Drayage operations expand with traffic
From the Memphis Buisness Journal -
An increase in container traffic is leading drayage operations, both locally and nationally, to expand.
Old Dominion Freight Line Inc. has opened a new container drayage site in Memphis, and Memphis-based National Drayage Services LLC is planning to double its business by the end of the year with new locations across the country.
The Intermodal Association of North America reports annual rail intermodal volume of 13.3 million containers and trailers in 2010, a 14.7 percent increase compared to 11.6 million in 2009.
Old Dominion, which is mainly known for its less-than-truckload operations, has been doing drayage business since the early 1960s. The drayage division mainly moves the ocean-going or rail containers to and from the ports, rails or container yards.
“With the response of the economy last year and continuing this year, at least from a transportation standpoint, we’ve decided to pick up where we left off in 2008, when we were putting together expansion plans,” Wayne Bersch, director of container operations for Old Dominion, says. “We started with Memphis because it is known throughout the United States, and probably the world, as being a transportation hub.”
The new drayage operation is located within Old Dominion’s 18.3-acre site at 3050 Carrier St., which also provides less-than-truckload and truckload domestic and international shipping services. The new service won’t mean new buildings on the site.
“Old Dominion typically overbuilds facilities to allow for growth,” Bersch says.
The service center, which has been in Memphis for more than 25 years, has 169 doors to handle shipments and currently employs 281.
The drayage facility will be staffed with five owner-operators at the start. Old Dominion is expecting to have 25 owner-operators by May 2012.
“The container drayage business is mostly owner-operators, which affords you a great opportunity to grow it quickly as well as shrink it as you need to,” Bersch says. “It really gives you a lot of flexibility.”
Bersch says Old Dominion likes Memphis’ central location, as well as its five Class I railroads, which the Association of American Railroads define as a railroad with operating revenue of more than $378.8 million.
“In Memphis, our focus is going to be on rail yards, but much of that rail business originates on ships,” he says.
What has been driving its decision to grow drayage operations has been strong imports into the U.S. as well as the export business showing signs of life. Exports typically move through containers, leading to an upsurge in domestic rail.
“We continue to see that as a growth market and we want to be part of that,” Bersch says.
National Drayage Services is looking to ride that wave as well.
The company has opened locations in Houston, Dallas, New Orleans and Mobile, Ala., so far in 2011. This growth brings it to 11 total locations across the country.
The company hopes to add Los Angeles, Oakland, Calif., and El Paso, Texas, locations in the third quarter.
“At the current pace we’re on, we could double in size this year, if not triple,” president Chris Moore says.
The company has 40 employees, not counting owner-operators.
Moore can see how Old Dominion and other companies would want to open or expand in Memphis, which has strong transportation assets.
Drayage business is driven by freight increasing.
“To me, it clearly seems the freight is coming back,” Moore says. “Consumption is up and more products are shipping. The gloom of a couple years ago is becoming more and more of a memory now.”
