Insights - September 2016 - 7

An Intermodalist Looks Back: Reflections from the Silver Kingpin Winner Jim Hertwig's career has truly been intermodal. The current president and CEO of the Florida East Coast Railway has served six years with the company and another six at CSX, but as he points out, he actually spent more of his career on the motor carrier side of freight transportation. He has had the opportunity to experiHertwig ence the history and see the potential for intermodal, and his contributions to the field have earned him recognition in the form of IANA's 2016 Silver Kingpin Award. In this interview with Intermodal Insights, we've asked Hertwig to join this year's distinguished list of intermodal leaders to reflect on IANA's 25th anniversary. Insights: When IANA was formed 25 years ago, intermodal was a fledgling market segment in transportation. What were some of the initial challenges that its supporters had to overcome to gain acceptance and respect for the mode? How did IANA and other trade associations work to overcome these challenges or objections? Hertwig: The size of the equipment was an issue back then. A lot of rail trailers were owned by leasing companies, many of them in poor condition. At that time there were no container programs of any significance for the domestic side of the business. There was also a perception of poor rail service. You had cross-towns from the western railroads to the eastern railroads, which delayed service in many cases. [Cross-town dray moves were often needed to take intermodal trailers from the terminus of one railroad to a rail yard of another when moving on multiple railroads from origin to destination.] IANA really established the forum where all the different parties in intermodal could come together and talk about best practices and industry standards, the creation of the UIIA, and other concerns of the day. There was a lot of strong leadership back then, and I think everybody wanted the product to be good. It was just a matter of getting out of your own silo and looking at the overall supply chain. I think IANA has continued to do that throughout the years - improve that communication and education among all the different modes of service. Insights: It sounds like IANA helped set the tone. Hertwig: Yes. I can't stress enough the importance of the Operations, Maintenance and Repair, and the other committees. In some of those smaller committee rooms there were some heavy debates, but out of them came a decision that, "This is the way that we're going to move forward as an industry." Everybody got the buy-in at those meetings. So, I think those committees were extremely important. People accepted it, they knew it was best for the entire industry, and they moved forward. Insights: Some in the industry say railroads were reluctant or resisted getting into the intermodal market. They are certainly on board today - how does today's attitude diﬀer from those early stages of intermodal development? How does that compare/contrast with the other modes in which you have worked? Hertwig: At first, a lot of intermodal was trailers, and trailers were difficult to make a profit. They didn't double stack [containers] much at that point in time. Once the leased trailers went away, and the container programs got off the ground, the railroads started embracing intermodal a lot more. When you think of it, they were able to get twice as much revenue when they used double stack as when they used one trailer. It helped profitability. Then, they started to see more and more truckload carriers becoming interested in getting into the intermodal business. There was a lot of discussion during IANA's meetings on how we could improve operations at rail terminals to benefit the motor carriers, on how they could come in, get their unit and get back out. A lot of people don't give IANA enough credit there. They brought the groups together, [including] motor carriers. And, the railroads listened. The result was they designed the newer terminals - intermodal facilities - and made them driver-friendly and better for the drayage community. They understood the intermodal product was not just moving from ramp to ramp, it involved getting it to the customer's door. Insights: Who do you feel, either people or entities, were most responsible for the strong industry it has become today, 25 years later? Hertwig: You have to give credit to UPS. They were a Hertwig3PLs - continued on page 9 9 - continued on page September 2016 | Intermodal Insights 7

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