be part of this fast liner then an aluminum post and then a growing organization. It is only eight thin exterior aluminum skin,this trailer years old. Wabash National has gone has a much thicker piece of aluminum from zero to a very strong position in the with just a very thin post outside joining trailer industry. Just to give you an panels of aluminum. That is called idea, we are building in excess of 100 plate wall. That has significance in trailers a day at our single Lafayette, terms of the interior width of the trailer, Indiana location where all our because that whole wall assembly is a production occurs. very skinny assembly and allows a maximum amount of width inside the Primarily, I'm going to talk about what trailer. It has implications in terms of we are doing with RoadRailer, but also durability and low maintenance costs, as about the efforts we are making on the well. domestic container side. Perhaps I can give_ you some flavor of what we think This type of construction is only now some of the comparison points are as we beginning to enter the intermodal arena, 112 Proceedings of TRF, Vol. 7, 1993 both through the addition of some of the customers, Schneider National, which is new generation containers that Charlie sort of a pilot program for this type of referred to, as well as through the equipment. movement of truckload motor carriers to 53-foot over-the-road trailers on flat cars. One of the challenges of the 120-inch We are starting to see,for the first time, inside height trailer is that you have to the intermodal user having plate wall be able to bring the rear-end of the technology available. trailer up to the standard dock height, which is typically 48 inches. The rear Another item that we see on the over- end of the trailer is normally, in the-road side that has not really highway mode,sitting around 40 inches. penetrated the traditional intermodal This trailer has to be an air-ride trailer, market is air-ride suspension. As air- and then the air-ride is utilized to raise ride prices and rates continue to decline, the rear end of the trailer up to dock we expect to see continued penetration height. So, here is another item that is on the full truckload side for this type of going to move us towards an air-ride technology, which reduces maintenance trailer. cost on the box in addition to providing a better quality ride for the . I expect that as intermodal continues to make inroads on certain lanes, you are If we polish up the crystal ball a little going to see a counter-balancing bit and look down the road, I wouldn't strategies on the part of some of the say these are inevitable, but I would truckload carriers that choose to remain certainly say they are possible and that, over-the-road to go towards equipment as we plan our intermodal system, we such as this. This equipment cannot be need to acknowledge these possibilities duplicated by a domestic container and allow for them. One of the items without a great many problems because that we think is most exciting is a new a 120-inch inside height domestic type of trailer that is based on a lower container cannot be stacked within the fifth wheel height on the tractor, a 40- clearance envelope that is available on inch fifth wheel height instead of 49- the railroads. inch, which generates a trailer with a 120-inch inside height. Another item which is outside the trailer industry's control but is more a subject What is making this possible are of government regulation and issues advances in tire and brake technology surrounding NAFTA, is the increased that allow a smaller tire to be used payload on the trailer that might under the tractor and drive axles and accompany a tri-axle suspension. That trailer, without compromising the is certainly a possibility, although it is weight-carrying capacity of the trailer. not very active at the moment. There is What we are talking about is going from some discussion of creating a high" a 110- to 112-inch inside height to 120- volume corridor linking Canada and inch, perhaps an eight or nine percent Mexico via the NAFTA route. increase in the cube of the trailer, and virtually free, because the trailer is no The last item that we are starting to heavier or significantly more expensive see, believe it or not, is yet another than the traditional trailer. increase in the length of the trailer to 57-feet. In fact, in all the Sun Belt -foot There is a fleet of about 150 of these states, it is now possible to run a 57 being operated by one of our good trailer from California to Florida. Developments in Intermodal Equipment 113

.1 1istory says that these types of trailer that has a separate rail running i nnovations are going to occur on a gear that gets left behind when the regular basis. I won't make any trailer goes out on the highway. That is Predictions as to when or in fact whether in addition to the 1,000 48-foot Mark 57 is the right length. I think the only IV's that Triple Crown was operating thing that we can safely say is that the originally. evolution of trailer dimensions will Probably not stop at 53. Charlie made reference to the difficulty that the railroad industry has in Turning now to the RoadRailer, we have transitioning from one trailer size to been working very hard to inter- another, be it 45- to 48- or 48- to 53-foot. n ationalize the RoadRailer technology. The nice thing here is that Triple Crown We are running in full commercial was able to make that transition simply operation right now in and by acquiring equipment of the largest New Zealand. We dimension that was legally allowed on o have test commercial perations underway in the U.K., the highway, and the newest 53-footers France,and between Denmark and Italy, that we just delivered can be operated through Germany, over the Brenner on the oldest rail equipment that they Pass have. So everything is compatible and they don't have to struggle to match a We have just signed a bring trailer size to a rail car capacity. R license to oadRailer to India and we expect to conclude an agreement in Thailand The list that you see are the railroads Shortly. The last two are very that either operate , or in interesting to us because we feel there is some cases, own RoadRailers. Some are a natural fit between the RoadRailer just in the test mode. Norfolk Southern technology and the needs of developing and actually own RoadRailer countries that don't have an intermodal equipment for their Triple Crown infrastructure. These are the first two service. Canadian Pacific operates for e xpressions of that. Triple Crown on a hook-and-haul basis between Detroit and Toronto. C ertainly some of the big, big markets that represent a potential for RoadRailer When we were bought by Wabash are the former Soviet Union and China. National back in 1991, we set forth some Those are areas that we will be taking a development goals for the technology look at in the months and years to come. which we felt needed some improvement if it was to realize its full role in the When we talk about where we are intermodal marketplace. do raestically with RoadRailer, we have to concentrate mainly on the activities of The most important was to take the Triple Crown, which is Tom Finkbiner's trailer, which at the time carried a former baby and now a jointly owned pretty hefty weight and cost premium, subsidiary — 50% by Conrail and 50% by and try to bring the trailer down to what Norfolk Southern. They have been very we call a universal intermodal vehicle, successful in making use of what the one that is identical, or as close as R oadRailer technology has to offer. possible, to the over-the-road standard trailer. We have just finished delivering about 900 53-foot what we call Mark V trailers, That has implications in terms of the this being the newer type of RoadRailer dimensions of the trailer, the weight and 114 Proceedings of TRF, Vol. 7, 1993 load capacity of the trailer, and the cost. cube container which is the type of At the same time, we needed to take the development that Charlie referred to. I rail side of the RoadRailer equation and want to make some comparisons here make it easier for the railroads to deal because we feel that, having done a with. That required making it a great deal of research on this topic, we simpler, more standard vehicle, have some idea of what is going to be improving the compatibility of possible on the container side, and what RoadRailer with conventional is going to be possible on the RoadRailer operations, running longer RoadRailer side. The left hand side of this chart than the 75 units that had been shows the dimensions of what I will call the standard, and getting the the gold standard, which is the over-the- maintenance down and the reliability up road 53-foot plate trailer. This is what on the railroad. Schneider National or any of the full truckload carriers are buying these days. This is an example of the latest RoadRailer trailer. It is what we call an With Ontario falling to the 53-foot wave, Ultra-Light 53-foot plate RoadRailer we would expect to see just about 100% trailer. This is one of the 900 that we 53-foot acquisition by these people. The have delivered to Triple Crown. In fact, inside height on that trailer is 112 this is a new trailer that has been inches in the back; 110-1/2 at the nose; assembled into a train in the back of our 101-1/4 inside width; a door opening plant in Lafayette. You are looking at height of 111-1/2 inches; a heavy-duty the RoadRailer terminal, which was floor capable of withstanding a 17,000 created at a cost of about $3,000 by pound forklift load; and a tare weight paving one of the tracks that happened with lift pads, which is how, let's say, a to run in back of the plant. I am not Schneider National is ordering it, of saying you can always create a about 14,600 pounds. RoadRailer terminal for that amount, but it is an indication of one of the For the high cube container, the length flexibilities of the RoadRailer we show as 50% 53-foot and 50% 48-foot. technology. That is the current status, which is dictated by the capacity of the double- This trailer is a plate trailer. You can stack well of 48 feet. So, in order to run see the white plates that we refer to, as a 53-foot container on most of the well as the thin silver exterior posts that equipment that is out there now, you've connect those two plates. Let me talk a got to have a 48-footer underneath that little bit about the characteristics ofthat 53-footer. trailer. The dimensions of this trailer you can also treat as being identical to Railcar manufacturers are feverishly that of an over-the-road trailer. The working on a 53-foot , which will weight distribution, the tare weight of allow two 53's to be stacked, but the that trailer, has been brought down to first of those has not yet, as I about 600 pounds more than the over- understand it, entered testing. I would the-road equipment size trailer. It has expect to see them coming into testing an air-ride and does all of the things that next year. There are weight and cost a RoadRailer has to do in order to run on implications in trying to stretch that 48- the railroad. foot vehicle to 53-foot.

Simultaneously with this, we have been Inside height — we talk about a nominal working on a second generation high 110 trailer. We get close to that — Developments in Intermodal Equipment 115 maybe 109-1/4 to 109-3/4, depending on somewhere in the 16,200 range. We What manufacturer or what design is don't think it is going to go much below being utilized. On the 53, in terms of that. In fact, I think there is some clear inside height, because of the evidence that it is going to creep up stacking frames and what not, you are from that as the trailers and containers Probably looking at more like a 107 than are subject to real life conditions and we a 109-3/4, although that is subject to find out where we have to reinforce change. them.

The inside width — again, on a 53 that The RoadRailer dimensions are identical does not have the interior stacking to the over-the-road trailer with the frames at the 40-foot points, you are exception of the tare weight, which is going to get close to the inside width of approximately 600 pounds heavier or the plate trailer's 101; for the lower about 1,000 pounds lighter than the container on a 48-foot with stacking container. frames at the 40-foot points, you are really looking at a clear inside width of I mentioned earlier a mixed train 98-1/2. operation. This picture is of some of the testing that we did with Southern Door opening — approximately 110 Pacific and Schneider National. In the inches; floor loading is a big issue with back is a little device that doesn't show these containers. up too clearly on this picture, which is what we call a coupler mate. It has a What you are having to do is fit this regular railroad coupler on the back. high cube container in an outside height What that allows you to do is to couple envelope of 114-1/2 inches. Well, if you the RoadRailers up to a conventional want 110 inches inside and 114-1/2 train and run them behind a outside, that leaves you 4-1/2 inches for conventional intermodal train. the floor system and the roof. To give you a comparison, the over-the-road We have to be careful how we do that trailer uses 7-1/2 inches of depth to do because our RoadRailer trailers are not that. What you have is a very tough as strong as a rail car and they have a technical challenge of trying to squeeze limited capability to withstand the fore that floor and roof system into 4-1/2 and aft shocks that are generated by inches without compromising the weight, slack action in a conventional train. the durability, or the cost. But, we have done the computer work and we know we can do this under a We feel some decisions have been made fairly wide variety of circumstances. with regard to the capacity of the floor, which we would estimate at about 12,000 Here you see another example of a pounds. Now, whether or not that is mixed train operation. This is some enough to meet the marketplace and testing that we did with Amtrak looking prove durable is an open question. Our at running RoadRailers behind their experience would suggest no, that you passenger trains to carry mail. That is need to have something more in the a 105-mile-an-hour trailer that you are 17,000 pound category. looking at, because that is how fast that train went during the test. We expect to On the tare weight side, the over-the- see some additional developments in road trailer is 14,600. Right now, the that area next year. Here is another high cube container on chassis is photo of the mixed train testing on 116 Proceedings of TRF, Vol. 7, 1993

Southern Pacific, which was done gear, and then we have a dealer delivery between Los Angeles and Portland. You unloading system for set-up automobiles. can see the traditional piggyback cars in front of the RoadRailers at the rear. If we peel the skin off of this unit, this is what the inside will look like. This Taking a look at where we are going to drawing shows six mid-sized be putting our efforts in the future — one automobiles, but it will handle six full- of the most exciting developments is a size automobiles without any tiedowns refrigerated RoadRailer. We are also or jigsawing of the cars. For the looking at a version of backhaul, the racks are raised up to the the RoadRailer, which perhaps is the tool ceiling and you have a trailer that has that ties together both the double-stack the same inside height as a conventional arena and the RoadRailer arena by trailer today — about 110 inches in the being able to carry domestic containers nose and 112 at the rear. as a RoadRailer on that chassis and then to flip them onto the double-stack car What you see at the bottom is actually when necessary. the air-ride suspension. Here the air- ride is extended to bring the trailer up Here is a picture of the RoadRailer to dock height. Here it is in the normal reefer, what we call a RefrigerRailer. highway mode. This is a 48-foot nose-mount trailer with a tare weight of about 17,000 pounds, This is the unloading process. You see again 1,000-2,000 pounds less than a six full-size automobiles. One of the domestic on things that is happening in terms of chassis and perhaps 1,000 or so more automobile design, particularly with than an over-the-road reefer trailer. these cab forward type vehicles that you This unit is now in structural testing. see here, is that they don't nest very We will have it in service, we hope, well in a container. Their configuration within the next month or two. is such that you can't gain much by trying to jigsaw them in. That is why AutoRailer is a very interesting topic. we felt it necessary to go to the 120-inch There seems to be a growing realization inside height, so you could just drive on the part of both the users of railroad them straight in without a problem. service in the movement of fully set-up automobiles as well as the railroads Here it is in an end view. This is, of themselves that the current system course, a very critical item, because we needs some improvement. are talking about driving these cars in. That means you've got to get the driver This is one of our potential answers for out. By going to the plate trailer, we that. It is under development. What we have the maximum inside width. This are looking at here is a RoadRailer of gives 18 inches with a smoother trailer the 120-inch inside height variety that is wall, which we feel will work very well designed to carry set-up automobiles in in that regard. one direction and dry freight in the other. Here you see the unit in highway The last item I will show you is the mode riding on a 40-inch fifth wheel same thing as before, except this trailer tractor with that 49-inch deck height is 15 feet high, so it is not an over-the- that we talked about before. For road trailer. It is designed for unloading, we simply slide the tandem movements solely on the rail and all the way forward, raise the landing between terminals. The advantage here Developments in Intermodal Equipment 117

is that we are able to handle over-height we have a motor carrier division, and a vehicles like a minivan or a four-wheel lot of people think of us as a railroad. drive type utility vehicle. This is the But CSX elected five years ago to make replacement, we think, for the railroad its intermodal company a separate bi-level car because it is much lighter business unit of the corporation. We are and carries the vehicles in a fully really a large transportation marketing enclosed environment. Also, it can be company. We do have terminals, assets, loaded by the manufacturer off rail. and trailers, lots of extra trailers. We buy transportation from CSX and a This has been a snapshot of where we number of other rail carriers — Conrail, are and where we are going. Hopefully, Norfolk Southern, SP, Burlington I have peaked your interest a little bit. Northern, and we run a national network.

Dick Sherid We began this project by looking at the CSX things that impede us in growing this business. Making intermodal terminals I'm going to talk about the Iron is very expensive. General purpose Highway project. I think we should locomotives do a good job at what they clarify in the beginning. Keep in mind were designed to do, but they are very all of the things the previous two expensive, the maintenance of them is Presenters have told you about the very high, and they take almost 20% of changes in the industry and the trends, their own power to move themselves etc. Our project is certainly in line with around. Maintenance and reliability is trying to address the kinds of things that an issue, as are the assembly of trains, are facing our industry. It probably goes switching of cars, and getting that spine a bit further, in that you have noted how car to match up with that 53-foot that things have been made obsolete by you want to move. All of those things changes in links and changes in weight, are expensive. and those types of things. As for intermodal rail cars, the 89-footer Several years ago, we tried to identify does very well with two 45-foot trailers. what we needed to do long-term to move We have a lot of 89-foot cars, but that is to the next stage of intermodal not, as you saw earlier, the trailer of development. Fortunately, we got choice in the marketplace. involved with New York Airbrake — a gentlemen by the name of Tom Ingle, Rail compatible trailers — that is what who actually originated this idea. we really found was the most pressing issue. It was to try to get a technology We were looking at how we could that did not tie the piece of equipment address some new markets, not that a customer chose to use to the rail necessarily to obsolete anything that is industry — equipment that had to move in the industry now or the things that or be forced back to the rail system. people are doing, but to look at markets that we can't touch today. I am going to We decided to develop a system that run through a series of slides fairly would get into new markets, transport quickly. any trailer, have strategic flexibility, and lower the break-even cost. When CSLIntermodal is not a railroad and it you look at lowering your break-even is not a trucking company, even though point, keep this in mind — today, to be 118 Proceedings of TRF, Vol. 7, 1993 economical, an intermodal train usually heavily in very time sensitive markets. has to go 500-700 miles, and we would Just to give you a picture of what we see like to have 100 or more boxes on it. We as profitable business today in want to design a system that you could intermodal, we are using Chicago as the operate in short haul markets down to, hub and everything inside the red is one in some situations, 250 miles, and run in of the reasons you don't see those short quantities as low as the equivalent of 23 haul markets being covered by 53-foot boxes. intermodal today. Some of those in that circle probably have been under This slide supports what you saw earlier. consideration for discontinuing. What You can see how quickly, from 1982 to we would like to see is, if you were 1990, the change to 48-foot or longer using these hubs, you could serve trailers within the industry took place. everything outside of those markets and That made quite a bit of our equipment make money with it. obsolete, since the rail industry focused on the 45-foot. Look at the size of the Here we are looking at a single, other market. integrated train element — a continuous platform that is approximately 1,200 I think we are being generous here based feet long. It could be varied to suit any on the statistics that Charlie had saying particular application, because it is that we have 135,000 pieces of rail fairly well overpowered compared to equipment. On the other hand, the today's intermodal trains. market that we would like to get is, let's say, five percent of those 2.2 million This is a picture of the prototype that we highway trailers that are running are testing in Pueblo, Colorado. around, which also get 3-4 times as Schneider seems to be showing up often many moves per year as a rail piece of today. It looks like they are looking for equipment gets. The utilization factor is new ways to do things. But from this, much higher. you can see the yellow ramp, which is part of a split ramp that would be in the What we have envisioned is to have a center of this 1,200 foot platform. It has line haul option for motor carriers, using a hand operation so that the operator of the type and size of equipment that they the power unit simply comes back, plugs elect to buy to suit the needs of their in his control, and drives the train apart, customers. When surveying motor while standing right next to the ramp. carriers, one of the things that we were told is, we don't want our box sitting This is a shot of the ramp together. You around 24 hours waiting for your once-a- can see the connecting cord where the day departure. operator is hooking it up to drive it apart. This is the other side of it, with We would like to have multiple the air brake on whichever side you are departures per day. Getting down to not going to move shut down in a lock. units of 20 would certainly help move in We had UPS trailers out there, because that direction. That is set as one of our we wanted to make sure that they would goals. Another is a higher reliability load okay, since they are low in the factor, which is especially necessary back. We are testing two different kinds when you get into packaged products of hitches. Originally, we were looking like those UPS and LTL's handle. at a movable hitch. These platforms are Reliability has improved in rail all 28-foot articulated platforms. This is intermodal, but we are not participating a totally integrated, non-slack unit. We Developments in Intermodal Equipment 119 ts. were going to have a movable hitch on the time. They cut down friction and ee each 28-foot platform. The hitch reduce fuel consumption, as well as in manufacturers said, wait a minute, we improve safety. le can put multiple hitches on there for ie about the same price. Your maintenance Integrated multiple power units — there rt will be far less and you will get almost is one power and control unit at each the same utilization factor. So, we are end of this element — will be in the final it testing both the locked-in-place hitch and version. a movable hitch. It has two 750-horse diesel electric This one, you can see, is on a track that engines that run A/C power through has mechanisms that would end up drive trains that are under the first five causing more maintenance long-term as platforms. That is designed to use the You move this hitch. The plunger on the trailer and the freight that you are end is what separates it. That is all hauling as your traction weight, and controlled by an arm and hydraulics on therefore cut down on the weight of the the hostler that release it, move it, drop whole unit and reduce fuel consumption. a hook in that hole in the center, and pull it up to put it onto the trailer. Again, the whole thing is set up in modular fashion to cut the normal This is a picture of the one that was maintenance costs for the rail industry. locked in place. The suspension system The way locomotives are designed at a here is quite unique. If any of you have million or a million and a half dollars a noticed box cars and rail cars with piece, they break down and you pull trailers on them, even articulated you them out of service and send them to a will see them swaying in the breeze as shop and hope you get them back soon. they go along. These are designed so you can do a These units are all designed with quick change of drive trains or the independently rotating wheels, no axles computer control systems or whatever. across. They have their own suspension Here on the 750-horse engines you can system of elastic pneumatic springs on a see the forklift holes at the bottom, and shock system. They also have a there are about five quick disconnects. steerable wheel. But the really unique You can pull into a terminal to load and part of this is where you see the end of a unload and you can change out a power brass plate sticking out. unit in about a half-hour.

There is no weight riding on the A lot of this is for reliability. This articulated joint in the center. These shows one of the screens that would platforms all ride with the weight appear in the cab for the operator. All distributed over the rail on the outer the bearings, all the moving parts have part, so that any motion of the platform sensors and are monitored on a is transmitted throughout the entire continuous basis so that you would have length of the element. This cuts out the advance notice of anything going amiss. rock-and-roll motion that there normally is on rail cars. Our timetable has probably slipped one quarter in 1993 as far as test marketing. The torsion bars are on an offset lobe on We are changing the front truck on the each wheel and turn the wheel so that test unit. The freight got a tremendous the flange stays 90 degree to the rail all ride, but the crew thought there was too 120 Proceedings of TRF, Vol. 7, 1993 much vibration coming up from the rail, can hold 20 53-foot trailers or a so they are changing it out to a combination of smaller equipment in passenger locomotive front truck. any configuration. Getting that new truck out there to finish the test has set us back probably As many as five Iron Highway elements three or four months. can be linked together to form a 6,000 foot train. At the center of each element This is a photograph oftwo units passing is the loading ramp. The ramp opens to that was taken in Pueblo when I was out split the train, creating two loading at the test. I always heard of these areas. The entire element can be loaded and pictures of intermodal with a sunset in in 50 minutes using two hostlers can the background from I guy I used to unloaded in 30 minutes. The hostler work with. I am going to send him a ride on this ramp to provide direct photo one day when this thing is customer service in remote locations. successful and say, we are now moving into the era of the sun rising on The Iron Highway is designed to permit intermodal. trailers of any type or length, including light-weight highway trailers, to be (The following is a video.) moved intermodally with a movable hitch located on each 28-foot platform. into In 1989, CSX Intermodal began a The hitch can be quickly moved of cooperative effort with New York place, thus providing full utilization Airbrake to develop an innovative form the entire loading surface. of transportation known as the Iron Highway. Combined with superior ride Because of the simplicity of its design, be quality and the most advanced low cost terminal operations can the technologies available,the Iron Highway located virtually anywhere along carrier can load and unload highway trailers rail system, near a motor without lift equipment and make terminal, or a private carrier operation. level intermodal transportation available to All that is needed is a relatively private fleet operators in markets of250 loading surface and roadway access. to 700 miles. With each element having its own power This is a small prototype of the system and control units, train lengths can vary now being tested at the Association of to fit customers' volume needs, and American Railroads' research facilities frequent service scheduling and multiple in Pueblo, Colorado. Each element is departures between major metropolitan 1,200 feet long. At both ends are areas will be possible. aerodynamic power and control units, now in final stages of design. The Iron Highway will help to reduce highway congestion and will reduce fuel are Each element is powered by four light- consumption per trailer mile. There and weight 750-horsepower diesel engines over 130,000 reinforced rail trailers There which sends power to motors that drive domestic containers in use today. trailers the first five wheel sets on platforms at are over two million highway Iron each end. The engines are mounted on that are not reinforced. The modular pods and can be removed and Highway is designed to extend exchanged in thirty minutes at the intermodal service in this totally new terminal, whenever necessary for market. Once loaded,the element closes maintenance. Each 1,200 foot element up and the train is ready to go. Developments in Intermodal Equipment 121

In addition to its emphasis on customer Gross - I think the key question is, if you convenience, the Iron Highway is are going to develop a vehicle that is sYstematically designed to meet going to be used by the full truckload customers needs, and offers many motor carrier as a universal trailer, then technological advances that will provide any compromise that you make from the a ride quality unmatched anywhere existing trailer has got to be very today. carefully weighed.

A new suspension system combined with That will then be your universal trailer steerable,independently rotating wheels that you use not only for intermodal but reduces rolling resistance by 30%, for over-the-road as well. If you look at, enabling smoother, articulated travel let's say, a J.B. Hunt,they are talking of under all rail conditions. perhaps a 50-50 mix of intermodal versus over-the-road. Final testing ofthe Iron Highway will be completed this fall, followed by the If you listen to a Schneider, maybe that construction of full elements for market number is more like 20% intermodal, testing. Designated lanes and pilot 80% over-the-road. So, what the full customers are now being selected for test truckload motor carrier has got to do is marketing in 1994. The Iron Highway is to carefully evaluate each of the scheduled to be fully operational in 1995. compromises that they are going to have to make in equipment capacity in order (End of video) to give it an intermodal capability.

Sherid - One more thing — the market While three inches or even 3/4 of an inch We plan to serve or target is any might not sound like a lot, there are business that is moving in either a certain market segments out there, for Private fleet operation or LTL motor instance, that need a certain inside carriers or truckload carriers, or anyone height — beverage containers, for else who has a fleet of equipment that example. You are going to write that they manage and operate. In other segment off if you can't get their size of Words, we have determined that one of pallet or size of product stacked into the things we do best is to move a box your new trailer. from here to here. Really, it is a question of nibbling We'll let someone else manage the fleet around the edges — I'm going to lose so that it is not deterred from going in five percent over here and ten percent the natural flow that freight moves in. over here of the heavy load commodities In other words, it won't be forced back to because the container is 1,000 to 1,500 the rail system. We only want to move pounds heavier. They have got to make between points the boxes that would the trade-off as to whether or not that is naturally flow that way. a good idea.

Wise - We have come a long way from If they decide that it is not, then either the phantom five feet. It is now a you have to back away from the matter of three inches in some places, as universal piece of equipment strategy Larry was saying. Larry, who cares? and go towards a segregated fleet and Why do we care about that extra two or say, I'm going to have an intermodal three inches in the width and door unit and I'm going to have an over-the- height and so forth? road unit, or you have to back away 122 Proceedings of TRF, Vol. 7, 1993 service new intermodal equipment and system that is largely selling its from the that stay with piggyback. to guys who only load 40-foot depth, is fine, and if you want to stay with If you go for a separate intermodal fleet, that, that's fine. there are all sorts of inefficiencies that a more are going to come into play because now But, if you want to expand to satisfies you have two J.B. Hunt boxes or acceptable universal size that public, Schneider National boxes. If one the needs of more of the shipping 45 customer is a container and one then you need to have not only the 48- or customer is a trailer, you have to make foot equipment or in this case the ought sure he loads the container to the place 53-foot equipment, but maybe you the can that is intermodally served, and the to kick your marketing people in need trailer to the place that is over-the-road and start selling to the people who served, and it is going to be very difficult the larger size trailers. to do that. It was interesting to note in Larry's kind of Wise. Charlie, how about your point of comments that he is popularity view here. What is the acceptable level foreshadowing the increase in as we know, of compromise in terms of dimensions? of57 -foot equipment, which, is now very popular in 14 states in the subscribe to Wilmot. Of course nirvana is to get a Sun Belt. I don't know if I trailer. The universally acceptable box. It is the inevitability of a 57-foot and towns interesting that you should mention the infrastructure of the cities States phantom five feet. I recall there was a throughout the rest of the United difficult by the name of Harry Bruce who will make 57-foot trailers very fellow will was the chairman of the IC Railroad at to accept. I think 53-foot trailers appeal, and the time. find much more universal eventually railroad intermodal adapt itself Just a little bit of history — he technology will find a way to apparently spent the better part of more successfully to 53-foot trailers. several weeks when the 45-foot trailer on the was really beginning to take off, and he Wise - Dick, any comments was objecting to it. He would go around subject of dimensions? checking the safety seals on the of the equipment on his railroad. He opened Sherid - I agree with both what we the trailers and found that these new 45- speakers. As I said before, services to foot trailers were only loaded to really have to design are customer approximately the 40-foot location inside satisfy what the ultimate are in an the trailer. wants. Both of these reactions effort to design a rail-compatible piece of case, one It appeared that 90% of the trailers that equipment, or in Charlie's design that were leased to him by these onerous division is over-the-road, but that are leasing companies who wanted to open equipment to meet the trends marketplace. Those up new markets by promoting 45-foot taking place in the number of trailers instead of 40-foot trailers, were could be made obsolete by a is usually selling this phantom five feet that he things, because equipment time. That is why didn't need on his railroad. Harry, who built to last a long develop a transport is no longer with the IC Railroad — I we are trying to all of these needs thought at the time — kind of missed the system that will meet anything about the point. The point is that if you've got a and not constrain Developments in Intermodal Equipment 123 ice box, be it a container or a trailer that is our customers have when they go out .at Popular in the marketplace. and buy their own equipment as opposed th to leasing it. I should mention that CSX has a lot of trailer business and we run a double- So, we need to have a 10-15 year service re stack network and we are expecting all life and to offer equipment on an of those things to continue to grow they operating lease basis in order to C, Way they are. It is just that we are continue to invest in equipment. 5- looking at a way to get into short haul markets that we can't touch today. The Question - I wonder if there are some Lt economics just don't permit it. reports on the experience with Amtrak a and the RoadRailer. Has that worked ialt§tism - One of the speakers out? Is it operating the way they mentioned that he would like to see wanted it to and do they plan to expand? containers and trailers that have a service life of 10-15 years. How does Answer- Up until this point, we have that compare with what there is right just run technical tests and some very now? That seems a little higher than limited commercial trials. What we What I understood. have established is that the equipment will operate at 90 miles an hour, which Answer - In fact, for the equipment that was the target threshold for running We add to our portfolio we look for useful technically, in a safe manner,behind the service life in the neighborhood of 10-15 existing passenger trains. Years. History would bear out that equipment does have that kind of a What they are in the process of doing financial service life. But, I'm not right now is putting together a exactly sure why you say that is not the specification for production equipment norm. Perhaps what you are referring to which we expect to see in the next is that a great many of the truckers, for month or two. It will look slightly instance, will use more on the order of 7- different. The trailer will be tailored to 8 years. Is that the discrepancy you are their requirements. Then we will referring to? hopefully build that and be in a limited but extended service demonstration Comment - Yes. project some time in 1994.

Answer - That equipment will go on to Yeager - I am with an intermodal have additional service life, but probably marketing company and we represent for other carriers in other applications. shippers, even though we are called So, the equipment that we add to our intermodal marketeers now. We feel portfolio may be in a certain kind of there is an awful lot of emphasis on Service for 7-8 years and then be standardization that may create some transferred to a different kind of service problems. We feel there is a greater for the balance. need for a 45-foot 102 with a 110-inch door than any other piece of equipment. But, if the trailer itself doesn't see some That is because many of our shippers kind of financial service for a period of who are now ordering 48-foot trailers 10-15 years, it is very difficult to bring it have to block and brace, whereas they to the market and be economically could use the door as a reinforcement. competitive with the buying power and The reason they are ordering 48-foot the financial cost structure that many of equipment is because the 40's and 45's 124 Proceedings of TRF, Vol. 7, 1993 just say one more are in such bad condition. They are old, Comment - If I could I want to draw a beat-up trailers. We feel that, although thing on that. where the there is a need for 48- and 53-footers, distinction. I think going is there is also a tremendous need for 45- intermodal system needs to be equipment footers. We hope that is going to be to be able to offer a variety of taken into consideration. to meet the needs of the marketplace. 45- Wilmot. You are absolutely right. I I think there is a problem if you see the don't think you saw my presentation. foot equipment being added and is not One of the things that I showed was that primary motivation is that there larger the attrition that has taken place in the capacity to handle any trailer is 45-foot and shorter equipment fleet on than that. In other words, equipment than the trailer side has bottomed out this being added for operational rather year, and we are forecasting growth in marketing reasons. that segment over the next year or two, there for with probably a net increase of 5,000 to If there is a marketplace out -foot, or 6,000 units. 45-foot equipment or 28 whatever, I think the intermodal position to As opposed to 48- and 53-foot equipment industry needs to be in a for intermodal, there is a clear need for offer that capacity. revitalizing the45 -footfleet intermodally around, Phil. and I don't want you to think that I or Wise - Let me turn that shippers, Transamerica are trying to ignore that. As somebody that serves the the 45-foot We are both investing heavily in why don't you buy upgrading that aspect of the fleet. equipment? money. It is Wilmot (in response to a comment)- The Yeager - We don't have the putting our trailer of choice in North America is the a very simple thing. We are people and 53. Phil's principal involvement today is money into computers and shipper's in the movement of intermodal goods. we are trying to satisfy the who will The principal customer base for needs. We feel there are people I think piggyback intermodal is still more invest in new equipment, and buy plenty weight sensitive than it is cube sensitive. the railroads will lease and is It does not necessarily reflect the trend of new equipment if utilization are facing that is going on generally in the North improved. That is the job we that American transportation system. — our responsibility is to make sure asset is better utilized. Phil has a particular and unique need beats up a for 45-foot equipment that I think is very Question - What is it that justifiable and one that we are trying to trailer? respond to and that the industry is that is, all responding to. By this time next year, Wise - I think the answer to intermodal you should see the size of the fleet more of the above. In particular, trailers tend to get in the neighborhood of 100,000 units as trailers or piggyback not only because opposed to 95,000 units today, as the a little bit harder use techniques that are chart showed. of the lift-on-lift-off used to put them on the railroad, but the very large and Comment - I am very happy to hear that also because of configurations that because I think it is very important for congested terminal intermodal. exist in intermodal. Developments in Intermodal Equipment 125

Another reason is that the trailer Comment - From the over-the-road changes hands so frequently. There perspective, it is the loading and tends to be a lack of accountability for unloading of the vehicle where most of Who is responsible for the trailer at any the damage occurs. Point in time. It is that lack of accountability in the intermodal system, That is one reason why the plate in particular, that ages an intermodal technology has gained favor. Plate trailer more rapidly than a highway technology is less susceptible to that trailer. type of thing.