How a food manufacturer used cross-border intermodal shipping to diversify its supply chain

• Diversifying rail routes reduces risk. Splitting volume across railroads and border crossings protects delivery schedules when one route closes.

• A contingency plan keeps freight moving. When rail is delayed, loads can shift to truckload at a comparable rate and similar transit time. 
• In-country expertise smooths border crossings. A tenured Mexico team manages customs, maintenance and daily coordination to prevent problems before they start.

To meet capacity demands during the pandemic, a leading snack food manufacturer started turning more frequently to brokerage services and engaging with multiple smaller carriers to help service its intermodal transportation to and from a facility in Mexico. The influx of carriers into its network complicated its supply chain and required a significant amount of time managing the daily logistics.

Seeing the inefficiency and working through the complications of managing so many carriers, the manufacturer wanted to get back to basics and simplify its supply chain. This included shifting away from brokerage and back to working primarily with asset-based providers that:

• Guarantee containers on-site
• Provide top-tier cargo security
• Have a reputation for reliability and consistency

The manufacturer was hoping to find supply chain relief from its existing base of transportation providers, which would allow them to avoid bringing another new carrier into the mix.

The manufacturer had looked to Schneider for help in the past with moving loads northbound by both Van Truckload and Intermodal. As the manufacturer started to assess its ongoing capacity needs in Mexico, coupled with its desire to simplify the supply chain, it collaborated with Schneider to find efficiencies.

Schneider assessed the manufacturer’s supply chain and saw that most of its intermodal volume went through the Eagle Pass, Texas, border crossing. Eagle Pass has a reputation for frequently closing due to security issues, which was a persistent source of frustration for the manufacturer. Schneider encouraged the manufacturer to consider moving volume to Schneider’s CPKC railroad solution, which crossed the border in Laredo, Texas, to reduce the risk of an Eagle Pass closure impacting delivery schedules.

As a producer responsible for nearly 70% of sales in the United States, the manufacturer could lose millions of dollars per day from missed deliveries – a chance it wasn’t willing to take.

Schneider explained the benefits of a diversified intermodal solution, illustrating how moving freight to another railroad mitigated risk in case of unexpected delays or closures. Loads going to or through Chicago would travel on the CPKC’s Mexico Midwest Express, while loads heading to the Southeast would use CPKC and CSX’s Southeast connection.

The CPKC line is a direct route from Mexico to Chicago. Schneider not only has priority placement on the rail, but there are also zero handoffs between Mexico and the Midwest – making it a fast, secure option.

With its longstanding presence in Mexico, Schneider knew the processes and requirements for smooth border crossings both into and out of the country. This cross-border shipping expertise would expedite crossings and further help support a smoother supply chain. Most important to the manufacturer, Schneider provided a contingency plan in case of delays on the CPKC: The loads could move via truckload at a comparable financial rate and similar speed of delivery as they would on the rails.

The manufacturer saw the value in diversification across both the underlying rail provider and the border-crossing location. It appreciated the approach Schneider took for contingency planning and was impressed by the provider’s ability to ramp up ahead of schedule.

While the manufacturer was looking forward to this strategic intermodal plan, it told Schneider how important it was to maintain, if not exceed, the current capacity and level of service it was used to having. To provide a strong contingency plan should intermodal loads be delayed, Schneider took on some of the manufacturer’s truckload business, so the facility always had Schneider-owned equipment available to provide flexible, in-country capacity at a moment’s notice.

Since it began moving intermodal freight for the manufacturer out of Mexico, Schneider has continued to meet its high service expectations. This is in large part due to the transportation provider’s tenured team in Mexico. Expertise they provide includes:

The simplified transportation process and ongoing collaboration are hallmarks of the relationship between Schneider and the manufacturer. With its rigor around service levels and available on-site capacity, Schneider was quickly awarded additional volume beyond bid-awarded levels. Additionally, the manufacturer is impressed with the Schneider team’s deep knowledge of the company’s end-to-end operations and how it routinely goes a step beyond to keep service, capacity and contingencies front and center.

In diversifying its intermodal freight to include the CPKC, the manufacturer experiences quicker load movement, with the train from Monterrey to Chicago providing truck-like transit times via a direct intermodal route from Mexico to the Midwest. To date, there have been zero load thefts out of the manufacturer’s facility. Now, Schneider is the manufacturer’s top carrier and a trusted advisor for cross-border transportation.

Learn how a collaborative approach to cross-border transportation can uncover efficiencies and streamline your supply chain.