Insights - October 2016 - 7

EXPO - from page 5 system vs. 9 billion miles 25 years ago," Rose noted. Speaking of the next 25 years, Rose indicated capacity expansion and innovation are needed. "We need to prepare to move 15 million more units annually." To prepare for all of this growth, Rose declared the need for capital investment. "Infrastructure is a word everyone loves to use but no one wants to pay for," Rose said. He included the electric grid, information and other critical infrastructure in his observation. "There's just so much need out there to re-modernize our infrastructure." He continued, "In the case of highways, there's a real 'watchout.' The highway system built by President Eisenhower relied on a user-based system since it was completed in the 50s. That's worked really well until the last decade where the highway system has fallen short and we've had to come in with general funds and bail them out." While cautioning against alternatives to the user-based system, Rose responded to one attendee, "The more efficient our supply chain is, the more competitive our jobs are in our country, the further reach we have." The Growth Imperative Rose's sentiments were echoed in the discussion by The Growth Imperative panel. "As far as market opportunity," offered Spencer Frazier of J.B. Hunt, "the opportunities that we see are several multiples of our current business." He added, "Service, innovation, and investment are three things that are core strategies of ours; three things I think should be core strategies for the entire industry." Asked what the next five years will look like, Jeffrey Heller of Norfolk Southern pointed to highway conversions saying, "Lacking organic growth, the way we're going to continue to outpace GDP is to be a better service provider. We're just going to have to be better at what we do." Hertwig Presented with the 2016 Silver Kingpin Award Jim Hertwig, president and chief executive officer of Florida East Coast Railway, received IANA's 2016 Silver Kingpin Award at this year's Intermodal EXPO. Throughout his multifaceted career, Hertwig has set new standards of service for his customers and earned the respect of his intermodal partners in the process. At the head of FECR, he has been instrumental in the growth of intermodal in South Florida, and the partnerships he developed with the state's ports have enabled them to accommodate greater volumes and bigger ships resulting from an expanded Panama Canal. Among growth opportunities, Frazier pointed out that transloading has been increasing on the west coast and is starting to exhibit potential in the east. Doug Punzel of Celtic International added that he was seeing a slight uptick in transloading as well. Calming the Seas The Hanjin bankruptcy was clearly the unavoidable topic for the Challenges in Liner Shipping panel which also carried the prescient title Calming the Seas. The ripples of events surrounding the receivership were working their way through the industry even as the panel was discussing them. Michael Burns, vice president of transportation services for Big Lots, suggested that some of the issues arose because of vessel-sharing agreements and alliances Hanjin had with other carriers. Howard Finkel of COSCO Container Lines agreed that alliances created problems saying, "It couldn't have been worse with peak season." COSCO stopped accepting Hanjin cargo it would have carried through vessel-sharing agreements and other contracts. The panel's general assessment was that the short-term effects, including what to do with Hanjin chassis and containers, were likely to work out in a few months. Long term, in Burns' view, the capacity would come back into the market. Beyond alliances, will there be more consolidation? Economic consolidation is more likely than national consolidation, noted Ted Prince of Tiger Cool Express. This is partly due to sovereign governments supporting their carriers and to the difficulty in consolidation across national boundaries rather than corporate lines. On the subject of the Panama Canal, the panel felt the preponderance of cargo that was going to move to the East Coast ports had already done so, prompting Prince to observe the bigger story for the East Coast will be the Suez Canal. Some of this resurfaced in the question and answer of the Growth Imperative's session in which Jeffrey Heller of NS responded, "We said for many years that we thought the Panama Canal expansion was going to provide an additional amount of EXPO- continued on page 9 October 2016 | Intermodal Insights 7

Table of Contents for the Digital Edition of Insights - October 2016