For more than two decades, intermodal has been the fastest growing major rail traffic segment, due in part to increased import and export transport. At one regional railroad, intermodal recently replaced the transportation of aggregates, such as crushed stone for construction, as its main revenue source. Intermodal terminals, where containers and trailers are transferred between modes (truck, rail, ship, air), are critical operational hubs. Terminal construction or expansion are typically multi-year, capital-intensive projects that require rigorous analytics-supported planning and decisions. CHALLENGE While considering large-scale expansion projects, the regional railroad’s leadership retained Princeton Consultants to Identify opportunities to increase capacity at two intermodal terminals in the short- to mid-term without significant capital expenditures. The terminals had capacity to process more freight, except during peak times when resources were strained. Anticipated increases in freight volume would force resource utilization at peak to 100% and exceed the congestion threshold. Although staffing and railcars could potentially be scaled upwards to match increased throughput, other resources were fixed and could not scale upwards. Terminal functions to be evaluated included in-gate, out-gate, parking, chassis usage, inventory, hostling, crane operations, load planning, car loading and railyard functions. Operations components included business processes, systems and staffing. APPROACH In its project research phase, the Princeton Consultants team conducted on-site observations and interviews to collect data, analyze the current state, and build an inventory of opportunities. www.princetonoptimization.com Increasing Intermodal Terminal Capacity through Simulation and Analytics OPTIMIZATION PRACTICE CASE STUDY
Transcript
For more than two decades, intermodal has been the fastest growing major rail traffic segment, due in part to increased import and export transport. At one regional railroad, intermodal recently replaced the transportation of aggregates, such as crushed stone for construction, as its main revenue source.
Intermodal terminals, where containers and trailers are transferred between modes (truck, rail, ship, air), are critical operational hubs. Terminal construction or expansion are typically multi-year, capital-intensive projects that require rigorous analytics-supported planning and decisions.
CHALLENGE
While considering large-scale expansion projects, the regional railroad’s leadership retained Princeton Consultants to Identify opportunities to increase capacity at two intermodal terminals in the short- to mid-term without significant capital expenditures.
The terminals had capacity to process more freight, except during peak times when resources were strained. Anticipated increases in freight volume would force resource utilization at peak to 100% and exceed the congestion threshold. Although staffing and railcars could potentially be scaled upwards to match increased throughput, other resources were fixed and could not scale upwards.
Terminal functions to be evaluated included in-gate, out-gate, parking, chassis usage, inventory, hostling, crane operations, load planning, car loading and railyard functions. Operations components included business processes, systems and staffing.
APPROACH
In its project research phase, the Princeton Consultants team conducted on-site observations and interviews to collect data, analyze the current state, and build an inventory of opportunities.
www.princetonoptimization.com
Increasing Intermodal Terminal Capacity through Simulation and Analytics
O P T I M I Z AT I O N PR AC T I C E
CASE STUDY
To fully assess potential opportunities, the team designed and built a simulation of the terminal facilities that incorporated the physical ramp/track layout, existing and varying train schedule and cutoffs, historical rail car composition, historical freight composition, and increasing volumes. The team simulated and analyzed operational changes and their impact on throughput.
Separately, the team conducted analytics independent of the simulation to assess both throughput and cost-benefit. To assess feasibility, the team performed a comparative assessment of opportunities grouped as operational, strategic, commercial, installation, and costs and benefits.
RESULTS
The assessment showed that the congestion threshold could be raised, and per-unit operations costs lowered by increasing and managing parking space, and by increasing work efficiency of staffing, track, and railcars. Resource usage could be reduced by spreading out demand, which would lower the peaks. This would entail changing train schedules to take better advantage of the 24-hour day, increasing cutoff-to-departure time, and reducing unit dwell time. Low-capital improvements would increase throughput by more than 5% in the first year and up to 12% over ten years, yielding a cumulative net benefit of more than $27 million.
A higher-cost tier of opportunities included improving capacity through the optimization of ramp efficiency
and track extensions. This tier of improvements would increase throughout more than 10% in the first year and up to 20% over ten years, yielding a cumulative net benefit of more than $40 million.
As a result, the regional railroad’s leadership was positioned to promptly and profitably begin increasing capacity and throughput.
ABOUT PRINCETON CONSULTANTS
Princeton Consultants works with many of the leading railroad-owned intermodal divisions, IMCs, drayage companies, steamship lines, and equipment providers to reduce operating expenses, improve asset utilization, improve service quality and increase staff efficiency. We help clients transform core operations for the greatest gain, improving the speed and quality of decisions during order acceptance and load planning, and during facility, dray and equipment execution.
CONTACT US TO LEARN MOREJon CrumillerChief Operating [email protected] x202
Jon co-founded Princeton Consultants and leads the firm’s management consulting and process engineering practices. He is well known in executive circles for his approach in turning management vision into well-defined action plans.
Shem joined Princeton Consultants in 1999. He helps leaders of transportation companies transform operations and processes to substantially improve asset utilization and increase network efficiency.
Patricia joined Princeton Consultants in 2007. She specializes in the design, development, and implementation of large-scale, high impact systems that help businesses optimize their decision-making at the strategic, tactical, and operational levels.
