In the case of increasingly fierce competition in road freight transport and lower and lower profits, it is necessary to find a way out in order to survive. However, where should we break through?

American J.B.hunt Transportation Company (hereinafter referred to as Shengshi Company), the largest full container container transportation company in the United States, is one of the top five freight companies in the United States and one of the Fortune 500 companies in the United States. This article is based on the speech given by Zhang Fei, Multimodal Transportation Director of Shengshi Company. From it, we can learn about the business model and development history of Shengshi Company's multimodal transport, as well as some reference experience for domestic multimodal transport, hoping to provide you with new ideas for enterprise development.

Shengshi Company was established in 1961. At that time, there were only 5 trucks, all of which were engaged in regional feed distribution. In 1981, with the loosening of the US freight control policy, quotations and routes no longer need to be submitted for approval, ushering in a major development opportunity. Up to now, Shengshi Company has become the largest full container container transportation company in the United States, with more than 20,000 employees and about 13,000 trucks.

Shengshi Company is also one of the top five freight companies in the United States and one of the Fortune 500 companies in the United States. In 2016, its turnover was US$6.6 billion and its net profit was US$430 million.

Summarizing the successful experience, I think these three points are very important for the growth of our company:

One is asset-heavy. The company has been an asset-heavy service-oriented enterprise since its inception. From the founder to the current leaders, they all agree that it is very difficult to provide high-quality services without heavy assets.

The second is strategic transformation. Beginning in 1989, we shifted greater resources from traditional trucking to intermodal road and rail transport, a key factor in our company's success.

The third is supply chain solutions. As a large-scale transportation company, many large freight forwarders are willing to purchase services from you, but they will not only purchase one kind of service, so you must have a variety of package service plans. Our company now has multiple sectors to support the management of this supply chain.

The development history of multimodal transport in the United States

Multimodal transport is a very old concept. Since the 1950s, since containerization began, multimodal transport has been a transport mode adopted worldwide. In the 1980s, the US President Shipping Company at that time had developed a double-layer stacked shipping container and began to do multimodal transportation on roads and railways in the inland of the United States.

The reason why multimodal transport can develop in the United States is due to many market conditions and some client conditions:

First of all, after 2000, due to the turbulence of international oil prices, including the shortage of drivers in the US market, multimodal transport developed very fast.

Second, customers in the United States are relatively dispersed. What should we do if we want to achieve high efficiency and extremely cost control in long-distance transportation? At present, multimodal transport is the best way.

Suggestions for the development of multimodal transport in China

Many companies in China are doing multimodal transport. Because of the constraints of roads and stations, they focus more on 40-foot to 48-foot sea containers, but the United States now uses more 53-foot inland containers. And this specification is widely used in the inland United States.

North American road-rail intermodal transport – main transport equipment

In addition, these containers are still refrigerated containers, with a cooler on top and an on-hook below, which can be directly boarded on the train, which is called humpback transportation in China. There are also some frames, and of course the container cannot be separated from these frames.

With the car, we also need some railway equipment. American railways can provide us with double-layer stacking function. If we have this function, the cost will be reduced by half. A train can transport 200-300 containers in the United States, while At present, China's special trains can only transport about 30-40 containers, so there are some bottlenecks in the country.

The advantage of humpback transportation is that the container and the frame are put on the railway together, and it can be unloaded relatively quickly, but its disadvantage is that it loses the double-layer stacking function, so it is suitable for some customers with high timeliness requirements, including some express companies .

The business model of Shengshi multimodal transport

In essence, Shengshi is a truck transportation company as well as a road transportation company. What we provide is container trailer service, connection service at both ends of the railway, and marketing support at the same time.

Specifically, we bring customers directly to the railway side, and the railway operator is responsible for the operation of the railway hub and the laying of the railway network. We combine these two advantages together, as a direct target of marketing, to promote directly to customers. In the market, the sea container is transferred to the inland container of the United States, and the long-distance road transportation is transferred to the combined transportation of road and rail.

In terms of service, we completely provide door-to-door service, not just from the door to the train end, or from the railway end to the door. We don't need the customer to know how the box goes on the railway, he only needs to know which end and where his goods are, and at the same time, we will place orders, track, report and settle claims with customers.

So on the client side, we are the direct service provider for the customer, and the customer no longer needs to deal with the railway alone. This is our road-railway operation model. Although many peers are doing this model, there will be more challenges to railway operators in China.

The U.S. rail network can basically cover all of the U.S. mainland. Most of the goods basically arrive at the west coast of the U.S., then transfer to 53-foot containers, and then send them inland, including Chicago, Memphis, Atlanta, and Kansas City. This territory is the railway network of the United States, and it is also our service network.

US Railroad

In terms of transportation capacity, according to our statistics, there are currently more than 280,000 inland containers in the United States, and our company currently has more than 85,000 containers. In terms of market share, we account for nearly 1/3 of the market, and it is expected that by 2020 it will reach More than 100,000 units.

The transportation capacity of Shengshi Company's road-rail combined transportation

A key strategic adjustment of Shengshi Company

In 1989, we made a strategic adjustment. In a sense, we also took a gamble, because we want to survive when the road competition is getting more and more fierce, and the profit of trucks is getting thinner and thinner. What should we do? After signing a long-term cooperation agreement with the railway, we also happened to encounter some objective factors, which gave us a lot of support.

First of all, from the side of the cargo owner, they see that multimodal transport is a lower-cost mode of transportation, but in China, the cost of multimodal transport has not yet come down, and compared with the cargo owner, his enthusiasm has decreased. There is a shortage of truck drivers in the United States. Why are many young people unwilling to be truck drivers? Because they don’t want to suffer, so many truck drivers are only willing to do some deliveries in surrounding areas.

But as a multimodal transport service model, truck drivers can run long distances, and he only provides some connecting services at the railway terminals, which greatly improves the living and working environment of drivers, so more drivers are willing to to do this work.

From the taxpayer's point of view, road congestion is undesirable, but a train can change two or three containers from road transportation to iron transportation.