RSI Flexes Multimodal Muscles To Meet Marketplace Competition

RAIL SERVICES Inc (RSI) of Okemos, Michigan, has flexed its multimodal muscles since the company began providing the service in 1989. Staying in shape through the past decade has paid off so that today the business continues to expand in bulk rail and truck transloading services.

The company was founded in 1985 by Daniel Chojnowski. Managers today include Robert Tuchek, executive vice-president; Joseph Irish, chief operating officer; Kelley Minnehan, vice-president terminal sales and marketing; and James Weglicki, vice-president, operations.

With corporate offices near Lansing, Michigan, the company operates transfer facilities in Grand Rapids, Michigan; Buffalo, New York; Philadelphia, Pennsylvania; Baltimore, Maryland; Oak Island (Newark), New Jersey; Petersburg, Virginia; and Phoenix, Arizona.

A new terminal was opened in November 2000 in Milwaukee, Wisconsin, to serve the pulp and paper and water treatment industry. "We are positioned outside of Chicago to enhance the trucking portion of the movement," says Tuchek. "The area is also served by two different railroads, Canadian Pacific and Union Pacific Railway."

The terminals transfer about 5,000 carloads annually. The mix involves almost 150 different products, ranging from foodgrade to hazardous materials.

An example of the company's established terminal system is the Baltimore facility. Norfolk Southern serves the 80-railcar spot site. The secured fenced and lighted area is closed by an electronic gate with entry via access code. Security is high at the facility with the Baltimore Metropolitan Transit Authority police station next door, says Minnehan.

Paved Yard The yard is completely paved, either with concrete or asphalt. Products transferred at the facility include foodgrade, plastics, and petrochemicals. Dry bulk products are usually loaded in self-loading trailers. All foodgrade products are kept on dedicated tracks away from hazardous materials.

Typical services and equipment available are air compressor, sampling service, steam heating, and liquid storage tanks. On site are conveyers, pneumatic transfer equipment, liquid pumps, and a 70-foot platform scale.

Training for personnel falls under the Federal Railroad Administration and calls for 25 hours per year of job-specific instruction. Department of Transportation regulations are also involved in the training program. In addition, customers tour the site and review the training program.

Each terminal location utilizes RSI's computerized terminal management system designed specifically for the company. Railcar trace reports are generated and used internally to track and expedite shipments or generate customer reports. The system is used to maintain customer inventories. Customers also can access their inventory reports via the Internet.

The reports can be customized to customers' specific needs and forwarded to them either as an e-mail or by fax. The program is based on information and detail required in the transloading industry and RSI's years of experience in the transloading business.

"The program, like other operation developments, is typical of the company's proactive management style that has been used since its founding in 1985," says Tuchek. "Through the years, RSI has diversified into a transportation logistics firm representing some 260 companies.

"We are flexible in providing the appropriate type of service to meet and exceed our customers' needs," Tuchek says. "Whether RSI is asked to simply provide transloading services at one location, or to provide inbound and outbound distribution, the type of service is developed precisely for each customer."

Terminal Network As a counterpart to the company-operated terminals, RSI has created a bulk terminal network (RSI-Net) association, which is comprised of 18 North American private bulk terminal operations. As a result of the association, the private bulk terminal operators can use RSI's marketing and sales staff. RSI also provides terminal operation information.

"As a result of this association, these private operators can rely on our marketing and sales staff to generate additional business for their terminals," Tuchek says. "Additionally, private operators can draw on RSI's operational expertise to seek guidance to successfully operate their terminals."

Rail Services Inc . . . RSI presently leases a total of 245 railcars largely consisting of tank and hopper cars of various design. To derive the lowest overall transportation costs, RSI will often acquire and replace railroad-owned equipment with private equipment.

Supply-chain management supports the movement of all inbound raw materials shipped from the customer's vendors to delivery into the designated production facility. RSI works closely with the customer's procurement and operations personnel to establish the desired schedule.

"We see our responsibility as guaranteeing that the products are shipped on schedule and are received by the production facility on time and by the most economical means possible," Tuchek says.

Transportation Fleet In addition to rail, RSI provides dry and liquid bulk tank truck transportation and dry van service throughout North America. The company separates the truck module into two distinct categories - RSI-owned and operated service and contract service.

The company-owned fleet of 19 tractors and 31 tank trailers is assigned to terminals in Grand Rapids, Michigan; Buffalo, New York; Phoenix, Arizona; and Milwaukee, Wisconsin, says Weglicki. In 1998, RSI transported 17,500 truckload shipments of various commodities from foodgrade to hazardous commodities.

The Freightliner FL120 tractors are equipped with Cummins or Caterpillar engines with a minimum horsepower of 350. They have Eaton Fuller 10-speed transmissions.

Tank trailers are supplied by Polar and J&L Tank. Dry bulk trailers with 1,600-cubic-foot capacity are the typical vehicles in the fleet, and all are equipped with Sure Seal valves.

The company utilizes two Comptank rubber-lined 5,000-gallon trailers used for corrosives. The company operates four Brenner tank trailers that haul liquid sweeteners.

The 6,200-gallon stainless steel foodgrade tank trailers, like the other liquid bulk trailers, typically have Ibex pumps.

Vehicle maintenance is outsourced, Weglicki says.

"Since we began trucking operations in 1990, there has not been any incidence of contamination of product, or claims holding RSI responsible," says Tuchek.

RSI has over 80 contracts with various motor carriers throughout the country. Trucking associates are required to uphold company service standards, and their performance is continually evaluated to insure that the shipments are delivered on time and safely, he adds.

RSI reviews the performance of each trucking partner and shares the results to avoid potential service problems. Since the trucking industry is constantly changing, RSI is always looking for ways to improve both rates and service, says Tuchek. In certain cases, RSI will perform the trucking with its dedicated fleet in situations it deems appropriate.

"We feel that because we are a carrier, we understand the costing methodology of the trucking industry," says Tuchek. "This knowledge is drawn on when negotiating movements with trucking associates, or when we are considering a potential associate.

"We have developed a proprietary costing system to determine the theoretical cost for any shipment. In combination with knowledge of the carrier base within North America, we are able to achieve the lowest cost rates without the sacrifice of service."

Customer Service RSI's customer service team provides the dispatching for all truck shipments. The customer service representative monitors each shipment through delivery and works closely with the customer to stay ahead of possible delays that could occur.

RSI has direct pricing agreements with several railroads for the intermodal movement of bulk tank containers.

RSI possesses a fleet of 85 bulk tank containers presently in dedicated liquid service for various customers. While the majority of the shipments are domestic US movements, several shipments are involved in international service.

In 1999, RSI was involved in about 1,900 tank container shipments. Industrywide, the growth of this bulk shipping option has been at a rate of 25% per year, says Tuchek.

The accumulation of all these individual modules is the essence of RSI's transportation logistics. The specific distribution package developed for each customer is a function of individual needs.

"If we perform the inbound movements for customers' raw materials, or the outbound movement for their finished products, we can identify, develop, implement, and manage an effective and efficient package specific to each customer," says Tuchek.

The company's backbone centers around rail transportation. In 1999, RSI was responsible for the origination of 38,680 rail shipments, which placed the company in the top 5% of all users of rail transportation, says Tuchek.

With the rail and truck transportation well in place, the company is in place for further development.

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