I used to be the shipping/receiving guy in a warehouse, it fell to me to arrange all of our freight pickups, which was annoying because I didn’t really have direct access to any information about pricing, deadlines, etc. so I was constantly going back to the office to show someone quotes to see whether the rates and transit times were acceptable.
Most of our freight was LTL stuff (less than truckload, a couple pallets, not enough to fill a truck by itself) but a few times every month or two we’d get full truckload sized orders.
When it came to them, often “intermodal” shipping had much better rates. Intermodal meaning at least 2 different forms of transportation were going to be used. Truck, train, boat, cargo plane, etc.
As a US-based company with mostly US-based customers, that usually meant rail for us.
However, almost none of our shipments went intermodal because it was too slow for our customers.
It wasn’t usually a drastic difference, we’re talking maybe 1-3 extra days in most cases. Over the Road (OTR) there weren’t many places in the US that we couldn’t get freight to from our location in 5 days or less, and those 5 day locations were mostly real middle-of-nowhere customers on the other side of the country.
It always blew my mind that we didn’t or couldn’t push our customers to just place orders 2 or 3 days earlier to save some pretty significant money on shipping.
I don’t claim to know much about the industry, i was just some kid who needed a job and ended up the shipping guy because I knew how to use a computer and spoke English. But we a textile company that made things like work clothes (chef coats, scrubs, industrial work wear, etc) and restaurant table linens, and we sold mostly to bigger wholesalers, business service companies, etc. who would resell it or provide it to their customers as part some sort of contracted laundry service or something, so not really something I’d think of as being particularly time-sensitive or wildly unpredictable that they couldn’t anticipate their bigger orders a couple days ahead of time
Guess it probably says something about how much we all love instant gratification.
Inventory became evil decades ago. “Just In Time” logistics became the norm instead of having warehoused inventory on hand. The beancounters all decided inventory was money that was sitting around not doing anything and maintaining the warehouse space cost more too. Can’t have those costs on the balance sheet. So speed in receiving smaller shipments more often is now the norm, along with ordering when you need them instead of ordering ahead of time, because some beancounter isn’t gonna be happy about extra inventory.
Worked in two factories since Covid. The first stockpiled components we produced in house, and relied in JIT logistics for external components. Which was basically the stupidest arrangement they could have cone up with. They had 10+ years worth of parts they could make in house, clogging up their warehouse. And couldn’t ship anything because they were waiting on suppliers.
The other built two new warehouses to stockpile external supplies, and never let up on production.
Yeah, if you ever need stories on just how stupid senior managers can be, look at supply-chain case studies. And don’t blame the accountants: it’s their job to report costs, but it’s the job of the managers to deal with risk. And running ultra-lean JIT comes with the risk that a five-minute delay in delivery of some critical component can shut down your line. It’s not the beancounters’ job to have appropriate plans in place to prevent that from happening. It’s the biz-school bell-ends who are asleep at the wheel or thinking that they’ll just pretend there’s no risk and hope they’re lucky enough to translate those low running costs into their quarterly bonuses. And the contingency planning if the supply chain does glitch? Often it goes no deeper than having a scapegoat lined up.
The beancounters are right about the costs. What they’re not right about is the risks. JIT supply chains are much more fragile, and to achieve some degree of resiliency, even sophisticated manufacturers will often mantain stockpiles of some critical goods. And things get even more funky when there’s only one good supplier for something, or the cost of switching suppliers is high.
Honestly, in that case it’s not even an inventory thing, just plan on ordering a couple days earlier and go for the longer slower shipping method so it ends up arriving on the same day. You don’t have to warehouse it any longer than if you ordered it later with faster shipping, and you save a decent chunk of cash.
Rail is used in the US. We just don’t have as much rail infustructure so they can only get so far. If the port/factory/wearhouse aren’t connect by rail then they’ll have to use trucks for at least part of the transit.
Not necessarily. A 40 tonne lorry damages the motorway as much as 1000 160’000 passenger cars. It will lead to the state having to renew the road surfaces every few years. Rails don’t have that problem, they’ll happily take 100 tonnes for decades.
The point I’m making is that the government has already decided to maintain the highways, so continuing on is the status quo. If they wanted to make new railroads they’d have to expend political capital to get anything new funded.
A 40 tonne lorry damages the motorway as much as 1000 passenger cars.
According to an old and well-attested empirical formula, road damage is proportional to the fourth power of vehicle weight. So if we make the pessimistic assumption that those passenger cars weigh 2 tons (pretend they’re all SUV-sized EVs), then the damage ratio is on the order of (40^4) / (2^4), which means your 40-ton lorry does as much damage as 160,000 cars.
Maybe 2 or 3 single rail lines across the country.
You guys gotta remember that the US is double the size of the entire EU. I will say that I don’t disagree in that more rail would be nice, but you have to think about this logically.
Oh I do, it’s where I live. At current costs its about $1.6m(1) per mile, so yea, agreed, probably not much. Will have to check back in 5 years after we see the costs to operate and lawsuits from accidents 😆
While I don’t necessarily disagree with you, trains are used here all the time specifically for long haul stuff.
I used to be the shipping/receiving guy in a warehouse, it fell to me to arrange all of our freight pickups, which was annoying because I didn’t really have direct access to any information about pricing, deadlines, etc. so I was constantly going back to the office to show someone quotes to see whether the rates and transit times were acceptable.
Most of our freight was LTL stuff (less than truckload, a couple pallets, not enough to fill a truck by itself) but a few times every month or two we’d get full truckload sized orders.
When it came to them, often “intermodal” shipping had much better rates. Intermodal meaning at least 2 different forms of transportation were going to be used. Truck, train, boat, cargo plane, etc.
As a US-based company with mostly US-based customers, that usually meant rail for us.
However, almost none of our shipments went intermodal because it was too slow for our customers.
It wasn’t usually a drastic difference, we’re talking maybe 1-3 extra days in most cases. Over the Road (OTR) there weren’t many places in the US that we couldn’t get freight to from our location in 5 days or less, and those 5 day locations were mostly real middle-of-nowhere customers on the other side of the country.
It always blew my mind that we didn’t or couldn’t push our customers to just place orders 2 or 3 days earlier to save some pretty significant money on shipping.
I don’t claim to know much about the industry, i was just some kid who needed a job and ended up the shipping guy because I knew how to use a computer and spoke English. But we a textile company that made things like work clothes (chef coats, scrubs, industrial work wear, etc) and restaurant table linens, and we sold mostly to bigger wholesalers, business service companies, etc. who would resell it or provide it to their customers as part some sort of contracted laundry service or something, so not really something I’d think of as being particularly time-sensitive or wildly unpredictable that they couldn’t anticipate their bigger orders a couple days ahead of time
Guess it probably says something about how much we all love instant gratification.
Inventory became evil decades ago. “Just In Time” logistics became the norm instead of having warehoused inventory on hand. The beancounters all decided inventory was money that was sitting around not doing anything and maintaining the warehouse space cost more too. Can’t have those costs on the balance sheet. So speed in receiving smaller shipments more often is now the norm, along with ordering when you need them instead of ordering ahead of time, because some beancounter isn’t gonna be happy about extra inventory.
as these tariffs start kicking in, companies are really going to regret not having local inventory.
Worked in two factories since Covid. The first stockpiled components we produced in house, and relied in JIT logistics for external components. Which was basically the stupidest arrangement they could have cone up with. They had 10+ years worth of parts they could make in house, clogging up their warehouse. And couldn’t ship anything because they were waiting on suppliers.
The other built two new warehouses to stockpile external supplies, and never let up on production.
Yeah, if you ever need stories on just how stupid senior managers can be, look at supply-chain case studies. And don’t blame the accountants: it’s their job to report costs, but it’s the job of the managers to deal with risk. And running ultra-lean JIT comes with the risk that a five-minute delay in delivery of some critical component can shut down your line. It’s not the beancounters’ job to have appropriate plans in place to prevent that from happening. It’s the biz-school bell-ends who are asleep at the wheel or thinking that they’ll just pretend there’s no risk and hope they’re lucky enough to translate those low running costs into their quarterly bonuses. And the contingency planning if the supply chain does glitch? Often it goes no deeper than having a scapegoat lined up.
The beancounters are right about the costs. What they’re not right about is the risks. JIT supply chains are much more fragile, and to achieve some degree of resiliency, even sophisticated manufacturers will often mantain stockpiles of some critical goods. And things get even more funky when there’s only one good supplier for something, or the cost of switching suppliers is high.
It’s always the fucking accountants.
Honestly, in that case it’s not even an inventory thing, just plan on ordering a couple days earlier and go for the longer slower shipping method so it ends up arriving on the same day. You don’t have to warehouse it any longer than if you ordered it later with faster shipping, and you save a decent chunk of cash.
Rail is used in the US. We just don’t have as much rail infustructure so they can only get so far. If the port/factory/wearhouse aren’t connect by rail then they’ll have to use trucks for at least part of the transit.
Probably could have built a lot of rail for the cost of R&D on self-driving semis…
I’m not so sure. Infrastructure is hella expensive and the US government already maintains the highways that make trucking make sense.
Not necessarily. A 40 tonne lorry damages the motorway as much as
1000160’000 passenger cars. It will lead to the state having to renew the road surfaces every few years. Rails don’t have that problem, they’ll happily take 100 tonnes for decades.The point I’m making is that the government has already decided to maintain the highways, so continuing on is the status quo. If they wanted to make new railroads they’d have to expend political capital to get anything new funded.
According to an old and well-attested empirical formula, road damage is proportional to the fourth power of vehicle weight. So if we make the pessimistic assumption that those passenger cars weigh 2 tons (pretend they’re all SUV-sized EVs), then the damage ratio is on the order of (40^4) / (2^4), which means your 40-ton lorry does as much damage as 160,000 cars.
Thank you for the correction! I remembered incorrectly.
Maybe 2 or 3 single rail lines across the country.
You guys gotta remember that the US is double the size of the entire EU. I will say that I don’t disagree in that more rail would be nice, but you have to think about this logically.
Oh I do, it’s where I live. At current costs its about $1.6m(1) per mile, so yea, agreed, probably not much. Will have to check back in 5 years after we see the costs to operate and lawsuits from accidents 😆
how about historically? we had rail, and it was great. Most of it was ripped up at the behest of auto manufacturers.
It was mostly the street car systems that got ripped up, not the stuff that carries freight.
trams were the biggest casualty, but not the only.
Tram! That’s the word I was looking for…