An innovative approach that transforms a negative into a positive for Wisconsin manufacturers and producers substantiates findings in research completed by the Center for Freight and Infrastructure Research and Education (CFIRE) at the University of Wisconsin–Madison.
Simply put, geography is an issue for Wisconsin shippers wishing to utilize intermodal rail—rail combined with other transportation modes such as trucking—as part of its supply chain. Chicago’s proximity results in Wisconsin shippers being held captive to the realities of the region’s freight system. As the busiest transcontinental rail gateway in the country with over 1,200 commuter, intercity passenger, and freight trains a day, Chicago is the heart of the continental freight rail system and exerts a gravitational mass that essentially creates a funnel for Wisconsin freight that wants to travel by rail. However, because of the regions’ congested rail system, getting freight through the Chicago gateway can take anywhere from hours to days, creating service and reliability issues for Wisconsin shippers.
Additionally, the proximity to Chicago has had the side effect of reducing investment within the state on our own rail infrastructure. Class 1 rail carriers’ business models and supporting network optimization have resulted in the near elimination of Wisconsin intermodal terminals from their networks. As a result, many Wisconsin shippers must implement an intermodal supply chain strategy that involves sending a truck to Chicago to pick up empty 20-foot or 40-foot containers which are then trucked back to their home city where they are loaded with product and then trucked back to Chicago for shipping out through that port. Paying to truck empty containers is not only inefficient, but is also often hindered by the international container shipping companies who don’t want their containers out of service for the time that this process takes.
In the CFIRE study, The Potential for Mode Conversion to Rail Service in Wisconsin, the call by Wisconsin businesses for additional in-state intermodal facilities to replace discontinued infrastructure and service was noted as a major impetus for the research. Researchers also noted the negative perceptions among Wisconsin shippers associated with Chicago’s proximity and the supply chain process of transloading, the unpacking and repacking of materials into different containers in order to switch between transportation modes. Research findings resulting from analyzing Wisconsin shippers’ proximity to rail access and a modal diversion analysis, compelled researchers to recommended that shippers instead view their proximity to Chicago as a positive as well as look to transloading for ways to improve the efficiency and economics of their supply chains.
By using a data-driven approach and applying Six Sigma process management to supply chain practices, a global supply chain firm independently researched, authored and designed a value proposition that uses solutions to improve the flow of material and containers to and from Chicago Inland Ports. GKM Global Supply Chain Management has turned Chicago’s proximity into a positive for Wisconsin companies that import and export products. The NE WI-41 and I-43 Circuitous Platform© facilitates economic and environmental efficiencies by using the region’s international traffic patterns to its best advantage. For one thing, Wisconsin shippers have relatively short trucking distances that allow direct access to multiple Class 1 intermodal terminal rail heads in the Chicago market. By comparison, more distant shippers must move freight by rail to Chicago and then, once there, transfer it between rail carriers by truck in order to gain access to their eventual end markets. The platform also eliminates inefficiencies of transporting empty containers, the unpredictable nature of container and/or chassis availability, as well as punitive fees for detention and demurrage. The I-41/43 Platform continues to scale at percentages that were not projected until 2018. As a result, companies that on-boarded eliminated assessorial charges and recovery delays. In addition to increased utilization, efficiency gains include service reliability and cost savings in most cases.
GKM Incorporated recently visited the University of Wisconsin–Madison campus to talk to students about how its circuitous supply chain platform supports the goals associated with Smart City initiatives, the current topic for CFIRE’s Transportation Management and Policy Program’s colloquium. In particular, the platform reduces TEU flows—the amount of freight capacity that is moved as measured in units equivalent to a twenty-foot shipping container—to and from Wisconsin. Additionally, its integration of traffic increases asset utilization and reduces the amount of international and associated traffic on I-41 and I-43. A cumulative effect of northerly and southerly integration flows to and from WI has potential to reduce greenhouse gas (GHG) emissions. The platform’s Circuitous Patterns and reoccurring traffic flows between NE WI and Chicago make the eventual implementation of non-diesel powered semi tractors a real possibility and further reduce GHG emissions. And, by helping companies manage their supply chain infrastructure “from the Tower,” the Platform places control of supply chain management and execution in the hands of shippers. Freight flows to or from intermodal terminals in Chicago are serviced organically by the Chief Operations Center (FTC, Bolingbrook, IL) during off-peak hours. This action also reduces congestion on Chicago’s roadways and improves the lifestyle of their dedicated fleet drivers.
As the CFIRE researchers had concluded, the Chicago Ports’ proximity, while often viewed as a negative, is a reality for Wisconsin shippers that can be an asset for our state’s producers and manufacturers, if properly leveraged. With its innovative approach to supply chain management, GKM is opening new avenues for Wisconsin producers to work more efficiently and cost effectively with its neighbor to the south.