The Cost of Deadheading Autoracks
At Pro-Tech Group, our goal is to provide expert logistics and supply chain solutions that companies need to respond quickly and decisively to ever-changing market demand. To do that, we conduct a series of research and analysis to ensure that our products and services positively support companies’ operations and finances. Here, we will share how we evaluated the automotive and rail industry while developing the industry-first collapsible mobile container system.
Our CEO, Earle B. Higgins, knew from his 32 years of automotive experience, automakers could experience significant cost-saving if they used autoracks for backhaul. Out of that theory came the Pro-Tech container system and analyzing the landscape. Upon joining Pro-Tech Group, Chief Financial Officer Wayne Chan analyzed the current industry data and agreed with Higgins. “As we reviewed the numbers more in-depth, it was apparent that our container system was a viable industry backhaul and cost-saving solution,” said Chan.
The Industry Landscape
“As we reviewed the numbers more in-depth, it was apparent that our container system was a viable industry backhaul and cost-saving solution.”
Our study found that automakers transport 70% to 75% of the 17.3 million cars and light-duty trucks across North America through the rail system’s estimated 66,000 available autoracks. Once those new vehicles reach their destination, the autoracks deadhead back to the OEM plants. Simultaneously, manufacturers and distributors from plants and distribution centers across the continent, mainly from coastal port cities, were shipping billions of dollars of parts and components through ground transportation to the OEMs assembly plants.
We analyzed the potential cost-savings for product shipping from California to Michigan through rail using the Pro-Tech container system versus ground shipping with this knowledge and other significant data. In this case, our system would provide an estimated annual savings of over $10 million, plus the various unquantified environmental benefits.
This example did consider a few critical factors; delivery frequency and drayage - the transport of goods over a short distance. The potential $10 million-plus annual savings factored in weekly deliveries on a string of 57 rail cars filled with Pro-Tech containers. Also, drayage to and from either end of the railyard. The container system needs to be seamless for the vendor and client. Part of the estimated $10 million-plus savings includes opportunities for our clients to negotiate empty rail car miles.
How We Can Help Your Business
The auto industry is just one example of how the Pro-Tech container system is a cost-savings solution. If you have a consistent shipping volume of more than 500 miles, we welcome the opportunity to discuss how the Pro-Tech container system may be an efficient and environmentally conscious shipping alternative for you. Contact us today at protechgroup.us/contact.
