Norfolk Southern’s Unique Way to Increase Efficiency
It should be no surprise to anyone that COVID-19 and the resulting uptick in pent-up demand, combined with the demand for better working conditions since the work from home movement began, has caused a global supply chain shortage. One such example of blockage is at intermodal points between boat, railroad, and truck. Norfolk Southern, a railroad company that operates 19,500 miles of rail across 22 states and the District of Columbia, is hoping to speed things up, and owner-operators working for themselves may benefit.
Details
Norfolk Southern says that when a trucker completes a delivery to one of its railyards, 85% of the time that truck will leave empty handed. That is an inefficiency that they want to resolve.
They are starting what they call the Dual Mission Reward program. Norfolk Southern is offering drayage truckers who both deliver and pickup on the same trip an extra $200 each and every time.
Norfolk Southern says that this is a scenario wherein everyone wins. “Trucks leaving the terminal that were formerly empty now become loaded, productive miles for the truckers,” said D’Andrae Larry, group vice president of international marketing at Norfolk Southern, in a press release.
Norfolk Southern gets more of its goods traveling, truckers deal with fewer deadhead miles (leading to more productive miles) and receive a $200 bonus, and the supply chain becomes slightly less congested in a time where it is remarkably clogged so other companies can get their computer chips and other materials. What is not to like?
Norfolk Southern estimates that through this program, 46,000 truck trips may be saved in Chicago alone. The potential only increases when considering all of their railyards along the eastern United States.
Conclusion
It will be interesting to see how this experiment works out. If this incentive program proves to be successful, it is likely that other companies may offer similar incentive programs to get freight moving, and may even have to compete amongst each other for truckers’ business. If that happens, truckers will benefit by potentially getting an even greater bonus than $200 per trip.
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