Tn_I—I_l_l_l---II----‘l AN INVESTIGATION OF THE FACTORS INHIBITING GROWTH OF CONTAINERIZATION IN DOMESTIC SURFACE FREIGHT SHIPMENTS Thesis for the Degree of D. B. A. MICHIGAN STATE UNIVERSITY VERNON CHARLES SEGUIN 1971 _._.* - -__‘ " A .nn “—— - LIBRARY 6",? Michigan State I University w—r "-“vw I to] at. nm 1m;.~'.v1 {Mum 3 . ABSTRACT ’ TIGATION or THE FACTORS INHIBITING or CONTAINERIZATION IN DOMESTIC SURFACE FREIGHT SHIPMENTS BY Vernon Charles Seguin . . . "fim (be :3 .Nu: at} i. In this study containerization is referred to as the ewe. us: , integration of commodities into common denominator module fieight containers which are compatible with the materials handling systems they will encounter. Nominal size freight containers are 8 ft. x 8 ft. in cross section and vary in length from 20 to 40 feet. Containerization has experienced rapid growth recently in overseas shipments and some United States ports are expected to handle as much as 90 percent of their cargo in this fashion within the next few years. However, rail container service accounts for only about 0.5 percent of all earloadings today despite the fact that it Was pioneered for domestic shipments way back in 1921. The literature abounds With projections and pronouncements concerning the factors “highs“ inhibiting the growth of containerization in 9‘04; surface freight shipments. This investigation ‘3? fideteImine the relative importance of these factors 'thgsaginiom of those who are actively engaged in veils: Ir.- ' . - w ibution of goods. {Old mg. g1; .. - a. avengfi-sanH‘ I"? ‘I'I'H‘ Vernon Char les Seguin WI I eh questionnaire was developed in which respondents m requested to indicate the relative importance of 20 selected factors which are said to be inhibiting domestic containeriZation. A response of over 60 percent was ob- tained from 463 questionnaires mailed to representatives from the following business sectors: (1) freight users (durable and nondurable goods manufacturers, retailers, and freight forwarders), (2) freight carriers (motor, rail, marine, and air carriers and port authorities), and (3) container equipment suppliers. Replies were coded and subjected to statistical analysis in computer programs. Interviews were conducted with representatives of business and government to develop recommendations in light of the study findings. Economic considerations which are listed as most important by all population sectors include, (1) rate struc— tures which are inadequate to promote containerization and (2) the burden of empty container traffic. Shortages of containers and equipment, as well as the available alter- native of TOFC (Trailer on Flatcar) piggyback are signif- icantly more important to freight users than to the other groups. Conversely, coordinative matters, such as problems 0f divided carrier responsibility, are of less concern to freight users than to the others. Equipment suppliers see the lower available cube of containers, when compared to vans in over-the-road movement, as significantly less '- I . . . 1. 7:23 kg’flm Vernon Charles Segu in .Mu‘tant than the users or carriers. All sectors ranked labor resistance as high in importance. However, from interviews it appears that this evaluation is influenced by difficulties with labor at the dockside involving foreign container shipments. None of the groups considers the influence of government as comparatively important in inhib— iting growth of domestic containerization. Questions were also asked concerning the container- ization activities of the freight user respondents. Almost all of the freight users indicated that some or all of their goods is containerizable. Almost none own m0st or all of the containers that they use. There is a weak relationship between the use of containers by firms in foreign commerce and their use in domestic trade. However, there is no sig— nificant relationship between the use of TOFC piggyback and domestic containerization. Durable goods manufacturers use containers in domestic service significantly less than do nondurable goods manufacturers, retailers, or freight for— warders. The larger manufacturers are significantly greater users of containers in foreign trade than are their smaller counterparts. No important relationships can be developed when the freight user population is subdivided according to activity as shippers, censignees, combined shipper and consignees, or freight forWarders. Clem-ION or THE FACTORS INHIBITING or CDNTAINERIZATION IN DOMESTIC .sunrncs FREIGHT SHIPMENTS BY Vernon Charles Seguin A THESIS :; ‘- Submitted to “‘ Michigan State University ' . in partial fulfillment of the requirements ' ‘4; for the degree of . _ ‘ Copyright by . . VERNON (BI-IARLES SEGUIN ‘ 1971 ‘. (- €’~ ' ---- This study is dedicated to those ‘”‘ who seek additional encouragement to in- ' It.‘un(10 . terrupt established careers in favor of the ’8 further education. The rewards outweigh t 0.11. the sacrifices. Jena; 2 m» VDL' . f ”Drona“ '.\.. use 2-31 {It ACKNOWLEDGMENTS A doctoral thesis begins with enrollment in the program, not with typing of the first page. Sincere appreciation is extended to the many persons who have con— tributed to the author's preparation for this culminating project. Particular thanks go to Dr. Thomas A. Staudt and Dr. Donald A. Taylor, successive Heads of the Department of Marketing and Transportation Administration, whose recommen— dations for fellowship assistance made possible my undivided attention to the program. My gratitude to those who assisted in deveIOpment of the thesis itself can only be inadequately recorded in words. SPt-Icial thanks go to Dr. Donald J. Bowersox, committee chair- man, who offered freely of his time and supervision. My aPprecziation is evident for Dr. Edward W. Smykay, committee member, Who volunteered his services even though on sabbat- ica1 leave. My grateful acknowledgment goes to Dr. James W- G°ffI COIMittee member, who provided special insights gained from his long-time involvement in the study of product Packaging. Finally, to my wife, Jan, who was willing to leave a 33139 harbor to embark with me upon the uncharted seas of academia, I owe my lifetime thanks. iv "he: ' LIST 0? Chapter I. II. III. IV. TABLE OF CONTENTS Page TABLES . . . . . . . . . . . . . . . . . . . . vii INTRODUCTION . . . . . . . . . . . . . . . . . 1 Scope of the Research . . . . . . . . . . 1 Present State of Container Practices . . . . 3 Statement of the Problem . . . . . . . . . . 5 Methodology . . . . . . . . . 6 Organization of the Thesis . . . . . . . . . 12 REVIEW OF LITERATURE--I . . . . . . . . . . . 15 Background for Containerization . . . . . . 15 The Concept of Intermodalism . . . . . . . . 16 Benefits of Containerization . . . . . . . . 25 History of Piggyback . . - - - 31 Growth Projections for Containerization . . 43 Containers and Handling Equipment . . . . . 51 Pallets and Unitized Loads . . . - 57 Conclusions to Containerization Background . 60 REVIEW OF LITERATURE--II . . . . . . . . .;. . 65 Factors Affecting Containerization Growth . 65 Major Economic Factors: Operating Costs, Investments, and Rates . . . . . . . . 66 ECIUiPment Availability: Leasing and Pooling . . . . . . . . . 90 Container Interchangeability: Standards . . 97 Labor Problems . . . . . . . . . . . . . . . 106 Government Regulation . . . . . . . . . . . 116 Multimodal Ownership Limitations . . . . . . 125 Factors Relating to Lack of Through Service . . . . . . . . . . . 129 Summary of the Review of Factors Affecting Containerization Growth . . . . . . . . . 139 VFIELD RESEARCH NETHODOLOGY . . . . . . . . . . 148 Factors Affecting Containerization Growth . :23 DevelOpment of Hypotheses . . . . - . - - - Page -iination of the Sample . . . . . . . . 157 «;;epnnnt of the Questionnaire . . . . . 163 I.v--' :ing and Processing of the Question- . -' hairs . . . . . 172 ‘ Mfli~rregram for Statistical Testing of Eypotheses . . . . . . . . . 175 Summary of the Methodology . . . . . . . . . 183 ',f Oomn-~’ ,ew'g’r. :33st or THE RESEARCH . . . . . . . . . . . 189 . v . y ”In " Mechanics of the Hypotheses Tests . . . . . 189 J. Lanesults of Tests of Hypotheses 1-A,B Through 5-A, B . . . . . 191 Results of Tests of Hypotheses 6 i u! Through 11 . . . . . . . 210 Tests for Biases in the Questionnaire Survey . . . . . 223 Summary of Replies to. an Open-Ended Question . . . . . . . . . . . . . . . 228 VI. SUMMATION OF THE STUDY . . . . . . . . . 235 Summary of the Study Findings . . . . . . . 236 Conclusions . . . . . . . . . . 245 Limitations of the Study . . . . . . . . . 251 Recommendations for Further Work . . . . . . 253 263 BIBLIOGRAPHY................... Appendix .‘I' INSTRUMENTS USED FOR COLLECTING DATA . . . . . 276 B. OUTPUT SHEETS FROM COMPUTER RUNS AND GLOSSARY OF TERMS . . . . . . . . 287 ‘V'c‘. Pom-UP INTERVIEW COMMENTS 0 o 0 e o o o l o 307 LIST OF TABLES . " . ’0‘- h" . ‘M‘J. Ton mile distr ibut' Ion among interc It y I ‘w ' mr£.r. - o e o s I o s o o o e o o c o n (.4. Revenue distribution among regulated 1“ Matters 9 a o n o o a o I o o o o o e o '5. -!'oreign versus domestic freight volume . . . . ’5. Cargo Claims: unit load vs. break-bulk systems................... ..7' Packaging costs: unit load vs. break—bulk .8. Piggyback plans . . . . . . . . . . . . . . . 9. Piggyback carloadings . . . . . . . . . . . . . 10. Trailers and containers terminated by classIrailroads......... m. Piggyback units and containers moved by Iallmodes................... 12. TOPC/COFC—-l966 actual vs. 1972 projection . . 13. United States container inventory . . . . . . . a. Wanted containerization of United States 5“ b I m “[968 o o e n a o e I o I u o C u a 0 ‘fr‘ 3% ‘ ed liner trade moving on unit trains . . fit 0.5 KW , r ltsngth-msage and 1968 production . . :13Mtive ratings of transportation modes - - A. flmlftransfers for combination service . . . . Page 17 18 22 22 24 26 27 35 36 37 37 45 47 17. 18 19. 20 21 22 23. 24. 25. 26. 27. 28. 29. 30. 31. .United States inland costs for 220—mi1e truck haul . . United States inland costs .for 370—mi1e rail haul . . . . . . . . . . . . . Shipper-tb—consignee costs for export cargo . . . . . . . . . . . . . . . . . Revenue and expense—-boxcars vs. containers Mean transit times and standard deviations for selected modal transfers . . . . . . . Marine containers vs. regular trucking equipment . . . . . . . . . . . . . . . . . Advantages and disadvantages of piggyback Rates by different transport methods . . . Comparative transport commodity rates . . . Questionnaire sample schedule . . . . . . . Percentage returns from major sample sectors Summary of tests of Hypotheses l—A through S-A . . . . . . . . . . Summary of tests of Hypotheses 1-B through 5-B . . . . . . . . . . . . A. B. c. Within group mean values for test of Hypothesis 1-A . Ranking of factors by within group means for test of Hypothesis l-A . . Calculation of Kendall' s W for test Of Hypothesis l-A . . . . . . . . . . . . o u a o Ranking of factors by within group means for tests of Hypotheses 2—A and 3—A . . . . . Ranking of factors by within group means for test of Hypothesis 4-A . . . . . . . . . . . Ranking of factors by within group means for test of Hypothesis S-A . . . . . . . . . . viii Page 67 67 67 7O 71 74 85 86 87 160 173 193 194 196 197 198 205 206 in. . — I” Page 32. Mean values of significant factors in test of Hypothesis S—B . . . . . . . . . . . . . 208 33. Contingency table and chi—square test of Hypothesis 6 . . . . . . . . . . . . . . . . . 212 34. Contingency table for chi-square test of Hypothesis 7 . . . . . . . . . . . . . . . . . 214 35. Contingency table for chi—square test of Hypothesis 8 . . . . . . . . . . . . 216 36. Contingency table for chi—Square test of Hypothesis 9 . . . . . . . . . . . . . . . . 218 37. Contingency table for chi—square test of Hypothesis 10 . . . . . . . . . . . . . . . . . 220 38. Contingency table for chi—square test of Hypothesis 11 . . . . . . . . . . . . . . . 222 39. Ranking by within group means to test bias of factor listing order . . . . . . . . . . 225 40. Ranking of factors by within group means to test bias of follow—up mailing . . . . . . . 227 41 Mean values used to test Hypothesis l—A,B . . . 287 42 Multivariate and univariate tests of Hypothesis 1-B . . . . . . . . . . . . . . 288 43. Mean values used to test Hypotheses 2- —A B and 3-Al B y a o e o I o o o o o . . 289 44. Multivariate and univariate tests of Hypothesis 2-B . . . . . . . . . . . . . . , 290 45. Multivariate and univariate tests of Hypothesis 3-B . . . . . . . . . . . . . . . . 291 46. Mean values used to test Hypothesis 4-A,B . _ , 292 47. Multivariate and univariate tests of Hypothesis4-B ..............,~ 293 48. Mean values used to test Hypothesis 5-A,B , , _ 294 ix -ai. nigasTAxil " and univariate tests of 15-3 0 a I e o I e e o o e o e o e ~vy table for testing Hypothesis 6 .wncy table for testing Hypothesis 8 - 'Iningency table for testing Hypotheses 9 .“ and lO--domestic shipments 1:. Glntingency table for testing Hypotheses 9 "I °\“ and.10--foreign shipments . . . . ' tlw “I " Contingency table for testing Hypothesis 11—- fte‘qh- domestic shipments '3aiw. Contingency table for testing Hypothesis 11-- foreign shipments . NWNCIE 57. efh I e o o o C e o O u o 0 Relationship between containerizability .rgeods and freight activity ‘ e e o 0 . 'efifluaunan values used to evaluate bias from ’ xterm I and Form II Questionnaires Kant 3': 59. v, r? ~ PH, 1 .1 Mean values used to test for bias from :first and follow-up mailings . . . u o a c , A '59:!)1N’7' 1'1: 111m; A. -:‘.'L' _ Vviw 36001:}. C; .‘.-- heeircd '- I.. I. . Page 295 296 297 298 299 301 302 303 304 305 .; 1""! "Illllll CHAPTER I INTRODUCTION Scope of the Research This study deals with the factors which are inhibit— ing the growth of containerization in domestic surface freight shipments. Expansion of containerization promises savings in physical distribution costs through reduction of losses from damage and pilferage as well as through improved efficiencies in intermodal transfers. Identification of the real as well as envisioned growth limiting factors is impor— tant for the development of programs to encourage greater participation by those concerned with domestic distribution of goods. The literature presents a diversity of opinion can- cerning the relative importance of factors said to be inhib- iting containerization growth. The vested interests of the various authors, relative to their professional activities, are hypothesized as being the primary cause of much of this divergence of opinion. In this research a questionnaire sent to a random sample of users, carriers, and equipment suppliers involved in freight movements was used to obtain Opinions. The investigation includes their evaluation of thrulative importance of twenty factors inhibiting con— tainerization as developed in the literature. An examina- tion of present containerization practices of freight users was also made. Although intermodal transfers include all possible combinations of motor, rail, air, inland waterway and mari- time carriers, this survey has been confined primarily to motor and rail operations. These two modes constitute the bulk of domestic shipments suitable for containerization. Rail and motor modes are also the major interface members with overseas shipments. While containerization in air cargos is currently experiencing significant growth, ton— nages are still small when compared with surface movements. Further, the factors influencing the growth rate of contain- erization in motor/rail modes are expected to be likewise applicable to air transport movement. In order to provide clarity, a few definitions are useful. Containerization is referred to as the integration 0f COmmodities into common denominator module freight con- tainers which are compatible with the materials handling SYStemS they will encounter.1 Tabak's definition Of a W is used as a guideline in this study.2 He States, A freight container is an article of trans— port eclui-Pment: a) of a permanent character and accordingly strong enough to be suitable for repleated use; b) especially designed to facil— itate the carriage of goods, by one or more modes “of transport, without intermediate reloading; c) fitted with devices permitting its ready handling, particularly its transfer from one mode of transport to another; d) so designed to be easy to fill and empty. . . Tabak defined a freight container as having an internal volume of at least one cubic meter (35.3 cubic feet), but this small size is limited primarily to use on aircraft. The nominal size in use today is 8 ft. x 8 ft. in cross section, by 20 feet long (1,280 cubic feet). Van size containers which are 40 feet long are growing in pOpu— larity. Highway trailers could also be considered as meet- ing the freight container definition given above since they are used in intermodal transfers on rail flatcars and in "roll-on/roll-off“ movements on ocean-going vessels. How- ever, they are not included in the "container" category by transPort trade. Containers are sometimes referred to as "Wheeless containers" to emphasize their difference from highWay trailer vans. Present State of Container Practices Containerization of international .shipments has experienced dramatic growth over the past 10 years. Con- tinued rapid eXpansion of overseas containerization is projeCted for the future. In 1970, at least one container- ShiP is Expected to sail from North Atlantic ports of the United States daily. These sailings Will provide a shipping . 3 “Paclty of 220,000 twenty-foot containers a year- BY 1975' flullizabeth, New Jersey terminal of the Port Authority of low York expects that the projected nine million annual tons of cargo it will handle will be 90 percent containerized.4 Japan's Transport Ministry predicts that by 1973 as much as 85 percent of that year's 2.6 million tons projected Japan- California freight will be containerizable.5 Increased containerization has benefitted overseas shippers through reduced labor costs. Decreased time delays in dockside transfers of goods, less damage to merchandise, and lower pilferage rates have also been obtained. Despite such recognized and demonstrated benefits in overseas shipments, containerization has lagged in domestic freight shipments. The major accomplishment of integrated transfers in domestic shipments has been piggyback opera- tions. These have recently been divided approximately 90 percent trailer—on—flatcar (TOFC) and 10 percent container— on-flatcar (COFC) . The TOFC/COFC carloadings rose from 417,000 in 1959 to 1,337,000 in 1968. However, piggyback service increased less than 1 percent further to 1,344,000 carloadings in 1969.6 In total, TOFC accounted for 4.8 per— cent of the 1969 carloadings. COFC, in comparison, was insignificant in accounting for less than 0.5 percent of total carloadings . . , . K. ‘ Q‘s-2h“. Statement of the Problem The literature on containerization has expanded rapidly in the last few years. There are a number of periodicals devoted exclusively to the field and many physical distribution magazines regularly carry special issues on the subject. Proceedings are frequently reported covering meetings of various organizations concerned with promoting development of containerization. For purposes of organization,statements in the literature relating to lagging domestic containerization can roughly be categorized into five areas of concern. These areas are not mutually exclusive since economic considera— tions can be read into almost any comment, but the following classification provides a useful basis for analysis: 1. Economic reasons 2. Container equipment availability 3. Coordinative activities 4. Labor resistance 5. Governmental regulation and influence. The problem of this investigation is the development of a list of factors which are inhib— iting growth of domestic containerization. The list of factors must be arranged in ordered seguence of relative importance so as to provide useful guidance for programs to promote more effective use of containers. ..._ ‘u -. - .._' n A number of difficulties are confronted in attempt— ing to develop an ordered listing of inhibiting factors. First, there is considerably diversity of opinion as to the items in the list of influencing factors and as to their relative importance. Second, opinion is subjective and not readily quantified for scientific analysis. Third, those who offer opinions have diverse backgrOunds and their atti— tudes must be related to the requirements of the sectors that they represent. Finally, the evaluations must be gathered from qualified authorities who are scattered across the country . WY. The general methodology summarized below includes the development of a questionnaire and its distribution to a randomly chosen sample. The sample design provides for adequate representation from recognized strata in the popu- lation. Questionnaire replies were used to test eleven hypotheses. Follow—up interviews were conducted to help develop conclusions in the light of questionnaire replies. The Quest ionna ire The primary research instrument in this study is a questionnaire which was mailed to a sample of 464 people who are involved in activities related to the movement of freight. A copy of the questionnaire which contains four groups of Questions is included in Appendix A. ." The first group of questions consists of twenty factors which have been mentioned in the literature as being responsible for inhibiting the growth of containerization in domestic freight shipments. In order to develop quantifiable relationships from subjective evaluations, respondents were asked to indicate their Opinion concerning the relative importance of each factor by marking a numerical rating scale. The scale consists of the following equal—appearing intervals: 1. Extremely important 2. Quite important 3. Medium importance 4. Not very important 5. Almost no importance. Five questions comprise the second group of ques- tions. They were designed to develop relationships in present container practices. Respondents who are Freight Users were asked for a Yes/No reply to questions concerning their use of (1) domestic containerization, (2) foreign freight containerization, and (3) TOFC piggyback. They were also asked about their ownership of containers and whether some of the goods they shipped were considered containeriz— able. The third group of questions was used to categorize respondents as to their type of business, freight activity, and the relative size of their firm. Finally, an Open-ended question was presented to cover Points not included in the questionnaire. ,A random sample was structured from the following sectors of the surveyed population: 1. Freight Users—-durable and nondurable goods manufacturers, retailers, and freight forWarders. 2. Freight Carriers—~motor, rail, marine, and air carriers, and port authorities. 3. Containerization Equipment Suppliers. Mhthods of Analysis Eleven hypotheses were develOped relating to the cmfients of the questionnaire. The hypotheses, presented in Hm null form, are abstracted below. Hypothesis 1: There is no statistically significant difference in the relative importance of factors inhibit~ ing growth of domestic surface freight containerization, as evaluated by representatives of the following sectors: (1) potential or actual users, (2) carriers, or (3) con— tainerization equipment suppliers. Hypothesis 2: There is no statistically significant difference in the relative importance of factors inhibit- ing growth of domestic surface freight containerization, based upon collective evaluations of the following sectors of the freight user population: (1) durable goods manufacturers, (2) nondurable goods manufacturers, (3) retailers, or (4) freight forWarders. ‘3 ’37". {L uum’ flyppghesis 3: There is no statistically significant difference in the relative importance of factors inhib— iting growth of containerization in domestic surface freight shipments, based upon collective evaluations ofrepresentatives of larger and smaller firms in the freight user population. Hypothesis 4: There is no statistically significant difference in the relative importance of factors inhib- iting growth of containerIZation in domestic surface freight shipments, as viewed by representatives of the freight user population, segregated according to their activity as (l) shippers, (2) consignees, (3) shipper and consignees, or (4) freight forWarders. Hypothesis 5: There is no statistically significant difference in the relative importance of factors inhib- iting growth of domestic surface freight containeriza— tion, based upon the collective evaluations of the freight carrier population in the following segments: (1) motor, (2) rail, (3) marine, (4) air, or (5) port authorities. Hypothesis 6: There is a statistically significant relationship between the use of containerization by firms in foreign shipments and their use of container- ization in domestic shipments. 10 v‘“ Hypgthesis 7: There is a statistically significant relationship between the use of TOFC (Trailer On Flat— car) piggyback by firms and their use of containeriza- tion in domestic shipments. Hypothesis 8: There is a statistically significant relationship between ownership of containers by firms amitheir practice of containerization in either foreign or domestic shipments. Hypothesis 9: There is a statistically significant I relationship between the type of business and use of ‘ containers in domestic or foreign service by freight i users. Hypothesis 10: There is a statistically significant relationship between the size of business and use of containers in domestic or foreign service by freight users. Hypothesis 11: There is a statistically significant relationship between the type of freight user activity (shipper, consignee, shipper and consignee, or forwarder) and use of containers in foreign or domestic service. . Hypotheses 1 through 5 were subjected to two <fifferent methods of statistical analysis. The mean values Ofnmasure from the numerical rating scale of importance for each of the twenty factors were used. A ranking of the couposite evaluation for each population sector was dbveloped. Kendall's coefficient of concordance, W, was ll calculated from the rankings being compared and a chi-square statistic was derived in order to test the given hypothesis.7 -A multivariate analysis of variance test was also applied to the same hypotheses in order to indicate the significance of differences of opinion concerning the level of importance of the individual factors. Hypotheses 6 through ll were tested by chi—square analysis of contingency tables developed from replies to questions concerning present containerization practices. The facilities of the Michigan State University Computer Laboratory were used in analyzing questionnaire replies. Programs developed by the Computer Institute for Social Science Research (CISSR) and the Schoool for Advanced Studies of the College of Education were used in testing the hypotheses . The Interviews To supplement questionnaire responses personal interviews were conducted with representatives of business, trade organizations, "and government. The interviews were held after correlation of the questionnaire results. .Inter— viewees were advised of the questionnaire findings and were asked to suggest approaches to obtaining increased applica— tion of containerization to domestic freight. A copy of the interview outline is also included in Appendix A. 12 M Organization of the Thesis The thesis is organized into six chapters, including this Chapter I, which provides an introductory overview of the study. A literature review is contained in the next two chapters. In Chapter II the fundamentals of intermodalism and the history of containerization and piggyback movements are traced. The technology relating to containers and hand— ling equipment is also reviewed. The factors which have been reported by various speakers and writers as being responsible for the lag in containerization of domestic freight are presented in Chapter III. Information contained in this section of the thesis was used in developing the factor questions in the research questionnaire . The methodology of research is evolved in Chapter IV. Matters considered In development of the hypotheses and dlit—Ermination of the size and nature of the populatiOn Sample are reviewed. The rationale of the program for statistical testing of the hypotheses is explained- The results of the research are reported in Chap- ter V. These include the tests of the hypotheses and sum- maries of replies to Open—ended questions. In addition. teStS for biases which might have resulted from the methods used in administering the questionnaire are also considered. Rec‘mlliendations for further work include an indicated need €31: additiOnal research on the economics of containerization. "mix." ' Jun... 1‘.' 31:24:" ' i - . ,. ,- Lulu . 0' - .. “U... CHAPTER.I--FOOTNOTES V‘IIlph 3. Sims, Planning and Managing Material Flow 3 .Industrial Education Institute, 1968) , p. 367. anerman D. Tabak, Cargo Containers--Their Stowage, _ nd Movement (Cambridge, Maryland: Cornell ltims Press, 1970), p. 5. q ,, .‘ 3”Export Is the Name of the Game," Distribution Wears, 1968, p. 36. .u. 4"The Port Terminals-~A New and Expanded Role," We; October, 1968 p. 52- 5"Container Potential Up, " Distribution Manager, June, 1968, p. Burton N. Behling, "1969 Review," Railway Age, Jalumnus, 1970, p. 54. 7pc: development of the Kendall coefficient of concordance, W, see Sidney Siege]., Nonparametric Statistics W (New York: :McGraw-Hill Book Co., 1956). pp. 229- 238. "3ng :3 i-. ‘. hufl‘hflflW“ounjv .32} cm; Lc.‘.‘.L'Lu.'b etlfk‘5.§&1‘: CHAPTER II REVIEW OF LITERATURE--I Background for Conta iner izat ion I It has been said that so much has been written and published about containers, their advantages, ‘ disadvantages, shapes, sizes and economics that it ‘ would take a man all his working life to read it. ’ It has also been stated recently that so much is now happening with containers throughout the world that it would take a fairly SOphisticated informa— tion storage and retrieval system to keep the information current. i . . . 1969 has seen the true start of the "Container Age." Many ships, port installations and inland transport facilities planned and con— structed over the past three or four years have i come into service and many more will be completed and oPerating by the end of 1970. From now on theOries talked about for so long will have to be made to work and the initial practical difficulties which face the intermodal movement of cargo through different transport media from producer to consumer W111 have to be ironed out, as they do with any new System which is introduced. . 1 (Foreword to Jane's Freight Containers) I The Purp03e of this first section of the literature review is to develop for the reader a general understanding and background of containerization as practiced in domestic freight Shipments. The background material has been selec- tively Chosen to aid in considering the factors which are 15 16 inhbiting the' growth of containerization in domestic durface shipments . The Concept of Intermodalism According to one writer,2 containerization could afford the basis for completely integrated, worldwide door- to-door transportation if perfected and advanced to the ultimate extent of its potential usefulness. He envisions all-purpose equipment which would be interchangeable in rail, highway, water and air transport. Achievement of an inte— grated transport system requires the complete coordination of the total physical plant, abetted by compatible govern- mental policy and managerial philosophy. This section considers the broad concept of intermodalism as the basis of an integrated transport system. A discussion of modal systems which allow an inter- Change of cargo units includes rail, highway, water and air routes, but omits pipelines as incompatible to the process. Interchange is desirable between modes in order to take advantage of their reSpective favorable factors. Inter- change within modes (intramodalism) is necessary when the initial and final points for a freight movement are not limited to the boundaries of a single carrier. A compar- ison of the relative desirabilities for the modes under consideration is presented in Table 1 below.3 17 Rail Highway Air Water 3 l 2 4 2 3 l 4 2 3 4 1 capacity 2 4 3 1 Wral (availabil ity 2 l 3 4 geliability or dependability 2 1 3 4 Pregnancy/continuity of service 3 l 2 4 Surge or peak handling capacity 1 2 3 4 a1 = most desirable. The numbers in the table are somewhat arbitrary and are subject to modification with changing technology. Cost of service depends upon such factors as the type of goods, the size of shipment, distance of shipment, and auxiliary services such as need for refrigeration, pick up and deliv— efy and special in-route services. All things being equal cost comparisons between modes vary directly with the speed of service. ’9".~" Al 4 0': ‘i i . ‘ 1am. {ails 3105;! .. W‘s-P {32% . 18 Table 2. Medal transfers for combination service Mode Rail Highway Air Water Rail Intramodal Highway TOFC/COFC Intr amodal Piggyback Air . . . Air-Truck Intramodal Air —Bus Water Train-ship Roll-On/Roll—Off .. . . Intramodal Fishyback In terms of numbers, the most important transfers in domestic freight movements are the intramodal shifts. Each of the major modes develOped and improved its carrying units to maximize their usefulness in accordance with the physical characteristics of its system. For example, rail boxcars are designed to be interchangeable on standard gauge tracks across the country. Highway trailers can be hauled inter— changeably on motor tractors. For the most part, inland waterway barges can be moved in mixed tows. In the case of air shipments, develOpment of standardized containers is now allowing greater freedom in intramodal shipments. The Specialization for maximum utility within the mode resulted in incompatibility between the modes, with the resultant requirement of manual labor for transfer of cargos between ,carrying units. This was followed by the development of adapter units (for example, placing rails on ferryboats to 19 all!!! water transfer of rail cars). Finally, the evolution of the cargo container is providing the means for bridging the incompatibility of the various modal carrying units. Rail-Highway In domestic intermodal movements, the rail—highway Trailer 0n Flatcar/Container On Flatcar (TOFC/COFC) shifts are most important in terms of numbers, with the TOFC por- tion accounting for about 90 percent of piggyback traffic. The development and characteristics of piggyback and con- tainerization are of sufficient importance to this study that they justify independent treatment in a later section of this chapter. Rail-Water For rail-water transfers, boxcars were rolled onto ships equipped with rails in ferry service on Lake Michigan as far back as 1892.4 Since that time the practice has expanded to the use of ocean-going vessels more than 400 feet long and capable of carrying over 100 loaded freight cars. Special loading facilities were installed at each port served, consisting of elevators capable of lifting loaded boxcars and positioning them over the hold of the trainship. With the advent of the 20 foot and longer con— tainer designed for ocean travel, demand for trainship movement began to decline in favor of containerships. In comparison, containers can be handled easier and quicker at dockside and do not require the Waste space occupied by rail 20 car undercarriage. In addition, the containers can be transferred to a motor carrier at the destination port for rapid final delivery, whereas trainship is limited to rail transfer at each end of the trip. Highway-Water A comparatively recent innovation in highway—water transfers is roll—on/roll-off "fishyback"; also referred to as "RoRo." The largest ship designed for this service has been operating for over two years on a weekly run between New York and San Juan, Puerto Rico.5 The vessel can carry 240 highway trailers as part of a 500 total vehicle mix. The major advantage claimed is total flexibility for hand- ling anything that can be rolled aboard. There is no need to be limited to standard sizes as is the case with con- tainers. Using multiple port Openings, the ship loads and unloads at the rate of One trailer on and one trailer off every two minutes. Turnaround time at the docks averages about 12 hours. About 20 percent of the ship's cargo comes directly from piggyback trains and the percentage has been growing, with a 40 percent snare expected in the future. A more recent development is the combined roll—on/roll-off containership. Vessels are available with a capacity for 824 standard 20 foot containers, plus a lower deck load of miscellaneous rolled-on vehicles, and are designed to Oper— ate at 24 knots on the high seas. «a: 34:1. ‘ _ a. e . / 21 7.. Included in water service are the barge lines that operate on the navigable rivers and intracoastal Waterways. A few barge lines have joint routes with rail and truck connections, but since this mode is most advantageously used in bulk commodity shipments, the business is primarily port- to-port . HighwaL‘Air Since airports are generally located on the fringes of urban centers, air carriers must interface with motor freight service to provide door-to-door coverage. Coordi- nated service agreements have been established, including those in which a single bill of lading is used. In order to serve smaller communities not provided with direct air freight connections, air-bus package express service is provided to about 6,000 communities. Shippers can use bus service to deliver packages to the nearest airport and bus transfer can also be used to deliver from the final port to the cons ignee . Relative Importance of the Modes The relative importance of the various modes in domestic freight movements can be evaluated in terms of activity, generally measured in ton miles, or total revenues. There are discrepancies in the numbers available, depending lupon the sources of information, but the numbers presented in the tables below are adequate for demonstration of rela— 6 .. tive importance . . retribution among intercity carriers 11 3 Millions Ton Miles Percent of Total 1966 1980a 1966 1980a 750,800 1,025,569 43.0 34.4 380,917 737,623 21.8 24.8 280,000 487,335 16.0 16.4 332,900 709,625 19.1 23.8 . - 2,250 18,138 0.1 0.6 ;fi,‘ 1,746,867 2,978,290 100.0 100.0 444,4 4 c... ; .. FPrejection. The selective transport by air and motor carriers of higher value goods which justify payment of higher freight rates is reflected in Table 4.7 Table 4. Revenue distribution among regulated carriers Percent of Total 1966 1980a wt: *— Railroad 43.6 28.8 vnsnnnaaarlar 48.5 61.2 .Inland water 1.5 1.0 new . . 4.2 4.0 2 0 23/ Both in terms of ton miles moved and in revenue generated, the railroad and motor carrier modes are the most important participants in domestic shipments and this situa— tion is projected to continue into 1980. Intramodal and intermodal transfers between these two modes represent the major potential for containerization growth in domestic shipments. The emphasis of this paper is directed to these two modes. There is currently a growing interest in appli— cation of containerization to air cargo traffic, but as noted in Tables 3 and 4, total volume and revenues are a minor factor in domestic movements. Relative Importance of Foreign Shipments Although the current. major interest and activity in containerization relates to foreign shipments, this study is primarily concerned with domestic movements. The volume of freight moved in domestic traffic is much larger than that in foreign trade, and containerization is already well developed in the latter area. Directly comparable numbers are not readily available since domestic freight is usually reported in ton-miles, while foreign trade is given in 32% or value of shipments. However, if a generous average 1,000 miles per shipment is used for foreign movements for pur- poses of comparison, the numbers would look somewhat like those given in Table 5 below.8 24 Table 5. Foreign versus domestic freight volume, 1966 Mill ions Ton Miles Domestic Foreign Railroad 750, 800 NA Motor carrier 380, 917 NA Air 2, 250 366 Marine —-- 452, 052 Total accounted for l, 133, 967 452, 418 The numbers on U.S.-foreign surface trade are not readily available, but would include primarily Canada and Mexico. Recent statistics indicate that these would add no more than 100 million ton miles to the foreign total. There- fore, it can be seen that foreign shipments comprise only about one-half of those of domestic movements in the modes that are primary targets for containerization; namely, rail, motor carrier, marine, and air. Nevertheless, marine ship-— ments in foreign trade have been the locus for the recent growth of containerized traffic. The discussion thus far has been intended to place the various modes in proper perspective with respect to their relative importance in national freight activity. Effective coordination of the modes would allow the transfer Of goods from one system to another at minimum cost in time and money. The objective is to use the technologies of two or more systems to achieve an optimum through movement of freight. _Implementation of coordinated service must be / 25 minded out by the carriers involved and containers are a necessary .tool for bridging modal interface barriers. Benefits of Containerization Most of the benefits of containerization derive from a simple concept: if you put something in a container you can both protect it and make it easier to handle. Benefits of the practice accrue to both the shipper and the carrier. - The opportunity for savings is highlighted by a former transportation analyst with Fruehauf Trailer Company, who pointed out that one-half the cost of transporting domestic goods is spent in shuffling between vehicles, across docks and platforms, in packaging, loss and damage claims, pilfer- . 9 age, and insurance. Reduction in Claims Due to Damage and Theft Containerization eliminates much of the extra hand— ling costs and thereby reduces likelihood of damage and loss from pilferage. A measure of the reduction in claims costs through containerization is presented in estimates deve10ped by the National Academy of Sciences, based upon published ICC data for truck and rail cargo during 1960.10 The fig— ures for inland claims per measurement ton of cargo include loss and damage expenses, claim payments and related cleri- cal costs. Damage claims and loss and pilferage claims were each responsible for about 50 percent of break—bulk cargo L. n as- . . \ 26’ locus. Containerization was estimated to reduce damage claim by about 50 percent and almost completely eliminate pilferage claims. The numbers are presented in Table 6 helm. Table 6. Cargo claims: unit load vs. break—bulk systems Dollars per Measurement Ton Load Type Truck Rail Break-bulk 0 . l6 0 . 26 Containers 0.04 0.07 Pallets 0.08 0. 13 Some idea of the potential for loss reduction through containerization is apparent from the fact that in 1963 the combined claims paid by rail and motor carriers were $226 million. Furthermore, the total cost of claims is estimated at five times the actual claim dollars paid 11 out. In 1969 clothing accounted for better than 10 per- cent of total claims paid on motor carrier losses, and this Was followed by household appliances at 6 percent.12 In contrast, the protection afforded by containers is demon- strated by a speaker who stated that claims were reported on less than 1 percent of 12,000 containers shipped over a recent three year period.13 A rail carrier representative 27 stated'that claims on containerized Cargos over the past few years were averaging about 10 percent of conventional break— bulk loadings . Packaging Costs Savings in packaging costs are not always as readily available for foreign containerized shipments as for domes- tic consignments. In the former the possibility frequently exists that the contents may not move door—to—door in the same container because of labor agreements, customs inspec- tions, and errors in documentation. On the other hand, containerization allows the use of lighter packaging in domestic trade if the cargo is properly stowed so as to avoid shifting of the load. Estimates based upon data provided by such shippers as the General Services Adminis- tration were prepared by the National Academy of Sciences 14 and are presented in Table 7. Not included in the table Table 7. Packaging costs: unit load vs. break—bulk Lead Type Type of Packaging Packaging Costa Break-bulk Export pack 32.00 Containers Domestic pack 20.00 Pallets Domestic pack & sheathing 22.54 aDollars per measurement ton. 7"" 28 are the savings from reduced tare weight due to lighter packaging, as well as reduced cube. The adjustment of packaging to containerized shipments is best subjected to a systems analysis, wherein the savings from packaging are balanced against the risk of damage to goods in transit. Although primarily concerned with import traffic, Mattel, Inc. reported containers removed the need for all—weather packaging required for cargo stowed loose, and a reduction in damage to goods was also realized.15 They were also able to negotiate favorable volume commodity rates on the o inland portion of their import movements because the use of van containers made it more economical to handle the goods from the harbor to their plants. Additional Benefits to Shippers The experience of Mattel, Inc. demonstrates addi- tional benefits through the use of containers (primarily in import shipments, but not necessarily limited to this area). Reductions in door-to-door transit time of two to three extra work days were obtained, mainly because of elimination of the need for unloading, sorting, and reloading loose cartons on trucks. Containers could also be loaded aboard rail flatcars 0n the west coast for movement eastward with— 'in 24 hours of arrival at the piers. Priorities in handling Specific containers can be arranged through billings which indicate container numbers and code numbers of contents. . :‘g' 1.7 29 By loading the container in the plant and then transferring it directly to an over—the-road truck, city pickups can be eliminated at each end of the trip. The box can be used for temporary storage at either end, free from the likelihood of damage, contamination, or pilferage. For extended storage, containers meeting ISA specifications are capable of being stacked as many as six high. The benefits of minimum handling and storage under proper conditions are particularly important in the shipment of fresh produce in refrigerated containers. A citrus fruit shipper testified that switching to containers provided longer shelf life for the goods and higher market prices.16 The benefits of containerization are readily appar» ant to the Department of Defense, which has pioneered in the development, particularly with the CONEX container in the early 1950's. (The CONEX container is roughly a seven foot metal cube that holds five tons of cargo.) It has been estimated that full application of containerization to the Vietnam operation would have saved over $1 billion in trans— port costs, losses in shipment and storage, and in packaging costs. Required logistical personnel would have been re— duced and there would have been increased efficiency and faster deployment of goods.17 The Department is now engaged in the development of a containerized logistics distribution system and has undertaken development operations such as the containerized shipment of ammunition. Intermodal innovatioas - ' ... .o. ,. , ~ ,-.«-~ .. n. - ..-- ,. .- -o.~ ' .. .. u. 0 ~ 9 e . 'eu- a l 1 1 e e c. .H.‘ . . ~.. I‘ n -t v 30 include the use of helicopters for unloading goods in ports where dock facilities are unavailable or too congested. Benefits of Containers Over Trailers in Piggyback Service Many of the benefits of containerization for ship- pers also accrue to the carriers. For example, reduced handling means faster turnaround of equipment; less dead time at the decks and rail sidings. There are also benefits mainly for the carriers and a goodly share of them are brought out in frequent arguments concerning COFC versus TOFC piggyback. Some years ago a consulting engineer pre- sented a list of advantages of COFC that would eventually allow it to displace TOFC. His predictions have not mate- rialized but the factors he presented are still valid.18 They include the following: 1. Standard van containers or flat cars are within railroad clearance regulations and do not require selective routing sometimes necessary for semi-trailers on flat cars. 2. Van containers can be positively secured to flat cars and highWay chassis with a minimum of attachments. 3. Loading or unloading of van containers from flat cars with cranes or fork trucks can be done randomly and more quickly than the roll— on, roll-off type end loading of trailers. 4. Van containers are lighter in tare weight than semi-trailers of similar capacity. 5. Van containers represent a lower investment than semi-trailers of similar capacity. 6. Flat container cars are smaller, lighter and cheaper than corresponding TOFC cars. e . a , . ran Wrfi if 31 With reference to the last item noted, a c0nsultant from A. '1'. Kearney Co. estimated that Special freight trains using lightweight flatcars and containers can save as much aetxn million ton-miles per day in deadweight as compared to conventional TOFC trains.19 With the higher center of gravity for the conventional piggyback trailer, the load is sMflect to more damage from jars and jolts of rail haulage. Lower wind resistance of COFC trains allows for higher speeds. With trailers, the cost of license plates, tax plates, tires (more than $2,300 worth on over-the-road traflers), bogies, etc., are tied up on a TOFC load, whereas Hwy can be kept in revenue service when used with a demount- flfle container. There is less exposure to vandalism for a container attached to a flatcar, as compared to a pneumatic- thmd trailer van lashed to the car. One final factor offlued is that the wide variety of liquid carrying con— tanmrs offers the tiucklines greater flexibility of service mm does not require dead—head time for unloading, since the cmfiminer can be drOpped off for use directly on the produc- tion line . History of P iquback Domestic Development The histories of container and trailer piggyback are intertwined in a general concept 0f containerization and intermodal transfers. The container principle was first ‘ .-" i ‘I, . ".‘Q. 32 recorded by James Anderson, an Englishman, in 1801. In 1834, the state-owned Main Line of Public Works in Pennsyl- vania began rail shipment of canal boats in detachable sections without breaking bulk between Philadelphia and Pittsburgh: this service was maintained until 1857. Just prior to 1850 the Pennsylvania Railroad began using con— tainers for transporting passengers' baggage.20 For a several year period beginning in 1885, the Long Island Rail— road Company Operated a "Farmer's Train" between Long Island points and the East River, carrying four loaded produce wagons per flatcar, with the teams riding along on the same train in specially provided box cars.21 The New York Central pioneered present day type container service, which it began in March, 1921, between Cleveland and Chicago. The Boston and Maine established rates on containers over points on its lines in March, 1927. The Lehigh Valley followed with offerings in 1928. The Pennsylvania first offered container rates over three routes in 1928 and soon added additional routes. By 1931, the three above mentioned lines had petitioned to extend the service to principal points in their territories.22 As an example, the rate established by Boston and Maine covered "miscellaneous less-than—carload shipments, rated not lower than fourth class-“when loaded into steel . and wood containers, the outside dimensions of which must be seven (7) feet in length, eight (8) feet in width, and seven (7) feet in height." The service, in this case, was v .M W. V. a '- L'- . . ‘, ‘- e,. '4 a. v ‘~ \ s . 33 established to accommodate a forwarding company which owned the containers, loaded and unloaded them, and was desirous of switching from an electric rail line which it had been using.23 The first trailer-on—flatcar service was instituted by the Chicago North Shore and Milwaukee Railway in 1926 between Chicago, Illinois and Milwaukee, Wisconsin. The railroad used 16-foot highway trailers for Operation over city streets for pickup of less—than-carload shipments at the door of the shipper. The trailers were loaded three to a flatcar for the rail journey, and then the goods were sub- sequently delivered by trailer to the destination. The service was discontinued in 1947.24 During the 1930's and 1940's various similar Operations were conducted by several other railroads with varying degrees of success. For example, in 1932 the North Shore invited over—the-road carriers to ship semi—trailers by train between Chicago and Milwaukee at a rate a little lower than what it would cost to move the same trailer over the highway. The railroads experimented with several rate bases and discovered that rates on a per-mile basis with a maximum charge per con- tainerwere the most practical basis. This basis was lit- gated before the ICC, who issued a new formula based upon classification of freight in the containers. The rates were not attractive to shippers and this resulted in the end of container service for that period25 (ICC Docket No. 21723 referenced as footnote 22) . 34 In 1936 the Great Western began transporting highway trailers between Chicago and St. Paul, using a basic rate per loaded trailer, Open to the general public. The trail- ers were loaded aboard flatcars by the shippers, two to a flatcar, and were returned empty at half the full trailer charge. The- New Haven instituted TOFC Operations in 1937 under an Open tariff in which motor common carriers reserve the right to substitute TOFC service for highway transporta- tion. The railroad was compensated according to a published schedule. Over 50,000 trailers were transported by the New Haven under this plan in 1953.26 Over the subseQuent years a number Of piggyback plans have been develOped. These apply equally to trailers or containers carried on flatcars. The basic plans are described in Table 8 following.27 The plans develOped more or less in chronological order, with Plan I initiated by the Great Western as described above. Plan II came into service in 1955, Plan III in 1956, Plan IV and Plan V in 1958. Plan 1135 was initiated in 1964 by the Missouri Pacific Railroad.28 A discussion Of the relative advantages tO the shippers, motor carriers, and railroads is deferred to a later section dealing with rates. DevelOpment of piggyback service from the experi- mental stage tO its present scale Occurred largely in the decade following the ICC decision in 1954 which clarified an accumulation of issues concerning the practice (ICC 35 mmumu HHmHIHOuOE bosom MOM mmeumu umeuumo Hemm mmfiammm mass ucooumm om “mums beam moeammm made ucmoumm or “mums beam mmaammm mass unwound 00 “moms umam mmumu huHUOEEOO pmouaflmm Ammeoaunm Hmsoa>aocH CO UOCV maoacw> on» Ca newsman saw how momma Hmcoflmfl>wo DOMCMHQ “mmumu Hmwuumu HODOE umeuumo HODOZ HmUHmBHOm HO Hmmmflnm Hmpum3HOw so ummmflcm mocmflmcoo pom uocmflmcoo umfluumo Hemm Hmauwmo Hobo: umauumo MODOE HOHHmuu pom Hmoumam mmcwecusm HmOHmBHOm no ummmflzm mumaamuu mmeHcs pom wpmoa Hmauumo Heme 0cm .mumoumaw nonmacmom UmOH IaamunApmmmma HO pmc3ov Hoaemuu nonmacuom Hmpum3H0m HO uwmmanm mmmooanmB pom mmuam mEmu cwm3umn Emcu m>OE 0cm muwaamuu UmOHco new mea mwcmflmcou cam uocmamcoo “Hmfluumo Hemm umauumo Hamm mumoumam mmnmflcnom Hmflunmo Hams “HMO lawns c0 Hmaflmwu mUmOH Ico pom mUmOH Hmwuumo HODOE “Hmeuumo Hobo: HmHHHmo HODOE HmUMmBHOm no Hmmmanm umpum3hom so memflnm possumo Hflmm Hmeuumo Hflmm Hmwuumo Houoz >H HHH mHH HH mumm m0 mammm mo mxoem Cam mHmDHHmQ 0:3 HmmmCmHB Cam ucmfimaovm mmflammsm 0:3 HOumGHmHHO Emam mCMHm MUMQNOOHQ .m manna 36 Docket 31375 referenced as footnote 21) . The record Of growth for selected years is given in Table 9 below.29 Table 9. Piggyback carloadings Year Year 1955 168, 150 1967 l, 207, 242 1959 416,508 1968 1,337,000 1964 890, 748 1969 1,344,000 The relative importance Of the various plans is illustrated in Table 10 below.30 It should be noted that the number Of trailers and containers listed in 1968 is greater than the number of carloadings shown in Table 9. This is because more than One trailer or container can be loaded on a flatcar. There were 59 railroads participating in PiggybaCk Service in 1965. There was substantial concentration of Operations in a few railroads,with five Of them accounting for 41 percent Of the total shipments. The majority Of Piggyback terminations moved in local service, with waYbill samples indicating that 86 percent Of the traffic originated and terminated in the same territory; i.e., Official, south- ern, and western. The average local haul was 589 miles and for inter-line service was 929 miles. Ten states accounted 37 Table 10. Trailers and containers terminated by Class I railroads, 1968 Terminations Plan (thousands) Plan I 276.0 Plan II 657.6 Plan 11% 462.5 Plan III 169.3 Plan IV 131.6 Plan V 57.2 Total reported by plan 1,754.2 Other arrangements __14l.0 Total terminations 1,895.2 flmr72 percenp of piggyback waybills. Illinois, New York, and New Jersey ranked high, with a large share of the traf- ‘fnznbving betweenfilllinois and the latter two states.31 A measure Of the relationship between containers and allgflggyback loadings for the domestic movements in 1968 is showiin.Tab1e 11 below, which was compiled from individual carrier reports to the ICC. 32 Tafle ll. Piggyback units and containers moved by all modes, 1968 Total Piggyback Containers Containers Mode Units Units % of Total Rail 1,915,200 154,600 8 Motor 308, 000 63, 200 21 Forwarder 242,800 10,000 4 Water 50,900 40,500 80 Totals 2,516,900 268,300 10 6 ¥ 1" --’ as. ‘ . "'v._ -. v H. -. e '-v, e.- ‘ 0.. . - , “. ‘ . .._ ’., 0- '. :- 38 According to Table 11, approximately 10 percent of all piggyback movements are now being handled in containers. The same relationship applies if discussion is limited to motor and rail modes. Marine Containerization Although the primary area Of concern in this paper is containerization in domestic freight shipments, the develOpment of containerization in marine traffic deserves treatment because Of its important influence in domestic activity. Those responsible for develOpment Of the practice in overseas shipments have provided leadership in improve- ments to "the box" and dockside handling equipment, and have created the "demand push" to move containers to inland destinat ions . As in the case with domestic activity, containerized marine shipments had early origins. In the late 1800‘s "lift vans" were used in Germany, but they did not make an appearance in the United States until the 1890's because the hatches on the ships used then were tOO small to accom- modate the large boxes. In order to avoid a duty on foreign- built lift vans, the Bowling Green Storage and Van Company was organized and began movement of household goods in American-built vans across the Atlantic in 1901. (The com- pany is still in Operation.) The Anglo-American Lift van CO. was organized in 1911 for shipment of household goods to and from EurOpe. They had constructed fifty steel vans, each 39 about 16 feet by 8 feet square, which could be fastened to flat bed trucks and were capable of handling the furniture in a six room apartment.33 Credit for the first major international use of containers goes to the United States Army. During World War II the Army turned to industry for solution to the problem of maximizing usage Of available shipping space. A reusable container for shipping aircraft engines was develOped and its use was later extended to other items. From this begin— ning the concept of the CONEX container, previously de- scribed, was deve10ped. The Armed Services have now had over 20 years Of eXperience with CONEX. By 1965, the fleet had grown to 100,000. In 1968, under the logistics pres- sures Of the Vietnam war, the inventory of CONEX containers was expanded and stabilized at 200,000 units, which is the largest container fleet in the world.34 The inventory is now in the process Of being modified to include 20 and 40 foot standardized van containers. Credit for initiation Of present—day commercial marine container movement is generally credited to Malcolm McLean, at that time head Of a trucking company, who recog- nized the potential for reduction Of repetitive handling of freight in intermodal transfers. McLean purchased the Pan- Atlantic Steamship Company as the nucleus for Sea Land Com- pany. Which he founded in 1955. The ships were converted for container service, which was Offered on intercoastal 4O routes between the east and west coasts Of the United States and to Puerto Rico. Success Of the undertaking in filling a mmmmiis indicated by present estimates that Over 90 percent ofthermuine traffic to Puerto Rico moves in containers. Sea-Land adOpted a "non-standardized" 35 foot container on the basis of highway trailer dimensions which were in use at Hmttfinm. Today the company controls a fleet of more than 3&000cxnmainers and an ocean-going fleet of 46 trailer~ flnpsvnnch.provide regularly scheduled calls at 36 termi— nals throughout the world.35 Matson Lines develOped traffic with Hawaii based \mon2324 foot long container which could be hauled in tandem on West Coast highways. Grace Lines develOped routes between the East Coast, West Coast, and South American ports usnmya 17 foot box initially and then switching tO the standard 20 foot container. These lines were soon followed bylkfited States and foreign firms in the develOpment Of Athnmic and Pacific containerized trade routes. An idea oftflm extent Of growth is Offered in the statistics pre~ sented below which were compiled by the Maritime Adminis- tration for the year 1968. IL§. North Atlantic/EurOpe Trade Route:36 Twenty-eight percent of total commercial liner traffic moved in containers. Cargo movement was carried in a total Of 201,000 20-foot container equivalents. U.S. flag ships carried 47 percent of the containerized commercial cargo. 41 U.S. Pacific/Far East Route: About 6 percent of the total commercial liner cargo moved in containers. The equivalent Of 78,000 20-foot containers were used to carry the containerized cargo. U.S. flag ships carried 49 percent Of the commercial container traffic. Third-quarter volume of containerized freight on the North Atlantic route increased from 479,000 long tons in 1968 to 824,000 long tons in 1969. Traffic on the United States/Far East route likewise increased from 159,000 to 518,000 long tons for the same periods.37 A 1969 listing by the Maritime Administration indi- cated that there were 79 United States flag containerships in service and another 103 ships with partial capacities for containers. At the same time there were under construction or on order a total of 122 containerships and 112 ships with partial capacities for containers. Twenty-three of the former group and seven of the latter group were being con-— structed in the United States.38 It was estimated that there were about 79,000 containers in service on the oceans in 1967, and this number has had to increase considerably since then in order to take care Of the dynamic growth in the ir use . .,' . n, ‘a. ' u a. .p_ s_ a . leu 42 Air £3;ng Containerization A few comments are presented here on containeriza- tion of air cargo, primarily to round out the picture. The containers moved by air are subject to surface movement on short hauls to and from the airport. It is only within the past couple of years that aircraft capable of handling con- tainers with an 8 foot by 8 foot cross section have been flying. Thus, the practice has been limited to use of a special line of containers designed to match the eliptical contours Of plane cross-sections. These have been stan— dardized under agreements reached by the International Air Transport Association (IATA) and have external volumes ranging up to about 425 cubic feet. A program for bulk unitization was introduced in October, 1969, whose purpose was to encourage shippers to Offer to the IATA member car- riers larger unit loads which would be packaged ready for transport. Reduced freight. charges were Offered in return for the expected reduction in ground handling costs and faster equipment turn-around. It is not likely that aircraft will haul the present standard 8 foot by 8 foot by 40 foot containers because they are too heavy. A minimum target by aircraft manufacturers Of a weight to cube ratio is 1% pounds to one cubic foot volume for containers, whereas the lightest weight contain— ers that will stand up under surface use today run about a 4;: to one ratio. Some progress has been made through the use of magnesium and honeycomb wall construction. World 43 production of aircargo van size containers was reported at 80 units in 1967 and was expected to climb to 1,480 units in 1969.40 It may be surmised that such units would find ini- tial use by the military on the giant C5A air cargo trans- port plane. The critical need to conserve on tare weight has led to the development of unitized loads for aircraft based upon "igloo" shaped packages stabilized with nets or shrink film. These are used interchangeably with containers of similar shape, also called "igloos" and meeting IATA standards. Rapid transfer Of baggage at terminals is important to passenger convenience. This problem has been magnified with the advent of the new generation of planes, such as the Boeing 747, which are capable of discharging as many as 400 passengers at one time. Specially designed containers have been provided for use in these planes in order to handle miscellaneous baggage as unit loads, but they are not used intermodally. Growth Projections for Containerization Projections Of the growth of containerization in the various modes have been made almost since the innovation was first practiced. It is a favorite subject for presentation at professional meetings. Numbers presented may be based upon careful analysis of existing trends, examination of Potentials based upon the goods being handled in a given 44 trade channel, or may merely be a reflection of enthusiasm on the part of the particular author. This section will treat briefly on some of the projections which are available in the literature. Piggyback Projections Rosey projections for piggyback growth were pre- sented in an article in Railwal Age in August, 1963, as follows: The trailer/container manufacturers have some intriguing predictions to egg them on: Their market researchers agree with TOFC eXperts who are estimating that railroads will carry 10 million trailer/container loads annually by 1970. . The highway hardware men can see where TOFC may be accounting for as much as 35% to 45% of all trailer and container production by 1970: production in 1962 was slightly in excess Of 72,000 trailers. Predictions [as to how fast TOFC will grow] range from a low Of a 15% increase compounded annually to a high of a 30% increase also com— pounded annually. Sticking to a rather conserva~ tive 20% annual increase, new trailer/container requirements involved in piggyback. Operations could amount to 118,000 unit.s--even assuming that none of the trailers or containers in the existing fleet would need replacing in that period.“- The purpose of presenting a projection made in 1963 is to illustrate how far Off the experts can be and to generate caution in accepting projections made today. It was noted previously in Table 11 that the total piggyback units and containers moved by _a_]:_]; modes in 1968 was only 2.5 million and there was essentially no further growth in the practice in 1969. In the period 1963-1968 piggyback carloadings actually grew at about a 12 percent compounded 45 annual rate. Trailer production for all uses was estimated by the president of Fruehauf, the nation's largest trailer builder,42 at about 150,000 in 1969 and projected at only 100,000 for 1970 because of an economic downturn. A more recent forecast, which also appears to be optimistic, was made in 1967 by Railway Age after a survey of major TOFC/COFC Operators. For clarity it is presented in tabular form below, compared with 1966 figures.4 Table 12. TOFC/COFC--1966 actual vs. 1972 projection 1966 1972 Piggyback carloads, millions 1.1 2.6 Trailers handled, millions 1.9 4.6 Piggyback revenues, $ millions 478 l, 100 Piggyback car fleet, units 28.000 56,000 Trailer and container fleet, units 100,900 250,000 The same article quoted the general manager of Container Marine Lines, a division of American Export Isbrandtsen, that in the long run the Container—On-Flatcar (COFC) system would prevail, primarily because it requires less investment . 46 The forecast Of the size Of the piggyback car fleet in 1972 was not too far Off, since Trailer Train Company, the major supplier, reported over 29,000 of its piggyback cars in service as of early in 1970.44 Of the 100,900 unit trailer and container fleet referred to in Table 12, only about 16,000 were containers (20 foot equivalents) and this number had increased only to about 20,000 at the beginning of 1968. A report by Pullman-Standard quoted a rule—Of- thumb that for every ten containers built for maritime service, approximately one is built for purely domestic use. Kaiser Aluminum Company recently made a more con- servative estimate of the piggyback van trailer and con— 45 tainer fleet at 198,700 units by 1977. The estimate also included the following production schedule for that year: Piggyback van trailers and containers 31,900 units Highway van trailers 88,100 units Total 120,000 units A survey among piggyback managers of the major rail- roads at the end of 1969 developed the conclusion that Piggyback Operations are expected to continue to expand in numbers of carloadings, trailers and containers handled, and in the share Of total freight revenues. Profitability will be enhanced by taking a more selective look at the type of traffic the railroads will handle; unprofitable short hauls Will be pruned. Better service will be provided through the use of all piggyback trains. The trend is already acceler- ating, with announcements by Missouri Pacific, Penn Central, , . e .. v: .1 .Il' v.. . - ,, v ‘ h .u. . u..- a. ,. .l ‘- ‘ .- 47 and Southern Railroad of such schedules. Experiments with the present rate plan structure are forecast in an effort to make piggyback more attractive to the shipper. Optimism prevails and the current slowdown in growth is attributed to the downturn in the economy, combined with an extended nationwide truck strike in 1970. Projections Of Total Container Usage The discussion has centered on containers for piggy~ back service since this relates tO domestic surface freight shipments. However, to develOp a picture Of total container growth projections, it should be pointed out that the piggy— back segment amounts to only about 14 percent Of the con- tainer inventory. The relationship is borne out in Table 13, which follows . 46 Table 13. United States container inventory (number of 20 foot equivalents as of January, 1968) ‘ Owner NO. % Marine 100, 840 70 Leasing and forwarding 23, 840 16 Rail 19, 950 14 Truck _______1__'_7_Q_ .. Total 144, 800 100 48 The Commercial Research Division of United States Steel Co. recently develOped a container annual demand schedule over the period 1969-1977 which was based upon an estimated range maximum inventory of 640,000 units and a minimum of 320,000 units by 1977.47 The big spread in the projection was justified upon the numerous uncertainties facing full acceptance Of their use-~the central concern Of this research. Their estimates of annual demand for 20 foot equivalent units were: Year 1969 25,000 tO 38,000 units Year 1977 45,000 to 88,000 units. The general concensus of most surveys is that there will be 300,000 to 400,000 containers in service by 1975. The major source Of demand will continue to be for marine service. Litton Systems published a study Of oceanborne shipping demand for the years 1973 and 1983 under a contract With the Department Of Transportation.48 The forecasts were develOped by analyzing characteristics of 34 trade routes in terms of growth characteristics and percentages of container- izable cargo carried. Their overall summarized conclusions are presented in Table 14. The important point about the projections is that break bulk cargo is expected to decline in favor of contain— erized movements, in spite of an overall growth in trade. Pertinent to the investigations of this paper are the projections of the amount of liner trade which will move in unit trains in the domestic portion of the journey. 49 lbbhalA. Projected containerization Of United States liner cargos 1973 1983 Tons 96 Tons % Containerized 12, 320,700 23 25,605,600 41.5 Break bulk 41, 117,300 77 36, 14L_400 58 . 5 Total 54,438,000 61,749,000 These are summarized in Table 15, and are based upon the assumption that essentially all of the "prime" container— izabhaitems will be so handled in 1973 and the "suitable" cmflainerizable items will be added by 1983. 49 Table 15. Projected liner trade moving on unit trains Total Trade Unit Train Volume YEar (thousand long tone) (thousand long tOHS) % Exports: 1973 8,955 1,659 18.5 1983 11,876 5,646 47.5 Imports: 1973 4,531 1,380 30.0 1983 5,811 2,924 50.0 _g 50 Expansion of unit train Operations is expected to cause a decline in the Great Lakes overseas trade and pro-— duce some reallocations between the Gulf, Atlantic, and Pacific Coast ports. In any event, such develOpments are sure to act as a catalyst to further growth of domestic surface freight containerization. Increased demand for service will justify investment in facilities which can be used to expedite goods consigned to both foreign and domes- tic destinations. Little has been said about the role of the highway carriers in projected growth of containerization. Figures in Table 13 indicate that truckers owned only about 0.1 percent of the United States container inventory in 1968. However, few international movements of containers are completed without; the service of truck lines, whether for line-haul or pick up and delivery service. Truckers are largely disinterested in containerization, for reasons more fully developed later in this investigation. However, as truckers gain experience in the practice they can be expected to become party to intermodal transfer agreements which may prove economically advantageous to themselves as well as to the shippers. ,Containerization of air shipments can be expected to expand at the highest growth rate among the modes over the next few years, first because of its present small base, and secondly, because it expedites ground handling, thus allow- ing more active use of very expensive planes. ....... up... -u .. I 4 .u. .. . .-.. ...-. 1 . .., - . 'u. - . .. 51 Contpiners and Handling Equipment This literature review is aimed at develOping a background of understanding of the practice of container- izatknlof goods for freight shipments. This section is intended to provide a description of the tools of the prac- timm namely, the containers themselves and the specialized eqwummnt used to handle them. A review of develOpments in this field indicates two Opposing forces at work: (1) efflnts to standardize containers and equipment in order tO shmflify and minimize costs of intermodal and intramodal tnnmfers and (2) continuous innovation and modification of theluudware to meet specialized needs and to improve pro- yxmed investment returns. It appears that continued growth intflm use of containers will require the needs to be served inlxmh.areas, hOpefully with a reconciliation of Opposing aims. A large number Of containers in service today meet tMarequirements of the International Organization for Standardization (IOS) . The work of this organization and standards in general will be discussed more fully in Chap- terJII. However, the dimensions for the two groups of amusiners included in the standards are presented here now, shun much of the discussion in this section relates to them, Series I has an 8 by 8 foot cross section as follows:50 nae 52 Nominal Size Volume (feet) (cu. feejj 40 x 8 x 8 2560 30 x 8 x 8 1916 20 x 8 x 8 1272 le8x8 628 6-2/3 x 8 x 8 413 5 x 8 x 8 320 Series II has a uniform nominal height of 6 foot, 11 inches and the three containers have the following nominal dimen— sions: Height Width Length 6 ft., 11 in. 7 ft., 7 in. 9 ft., 7 in. 6 ft., 11 in. 6 ft., 11 in. 7 ft., 11 in. 6 ft., 11 in. 7 ft., 7 in. 4 ft., 9 in. Standard terminology has been developed. Of partic— Lflarzhnerest is the standard definition of a freight con- tainer, as follows: By freight container is meant an article of transport equipment (a) of a permanent character and accordingly strong enough to be suitable for repeated use: (b) specially designed to facilitate the carriage of goods by one or more modes of tranSport, without intermediate reloading: (c) fitted with devices permitting its ready handling, particularly its transfer from one mode of transport to another: (6) so designed to be easy to fill and empty: (e) having an internal volume of 35.3 cu. ft. (1 cu. meter) or more. The term freight container does not include vehicles or conventional packing. The American Bureau of Shipping has a similar definition for a cargo container, but sets a minimum volume of 628 cu. ft. 53 The Bureau tests, inspects and certifies containers meeting its requirements . Types of Containers in Service Containers in actual service vary as to dimensions, materials of construction, and in special features, accord- ing to the needs of the users. Steel is the basic building material, especially where strength is required and where weight is not of prime importance, as in marine service. However, an area of continuing develOpment involves the use of material combinations designed to reduce tare weight with- out sacrificing serviceability. Major materials include plywood, aluminum, magnesium, honeycomb panel constructions, and fiberglass reinforced plastic panels. A recent port activity survey by the United States Maritime Administration develOped the following analysis of, container lengths in use, while the Truck Trailer Manufactur- ers Association published the distribution of container lengths produced in 1968, as listed in Table 16.52 Usage was surveyed in North Atlantic Ports: had the 'Pacific Coast been used, 24 foot containers (used by Matson) would more closely. have balanced production. The 35 foot output is presumably to meet demand from Sea Land. The bulk of production is in the standard 20 and 40 foot lengths, with the latter growing in importance, especially for domestic traffic. 54 Tflfle 16. Container length--usage and 1968 production Selected Area Us age Product ion Mnmth PrOportion Length Proportion (feet) (‘36) (feet) (%) 10 1.96 10 0.48 20 55.93 20 37.45 30 0.13 24 9.25 35 15.25 35 25.50 40 25.58 40 27.30 Other 1.15 Other 0.02 Total 100.00 Total 100.00 In addition to the general dry cargo freight con- tanmm the following are among those available for special services: 1. Open tOp general cargo to permit overhead loadings and discharge. Refrigerated cargo or "Reefers" to transport meats and other perishables. Controlled temperature cargo which is heavily insulated for tranSport of perishables and delicate equipment. Heated cargo for use in cold climates, such as Canada, to prevent freezing of such commodities as beer. Tanks to transport whiskey, liquid foodstuffs and chemicals. Cattle carriers to transport live animals. 55 7. Open tray bulk, similar to general cargo but less than 8 feet high for high density materials. The Flexi-Van fleet of the Penn Central comprises a special group of containers: the company has over 5,000 of them in service, as well as over 1,500 special flatcars.53 The Flexi-Van differs from other containers in that it has all the features of a trailer (except wheels): it is equipped with a fifth wheel plate and kingpin, folding prOp legs, and wiring. 0f the twenty-two railroads with con- tainer handling facilities, four have Flexi—Van facilities only. The Penn Central has found that while an ordinary boxcar spends 43 percent of its life empty, Flexi—Vans are idle only 8 percent of the time. Container Handling Equipment Because of their large size and weight when loaded, containers require specially designed equipment for handling. The containers must be loaded and unloaded from flatcars, from over the road chasis, into holds of containerships, and stored at shipping docks or stacked in multiple height tiers. Handling equipment includes regular cranes, gantry cranes, straddle cranes, and special fork lift trucks. Capacities of railroad owned equipment vary up to fifty tons lifting ability, with a large share of the equipment capable of handling at least forty tons. Where a rail line does not have handling equipment at a destination terminal, the _.v ‘ o 'r.‘ .nVll“ u .. .- o — n .u . .._ ., -\ -- . . ‘. .- v 9.. Q ‘~\, - '~ 'In. ‘2‘ ‘ “.. 56 container is shipped on a chassis/bogie assembly and unloaded from a ramp. A special system which is partic- ularly pOpular in Canada is the Steadman side-transfer unit. It involves the use of a semi—trailer equipped to move a container on or off a flatcar in a sideway movement. The importance of handling equipment to a containerized Opera— tion is demonstrated by the experience of the Southern Rail- road. They attribute part of their success to their ability to design and build handling cranes at a cost which allows them an acceptable return on their investment. Special flatcars are needed to carry containers over the rails. In 1955 a group of railroads created the Trailer Train Company with the basic purpose of providing standard— ized piggyback cars to the industry.54 The original fleet consisted of five hundred 75—foot roller bearing flatcars ecNipped with standardized trailer locking devices. Since then additional models have been develOped to handle longer and heavier loads. The "All-Purpose" car will handle con— tainers and trailers interchangeably and is over 89 feet long (thus two 40-foot containers can be carried on the one Car), Rental rates are based upon a combination per diem and mileage charge, with the schedule designed to promote high active use of the cars. 57 Pallets and Unitized Loads A brief review of the literature on pallets and unitized loads is included because this shipping alternative can affect the growth of containerization by offering some of its advantages at lower investment cost. In this review the definition of the Unit Load Council is used: A unit load is one or more packages secured to a pallet, skidded or strapped together in such a manner that the entire unit may be handled efficiently from the manufacturer's plant, received by the ocean carrier, safely loaded, stowed under deck in the vessel and quickly delivered at the port of discharge by mechanical equipment. The Unit Load Council, comprising a group of ship- lines, has been formed to develOp and promote the unit-load concept in international trade. However, the practice finds wide application in domestic surface and inland waterway movements as well as in air traffic. In fact, unit-loading methods are used in a high prOportion of air cargo traffic. Many of the advantages claimed for containerization are also available in unitized loads. Included are reduc- tion in handling time and costs, less damage to goods, door- to-door movement of consignments, simplification of billing procedures, and increased customer satisfaction. Because the unitized lots are normally much smaller than containers they do not require the use of SOphisticated, expensive handling equipment. The loads can be placed aboard boxcars, ordinary flatcars, or in over-the-road highway trailers using common fork lift trucks. Offsetting this latter ,..<’ .. v ’, ’ . ’.-- Q I o . ..~ “uov ‘ ,..- .- - . _.. . ...-. . ., u, .. .H. ... .. . ...... .u ‘ . h v. -- . -..- o ,_ ‘ .\ I ,, _ -~ ..‘ e... ~- l_'~v n - "-. n u n 58 advantage, when compared with containers, is the greater time required for transfers at the intermodal interface. Pallets are the most common and one of the most efficient means of unitizing loads. Complete pallet loads can be stacked in consolidated tiers during shipping or storage without the need of racks, thus maximizing utiliza- tion of cubic space. Since they are used universally, dead- head returns of empty pallets to equalize unbalanced traffic is not a major problem. They can be constructed cheaply enough so as to be expendible if dead heading is a problem. The sizes most frequently used are 40 by 48 inch and 32 by 48 inch. The Department of Defense has established military standard palletized loads based upon the 40 by 48 inch pal- lets, skids, runners, or pallet-type bases.56 Standardized arrangements have been develOped for positioning unit goods on pallets in order to stabilize the load and minimize void spaces. The most recent development which is likely to influence the growth rate of containerization is the advent 0f shrink wrapping of pallet loads. It has been estimated that by 1975 some 1,000 package-using companies will have Pallet-load shrink—wrap systems, as compared to about 80 using them in 1970. In 1968, eighteen million pounds of p01yethylene film was used for shrink wrapping, and this is PrOjected to grow to 200 million pounds by 1975.57 A large share will be used on pallets. .'. _5,“'.Z '11.? 1:1, 3 1- iii. . ’.-.hhs" "I... v. ""v: a n I A. a . : - 2* . " it , v ."v I ... ., ~ ._‘ . u -- 'I "u. -. .". i. ‘. l “ 'o .. ~ \ ‘ ‘ ‘s. I" u y . I n a. ~ I. n h‘ ’ ‘u Q n v. .“ .~ 'm a . b. 1 1 '~ : 1‘. ‘ \ s. . u‘~ a. 59 A hand unit which allows one to shrink wrap a pallet in eight minutes can be purchased for less than $500. A typical average machine now sells for about $20,000, while a highly automated high capacity installation may cost up to $140,000. The point is that small Operators can adOpt the innovation with a minimum investment, and some goods that might otherwise be containerized can be handled on shrink pallets instead. Items which have been so wrapped include refractory bricks, cement sacks, cartoned goods, and five gallon paint can loads. Economies of shrink film wrapping have been sug— gested in five areas: (1) lower cost packaging materials may be acceptable, (2) automated equipment can reduce labor cost, (3) pallet overwrapping does not require highly skilled labor, (4) the lightweight plastic film helps reduce freight charges, and (5) inventory costs of packaging materials is reduced.58 Savings of $0.50 to $2.40 per pallet load over conventional palletizing methods have been reported. It can be expected that shrink-wrapped pallet loads Will also be moved in containers. Reduced costs in trans-- ferring unitized loads in the containers at both ends of the trip can be realized. Elimination of damage by abrasion during shipping is a posSible benefit. Unitization of odd- shaped items can aid in reducing stuffing time and in improv- ing stability of the container load. The advantages of containerization and unitization of loads can be cumulative .I'l 60 but the ultimate growth patterns will be determined by relative benefits and customer satisfaction. Conclusions to Containerization Background The literature review presented thus far has been intended to bring out the role that containers fill in expediting intermodal transfers. The background material includes the historical develOpment of intermodalism, the benefits derived from the practice, and some of the factors which have had to be dealt with in order to arrive at the present state of the art. The next section reviews those offerings in the literature which shed light on factors which are assumed to be inhibiting growth of containerization in domestic freight shipments. The background presented thus far should be help- ful in orienting the reader to a better understanding of the problems . CHAPTER I I --FOOTNOTES lPatrick Finaly, ed., Jane's Freight Containers (New York: McGraw-Hill Book Co., 1969) , Foreword. 2Morris Forgash, "Containerization--A Tool of Tnnmportation," in Transportation Century, ed. by George F. Mott (Baton Rouge, Louisiana: Louisiana State University Press, 1966), p. 194. 3John F. Magee, Industrial Logistics (New York: McGraw-Hill Book Co., 1968), p. 135. 4Charles A. Taff, Managgment of Traffic and Physical Distribution (Homewood, Illinois: Richard D. Irwin, 1964) p. 85. 5Richard T. Nagle, "Roll On-Roll Off: Piggyback Goes to Sea," Railway ACE, October 27, 1969, pp. 46-47. 6"Ton Mile Distribution Among Intercity Freight Carriers," Distribution Manager, April, 1969, p. 24. 7James M. Dixon, "Trucker's Outlook Is a 'Mixed Bag'," Distribution Worldwide, April, 1970, p. 37. 8U.S. Department of Commerce, Office of Business Economics, 1969 Business Statistics (Washington, D.C.: Government Printing Office, 1970), p. 119. Reported tons are estimated as ton-miles for foreign shipments. 9Thomas F. Dillon, "Containerization--A New Twist on an Old Idea," Purchasing, January 28, 1962, p. 84. 0Maritime Cargo TranSportation Conference, Inland and Maritime Transportation of Unitized Cargo (Washington, D.C.: National Academy of Science, 1963), pp. 33-36. 11R. E. Colton and E. S. Ward, Practical Handbook of Industrial Traffic Management (Washington, D.C.: The Traf: fquervice Corp., 1965), p. 149. 12Joel Nelson, "Pilferers, Hijackers Confound All Parties,” Metalworking News, May 4, 1970, p. 20. 61 62 13Eugene R. Birchler, "Six Myths About Containeriza- tion" (paper presented before International Executives Assn., Statler Hilton Hotel, New York, N.Y., February 18, 1969) , p. 2. l4Maritime Cargo Transportation Conference, p. 36. 15B. J. Hale, "Containerization--A Vital Part of the Mattel Success Story" (speech before the Fifth International Container Services Exposition, Chicago, Illinois, April, 1970), p. 2. 16R. H. Autenreith (statement before the Container- ization Institute Conference, Los Angeles, California, November 13, 1969) . l7Gen. Frank S. Besson, Jr., "Defense Implications of Containerization" (talk before the Fifth International Container Services Exposition, Chicago, Illinois, April, 1970). 18"Consulting Engineer Believes Containers Will Replace Trailers in Piggyback Service, " Traffic World, October 31, 1959, pp. 42-43. 19"Containerization's Changing Patterns," ELe—g—E Owner, January, 1961, p. 67. 20An Economic Study of Containerization and Its w (Richmond, Virginia: Market Research Dept., Reynolds Metals Co., 1961) , p. 4. 21U.S. Interstate Commerce Commission, 293 ICC 93, J_uly 30. 1954, ICC Docket No. 31375, Movement of Highwafl gill-ers by Rail, ICC Reports Vol. 293, June, 1954—January, 1955 (Washington, D.C.: Government Printing Office, 1955), P. 94. 22U.S. Interstate Commerce Commission. 173 ICC 377' APLil 14. 1931, ICC Docket No. 21723, In the Matter of QCLntainer Service, ICC Reports Vol. 173, March-April, (WaShington, D.C.: Government Printing Office, 1931): 231bid., p. 386. 1931 p. 384 . 24A23 ICC 93L ICC Docket No. 31375, p. 95. . ZSU-S. Congress, Senate, National Transportation W. John P. Doyle, Staff Director, Report No. 445, 7th Congress, 1st Session, June 26, 1961, p. 654. 26Ibid., p. 655. 63 27Josephine Ayre, "History and Regulation of Trailer-On-Flatcar Movement, " in Highway Research Record, No.158-Piggyback (Washington, D.C.: National Academy of Science, 1967). P- 5- 28Ibid., p. 6. 29Yearbook of Railroad Facts (washington, D.C.: Asmm.of American Railroads, 1968), p. 33: and Burton N. Behling, "1969 Review," Railway Age, January 19, 1970, p. 59. 3OU.S. Interstate Commerce Commission, Bureau of Economics, Transport Economics (Washington, D.C.: Government Printing Office, July, 1969) , p. 2. 31U.S. Interstate Commerce Commission, Bureau of Economics, Piggyback Traffic Characteristics, Statement No. 66-1 (Washington, D.C.: Government Printing Office, December, 1966), pp. 1-3. 32Transport Economics, April, 1970, p. 12. 3"Trans-Atlantic Containerization-~Circa 1901,“ Qstribution Age, February, 1967, p. 36. 34Gen. Frank S. Besson, Jr., p. 8. 35Commercial brochure published by Sea—Land Co., New York, New York. 36U.S. Department of Commerce, Maritime Administra— tion, Foreign Oceanborne Trade of the United States—- antainerized Cargo (Washington, D.C. : Government Printing Office, September, 1969), pp. 2-6. 37Ibid., pp. 4-7. 38U.S. Department of Commerce, Maritime Administra- tion, U.S. Flag Containerships and U.S. Flag Ships with Partial Capacities for Containers (Washington, D.C.: Government Printing Office, 1969) . 39IATA Bulk Unit ization Concept (Montreal, Quebec; International Air Transport Assn., 1969) , p. 2. 40Containerization, An Outlook to 1977 (Oakland, California: Kaiser Aluminum and Chemical Co., 1968) , p. 31. 41"For Trailer/Container Builders: Market Boom in TOFC," Railway Age. August 26, 1963, pp. 19-20. .4 .,._ n . v- I «y. ..- 64 42"Fruehauf Sees 33% Fall in Trailer Industry's Vohmw During 1970," Wall Street Journal, August 31, 1970, p. 15:3. 43Gus Welty, "TOFC/COFC: 'Why the Future Looks 80 Goal" Railway Age, May 29, 1967, p. 33. 44Annual Report, 1969 (Philadelphia, Pennsylvania; Trailer Train Co., 1970) . 45Kaiser Aluminum and Chemical Co., P- 1~ 46Containerization--A Maturing Intermodal Trans— portation Concept (Pittsburgh, Pennsylvania: Commercial Research Div., United States Steel Co., August, 1969) , pp. 20-25. 47Ibid., pp. 5-6. 48Litton Systems, Inc., Oceanborne Shipping: Demand amiTechnology Forecast--Part 2 (Washington, D.C.: Govern— ment Printing Office, 1968) . 491bido: Pp. 6-25. 50Jane's Freight Containers, p. 487. 51Ibid., p. 490. 52United States Steel, p. 29. 53R. G. Hilts, ed., The Official Intermodal Equip— muqueqister (New York: Intermodal Publishing Co., August 25, 1969), p. 70. 54Trailer Train Co., pp. l-4e SSHUnit Load Council Set," Distribution Worldwide, May, 1970, p. 26. 56See Military Standard Palletized and Containerizeg flhflzlmmds, MIL-STD—l47B (Washington, D.C.: Department of Defense, April 30, 1968) . 57"Shrink-Wrapping of Pallet Loads to Grow," EEEEQSE, W. May, 1970, p. 32. 58"Shrink Film Palletizing: It's Everybody's Baby, Nam" Mpterial Handling Engineering, February, 1970, p. 73, CHAPTER III REVIEW OF LITERATURE--II gégtors Affecting Containerization Growth Current literature provides a rich source of Opinion and facts relating to factors influencing growth of domestic containerization. Economic considerations can be identified as the basis for most matters appraised, whether they be government regulation or standardization of equipment. This literature review first examines the primary factors of cost, investment, and income determining rate structures which are normally considered to influence profitability of physical distribution activities. The areas of equipment standard- ization, equipment availability, government influence, and labor which bear on the problem of containerization develOp- ment are then reviewed. Factors discussed in the literature have been used to develOp the research questionnaire presented in Appendix A. The questionnaire has been used to establish the rela- tive importance of the various factors believed to be impeding growth of domestic containerization, as viewed by those engaged in physical distribution activities. 65 ..‘ ~\~ s.» 66 Majgr Economic Factors: Operating Costs, Investments, and Rates Comgapative Operating Costs Comparative Operating costs generated by break-bulk versus van trailer and/or container consolidated movements are of importance to the carrier in determining service to be offered. An innovation, such as containerization, is attractive if it offers a carrier the Opportunity of in- creasing profit margins given current business, or helps to attract traffic from competing modes, or allows generation of new volume. Table 17 (presented in three parts A, B, and C), taken from the literature, develOps an analysis which shows the cost benefits of cargo unitization, both in the inland portions and in the overall costs of a marine eXport ship- ment.1 Savings are much more dramatic in the total trip but are also evident in the inland segment. The analysis may mirror the basic reason for the explosive growth of containerization in marine shipments as compared to domestic activity. In the develOpment of Table 17, inland line haul distances are assumed at 220 miles for truck and 370 miles for rail. Cargo of 29.5 lb. per cubic foot is assumed unitized at the shipper's premises. The tables indicate about a 20 percent savings for the containerized shipment as compared to the break-bulk transfer. The palletized load is the least desirable in 67 h— Tafle lldh United States inland cost for 220-mile truck Container/ Other Line Pallet Unitizing Handling Haul Ownership Total (dollars per measurement ton) Break-bulk -- l . 20 2 . 53 -- 3 . 73 PaUets 2.06 0.53 2.72 0.04 5.35 40 ft. vans .0.38 0.20 2.62 0.10 3.30 20 ft. vans 0.38 0.20 2.69 0.14 3.41 Tabhalfl-B. United States inland cost for 370—mi1e rail Container/ Other Line Pallet Unitizing Handling Haul Ownership Total (dollars per measurement ton) Break-bulk —— 1.40 2.42 -- 3.82 ‘ PaUets 2.06 1.22 2.60 0.04 5.92 40 ft vans 0.38 0.20 2.37 0.10 3.05 20 ft vans 0.38 0.20 2.39 0.14 3.11 Tafle l7-C. Shipper-to-consignee costs for export cargo (assumes two 220-mile inland truck hauls) U.S. Steve- Other Overseas Inland doring Pier-to-Pier Inland Total (dollars per measurement ton) Break-bulk 3.73 5.15 5.83 2.63 17.34 Pallets 5.35 1.33 3.66 2.50 12.84 40 ft. vans 3.30 0.94 3.80 2.53 10.57 K)ft. vans 3.41 0.94 3.94 2.63 10.92 .t- ‘ w-uv ... u ._‘ a -.. ._- " I-c. ’ \. 1 _ . ‘ \ I... . "p n ‘ I" ~., ' v- u. -. ..,. . u n...“ ‘ « A . fl. . 68 this case because of the extra cost of preparing the pallets, cuhalost by pallet volume, and no Opportunity for rehand- limgsavings. Of particular interest is the lower total com:fOr a container movement carried 370 miles by rail as compared to a 220 mile truck haul. The benefits of unitiza- timntmcome more pronounced in the analysis of the cost of tmasame shipment, from shipper to consignee, including two inland and a marine movement. This is shown in Table l7-C.2 The comparative costs for boxcar and TOFC shipments were develOped in a study at the University of Pittsburgh.3 Eight regional freight districts in the United States were analyzed for different load levels and different hauling distances. While total cost levels changed with different panmmters, out-of-pocket costs were always higher for TOFC movements. As an example, for the New England Region, a loaicfi’ZO tons hauled a distance of 500 miles was estimated azthe following out-of—pocket costs: Cents/100 lbs. Boxcar Terminal 18.8 Line-haul 47.0 Total 65.8 TOFC Terminal 19.9 Line-haul 47.4 Sub-Total 67.3 Truck terminal 6.5 Trailer rental 6.9 Total 80.7 '- A- I, 1 ‘71 69 Boxcar service includes the cost of movement from the shipper's siding, whereas the TOFC movements to and from the rail ramps are added to develOp "equivalent" service Out— of-pocket costs. While not directly comparable, results of a study by the ICC covering out-of-pocket costs for eight transcontinen- tal truck lines indicate line-haul numbers higher than those listed above for TOFC transfers. At an average cost of 0.13'cents per cwt.-mile, a 500 mile truck run would cost 65 cents per 100 pounds, as compared to 47.4 cents for TOFC.4 However, with rail terminal costs eliminated, line-haul costs from the truck terminal appear to be about equal for both systems. The numbers presented do not indicate that piggyback has grown because Of savings provided the carriers in line— haul and terminal car handling costs. Although presented back in 1931 in a landmark ICC container rate case, the cost and revenue analyses submitted below comparing less-than— carload and container eXperience indicate freight claims, clerical and platform costs provide savings more than off— setting higher line-haul and terminal costs for containers.5 Because of container rental charges, the Lehigh Valley showed less net revenue for container traffic than for boxcar shipments. New York Central had contract rights to use containers without rental: the ICC stated that claimed savings would have been entirely eliminated if equal container charges had been assessed. After reviewing all 70 Table 18. Revenue and expense--boxcars vs. containers New York Central Lehigh Valley Boxcar Container Boxcar Container (dollars) (dollars) Gross revenue per ton 13.76 8.71 13.32 8.99 Expenses per ton 9.47 2.24 5.59 3.55 Net revenue per ton 4.29 6.47 7.73 5.44 Expense items as per- cent of total eXpenses (percent) (percent) Rental of containers -- -- —- 34.39 Freight claims 1.30 -- 1.84 —-- Clerical costs 26.77 1.85 21.39 1.75 Platform costs 24.47 -- 28.10 -- Crane costs -- 4.27 -- -- Switching costs 19.55 31.89 13.85 16.43 Road haul costs 23.55 55.34 31.51 44.44 Car maintenance 4.36 6.65 3.31 2.99 Total selected expense 100.00 100.00 100.00 100.00 the data the Commission concluded that in many cases con- tainer rates were lower than carload rates, without justi— fication, and ordered then existing container rates cancelled.6 Despite higher Operating costs, piggyback has been profitable to the rail carriers. In 1966 the New York Central reported that containers represented less than 1 per— cent Of its total Operating equipment (Flexivan service), yet provided 9 percent of its revenue and 16 percent of its earnings. Evidently the carriers learned that improved ser— vice could justify higher rates. As stated by Roberts, l" .o. u»- ll 71 The potential benefits of coordination are to some extent measurable in terms of two of its possible effects on the performance of the trans- portation system: the costs of providing the services required for a particular transport mission, and the guality of these outputs. . . . Both aspects of performance are reducible to cost terms since the qualitative attributes in- fluence shippers' overall costs, either through direct monetary effects on production and dis- tribution outlays or through the Opportunity costs of different sales levels attributable to customer servicing standards.7 As an indication of the comparative quality of ser— vice (measured in terms of mean days of transit time) fOr the modes under consideration, Roberts offered the following as shown in Table 19.8 Table 19. Mean transit times and standard deviations for selected modal transfers Rail Truck TOFC . Mean Std. Mean Std. Mean Std. Mileage Band Time Dev . T ime Dev . Time Dev . (days) (days) (days) ZOO-400 6.00 2.49 1.51 1.14 1.73 1.01 BOO-1,000 7.34 2.24 6.47 2.66 2.36 1.04 2,000-2,400 8.64 2.34 -- -— 4.22 1.20 The numbers indicate that beyond 400 miles TOFC pro— vides faster service, and in all cases it provides more reliable service (smaller standard deviation). a , .c- . e-..‘ '4‘ .. .. “ , \ .. 4" M... . . n -.-¢- V ...v , . ”w- 4...... . ‘O - .. I . ‘1‘... q .- .-._. ’u. n. ‘ \ 1 "D n. 72 Thus far the discussion has centered primarily on cost differences relating to boxcar or over-the-road move- ments, as compared to piggyback traffic. The literature offers some information comparing costs of container on flatcar (COFC) and trailer on flatcar (TOFC) movements which are important to this study. Santa Fe reported on tests comparing a 31 Flexi-Van car train (2 containers per car) and a 29 car conventional TOFC train (2 trailers per car) over a 20 mile high-speed track. Speeds ranged from 35 mph to more than 80 mph. Conclusions from the test were that "the cost of hauling a ton Of freight is lower in containers than in semi-trailers . . . that use of containers would at least mean a savings in fuel, locomotive maintenance, number of drive units and equipment investment." An all container train was eXpected to have the advantage in speed, fuel consumed, motive power requirements and dependability; these considerations were important in the develOpment of Santa Fe's "Super C" high speed piggyback service between Los Angeles and Chicago.9 7 The penalties for hauling trailers with added weight from chasis, as compared to containers, higher center of gravity and higher wind resistance have been estimated at uP to 30 percent extra in terms of motive power and fuel to pull a trailer train.10 The higher center of gravity of trailers was said to limit speeds on curves, contributed to instability problems, and to damage claims resulting when subjected to above-normal acceleration and deceleration. -... --~u .., stu- In. v. u.‘ *- \ Us ‘-. o..- u 0" u v... ,u '- .. 5. .._ ~. 5.” :' . ~.. '. ."., * u “L“ 73 Deadweight from the trailer bogie and trailer hitch was estimated at 235 tons per unit. After studying rail tranSport costs in the United States and EurOpe, a consultant from McKinsey & Company, Inc. concluded, Railroads in the United State: have a sig- nificant Opportunity to use containerization to competitive advantage in develOping traffic and holding their share—of-market over road trans- portation. To do this, they will have to develOp inland container train services not necessarily based on coast-to—coast, land—bridge Operation, but rather on modern container train services with dedicated equipment and efficient, low-cost road/rail terminal Operations. It appears that the key to success of con- tainer transport systems lies in high utilization of capital resources and low—cost, rapid transfer between modes and at terminals. Where this is being Obtained, develOpment of container services is moving ahead quickly. But where the age-Old inefficiencies and high costs of intermodal trans- fer are retained, develOpment is stymied. The major emphasis Of the literature review thus far has been primarily related to rail movements. However, there is considerable demand for motor carrier transfer of marine containers to and from dock areas. One major water carrier states that 40 percent Of his overseas cargo orig- inates less than 200 miles from port. Railroad COFC move- ment is only marginally economical on distances up to 300 miles. Highway carriers are not enthusiastic about handling marine containers because they do not compare favorably in dead weight and load capacity with standards of regular van trailers. These differences are presented in Table 20 following.12 .e- .-5 v.‘ 74 Table 20. Marine containers vs. regular trucking equipment Conventional Two 40 Foot 40 Foot 20 Foot Semi-Trailer Container Containers ~—V Tare Weight: (pounds) (pounds) (pounds) Tractor 115,000 15,000 15,000 Trailer 10, 125 -- -- Container(s) -- 5,630 7,270 Chasis 7,000 7,000 Total tare weight 25, 125 27, 630 29, 260 Container increment -- 2, 505 4, 135 mflfic Capacity: (cu.ft.) (cu.ft.) (cu.ft.) Trailer or container 2,390 2,258 2,220 Container decrement —- 132 170 Efforts have been made to overcome the disadvantages of dead weight and unfavorable cube. There are couplable 20 foot containers which require less chassis support, but truckers claim the coupling Operation is bothersome. Cost of boxes constructed Of materials lighter than steel tend to be higher, but the added cost is not borne directly by the trucker. In carrying high-density cargo, marine carriers may load containers beyond the limits allowed in over-the-road transfer. This results in a trade-off between added hand- ling costs at dockside and greater load aboard ship. Partial unloading of containers can cause delays for truck- ers. Another problem relates to the fact that containers on 75 chassis moved inland for unloading must be returned to the seaport. The containers are less efficient for hauling domestic commerce on the back-haul and the geographical distribution of regular equipment is thrown out of balance. On the favorable side, truckers' capital investment is reduced, since the steamship lines supply the containers and the trucker must supply only the~tractive unit, chassis \ and bogies. Savings are also made in dockside deliveries ‘1‘ where the container is turned over to be loaded aboard a single ship instead of making several stOps at various piers to unload LCL deliveries. Perhaps the greatest concern of truckers is that theyjmay have more to lose than to gain by a domestic con—- tainer revolution. More than $4.6 billion of their total revenues comes from hauls greater than 400 miles. If the unit train concept takes hold, railroads are sure to go after a greater share of this traffic, as they have done in rack car hauling of new automobiles. Nothing has been said thus far with respect to cost considerations of containerization for the shipper and consignee. In their case, costs are generally of the nonrecurring type that are associated with acceptance of innovation, such as training of personnel in any special procedures which might be involved in handling containers. Actually, the shipper receives a container on chassis delivered by the trucker in the same manner as he receives ..- "‘ - .-. c- - n n o... A. s. .p.\ s I ~,‘ .~' ‘ . u“ . ‘ ~- u e. v o M u ’ x u h 76 a van trailer. If the shipper's goods are of low density, the reduced cube may be bothersome and a source of cost, since additional movements will be required to accommodate the same volume transferred. If'tthe shipper incorporates the container into his production line or warehousing system he is faced with possible handling equipment investments, but these are likely to be justified by reduced production handling costs. Shipping costs will be discussed later, but piggyback charges are the same for a van or a container delivered to the rail yard. Investment Costs for Containerization It has been estimated that transportation private capital expenditures in the United States traditionally average about 2 percent of the gross national product for equipment alone.13 At present levels this amounts to near $20 billion annually. No more than 10 to 20 percent can be generated internally through depreciation and retained earn- ings, so the burden is carried by the investment community. Tight investment money and high interest rates restrict new project considerations to those with assured high returns and quick payout. These requirements are apparently being met in marine transport containerization, based upon the (proliferation of containerships and containers to fill them. However, investment opportunities are not nearly so attrac- tive for domestic containerization. For one thing, cost improvements are small when switching from trailers to .v" _ 4.-.-.. . n .‘v " 7.. h .. - --._ h v._. n I” ’| . ._' " ‘A. '. H. u,_ t 's u l.‘ 5 - 77 containers, as compared to switching from marine bulk to containerized freight. Secondly, a huge investment exists in piggyback trailer equipment; the National Railroad Trailer Pool Operated by REALCO is currently about 20,000 units.14 The cost of a standard 20 foot container has been reported at about $1,500 in steel, $2,000 in aluminum, and $6,000 in plastic construction. Special cohtainers, such as "reefers" (refrigerated boxes) cost up to $18,000 each. To the cost of the container must be added approximately $3,500 for a set of wheels. Thus, the combination cost is $5,000 to $5,500 for a 20 foot box, and $6,000 or more for a 40 foot container/chassis assembly. In comparison, a highway trailer costs about $4,500 and a rail boxcar sells 1 . . . . 5 Thus, a contarner/chassrs rig is more for about $9,000. eXpensive than a highway trailer by $1,500-$2,000, and the equivalent shipping volume (two containers) is more expen- sive than a boxcar. The unfavorable economics of shipping containers on wheels, as is the practice on most eastern railroads, is evident. On the other hand, for containers shipped without wheels, it is’estimated that an average of one chassis is required for §_w_o_ containers where the move- ments are between major centers. This number approaches one-to-one as the system expands to include minor terminals. 0n a one chassis for two container basis, investment require- ments are about equivalent to TOFC costs. J. .. v an v-I.» c. .«.., \ "-. -b o u i“ :Q. ‘ a .. no, '0‘ ‘ . 78 As was mentioned previously, the prospect of large Operating savings in marine containerization justifies large equipment investments. It is estimated that two containers are required on shore for each container "on board" to assure rapid turnaround. Thus, for a ship designed for 1,000 containers, about 3,000 boxes would be included in the capital investment. The total cost for them would range from $6 million up to $17 million, depending upon their construction: this is comparable to the total cost of the vessel.16 I Originally, loading and unloading of TOFC trailers was accomplished through the use of ramps in a "circus train" fashion. A tractor would back up a ramp, hook on to a trailer and haul it Off. The process was repeated until the string of flatcars was empty and was reversed to reload the train.’ Because of the low investment, in the neighborhood of $10,000, the ramps proliferated. However, as volume at major centers increased the limitations of ”circus train” loading became apparent and ramps are being replaced with mechanical loading equipment as quickly as volume justifies. It is estimated that it requires an average of 7 minutes per trailer to unload a normal piggyback train of 29 cars from a ramp. With modern cranes or side handling equipment, this can be done at an average time of 2 minutes per container. The difference in unloading time is thus about 5 hours when there are two trailers per flatcar. The extra time can make 79 the difference in meeting connecting train schedules and in promiSed overnight delivery of trailers to customers. A Steadman side-loading trailer, capable of trans— ferring one 40 foot or two 20 foot containers from a flatcar is currently available at about $20,000. It has found acceptance in smaller yards and in captive use Of large shippers who handle containers. Side-loading fork trucks large enough to handle containers range in cost from $120,000 to $180,000. Overhead cranes, depending upon capacity, range in price from $30,000 to $1 million, but the larger equipment is most likely justified at a marine terminal. Two traveling gantry cranes were installed at the Long Beach, California port to handle 20-ton containers at the rate of 60 per hour; cost was $1.3 million. A crane suitable for efficient handling of containers (or trailers) in a rail yard can be built for about $300,000. However, the possibility of interrupted customer service because of crane breakdown generates pressure from the marketing groups to provide backup equipment, even to the extent of dupli- cated facilities. Flatcars provided with special fittings to tie-down trailers or containers are also expensive. A regular piggy- back car offered for service by Trailer Train Co. costs about $16, 500 . 17 Newer "all—purpose" cars, which will handle combinations of 20 and 40 foot trailers and/or containers are estimated to cost near $20,000 each. This compares with a boxcar costing $9,000. However, one writer .i u -" , - ' _ ..vv .1.- u. e. u . ‘- . v . ,- x 'u. -. 80 claimed to show that investment costs in cars and containers were not overburdening when viewed as part of total Operat- ing cost. Using a 50,000 mile per year service (actually being Obtained by Trailer Train leasees) the following num- bers were presented : 18 (per mile) Investment--flatcar $0.016 Investment--containers 0.024 Transportation cost Flatcar 0.0825 Container & load 0.055 Maintenance--car 0.019 Total $0.1965 A measurement of the investment requirements for piggyback distribution yards is indicated by a recent $3.5 nullhxleXpenditure by Burlington Northern at its Seattle, Wmflungton location. The installation included enough trackage to spot 100 flatcars, a 4l—truck distribution unmer, a side-loading lift truck, and an 82 acre site.19 WMflll969 traffic at 22,000 piggyback units, the project was already scheduled for expansion. The facility highlights mmmher investment requirement for piggyback Operations: hns of land area for storage of trailers and containers. Here containers offer an advantage, since it is possible to ‘stack them in storage and aisle space can be minimized where cranes and handling equipment are used for spotting them. LnMIations of available space for piggyback distribution Yards in urban areas are particularly pressing in the heavily pOpulated Eastern states. u l . u .-» . . l. .- ..- lav-- . mow. “ e. b 5.“ ~ sq” u‘ c 4'- 81 Conclus iglp Concernirgppprating andfilpvestment Cogts The key to success in container systems appears to lie ulthe high utilization of equipment made possible by repulintermodal transfers at the terminals. Containers offer savings in long-distance rail line haul costs, when compared to trailers, because of their lower center of grmdty, reduced wind resistance, and elimination of unused wheel assemblies. However, reductions in freight claims and clerical and platform costs are important sources of savings for both TOFC and COFC piggyback, when compared to break- bulk movements . Offsetting the savings to carriers from piggyback (xmrations are the increased investment costs. Handling mnflpment and terminal installations required to rapidly handle large numbers Of containers are expensive. Combi— natnnlcontainer/chassis assemblies are more expensive than {figgyback trailers, and the differential is aggrevated where additional bogeys are required to service a number of termi— nal locations. The truckers are not anxious to work with containers. Added Operating eXpenses are incurred because the cube of tie containers and the handling requirements do not mesh Vfith their van Operations. Furthermore, they view eXpanded mmfiainerization as a threat to their share of the long-haul freight market . .-... .- ........ --- .. -.. ._ I . ‘ .,. .., -. n " ., "no "- ... 'u I: 'V .. '- o .- >v \' .5 . 'UI . ..l '- ." ‘v. a . a 1“ 82 The rate structures which have been developed to provide for profitable intermodal Operations by the carriers are reviewed next. Rite Congipeizgions Thus far the review of economic factors has been concerned with Operating costs and investment requirements for containerization. These must be Offset by income to the rail and highway carriers through rates established high enough to generate a profit, but low enough to attract traffic. The regulatory authorities are constantly faced with the problem of reconciling the Opposing rate requirements of the motor and rail modes because Of their respective capital structures.20 Fixed costs for railroads are large relative to total costs because the investment in equipment and facilities is large relative to output for a given period. Variable costs are small in comparison to fixed costs for the short run (five years or more). For the motor carriers, fixed costs are a very small portion of total costs. Vari— able costs for Class I common motor carriers of general freight have been estimated at more than 90 percent of total costs. With a high variable cost factor it is not difficult for a motor carrier to determine his cost of service and use this as a basis for establishing rates. Without regulation the rail carriers can use their low variable costs to develOp 83 short term rates which can be ruinous for motor competition. The next section discusses the matter of regulated rates. Intermodal Rate Consideration In 1969 the ICC instituted a study of cost standards to be used in intermodal rate proceedings and invited com- ments on (1) what advantages of the modes are‘entitled to protection under the ICC Act, and (2) how should the costs of competing modes be recognized in order to preserve their inherent cost advantages.21 As might be eXpected, the rail- 1 roads urged that rates be based on long-run variable costs, 5 while the motor and water carriers generally argued for a fully distributed cost standard. The variable cost base would allow the railroads to compete for traffic with lower rates. The Department of Transportation urged against the use of rate floors to protect one mode against the encroach- ment of another more efficient mode because the practice promotes inefficiency. Intermodal service implies the use Of more than one carrier, and the resultant need to divide revenues between them. In issuing rules requiring water carriers to file through, joint intermodal rates with the Commission, the FMC recently included the following definitions: Through Route: An arrangement for the continuous carriage of goods between points of origin and destination, either or both of which lie beyond port terminal areas. 84 Through Rate: A rate eXpressed as a single num- ber representing the charge to the shipper by a carrier or carriers holding out to provide transportation over a through route. Joint Rate: A through rate in which two or more carriers participate by agreement for the offer- ing of through transportation over 32through route published in the same tariff. The Federal Maritime Commission is limited to the port-to-port portion of joint rates. Jurisdictional squab~ bles have develOped in the past when the Interstate Commerce Commission issued regulations pertaining to through rates which included marine transfers. The ICC has authority to prescribe through rates on rail-inland water routes. There is currently legislation under consideration in Congress which would extend ICC authority to prescribing through rates between motor carriers and for motor-rail intermodal movements . 23 Although not required by the ICC, the motor and rail carriers do participate in joint rates, primarily under the piggyback Plan V. The plan provides for through routes under joint rates and effectively extends the territory of each participating carrier into that served by the others. The advantages and disadvantages purported for the various piggyback plans are presented in Table 21.24 Most recently, the Missouri-Pacific Offered a set 0f CONTAINERPAK plans for shipping by container.25 The basic points of the program are as follows: Table 21. £35 Advantages and disadvantages of piggyback Plan Shipper Motor Carrier Railroad Advantages: II 118 III Service benefits of speed, dependability, safety of shipments (Same as Plan I) (Same as Plan III) Provides more economical rates than other plans plus speed, flexibility, and safety of shipments (Same as Plan III) Beneficial if available 111m: I II 115 III IV Higher cost than other plans No advantage: railroad owns and Operates all equipment (Same as Plan III) Must pay terminal charge8 and assume loss/damage claims. Limited to 60% rule (Same as Plan III) Limited application because through routes and joint rates not mandatory Economical to motor carrier: moves at motor carrier rates on a flat charge Not available to motor carriers (Same as Plan III) Not available to motor carriers (Same as Plan III) Beneficial if coordination with railroads can be arranged Additional $5 per trailer charge if piggyback used vs. road operation Not available to motor carriers (Same as Plan III) Not available to motor carriers Not available to motor carriers Limited application Any traffic acquired adds to gross railroad revenue Most desirable for rail- road: all equipment used is Operated by railroad on rail rates (Same as Plan III) More revenue. Simplify terminal Operations, in— crease flatcar use, allow better train schedules, lower capital needs, relieved of handling forwarder traffic (Same as Plan III) Beneficial if coordination with motor carriers can be arranged Erratic volume. Motor carriers use for over- flow traffic Not profitable for short hauls because of terminal expense (Same as Plan III) Use of long flatcars required to meet 2 for 1 rule Could interfere with rail interchange and car service problems Limited application 86 lenI: Door-to-door service on rail. Container remains on flatcar for loading/unloading. Iflan II: Door-to-door service on wheels. Container moves tO/from flatcar and chassis. Pflan III: Covers all TOFC plans. Container moves on chassis at all times. Eden X: Shipper-receiver innovation. Customer can develOp plan tailored to his specific, special needs. With the exception of modifications under the CONTAINERPAK program, containers and trailers enjoy the same rates as piggyback TOFC or COFC. Rate comparisons between modes are complicated by the tangle of rate structures, and mnmmlly comparisons can only be made for a given commodity. One example of such a comparison is given below as it was . 26 presented for testimony in an ICC hearing. Tafle 22. Rates by different transport methods (plastic materials--Philadelphia to Chicago) ¥ ; Min. Weight Rate Mode (lbs.) ($/100 lbs.) Rail boxcarload 70,000 0-85 Truckload 30, 000 1 - 27 Plan II piggyback 30,000 1.27b Plan III piggyback 70,000a 0-85 a . Maximum for flat rate. Average. H. e! ,.- , v. ' . e ' _ v...‘ uva I" n- '-.. U: 01 \ , . p: ‘ 0- U u ‘- V n "n. . 87 The influence of tariff structures and commodity rates on cost of transport to the shipper is illustrated. in Table 23. It compares boxcar and piggyback service, as quoted by a local freight agent for two different products shipped from Lansing, Michigan to New York City. Table 23. Comparative tranSport commodity rates Weight Total Charge Mode (lbs.) ($) Motor Wheplg: Rail boxcarload 72,000 min. 900.00 Plan 11% piggyback 72,000 max. for 565.06 2 trailers Rail boxcarload 70,000 min. 406-58 Plan 11;: piggyback 72,000 max. for 565.05 2 trailers piggyback To be equivalent to boxcar door—to-door service, approximately $60 should be added to the above piggyback numbers for delivery and pickup of the trailer from the rail yard, Another difference would be free return of pallets or Other special crating (such as those used for motor wheels) if the load moved by boxcar, whereas there would be a dead hefid Charge via piggyback service. 88 As a result of extensive investigations by the ICC cwertflm period 1958-1965 it was generally concluded that tmarates quoted by the railroads for Plans III and IV do allay out-of-pocket costs and contribute to fully distrib- uted costs. Further, the railroads were able to retrieve smmetraffic from private carriage by offering these two plans.27 There is considerable argument that containerization amigfiggyback movement can be promoted through more univer- mfl.application of freight-all—kinds (FAK) rate structures. The philOSOphy is that what is contained in the box being rmwed should be of no concern to the carrier, providing he isrmm required to assume extra liability or bear added compensate for equipment imbalances. On the other hand, Missouri Pacific Intermodal, Inc., a Missouri Pacific Rail- road subsidiary, has inaugurated a chassis pool to insure awailability of a supply of wheels for containers in inter— modal service anywhere on the MoPac system.36 Chassis will he available for distribution from New Orleans, Houston, Kansas City, and St. Louis in order to minimize backhaul problems. Thus, pools of intermodal equipment can be GXpected to develop on regional and global bases to meet tflm need for efficient, economic service. 95 While the practice of leasing offers many advantages, thecriticism because of jurisdictional disputes, interagency disagreements in Specific areas of transportation policy, and to actions by one regulatory agency without regard to 1mm effect on modes of tranSport regulated by another agency. flflmse problems have led from time to time to recommendations fintcombining agencies, or at least to providing coordina- tive activity, such as was proposed in the Doyle Report.72 Ancmugrowth of these recommendations was the establishment ct’the Department of Transportation (DOT) in 1966. Among its stated purposes, that one which is of greatest interest to this study is the assignment, "to facilitate the develOp- ment and improvement of coordinated transportation service, to be provided by private enterprise to the maximum extent feasible . " 73 -Also important is the assignment "to stimulate technological advances in transportation." Initial efforts have been aimed primarily at unsnarling congested systems ,A n.o .I- u‘ «- n l 118 for moving people--mainly the intercity highways, and the develOpment of rapid mass transit systems. However, the Office of Facilitation has studies under way which are intended to help in further development of container traffic. Regulation of Piggyback The history of regulation of containerization is bound up in a series of cases and decisions of the ICC. Highlights of a few "keystone" cases in the develOpment of today's regulatory structure will be presented. The first key case, ICC No. 2l723, In the Matter of Container Service, 74 The ICC denied continuance was decided on April 14, 1931. of container rate charges based upon weight and distance without regard to the nature of the contents, stating: We cannot approve varying rates based on the weight of the lading offered for container shipments except upon a record which established that charges so determined are warranted by dif- ferences in the cost and quality of the service. This decision effectively terminated piggyback container service, which had just begun to grow in pOpularity because of the economies of "freight all kinds" rates being offered. The Doyle report commented on the decision, stating that it had effectively caused an end to container service for that period because shippers were not interested in the freight classification rates proposed by the ICC, and that economy was denied in favor of compliance with rate tradition.75 In 1936 the Chicago Great Western Railroad published tariffs for a "substituted service" and for coordinated rail «Y- ‘1. «‘1- an - (tr ’v ‘v '. 119 and motor service, which were to become Plans I and V, respectively. In “substituted service," the motor carrier substitutes TOFC service over part of the route. These tariff publications were approved by the ICC.76 The ICC later conducted an investigation and established rules for substituted service if the shipper authorized such substi- 77 tution. Piggybacking finally became an accepted, estab- lished practice following the ICC decisions in the New Haven case.78 The New York, New Haven & Hartford Railroad Company submitted a list of questions to the Commission aimed at clarifying regulations, limitations, and obligations related to piggyback service. Among the principles set forth in the decision were (1) the right of railroads to tranSport trail- ers of private and common motor carriers and forwarders, subject to specific regulations, and (2) the requirement to provide service to forwarders if it were also offered to private carriers. The decision provided guidelines which encouraged carriers to procure equipment and expand piggy- back service. After rendering a number of decisions relative to the lawfulness of the various piggyback plans as they were develOped, the Commission initiated an investigation re- 79 It handed down a decision in ferred to as .Ex Parte 230. the form of eight rules with subsections. The decisions were appealed to the Federal Courts by the carriers and forwarders affected, and the ICC postponed the effective Iv nu - a 'v. n n, a v If", 1:0 120 date of its proposed rules, pending ruling by the courts. One of the rules required that each railroad offering TOFC service be made to file the charges governing the leasing inxs equipment (including trailers). This led to the develOpment of Plan 1135 as a replacement for Plan III.80 Another rule forbid the use of substituted service by common carriers where the piggyback section is less than 85 per- cent of the total route. There have been many more cases argued before the ICC and the Federal courts, but the above-mentioned cases luwe been generally responsible for setting the path for development of piggyback service, both for containers and trailers. As a general overall observation, the cases relate to (l) the acceptance of prOposed rates,(2) limita- tions as to who may or may not participate in given service arrangements, and (3) specification of the details of service which may be allowed or denied. Limitations of the Regulatory System The three major regulatory agencies have their respective domains of authority in the areas of air, marine, and domestic surface movements. Weaknesses in the regula- tion of intermodal activity are most apparent at the inter- faces because of overlapping authority and gaps in coverage. Historical development of transport regulation has not been aimed at achievinga coordinated, unified system. As one writer states, 1.4 (J '1. q. ... -,,‘ III I !\‘ 121 [Government policy] has tended to deal with the different modes according to the exigencies cm'the moment, rather than as parts of an inte- grated system. We have, then, a loose grouping of individual industries separately regulated and favored and sometimes operating without due regard for balanced develOpment in terms of the overall needs of the economy. Illustrating overlapping authority, he singled out laws governing intermodal transfers between the United States mainland and Alaska and Hawaii "applicable to identical traffic moving on identical carriers serving identical points but regulated differently depending upon whether or not through arrangements have been made by the carriers." Arrangements would determine whether FMC or ICC would have jurisdiction.82 Ultimate maturation of intermodal traffic, espe- cially that involved in door-to-door movements including foreign commerce, requires the develOpment of through routes and joint rates. A unilateral announcement by the ICC that it would accept joint tariffs between ocean and land car- riers led to a jurisdictional squabble with the FMC.83 The matter‘was resolved when the FMC agreed to allow ocean carriers to participate in such rates, provided that tariffs clearly "break out" the shipline's division of revenues. In recognition of coordinative problems of regula— tion involving intermodal transfers, both in foreign and domestic trade, the newly formed Department of Transporta- tion submitted a Trade Simplification Act of 1968 to Con- 9ress for consideration: it has not yet been adOpted.84 a. .v ov- a" n,‘ 'N c... 9; '5 'Vl 122 The law was intended to remove uncertainty in regard to regulatory laws and anti-trust laws relating to carriers' rhfifis to engage in joint rates, interchange of equipment, and through bills of lading. An example of a gap in coverage is the limited regulatory authority available to require establishment of through intermodal rates. The ICC has authority to require tflmough routes and joint rates between rail carriers and :hfland water carriers. It may approve but cannot require mufl1agreements involving motor carriers among themselves, umtor and rail, or motor and water carriers. Likewise, tflmre is no authority requiring joint rate and/or route agreements between air/motor, rail/ship or motor/ship modal transport combinations. Legislation has been prOposed by tflm CAB, the FMC, and the ICC to create a new joint board comprised of one member from each agency to process through service and joint domestic rates of any combination of air, water, and ground carriers, where such rates are not subject to'individual agency jurisdiction. Legislation has also keen prOposed whereby the ICC may require the establishment 85 CE joint rates in areas not now covered, such as motor/rail. Another recognized weakness of the regulatory system is the limited provisions for planning. A quotation by one cm'the ICC commissioners is enlightening:8 As I see it, the ICC has no direct respon- sibility to develOp or promote containerization. . . . I do so mostly on my own time-—nights and weekends--with no prospect of personal benefit. It. a 5" .‘v “(I in. n, r J. -r1 123 Underlining the need for coordinative leadership, he stated, This problem can only be solved through establishment of an integrated transport system, involving close OOOperation between shippers and tntween Operators of trucks, railroads, barges, and ships-~a type of COOperation which today's attitudes and prevailing intense intermodal con- flicts make difficult. . . . For the most part present planning for domestic movements of con- tainer traffic is on a strictly intramodal, "go it alone" basis. He concludes, without telling how we will get there, The key to success is not to be found in singlemode enthusiasm for obtaining a competitive advantage over all other modes on container traf- fic. Real success--success which is in the public interest-dwill come only to the extent that we coordinate all modes of carriage into an effi- cient carrier "system." The Department of Transportation was created in recognition of the need for a coordinating, planning agency. However, the fragmented regulatory structure which still remains has prompted prOposals for change. The CAB chairman is reported to favor a single agency combining authorities cm'the CAB, FMC, and ICC. The President's Advisory Council (HIExecutive Organization has made a similar recommendation, although it is reported to have had a cool reception by the lflfite House staff.87 A team of consumer-advocate Ralph Bhder‘s investigators likewise prOposed a single agency. In a 1,500 page report, Nader’s team contended that the ICC is preoccupied with settling disputes among private trans- Portation concerns instead of looking Out for the public interest.88 Perhaps the problem is best summed up by R. J. Barber of the DOT, who stated, m. - ‘- I u a o‘. N.‘ ‘4 'v ll. r—4 ty‘ 124 All things considered, a regulatory scheme that evolved in a period when transportation modes were readily classifiable into air, rail, marine and motor may simply not be in tune with the technology of the last third of the 20th century. Conclus ions Concer nianove r nme nt Regulat ion Regulation of the country's transport system through three major governmental agencies does not appear to be an Optimum arrangement. Divided reSponsibility has impeded innovations in intermodal practices. Establishment of the Department of Transportation with responsibility for pro— moting develOpment of the tranSport system appears to be a step in the right direction, but the problems Of fragmented regulation remain. The container revolution has been a major force in blurring modal boundaries. Mounting pressures for reorga— nization of regulatory authorities into a structure designed to COpe with today's tranSport needs may result in formation of a body which will provide both regulation and coordina- tion of all modes into an efficient carrier system, as spelled out by Interstate Commerce Commissioner Walrath. Intermodal movements of containers can be expected to pro— vide the linking pins in such a system. Multimodal ownership by individual carriers also comes within the regulatory agency province but it is of sufficient interest in considering intermodal activities that it is given separate treatment in the next section. 125 Multimodal#0wnership Limitatipns Multimodal ownership by individual carriers has been prOposed as one means of achieving efficient systems which bridge the intermodal interfaces. Resistance to such a trend is provided by the Congress and the regulatory agen- cies. Opposition to the idea of multimodal ownership seems tolmzpromoted by two basic fears: (l) in a given area such aacompany could establish control of transport facilities so astx>enjoy a captive market and (2) the management of such a company would consider one mode as dominant and would restrict develOpment of other modes under its control, thus restricting service to the public.90 Because of their vast capital resources, the railroads are the mode generally feared as being capable of swallowing other modes (partic- ularly the trucklines). The Motor Carrier Act of 1935 and the Transportation Act of 1940 were interpreted by the ICC as giving to the Commission the authority to limit rail ownership of motor trucking. Before 1935 the railroads could have entered any field of transportation without approval of the ICC, except thisome cases covered by the Panama Canal Act of 1912. Those few railroads which did enter into the motor trucking fie1d*were protected by grandfather clauses. and today have subsidiary motor carrier certificates. A few railroads have obtained certificates for limited motor Operation in supple- mental service. On the other hand, liberal interpretations .u. .0. 1" u.- H, n,’ I... u,- hi] 126 are applied where inland water carriers desire to acquire a motor carrier. Likewise, other modes are not restricted frmnpmrchasing railroads, although the practice is quite limited. An example of a multimodal ownership Operation retained under grandfather clauses is the Missouri Pacific Raflxoad and its subsidiary trucklines, which Operate over ILOOO miles of interstate certificated rights.91 Coordi- nated transportation has permitted Missouri Pacific to compete in and reverse the downward trend in less—than- carload tonnages. They employ Plan V joint rates over the Huxmgh routes served. Multimodal ownership has allowed for mxudinated sales, pricing, and other functions, such as lfllling and collecting. EXperience in captive coordinated service may have been a factor in develOpment of the MoPac CONTAINERPAK plans for shipping by container. An interesting analysis Of alternatives to present regulatory practices which included the possibility of "transportation companies" was developed in a background paper for a conference held at the Brookings Institute in 92 Ibeember, 1967. Advantages of establishing transportation companies of multimodal nature were Offered as follows: Such companies should be able to coordinate intermodal services and provide a more efficient package of transport services to the shipper than could be achieved under the existing separation of the modes. Moreover, by permitting the sub- stitution of trucking for rail services, trans— portation companies could enable the railroads to achieve a more efficient scale of Operation 127 and thus eliminate one of the major costs of current regulatory policies . . . [they] should be able to coordinate rail and trucking services better than could rail and trucking Operations acting independently. Periods of excess invest— ment . . . would be less likely to occur. It was recognized that since railroads are the corporate giants of the industry it is likely that they would do the acquiring of other modes if unrestricted. In the ensuing conference the participants agreed that transportation companies offer great potential to eliminate excess capacity, to Offer better service, and to reduce transport costs by coordinating and integrating the various modes.93 However, there was little faith in rail- road management's ability to take advantage of possibilities for such improvements. Secondly, there was concern that railroads would dominate and neglect potential develOpments and innovations in other modes. Third, there were no assured ways that independent firms could be treated With Parity in Obtaining integrated services from the transpor- tation companies and thus could not remain competitive. Possibilities Of acquisitions by nontransport companies and doubt of continued competition were also raised. As an alternative to tranSportation companies, several par- tiCiPants prOposed the develOpment of transport brokers, Similar to the nonvehicle Operating freight forwarders. However, their possible impact was considered inadequate to the needs for reorganization of the transport system and Its rEQUIation, ,. .1 Di 1‘ Va. 0“ 128 The Canadian Pacific Railroad is a multimodal opera- thnxcontrolling rail, motor, air, steamship and pipeline modes. In discussing advantages of such a system, a writer recently mentioned benefits relating to new technology which are of importance in develOpment of containerization.94 He said, The increasing sophistication of multimodal transportation systems places a premium upon the utilization of complex transfer devices, as well as basic freight vehicles that are compatible between all modes. Vested interests of certain transport modes, the inability to secure agree— ments regarding the hardware of inter-modal equipment and facilities, as well as the practi- cal difficulties of reconciling the differing interests of dozens of firms in the various modes, all suggest that the single transportation firm, reaching across all modes, is uniquely suited to hasten the introduction of multi-modal technology. The current literature abounds with argument pro and cmm on multimodal ownership of transport companies, with the railroaders generally for it, truckers against it, and cmhers positioned according to their special interests. finds section of the literature review will wind up with a few quotations which serve to illustrate the point. The Acting Chairman of the ICC stated recently, There are different views on the relative proficiency of an integrated transportation com- pany that could be formed if common ownership were permitted, as against separate and inde- pendent transportation modes working in harmony in a multi-modal arrangement. At this juncture the ICC consistently has been in Opposition to changes in the law restrict- ing railroad ownership or control of other modes. . . . Requirements for independent ownership Of the transportation modes does not, in my Opinion, retard containerizatign progress.—9 ‘1‘. you ape u... 129 A man who looked at tranSportation both as a par— tfleipant and as a regulator was quoted as saying, Intermodal transportation systems under one management, designed around the phenomenon of the container . . . are the key to domestic distribution efficiency of tomorrow. Our present compartmentalized system of transport . . . can cxfly'work against the orderly growth and develOp- ment of domestic container traffic. I believe . . . that most of the problems of coordination and pricing of domestic intermodal transportation services would disappear if common ownership of transportation systems were authorized. Finally, a railroad executive who later took an administrative position with a trucking firm stated, in answer to a question on barriers to intermodal COOperation, I think the principal barrier is that no one really sells intermodal operation. Carriers make intermodal arrangements, but then none of those participating in the intermodal tariffs really goes out and sells it. Each one is try— ing to sell his own mode. Intermodal ownership would be expected to promote greater Opportunities for through service. Additional factorS‘which influence intermodal integration are reviewed next. Factors Relating to Lack of Through Service Containerization is just one of the new equipment and procedural concepts that is being installed throughout the transport common carrier industry today. In an overall view, these innovations are aimed at integrating the Opera~ tions of the carriers with the needs of the shippers into an y. In. . u..‘ w -\ 130 effective economic physical distribution system. "Door—to- dmnfl through shipment service at minimum time and cost is the goal, whether the trip be entirely domestic or interna- tional in sc0pe. Although progress is being made toward the goal, some areas of concern remain which require attention nladdition to those already discussed in this literature review. As with previously mentioned factors, regulatory _ practices, technological develOpment, and limitation of capital funds influence the rate of progress. The railroads spend relatively little on research and develOpment. They have been particularly slow in adOpt- ing innovations. For example, the time period elapsed letween a 10 percent and 90 percent acceptance of an inno- vation in the rail industry has been 6 years longer than in tfie steel industry and 14 years longer than in the brewing industry.98 Evidence strongly indicates that the rate of innovation has been stifled by the regulatory process. The same observations can probably be applied, at least qualita— tively, to the other modes, which are likewise subject to regulatory control . The Land Bridge Concept An example of slow adaptation of an innovating con- cept is the land bridge prOposal which has been discussed for some years. The idea combines the use of containers and integrated unit trains so implemented as to provide for rapid crosscountry carriage of goods. The original intent '0‘. a nu. ‘ a 0‘. ‘ 1"! J 131 was to provide a land bridge across the United States for shipments from Japan to EurOpe, bypassing the Panama Canal, to mflfieve a savings in time and distance traversed. With the advent of faster ships today, and with the projection of mull faster cargo ships in the future, the expected time advantages begin to disappear.99 The need for intermodal transfers at East and West Coast docks plus possibilities of nussed connections due to schedule slips are factors which reduce attractiveness of the prOposal. On the other hand, the idea of "mini-bridges" appears to have merit. Proposals have been develOped which indicate that containerized unit trains can provide fast efficient service when moving between the East and West Coasts, the Gulf areas, or when terminating at inland des- tinations, such as St. Louis or Chicago. The Union Pacific and Norfolk and Western have develOped a joint plan to move international container traffic from Seattle to Norfolk. Likewise, the Sante Fe and Penn Central worked out an agree- ment to handle containers between California and Atlantic ports on a five day schedule in each direction. A factor limiting these offerings to "foreign-to-foreign" shipments is that the ICC does not have regulatory authority and rates can be obtained on a straight contractual arrangement be- tween the railroads and steamship lines.100 For an all domestic service, a containerized unit train prOposal was develOped to move on 4 to 5 day schedules between California and the East Coast, carrying fresh vegetables and/or canned 132 goods eastward and suitable manufactured goods on the return trip.]'01 Advantages to the shippers include reduced in- transit inventory costs and improved shelf life for perish- ables. Of benefit to the railroads, unit trains can be moving in revenue service up to 80 percent of the time, as compared to an estimated 10 percent of the time for conven- tional trains. The technolOgy exists for effective land bridge crossings of the continent with dedicated container trains. Logistical support in the form of transfer equipment and container marshalling yards is not yet complete. Container pools to equip the trains are still too lean in some loca- tions and nonexistent in others. Beefing up of the required infrastructure requires capital funds, which are not readily available to the rail carriers because of their poor stature with investors. In addition, resistance to change also prompts such actions as the. requirement of chassis under containers moved by most of the eastern railroads. Unless special arrangements have been made, containers arriving in Chicago from the West will be unloaded from the flatcar, placed on a chassis, and reloaded before moving eastward. A deadhead container return is also likely to be mounted on a chassis. Such wasteful practices are inhibiting growth of containerization in both domestic and foreign trade. 133 Liability and Documentation Problems Requirements of excessive documents to accompany unmainer shipments and limitations in coverage and assign— ment of responsibility for losses in transit also inhibit mmfiainerization, but the effects are more noticeable in foreign traffic. Just a few of the papers required in a given shipment include a bill of lading, dock receipt, :hmurance certificate, certificate of origin, delivery immtructions, government bill of lading, export documents, and in some cases, consular documents. The package can amount to as many as 90 COpies, costing an average Of more than $160 per shipment, just for the paperwork. In an effort to obtain relief from the problem, a group of inter- ested participants formed the National Committee on Interna- tional Trade Documentation (NCITD) .102 After over two years cm coordinative effort they have designed a single sheet international intermodal shipping format and are now pro- tmxing its acceptance. They have also been successful in eliminating the need for a Shipper's EXport Declaration in about 90-percent of the cases where it was formerly required. The NCITD is currently involved with the Department Cfi Transportation in a world—wide international trade docu— nmnt study. This involves a computer assisted listing and classification of every piece of paper associated with a given freight movement, from the time the order is received until the cargo is delivered at its final destination. It 134 usexpected that guide-lines will be established for docu- mentation simplification: the changes should be beneficial flnrdomestic container movements as well as in foreign ship- ments. Simplified documentation is considered a requirement naueet the needs of through billing, through rates, the' computer revolution, and the container revolution. In the matter of carrier liability, it is recognized that containerization provides significant reductions in cflaims due to loss or damage in transit.103 However, while the container prevents damage, it also hides damage in tran— sit. In intermodal transfers the problem becomes one of establishing responsibility against one or more Of the carriers for a claim by the shipper. In the case of theft, tflm whole container may be lost rather than just a portion of the cargo. In marine transfers the amount for which a ship— Owner may be held liable for loss or damage to cargo is limited by the Carriage Of Goods by Sea Act Of 1936 to $500 per package or customary freight unit (also known as the "Hague Rules," originated in 1924 at a world conference).104 Some steamship companies maintained that the container is the package and thus liability is limited to $500. After an international conference in Brussels in 1968 the limit Was raised to 90¢ per pound, or $662, whichever is greater. The carrier and shipper must agree on whether or not a container should be considered a single package and rates are adjusted accordingly . 135 Rail and motor carriers and freight forwarders are mflfiect to Section 20, paragraph 11, of Part I of the Inter- state Commerce Act, which provides that common carriers shall be liable to the owner of the goods for full actual loss, damage, or injury caused by the carrier.105 The Bill of Lading Act fixes responsibility for the loss or damage upon the railroad which issues the contract of carriage to (fin owner of the shipment, regardless whether the loss cwcurred on its own line or with some other connecting rail- roml. The problem of assigning responsibility and determin— ihg the amount of liability incurred becomes complicated in maintermodal transfer which may include truck, rail, and marine movements. For protection, a shipper may obtain a policy with warehouse-to-warehouse "umbrella coverage." In recognition of the problem, the Department of Defense and tie Maritime Administration have joined in funding a study designed to unravel complexities of shipper-carrier liabil- ity in intermodal transfers. Study of the legalities of through rates and documentation problems are also included in the project. Restrictions on Forwarders Examination of restrictions to forwarders provides a fitting conclusion to the matter of limitations in through service. Several participants at the Brookings Institution Seminars believed integrated transportation could best be achieved through the development of companies that would act 136 astxansport brokers and would coordinate use of the various modal services without owning any tranSport facilities them- 106 Freight forwarders were considered the likely selves. candidates for such activities. Some writers have referred tx>such agents as "transmodalists." Before such arrange- ments can come to pass, however, certain restrictions to forwarder activities will have tO be removed by the regu- lators. Under Part IV of the Interstate Commerce Act, The term ”freight forwarder" means any per- son which (otherwise than as a carrier subject to Part I, II, or III, of this Act) holds itself out to the general public as a common carrier to transport or provide transportation of prOperty . . . for compensation, in interstate commerce, and which in the ordinary and usual course of its undertakings, (a) assembles and consolidates . . . shipments of such prOperty, and performs or provides for the performance of breakebulk and distributing Operations with respect to such consolidated shipments: and (b) assumes responsi- bility for the transportation of such prOperty . . . and (c) utilizes for the whole or any part of the transportation of such shipments, the services of a [common] carrier.10 Among existing limitations, the ICC may deny a forwarder application solely on the ground that existing forwarder service is adequate for the needs of the shippers. Rates must be approved in the same manner as for modal com- mon carriers. (Forwarders have been permitted to negotiate Special contracts with truckers, but an amendment to Part Iv of the Interstate Commerce Act is required to allow them to negotiate for special contracts with the railroads. This would allow them to participate in Plan I piggyback service . . it: (I) 0v. . q . R q hen-a.“ . v-U» I I E in» . ‘l a. ”'7“ 'u.. .‘ 137 ontflm same terms as truckers. Hearings on such a prOposal have been conducted before Congressional subcommittees.108 Other steps are being taken to allow forwarders freedom to establish joint-rate and through-route arrangements in ship- ments involving more than one mode. Forwarders collect less-than-carload lots for consolidation into carload (or unmainer) lots and Operate on the spread between the two rate levels. Present consideration of a forwarder as a "shipper“ when dealing with the carriers, but viewed as a "carrier"‘when dealing with his shipper customers is a problem. Growth of forwarding has not kept pace with that of the other modes, and relief through ability to negotiate larger rate spreads is indicated as needed. The FMC regu- lates ocean freight forwarders and has authorized them to negotiate with ship Operators in order to obtain favorable rates. Despite the limitations placed upon them, a trend appears to be develOping wherein forwarders are being inte- grated into corporate alliances with other transport ser— vices in order to provide a package service. For example, a recent full page advertisement in the Walljtreet Journal hw'Inter-Freight described itself as a distribution system under single management control providing every surface transportation service required to move freight between interior points in the United States and interior points 109 in foreign countries. The combine includes local drayage, .u-F“ I'm-i'. .IF‘O- . an. u u v-v...) . I-yln. u»-v.. 'v‘ ,, r Ir! (1”) In , \. n ‘8 138 domestic interline road and rail carriage, consolidation, terminal services, leased-container equipment, water carriage, and destination delivery. Total door—to—door liability is offered. Finally, participants in a series of workshop ses- sions agreed that implementation of tranSport coordination across modes must be in the hands of the carriers.110 They would have to initiate, develOp, and Operate the coordinated systems. The participants felt that government responsibil- ity should be confined to removing the Obstacles that exist to such implementation. Conclusions ConcerningThrough Service The technology exists for implementation of the land bridge or container train concept to domestic transport. However, the infrastructure is inadequate to support such a develOpment except in limited application. Lack of research and develOpment activity by the carriers, as well as lack of support by governmental agencies contribute to the slow progress of innovation in intermodal tranSport. An example of the type of concerted effort needed is demon- strated by the NCITD work aimed at simplifying documentation requirements . Forwarders would be in a better position to contrib- ute to the progress of integrated transport if they were less restricted in their activities by the regulatory authorities. The Department Of Transportation has submitted 139 bills to Congress which are intended to reduce regulatory impediments to integrated transport. Freight brokerage services may develop as the result of merging of forwarders and other modal representatives into conglomerate organiza— tions. Summary of the Review of Factors Affecting Containerization Growth This chapter has been devoted to a review of the lit- erature relating to factors which are affecting the growth of containerization and intermodal freight activities. The general areas of concern include (1) economic factors, such as operating costs, investments, and the rate determining matters, (2) the availability of container equipment, (3) labor problems, (4) the influence Of government, and (5) affairs relating to coordination of intermodal movements. The intention has been to present the divergence of Opinion in these areas which reflect the individual concerns of those engaged in the various activities which contribute to the total transport system. The factors which have been reviewed in the liter— ature were used as the basis for a questionnaire research tOOl. The next two chapters discuss the methodology em- Ployed in the use of the questionnaire and the evaluation of results obtained from the investigation of factors believed to be inhibiting growth of containerization in domestic surface freight shipments. CHAPTER III--FOOTNOTES 1Maritime Cargo Transportation Conference, pp. 15-16. 2Ibid., p. 27. 3Merrill J. Roberts, Intermodal Freight Transpor- tation Coordination: Problems and Potential (Pittsburgh: Ikfiversity of Pittsburgh, 1966), pp. 393-395. 4U.S. Interstate Commerce Commission, Cost of Transporting Freight by Class I and Class II Motor Common Carriers (Washington, D.C.: Government Printing Office, 1968). p. 20. 5173 ICC 377, ICC Docket NO. 21723, p. 398. 6For a recent cost analysis of transporting via {figgyback, see Ann F. Friedlander, The Dilemma of Freight Transport Regulation, Appendix B "Derivation of the Costs CE Transporting High4Value Goods" (Washington, D.C.: The Brookings Institution, 1969) . If consideration is given to added inventory costs for longer time in transit, the line haul costs of boxcar Operations were estimated as roughly eQual to piggybacking line haul costs. 7Merrill J. Roberts, p. 82. 81bid., p. 137. 9"'Super C, ' Sante Fe Claims It Has World's Fastest Freight Train," Railway Age, January 29, 1968, p. 25. 10Alan R. Cripe, "Containerization and Integral Trains," in Integral Trains (Chicago: Railway Systems and Management Assn., 1963), pp. 17-18. llRobert~A. Hammond, "Emerging Changes in the Container Revolution," in Highway Research Record-eNo. 281 (Washington, D.C.: Highway Research Board, National Research Council, 1969). p. 15. 140 141 12Marvin J. Barloon, "Containers—-Economics and numct," ianegular Common Carrier Conference Report on mnmainerization in_;nternationa1 and Domestic Traffic (Washington, D.C.: American Trucking Assn., 1969), p. 4. 13John P. Doyle, p. 3. 14"1970 Outlook--Carmarket: 70,000 in '70," Railway Age, January 19, 1970, p. 38. 15Reynolds Metals Company, p. 38. 16United States Steel Company, p. 9. 17Gus Welty, "Special Piggyback Reports: TOFC/COFC," Railway Age, November 27, 1967, p. 36. 18Alan R. Cripe, p. 21. “ 19..B-1g 'Boxing' Event," Distribution Worldwide, April, 1970, p. 59. 20For a rather complete discussion of rate struc- tmres, see Dudley F. Pegrum, Transportation: Economics and MPolicy (Homewood, Illinois: Richard D. Irwin, 1963), pp. 174-186 and 228-230. 21"ICC Must Choose Between Marginal-Cost or Full- (kmt Standard in Setting Rates," Traffic Worldj May 23, 1970, EL 68. 22"FMC Issues Rule Requiring Water Carriers to File Tflmough, Joint Intermodal RateS," Traffic World, April 18, 1970, p. 79. 23"ICC Urges Enactment of Routes-Rates Measure as Senate Hearings Begin," Traffic World, May 9, 1970, p. 86. 24 Josephine Ayre, p. 8. 25"The First Domestic Container Program," Handling and Shipping, July, 1970, p. 47. —‘ 26Josephine Ayre, p. 21. 27Ibid., p. 27. 28H. Me‘Werksman in a panel discussion, “Container- ization--Problems of Today and Potential for Tomorrow“ flkuck Trailer Manufacturers Assn., 26th Annual Convention Grand Bahama Island, April 17, 1967), pp. 48-49. I 142 29R. J. Owen, "Research and the Unit-Load Principle," hITDFC and Containerization (Chicago: Railway Systems and Management Assn., 1963) , p. 51. 30"Market Boom in TOFC," Railway A98, AUQUSt 26: 1963, p. 20. 31"Leased-Container Surge," Distribution Worldwide, April, 1970, p. 33. ' 32“1970 Outlook--Carmarket: 70,000 in '70," Railway Age, January 19, 1970, pp. 38, 92. 33"E. R. Birchler, "Containerization--The Inevitable" (speech before First Annual International Marketing Seminar, sponsored by Northeastern University at Sutton, Massachusetts, June 26, 1969), p. 8. 34Palmer Bayer, “Pool Systems and Coordination," in Coordinated Transportation, ed. by E. G. Plowman (Cambridge, Maryland: Cornell Maritime Press, 1969), pp. 195-200. 35W. E. Schirmer, "Integrated Physical Distribution-- A Containerizat ion Must, " Brandon's Container World, May, 1970, p. 12. 36R. E. Howell, "Growth and Problems of Container- ization," Distribution Worldwide, September, 1970, p. 40. 37Ibid., p. 38. 38XTRA Directory (Boston, Massachusetts: XTRA, Inc., 1970. . 39"International Container Pool," Transportation and Distribution Management, January, 1969, p. 12. 4O R. E. Howell, p. 40. 41T. F. Dillon, "Containerization--A New Twist on an Old Idea," Purchasing, January 28, 1962, p. 86. 42Regular Common Carrier Conference Report, p. 26. 43Fred Muller, Jr., "The Role Of Standards in Inter- national Coordination," pp. 216-222, and John B. Hulse, "Standards and Specifications in Coordination," pp. 222-227, both in Coordinated Transportation. 44See Chapter II, "Containers and Handling EQUipment," p» 55. 143 45Jane's Freight Containers, pp. 478—493. 46Guide for the Certification of Cargo Containers wmw York: American Bureau of Shipping, 1969). 47Fred Muller, Jr., "The Impact of Container Standards on Integrated Transportation," in Papers--Eighth Annual Meeting--Transportation Research Forum (Oxford, Indiana: Richard B. Cross Co., 1967), p. 34. 48See Table 16, "Container Length--Selected Area Usage and 1968 Production," p. 54. 49 Regular Common Carrier Conference Report, p. 28. 50John P. Doyle, National Transportation Policy, it 666. 51T. F. Dillon, p. 86. 52ICC Commissioner L. K. Walrath (remarks before the National Conference of State Transportation Specialists, Seattle,‘Washington, May 8, 1968), p. 5. 53U.S. Department of Commerce, Maritime Administra- tion,‘§ptomatic Container Identification Conference (wash- ington, D.C.: Government Printing Office, January, 1970). 54H. M. Werksman, p. 13. 55"The Container and the User," Mechanical Handling, October, 1969, p. 109. . 56o, I. M. Porton, "A Look at Labor and Containers 1n.Europe" (talk before the Fifth International Container Exposition, Chicago, April 17, 1970), p. l. 57Merrill J. Roberts, pp. 266—267. 581bid., p. 275. sglbid., p. 278, quoting from Article 29, Section 2, * Po 42,.National Master Freight Agreement, 1964. 601bid., p. 280. . 61"Will Labor Help the Railroads Carry the Freight?" Editorial in Railway Age, March 4, 1968, p. 40, 144 62Seminarson the Container Revolution--November 13, 196% pmepared for use of the Committee on Commerce, U.S. Senate (Washington, D.C.: Government Printing Office, 1968), pp. 85-105. 63Ibid., p. 99. 64H. Bridges, "Containers and Their Effect on Waterfront Workers" (talk presented before the Fall Meeting cfi’the Containerization Institute, Los Angeles, California, November 13, 1969). p. 3. 65H. F. Hammond, "Containerization—~The Labor— Management VieWpoint" (talk presented before the Fall Meeting of the Containerization Institute, Los Angeles, California, November 13, 1969), pp. 5-6. 66R. F. Church, Background Note on the DevelOpment cf Containerized International Shipping (Evanston, Illinois: The‘Transportation Center at Northwestern University, 1968), p. 24. 67T. W. Gleason, Address before the Fifth Interna- tional Container Exposition, Chicago, April, 1970. 68"New York Port Balks," Distribution Worldwide, February, 1970, p. 14. 69"Another Round of ILA vs NYSA," Brandon's Container World, May, 1970, p. 4. 70Most comprehensive texts relating to Physical Ifistribution study Offer extensive coverage of regulatory authority and activities of the governmental agencies. For example, see C. A. Taff, Chapter 16, "Regulation and Regulatory Procedure," in Management Of Traffic and Physical Distribution (Homewood, Illinois: Richard D. Irwin, 1964), pp. 388-421. 7J'For a condensed presentation of the National Transportation Policy, see Interstate Commerce Commission-- In the Public Interest (Washington, D.C.: Government Print— ing Office, 1970), p. 2. 72 John p, Doyle, National Transportation Policy, p. 106. 73United States Department Of Transportation (Washington, D.C.: Government Printing Office, 1969), p. 1, 74173 ICC 377, ICC Docket No. 21723, p. 450. - ---' .- ‘.. .- :- ' A. ' u _ II. .‘ —— . ‘:'vln ,. '5. ~ ~~ RA. ' Hr " 4V: A A .,. h it :u u“; . ‘:. 1...“ r .A ,,'v ‘ e . I” ‘ '91 y b ) A I I- “55‘ . . ~ 5 'c 145 75John P. Doyle, p. 654. 76U.S. Interstate Commerce Commission, 216 ICC 435, mum 20,.1936, Trucks on Flatcars Between Chicago and Twin Cflfies, ICC Reports, Vol. 216 (Washington, D.C.: Government Printing Office, 1936), p. 435. 77U.S. Interstate Commerce Commission, 232 ICC 683, July 25, l93_9J_;LCC Decision: Ex Parte No. 129, Substituted Freyflupgervice, ICC Reports, Vol. 232 (Washington, D.C.: Government Printing Office, 1939) , p. 683. 78293 rcc 93, rcc Docket No. 31375. 79U.S. Interstate Commerce Commission, 322 ICC 301, gggch is, l96§y ICC Decision: Ex Parte NO. 230, Substituted Service-Charges and Practices of For-Hire Carriers and Freight Forwarders (Piggyback Service), ICC Reports,Vol. 322 (washington, D.C.: Government Printing Office, 1964), p. 301. 80See Table 8, "Piggyback Plans," p. 35. 1James E. Mazure, "Reducing Overlap Barriers in (Mean Commerce," in Coordinated Transportation, p. 103. 82Ibid., p. 104. 83"Joint Rates," Transportation and Distribution Management, June, 1970, p. 19. 84R. J. Blackwell, "Perspectives on Through Route and Rates," Brandon's Container World, May, 1970, pp. 27-28. 85A seminar titled, "Intermodal Transportation-- Government Regulatory Policy," was conducted in March, 1970 lnIthe State University of New YOrk Maritime College. A report on the divergent views presented is given by Carlo J. Salzano, “Government, Industry Spokesmen EXpress Divergent Views on Intermodal Transport," Traffic World, March 4, 1970. pp. 21-25. 861cc Commissioner L. K. Walrath (remarks before the Association of Interstate Commerce Commission Practitioners, June 21, 1968, Minneapolis, Minnesota). 87"White House Cool on Agency Merger Plan," Traffic Management, September, 1970, p. 11. 88"Nadar Group Says ICC Fail Public, Urges Single Transportation Regulatory Agency," Wall Street Journpi, March 17, 1970, p. 613. 146 89R. F. Stoessel, “Transport in the '70's: Revolution Ahead," reprint from Business Management, November, 1969. 90John P. Doyle, pp. l38~144. 91C. P. Dircx, "Inter- and Intramodal Coordination cnithe Missouri Pacific," in Coordinated Transportation, pp. 183-191. 92 Ann F. Friedlaender, p. 156. 93Ibid.. pp. 185-186. 94W. J. Stenason, "Multi-Modal Ownership in Trans— ;mmtation," in Papers-~Eighth Annual Meeting-~Transportation Research Forum (Oxford, Indiana: Richard B. Cross Co., 1967). p. 471. 95"Independent Ownership Of Modes Found Not to Be Ifindering Containerization," Traffic World, April 18, 1970, p. 27. 96Gus Welty, "Tomorrow's Railroads," Railway Age, August 25, 1969, p. 36. 97"Railroader-Turned-Trucker W. G. White Says: 'We Need a Meeting of Minds on Common Goals, "' Railway Age, June 2, 1969, p. 20. 98 Ann F. Friedlaender, p. 92. 99A.E. Gibson, "Land Bridge-~Fact or Fiction?" (remarks before National Railroad Piggyback Assn., Montreal, Canada, 1969). 100K. Marshall, "New Routes for World Trade?" Transportation and Distribution Mangement, October, 1969, pp. 63-64. 101'"The‘ Ultimate Unit Train?--Support for Land Bridge Grows," Distribution Manager, May. 1968, P- 45- 102Comments have been Obtained from remarks by Arthur E. Bayliss, National Director of NCITD before various groups. For example, "International Documentation-AWhere Are We Now?" before the Tenth Annual Conference of the Containerization Institute, New YOrk, January, 1970. 1O3See Table 6, p. 26. " 147 104S. V. Timberlake and C. E. Henshall, "Insurance Yardsticks for EXport Containers," Distribution Manager, June, 1968, pp. 53—58. 105For an overall treatment of domestic transport cflaims practices, see C. A. Taff, Chapter 15, "Claims Procedure and Prevention," in Management of Traffic and Physical Distribution, pp. 358-387. 106Ann F. Friedlaender, p. 185. 107U.S. Interstate Commerce Commission, Transport Statistics of the United States, 1966: Part 8: Freight Forwarders (Washington, D.C.: Government Printing Office, 1967). p. l. loaggnd Annual Report of the Interstate Commerce Commission--Fiscal Year Ended June 30, 1968 (Washington, D.C.: Government Printing Office, 1968), p. 114. See also, "Hearing Opened by House Panel on Bill to Permit Rail- Forwarding Rate Making," Traffic World, January 31, 1970, pp. 17-21. 109u1nter-Freight"The Only System that Assumes Total Liability" (advertisement in the Wall Street Journal, July 7, 1970). p. 11. 110M. L. Fair, Coordinated Transportation, p. 303. CHAPTER IV FIELD RESEARCH METHODOLOGY Factors Affecting Containerization Growth A program may be develOped to promote more effective use of containers if the factors which are inhibiting their use can be determined and arranged in an ordered sequence of relative importance. The problem faced in developinggsuch an ordered listinggis that Opinion variesp_depending upon the needs of the respondent in terms Of freight activity. However, it may be possible to correlate the opinion of representatives of the individual sectors and thereby cater to their collective needs. The research undertaken in this project‘was designed to identify individual sector Opinion am well as to develOp an overall evaluation concerning prob- lems of domestic freight containerization. An analysis of the literature review presented in the previous chapters offers the conclusion that the major areas of concern may be categorized as follows: (a) economic factors, (b) equipment availability, (c) governmental regula- tion, (d) labor, and (e) coordinative activities. The 148 149 research develops a body of Opinion relating to container- ization in each of these areas. The general outline of research described in this chapter includes, (a) develOpment of the hypotheses, (b) determination of the sample makeup, (c) design of a ques- tionnaire, and (d) administration of the questionnaire. Testing of the hypotheses on the basis of the questionnaire replies is described in Chapter V. DevelOpment Of Hypotheses General Cons iderat ions A statistical hypothesis is a prediction of how the statistical analysis of quantitative data obtained from the research will evolve. In this investigation the hypotheses are stated in the null form and are subjected to statistical testing. The null hypothesis, Ho’ assumes that there is “no significant difference" between two variables and that any differences noted are ascribed to chance error. The alter— rune hypothesis, H1, may be accepted if statistical testing leads to rejection of Ho. The relationships are normally stated in algebraic form as follows: 3’ II [I] Null Hypothesis H Alternate Hypothesis ‘Hl: A # B. 150 Popplation Sectors and PrOposed Statisticel Hypothese§_ Preliminary research and the literature review indi- cate that the population of those engaged in domestic freight mfldvity which could dictate involvement in the use of con- tainers can be roughly divided into three sectors. These sectors are (1) those who use freight services, (2) those who provide freight services, and (3) those who supply the equipment. In this investigation, representatives of the respective population sectors were presented with a list of factorS‘which are claimed to be retarding growth of contain- erization. Based upon the consensus of Opinion, their col- lective evaluations were measured in terms of an overall ranking from the most important to the least important factor. Opportunities for statistical measurement are avail- able in at least two areas which are, (l) agreement on the relative ranking of factors according to importance, and (2) agreement on the relative importance of each factor, considered individually. On the basis of the above concepts, the following lwpotheses are prOposed and are Offered in the null form for convenience in statistical testing: Hypothesis l-A (Ho): Factors inhibiting growth of domestic surface freight containerization are ranked in similar order, based upon collective evaluations of representatives of the following sectors: (1) potential 151 or actual users, (2) carriers, or (3) containerization equipment suppliers. Hypothesis l-B (HO): Comparing evaluations of any one given factor said to be inhibiting growth of domes- tic surface freight containerization, there are no statistically significant differences in the level Of importance as seen by representatives of the following sectors: (1) potential or actual users, (2) carriers, or (3) containerization equipment suppliers. For purposes of illustration the alternate hypothe~ ses will be presented for the two null hypotheses given. Hewever, in order to simplify the reading, the alternate hypotheses will not be listed along with the remaining hypotheses to be presented. An alternate hypothesis is implied in each case. Alternate Hyppthesis l-A (H1): Factors inhibiting growth of domestic surface freight containerization are not ranked in similar order, based upon collective eval- uations of representatives of the following sectors: (1) potential or actual users, (2) carriers, or (3) containerization equipment suppliers. Alternate Hypothesis l-B (H1): Comparing evalua- tions of any one given factor said to be inhibiting growth of domestic surface freight containerization, there are statistically significant differences in the level of importance as seen by representatives of the 152 following sectors: (1) potential or actual users, (2) carriers, or (3) containerization equipment suppliers. When considered in the light of types of goods or services offered, the Freight User sector is composed of a vdde variety of firms. Business differences may influence attitudes toward containerization. The needs of the study should be met if this variety of attitude is identified in terms of broad categories which cover most of the sector. Accordingly, the following hypotheses are prOposed: Hypothesis 2-A (HO): Factors inhibiting growth of domestic surface freight containerization are ranked in similar order, based upon collective evaluations of rep- resentatives of the following sectors of the freight user pOpulation: (l) durable goods manufacturers, (2) nondurable goods manufacturers, (3) retailers, and (4) freight forwarders. gypothesig_g:§_(Ho): Comparing evaluations of any one given factor said to be inhibiting growth of domes- tic surface freight containerization, there are no statistically significant differences in the level of importance as seen by representatives of the following sectors of the freight user pOpulation: (l) durable goods manufacturers, (2) nondurable goods manufacturers, (3) retailers, and (4) freight forwarders. Relative size of the Freight User firms may be an important factor in influencing their attitudes toward containerization. The larger firms can be expected to have -v._. U-Pu. M1. ‘ ‘- a... g C'“ 153 aagreater command of capital required to modify existing pmactices. The breadth of territory covered and the average size of shipments are examples of important variables re- lated to firm size. In this connection, the following hypotheses are offered: Hypothesis 3-A (HO): Factors inhibiting growth of domestic surface freight containerization are ranked in similar order, based upon collective evaluations of rep- resentatives of larger and smaller firms in the freight user pOpulation. Hypothesis 3—B (HO): Comparing evaluations of any one given factor said to be inhibiting growth of domes- tic surface freight containerization, there are no statistically significant differences in the level of importance as seen by representatives of larger and smaller firms in the freight user pOpulation. The type of freight activity engaged in by the firms in the User section can also be categorized. For example, a retail business is likely to be engaged primarily in receiv— ing freight. A manufacturer may receive raw materials and ship finished products. A raw material supplier may act primarily as a shipper. The freight forwarder is seen as a carrier when soliciting business, but as a shipper in the eyes of the Operating carriers. These differences in freight activity may influence attitudes toward containerization. Therefore, the following hypotheses are offered: 154 Hypothesis 4-A (Ho): Factors inhibiting growth of domestic surface freight containerization are ranked in similar order, based upon collective evaluations of representatives of the freight user pOpulation partic- ipating in the following categories: (1) shippers, (2) consignees, (3) combined shipper and consignees, or (4) freight forwarders. Hypothesis 4-B (HO): Comparing evaluations Of any one given factor said to be inhibiting growth of domes- tic surface freight containerization, there are no statistically significant differences in the level of importance as seen by representatives of the freight user pOpulation participating in the following cate- gories: (l) shippers, (2) consignees, (3) combined shipper and consignees, or (4) freight forwarders. The literature review revealed that containerized domestic surface freight shipments are largely handled by the motor and rail carriers. However, the air and marine modes are in contact with domestic movements at their respective interfaces and, accordingly, can influence develOpment of container usage. The next hypotheses are submitted in recognition of the different needs and atti— tudes of the modal representatives of the Carrier sector. Hypothesis 5-A (Ho): Factors inhibiting growth of domestic surface freight containerization are ranked in similar order, based upon collective evaluations of 155 representatives of the freight carrier pOpulation in the following segments: (1) motor, (2) rail, (3) marine, (4) air, and (5) port authorities. Hyppthesis 5-B (HO): Comparing evaluations of any one given factor said to be inhibiting growth of domes- tic surface freight containerization, there are no statistically significant differences in the level of importance as seen by representatives Of the carrier pOpulation in the following segments: (1) motor, (2) rail, (3) marine, (4) air, and (5) port authorities. Thus far the hypotheSes have been concerned with the relative importance ascribed to the various factors which may be inhibiting growth of containerization, as seen by the various sectors involved in freight activities. Reflective consideration indicates that an examination of the actual containerization practices of Freight Users may develOp relationships which would be enlightening to the study. Factors*which could be influential in decisions to use containers in domestic freight include present use of them in.foreign shipments, present use of TOFC piggyback, and suesent ownership of a substantial number of containers. These considerations lead to prOposal of the following hyPotheses: Hypothesis 6 (Ho): The use of containerization by firms in domestic shipments is statistically independent of their use of containerization in foreign shipments. 156 Hypothesis 7 (Ho): The use of containerization by firms in domestic shipments is statistically independent of their use of TOFC (Trailer on Flatcar) piggyback. Hypothesis 8 (Ho): The practice of containerization by firms in either domestic or foreign shipments is statistically independent of their ownership of con- tainers. Hypgthesis 9 (Ho): The use of containers by Freight Users in either domestic or foreign service is statisti- cally independent of the type of business in which they are engaged. Hypothesis 10 (HO): The use of containers by Freight Users in either domestic or foreign service is statistically independent of the relative sizes of the businesses. Hypothesis 11 (HO): The use of containers in either domestic or foreign service is statistically independent of the type of Freight User activity (shipper, consignee, shipper and consignee, or forwarder). The next section will discuss the requirements of the sample which is used to test the hypotheses. I' I J: p “a 0 ‘—-— LI Ii 3‘” shut llnh I . tun I vole ::-- diml- . 157 Determination of the Sample The Populatfln Sectors A primary requirement of the sample design is that it meets the needs of the hypothesis tests. In the previous section the various strata of the pOpulation which are of concern in this study were identified as the hypotheses were develOped. The sectors which must be represented in the sample are related to the hypotheses as follows: Hypothesis L: Freight Users, Carriers, and Containerization Equipment Suppliers. Hypothesis ;: Durable goods manufacturers, non- durable goods manufacturers, retailers, and freight forwarders among the Freight User sector. Hypothesis 3: At least two levels of relative size among the Freight User sector. Hypothesis 4: Shippers, consignees, combined shippers and consignees, and freight forwarders. This classification can be seen to overlap the requirements of Hypothesis 2, with freight forwarders being the most obvious example. Hypothesis 5: Motor, rail, marine, and air carriers and port authority segments of the Carrier sector. Hypotheses 6 through 11: The Freight User sub- sectors. 158 If the business size requirement is limited to two levels, the sample strata separations of the Freight User sector can be illustrated in the diagram shown below: Durable Nondurable Goods Goods Manufacturer Manufacturer Retailer Forwarder —_i Larger x x x x Smaller x X X x Statistical Considerations of Sample Size With random sampling the larger the sample, the closer the "true" value of the pOpulation statistic is approached.1 The problem then becomes one of balancing the cost of collecting a large sample against the risk of not obtaining a "true" value of the pOpulation being sought. Methods available for calculating sample size are concerned with the standard error of the mean and are valid for para- metric statistics. since the questionnaire in this study employs an ordinal scale of estimated "levels of importance," nonparametric methods of analysis are indicated.2 A "rule 0f thumb" that a random sample of 30 will ordinarily produce a mean value acceptably close to the true mean of the 9099‘ lation is a useful approximation for use with nonparametric Statistics.3 The chi-square distribution is useful in dealing With nonparametric statistics and it is employed in this 2.1a . I‘ a in. I . an... a. ...E . (I: l I, '1 159 study. A "rule of thumb" relating to sample size for chi- square analysis is quoted from Chao as follows:4 The larger the sample size, the better the approximation will be. In the test of goodness of fit, the expected frequency of each class must be at least 5 in order to have a good fit. Similarly, in a test of independence the expected frequency should also be 5 or more when the degrees of freedom are larger than 1. When the degrees of freedom are exactly 1, or when a 2 x 2 contingency table is used, the sample size should be large enough so that no expected frequency is smaller than 10. (Emphasis added.) The "rule of thumb" for a random sample of 30 and Chao's estimates of minimum sample size for chi-square analysis were used in determining the sample size for the questionnaire mailing. The Sample Schedule Calculations of the required sample size were based upon a conservative one—third return Of the questionnaire nailing. At least 30 replies were desired from each of the three major pOpulation segments of (1) Freight Users, (2) Carriers, and (3) Container Equipment Suppliers. An addi- tional requirement was a minimum of 10 replies for each subsector of the User and Carrier strata. The sample as originally intended is presented in Table 24. This was sObseguently modified in cases where the total population Of a subsector is less than the original number desired. (For example, there are not 30 major air carriers available, to PrOVide a one-third return = 10 replies.) . out! line)- Ina-o; “1... n‘._ .5"..- 3.! EA... u“ lt- lb 160 Table 24. Questionnaire sample schedule Intended Expected Actual Actual Sector Sample Return Sample Return FREIGHT USERS: (Large) a Durable goods mfgr. 30 10 31 29 Nondur. goods mfgr. 30 10 31 18 Retailer 30 10 28 21 Forwarder 30 10 16 12 (Small) Durable goods mfgr. 30 10 33 22 Nondur. goods mfgr._ 30 10 27 18 Retailer 30 10 32 12 Forwarder 30 10 42 15 Freight User subtotal . 240 80 240 147 CARRIERS: Motor 30 10 40 33 Rail 30 10 24 21 Air 30 10 l7 14 Marine 30 10 17 15 Port authorities 30 10 21 13 Carrier subtotal 150 50 119 96 EQUIPMENT SUPPLIER 90 30 104 55a Grand totals 480 160 463 298 aSome of the "Equipment Suppliers" identified them- selves as "Durable Goods Manufacturers" in the replies, which accounts for the unusually high return in the latter category. v . adv :— V. ~\. )5. \au ‘3 - C h p O psi :1 RI 161 Examination of the actual returns listed in Table 24 reveals that the major sampling objectives were met, namely, (1) at least 30 sampling units are in each major subgroup, (2) at least 10 units are available for every cell, and (3) when size separations are combined, each minor group of the Fireight Users strata totals close to 30 or more. Returns of from 60 to 87 percent were realized where the total pOpula- tion size of a subgroup is a limiting factor. These numbers indicate that with random sampling the mean values deter- udned should approximate "true" values. Establishment of the Working Sample Only the larger firms in the Freight User category were considered sufficiently involved in containerization practices that their Opinions would be meaningful. Names of these firms found in the Fortune 500 listing5 and the Fortpne Second 500 listing6 were used as a sampling frame. (A "frame" is a means Of access to a portion or all of a universe.) A decision was made with respect to designation of "larger" and "smaller" firms in the segmentation on the basis of size. A separation at "over $200 million“ annual sales includes the tOp 428 industrial firms and the tOp 50 retailers in the Fortune 500 listing. The remainder of firms in the tOp 500 list and the Fortune Second 500 list are included in a cutoff point of $50 million annual sales. i u 1 u . Add \LA I: 162 A Dun and Bradstreet listing of annual sales for 48 freight forwarders indicates $1 million annual sales as an accept- able separating point between large and small firms.7 Therefore, the Freight User subsectors were designated as "larger" and "smaller" firms according to the following schedule of annual gross sales: Larger Smaller Manufacturers (durable and nondurable) Over $200 million $50 to $200 million Retailers Over $200 million $50 to $200 million Forwarders $1 million and over Less than $1 million All of the Dun and Bradstreet forwarder names were used and these were supplemented with an additional listing in the "1970 Routing and Transportation Information Directory."8 A table of random numbers was used to pick the sample units from the Fortune listings of manufacturing and retailing firms.9 The retailer list was supplemented by random picks from.Moody's Industrial Manual.10 All of the "Transportation Companies" in the Fortune listing that meet the carrier sample requirements were used. These units were supplemented by listings in Moody's Trans- portation11 major carrier firms was used. The sample of Port AuthOr_ so that essentially a complete sample of the ities was obtained from The American Association of Port I. Qv 163 Authoritiep--l970 Handbook and includes all the major ports (nithe Atlantic, Pacific, Gulf, and Great Lakes.12 The Container Equipment Supplier sample includes manufacturers of containers, leasors Of containers, and cmhers associated with the industry, such as manufacturers of container fittings and container handling equipment. Names were obtained from Jane's Freight Containers,l3 the above-listed sources, and advertisements in transportation magazines. 'With a sample objective of at least 100 sample \ufits it was necessary to use all names meeting the strata requirements. DevelOpment Of the Questionnaire General Considerations From the analysis thus far certain points have been develOped which indicate the use of a mail survey as the lest means of determining the factors which are inhibiting the growth of containerization in domestic freight shipments. Predominant among these are the following considerations: 1. The range of factors Offered in the literature indicates the need for a questionnaire covering a number of areas related to the problem. 2. The diverse backgrounds of those involved in con- tainerization dictates a sample with representation from the many subsectors of the pOpulation. The desired sample is large (over 400) and it is also Spread over the entire United States. ‘vo .Lo.. 5... 'Lv '& and much information has been written on the practice. 164 The mail survey is a commonly used research tool, 14 Among advantages of mail surveys in comparison to other nethods of data collection are: \IO‘U'chwNH Wider distribution Less bias in sample distribution No interviewer bias Better chance for truthful reply Better chance of thoughtful reply Time and cost saving Centralized control. The main considerations in questionnaire construc- offered by Erdos which apply to this study are:15 The questionnaire should contain all the important questions on the subject, but none which are not purposeful It should appear brief and easy to complete The reader must be made to feel that he is participating in an important and interesting project. ngiqn of the Questionnaire In order to meet the needs of the study, the ques- tionnaire had to be designed to provide the following: 1. A body of Opinion concerning the relative importance of factors retarding containerization in domestic surface freight shipments. This information had to be in a form which could be analyzed and used for testing of the hypotheses prOposed. Ability to segregate the respondents into their representative pOpulation subsectors. Information which could be used to develOp an analy- sis of containerization practices of Freight Users. 165 The questions included in the final questionnaire represent the major areas of concern relating to container— ization found in the literature. To meet the needs of twevity and clarity each factor was listed in title heading form and was followed by an abstract or quotation from the literature. The following listing is not in the order cmfered in the questionnaire, nor are the factors segregated according to major areas of concern. 1. Economic Factors vassTMENT REQUIREMENTS AdOption of containerization requires a capital investment decision. DISTRIBUTION OF BENEFITS Benefits from containerization may not be distrib- uted prOportionately to respective participants' investments. TERMINAL HOLDUPS Rail or truck terminal holdups cause undesirable shipment delays. TOFC ALTERNATIVE TOFC (Trailer on Flatcar) piggyback service provides an acceptable alternative to containerized shipments. EXISTING TOFC INVESTMENTS Containerization may not offer sufficient economic incentive for switching to those who are heavily invested in TOFC piggyback facilities. INADEQUATE RATE STRUCTURES Through shipment rate structures are needed to encourage a shift to containerization. EMPTY CONTAINER TRAFFIC_AHD TARIFFS Unbalanced traffic and nonstandard empty container rates contribute to "dead head" movement costs. INEFFICIENT CONTAINER CUBE vs VANS Trailer vans offer more efficient cubic volume per trip in over-the-road trips than standard containers. 166 ,Equipment Availability NONSTANDARD CONTAINERS The existence of nonstandard containers inhibits intermodal transfers. CONTAINER AND CHAHSIS SHORTAGES Shortages of containers or chassis/bogey rigs result in shipment delays. Government Regulation LACK OF GOVERNMENT LEADERSHIP Government has supplied little leadership in promoting containerized intermodal traffic. GOVERNMENTAL REGULATION Governmental regulations and agency jurisdictional overlaps retard containerization developments. INTERMODAL OWNERSHIP FORBIDDEN Present laws and regulations prevent common ownership or control of modes. Labor LABOR RESISTANCE Threat of loss of jobs encourages the labor movement to impede containerization. .Coordinative Activities DIVIDED CAHRIER RESPONSIBILITY Responsibility for coordination of intermodal freight movements is divided among the carriers involved. LACK OF LAND BRIDGE An effective coast-to-coast rail container land bridge has not yet been develOped. INADEQUATE CONTAINER INTERCHANGE An effective national container pool system does not exist. LACK OF MOTOR CARRIER SUPPORT Many truckers believe that expanded containerization would reduce less-than-truckload and long haul revenues. 167 SHIPLINEHLEADEHHHIP Shiplines have taken major responsibility for promoting containerization without giving adequate consideration to domestic sector needs. INTERMODAL RIVALRY No carrier sells intermodal Operations: each one tries to sell his own mode. An Open-ended question was included to cover two situations which are (l) certain factors important in inhibiting containerization might not have been discovered in.the literature, and (2) inclusion of every minor conceiv- able point would make the questionnaire excessively long. The Open-ended question was presented on a separate page to allow adequate room for comment and was phrased as follows: If there are any factors which have not been covered in the questionnaire which you feel are important in inhibiting growth of containeriza- tion in domestic surface movements, or if you have any additional comments to offer, please note them on the remainder of this sheet. The reSpondent was asked to indicate his estimate of the level of importance of each factor on a multiple choice scale which will be discussed more fully at a later point in this chapter. In order to segregate respondents into their repre- sentative pOpulation subsectors, they were directed tO the following: Check below which category most closely repre— sents your firm's vieWpoint in answering a freight questionnaire. USER: Shipper Consignee Forwarder ul— 'h u! 168 CARRIER: Motor Rail Marine Air CONTAINER EQUIPMENT SUPPLIER OTHER--Specify The Freight Users were separated by firm size through response to the most apprOpriate annual gross sales luecket from among the following: (1) Over $200 million, (2) $50 to $200 million, (3) $10 to $49 million, (4) $1 to $9 million, and (5) Less than $1 million. Separation according to the Freight User firm lmsiness activity was Obtained from the following classify- ing question: DURABLE GOODS MANUFACTURE_____(Machinery, trans- port equipment, primary metals, wood, furniture, glass, fabricated products, etc.) NONDURABLE GOODS MANUFACTURE_____(FOOd, beverage, tobacco, drugs, textiles, apparel, paper, pub- lishing, chemicals, petroleum, etc.) RETAILER OTHER-~Specify Information which could be used to develOp an analysis of containerization practices among Freight Users was obtained by "yes" or "no" answers to the following five questions: 1. Does your firm ship or receive trailer-on— flatcar (TOFC piggyback) freight in domestic trade? 2. .Does your firm ship or receive containerized freight in domestic trade? 3. Does your firm ship or receive containerized freight in foreign trade? A o .3. . “v '~ ‘! l 169 4. If your firm gpee ship or receive pppppipepe igeg freight, do you pyp_most or all of the containers you use? 5. Regardless of your freight practices, are some of your goods deemed containerizable? An earlier form of the questionnaire which contained 23 factors*was submitted to 31 physical distribution special— ists who were participating in a seminar. On the basis of their comments the factors were reduced to 20 and wordings were changed to improve clarity. In addition, the form had requested the respondent to identify himself and his firm. Because of comments that this would tend to inhibit partic- ipation, the final version provided for voluntary identifi— cation. Respondents were asked to fill in their name on a separate piece of paper in order to Obtain a summary of the study. .Erdos states that the use of an apprOpriate incen— tive will usually increase the response rate and, thereby, make the results of the survey more reliable.16 A total of 181, or 61 percent, of those who completed the questionnaire requested a summary of the results. The Rating Scale With the containerization inhibiting factors defined, the problem becomes one of providing a means for each respon- dent to indicate the respective levels of importance. The evaluations must be available in a form which can be pro- cessed for use in testing the hypotheses. For example, if 170 tie respondent were merely asked to write his Opinion on each factor the result would be a wide range of divergent answers] which would have to be categorized into somewhat homogenous groups. Statistical analysis would be difficult. For these reasons a numerical rating scale was used as a factor evaluation tool. A rating_scale has been defined as "a psychological measuring instrument that requires the rater or Observer to assign the rated Object to categories or continua that have numerals assigned to them."1 Guil- ford comments that numerical rating scales are among the easiest to construct and apply, and are the simplest in terms of handling the results. They can be used directly in statistical analysis.18 The work of Osgood ep_ei, on the fundamentals of semantics offers valuable guidance in the develOpment of a rating scale.19 In discussing semantic space, they state, The point in [semantic] space which serves as an Operational definition of meaning has two essential prOperties-—direction from the origin, and distance from the origin. We may identify these prOperties with the quality and intensity of meaning, respectively. Through factor analysis they determined that the factors of evaluation, potency, and activity account for most of the semantic analyses made.20 Important-unimportapp is an evaluative factor and is the one chosen for the rating scale in this study. The potency factor is concerned with power, such as size, weight, and toughness. The activity factor is concerned with such things as quickness, in». nu A -\v' -: In v ’7” o... ‘I i n- C); av 171 excitement, and agitation. Factors described in the literature on progress of containerization appear to be involved almost entirely with the evaluative factor. Accordingly, the rating scales were limited to the important- unimpprtant evaluative factor. In a one-way scale the Opinion or stimulus being evaluated begins at or near zero and increases in intensity; application of an electric shock at varying levels is an example which illustrates a one-way stimulus vector. In this study a onedway scale starting from essentially no importance up to extreme importance is indicated for the inhibiting influence of the various factors on container- ization develOpment. Osgood arrived at an Optimum seven "equally-spaced" steps along a tWOdway vector in develOping scales. With a greater number it became difficult to discriminate and with fewer than seven steps observers complained of inadequate differentiation.21 With the oneeway semantic vector indi- cated for this study, a five step separation was chosen with medium importance used for the mid-point of intensity. Reinforcing instructions were used to fix in the mind of the observer the intent of the evaluation. The scale was pre— sented in the questionnaire as follows (one of the questions is included for clarity): e... a. {all (I, 9.“. my 172 Please indicate your estimate of the relative importance of each FACTOR listed below in retard- ing growth of containerization in domestic surface shipments. . . . The degree of importance choice has been scaled as follows: 1. Extremely Important 4. Not Very Important 2. Quite Important . 5. Almost NO Importance 3. Medium Importance Circle your choice 1 2 <:) 4 5 RELATIVE IMPORTANCE OF FACTORS RETARDING DOMESTIC SURFACE CONTAINERIZATION 1. NONSTANDARD CONTAINERS The existence of nonstandard containers inhibits inter- modal transfers. 1 2 3 4 5 Mailinggand Processing of the Questionnaire A OOpy of the cover letter used in this study and a COpy of the follow-up letter sent out two weeks later are found in Appendix A. A Directory of persons actively engaged in physical distribution executive work was used as a major source of addresses.22 A stamped, self-addressed envelope and provisions for anonymity of respondents were provided. The follow-up mailing was directed to all except those who could be identified as replying to the first mail- ing. Except for a revised letter, it contained the same material as the first mailing. To check for possible bias from the order in which the factors were listed in the ques~ tionnaire, the questions were printed in reverse order for ib '- II 173 tflm second mailing (referred to in further discussion as Form I and Form II, respectively). A,record of question- naires returned in response to the first and second mailings lwes maintained. This record was included in the data pro— cessing cards for use in testing bias. There were 194 replies received from the initial nailing (approximately 42 percent). This total was in- creased to 298 replies (over 64 percent) with the second nailing. Five additional questionnaires trickled in after the replies had been analyzed, with the last one arriving a full three months after the initial mailing! The percentage breakdown of returns from the three major sample categories is presented in Table 25 which fOllows. Table 25. Percentage returns from major sample sectors “— N————_—_— Returns Sample Units Returns Units 6Q Freight Users 240 147 61 Carriers 119 96 81 53 Equipment Suppliers 104 .22. Overall 463 298 64 k I ”he. .‘. 'IVU h-.; i uuq ..¢ ”.1 on“ H... . n. 44.1 911 '1 (I) 174 The Freight User category was inflated at the expense of the Equipment Supplier segment because the latter respondents sometimes categorized themselves as Durable Goods Manufacturers. ‘Where such a respondent identified Ifinmelf by name the questionnaire was corrected to place him thithe original intended category. The high return of the Carrier segment indicates a higher interest in the problem cm containerization develOpment than that evidenced by Freight Users. A card file was prepared to correspond to each firm in the sample and each card was provided with a key number. A keypunched card was prepared for each questionnaire returned. Coded into each card were the following items: 1. A three digit respondent number (a "900" series number was used to designate replies of unidentified respondents). 2. A single digit number indicating the respondent's business category. 3. A single digit number to indicate the respondent's freight activity, if the firm was classified as a Freight User. 4. The digit corresponding to the "Importance" scale choice for each of the 20 factors evaluated with respect to inhibiting influence on containerization develOpment. 5. A digit corresponding to a "Yes," "No," or Blank choice, indicating replies to the five questions which were designed to relate containerization activities. 6. A digit corresponding to the annual gross income of Freight User firms. 7. A digit indicating whether the questionnaire was Form I (mailed before the follow-up letter), or Form II (mailed after the follow—up letter). .5.- anti . v.5 but Q! (I' 175 An Open-ended question had requested respondents to cxmment on any factors which had not been covered in the questionnaire. ,Replies were consolidated where possible into related categories. The Program for Statistical Testing of Hypotheses The purpose of this section is to provide the reader with a general understanding of the reasoning employed and factors considered in develOpment of the hypothesis testing program. It is considered beyond the needs of this paper to present more than the basic considerations and limitations of the statistical methods as they apply to this analysis. Where a formula is Offered the complete develOpment and in depth discussion concerning it can generally be found in the footnoted references. The steps for testing a hypothesis have been listed as including the following:23 Step 1: State a null hypothesis HO and an alternative hypothesis H1. [For the sake of clarity, where a number of hypotheses are pro- posed, the alternative may be implied, but not spelled out.] Step 2: Decide on an apprOpriate sample statistic and test statistic. The choice of a test statistic is based on (1) the null hypothesis, Ho, (2) the sample statistic, and (3) assumptions concerning the sample pOpula- tion distribution. Step 3: Decide on a level of significance a and a sample size N. n: 1.65 y 1.“ 0V. 176 Step 4: Obtain a sample statistic and com- pute the test statistic. Accept or reject H0 in accordance with where the test statistic falls with respect to the region of rejection. Taking into consideration the matters which have eflieady been discussed, the following steps remain to be reviewed: 1. Choice of apprOpriate sample statistics 2. Choice of appropriate test statistics 3. Decisions concerning the prOper level of significance a. Implied in the choice of apprOpriate test statistics for the respective hypotheses is the choice Of statistical methods for deriving these test statistics. Sample Statistic .Arithmetic mean is the measure of central tendency used as the sample statistic in the testing of Hypotheses 1 through 5. Use of the arithmetic mean assumes equal inter— vals in the numerical semantic differential scale employed in the questionnaire. Osgood ep_ei, offer data to substan— tiate their position that scales employing the terms such as "extremely" and "quite" are associated with more or less equal interval degrees of intensity of whatever is being measured.24 They use mean values for measures of central tendency in their calculations. It is recognized however, that the work deals with a "pseudo—interval" scale rather than an absolute interval scale and, as such, the mean n- - ‘a-d 1.5» “As. yvn‘ 91!. how: r1 I): fit- (1‘ ‘i u: LL) 177 values are in error to the extent that the successive inter- vals on the scale are not equal. No assumptions are made concerning the form of the distributions in the pOpulations and the "standard deviation" applied to "normal" distribu- tions is not used. For testing Hypotheses 6 through 11, a simple "Yes- NO" scaLe is employed. Siegel agrees that such a dichotomy meets the requirement of continuum in an ordinal scale of ranking.25 Such a requirement is necessary for the nonpara- metric techniques used in testing the prOposed hypotheses. In this case, a sample frequency is used as the sample statistic. Test Statistics for Hypotheses l—A flrOugh 5 -A A suitable statistic for testing of Hypotheses l-A through S-A is the Kendall coefficient of concordance, W.26 It is a measure of the correlation among several rankings of N objects (or factors). The coefficient, W, can be tested against the chi-square distribution when N is larger than 7 by use of the following relationship: x2 = k (N-l) W where x = chi-square k = the set of rankings N = the number of factors being ranked, and 2 II the Kendall coefficient, W. '0 a- [av-H m. V e.“ lbw .- V. F‘ [i- ”E D—7 178 The degrees of freedom = N-l. In testing of Hypotheses l-A through S-A, N = 20, and the degrees of freedom = 19. The chi-square distribution is useful in nonpara- uetric analysis because it makes no assumptions concerning the distribution of the population from which it is drawn.27 It has the important prOperty that its shape approaches that cm the normal distribution as the degrees of freedom approach 30 in number. The coefficient, W, is based upon the sum of squares of differences from the means of the ratings and is demon- strated in an example below which shows a high concordance. The expression for the Kendall coefficient is: S W: 1 2 3 12 k (N N) Where S = the sum of squares of differences from the mean, k = the sets of rankings, and N = the number of factors being ranked. The following example Of a high concordance is offered: 179 Ranks assigned to 5 factors by 3 groups Groups (k) Factors (N) l. 2. 2. 2. ,2 A l 2 3 4 5 B 1 3 2 4 5 C 2 1 3 5 4 Sum of ranks = Rj 4 6 8 13 14 Mean of R.'s (z Rj/N) 45/5 = 9 Deviation from Mean (Rj - Z Rj/N) -5 -3 -l 4 5 Deviations Squared (Rj - z Rj/N)2 25 9 1 16 25 Sum of Squares = S 76 S 76 IEIk (N - N) 12.x 9 (125 - 5) W = 0.845 expresses the degree of agreement among the three groups in ranking the five factors. For perfect agreement, W = 1.00. The significance of any observed value CE W may be tested by determining the probability associated With the occurrence under Ho Of a value as large as the S With‘which it is associated. A table of critical values of S is offered in Siegel as Table R.28 Reference to Table R reveals that the S = 76 associated with an agreement W'= 0.845 is significant at a 1 percent confidence level. Thus, the null hypothesis that the observers in the example rank the samples similarly can be accepted with a 99 percent cer- tainty that the indicated agreement is not caused by chance. 180 Test Statistics for Hypotheses 6 Hummhll The chi-square distribution is used in tests of independence of classification for Hypotheses 6 through 11. values from the questionnaire replies were assembled for cross classification of data in contingency tables. The expression for the chi—square reference distribution is, 2 where fo is an observed frequency, and fe is an expected theoretical frequency. The degrees of freedom is determined as df=(r-l) (c-l) where r the number of rows in the contingency table and c = the number Of columns in the table. For a 2 x 2 contingency table with 1 degree of freedom, the Yates correction for continuity is used to reduce the com- puted value Of chi-square as follows: where lfo - fe is the absolute difference between f0 and fe. 181 Test Statistics for Hypotheses l-B Through 5 —B Testing of Hypotheses l-B through 5—B is concerned with variances in mean values a. determined on 20 factors, by b. a large number of observers, which are drawn from c. several pOpulations sectors. Multivariate analysis of variance is a logical technique if parametric methods can be justified.30 Variances are determined from sums of squares Of deviations from group means. The relationship for the total variance is given by where V total variance, t Vb = between group variances, and . . . 31 Vw = Within group variances. A test involving these variances is the F ratio, where The F distribution approaches a normal distribution as the degrees of freedom of the sample groups increases. Kerlinger points out that in the use of parametric Statistics, two assumptions are made: (1) the samples have been drawn from pOpulations which are normally distributed, his 182 referred to as the assumption of normality, and (2) in analysis of variance, the variances within the groups are statistically the same, referred to as the homogeneity of variance. He goes on to state, The evidence to date is that the importance of normality and homogeneity is overrated. . . . Unless there is good evidence to believe that populations are rather seriously non-normal and that variances are heterogeneous, it is usually unwise to use a nonparametric statistical test in place of a parametric one. The reason for this is that parametric tests are almost always more powerful than nonparametric tests. [The power of a statistical test is the probability that the null hypothesis will be rejected when it is actually false.] He further quotes other researchers as follows: . . . the H_distribution is amazingly in— sensitive to the form of the distribution of criterion measures in the parent pOpulation. . . . In a large number of research situations the probability statements resulting from the use ofip and H tests, even when these two assumptions are violated, will be highly accu- rate. . . . It is probably safer—-and usually more effective-—to use parametric tests rather than nonparametric tests.32 A third assumption concerning the use of parametric statistics is that the measures to be analyzed are continu- ous measures with equal intervals. It has been assumed from previous discussion that the intervals on the rating scales are sufficiently equal that the arithmetic manipulations required for H_test are acceptable. With the above mentioned justification for para- metric testing in mind, Hypotheses l-B through 5'3 are tested by multivariate analysis of variance, employing an E test as the test statistic. 183 ThenggelLof §tat iptical Significance a In testing a hypothesis, the procedure is to reject Ho in favor of H1 if a statistical test yields a value whose associated possibility of occurrence under H0 is equal to or less than some small probability symbolized as a (or p), called the level of statistical significance. In statistical decision theory, an a value of 0.05 or 0.01 is Often used. In a normal distribution, these values correspond to i_two and three standard deviations, respectively, or 95 and 99 percent of the values included under the distribution curve. In this study an a = 0.01 is used in rejecting Ho When a nonparametric test is employed because such tests are generally less powerful than parametric tests. An a = 0.05 is used in rejecting Ho when a parametric test is employed. In all cases the probability level associated with the find- ings are reported, indicating the level at which HO may be rejected. Hummary of the Methodology The methodology develOped in this section is briefly recapitulated for the reader's benefit. A questionnaire con- Sisting of four groups of questions is used as the research tool. The first group employs an equal appearing interval semantic differential scale for evaluation of the relative impOrtance of factors reported to be retarding the growth of containerization in domestic surface freight shipments. The “'4‘ ‘u out“- IAII he I'UI ly‘l r..£ IAI4 .I' a N‘- .- L24 184 second group of questions requires a "Yes-No" choice and is designed to determine the relationships of existing contain- erization practices. The third group establishes the sample sector of the respondent. The last item on the question- naire is an Open ended question concerning containerization retarding factors. The populations sampled include Freight Users, Freight Carriers, and Containerization Equipment Suppliers. The first two groups have sample subsets. Samples were drawn randomly and of sufficient size to meet the require- ments of the statistical tests employed. Hypotheses l-A through S-A are concerned with the ranking of the factors according to importance from the first set of questions. Hypotheses l-B through 5-B relate to differences in levels of importance assigned to any given factor from the first set Of questions. Population segments are parallel in the two sets of hypotheses. Hypotheses l-A through 5~A are tested with the non- parametric Kendall coefficient Of concordance,W,and a chi— square distribution. The level of a used in rejecting H0 is 0.01. Hypotheses l-B through 5-B are tested with the para- netric multivariate analysis of variance related to angg distribution. The level of a employed is 0.05. Hypotheses 6 through 11 are tested for independence Of classification through the use of contingency tables and 185 a chi-square distribution. For this nonparametric test an a value of 0.01 is used in rejecting Ho. CHAPTER IV--FOOTNOTES 1F. N. Kerlinger, Foundations of Behavioral Research (New York: Holt, Rinehart and Winston, 1964), p. 160. For a simple develOpment of the subject of sample size see C. T. Clark and L. L. Schkade, Chapter 9-—"Sample Distribution and Estimation," Statistical Methods for Business Decisions ' (Cincinnati: SouthHWestern Publishing Co., 1969). 2Sidney Siegel, Nonparametric Statistics for the Behavioral Sciences (New York: McGraw-Hill Book Co., 1956), p. 26. 3R. Ferber and P. J. Verdoorn, Research Methods in Economics and Business (New YOrk: The Macmillan Co., 1962), p. 239. 4L. L. Chao, Statistics: Methods and Analyses (New York: McGraw-Hill Book Co., 1969), p. 292. 5"The Fortune Directory of the 500 Largest Corpora- tions," Fortune, May 15, 1969, pp. 166-184. 6"The Fortune Directory of the Second 500 Largest Corporations," Fortune, June, 1970, pp. 98-125. 7Dun and Bradstreet, Reference Book of Transporta— tionl Spring 1970 (Washington, D.C.: Trinc Transportation Consultants, 1970), p. 507. 8"1970 Routing and Transportation Information Directory," Handling andyphippinq, February, 1970. pp. 41—49. 9Random numbers were obtained from "A Table of 14,000 Random Units," in S. M. Selby, ed., Htandard Mathe— matical Tables (Cleveland: The Chemical Rubber Co., 1967), pp. 565-568. Numbers beginning on page 567 were used. The last three digits of five digit numbers determined picks from the two Fortune listings. Sample units were drawn until each subcategory had been filled. 10"Classification of Companies by Industries and Products," Moody's Industrial Mehuel--July, 1969 (New York: Moody's Investor's Service, Inc., 1969). pp. a172-al73. 186 187 llMoody's Transportation, March 27, 1970 (New York: Published semidweekly by Moody's Investor's Service), pp. 1737-1747. 12 The American Association of Port Authorities, Inc.-+Handbook 1970 (Washington, D.C.: AAPA, 1970). pp. 45-67. 1'3Jane's Freight Containers, pp. 449-476, 501-562. 14 Paul L. Erdos, Professional Mail Surveys (New York: McGraw-Hill Book Co., 1970) , p. 5. Additional material on mail surveys may be found in such writings as D. J. Luck, IL.G. Wales, and D. A. Taylor, Marketing Research (Englewood Cliffs, New Jersey: Prentice-Hall, Inc., 1970): also R. Ferber, D. F. Blankerts and S. Hollander, Jr., Marketing Research (New York: The Ronald Press, 1964). lsIbid.. pp. 37-38. l61bid., Chapter 11, "Incentives." 17F. N. Kerlinger, p. 514. 18 J. P. Guilford, Psyghometric Methods (New York: McGraw-Hill Book Co., 1954), Chapter 11, "Rating Scales," contains an extensive discussion on the subject. 19C. E. Osgood, G. J. Suci, and P. H. Tannenbaum, .The Measurement of Meaning_(Urbana, Illinois: University of Illinois Press, 1957), p. 26. 201bid., p. 72. 211bid., p. 85. 22The Official Directoryyof Commercial Traffic Executives (Washington, D.C.: The Traffic Service Corp., 1969). 23 R. E. Kirk, Experimental Design: Procedures for the Behavioral Sciences (Belmont, California: . Cole Publish- lng Co., 1968), p. 25. 24C. E. Osgood, p. 29 and p. 146. 25$. Siegel, p. 25. 26 See S. Siegel, pp. 298-328 for the develOpment of the Kendall coefficient of concordance, W. 188 27See C. T. Clark and L. L. Schkade, pp. 424-451 for a'discussion of the chi-square distribution as applied to nonparametric statistics. "Table R--Tab1e of Critical Values of 28$. Siegel, 286. S in the Kendall Coefficient of Concordance," p 29C. T. Clark and L. L. Schkade, pp. 424 and 433. 30D. F. Morrison, Multivariate Statistical Methods (New York: McGraw-Hill Book Co., 1967) . A comprehensive treatment of multivariate analysis. See especially, Chapter 5, "The Multivariate Analysis of Variance," pp. 159-198. 31F. N. Kerlinger, pp. 187-194. CHAPTER V RESULTS OF THE RESEARCH Mechanics of the Hypotheses Tests Keypunched cards were prepared in coded form to represent the information contained in each returned ques— tionnaire as described earlier in the section, "Mailing and Processing of the Questionnaire." The cards were then used as data input with suitable available computer programs for testing the hypotheses. Facilities of the Michigan State University Computer Center were used for processing the pmograms. .Both the Control Data Company CDC 3600 and CDC 6500 Computers were used. The multivariate analysis of variance tests for Hypotheses l-B through 5-B were performed through the use of Jeremy D. Finn's Multivariance Program, as supplied by the Office of Research Consultation in the College of Education at Michigan State University.1 The program has many capa- bilities, but only those of direct concern to the study will be mentioned. An exact least squares method of analysis is employed. For tests of hypotheses, a stepwise univariate and multivariate multiple regression analysis is performed to determine the effects of the individual independent 189 190 variables. Also, a univariate and step—down multiple corre- lation analysis is provided to determine the relationship between the independent variables and the individual depen- dent measures. The F-ratio for the multivariate test of equality of mean vectors is presented, as well as the level of statistical significance, a. The matrix of cell means related to the variables is also listed. Pertinent sections of the computer printout are found in Appendix B, Tables 41- 49. The tests Of independence of classification for Hypotheses 6 through 11 were develOped through the use of the NUCROS Program provided by the Computer Institute for Social Science Research (CISSR) at Michigan State Univer- sity.2 The program produces cross-classification or con- tingency tables in two, three, or four dimensions. Chi- square values and percentage tables (one by columns and one by rows) are produced. Relevant computer printout sections are found in Appendix B, Tables 50-56. An Operating version Of a program for Kendall's coefficient Of_concordance,W,was not available for testing Hypotheses l-A through 5-A. Mean values for the ranking of factors were obtained from the output of Finn's Multivari- ance Program. Group rankings were determined manually and‘ Kendall's coefficient, W, was derived from the sum of squares, S, in the manner described earlier under the "Test Statistics" section. A sample calculation is presented in Table 28-c. 191 In testing Hypotheses l-A through 5-A the value of chi-square is directly related to Kendall's W. Therefore, the null hypothesis of similar ranking is rejected when chi- square is less than the critical value. Hypotheses 6 through 11, concerning independence of the variables, are rejected when chi-square is larger than the critical value. The F value increases as the between group variances in- crease. Therefore, the null Hypotheses l-B through 5—B are rejected when the P value is greater than the critical value. Results of Tests of Hypotheses l-A,B ThrOLgh S-A, B Hypothesis l-A and Hypothesis l-B will be again prOposed here for ready reference. Hypothesis l-A (HO): Factors inhibiting growth of domestic surface freight containerization are ranked in similar order, based upon collective evaluations of representatives of the following sectors: (1) potential or actual users, (2) carriers, or (3) containerization equipment suppliers. Hypothesis 1-B (HO): Comparing evaluations of ppy oneygiven factor said to be inhibiting growth of domes- tic surface freight containerization, there are pp spppisticailysignificant differences in the level 9: importance as seen by representatives of the following sectors: (1) potential or actual users, (2) carriers, or (3) containerization equipment suppliers. 192 The same population subgroups are being considered in Hypotheses l-A,B. Hypothesis l-A concerns the differ- ‘ences in ranking of the list of factors according to the within group means. Rejection of the null hypothesis infers that the pOpulation subsectors rank the list of factors in significantly different order. Hypothesis 1-B is subjected to a multivariate analysis of variance test which compares the importance levels assigned to each factor by the population subgroups. The mean value of all evaluations for a given factor by one of the pOpulation's subgroups represents the assigned level of importance. Evaluations are based on the rating scale (1 = Extremely Important, through 5 = Almost NO Importance). Rejection of the null hypothesis infers that there are sig- nificant differences in the relative importance of given factors, as viewed by the pOpulation subsectors. The same parallel structure applies to Hypotheses 2-A,B through 5-A,B, with different pOpulation subsector groupings being considered in each case. .For this reason, results of tests for each null hypothesis pair (A,B) will be discussed jointly. A summary of the tests Of Hypotheses 1-A through 5-A is presented in Table 26. A summary of tests of Hypotheses l-B through S-B is presented in Table 27. Mean values used in all the tests are presented in the computer printout displays in Appendix B. The tables which summarize the 1133 .ao.o u c @ a.om u ax “3.0 u a @ a.om n mx "oases osmsomuaco sous .manumc “Aanomviuflanzvnueocmmnm mo monsoon .mv~ .m :.oumsom1«nu mo mosam> Hmoaueuu mo Tapes .0 canoe: .Hmmmem .mm moauapocuse atom one woman: . 0 Adam HO O m UUQflOH UOZ m.Hm OVm.O owmw HOUOZ "mumwuhmo wv Hm film Hooum3uom o mocmamcou +ummdecm . O seawamcou HO O m uomnmu uOZ m.oo mmh.o mvvm HTQQHLm nummD 0? on 41v . o HamEmnnuooumzuom mo 0 m uomflmm o.o~ ooa.o mmma mmumdnlumpumzuom "Homo . o aamEmunuoHamuom mo 0 m upenom o.m~ mma.o maom wmumaauuoaamumm "How: . o sesamnu.muz .uspcoz mo 0 o m powwow H.0m mma.o moAN mmumqnu.mwz .usccoz ”new: mo.o m bounce uoz . aamsm11.muz manpuso Ho.o m comets «.mm eem.o ommm omens--.cez espouse “new: no on 41m HHmEmnuuocum3uom Hamsmluumaamumm o sesamun.ouz .Esocoz Ho.o m cooflop ooz ~.ms com.o ammo aaesmuu.ocz espouse "pom: mmumqulumoum3uom omumqnuumaamuom o mmumqlu.mwz .usccoz ao.o m cooflou ooz «.mo mam.o «Hem ooppauu.moz espouse "new: me am m-~ nodammsm ucoeaasom . o Hmwuumu so o m cameos ooz m.ms msm.o moon some as snow a1H m codnaooa oumoom 3 mmumsom masouu Godumaseom manna manna om taco m.aamccox Esm mcmmz mxcmm scum cmsounu 41A monocuomhm mo mumou mo mumEEsm .ON THEME 1194 :COMDEQAMDmHQIM .muCHOQ mmmucooumm: .mosam> one: Ca moocouomuan ucmonacmem u .NomIomm .eo .Ieooa ..oo pecans aeoaamno one .moHnt HmoHumEmcumx commemum ..©m .xoamm .2 .m mom scauoonomo .oanms OaummIm mono "cemam>maov v0.0 No.~ codumasmom unmEcuo>oo .ma Ho.o am.m mucmsumo>sH omoa msaumaxm .aa Ao.o me.m musuosuum wumm mumEUMpmcH .va moo.o mm.v omcmrouwucH umcamueoo monsoocmcH .h Hoo.o mm.v mom> .m> onsu ucmaoawwmcH .ma oooo.o ea.m cacmuoomma mcaaoacm .ea mooo.o hm.m o>aumcumuafi 0&0? .OH Hooo.o oa.h u Oeumm I e nuocamucoo cumccmumcoz .H v n ma mmmmmmwwmm moOuomh unappeaccam O mmaueuocuoa uuom aooo.o m cameos eoeo.~ u cases I m use com u moo om u Hmo scape: Hana museum>auasz uOuoz ”mumwuumu av we .mHM mo.o o mmao.a n Owumm I m umeum3uom m noose“ uoz ohm u Nee oo u amp mocmamcoo + toenatm mocoamcoo museum>auaoz mommacm "son: be we mIv no.0 mo.v mcm> m> peso ecoaoamooce .ma No.0 hm.v u Oaumm I m uuommom umauumu noboz MG Road .oH a n ma museum>ecb muOuomm campawacoam o HHmEm m> mmuquIuooum3uom mo.o m uumnwm coon.a u Oeumm I m HHmEm m> mmuquIumaamumm can u «so om n amp aaosm m> omupsuu.mmz .uspcoz oumHHm>auHsz AHmEm m> mmuquI.mmS odomusa "moms me me mIm o nocum3uom mo.o m cameos uoz mcma.a u cases I m soaaouom mmm u men as u Hen .muz .uoccoz mamasm>acasz .mmz espouse "some so me mum no.0 om.m mmmucmlm‘mammmto Metamucoo .m ~o.o am.m possum cams no some .m moo.o m~.m m>aemcuoua< omoa .oa Hoo.o ma.e n oases I m mcp> m> page ucmaoauuoce .ma N n he .mmmmmmmwmm mucuomm unmeawacoem moo.o om uumflmm vmom. u Oauom I m umaammsm ucmEmesqm «mm u so cs n Hmo umauumo oumaum>euasz womb NV av mIH m fiscaowuoa Oeumm m mmoOuO coHumHsmom manna manna 0 ounce umoa meow! m mmlm cmsounu mid mononuomhm N0 mums» NO xumEEsm .hN THQmB 195 tests also indicate the apprOpriate mean value reference tables. Hypotheses l-A,B DevelOpment of the test of Hypothesis l-A is pre- sented in three tables. Table 28-A lists the within group mean values for the 20 factors: Table 28-B rearranges the factors and ranks them within respective pOpulation sectors (lowest mean value is the most important factor: and Table 28-C presents a sample calculation of S (sum of squares), Kendall's W, and chi-square. The basis of the calculations was discussed in the section, "Test Statistics." As indicated in Table 26, with a chi-square value Of 48.3 derived from the comparative ranking of factors by the pOpulation subgroups, the null Hypothesis l-A cannot be ££j£££§g_at a confidence level p = 0.01. This infers that Freight Users, Freight Carriers, and Containerization Equip- ment Suppliers rank in similar order (based upon their collective evaluations) the 20 factors reported to be inhibiting growth of domestic surface containerization. Inspection of Table 28-B indicates the noticeable agreement on the factors, particularly at the tOp end and bottom end 0f the lists. Results of the multivariate analysis of variance test summarized in Table 27 indicate that the null Hypoth- eSiS 1‘3 can be rejected at a confidence level p = 0.002. 196 .Houomm pomuHomEH umoz u a u and: unmzoqm mm as has season as posses ms.m os.m om.~ spam>am amoosuoucH .om henm mm.m om.m msm> .m> coco ucoaoammmcH .ma ma.m mo.m mm.a possumammm Hoomq .ma mm.m nm.~ mv.m manmumoqu moaamflnm .ha mm.~ ee.m oe.~ opooosm awesome Hobos so some .oa em.a >©.H om.a oammmua Hosemucoo women .ma mm.a mh.a mm.a musuoouum mumm mumoomomcH .¢H H@.m mo.m om.~ coHumasmom ucoecuo>oo .ma mm.m No.m so.m manmsmommq ucmscpm>oo mo some .ma ~m.m em.~ ma.m mnsosumm>cH oaoa meanness .Ha mo.~i oa.m mm.m o>eumcuouam umoe .oa mm.~ me.m oa.~ mascaom accesses .m m©.m mo.m ON.~ mommuuonm w wemmmno Hmchucoo .m mm.m NN.N mo.m mmcmLOHODCH Hocamucoo TumoOOOEGH .5 oe.~ oe.m oo.~ cocoonsom cacmpocao assessmuce .o cm.m mm.m oa.m possum some so some .m oe.~ m~.m om.m apaaanamcoommm smausmo oooa>ae .s mm.~ a¢.N om.~ muemocom mo codusoeuumant.m om.m AH.N om.~ muCTETHHsoom ucoEuET>GH .N mv.m ¢H.~ mo.m moccamucou oumocmumcoz .a nomaammsm numenumo muons nHOuomm newsmwoom unmamum mdla meownuomhm mo ammo How mmoam> some mooumtcwnua3_ .4ImN manna 197 .uouomm HomuHOQEH umoz u A umcwxcmmm mm mm boa mHmEmm EH HooEsz om om om possum some so some .m ma ma ma mesmumomma acmecnm>ow mo xomd .NH as ea ma opossum emanate Hobos mo some .oa ha ma ha cmcoHouom menmuoEBO HEUOEHTDEH .0 VA VA ma coHumasmOm ucmEcHo>OO .ma Ha OH ma muewmcmm mo coausoauuman .m HA ha ea mosoaom HmcHEHOB .m o m ma cacmpoomma ocaaoacm .ea v e NH mucmEmHHoUmm ucmEumm>cH .N m 6 ca soaaanamcoomom nonstop oopa>an .4 ma 0 OH mcm> .m> mono ucmHOAMMOCH .ma on as o asam>am Hmoospoucs .om OH ma m O>Humcumuam omoa .oa ma ma a mommunocm cam mammmno Rosamucoo .m m me o musmsumm>ce omoa msaumaxm .HH 0 o m cosmtoumucH Hocwmucoo mumsomcmcH .h m m e mumcwmucou oumccmumcoz .H N H m cannons Hochuooo modem .ma m m A mocmumammm Hoomq .ma H N A ousuosuum comm oumoooomcH .va muowammom mumauumo muons muouomm ucmEmHoom ucmwmum mmIH mammcuomhm no one» How momma msoum sacua3 mo mwouomm mo mcflxcwm .mlmN manna .cmmmuw>m mam mmaam 2198 ao.o u m @ mmENRCmH Ca umcuo HmaaEam mo dIa mamonuomxm powwow uoccmu m.ma u ax u oposchaco u mcm.o 1a I ems m u 3 1a I so x u «x low I ooo.mv m . mm. 12 I mzv ~x.mw mem.o n 3 c n u s moon m . z m cm I z m u x moon u m u dIII I .m w .m w m a me can ca oam amp owe oma moo Ne cm «ma Na mma owe mam me On mma «ma AHIMI I .m. N .m N a 0.5 o.s~I o.e m.ca m.m~I o.e~I m.~a m.s~ m.mI m.e m.aa m.m m.maI m.o~ m.mm m.oI m.m m.aaI m.maI .HIMI I .m .m w n m.am n o~\Omc z\.m w n m.mm m.a m.e~ as c m.s so am mm on me mm ma mm oo ma em om ma .m . . muoaammsm ma m m o ma N a sa ma m ca Na ma m o ea on m Na 4 m acmesasom m m m 6a a m ea ma Na ma ea ma m.o ma om m.o ca 4 m soauumo m.oa m.a ma ma m m.a ca ma 6 o ea a m ea om m.oa ma Na 4 some ma ma ea oa ma ca ma ma aa oa o m e o m a m a a scope mucuumm msIa mammtuoesm so some now 3 m.aampcmx no coaumasUamo .OImm manta 199 The alternate hypothesis (H1) states that there are differ- ences in the relative importance of factors, as indicated by nean values, which are statistically significant. Univari- ate analysis indicates those factors whose means vary significantly and these will now be examined for possible insights concerning the evaluations. Mean values of significant factors from Table 41 are presented below: Significant Factor User Carrier Supplier 19. Inefficient Cube vs. Vans 2.367 2.385 3.072 10. TOFC Alternative 2.285 2.760 2.690 5. Lack of Land Bridge 3.102 3.552 3.345 8. Container Chassis & Shortages 2.265 2.625 2.636 The following inferences can be drawn: 1. The Containerization Equipment Suppliers think the less efficient cube of containers (as Opposed to vans for over—the-road movement) is not as important a factor in inhibiting containerization growth as do the Users and Carriers. 2. The availability of TOFC piggyback is more important as a deterrent to containerization growth in the opinion of Users than it is to the Carriers and Suppliers. 3. There is a spread in evaluation of the lack of a land bridge, with the Users thinking it comparatively most important of the three groups. It should be noted that all three groups ranked the lack of a land bridge as the least important of the 20 factors, 200 yet their differences as to the relative importance on the rating scale are statistically significant. This dichotomy illustrates the point of difference in analysis between Hypothesis l-A and Hypothesis l-B. 4. The contention that shortages of containers or chassis/bogey rigs result in shipment delays is relatively more important to the Users than it is to the Carriers or Suppliers. Additional relationships can be found by further examination of Table 41, but they are not statistically significant. Hypotheses 2-A,B Hypothesis 2—A is concerned with the comparative factor evaluations by representatives of the following Freight User sectors: (1) durable goods manufacturers, (2) nondurable goods manufacturers, (3) retailers, and (4) freight forwarders. Table 29 presents the factor rank- ings develOped by these sectors further broken down into representatives of larger and smaller firms. The null Hypothesis 2-A cannot be rejected at a confidence level of p = 0.01 when rankings of the leggp£_firm subsectors are compared. Hypothesis 2-A cannot be rejected at a confidence level of p = 0.01 when rankings of the smaller firm subsec- tors are compared (see Table 26). This indicates that the type of business activity of Freight Users (among those 2C)1 .HODUOm ucmuaomEH umoz I .comHummeoo now A a "coarsest ma aN ON Eva OHOEEO ca. umgcaz MA ON ON ON OH @H ON wmmuiwum mvCMaH NO XUMQ .m OH OH O OH OH OH ON ON OH Oatmuoommq unoccuw>oo wo xoma .NH ON ON OH OH VH OH OH nH mH uaooasm awHuamU uOuoz mo xUmH .OH m OH ON mH NH O NH vH NH cwocacnom narmumc3o HmOOEumucH .O N a NH OH vH OH OH coaumHsmOm ucOEcwm>oo .MH ea ea ma Na ma ma ma ma weapocom so coaessauomao .m ma m ma ea ea ea m ea ea mosoaom amcasuoa .o e ea O Na 6 ma Na Na ma oatmsmomwa wcaaEacm .ea OH OH mH HH NH O HH e NH mucwEOHHsomm ucwEqu>cH .N O a NH OH O OH NH vH OH xuaaabachQmom amaaamo ooca>ac .v OH NH O «H m NH OH m OH mcm> .m> mono occaonumcm .0H m Na R 6a m aa a suam>am atmospocca .o~ a m m 0a 0a m m m m m>auccaouas omoa .oa NH 5 OH N NH OH O OH 5 mommuaocm Q mammmcu HOCHODCOU .m HH m N O O MH v m O mucmfiumm>cH Oboe mcHumem .HH vH vH OH 5 HH a o m mmcmcoamucH uwchucoo mumsoOcmcH .n O a e O H m v n v muschucou pumccmumcoz .H OH h m N O H m m m unwmuB uwchucoo women .OH O H H v N v N N H mocmumHmOm Nonmq .mH m MH N H m M w H H masuosuum Oumm mumsowcmcH .OH H m m m m N N m maOuomm HHOEO among HHmEm WMHOH wwwmm wwwma ummwowm HHmEm momma am mm MOHHmumm .mwz . w: my: OHnmuDQ o umoam3uom Hocam3uom HOH. u .asccoz usccoz OHn a N z . . 202 considered) does not have a significant influence on their rankings of the importance of factors inhibiting growth of domestic freight containerization. The multivariate analysis test of Hypothesis 2-B shows that it cannot be rejected at a confidence level of p = 0.05. There are no significant differences in the way the business type subsectors of Freight Users evaluate the factors individually in terms of relative importance (see Table 27). Hypothesis 3-A,B Hypothesis 3-A involves the same pOpulation sub- sectors of the User business types as considered in Hypoth- esis 2-A. However, the question is now related to whether the size of the firm in a given business segment has a sig- nificant influence on the relative rankings of the 20 fac- tors. Tests indicate that Hypothesis 3-A can berejected at the confidence criterion level of p = 0.01 when comparing (1) durable goods manufacturers (larger and smaller), (2) nondurable goods manufacturers (larger and smaller), (3) retailers (larger and smaller), or (4) forwarders (larger and smaller). A "borderline" case is that of the durable goods manufacturers, where Hypothesis 3-A cannot be rejected at a confidence level of p = 0.05. (See Table 26 for test summaries and Table 29 for factor rankings.) The alterna- tive hypothesis infers that the geiative size of a given business type of Freight User does influence how representa- tives view the containerization inhibiting factors. 203 The multivariate test Of Hypothesis 3-B suggests that it pan be rejected at a confidence level of p = 0.05. The factors exhibiting significant differences (according tO'the univariate analysis) will be examined in light of the mean values of the respective population subsectors. The values obtained from Table 43 are presented below. For convenience in tabulation, labels for the factors are used as follows: 16. Lack of Motor Carrier Support MTRSPT 19. Inefficient Cube vs. Vans LOCUBE Durable Mf . Nondur. Mfg. Retailer Forwarder Factor .prge Small Large Small Large Small Large Small MTRSPT 2.689 2.636 3.000 2.500 3.047 3.000 3.333 2.066 LOCUBE 2.172 2.863 2.333 2.555 2.095 2.500 2.250 2.200 From the above it appears that lack of motor carrier support seems much more important to small forwarders than to larger forwarders: the same relationship carries for the nondurable manufacturers. In a reverse situation, the inefficient cube of containers as compared to over-the-road vans is more important to all the larger firm groups except the forwarders, who are indifferent. Large lot shipments requiring high cube are likely to be of greater concern to larger firms. Hypotheses 4-A.B The.Freight User population can be segregated accord— ing to major freight activity, viz., shippers, consignees, 204 shipper and consignees, and freight forwarders. The hypoth- eses test results parallel those for the Freight User pOpu- lation segregated according to business activity if relative size of firms is not considered. From the rankings of importance of factors listed in Table 30, Hypothesis 4-A gpppot be rejected at p = 0.01. Within statistical signif- icance the Freight Users rank similarly the relative impor- tance of the 20 factors said to be retarding growth of domestic surface freight containerization. The multivariate analysis (Table 27) suggests that Hypothesis 4-B cannot be rejected at a confidence level of p = 0.05. Differences in estimated relative importance of the factors considered individually are not significant when viewed by Freight Users segregated according to their freight activity. Hypotheses 5-A.B The Carrier population is segregated according to the mode served, including motor, rail, air, and marine carriers. Port authorities have been included because of their activity at the important land/marine interface. It might be eXpected that these diverse subgroups would rank the 20 factors differently on the basis of their respective collective evaluations. However, the Kendall's W test of the rankings in Table 31 indicates that Hypothesis 5-A cannot be rejected at p = 0.01. This means that within statistical significance the various carrier subsectors rank similarly 2C15 .cowHamOEoo Mom o .HOuomh ucmuHOOEH umoz n H "Occhwmm NN ON ON OO NvH OHmEmm CH Hooeoz OH ON mm NH ON ON OOOHHO coma mo Roma .O ma ma ea ma ma nanosecond ucoecagoo mo x23 .ma OH N OH OH OH anomasm umHuamU uOuOZ mo xoma .OH OH H NH vH NH cmooHouom chmamcso HOOOEHODEH .O O OH OH OH OH coHDMHOOmm ucwficuo>oo .OH NH O ON OH OH muHOOEOO mo coHusoHuumHQ .m NH O OH vH szOHom HmcHEamB .O aa aa ma ma ma cacmpooooa ocaasacm .ea HH O OH O NH mu:mEmuHoUOm OCOEOOO>CH .N O NH OH OH OH NDHHHQHOCOOmOm umHaumU OOOH>HQ .v NH NH O OH OH mam> .m> Togo ucmHoHummcH .OH OH OH O N O NuHm>Hm HOOOEEOOCH .ON 0 ca a aa m o>aumssmuaa omoa .oa mH O e O N mOOmuuocm O mammmco HOchucou .O v O OH O O mucmEumo>cH Duos OcHumeO .HH mH O O O O OOcmcououcH uwchucOU mumsOOOMCH .N N O O m e mHOsHmucoo Oumocmumsoz .H O N N N m oHuwmue HochucOU Numem .OH H H H v H oucmumHmOm Honmq .OH N N m H H masuusaum mumm mumsOOOOCH .OH muopumzuom mOOCOHmcou mOOCOHmcoo mummOHcO momma maOuomh \meooficm surnames dev mHmonuomhm mo umou How memos msoaO cHnuH3 an muouomm mo OcchOm .Om OHnt 1206 .EOmHamOEOO Homo aOuomm ucmuuomeH umoz u H "Occhmmm ma ea ma an an om oassmm ca posses ON ON om om ON on omcaum coma mo xoma .O OH HH OH OH OH OH matmuOOmOH ucmecum>ow mo xomH .NH O NH OH NH NH OH EOOOHQHOO ermuoc3o HmOOEaOucH .O aa Na aa ma ma Na mascaos amcassma .m OH NH O OH OH OH unommsm uoHuamo Mono: mo xumH .OH OH OH OH N OH OH O>HumsHOuH¢ umoe .OH oa ma m ma Na Oa coaumasmom scotcam>oo .ma OH OH O OH OH OH mmOmuuonO a mHmmwno Hmchucou .O ma m ca m ma ma ecosnmo>ca omoa mcauaaxm .aa o N Na Na oa aa Nuam>am annotaouca .om NH HH N NH O OH muHOOcOO mo coHusoHuumHa .m NH OH NH O O O mcm> .m> mono ucoHUHOOOCH .OH N a ma aa m m oasmuoomoa ocaaEaam .Na m N O O NH O NOHHHoncommom uOHuumU OOOH>HQ .O N O OH N N O mOcmLOHOHCH umchucoo OumDUOOOEH .N NH O NH O N O muochucou Oumccmumcoz .H O O m m N O nanoseuHsoom useEumO>cH .N O O O O O m mucoumHmom noomH .OH H N H O N N masuusuum mama oumoowcmsH .OH O H O H H H UHOOOHB nochucoo Numem .OH mOHuHuonusm sad ocHumz HHmm Hobo: maOHuamU maOuomm upon E m¢IO mHmOnuomNm No one» qu memos msouO cHnuH3 No mucuomw mo Ocaxcmm .Hm OHQOB in D‘ '(‘l 207 the 20 factors said to be inhibiting domestic container- ization. Despite the similarity in rankings, the multivariate analysis (Table 27) suggests that Hypothesis S-B of no differences in evaluatiOns of given factors by the Carrier population subsectors can be rejected at p = 0.0001. There are eight individual factors where the differences in evaluations of levels of importance are significant. The mean values of significant factors listed in Table 48 are abstracted in Table 32 following for convenience in exam- ination. All sorts of nuances can be read into the relation- ships presented in Table 32. Only the major points will be presented in the analysis for the sake of simplicity. As an editorial comment, it appears that most of the differences in collective evaluations can be logically eXplained in terms of the relationships of the various carrier subsectors to their involvement in containerized freight traffic. Dis- cussion of the significantly different evaluations follows: 1. Nonstandard Containers: The problem appears most important to the motor carriers, followed by rail and air, with marine carriers least concerned. 2. TOFC Alternative: The rail carriers see this factor as more important in inhibiting containerization growth than do representatives Of the other modes. 3. Shipline Leadership seems most bothersome to the motor carriers, is acknowledged by the port 208 .Houomm OsmuHOOEH one: u H “Occhwmm aoe.m mmm.~ oom.a eaN.N omo.~ coapmasoom pcmsspm>oo .ma NOm.m OON.N OOO.m OMN.N mOm.N mucmEumm>cH OOOB OcHumem .HH HOO.H OHN.H mmH.H OOO.N HNH.N OHEOOOHOO oumm OOOOOOOOGH .OH OOO.H HNO.N OON.m OOH.N HNH.N OOcmtoaoucH HOchucou OOOOOOOOGH .N NOO.N HNO.m OOH.m OON.N OOO.H msm> .m> mooo ucmHOHOOOGH .OH mma.~ OaN.m ooo.m oes.m coo.a caaosmomoa oeaamacm .Na OON.m HNO.m OOO.N HON.H OHO.N O>HumcaouHm Oboe .OH OOH.m OOO.N OOO.N OOO.N OHO.H muwchusoo oumocmumcoz .H meuHH0£uo¢ HHN mcHamz HHmm Hobo: mmsHm> COOS OGOHOOOHQ uaom NHucmoHOHcOHO nqu muouomm mmIO mHmmnuomNm mo umOu EH OHOOOmm OsmonHcOHm mo mOOHm> COOS .Nm mHomB 209 authorities, and is seen as relatively unimportant in inhibiting domestic containerization growth by the marine carriers (logical). As expected, the inefficient cube of containers vs. vans in over-the-road movements is most important to the motor carriers, followed by the rails, and not acknowledged by the marine group. Shipline leader- ship has been the major driving force in design and utilization Of containers and this reflects in dis— satisfaction by motor carriers over nonstandard and comparatively inefficient containers for over-the- road use. The_port authorities are probably most sensitive to inadequate provisions for container interchange, since the problem (as far as carriers are concerned) is most evident at the docks. The marine group owns a large share Of their containers, so are least con— cerned about this factor. The problems Of rate structure are highly important to all sectors, but "Extremely Important" to the marine sector in inhibiting domestic containeriza— tion growth. This evaluation may reflect recent concern over rate wars. Motor, rail, and air carriers are in agreement on the importance of existing TOFC investments, whereas marine and port authorities believe this factor is relatively less important. 210 8. Government regulation is of greatest concern to the marine sector in the comparative evaluations and this concern is mirrored to some extent by the port authorities. In the overall view of Table 32 the marine carriers (with the exception of rates and government regulation) appear less concerned about the importance of the factors considered than do the other modal representatives. Results of Tests of Hypotheses 6 Through 11 The remaining hypotheses have been prOposed in develOpment of the relationships between firms' use of TOFC piggyback, domestic freight containerization, foreign freight containerization, and ownership of containers. Information concerning Freight User firm size, type of business, and freight activity was correlated with "Yes-No" answers to the following questions: 1. Does your firm ship or receive trailer-on-flatcar (TOFC piggyback) freight in domestic trade? 2. Does your firm ship or receive containerized freight in domestic trade? 3. Does your firm ship or receive containerized freight in foreign trade? 4. If your firm does ship or receive containerized freight, do you own most or all Of the containers you use? One additional question was asked to cover the pos- sibility of influence on containerization practices. It was, 211 5. Regardless of your freight practices, are some of your goods deemed containerizable? Of 164 replies to this last question, only four respondents indicated that their goods were not containerizable. Obviously, this is not an important factor, percentagewise, among the 37 respondents who do not use containerization in either domestic or foreign shipments. Results are summarized in contingency tables which follow the discussions. Chi-square values are calculated according to the method presented by Chao for tests of independence of variables.3 Calculated chi-square values Which are greater than the critical values for a given confidence level, p, indicate that the Observed cell numbers are significantly different from the expected cell numbers. A hypothesis of independence of universe prOportions may be rejected under these circumstances. Where a 2 x 2 contingency table is develOped (with one degree of freedom) the Yates correction for continuity is applied. Refer to Table 33 following for a sample calcu- lation. ApprOpriate COpies of computer printout sheets are included in Appendix B. ISEEiof Hypothepis 6 Hypothesis 6 (Ho): The use of containerization by firms in domestic shipments is statistically independent of their use of containerization in foreign shipments. .OO.O u m um mmHomHum> cmo3uoo OOCOOCOOOOOH O0 om uomnmu coo “HO.O n m up mmHomHam> smm3umo OUCOOOOOOOEH Oo om uomflmu uoccmo c O + n o + m Hmuoe NO.O u x a HHHHV HNOV HNOV AOOV u x N NHN\OOH I _OHxOO I NOme_HImOH N o + o O o w ao+cv lo+ov ao+mv 1n+mv I Nam\c I _on I om_Oc I ax b + m n m x umonHoO mm Hmuoa m N Omusmeoo mH momsOmIHso Omuomuuoo one .OOHHOOO mH muHocHucoo H0O coHuowaaoo .moumw men 212 moa aaa No mm om mm Hmmmw no» mo momaOmO one mamn3 .OHomu NOCOOEHOCOO N x N m CH .H u EOOOOHO OHQOB wocmummmm mozmmzmmeZH m0 Emma MONDOmIHmU mm Hmmmm ma mm? Nm mm mm moons» EOHOHOO EH prOHmum OTNHHOEHOOGOO 0>Hoomu no OHsm EMHO H50» moon mmOmHu oHummEoo CH ucOHmam OONHHOEHOOOOU O>HOOOH Ho OHnm EHHO H50» moon O nHmmcuomhfl MO ummu mumsvaHnu new mHoOu NUGOOCHOCOU .mm OHQmB 213 A 2 x 2 contingency table summarizing the answers to the two questions relating to this hypothesis is presented in Table 33. The relationship between containerization by firms in domestic and foreign shipments is borderline on the basis of a chi-square value of 4.02 with one degree of free- dom. The hypothesis cannot be rejected at a confidence level of p = 0.01, but it can be rejected at p = 0.05. Examination of the "Yes-Yes" block indicates that the cell number of observations is somewhat greater than might be expected when the totals of all replies are considered. On the basis of the results of the test of Hypothe- sis 6 there is a weak justification in prognosticating that further growth of containerization in foreign shipments will be accompanied by growth of containerization in the domestic freight sector. A COpy of the computer printout from which Table 33 is derived is found in Appendix B as Table 50. Test of Hypothesis 7 Hypothesis 7 (HO): The use of containerization by firms in domestic shipments is statistically independent of their use of TOFC (Trailer on Flatcar) piggyback. The distribution of replies relating to the hypothe- sis are presented in a 2 x 2 contingency table in Table 34. The chi-square value of 0.482 indicates that the hypothesis of independence between the use of domestic containerization 214 .OO.O n O um moHomHam> comBOOo OOCOOEOOOOOH mo om OOONOH uoccmu Noa oma S cm 3 ON Hedda. mow Nm HH HN mm NO0.0 HOHOH mow swoops oaumoaoo ca occamsm laces INOOHO Omoev HmoumHOIOOIHOHHmHu O>HOOOH no OHcm EMHO woo» moon H x N moons» oHumoEoo CH utOHOHO OONHHOOHOOCOU O>Hmoma no mHnm EHHM H50» moon N mHmonuommm mo ammo mumsvaHno How mHnmu mocmOcHucoo .Om OHQOB 215 and TOFC by firms cannot be rejected. Use of TOFC does not significantly influence firms to use domestic containeriza- tion. The apprOpriate computer printout is found in Appendix B as Table 51. The computer program develOps and prints the row and column percentages as well as cell fre- quencies. The chi—square value given in Table 51 is higher than the one presented above because the computer program evidently does not use the Yates correction. However, the decision to reject the hypothesis is not changed with the higher chi-square value in this case. Test of Hypothesis 8 Hypothesis 8 (HO): The practice of containerization by firms in either domestic or foreign shipments is statistically independent of their ownership of con- tainers. Replies relating to tests of this hypothesis are presented in two 2 x 2 contingency tables, one for domestic shipments and one for foreign shipments. Only 8 of the 136 respondents indicated that their firms own most or all of their containers so the calculated chi-square values are not meaningful. Intuitively, the hypothesis of independence of use of containers in domestic or foreign shipments and ownership of containers cannot be rejected. The numbers are shown in Table 35. 216 X .mHHwo NOO O N OOH mO OO O O m ONH OO OO HmuoB mm? mm :mm%: CH. moons» cmHmaow CH usOHmHO OONHHOEHOOEOO O>Hmoma no mHsm EHHO H50» moon mamflEoc HHmEm O0 mmsmomo HON0.0 OOH OO O O ONH NO amboa mm» H x N GO HOMOCHCOOE DOC mamsvaHnU amuoa mow momma» UHumweoo CH usOHmam OONHaOchucoo O>Hooma co chm EHHO ago» moon News 50» mamchucoo one mo HHm Ho umoe :30 50» 0O .OSOHOHO OONHHOOHOOCOO T>HOOOH Ho OHsm mmoo EHHO MOON OH O mHmocuomhm mo umou OHOOOOIHso How mOHomu NOCOOGHOGOU .Om mHomB 217 The questionnaire confirms the fact that few Freight Users own their containers. They are leased from or pro- vided by carriers or obtained from leasing firms. This situation may partially explain the ranking of the "Invest- ment Requirements" factor as No. 12 by Freight Users as compared to No. 4 in importance by Carriers in Table 28-B. Test of Hypothesis 9 Hypothesis 9 (HO): The use of containers by Freight Users in either domestic or foreign service is statisti- cally independent of the type of business in which they are engaged. The relationships between containerization practices and the Freight User type of business are presented in two 2 x 4 contingency tables in Table 36. The chi-square value of 9.230 with three degrees of freedom indicates that the hypothesis of independence of domestic containerization and type of business cannot be rejected at p = 0.01 but can be rejected at p = 0.05. The high chi-square value is contrib— uted to primarily by the durable goods manufacturers. They report only about two-thirds the activity in domestic freight containerization that might be expected on the basis of the total sample distribution. The nondurable goods man— ufacturers, retailers, and forwarders are almost evenly divided between those who do and those who do not use domestic containers. 218 .mo.o n m um moanMHum> cmmBqu mocmpcmmmvcH mo om uomflwu uoccmo voa VN mm hm Ah HmuOB NHH 5H mm mm mv mm? mm N OH 0 mm mm Hmuoe umUHmBHom Hmaflmuwm .mwz .uspcoz smwz .HSQ .Ho.o n m um moanmflum> cmmzuon mocmpcmmmch mo om powwow uOCCmU .mo.o n a pm moanmaum> cmm3umn mocmpcmmmpcfl mo om powwow emu Hoa mm mm mm on Hmuoe om ma ma ma om mm% mm 3 2 ma om olz Ohm.a H x mmpmuu .mmflwmmw GM unmwmnm possumsamusoo m>flmomu no aflnm Sham Ado» moon 0mm.m n x moons» owummeom CH unmamum pmNHHmCHmucou m>wmomu Ho manm EHHM H50» moon Hmuoe Hooumsuom Hmaamumm .mmz .Hspcoz .mmz .Hsn Euwm mo mama m manoeuomhm mo ummu mumsvmlwno How moanmu mocomcflucoo .om manna 219 In foreign shipments the chi-square value of 1.976 indicates that the hypothesis of independence of container- ization and type of business cannot be rejected at p = 0.05. Roughly, twice as many firms use foreign containerization as those who do not in each business category. The relationships of both business type and size were developed in a two-way analysis by the computer program. It required eight tables of computer output. Only one table is included as representative of the hypotheses tests in Appendix B as Table 53. Test of Hypothesis lO Hypothesis 10 (HO): The use of containers by Freight Users in either domestic or foreign service is statistically independent of the relative sizes of the businesses. The hypothesis is tested with four 2 x 2 tables related to domestic freight and four 2 x 2 tables concerning foreign shipments. Each of the durable goods manufacturer, nondurable goods manufacturer, retailer, and forwarder sec- tors is tested at larger and smaller size classifications in Table 37. The chi-square values indicate that the hypothe- sis of independence between domestic container usage and size of firm cannot be rejected at p = 0.05 for any type of firm. 220 Ho.o u m Ho.o u m 0 02 oz mm» mow mmo.o u a pm pmuoman on m emu moo.m Nva.m mon.n www.ma n mx commasoamu ma Ha NH om ma ma mm mm Hmuoa mmpMHu HH 0 m 0H 0H ma 5H mm mmw cmHmHom an unmnmum pmNHHochucoo 0>HmomH m m w v m H Hm m mm no munm anew snow mmon am am .elm .mm .elm .3 .elm .fl HmpHm3H0h HmHHmumm .mmz .Hsmcoz «wmz .Hsa oz oz oz oz mmo.o M Q um pmuommmH on 0m Gmo Hmo.a mmw.m moo.a mmm.o u «x nonmasoamo NH AH NH om ha ma mm mm Hmuoe mmpmHu m m m NH 5 AH m as mm» ouummsoc an pnmnmuu poNHHmchucoo m>HmomH v o m m 0H m mm Hm mm H0 chm EHHM H50» moon .sm .mu .Em .mq .sm .mq .Em .mq HmpHm3Hom HmHHmumm .mmz .Hspcoz .mmz .Hsn EHHh mo mNHm can make mHmmsuomhm mo umou mHmsvaHno How moans» mosmmcHucou .hm manna +2 ‘1 221 In the case of foreign containerization, chi-square values indicate that the hypothesis of independence of rela- tive size can be rejected at p = 0.01 for both the durable and nondurable goods manufacturers. The hypothesis cannot be rejected at p = 0.05 for retailers or forwarders. Use of containers in foreign service is significantly greater among the larger firms in the two manufacturing sectors than among their smaller counterparts. More of the larger forwarders than might be expected reported that they do not engage in foreign containerization. However, these respondents may not engage in any foreign freight forwarding activity. Test of Hypothesis ll Hypothesis 11 (HO): The use of containers in either domestic or foreign service is statistically independent of the type of Freight User activity (shipper, consignee, shipper and consignee, or forwarder). The hypothesis is tested with two 2 x 4 contingency tables as shown in Table 38. The chi-square value of 2.073 indicates that the null hypothesis of independence of con— tainer usage and freight activity in the domestic area gggnpt be rejected at p = 0.05. Likewise, a chi—square value of 1.030 signifies that the hypothesis cannot be rejected at p = 0.05 in the case of foreign shipments. With the exception of a higher than expected usage by forwarders in domestic shipments, all of the cell observations are 222 O .mo.o n m um mmHQmHHm> cmmBHmQ mocmpcmmwch mo m Hommmvamdmmw omo.H H Nx Ned VN mm mm no Hmuoe moCMHu H3 2 om S 3 3» JIIIIc Hmuom 5. £33m pmNHHmchucoo 0>HmumH av n m m om mm H0 chm EHHm H50» moon Hmuoe prHm3Hom mmcdesoo mmeHmCOU HmmmHnm w HMQQHnm .mo.o H m um mmHQMHHm> cmm3umn mocmpcmmmch Mo on Homth Housmo muo.m n Nx mma mm mm mm mm Hmuoe mwpmHu mm ma OH OH mm mm» UHHmmEoc CH uanmHm pmNHHmGHmucoo m>HmowH om S 3 3 mm mm no 9:3 53 mac» 305 Hmuoe HmpHm3H0h mmcmHmcoo mmeHmcou Hmmchm m. HmmmHnm »uH>Hu0m HmmD uanmHh mo mm»a Ha mHmmnuom»m m0 ummu 0Hm5vaHco How modem» »ocmmsHucoo .mm manna 223 close to what might be expected on the basis of sample distributions. One of the four computer printout tables which was used to develop the contingency tables is included in Appendix B as Table 55. Tests for Biases in the Questionnaire Survey Biases in the Order of Questionnaire Factor Listing The respondents to the research questionnaire were asked to indicate their estimate of the relative importance of each of twenty factors said to be inhibiting growth of containerization in domestic surface freight shipments. The possibility exists that the order in which the factors are listed can bias the survey results. For example, the first- listed factors might be evaluated as of higher importance when compared to those appearing farther along in the questionnaire. In order to test listing order bias the sequence of factors was reversed in most of the questionnaires that were sent out with the follow—up mailing. Whereas the factor, 1. NONSTANDARD CONTAINERS was first in the original mailing (Form I), and the factor 20. INTERMppAL RIVALRY was last, the whole list was inverted (Form II). The question on intermodal rivalry became the first one in the follow—up mailing. The punched cards used for data input in the 224 computer programs were coded to identify which form was returned. A comparison of the replies from the two forms is shown in Table 39. The factors are ranked by within group means, as had been done in testing Hypotheses l-A through 6-A, and Kendall's coefficient, W, was determined. On the basis of the chi-square value = 35.0 and degrees of free- dom = 19, the hypothesis of differences in rankings for the two lists can be rejected at p = 0.0l+. Five of the first six ranked factors appear at the top of both lists. Four of the last six factors appear at the bottom of both lists. However, there is some indication of the possible effects of list reversal: Factor 20 (Intermodal Rivalry) moved from 13 to 8th place in relative importance and Factor 3 (Distri— bution of Benefits) moved from 7th to 18th place in Form II results. Overall, the displacements were not sufficient to be considered significant. Differences in the populations comprising the two questionnaire form sectors could have affected the test results. Since there were only 44 replies used for each type form received after the second mailing, segregation into respondent activity sectors would have resulted in sample groups too small to be meaningful. The test which was performed can be used to indicate with some degree of assurance that the order of listing of factors was not an important bias in the results Obtained. 225 Table 39. Ranking by within group means to test bias of factor listing ordera Initial Reversed Factors Form I Form II 14. Inadequate Rate Structure 1 1 15. Empty Container Traffic 2 1 2. Investment Requirements 3 7 7. Inadequate Container Interchange 4 6 1. Nonstandard Containers 5 4 18. Labor Resistance 6 3 3. Distribution of Benefits 7 18 17. Shipline Leadership 8 13 4. Divided Carrier Responsibility 9 10 19. Inefficient Cube vs. Vans 9 l4 6. Intermodal Ownership Forbidden ll 14 8. Container Chassis & Shortages 12 8 20. Intermodal Rivalry 13 8 11. Existing TOFC Investments 14 13. Government Regulation 15 16 9. Terminal Holdups 16 10 12. Lack of Government Leadership 17 20 10. TOFC Alternative 18 10 16. Lack of Motor Carrier Support 19 17 5. Lack of Land Bridge 20 19 Number in Sample 44 44 Sum of Squares = S = 2446 Kendall's W = 0.920 x2 = 35.00 Can reject hypothesis of differences in rankings<§ p = 0.01+ —_ aRanking: 1 = Most Important Factor. |fz ltx) 226 Biases in Replies to the Fgllow-Up Mailing Students of research by questionnaire comment that replies to follow-up mailings can be biased when compared to results of initial mailings. Differences in the level inter- est in the survey subject are given as one cause of bias. This study‘was monitoredwfor such bias by coding the com- puter data cards representing questionnaires received before and after the follow-up mailing. Replies obtained from the Freight User category were segregated and ranked according t0'within group mean values indicated for the 20 factors said to be influencing growth of domestic containerization. The rankings of the two groups are shown in Table 40. Deter- mination of Kendall's W and the chi-square value suggest that the hypothesis of differences in rankings between the groups can be rejected at p = 0.01+. The t0p six factors appear in the rankings of both groups and four of the bottom six factors are similarly ranked. Here again differences in the subsector makeup of the two test populations could have an important influence on the analysis. However, in view of the results, it can be stated with reasonable assurance that the need for a follow-up letter to elicit replies did not significantly bias the findings of the study. 227 Table 40. Ranking of factors by within group means to test bias of follow-up mailinga Initial Follow-Up Factors Maining Mailing 14. Inadequate Rate Structure 1 3 18. Labor Resistance . 2 1 15. Empty Container Traffic 3 2 1. Nonstandard Containers 4 3 11. Existing TOFC Investments 5 6 7. Inadequate Container Interchange 6 5 10. TOFC Alternative 7 12 20. Intermodal Rivalry 8 11 8. Container Chassis & Shortages 9 7 4. Divided Carrier Responsibility 10 10 19. Inefficient Cube vs. Vans 11 7 2. Investment Requirements 12 12 9. Terminal Holdups l3 l6 l7. Shipline Leadership 14 12 3. Distribution of Benefits 15 18 13. Government Regulation 16 12 6. Intermodal Ownership Forbidden 17 9 16. Lack of Motor Carrier Support 18 l7 12. Lack of Government Leadership 19 2O 5. Lack of Land Bridge 20 19 Number in Sample 107 27 Sum of Squares = S = 2478 Kendall's W’= 0.932 x2 = 36.19 Can ~ reject hypothesis of difference in rankings<§ p = 0.01+ aFreight Users replies only. Important Factor. Ranking: 1 — — Most 228 Summary of Replies to an 0pen-Ended_Question It was recognized that the 20 factor questionnaire concerning inhibitors to growth of domestic containerization could not be all inclusive. To allow recognition of addi- tional factors by respondents, the following open-ended question was posed: If there are any factors which have not been covered in the questionnaire which you feel are important in inhibiting growth of containerization in domestic surface movements, or if you have any additional comments to offer, please note them on the remainder of this sheet. Some comments merely gave further emphasis to the factors listed in the questionnaire. Some offered strong disagreement as to the validity of given factors. Comments were made which relate primarily to marine or air movements. Those concerning labor impediments were mainly directed to dockside activities. Some remarks offered additional in— sight into the factors presented in the study. These latter points, as well as those which had not been considered in the questionnaire have been roughly segregated into four categories (which are not mutually exclusive). They are quoted below pretty much as stated. Economic Factors gQrt Authority: Containers are designed to withstand stacking and sea voyages. It is not necessary to have such strong, heavy equipment for domestic movement, with resultant loss of cubic space as compared to a truck body of the same weight. 229 Motor Carrier: The cubic limitations of the container combined with the motor carriers pro- portion of the through movement does not provide a profit. Motor Carrier: In most of the container interchange contracts we have had occasion to review, we feel the charges for rental, etc., are unrealistically high: in many instances 4 to 5 times our daily cost of owning trailers. Railjgarrier: The railroads should not be expected to handle steamship line containers free- of-charge from port area to inland loading points unless the steamship lines are willing to relieve the railroads of per diem payments while containers are under load. Steamship lines . . . also vigor- ously protest the application of charges for the handling of empty containers to inland loading points. Equipment Supplier: For rail or highway carriers to abandon the wheels at some point of the trhough haul, absent a sound Operating reason, would be the height of economic folly. It must be remembered that you don't "leave the wheels behind," in the popular misconception, you "send the wheels ahead." Simple arithmetic reveals that for a captive road-rail-road containerized Operation between Chicago and New York, Operating six days a week, at least two more sets of wheels are required than sets of containers. If the pairs of points are increased, the excess of wheels also increases. Equipment Supplier: Demand for the "Flexi- Van" rail cars for hauling containers has fallen because railroads don't want or can't afford to make the capital investment required. This system is practical and ties in well with the ocean container carriers. Equipment Supplier: Perhaps you should look a little closer at the "operating difficulties" incurred by Operators requiring container hand- ling facilities at too many smaller stations: utilization rates suffer because of the complex- ities of having various types of idle ground support equipment available at major container stations. 230 Retailer: We have found a marked reluctance on the part of carriers, whether they be rail or truck, to be responsible for loss or damage in a container. The general approach has been that the other carrier or shipper or receiver contrib- uted to the damage and therefore, they were not liable. If the rate structure is such that you have taken into consideration additional liability and high rate, it is not advantageous to use con- tainers, or to push this media. Retailer: There is not an economic approach for containerization in the food industry other than TOFC. Equipment Supplier: The proven transportation savings through use of containers by railroads only applies to unit train or trainload operations and not in normal train service. Port Authority: Lack of proper motor carrier published tariffs for containers in Midwest and lack of import/export rate system for Great Lakes, allowing discriminatory rates favoring other coasts inhibits Great Lakes from contributing to container movement's growth in the national transportation picture. Forwarder: No one (or at least very few) does anything to reduce the gross waste and inefficiency in the traffic area. Rate increases go into prices and customers complain very little--no complaints from shippers, consignees and the consuming public means no action. Problem combines public apathy to the cost of transportation with the inadequacy of many traffic people. Equipment Considerations and Availability Motor Carrier: One major motor carrier prob- lem is inadequate maintenance of containers and chassis on the part of ocean carriers owning this equipment. .Forwarder: The imbalance of traffic almost precludes our investing in containers for our own use. However, if there were ways around this imbalance, such as are present in TOFC movements, whereunder we can rent or lease trailers from the railroads in a onedway movement, there would be 231 many instances where we could take advantage of containerization benefits. Rail Carrier: There are enough standard containers in service to satisfy existing needs, however, the real problem we experience is the lack of standard chassis. Motor Carrier: We have eXperimented with "twin-twenties“ (tandem 20 foot containers) and found that mechanical problems of joining (and uncoupling) into 40 foot road trailers more than offset any economics in our Operations. Equipment Supplier: Lack of standard inter- change agreements (for containers) between all modes inhibits containerization growth. Rail Carrier: Steamship lines stand to bene- fit from intermodal and containerized transporta- tion as much or more than anyone but they do not seem willing to provide adequate equipment for rail and highway requirements. Forwarder: The sad truth is that many con- tainers simply are not designed for the cargo they are supposed to carry. Once you achieve good container design, then the containers are no longer intermodal. Motor Carrier: Motor carriers do not want to get involved with containers that do not provide for about the same cube as their own equipment. They do not care to handle units coupled together as a unit. Coordinative Activities Retailer: Primary deficiency appears in the lack of a unified approach from various transport segments. Possibly a nudge in the form of a governmental grant or subsidy would establish a workable goal. Equipment Supplier: Containerization, as an intermodal concept is obviously most practical. Political reasoning, however, will most certainly delay truly economic intermodal transportation systems from being develOped. Unfortunately, those involved are a long way from reaching agreement between themselves. 232 It is this writer's opinion that the Department of Transportation will be forced, or at least should be forced, to take a far more active part in directing this crucial industry, but regret that they are not doing so at the present time. Handing down authority through the associated bodies is not the answer. No common agreement can ever be reached when responsibilities are not delegated with total understanding of what is involved. Eguipmentjgupplier: One of the main reasons for the lag in containerization at the present time is the unwillingness of inland carriers and shippers to get together. Retailer: A 20 foot container program would be most helpful in consolidating LTL shipments at major supplier cities. The time required to consolidate a full load for a 40 foot container is too great and impedes our scheduling of in- bound merchandise. A container could be dis- patched more frequently and the cost remain the same if our container were married with another container routed to the same city. Motor Carrier: Shiplines sell by cube, thereby encouraging shippers to load to full capacity without regard to weight restrictions which must be met by highway users. Example: 100,000 pounds loaded in 20 foot container; must transfer to multiple vans, thereby defeat- ing concept of containerization. Retailer: A pick-up system is needed. Containers take up too much space after empty— ing--there is too long a wait for pick~up. Containers are no good for short haul freight. 233 Government Regulation Forwarder: The most significant factor is interference of the Government through ICC, CAB, and PUC controls which overprotect the sick, out- dated transportation companies. If forwarders were able to issue tariffs rather than utilize ICC controlled present tariffs, then container- ized mode would flourish. However, at present, the existing common carriers can block the growth simply by overpricing their services and making a containerized rate non-competitive. Motor Carrier: A serious problem in domestic transportation is the lack of uniformity in state regulations in regard to equipment. CHAPTER V--FOOTNOTES 1D. J. Wright, Jeremy D. Finn's Multivariance-- Univariate and Multivariate Analysis of Variance and Covari- pnce: A FORTRAN IV Program. Issued as "Occasional Paper No. 8" (East Lansing, Michigan: Office of Research Consul- tation, College of Education, Michigan State University, March, 1970). Based upon documentation by Jeremy D. Finn, Department of Educational Psychology, State University of New York at Buffalo. 2A. R. Holdridge, Technical Report No. 12: Four- Dimensional Contingency Tables--NUCROS (East Lansing, Michigan: Computer Institute for Social Science Research, Michigan State University, February, 1968). 3L. L. Chao, pp. 288-292. 234 CHAPTER VI SUMMATION OF THE STUDY The previous chapters have been concerned with pre- senting a stepwise description of the research project. From a search of current literature, twenty factors were develOped which are claimed to be inhibiting growth of containerization in domestic surface freight shipments. A questionnaire was submitted to representatives of Freight User, Freigh Carrier, and Containerization Equipment Supplier sectors for their evaluation of the relative importance of these factors. Questions were also asked concerning Freight Users' activ- ities relating to containerization. Questionnaire replies were analyzed in order to test hypotheses relating to details of the domestic containerization growth problem. It remains now to form a summation which will offer useful guidance for those who are concerned with developing solutions to the problem. A structured interview outline was develOped to relate the opinions and recommendations of those actively involved in containerization to the findings of the research. Men representing different outlooks were interviewed and their comments are consolidated in Appendix C. 235 236 Summary of the Study Findings Underlying Congiderations of Factors Inhibiting Containerization The points summarized in this section relate to the results of the tests of Hypotheses l-A,B through 5-A,B. They concern the evaluation by the test population of the 20 factors said to be inhibiting growth of domestic surface containerization. In order to develop a rough guide to the underlying considerations involved in ranking of the factors, a simple correlation exercise was performed. In Chapter IV the 20 factors were divided into five categories.1 The groupings were as follows: 1. Economic Factors: INVESTMENT REQUIREMENTS DISTRIBUTION OF BENEFITS TERMINAL HOLDUPS TOFC ALTERNATIVE EXISTING TOFC INVESTMENTS INADEQUATE RATE STRUCTURES EMPTY CONTAINER TRAFFIC AND TARIFFS INEFFICIENT CONTAINER CUBE vs. VANS 2. Equipment Availability: NONSTANDARD CONTAINERS CONTAINER AND CHASSIS SHORTAGES 3. Government Regulation: GOVERNMENTAL REGULATION LACK OF GOVERNMENT LEADERSHIP INTERMODAL OWNERSHIP FORBIDDEN 4. Labor: LABOR RESISTANCE 237 5. Coordinative Activities: LACK OF LAND BRIDGE DIVIDED CARRIER RESPONSIBILITY INADEQUATE CONTAINER INTERCHANGE LACK OF MOTOR CARRIER SUPPORT SHIPLINE LEADERSHIP INTERMODAL RIVALRY Elements of these groupings were assigned the rank- ings of factor importance from the Freight User, Carrier, and Equipment Supplier sectors as shown in Table 28-B.2 An "index-number" dependent upon the location of the factors in the rankings was determined for each factor grouping. The derived relative levels of concern are indicated in the listing below, with the most important group shown at the top: quipment Users Carriers Spppliers Most Economic Economic Economic Important Labor Labor Labor Equipment Coordination Coordination Coordination Equipment Equipment Least Important Government Government Government It is not unexpected that economic considerations would be considered by all sectors as being most important in inhibiting growth of domestic containerization. The rank- ing of "Labor" as second most important does not fit with the comments obtained in personal interviews. There was agreement that labor is a problem in dockside activities relating to container movements but it was not considered 238 highly important where motor and rail movements are involved. When making an evaluation the respondents may have been in- fluenced by militance among dockside workers. Except where Freight Users show greater emphasis on importance of equipment availability than on coordinative activities, the basic considerations appear to be pretty much agreed to by all the major population sectors. The lesser importance of government regulation is particularly noticeable in all rankings. Discuspion of Tpp-Ranked Factors The summary discussion will be limited to those factors ranked highest with respect to individual relative importance. Table 28-B shows surprisingly close agreement in tOp rankings.3 The reader can satisfy his particular interests by examining the rankings further and also by digging into relationships which develOp as the pOpulation is broken down differently in Tables 29 through 31. Factor 14. INADEQUATE RATE STRUCTURE is considered highly important in inhibiting growth of domestic container- ization. Furthermore, there is very close agreement as to the relative importance of this factor, based upon mean values of 1.85, 1.79, and 1.89 for the User, Carrier, and Equipment Supplier segments, respectively. It cannot be concluded, however, that judgments are made on the same grounds. Users look for more rate incentives to use con- tainers. Carriers disagree on how the savings should be 239 distributed and whether costs justify rate reductions. Equipment Suppliers may recognize the problem through their association with the other two sectors. Factor 15. EMPTY CONTAINER TRAFFIC is listed about equally in line of importance with the LABOR RESISTANCE factor. In Table 31 the motor, rail, and air carriers all put the "dead head" factor at the top of the list, while the less-affected marine carriers put it fourth. Empty container traffic appears most bothersome to the motor carriers, who assign a mean value of 1.48 (on a scale of 5) to this factor. Rails are close behind with a 1.66 mean. An interview com- ment that the "dead head" problem is also present for trail- ers used in TOFC piggyback is pertinent. So is the comment that empty hauls can best be cured by marketing. Factor 1. NONSTANDARD CONTAINERS appear to be an important problem to Users and Carriers but less important to Equipment Suppliers, as indicated in Table 28-B. The listings in Table 31 indicate that the problem is most important to the motor group and of comparatively little importance to the marine sector. Interviews and answers to the Open-ended question bear out the concern of the motor carriers, who have little flexibility in their equipment to cope with nonstandard boxes. On the other hand, the marine carriers appear less concerned because they generally own their containers, or at least control and limit the choice 0f container size to the limitations of containership cell dimensions. 240 Factor 7. INADEQUATE CONTAINER INTERCHANGE finds close agreement among all three sectors, both in terms of ranking and in between mean comparisons. The problem is probably most pronounced where marine shipments are involved since the need to match ownership of a container with owner- ship of the vessel scheduled to make the trip can result in missing the vessel departure. An exchanged container would have served the shipper's purpose just as well. Frequent comments concerning the need for container pools reflect concern over this factor. Factor 11. EXISTING TOFC INVESTMENTS show agreement between Users and Equipment Suppliers that this is the next most important factor but the Carriers give it a consider- ably lower priority (mainly because of very low ranking by the marine sector). A practical demonstration of the influ— ence of existing investment is the decision by the Southern Railroad to promote container services, partly because they had ppp.previously invested in TOFC piggyback. On the other hand, rail carriers who have heavy investments in TOFC piggyback equipment which may be incompatible with COFC container service resist the change. There is no point in rehashing the details of all of the hypotheses tests, but some overall generalizations should be worthwhile. With one exception, ranking of the factors according to relative importance is not greatly influenced by how the population is segmented. The 241 exception: the comparative size of the firm.within a given business type apparently makes a difference in the respon— dents' outlooks:1 The durable goods manufacturers have the closest agreement between firm size segments (Kendall's W = 0.874) while the forwarders are farthest apart (Ken- dall's W = 0.700). ‘When agreements on relative importance of individual factors are examined (Hypotheses l-B through 5—B) there is less uniformity of judgment. The major subgroups (User, Carrier, and Equipment Supplier) are not in agreement on four factors which have statistically significant differ- ences. Size within the business type subgroup is related to significant differences of evaluations on two factors. The most obvious differences in individual factor evalua- tions occur in the carrier group, where eight significant differences are listed.5 In the overall View of the evaluations of factors reported to be inhibiting growth of domestic containeriza- tion it can be said that there is general agreement as to the relative importance of the various factors, regardless of how the pOpulation is segmented, but close inspection reveals points of significant differences. The general agreement relates to the common primary concern over eco— nomic considerations while the individual differences re- flect special needs of the various pOpulation segments. 242 Relationships in Containerization W The most obvious relationships develOped from the survey will be discussed first. Among Freight Users who engage in containerized traffic, only 8 of the 136 respon- dents stated that they own most or all of the containers in their use. The other obvious relationship concerns the containerizability of Freight Users' goods. Only 4 out of 164 respondents did not state that some or all of their goods was containerizable. Therefore, judgments as to con- tainerizability of goods do not appear to be important in inhibiting growth of domestic freight containerization. In the review of literature it was brought out that containerization first developed in the domestic area and that a short time ago it began to enjoy a rapid growth in the foreign traffic sector. Hypothesis 6 eXplores the pos- sibility of a relationship between firms' use of container- ization in foreign shipments and their use of the art in domestic movements. The conclusion is that there is a weak relationship between use of containerization in the foreign and domestic freight sectors (can reject Ho of independence between variables at p = 0.05). Whether this relationship is due to the early existence of domestic container traffic or whether foreign practice begets domestic practice cannot be stated. However, the indicated inter-relationship sug- gests that those who would benefit in either of the sectors should work together for common gain. 243 The possibility that TOFC piggyback use would be related to domestic containerization was eXplored in testing of Hypothesis 7. The relationship does not appear to be significant.6 When use of containers is segregated according to business types among Freight Users there is a weakly signif— icant relationship (at p = 0.05) in the domestic area, pri- marily because of lagging interest by the durable goods manufacturers. In the foreign shipments field, however, there is no significant relationship.7 Both the durable and nondurable goods manufacturers show significant relation- ships between business §i§§ and use of containerization in foreign freight. The smaller firms are less inclined to use containers than might be eXpected on the basis of the total sample size. There are no other significant relationships in either foreign or domestic movements in this size com- parison. Finally, segregating the Freight User pOpulation according to freight activity (shipper, consignee, shipper and consignee, and forwarder) reveals no significant con— tainerization relationships in either domestic or foreign freight. Additional Factors from Open- Ended Question and Interviews There were a few factors presented in answers to the Open-ended question and in the interviews which were not considered in the questionnaire. An important item is the 244 difficulty of assigning liability for damage to containers or their contents. This was inferred but not spelled out in Factor 4: DIVIDED CARRIER RESPONSIBILITY. The problem is particularly bothersome to both the shipper and consignee. As stated by one respondent, "the general approach has been that the other carrier, or shipper, or receiver contributed to the damage and therefore, they were not liable." Since the containers are kept sealed as much as possible to reduce pilferage and damage, the problem of concealed damage is aggravated. The problem is further compounded by the lack of established rules or agreements for sharing or assigning liability. One solution is offered by the "integrated for- warder" who assumes liability for all segments of the trans- fer which he controls. Another factor mentioned is a general lack of inter- est by shippers. This was reinforced with comments that "few do anything to reduce the gross waste and inefficiency in the traffic area," and "motor carriers don't feel pres— sure from shippers to move containers." The problem is approached in Factor 20 of the questionnaire, INTERMODAL RIVALRY (no carrier sells intermodal operations: each one tries to sell his own mode). By a small margin the User sector feels this situation is more important than do the Carrier or Equipment sectors, and it falls about midway in the ranking of all factors. 245 At least one more factor is indicated: lack of familiarity with the practice, especially by shippers. Two comments that relate to this problem are, "the main problem is going to be the training of people," and "specialists being assigned by the various modes and liaison develOped between the modes will create communication, the lack of which is a problem now." Conclusions The Methodology First, a few conclusions are in order with respect to what has been accomplished with the research methodology employed. Limitations of the research will be discussed separately. In determining the relative importance of factors inhibiting the growth of domestic containerization the researcher is faced with (a) a diversity of Opinion concerning a large number of factors, (b) a heterogenous pOpulation with diverse interests in freight activity, and (C) a population which is spread widely across the country and whose geographic location might influence opinion in the study area. The first conclusion is that in the face of these conditions, the survey questionnaire has proven to be a satisfactory research tool for the develOpment of an identifiable set of evaluative relationships. The second conclusion is that the use of an equal interval numerical rating scale is a useful tool for quan- tifying opinion concerning an intensity factor involving 246 levels of importance. The results of numerical rating can readily be used as input to a broad range of available com- puter programs. Considerably greater depth of analysis is available through the use of these programs than could be obtained without a quantitative approach. Finally, the limitations of unstructured, Open-ended questions are apparent. The results are difficult to quan- tify and often even difficult to correlate. Diversity of Opinion can be recognized but it cannot be readily measured. The main advantage of such questions is that they often uncover areas that might not have been considered if the investigation had been completely structured. Conclusions Derived From the Study A number of conclusions have been built into the summary of the study and they will be mentioned only briefly to avoid repetition. Other points have not been previously spelled out but can be deduced from the data presented. The conclusions are listed without particular regard to order of importance. 1. Economic considerations are predominant in influencing and retarding the growth of containerization in domestic surface freight shipments. The rate structures are not designed to promote the practice and the carriers do not believe that there are sufficient savings to justify rate reductions. The domestic carriers believe that benefits 247 accrue primarily to the marine sector when containers are used in overseas shipments and that they do not share equitably in handling the domestic portion of such transfers. A major share of savings occurs at the dockside, where con- tainerization allows quick turnaround of expensive contain- erships. A similar savings Opportunity is not available in the domestic area without the requirement of major invest— ments for equipment to handle large numbers of containers expeditiously at the rail terminals. Empty container traffic is burdensome to the domes- tic carriers, particularly where it is involved in the domestic portion of an overseas shipment. Lack of container interchange agreements aggravates the problem. Boxes are often dead headed to a location where available containers belonging to other owners could be used if exchange were permitted. Leasing would alleviate the problem if pools were adequate in size and if lease rates could be reduced to attractive levels. A major factor is the readily available alternative of TOFC piggyback. This is the method in common use where intermodal transfers are justified. A switch to container- ization involves effort on the part of the traffic managers, plus the unmeasured possibility of economic disadvantage. The benefits are frequently related to Special situations such as the need for tying a container directly into a pro- duction line, the need for stacked storage of the boxes, or some similar need which cannot be met with van trailers. 248 The most likely area of rapid development in the domestic sector appears to be in the use of containers on unit trains dedicated to mixed TOFC/COFC or all COFC service. Quick turnarounds made possible with proper handling equip- ment and tight scheduling can result in deliveries of goods over long distances (500 miles or more) which cannot be met by other means. Such service can produce the savings to the shippers which make containerization attractive to them. 2. It appears that there is need for a set of "domestic container standards" which can be applied to boxes which are not intended for overseas transfer. These con- tainers could be standardized to larger cube dimensions so as to be competitive with the over-the-road vans. Lighter construction, where stacking is not required, would allow them to be built cheaper, thus reducing lease or purchase costs. The materials would not have to be resistant to the corrosion of ocean spray and they might be outfitted with devices which would make it easier to secure and handle them in domestic freight yards. If the 20 foot container is continued in use by marine carriers it will have to be modified to allow for easier coupling in order to be more readily acceptable to the motor carriers. An alternative is to phase out the smaller boxes and the trend appears to be in this direction. 3. Leadership in the marine container program has been held by the major ocean carriers. Organized leadership for container Operations is not evident among the domestic 249 carriers. There are differences of opinion as to whether TOFC or COFC piggyback should be promoted by the rail car- riers. The motor carriers would just as soon stay with the wheeled vans since they feel that they have better control over the long haul market than they would have if container usage were to grow. The rail flatcar is capable of provid— ing cheaper service for intermediate or long hauls. Governmental agencies have not provided significant leadership in promoting use of containers. The agencies are more concerned with day to day regulation than with longer term development needs of the transportation industry. The Department of Transportation is just beginning to work in this area and their Office of Facilitation has some develOp- mental projects under way. The trade associations tend to look to the needs of the modes they represent and there has not been effective c00peration among them in promoting containerization. Where cooperative effort has been obtained the results have been useful. Accomplishments include the contributions to con— tainer standardization and the Trailer Train approach to standardized rail cars for piggyback service. 4. Because of the lack of cooperation-there exists a lack of coordination as well. Boxes moved from the West Coast without wheels have to be removed from flatcars and fitted with chassis before being accepted by eastern rail- roads. The consignee has difficulty in assigning responsi— bility for damage which occurs to goods in transit. 250 Schedules are not coordinated for minimum delays in transfer at modal interfaces. Container inSpections and maintenance are not coordinated. A container pool similar to the rail car pool does not exist. Dead head movements are greater than necessary and equipment utilization rates are less than optimum. There is no organized nationwide marketing program to sell the benefits of containerization to the shippers. There is no program of education in the art for the traffic managers who make freight decisions. The situations men- tioned lead to frustration for those innovators who want to obtain the inherent advantages of containerized shipments. 5. The system is eXperiencing growing pains. Ade- quate equipment handling facilities have only recently been installed at the major freight centers and most of these have been provided primarily for servicing of marine move- ments. The high equipment costs and lack of capital funds have limited expansion of handling facilities at inland locations. Until adequate facilities are available to handle container traffic the practice will be retarded. The container itself is still in a developmental stage. Potential buyers are reluctant to make major com— mitments for equipment that may be economically obsolete in a short time. Regulations are still being evolved. The major regulatory agencies are not in agreement nor are they coordinated in their task of controlling practices in the 251 growing program. Basic principles relating to consolida- tions, mergers, and intermodal ownership are in a state of evolution. This situation can affect the long-term roles played by the transportation sectors in further develOpment of the art. Limitations of the Study Thefigpeiof a Mail Survey The mail survey makes it possible to contact a diverse population scattered over a broad geographic area. However, it also has certain inherent disadvantages which influence the results. Since the questionnaire must be reasonably short the questions must be structured. There is no allowance for discussion of all the variations of meaning and interpretation which may occur to the respondent in answering a question. This problem is best handled in a face-to-face interview. For example, a high importance level was given to the labor resistance factor by all sec- tors responding to the questionnaire but labor was appraised as no major problem by those interviewed. It is likely that the questionnaire was processed with some bias toward prob— lems in the marine use of containers. The questionnaire was distributed randomly to pOpu- lation sectors containing many representatives. An effort was made to direct it to those in responsible charge of traffic activities. However, it must be recognized that 252 these pe0ple have different levels of exposure to both domestic and foreign containerization. The opinions are all lumped together in average replies which might be signifi- cantly different than those obtained solely from "experts." However, a true cross-section of Opinion is available for anyone who is interested in promoting the art of container— ization. Finally, the researcher has no actual control or firm knowledge concerning who actually fills out the ques— tionnaire or the circumstances under which it is processed. An offer of a summary of the findings partly overcame this problem because the respondent indicated his name and title on the request form. In some cases the questionnaire was passed on to someone who may have been less busy rather than more qualified than the addressee. It can also be assumed that some respondents gave the questionnaire careful con— sideration while others just moved down quickly through it in order to get another piece of mail cleared from the desk t0p. These factors would tend to make the results less meaningful and the effect was best countered by the use of as large a random sample as was practical. EQBEarametric Statistics and Behavioral Research The thrust of the research project has been the gathering of opinion. Unfortunately, opinion is not easily quantified. It can cover a continuum of values on any given question. The methodology employed assumes that the factor 253 of intensity, as indicated by the level of importance choice, can be approximated closely enough so that arithmetic manip- ulation of the concensus is acceptable. Since the results of such manipulations appear logical and explainable, there is some assurance that the approach has been reasonable and that the results can be usefully applied. Researchers in the behavioral area share a common prOblem of deciding whether to use parametric statistical methods with nonparametric data. Authorities indicate that such a choice is justified because the opportunities for more powerful analysis outweigh the limitations of the non- parametric test treatments. This study has employed both approaches and the results do not appear to be incompatible. However, the reader must be cautioned that validity of the conclusions is influenced by assumptions of normality of distribution and homogeneity of variance, neither of which are readily measured. Recommendations for Further Work Research on Economics of Coptainerization The greatest need for further research is in work relating to the economics of containerization. Such effort should help to alleviate the economic problems which are believed to be most important in inhibiting growth of domes- tic containerization. More work is needed to quantify the cost benefits which can accrue to the various modes through 254 containerization. A beginning has been made in test runs which have demonstrated significant reductions in power requirements for COFC as compared to TOFC piggyback trains. A schedule needs to be develOped to show the increased income derived from stepwise improvements in the time that rolling stock is in revenue service. Such a schedule could be used to justify investments in container handling equip- ment to reduce turnaround time of trains in the freight yards. Simulations of freight movements by over-the-road trailer, TOFC piggyback, or COFC transfer could be developed to indicate Optimum trip distance for each choice. Benefits are claimed for freight users through greater use of containers. Examples of claimed benefits which need to be quantified in economic terms are reductions of in-transit inventories, improved damage and pilferage loss experience, and savings in packaging costs because the goods are not rehandled. If operating savings obtained by the carriers from handling containers are not sufficient to be passed on in direct rate reductions, then freight users will have to be sold on containerization because of the indirect benefits. Some of the freight user organizations with progressive physical distribution departments can be expected to develOp economic analyses which will indicate Whether or not to embrace containerization. However, the burden of responsibility for much of the economic research in the areas discussed falls to the rail carriers. In the 255 long run they stand to be most concerned with investment decisions relating to containerization. A unified systems approach to the national freight transportation problem is needed.8 The concept of contain- erization appears to offer possible use as an integrating tool in the develOpment of such a unified system. Economic analysis will be required to determine how the benefits of such an integration can best be distributed in order to encourage active participation by all the sectors. It may be that such a broad study would best be conducted by an impartial private research group or governmental agency. LOQIgtical Studies Logistical studies encompass both economic and systems analysis considerations. Logistical studies are needed in order to Optimize decisions in the implementation of containerized systems. Following are a few questions which serve as examples of the type of problems which need to be solved by such studies. - How many sets of bogies are needed and where should they be inventoried to serve a given number of con~ tainers which are distributed to a given pattern of stations? - 'What is the Optimum size and layout of a container marshalling yard needed to serve a given projected traffic volume? 256 — ‘What are the Optimum equipment handling facilities for different sized Operations? - What are the best schedules which can be develOped for dedicated train service on long hauls? - ‘Where are the existing and projected centers which will justify assignment as container handling hubs? Railroads should take the responsibility for re- search in the logistical area since the problems relate more to their activities than to other modal sectors in domestic freight movements. Research sponsored by trade associations would help to use available funds more effectively by reduc- ing overlapping effort. Research on Eguipment Further research is needed in the design of the con- tainers themselves and in the handling equipment to improve ease of intermodal transfers and to reduce costs. Different materials of construction need to be develOped in order to reduce container tare weights, to make them more durable, and to reduce their cost. Experiments with different cubic arrangements can lead to greater compatibility between over- the-road piggyback, and marine modal requirements. Modifi- cations to meet special needs will help to expand container use. DevelOpment of internal fittings which can be used to better secure the loads quickly and cheaply is one such area Which can be pursued. 257 EXperiments with mini-containers have been described in the literature. These are modular subunits of the stan— dard sized containers which can be used for consolication of less-than-carload lots. They offer promise of savings to forwarders who may arrange to collect them pre-loaded from a circuit of customers and then stuff them readily into containers or truck vans for the long haul. Such mini: containers should also find use on the production line for consolidation of high value products which are shipped in less-than-carload lots. The search for competitive advantage should motivate the equipment suppliers to promote research on equipment. Two examples of work in progress are the current development of light weight boxes for air shipment and the improved trailers for side-transfer loading of containers. Coordination by Business Coordination is the key to any real progress in domestic container activity. Cooperation among the carriers will have to improve in order to meet coordinative needs. Their work should be directed toward developing a better understanding of customer wants and of promoting programs designed to meet these wants. The container offers the promise of savings to the customer through more efficient raPid transfer of goods. Wasted motion of dead head traffic and terminal delays can be reduced by better coordination. If suppliers coordinate their efforts, leasing, equipment 258 interchange agreements, and nationwide pool arrangements can provide ready access to containers when and where they are needed. Domestic and international pool requirements can be integrated for maximum effectiveness. Rate structures need to be examined carefully in order to deve10p incentives for container usage and to pro- vide for an equitable distribution of costs and benefits. Joint rates are indicated as desirable for freight movements involving intermodal transfers. The cost of transporting a box of a given size over a given distance containing a given weight cargo dictates the use of a freight-all-kinds (FAK) rate structure. The offer of unrestricted FAK rates will promote greater use of containers and will eliminate effort now wasted in examining cargos to Check on commodity declarations. FAK rates will also reduce paperwork. A workable means of distributing liability for losses from damage to goods and equipment is needed. A program should be develOped for frequently inSpecting and prOperly maintaining containers. A nationwide tracing and accounting procedure is needed to assign per diem charges and to discourage under-utilization of the equipment. Automated methods which have already been developed for identification of containers en route should be implemented. Some business firms now recognize that their phys- ical distribution needs go beyond the historical rate and scheduling work of the traffic department. Effective 259 physical distribution management can contribute signifi- cantly to corporate profits. The container can prove to be a useful tool for those distribution managers who have been educated to its potential. The equipment suppliers and carriers can contribute to the education of customers in the use of containers and intermodalism. The trade asso- ciations are loqical candidates for promoting desired educational programs among their members. Coordination by Government Many businessmen prefer a "hands-off" situation in freight activities as far as government is concerned. How- ever, the regulatory agencies need to move beyond day-to-day regulation as their almost exclusive function and to encom- pass responsibility for promoting longer range develOpments in the transport industry. The layers of lawyers need to be supplemented with peOple who are competent in transport technology. Governmental nudging may prove to be effective in promoting intermodal cooperation. An example of such service is the present program by the Department of Trans- portation to deve10p a common equipment interchange agree- ment. Success in simplification of documentation and customs requirements can only be achieved through coop— erative efforts of gOvernment and business. Rate regulation needs to be directed toward pro- moting overall efficiency in the national transport system rather than toward protectionism and maintenance of the 260 status quo. Joint rates should be encouraged if they pro- mote efficiency and equitable distribution of revenues. Forwarders should be allowed more flexibility in setting rates if they can thereby help to minimize the small ship- ments prOblem. Growth of freight brokerage organizations should be encouraged if such a development is determined to be beneficial to greater transport efficiency. The limitations of regulation by three major agen- cies have long been recognized and pressure is growing for consolidation of their activities. Fragmented regulation has impeded through service arrangements for container move- ments. Coordination of containerization in the national transport structure would be more effective if the regula- tory agencies themselves were better coordinated. As an example, guidance from a single transport agency could be expected to promote equipment standards more suitable to both domestic and marine modal requirements. Research and develOpment work which is aimed at optimizing develOpment of the national transport system can best be guided by an organization which has an overall per— spective. The Department of Transportation has develOpmen- tal reaponsibility included in its charter. The Department could encourage c00peration between trade organizations in promoting containerization and other innovations which will improve transport efficiency. Research projects can be underwritten to standardize paperwork, to deve10p simula- tions aimed at economic and logistic evaluations of 261 container movements, and to project future transport requirements. The desirability of combining both develop- mental and transport regulation into a single authority should be assessed by an unbiased study. Final Note The entrepreneurship of Malcolm McLean is credited with the giving birth to the explosive growth of containers in marine service. Others can be expected to foster ideas which will bring the full benefits of containerization to the domestic freight sector. One writer predicts that there will be more containers than rail cars in service by the year 2000.9 Innovations in automated handling and storage 10 The container of containers have already been prOposed. will be an important link in an integrated national freight tranSport system of the future. The people who pay the freight bills will demand the savings that containers can provide. CHAPTER VI --FOOTNOTES 1"Deve10pment of the Questionnaire," Chapter IV. p. 163. 2Table 28-B. "Within Group Mean Values for Test of Hypothesis l-A," p. 196. 3Ibid. 4See Table 26, p. 193. See Table 27, p. 194. 5 6See Table 34, p. 214. 7 See Table 36, p. 218. 8For a treatment of the systems approach to physical distribution, see D. J. Bowersox, E. W. Smykay, and B. J. Lalonde, Physical Distribution Management (New York: The Macmillan Co., 1968). ESpecially see Chapter 12, "Distribu- tion System Design," pp. 323-351. 9Vincent F. Caputo, "Transportation in the Year 2000," in Transportation and Tomorrow, ed. by K. M. Ruppenthal and H. A. McKinnell, Jr. (Stanford, California: Stanford University Graduate School of Business, 1966), p. 23. 10Ibid., Kenneth L. Vore, "A Shipper Views Tomorrow's Transport," pp. 156-160. 262 B IBLI OGRAPHY BIBLIOGRAPHY Books Bowersox, D. J., Smykay, E. W., and LaLande, B. J. Physical Distripution Management. New York: The Macmillan Co., 1968. Chao, L. L. §tatistics: Methods and Analyses. New York: McGraw-Hill Book Co., 1969. Colton, R. E., and Ward, E. S. Practical Handbook of Ipdustrial Traffic Management. Washington, D.C.: The Traffic Service Corp., 1965. Church, Robert F. Background Note on the Development of Containerjped International Shipping. Evanston, Illinois: Transportation Center at Northwestern University, 1968. Clark, Charles T., and Schkade, L. L. Statistical Methods for Business Decisions. Cincinnati: South4Western Publishing Company, 1969. Erdos, Paul L., and Morgan, A. J. Professional Mail Surveys. New York: McGraw-Hill Book Co., 1970. Ferber, Robert, Blankertz, D. F., and Hollander, Sidney, Jr. Marketing Research. New York: The Ronald Press Co., 1964. , and Verdoorn, P. J. Research Methods in Economics and Business. New York: The Macmillan Co., 1970. Finlay, Patrick, ed. Jane's Freight Containers. New York: McGraw-Hill Book Co., 1969. Friedlander, Ann F. The Dilemma of Freight Transport Regulation. Washington, D.C.: The Brookings Institute, 1969. Guilford, J. P. Psychometric Methods. New York: McGraw- Hill Book Company, 1954. 263 264 Kerlinger, Fred N. Foundations of BehaviorallResearch. New YOrk: Holt, Rinehart and Winston, Inc., 1964. Kirk, Roger E. Experimental Design: Procedures for the Behavioral Sciences. Belmont, California: Brooks/Cole Publishing Company, 1968. Luck, David J., wales, H. G., and Taylor, Donald A. MarketingiRgpearch. Englewood Cliffs, New Jersey: Prentice-Hall, Inc., 1970. Magee, John F. Industrial Logistics-~Analysis and Manage- ment of Physical Supply7and Distribution Systems. New York: McGraw-Hill Book Co., 1968. Morrison, Donald F. Multivariate Statistical Methods. New York: McGraw-Hill Book Co., 1967. Osgood, Charles E., Suci, G. J., and Tannenbaum, P. H. The Measurement of Meaning. Urbana, Illinois: The Univer- sity of Illinois Press, 1957. Pegrum, Dudley F. Transpprtation: Economics and Public Policy. Homewood, Illinois: Richard D. Irwin, Inc., 1963. Selby, Samuel M., ed. Standard Mathematical Tables. Cleveland: The Chemical Rubber Co., 1967. Siegel, Sidney. Nonparametric Statistics for the Behavioral Sciences. New York: McGraw-Hill Book Co., 1956. Sims, Ralph E. Planning_and Managing Material Flow. Boston: Industrial Education Institute, 1968. Tabak, Herman D. Cargp Containers--Their StowageL Handling, and Movement. Cambridge, Maryland: Cornell Maritime Press, 1970. Taff, Charles A. Management of Traffiggand_ghysiqgl Distribution. Homewood, Illinois: Richard D. Irwin Co., 1964. Dunn and Bradstreet. Reference Book of Transportation-- Spring,_l§j0. Washington, D.C.: Trinc Transportation Consultants, 1970. Inland and Maritime Transportatppn of Unitized Cargo. Washington, D.C.: National Academy of Sciences, 1963. Moody's Industrial Manual:-Ju11. 1969. New YOrk: Moody's Investor's Service, 1969. 265 Moodyfs Trangpprtation-—March, 1970. New York: Moody's Investor's Service, 1970. The Official Directory of Commercial Traffic Executives. Washington, D.C.: The Traffic Service Corp., 1969. Articles in Books Forgash, Morris. "Containerization--A Tool of TranSporta- tion," Transportation Century. Edited by George F. Mott. Baton Rouge, Louisiana: Louisiana State University Press, 1966. Caputo, Vincent F. "Transportation in the Year 2000," pp. 18-23. Vore, Kenneth L. "A Shipper Views Tomorrow's Transport," pp. 156-160. Transportation and Tomorrow. Edited by K. M. Ruppenthal and H. A. McKinnel, Jr. Stanford, California: Stanford University Graduate School of Business, 1966. Bayer, Palmer. "Pool Systems and Coordination," pp. 195-200. Dircx, C. P. "Inter- and Intramodal Coordination on the Missouri Pacific," pp. 183-191. Hulse, John B. "Standards and Specifications in Coordina- tion," pp. 222-227. Mazure, James E. "Reducing Overlap Barriers in Ocean Commerce," pp. 103-107. Muller, Fred, Jr. "The Role of Standards in International Coordination," pp. 216-222. Coordinated Transportation. Edited by E. G. Plowman. Cambridge, Maryland: Cornell Maritime Press, Inc., 1969. Periodicals Becker, H. G., Jr. "The First Domestic Container Program," Handlingyand Shipping, July, 1970, pp. 45-46. Behling, Burton N. “1969 Review," Railway Age, January 19, 1970, pp. 54—67. Blackwell, R. J. "Perspective on Through Routes and Rates," Brandon[p_Container World, May, 1970, pp. 27-28. Dillon, Thomas F. “Containerization--A New Twist on an Old Idea," Purchasing, January 28, 1962, pp. 84-86ff, 266 Dixon, James M. "Truckers Outlook Is 'Mixed Bag,'" Distribution Worldwide, April, 1970, pp. 36-38. Elson, Joel. "Pilferers, Hijackers Confound All Parties," Metalworking News, May 4, 1970, Sec. 2, p. 20. Hilts, R. G. The Official Intermodal Equipment Register-- Containers, Chassis and Bogies in Intermodal Service. New YOrk: Intermodal Publishing Co., Ltd., Vol. 2, No. 1, August 15, 1970. Howell, R. E. "Growth and Problems of Containerization," Qiptribution Worldwide, September, 1970, pp. 37-41. Marshall, Kenneth. "New Routes for World Trade?" Transportation and Distribution Management, October, 1969, pp. 60-64. Nagle, Richard T. "Roll On-Roll Off: Piggyback.Goes to Sea," Railway Age, October 27, 1969, pp. 46-47. Salzano, Carlo J. "Government, Industry Spokesmen Express Divergent Views on Intermodal TranSport," Traffic World, March 14, 1970, pp. 21-25ff. Schirmer, W. E. "Integrated Physical Distribution--A Container Must," Brandon's Container World, May, 1970, pp. 9-12. Welty, Gus. "TOFC/COFC: Why the Future Looks So Good,“ RailwayyAge, May 29, 1967, pp. 29-36. . "Tomorrow's Railroads," Railway Ase. August 25. 1969, pp. 33-40. "Another Round of ILA vs. NYSA," Brandon's Container World, May, 1970, p. 4. "Transport in the 70's: Revolution Ahead," Business Management, November, 1969 (Reprint). "Trans-Atlantic Containerization . . . Circa 1901," Distribution Age, February, 1967, p. 36. "The Ultimate Unit Train?--Support for 'Land Bridge' Grows,“ Distribution Manager, May, 1968, pp. 44-45. "Container Potential Up," Distribution Manager, June, 1968, p. 28. "Export Is the Name of the Game," Distribution Manager, June, 1968, pp. 36-37. 267 "The Port Terminals--A New and Expanded Role," Distribution Manager, October, 1968, pp. 52-56. "Insurance Yardsticks for EXport Containers," Distribution Manager, June, 1968, pp. 53-58. "Ton Mile Distribution Among Intercity Freight Carriers,“ Distribution Manager, April, 1969, p. 24. "New York Port Balks," Distribution Worldwide, February, 1970, PP. 14-15. "Big Boxing Event," Distribution Worldwide, April, 1970, p. 59. "Leased-Container Surge," Distribution'Worldwide, April, 1970, p. 33. "Unit Load Council Set," Distribution.Worldwide, May, 1970, p. 26. "Containerization's Changing Patterns-~How Fleets Fit In,“ Fleet Owner, January, 1961, pp. 66-70. “The Fortune Directory of the 500 Largest Corporations,“ Fortune, May 15, 1969, pp. 166-184. "The Fortune Directory of the Second 500 Largest Corpo- rations," Fortune, June, 1970, pp. 98-125. "1970 Routing and Transportation Information Directory," Handling_and Shipping, February, 1970, pp. 41-49. "Shrink Film Palletizing: It's Everybody's Baby, Now,“ Material Handling_Engineerinq, February, 1970, pp. 69-81. "The Container and the User," Mechanical Handling, October, 1969, pp. 108-110. "Shrink4Wrapping of Pallet Loads to Grow," Package Engineering, May, 1970, p. 32. "For Trailer/Container Builders: Market Boom in TOFC," Railway Age, August 26, 1963, pp. 19-27. "'Super C', Santa Fe Claims It Has World's Fastest Freight Train," Railway_Age, January 29, 1968, pp. 22-25. "Will Labor Help the Railroads Carry the Freight?“ Rainway Age, March 4, 1968, p. 40. "We Need a Meeting of Minds on Common Goals,“ Railway Age, June 2, 1969, pp. 20-23. 268 "1970 Outlook-Carmarket: 70,000 in '70," Railway Age, January 19, 1970, pp. 33-38ff. "White House Cool on Agency Merger Plan: Senators Call for End of ICC," Traffic Management--Physical Distribution, September, 1970, p. 11. "Consulting Engineer Believes Containers Will Replace Trailers in Piggyback Service," Traffic World, October 31, 1959, pp. 42-43. "Hearings Opened by House Panel on Bill to Permit Rail- Forwarder Rate Making," Traffic World, January 31, 1970, pp. 17-21. "FMC Issues Rule Requiring Water Carriers to File Through, Joint Intermodal Rates," Traffic World, April 18, 1970, pp. 79-80. "Independent Ownership of Modes Not Found to Be Hindering Containerization," Traffic World, April 18, 1970, pp. 27-29. "ICC Urges Enactment of Routes-Rates Measure as Senate Hearings Begin," Traffic World, May 9, 1970, pp. 86-88. "ICC Must Choose Between Marginal-Cost or Full—Cost Standard in Setting Rates," Traffic World, May 23, 1970, pp. 68-69. "International Container Pool," Transportation and Distribution Management, January, 1969, p. 12. "Joint Rates," Transportation and Distribution Management, June, 1970, p. 19. "Nader Group Says ICC Fail Public, Urges Single Transporta- tion Regulatory Agency," Wall Street Journal, March 17, 1970, p. 6:3. "Inter-Freight--The Only Distribution System that Assumes Total Liability," (Advertisement), WallyStreet Journal, July 7, 1970, p. 11. "Freuhauf Sees 33%.Fall in Trailer Industry's Volume During 1970," Wall Street Journal, August 31, 1970, p. 15:3. 269 Public Documents U.S. Department of Commerce. Office of Business Economics. 1969 Business Statistics. Washington, D.C.: Government Printing Office, 1970. U.S. Department of Commerce. Maritime Administration. Foreign Oceanborne Trade of the United States-- Containerized Cargo--Selected Trade Routes--Third Quarter, 1969, 1969. U.S. Department of Commerce. Maritime Administration. U.S. Flag Containerships and U.S. Flag Ships with Partial Capacities for Containers--As of June 30, 1969, 1969. U.S. Department of Commerce. Maritime Administration. Automatic Container Identification Conference. Washington, D.C.: Government Printing Office, 1970. U.S. Congress. Senate. National Transportation Policy. John P. Doyle, Staff Director. Report of the Committee on Commerce, Special Study Group on Transportation. Report No. 445, 87th Congress, lst Session, June 26, 1961. U.S. Congress. Senate. Seminars on the Container Revolution. Prepared for use of the Committee on Commerce. Washington, D.C.: Government Printing Office, 1968. U.S. Department of Defense. Military Standard-~Palletized and Containerized Unit Loads. MIL-STD-147B, 1968. U.S. Interstate Commerce Commission. 173 ICC 377, April 14, 1231. ICC Docket No. 21723, In the Matter of Container Service. ICC Reports Vol. 173, March-April, 1931. Washington, D.C.: Government Printing Office, 1931, pp. 377-450. U.S. Interstate Commerce Commission. 216 ICC 435, June 20, 1936, Trucks on Flatcars Between Chicago and Twin Cities. ICC Reports Vol. 216. Washington, D.C.: Government Printing Office, 1936. ' U.S. Interstate Commerce Commission. 232 ICC 683, Julypgg, 1939, ICC Decision: Ex Parte N0. 129L_Substituted ' Freightygervice. ICC Reports Vol. 232, March-July, 1939. Washington, D.C.: Government Printing Office, 1939, pp. 683-693. 270 U.S. Interstate Commerce Commission. 293 ICC 93, July 30, 1954, ICC Docket No. 31375, Movement of Highway Trailers by Rail. ICC Reports Vol. 293, June, 1954-January, 1955. Washington, D.C.: Government Printing Office, 1955, pp. 93-112. U.S. Interstate Commerce Commission. 322 ICC 301, March 16, 1964, Ex Parteygjo, Substituted Service-~Charges and Practices of For-Hire Carriers and Freight Forwardere jgiquback Service). Decisions of the ICC of the U.S. Vol. 322, January, 1964-July, 1964. Washington, D.C.: Government Printing Office, 1966, pp. 301-417. U.S. Interstate Commerce Commission. Bureau of Accounts. Cost of Transporting Freight by Class I and Class II Motor Common Carriers of General Commodities--Trans- continental Territory--l966. Washington, D.C.: Government Printing Office, 1968. U.S. Interstate Commerce Commission. Bureau of Economics. Piggyback Traffic Characteristics. Washington, D.C.: Government Printing Office, 1966. U.S. Interstate Commerce Commission. Bureau of Accounts. TranSport Statistics of the United Statee, 1966-—Part 8: Freight Forwarders. Washington, D.C.: Government Printing Office, 1967. U.S. Interstate Commerce Commission. 82nd Annual Report of the Interstate Commerce Commission--Fiscal Year Ended June 30, 1968. Washington, D.C.: Government Printing Office, 1968. U.S. Interstate Commerce Commission. In the Public Interest- 1970. Washington, D.C.: Government Printing Office, 1970. U.S. Interstate Commerce Commission. Bureau of Economics. Transport Economics. July, 1969, April, 1970. U.S. Department of Transportation. United States Department of Transportation. Washington, D.C.: Government Print— ing Office, 1969. 271 Reports Guide for the Certification of Cargo Containers. New YOrk: American Bureau of Shipping, 1969. Yearbook of Railroad Facts. Washington, D.C.: Association of American Railroads, 1968. IATA Bulk Unitization Concept. Montreal: International Air Transport Association, 1969. Qontainerization--An Outlook to 1977. Oakland, California: Technical Publications Department, Kaiser Aluminum and Chemical Corp., 1968. Ayre, Josephine. "History and Regulation of Trailer-on- Flatcar Movement," Highway_Research Record, No. 153-- Piggyback-~5 Reports. Washington, D.C.: Highway Research Board, National Academy of Sciences, 1967, pp. 1-30. Hammond, Robert A. "Emerging Changes in the Container Revolution," Highway_Research Recordy_No. 281--Use of Containerization in Freight Transportation. Washington, D.C.: Highway Research Board, National Academy of Sciences, 1969, pp. 10-15. Litton Systems, Inc. Oceanborne Shipping; Demand and Technology_Forecast—-Part 2. Washington, D.C.: Government Printing Office, 1968. An Economic Study of Containerization and Its Markets. Richmond, Virginia: Market Research Department, Reynolds Metals Co., 1961. Roberts, Merrill J. Intermodal Freight Transportation Coordination: Problems and Potential. Prepared for the Under Secretary of Transportation, U.S. Department of Commerce. Pittsburgh: University of Pittsburgh, 1966. Annual Report--l969. Philadelphia: Trailer Train Co., 1970. The Trailer Train Stopy, Philadelphia: Trailer Train Co., 1970. Containerization—-A Maturing_Intermodal Concept. Pittsburgh: United States Steel Co., 1969. XTRA Directory. Boston: XTRA, Inc., 1970. 272 Proceedings Barloon, Marvin J. "Containers-~Economics and Impact," Regular Common Carrier Conference Report on Container- ization in International and Domestic Traffic. Washing- ton, D.C.: American Trucking Assn., 1969, pp. 1-7. Inland and Maritime Cargo Transportation Conference. Washington, Maritime Transportation of Unitized Cargo. D.C.: National Academy of Science, 1963. U.S. Department of Defense. Conatinerization Usage Briefing for National Defense Transportation Association. Washington, D.C.: National Defense Transportation Association, 1968. "Containerization and Integral Trains," Chicago: Railway Systems and pp. 13-22. Cripe, Alan R. Integral Trains. Management Association, 1963, Owen, R. J., Proff, R. A., and King, P. J. "Research and the Unit Load Principle," TOFC and Containerization. Chicago: Railway Systems and Management Association, 1963, pp. 50-59. Muller, Fred, Jr. "The Impact of Container Standards on Integrated Transportation," pp. 29-34. Stenason, W. J. "Multi-Modal Ownership in Transportation," pp. 469-475. Papers--Eighth Annual Meeting:-Transpor- tation Research Forum. Oxford, Indiana: Richard B. Cross Co., 1967. Containerization--Problems of Today and Potential for Tomorrow. (Panel Discussion) Truck Trailer Manu- facturers Association. 26th Annual Convention, Grand Bahama Islands, BWI. Washington, D.C.: Truck Trailer Manufacturers Assn., 1967. Unpgblished Material Autenrieth, Robert H. Statement Before the Containerization Institute Conference. (Mimeograph.) Los Angeles, California, November 13, 1969. Defense Implications of Container— Talk before the Containeri- 1970. Besson, Frank 8., Jr. ization. (Mimeograph.) zation Exposition, April, 273 Birchler, Eugene R. Six Myphs About Containerization. (Mimeograph.) Talk before the International Executives Association. New York City, February, 1969. . Containerization--The Inevitable. (Mimeograph.) Speech before the First Annual International Marketing Seminar on Trends and Developments in Physical Distri- bution. Sutton, Massachusetts, June, 1969. Bowersox, Donald J. The Economics of Containerization in Physical Distribution. (Mimeograph.) Talk before the Containerization Institute--Tenth Annual Conference. New York City, January, 1970. Bridges, H. Containers and Their Effect on Waterfront Workers. (Mimeograph.) Talk presented before the Fall Meeting of the Containerization Institute. Los Angeles, California, November 13, 1969. Bayliss, Arthur E. The Through Bill of Lading and Joint Rates. (Mimeograph.) Presented to the Technical Congress and Exposition. New York Coliseum, September 17, 1969. . International Documentation--Where Are We Now? (Mimeograph.) Talk Before the Containerization Institute Tenth Annual Conference. New York, January, 1970. . The Documentation Dilemma--Let's Solve It Now. (Mimeograph.) For the International Transportation Seminar. University of Hawaii, Honolulu, Hawaii. New York: National Committee on International Trade Documentation, 1970. Gibson, A. E. Land Bridge--Fact or Fiction? (Mimeograph.) Remarks Before National Railroad Piggyback Association. Montreal, Canada, July 23, 1969. Gleason, Thomas W. The Automation Problems Are Coming, (Mimeograph.) Address before the Fifth International Container Services and Equipment Exposition. Chicago, Illinois, April, 1970. Hale, Bernard J. Containerization—-A Vital Part girthe Mattel_§uccess Stogy. (Mimeograph.) Speech at the Fifth International Container Services and Equipment EXposition. Chicago, Illinois, April, 1970. 2 74 Containerization--The Labor-Manegement Talk presented before the Los Hammond, H. F. Viewpoint. (Mimeograph.) Fall Meeting of the Containerization Institute. Angeles, California, November 13, 1969. Holdridge, A. R. Technical Report No. 12: Four Dimensional Contingency Tables--NUCROS. (Mimeograph.) East Lansing, Michigan: Computer Institute for Social Science Research, Michigan State University, February, 1968. A Look at Labor and Containers in Europe. Talk before the Fifth International Chicago, Porton, O. I. M. (Mimeograph.) Container Services and Equipment Exposition. Illinois, April, 1970. Wright, D. J. Jeremy D. Finn's Multivariance--Univariate and Multivariate Analysis of Variance and Covariance; A FORTRAN IV Program. (Mimeograph.) Occasional Paper No. 8. East Lansing, Michigan: Office of Research Consultation, College of Education, Michigan State University, 1970. Walrath, L. K. (ICC Commissioner.) Remarks Before the National Conference of State Transportation Specialists. (Mimeograph.) Seattle, Washington, May 8, 1968. . Remarks Before the Association of Interstate Commerce Commission Practitioners. (Mimeograph.) Minneapolis, Minnesota, June 21, 1968. Bibliographies Jamison, Paul E. A Bibliography of Research Papers in Transportationy_Traffic and Distribution Management. Washington, D.C.: The Traffic Service Corp., 1968. A Bibliography on Economics of Container- Illinois: The Library of the Ramm, Dorothy V. ization. Evanston, Transportation Center at Northwestern University, 1968. (Monthly.) Current Literature in Traffic and Transportation. Evanston, Illinois: The Library of the Transportation Center at Northwestern University. 275 Containersr-A List of References--l901-l968. Washington, D.C.: Economics and Finance Department Library, Association of American Railroads, 1969. Containerization in Global and Domestic Goods TranSport. Bulletin of the Business Information and Science and Technology Departments. Cleveland: Cleveland Public Library, July, 1967. APPENDICES APPENDIX A INSTRUMENTS USED FOR COLLECTING DATA MICHIGAN STATE UNIVERSITY EAST musmc- MICHIGAN 48823 GRADUATE SCHOOL OF BUSINESS ADMINISTRATION DEPARTMENT OF MARKETING AND TRANSPORTATION ADMINISTRATION ' EPPLEY CENTER July 21, 1970 I am a graduate student working on a doctoral degree in Marketing and Transportation Administration. My research project involves an analysis of the factors which are retarding growth of containerization in domestic surface freight shipments. The enclosed short multiple-choice questionnaire has been directed to eXperienced businessmen in order to obtain a meaningful cross section of Opinion in the study. The questions are nonproprietary in nature. Identity of the survey participant is not shown on the form and all correspondence will remain confidential. A sheet is provided which can be returned with the questionnaire or separately if you desire a report on the results of the study. Response from you or another qualified member of your firm is important to my ability to make this research project meaningful. A stamped, addressed return envelope is provided for your convenience. I want to thank you for taking the time to complete the form and return it. Very truly yours, Vernon C. Seguin Doctoral Candidate 276 MICHIGAN STATE UNIVERSITY EAST LANSING - MICHIGAN 48823 GRADUATE SCHOOL OF BUSINESS ADMINISTRATION DEPARTMENT OF MARKETING AND TRANSPORTATION ADMINISTRATION ' EPPLEY CENTER August 4, 1970 Recently I mailed you a short questionnaire relating to my research on containerization in domestic surface freight shipments. Since these were sent to men like your- self in a number of different business categories, your Opinion is very important to the accuracy of my doctoral degree study. Since the previous mailing was conducted so that your answers would be anonymous, it is possible that you have already sent in your reply. In this case let me take this Opportunity to thank you again. In case my original request didn't reach you, I have provided another c0py of the short multiple-choice form. It should only take a few minutes for you or another qualified member of your firm to fill out and return it in the en- closed stamped envelOpe. A sheet is also provided which can be returned with the questionnaire or separately if you desire a report on the results of the study. Even if you feel that only part of the questions apply to your business, your reply will still be valuable if not completely filled out. Many thanks for your help in my study. Very truly yours, Vernon C. Seguin Doctoral Candidate 277 MICHIGAN STATE UNIVERSITY DEPARTMENT OF MARKETING AND TRANSPORTATION ADMINISTRATION CONTAINERIZATION is defined as the integration of commodities into common denominator large metal, wood, or plastic boxes, such as the standard-sized 8' x 8' x 20' or similar boxes designed for intermodal transfers. Please indicate your estimate of the relative importance of each FACTOR listed below in retarding growth of containerization in domestic surface shipments. Where the factors considered may not relate directly to your experience, use your best judgment in order to answer as many questions as possible. The degree of importance choice has been scaled as follows: 1. Extremely Important 4. Not Very Important 2. Quite Important 5. Almost No Importance 3. Medium Importance Circle your choice 1 2 (:> 4 5 RELATIVE IMPORTANCE OF FACTORS RETARDING DOMESTIC SURFACE CONTAINERIZATION 1. NONSTANDARD CONTAINERS The existence of nonstandard containers inhibits intermodal transfers 1 2 3 4 5 2. INVESTMENT REQUIREMENTS AdOption of containerization requires a capital investment decision. 1 2 3 4 5 3. QI§TRIBUTION OF BENEFITS Benefits from containerization may not be distributed proportionately to respective participants' investments. 1 2 3 4 5 4. DIVIDED CARRIER RESPONSIBILITY Responsibility for coordination of intermodal freight movements is divided among the carriers involved. 1 2 3 4 5 5. LAQK 0: LAND BRIDG§_ An effective coast-to—coast rail container land bridge has not yet been develOped. 1 2 3 4 278 10. 11. 12. 13. 14. 15. 279 1° Extremely Important 4. Not Very Important 5. Almost No Importance 2. Quite Important 3. Medium Importance RELATIVE IMPORTANCE OF FACTORS RETARDING DOMESTIC SURFACE CONTAINERIZATION INTERMODAL OWNERSHIP FORBIDDEN Present laws and regulations prevent common ownership or control of modes. 1 INADEQUATE CONTAINER INTERCHANGE An effective national container pool system does not exist. 1 2 CONTAINER AND CHASSIS SHORTAGES Shortages of containers or chassis/ bogey rigs result in shipment delays. 1 2 TERMINAL HOLDUPS Rail or truck terminal holdups cause undesirable shipment delays. 1 2 TOFC ALTERNATIVE TOFC (Trailer on Flatcar) piggyback service provides an acceptable alter- native to containerized shipments. 1 2 EXISTING TOFC INVESTMENTS Containerization may not offer suffi- cient economic incentive for switching to those who are heavily invested in TOFC piggyback facilities. 1 LACK OF GOVERNMENT LEADERSHIP Government has supplied little leadership in promoting container- ized intermodal traffic. 1 GOVERNMENTAL REGULATION Governmental regulations and agency jurisdictional overlaps retard containerization develOpments. l INADEQUATEfiRATE STRUCTURE§_ Through shipment rate structures are needed to encourage a shift to containerization. l EMPTY CONTAINER TRAFFIC AND TARIFFS Unbalanced traffic and nonstandard empty container rates contribute to "dead head“ movement costs. 1 2 3 4 5 16. 17. 18. 19. 20. 280 1. Extremely Important 4. Not Very Important 2. Quite Important 5. Almost NO Importance 3. Medium Importance RELATIVE IMPORTANCE OF FACTORS RETARDING DOMESTIC SURFACE CONTAINERIZATION LACK OF MOTOR CARRIER SUPPORT Many truckers believe that eXpanded containerization would reduce less- than-truckload and long haul revenues. 1 2 3 4 5 SHIPLINE LEADERSHIP Shiplines have taken major responsi- bility for promoting containerization without giving adequate consideration to domestic sector needs. 1 2 3 4 5 LABOR RESISTANCE Threat of loss of jobs encourages the labor movement to impede container- ization. 1 2 3 4 5 INEFFICIENT CONTAINER CUBE vs VANS Trailer vans offer more efficient cubic volume per trip in over-the-road trips than standard containers. 1 2 3 4 5 INTERMODAL RIVALRY No carrier sells intermodal Operations: each one tries to sell his own mode. 1 2 3 4 5 The remaining questions, which pertain to your firm, are nonconfidential in nature and will be used only for clas- sification of the above questionnaire replies. Please turn to the last page. ' 281 A. Check below which category most closely. represents your firm's vieWpoing in answering a freight questionnaire. USER: Shipper Consignee Forwarder CARRIER: Motor Rail Marine Air CONTAINER EQUIPMENT SUPPLIER OTHER--Specify B. If you checked a USER category in Question A above, please answer the remaining questions. All others may proceed to the loose sheet enclosed to offer any addi- tional comments and to request a report on the results of the questionnaire. 1. Does your firm ship or receive trailer- on-flatcar (TOFC piggyback) freight in domestic trade? Yes No 2. Does your firm ship or receive con- tainerized freight in domestic trade? Yes No 3. Does your firm ship or receive con- tainerized freight in foreign trade? Yes No 4. If your firm does ship or receive containerized freight, do you pyp_ most or all of the containers you use? Yes____ No___ 5. Regardless of your freight practices are some of your goods deemed containerizable? Yes____ No___ 6. Please Check the most appropriate annual gross sales bracket for your firm: Over $200 million $1 to $9 million $50 to $200 million Less than $1 million $10 to $49 million 7. Check your major classification (FORWARDERS skip this). DURABLE GOODS MANUFACTURE (Machinery, transport equipment, primary metals, wood, furniture, glass, fabricated products, etc.) NONDURABLE GOODS MANUFACTURE (Food, beverage, tobacco, drugs, textiles, apparel, paper, publishing, chemicals, petroleum, etc.) RETAILER OTHER--Specify 282 . If you desire to receive a summary of the question- naire results, please fill in your address below and return it. NAME TITLE ORGANIZATION ADDRESS Zip If there are any factors which have not been covered in the questionnaire which you feel are important in inhibit— ing growth of containerization in domestic surface movements, or if you have any additional comments to offer, please note them on the remainder of this sheet. Your assistance in filling out the questionnaire is greatly appreciated. Thank you. COMMENTS: INTERVIEW OUTLINE FACTORS INHIBITING GROWTH OF DOMESTIC SURFACE CONTAINERIZATION The purpose of this interview is to help develop a number of recommended actions to be taken to promote domestic containerization, in line with findings of the questionnaire you have been shown. It has been completed by about 300 men representing freight users, carriers, and containerization equipment suppliers. About 98 percent of the freight users claimed that some or all of their goods was containerizable, but only about 40 percent stated they shipped or received container- ized freight in domestic shipments. All respondent sectors listed the lack of adequate shipment rate structures among the tOp factors limiting develOpment of domestic surface containerization. Would you comment on the limitations of present rate structures and do you have any suggestions as to how they might be adjusted to promote containerization? 1. Cost of "dead head" movements and nonstandard empty container rates are also at the top of the list as problems in the develOpment of domestic containerization. Are you aware of any actions being taken and do you have any sugges- tions to relieve this problem? 2. 283 284 Is labor resistance to containerization going to be a long-term problem in the domestic freight area? Are there any encouraging develOpments in this matter? 3. Nonstandard containers seem to be viewed as a major problem by all but the equipment suppliers. How may this situation be relieved as an impediment to growth of contain- erization in domestic shipments? 4. Respondents believe that lack of an adequate national container pool is an important limitation to container move- ments. Do you feel that this problem will be overcome; If so, how will it be accomplished and how long would you expect it to take? 5. 285 The situation where responsibility for coordination of intermodal movements is divided among the carriers in— volved is viewed as an important factor, primarily by the carriers. Do you have any suggestions as to how this arrangement might be improved? 6. There is some agreement among the carriers and equip- ment suppliers that Shipline leadership in develOping and promoting containerization has caused some of the problems in the domestic freight area. ,DO you believe there will be a shift in responsibility for develOpment to the domestic carriers: if not, how can this problem be reduced? 7. For the most part, governmental regulation and the lack of government leadership in develOping domestic con- tainerization are not considered serious factors. .15 there likely to be any change in the role of government in this area of freight activity? What might governmental agenCIes do to help in develOpment of domestic containerization? 8. 286 After looking over the factors included in the questionnaire, do you have any additional suggestions on changes which might be made to aid in develOpment of domestic containerization? Are there any additional factors which have not been discussed which are important to the problem? 9. INTERVIEWEE TITLE FIRM ADDRESS DATE APPENDIX B OUTPUT SHEETS FROM COMPUTER RUNS AND GLOSSARY OF TERMS 2817 HmHamm5m HOTEQH5om H m HOHHHmo u N How: uanme u H acmcmcsw ANANko.n nk~kmu.u oaoaan.~ - odoaon.~ nmvmcouu season.” ~o~o«o.~ oaoaom.~ num-n.~ . - n. an~oo¢.~ savanna“ enemas.“ -.nnoosu.~ : anuokk.~ ”posse.“ . econox.n onwono.~ - annoms.n kooflcm.~ . u. «masontm scnkon.~ ”edema." 'knmnv.~ noauos.~ mokvao.u awaken.” o~¢AHn.~ ouokvo.n ou~no«.~ « .>:4>—¢ mosses I .«eoaes s-.-¢o4uxm. - .Hmmmtx , moxame,.o.mcsm»<¢ 4a¢>oo.- «assoc --z.uuo» - on .u - .u A“ ,; . on - nu .:- .H nu - «a . . «A . ooosoo.~ osodsn.~ canons.” cannon.~ anonok.~ nm'mennn osoooc.~ oasaom.~ H~R~k~.~ .ononv.~ n “accostu cmuuos.~ ooonao.~ soao-.~ nooaos.~ noaamn.n soao-.~ koooav.~ .nom'««.~ nnomvu.~ N vasnumiu mom~o¢.~ canmo~.u onwmoo.~ ~vcnoo.~ ”vanes.” . Henson." «ovnon.~ emacsn.«. .Hovno.u . « Lento» Isaac: . nexus» . apnea. uz:ox. moo_¢o emmmmm mtuzmm. sxm>z. .. osmzoz on a a A o n c n n . « .‘I.IIII..-.I.I.J..o.."4|0.5.-.-I.SUICIUUC.-.’|.I..|.‘..I.ICII _ .. nm4o<~¢¢> mes mzxasou «Esau m¢< mzox en. mzemx uauu 4 goes it mesons n no m.m»4~»4:z m‘mzsu ms¢lH mflmmflfiOQWW “mm“ 0“ UOmD mODHm> COOS .HV OHQMB now nmoxmw «on toowwm... no mwmroma 2863 O‘CVHHVUVOF~OCD ;- -.. . - - ..... -z:.~ .m_mmx»oa>z cos_zoawmmu to mmmuamo -.. I- - -sII. - akov.a .-.::.- nooo.o --f-é:-|:;:s -.nnnv.o ..-- 5---; nook.o _ z... .- ,. oomo.o : - -- :-- sussna oapa.o - - omcvwo --ra.-- asso.o - o«n«.u .mco.o« .-;.--: masuos HnH~.a neon.“ omkd.a cock.“ cmmn.~ «some; ossa.a .z ..nou~ --;II-.I .I Noonuo -1. ..omno.s ,:. -z... Hook.o --:I;Is;:, aosuzm o~o~.o o~m~.A ~mnn.° oouo.s nook.a same»: Homa.o annoum ---- a - ooAA.o -- --a. amnH.~ -: -- okoo.a ; .:-: mazamc Nonm.c «snows ovo.o ooo~.o ~.c~.o atwpsa anno.s masons ---ea - -- omoo.o - nvca.o o~H~.s . -,. -- Jam>oo oomo.a skovua .cuno.o nomo.a mooa.a ma4>oc nonc.c -: onuo.a .-;I:-:.z;s2 mnoo.o .: ..... I. «Han.~ .. .- svev.» -;.;-s- -. zLOCo» omsa.a «Noaun cmoo.o seam.“ omco.s Sacco» Honn.c canon“ --Iu:|::tué. nowa.o - . .I : nooo.~ -- I oovo.~ .- 1 .: maoaoz Avcd.a mmuuflu ammo.o «can.» nuno.v memoxm Aaro.a Nadeua .:I:c:.iIaza scones .- - - poo~.a - ~mve.« uum»z. amok.c oo-.a oaocwo Hack.o cued.“ «23°:— ouwa.o - - “can". . -Ii:n.s-. ammo.o -.a «one.» - : - ..Hkko.n . - -1- menses ons~.a oceans oaom.o onam.o ammk.o Hmumma «ooa.a -- on.fl“a -:---- - nono.o - oscv.o ;-. - .~ncn.o . . . :. meuzmm a-d.a census om.~.o ooav.« cone." me>z~ aoc«.a ouemum - I «nou.o . oav~.~ . - oon~.n opmzoz .OOJCII'WOMIOOIOOOOIIIFIOOOOIO.0 ODD.00.00.004.01ICC-GIOIOOOIIIWOI. I - OIIPIIITIIWDIIM , 000.0040 2‘1» anus a a zaua «new 2‘2. mam; I u m»<»¢‘>.za on z III.-- -«uooss 2(1» anus I - ooa°.~nn oz. .sc ..C.a. -- - . - coco.» .muo.uu> zshsox «on osbsm.u mud mHmmnuom»m m0 mummu mumHHm>H55 Cam OHmHHm>HHH52 .Nv wanna 2899 noose..~ nnnnnnnu unnnnnqu oscsouiu unannniu NNNNNNWN Rwuwkuiu oA-ccnau sm4>nx an cacao-mu asaanaiu oceankia ”vaunoiu .cvvecam osnssuuu Rwswkwuu «ocnsunu .quuOh. on .c was» cooao~.N .oss.m~.~ season.~ onwnoo.~ Samoan.” nnnnnn.~ anonao.~ .«.~s«.~ unsung a“ ososoo.n sooooo.~ nannoo.~ Akno~4.~ scoops.“ nannno.~ sanded.“ osmovv.u pause: o nuaocooaam “uIDoao . . m¢.¢zza~emmao umznspzou HOOHm3H0m HHmEm n m HOOHm3H0H0mHmA H h HOHACDOH HamEm n O - HOHHmumH mmHmA n m enemas." n»nnnn.~ scoooo.~ -Aoaooo.. asaon~.~ sesame.~ annnnn.n- season.— osoons.» unnnom.~ assess.» “ceases“ oasemn.» unnnnn.~ caches.» wokvaa.u .cooso.~ .c..¢..~ season.~ okkkkkua --~s.u cevvco.~ gasses.» c...¢o.u census." «acoo¢.~ .onono.~ “memes.“ oonuno.u .Anokn.~ .onoooo.~ - .naunoun ego-.4 «asst» .Hxnesz I: «aroma on pH oa nu ”manna.“ sooosu.~ "manna.“ season”. “cocoa.” nnnnnn.~ ”manna.” “cacao.— soasns.u secede.” Nassau.“ aossnwwa unseen.” ogox...~ oceans.“ panacea» “cease." «AAAAo.H «AAAAS.~ ---nn .44...." cannon.“ soooou.~ «Hauao.. .on.»u.« «cocoa.» suhwks.~ coosos.. ncn.un.~ soooou.~ okwo...~ “nouns". .aeuoxu sneeze czxox. maa.¢- . s o n um4a¢.¢<. one nzxasou IOOOI...WOOOIObIIIIflO4.00m...IIQOOSOIIIOIIOQI00.000.00.00... n44uu w¢< «30¢.oso 024w: 44.9 HOH5uomm5cmE mooom OHQmH5©coc HOH5OOOH1COE mpoom OAQOHTOOOG . . HOHomOmw5cO&.wO00m.OHOOHIO. HOHOHOmH5cmE mooom OHOOH5O ”nouns.“ Hoooac.~ cacosc.n n»nnn«.~ nnnnoa.~ nnnnno.~ asasah.» nnnnnn.~ ooossg.. assess.~ nnnnno.~ cosonx.~ ooosss.~ «Ano~c.~ oceans.“ onwao°.~ ousaoo.. .AAAAAS.~ attest.“ onesen.~ --~k.a asses~.~ «HAHAH.» “Adan“.m n»~.~s.« oooaan.~ mnenvs.n Rococo." one.~s.« nowa.~.~ nausea.» .H.~A«.~ chaps: season cas>oa zsouo» .« n“ «A «a Hoosos.~ oooaa~.~ ”cocoa.“ ”manna." soo.«..~ sooon~.~ n»nnnn.~ assess.“ nnnnnn.~ nannn0.~ cocoon.~ nnnnnn.~ oasn~n.~ “cocoo.~ .mnoas.~ neskno.« some...” saaaoo.~ ousns~.~ soooo«.~ AAAHAO.~ season." onnmno.~ Rococo.“ oas.an.u .ono»o.~ «nonon.u enemas.“ os~occ.. nosndv.~ «nosn«.~ soooo~.~ smenux metzmo pensz~ - opmzoz . n a . « HHmEm mmwmd 3 mam mmHOA v—INMV O‘CU'2‘IDMDFHD CQIUMHCIVOO~O mamsaoo zo.».u:om,c :«caome ngm»4.»4:: muzzss m. com: .mv magma (I‘.I|I - . . -onu acoumw «on xonwmmu no mmmmoma n mmnmmxpom>x con toawmcu kc mmmxomo ‘flCVHr‘CVOI~OMI «can.a oouhma II---III. anca.o I: - ocuamo.-- , I- II okca.o 2.,I I >¢J>~¢ ckokna «manna anno.o acumen enso.o moans; score 3:: I 3:5 3:3 - 3.2.5 - meow: «soo.c on.._° oooo.° «soo.o noes.o ensuxm anna.a oosuuu .: III coon.o Sosa.“ - I- Sosa." . I- I Heme»: .m.c.c awash“ onka.o v~oo.a scan.“ maxomo sno~.a Hanan“ I oknn.o I omoo.a - --I- ank.o I - - msmpoo 20M... 3:: - :3; - 3:... -- . :2.» I umwfiw man a ooosua noou.o A.A..° noon.° s canons nflowua I -.II .onflo.o II..2 n.sa.o II-I noc~.o - - . 4.0uo» 0°.m.s s~mhns ano~.s o.t~.« a....« sense; o.~..o okunua I .I II o~on.o I--:.. commm» - I «men.» I . memoxm RAA~AO wnwmus soo°.o amn.u~ °.n«.» auatz. no OD,3... Ammnnu - «nas.s -- om~0.~ I sass.» .. «210x. OJ naeamc nounuw oac~.o emacma anew.“ moo.am “2 nussua Renews -IIII- Nnnkmo - ~m~¢.a I I - ooae.a - -- pmummm oawmto ”natud nuance condoa knowofl mkkzwm “nouns ”ouch“ - I - .oku.o - . oops.” ..I.: -- .noka.« -II. III pxmszs .«A. s unsung «stoic onn~.. ano~.s osmzoz OOIOOOOJQIIIOOOOOOOCIIDI-.00..'0 I O-IIIIQOOOOlfillIIDJwQOOO40.IIOQOI GOODIOOuIImIIOJ .IIIIIIOI zax» man» A .. zaaa,um»» sea» m»m3..--. s mH~za a» zemx zumxpm. : u4o4~¢<> qkooauo 24:».mnmu I o....-nn oz. so ..n..o . - ,.1. - .o..«.« :-.m¢a»omx zamx to »».4(:ou so poms.m»¢.¢‘>.esox mus ashaxuu . I - I. .- someum gnome mum mHmO3uom»m mo mummp mHmHHm>HC5 new mumHHm>HuH52 .vv manna .nu .eoxzm.¢og xoauuce so mmmuomn a .m.um:»o;>z «on zoommcu so muncomo I! .I'! II II;I.V-IIII '0. 6.:vil0ll'. n‘.nl~ cl"-.. ‘0..- 00 «N ncnoso ddddfid Or!“ I‘d-'0 “NM.I\°BOO anua.a - oaanuu .I. - - 32:11 accuse -,II - owcana .I:I|II:II. oom«.o - II - >¢4>~¢ «scans .Aokuk Auno.s “Noo.. nuns.» masses Anon.a Anson“ I .I II .-on.o - I - «mucus . I;.:I;II-. omco.o . -- I I «some; Hank.s “oasis sona.o .ssois occa.s easel» o.s«.a Boson“ I. -I-.. .A~°.. - I. nmxo.. - -IIIsI--. ~nn..n -III - Heme»; coma.c ammo”: «ouo.o noun.» movo.~ moxowo nowk.a NASA": I .ono.o - Assam. .I II..- «oss.s I a»m».a okoa.a oceans n».o.o mon°.o csna.o Ja¢>oe nae..a - coocua -.II..II: . esso.o -I.II- n»a~_s II-IIIvII. can..o ---I. - ¢o4>oo o«.~.a oo.«.° “floods .~o«.o can~.o z.uuos oesoLO - ~onunn - I- -- "on”.o ..::I« v~oos~ - - III: «vev.~ I- 4.0uo» ano..a nooAua «Sea.o “one.“ ammo.“ moose: s2.»... so..ua - - - III con~.s : 9034““ - III-II 00's.“ atmoxm mu oas».° Non.ua “as..° n.oo.. ~aoo.o au¢»z_ .2 koas.a “can"o I- IsII: I acok.o «sass. I;:;III o.c«.o - mzzoxs "u““un mm..m~ nu-.o anemia vans.“ mmmmmm . . n no n -i-IIIIIII. weenie .I. caouua .I III- noon.“ - v~O~mc ~oooJa 5"“.0 cnonoo ~«on.o mpuzwm «cm. a suu~uo - I I . - neocio woos". - -I «Neo.a szmsz. .2»... 2:: .8»... 2:: :3; 2:52 .O..0.‘O-..W...O.J.O.Cfi....C....0,I IIIIIII. “.OOII‘IOCIO‘IITI.OOCUIICOOIIIOOD .IIIIIIII .OO.O...U'IWICOJ III .OO.O‘III .zcx» any; a I. . s z.on.~usa - .- :41» mums e e mp<~¢<>~zs a» zen: zmmzsmo -. u4o<~e4> I,- - sevens 2.x» mama g sooouonu oze on .we.o -- - -..I I. ...sm« ..»¢a>ous tam: to ».~4«aa- to sum. m»«.¢<>.pso: «.5 o.~.¢.. . II .I. .alvl o I.b OI .I woman. ”Nun I: . . . II... . I : mum mHmmnuom»m mo mummu OHMHHO>HGO mam mumHHm>HuH52 .mv manna .292 HOOHOEWOM n o -;f . .Omcmewcou n.~ mmcmHmcoo OCm Hmmmwnm n m HmmmHnm u a Hacks.mm A--~.~ .noomoo.u oamoam.~ onpo~o.~ om~0m~.u ooooao.a snoomo.~ v.¢v«v.n mmmmmwum c essomn.~ oooos..~ season.“ soooo~.~ cocoon.~ cocoon.“ saosoo.n. assasn.~ cocseo.~ osssmfl.m n can~o«.~ mookan.~ osonmo.u .ooosn.~ mao.mo.~ oceans." Nookoo.u nmoosm.~ .maoco.~ oakonm u N seawan.« nakvnv.~ assess." oosno¢.~ .oauook.~ monoco.a canoes." ooan~¢.~ avom««.n. ooa~o~.~ A s¢4>.¢ umaoou ¢¢0a«4 unsaxm pence: -- naxama ¢»»»<¢ . season use>ou zsueo» am a. on A" on a“ .a nu «A AA anonnnum ~nmano.~ nommom.» nommon.~ «defies.» «eased.» ---.~ m--m.~ odmmflm.~ avflnv«.~ . casco«.~ ooao'~.u asaa-.~ cocoon.“ oooooo.~ consecun ecoo¢~.u sooaco.m cacooo.m oooaoo.~ . n moon««.~ csn~o«.~ masses.» Hkon~0.« mascan.~ .mfloco.~ oonuoo.u Hksnmo.~ ocnnmo.~ n~ooe°.~ A «doesn.~ cok~ov.~ nnnnnn.~ novvso.~ .ms~ov.~ «onsau.n oucsvn.~ cosnmo.~ .nnnnnn.«. sanmno.u .« deuce» Isaac: menses opera. eases. maa.¢m panama assess. .s:m>z. I atmzoz as a s H o m . n w A OIIOOIOOCIJOIOUIOIOQIOllIQOIOIIOSCIOOIIOOIIWOIIIOIIQIOOQOIkO o .waae mw5m<~¢«> m¢« mzxasou «same m¢< «you .I. mzemz asuu messes . to «Impsezc I m¢.ezzo.smmso zo.n«-¢mz~«»zou. womssou zospstsaz muzzsu m.«nv mHmmzuom»m umwu ou poms mosam> smmz .ov manna .293 III-I! I C Ill! n new «mommm con.xoomwmu no mmwmumo nmummipomrx «on toowmmu no mmwmomo MONDOO fiflHC-OHN OHNFOV Hr! Hv-QH CHOIMH'KMOP\¢)O mono.a axonIo .. :III.I voaouo wok«.o - 2; ncc~.o I seq>sa A.oo.o mmmouo kwmo.o onsn.o onnn.s mmsuos o-~.o “amen“ I I- I woo~.s m~n~.A “can.“ -- «mom‘s mmno.a He'dna omso.o Nomm.a on~m.° mosaxm .~.4.o omwaua I -.III.o.oo.o I ~o¢~.s oss~.o .. :I -- I name»: omnfl.c anemia H-«.o "moo.” nnam.fl «aroma oako.o no-na - I! ooko.o - II- vo-.a . «on~.o :.I- memtea amos.° Hksm.a Heao.o Amdn.o ovoe.o ch>oo oao~.a ”sewn“ - - A0~A.° - oases“ cHo~.n I: I .mos>oa amoe.o nnonwa nnso.o vvmo.o omoa.° z.uuo» advm.o monnuo - I-- ..Hno.o -- - ono¢.o - v.om.° - 4.0uo» scam.a assess a~oa.o ooom.“ Han¢.~ asaso: muon.a «moons - I I - onaa.a - - “one.“ macm.~ mtaoxm mna~.o “Ham.“ nmoo.o ~AOH.~ mmo~.m sum»:— omco.o ..ovum I- swwa.o coco.“ mafia.» - ngox_ maon.a coach” sono.o vsvm.a noco.o moo.mm snoo.o nomm.o - - .- o:o..° ..... - - smoo.o -I-. seem.” - Hmmmma otoa.o AAHH.v omoo.o ~H0¢.. mkmn.v mpuzwm odo~.a Nksnuu oon~.o moat.” c.ns.« I.- Hym>z~ ammo.o ”pawns onuo.° noma.o choH.° atmzoz OOOIQIOOHOOIIOOOIOIOOOOIflOOOOIIO WkI000”.IIOImIOOOD+OOOOOOIOIIOQIU Oiilltiflllltlou IIOIOIIO 2‘1» on»; A - g zzoa amp» I I z«:. mama a u weeame>sza.. om zamx zmmxtmm mam..u(> : _ovn4no 2‘1» mums u s~o5.onn az< so .uu.a ..- - .I. ,.. ”wanna .mzo»uw> new: to >H~4¢som to saw» menueessesa: mos oHHHG5 ppm wumHHm>HuH5z .bv magma 29%4 Huauumu mcflumz n m ..Muawonusmmwmm.w. I II I: WWWWWMU Adam H N :3 Hmfluumo ham u - - ,i- umaummo H0u02-n A . ooo°994~ o°n~oo.~ .«nwo.».uI «conn«.~. unan~o.~ «nmoohmn onnaoc.a onmdov.~ .maovm.~ Nooscn.n n cocoomuw omvaso.n_- oo~.«s.« oo~vas.~ oo~.«~.n o~¢asm.« oo~'«n.« u~mo~o.~ n¢a~mo.~ .asmc~.~ . sooooo¢u nannn«.n hoooo~.u .ooooo.» oooooo.~ nnnnnd.a nnnnna.d “cocoa.“ nooooo.~ sconce.» n nooaou«« cashew." an»~mo.u- .oaosc.~ . sooooo.~ .-sooooouu oooooo.« ooucn~.~ coaoh..n racon~.~ ~ s--~.~ chooooJ« poop...» “cocoa.“ ~ooooo.~ o¢occvmu ~«~«~«.a canono.~ nonono.n anonon.~ « >¢4>.¢ guano; «com‘J onmrm . ~mwm»: I moxoma - chmp‘x Jo¢>ou ¢o4>oa z~0ko» ca 9“ an -- a“ o“ mu .« ”a w“ a” aoscn~.n ~¢¢onn.u I unan~°.« ~o.onn.a oesonu.~ nonmao.n canNoo.a nonmao.~ oeson~.~ occana.» n oN'unoan on~Vfi~.n omcano.n omvaso.~ oo~.«~.n “snomo.n cocoon.« nvahno.~ «hmowv.~ oooooo.~ v nn»nnn.n nnnnns.~ noon..." “ocean.” nannno.~ cognac.» ooooa~.~ oaoao¢.~ engage.“ .ooooo.~ n nooaos.u oomvas.~ .Nmooo.~ oncood.~ adonmn.~ ”cocoa.” .Huno~.. ouonwm.~ ~o~.oo.u nammo°.~ N «cacao.u onnsms.a ,.«s~u~.u ~a~a~«.~ oanono.~ ononon.» onanon.~ cocooo.~ ~«~H~«.~ unaman.« « J‘OKO» usage: .n»coa» camps“ gzxox. mon—mo »ntmm¢ m*u¢ao kzm>z.l o»mzoz on o a s o n c n u « .‘IHIIIIIIC‘IV’IIODMIFCICWUUO0......DOOCUCUUCCCIICI‘UIICIINI . nmgm‘_¢‘> m¢« mzxaaou magma mc‘ wxox .I. mz‘m: JJuo . ma«p mmoacm n no m.w»44ufisz muzznu m. ammz .mv manna «o umommw «on roomwmu no mwmcowo 295 “0"000 flfldv-CHN ESQ-ON")? HHHv-GH H Nn'nflhflo III_II2::II. --II;I:I. .¢. .m.mmzhon>z co. snowman no mmmaomo . I . I I.,. ocmo.a mon..~ nona,o .IIIIIIII. comm.“ .I..I . III mafio.~-.-..:. I:.I. >c4>.a oonmna «sav.« I I- I ¢Hoo.a :..I:: mono.¢ I --I nnaa.» - I! - - mmauo; mum» c om»«.« . . . " oon«.o can“ « c'no.~ «mom‘a Hono.c I- nwonHN I I oooo.o -I.: . «auv.n :II. -I eomo.n I I moqnzm ”WWW.” ammn.o nnmm.o ofioo.a mafia.“ puma»: s~n°.o ..... “mom"a . II on¢auo I nnns.a IIIII. . “mma.fl . I I: .- moxomo and“.a o o ”M oOflo.o cmo¢.n ~¢~«.n mpmk‘a odcn.c .: “mmmua III: I cavemo III- :II come.~ I I- II I moon.» I Jum>ou on"~.° o ecu" ooon.o qmmo.a “mm~.« mcq>ou m~c°.o : I “a u IIII- I .«Vfio o moaan 1 on~«.v I; I-:I-I zuuuo» anon.o ”mnMu" moooHo onsm.m nomm.s J‘uuo» «an~.= - anncna -!.IrII I: I Nono.o IIIIIIII;: ovno.a. III III - “cocwo -:I I; III. aDQJoz n~o°.a mama". Nmowno nwfim.a o~o~.~ m»:oxm .ncc.c fII owvowo IIzIIII II -oo.o - III- oonmmv. I I III . Hohsnn I -I.I uum»z~ o~on.c I onno.u oao~.o vom~.« oosm m «230:— omo~.° I- nanmna -.I-- I II noon 9 I umoo a --I -II ohmo.° III mua_mm n~mn.° cocdnu onmv.o «cmo.o comm.“ pmmmmm coon.a I I-I cocoa“ -.II II I noodwo smun.a I ..IIII - unno.~ I I I mpuzmm «ao°.a L nuns a omoc.o . saoo.o pxm>z~ I - mac“ 5 -IIzII. «coo.o -I_- I I .!.nno«.s..- I I IIII ~o~O.o I apmzoz OI...IJJflOOOOOOOIIIIIIIOOSTIOWIO . O-IIIOI04.I.‘Oi'l.fifi00004|dllil't IIIIIIOflIOVIIII .lIIIIIC 2.x» umMJ ; u zxoa ampm 2(1» mmmJ u u m»«~¢«>—za .m 2(m: zmwzpmm m4m<_u‘> «goons z_»43t «on o~»<¢.u mum mammnuomam mo mummy mumfium>flcs 0cm mumwum>auasz .mv magma I296 .«.oo o.«n . no” 4«kc» Ut.‘llv-..ul‘|' I I... I PI IIIIr. IIIIIOOIII' IIII, I II '1'. lull. I 'I I. l .I I 0. BB ‘.N~ .u .I. .. I .0 . ho . n. N -I...II.I-II mmwwmmflmfimucou AmwwmomhImmfiflmw.-zi- . v.3 9: . _ . 3 « GodumNHHmCHmucoo oHummEOQ u mBOm IIIIIIIIIIIIIIIIIIIII -IIIIIIIIII, IIIIIIIIIIIII .I.III.IIII.x_I...:..«x m>cm1 mkzmcaaa li'.“'l||’.lll‘.|i mmw n N 3..“ um . I II I mu : ..:I-;I- I V ,II 0.0. o.o~ .-I:I fl.d. ~ IIIIIIIIIIIIIIIIIIIII- IhwmeJImIIIIIIIIzIIII .~.nm m.«h: o.¢m . a ."’II‘II'I mofl. .4.»c~ I.-- III--- IIIIII1IIIII; -I II I- I. III.I-:IIII IIIIIx~ap‘:-m>om‘Iwah zozu szJOU >m.mhzmu«ua I on“..-,w x»a...~oa.IIIuIHxafI on». ..r ‘zx‘o - ns«.I - m.a<».. no“. . o. ovn.¢ u mx(aom _xo I. .IuI'II. 0 Vs ’1 IIIIU."II"I"IIII’." I IIIIIIII III IIIIIIIIII IIIIIIIIII I I. I I I II I I "I: Inn. 0 .I I I. no.“ 31.—ow III II I I- III II III... I I: III I I. an on o Ne .- N I IIIIIII IIIII IIIIIIIIIIIIIIIIIIIIIIIIII . I .on mm o I no, I a I It. IIIII . I.I;I.|IIIIII II I. I- I. c . O O O 0 (III. at I In. 0 Illinl II I I II 0 -III! I I |o III. IIlIIIl. I N . fl ID I I... .I—ICF II. IIIIIIIIII IIIIII IIIIIII III: II IIIIIIII I I I. I ..IIIIIIIII- uuou mwxou N .02 wgm<~c<> .ma.> - III. I upzoo ‘ao. n Iyoz.m4m._u‘> . .¢-. .02 m4a<» Ich\v0\0c IIIIIIIIIIII.I .IIIIIIIIII I. III..IIIIIIII|IIII II.-. III. iIIIIIIIIIIIIIIIII- I IIIIII .I..i f I: . I I _ I wo.m accusz m mammnuommm mewummu How magma hocmmcflucoo .om magma 29T7 unmwwuw. kuwwmcwmucoo u m3omr I‘IIIII." v- U I f .O xomnxmmam once u mceaaoo ‘III 6 . ‘1' -~.oo c.0fi. I. . mo -o.no.c.ofiI;;. : No .o.sn «.mu . mo D- In Jom« wz»;zoau xoa rm mpzmcmma mm» M N on" 3 m3 1:: I - I II I I I I I III I -H.n. v..n . ..av m 0 "I II ..I - IIII I - II- .2 a- . .o.om 0.00 o.mm H -II -:I -I IIIII - III -I - III - II I. .x_a»4z m>oc«-wxp.zoxu 2x340u »m.mkzmuqua I “go. m x>a.I “no..II. .x0 «0“. . .zx¢o Duo. .. m-:.»-- ouo.. . u wow. « wa.aom _xu II.IIII;I:IIIIIII:I:I.II :IIzzI.IIIIIII.II:IIIIIII:II - .- I ..I:IIIIon«..mn IIo .I-.. NcfiII.4‘»cp II I I IIII I I; .II.I. I I . I on «a 0 Ne m IIIIIIiI I I .-IIII K i.:iI.'s.fi~35 : mo a o c o o o - I II- I IIIIIIIII:II III IIIII I I.~ fl ItoI.;I .or; I --IIII I : I I.I- I; II ,,IIII:I!.uuou mmloo a -.oz.wqm..m.>-:.mm>.. I .I. _ one» mwxoo « .oz me<~m«> n .02 w4a<» os\.oxoo I I: III; IIIII;.I .IIII..IIIIIIIII:I,II IIIIIIIII.: IIIIIIIIII_II III I .o.~ mcmoaz h mammnuommm mcflumwu Mom magma mucmmcflucoo .Hm magma 298 o n :.I, I-.. I- III-II. IIIII-I-I- II I- I, H o o I. III -I .I III-..- -II-IIIIII. III- III..-- N a o , 0l| ll"‘l"! --I}!|‘ziltl|'l ‘tll'. l‘!‘ I'i‘r" Ii- .' .. "-|.. I.-- H o o II III I: III -- III-IIIIII I III N o v I! III"- ll!" """I ‘l’.'ii||"|‘-‘ll"- -. ummD Iucmamum mm Hmaammdm IIIIII'III... IIOIIIvnyluI- i. IDOIIIAIvI II"! ucmEQHs-Um al'll III-IIIIO 'I'IIIIO...’ '3‘o-1 '1'"- HwUHmBMOm unmam-HMII I‘ll! I-l m ¢ it...‘ IlttII' ..I! Ill-I- .l...‘ l III-I .-I ..2Kum 1‘1'1 zxvm _ o ¢»zou ‘30 c “COOOOOOO m ,°.oo« I .! .mmcmamcoo Gum memanm u m 30m I ”a" mmcmamcoo u N 30m w.” Hmmmwmmlm- wmmIIIII-I: I 2.. “Hum II-IIII :IIII::II:iIIIIII!IIIimwwIMIm casaomiI;i. .“H” I. ?I:I:IEIIIiI IIIImmuWMI Emmoo- ..... I mg» .IIII::.IIIII:I:IIIIIIIII!IIIIIII:I I: --IIII: III I.II- 24x~ay«x m>om‘ I II IIIIIII II IIII II IIII .I.III: I .-z. I:I- -I:,:I IIIII.;III- I..0 I II III. III I III- IIIcmmIo II-u- m-m«:ou ”Irv IIIIIIII fl .- I I- o -I II! III :IIIII: III- - I II:III: I.‘ o I I :-III!IIIII I: I III- IIII I II III II I o c 9.7 I I-"llll' 0.0.‘I'oI-n. I'II' I II I c o I I I ....... >~>pu< pan 0. .oz uga..m<> Imu> .n o I.m~vcwwwc I.oz w4m<~u<> lzIO‘Ilvl III'II‘ I -II I..- I ..I-.. I. I--. ..oz WJa<» II... uo.~ mcmunz N m mammnuomxm mafiummu Mom magma wucmmcHucou and Jake» : o.coa o.vo HOOD O fiNn'mOUNQO lileIIIIIII. g. x~mr<1 w>om¢ mxh toau.xom >5 mhzmcmua cw" on" .4.»c* « .--I I . H o a n o n a v n 1.0“ N v.av N.nv « m1» zomu ZIDJOU ha mpzmuama emu a ma 0 . c .o c “a mu "w mm a - on«.. 4(ho» cu OOOODOOODD H 0- OHNDVmOBOO .H O p- O y. .Nm magma 299 . o.o~ ..as_.. . I on 44FCH I II I I I I III- II I- I I::III.::I;II:I-I I H.n~ n.on . : I- an N .IIIIII-I.II: -IIII .IIIIIIIIIII I IIIII! III: III IIIIIII:II . III- v..n o.no I I: 2 mm H ..--..I-I..II-IIII--. -.mwmwmwufiIuFmV-Hmmmiw v :oncmEHo wmImI I IEES. Sam. w...» :2: .30... E 353% HmHHmumm u m :oncwEHn Uum HmuduomMSCmE mUoom mHQMHSUcoz u m :oncmEHQ Uum ow cm on 4.2: IleiI: IIIIEI.I :IIIIIIIIIIIII;sIIIIIIElI-I.-III . . . , .. “manuommdmme mUoom mHnmI-Snu H concmEHQ Uum: I ”.mm ”w“ ”.mm m :- I- - I I II I I II, I . ., ..x_a»om< ml» soak zzDJOu >m mhzmumwa I I . I. IBM-HM. umHHImeIIu NIzwmm II -TII I . 8. Ian 0 I I2... I 4:3. I-. .I_. :..I.I..II. III-IIIIII:II IIIIIIIINLIIIIII-III.I- - . - .- o . om . o . II- on. . - II; III! . IIIIIIIIIII EHHM IummuquJ H 30WIIEIII;III-T I «HI-HNIIO I ..mn . « Isa-HumNHumchucou oHummEOU m0 mm: .mm% H m cEsHOU o o o o o ; defiwmwauchmucoo uaummEOUIwqummIow u IH :GEdHOU.. m : H I a ho» I -- III III--- II n2. a mica-Em.-. III-II. .- I II III- I III:IIIIrII-IIIIIIIIII:I III H . zoum‘m:_o can I I II I- IIIIIIIIIIIIIIIIIIIIIIIIIIII.I III-IImu»» me I- 5 .oz m4m<_m.> .ma> II- III-IIIII. II..IIIIII.I-.. I-IIIIIIIII III-IIIII.IIII .1.-me mac 0.. .oz ”3.3;; .ma> . uuou mmzoo u .02 ugm«~m<> u .02 wgm‘» °H\.°\QOI. .IIIIIIIIIIIIIIIII I I .III;.II.:::II.-: .I.. «°.~ mocuaz Aumm mnu CH mmHnmu concmEHUIUHHsu usomv mucmEmHnm oHummEOUIIOH Ucm m mmmmnuommm mcHummu now magma wocmmcHuCOU .mm magma 300 . o It . ll'.‘ I; Ilo, -0- '. .::u.: n ;-_-.v;no o.on :1 -:.-;,HH ‘ J‘Ho» i- 11.1: - -i... 1...; ..- -avlllis--:-;i:..i.li -- .1----.1.:- s. -53 n6» .- - on m .iazznlu..:111,xn:.!-ulss. : . - :.!;:!:!:-a,lus:.-41:-2slt.an;;sie-ezt.s.o.vc ~.nH.. .;-..on;.. H HmUHmBHOM uanmHm w concmEHQ cum 113;. I. x~¢»4.t w>.o.m< wxh tom... 10m. rm mhzwumwn HmHHmu.mm u m concmEHQ cum umuduummscme mwoom mHnmusocoz n m concmEHQ cum mv ow H5 4‘2: -z-. a - -1; ;,¢:Ii::aa.-::uio:;:--..!!::I.LWI.I|II:;II-:a:II:Ia.I It; -. .--.m.sn m.oo .-a ,--m.nm a m 34...! --s:mmuduomwscm6 mvoom mHnmusn .....I H -coH mamWHHQ cum- I. lil::.u..~o. ~23; - ii. - n6. . H I a - ..l? I..-- llll..:1.l.!l I-.- i-.:-.n.-?--;.l .-v-.!li--.:a .. - in. ‘13: 1.... a ixaahsx Hm>om< . m1». tomb ZIDJou rm mpzmumma 4 ..x I... - KHAN HQHAMBW H N - 3.0m - . mv on o as J .mn; .;.o-- .I::a-:;;. .1- -g' :. at..sa;;eu.ax|!: .m-m mam o. .02 qu‘.a«>.-4mu> . . .¢»zcu ‘uou n. .02 w4¢ n .02 m4a

om¢ .2-. . x~¢H<1 w>om< ax» loam :0: >1 mhzmuzma 11II1 1- ;-.. 1 ! mo How J1 mpzwumwa ummD uanme mm HmHHmmsm ucwEQHDUm n m 30m co mo .0 HoH. git: l 12,:3.-.11;311-f MWOHM3HOM uanmHm H v.30m u mm 9 mm .o -- -- «Mama. gym-mam -mmmfinw u.-m ram . -- W W M w w 31.-1:..- 1111.w.mmmmmmmm:hm1rom .- .11 n n M w - M - - --11-1 1-. - -----mwmm2m 1; mom. - .1 w” MM u MN m - -1 -- - . mm». 1 ”wen-Ham . - .3 MM M MN m : :1: -1 : 1 -11: 31 .111--111- oz u H wasHoo - -c c , o 1 o o - 1 .11. - -.: 1-1---- -11.:1-,- ;cwwrw -..wm<:om.wzu m H o be» - 1 1.: 1 1 1- 1- .1. -- - 1-11 >p>»u« Huh .0. .oz u4c<_a«> .ma>. . . uuou mwxou a .02 qu«_a.> 5 .oz w4c¢p .vammMmm-t.;--:--. .- -1 -- -1 - - 1 ..- Hom~.mcmc:2 mucmEmHnm UHHmmEovIIHH mHmmnuommm mcHummu Mom mHQmu mucmmcHucou .mm mHDmB 99 -1- - - 9.99 9.99 999 99999. 1- 1 9 mm c. o . 1...... 1 . ..M 3. 9.9 9.9 9 9 -- 9.9 9.9 --..11- -1-1:--.1. 9.9 9.9 1- 1. 9 9 9.9 9.9 9”9 9”9 9 9 - 1-- 1- 1 1- 9.9 9.9 -1-11..1-;:- 9.9 9 9. - 9 9 9.99 9.99 9 99 9.99 99 v 1 1 1- 1 9.99 9.9 - -1- -111. - -- --9.99 9.99 .1 99 9 9.99 9.99 9.99 9.99 99 ~ 1 9.99 9.99 111111.1-111-1- -- 9.99 9.99 11. . - -99.1 9 lo 1- 1O .111111i-3111 x_k»<1 w>om< th-zomu 30m >a,mhzwumwn .iWWmm1mzmHwww-mmlumm mmWWW1wmm9mwwvn-1.m1row- 111:999 99 m 1111 -. 33.-.39091999m-Mm...-.11913mm--1.-.. 2.-.. M 3 3 -1- 1-- wmm-mHWMflU cam HmmmHnm -1m1Mmm1.:--.-1 w w 9 1111..mhm-w-mmwma-wu-m-99.9-- -4-..” -n M 11-. .w - -- .:.._.1.-m.mm9.9.9-w1M-H13-mmz 313.1... m M. -M . - .. -- 9 M. m .1111111-:.1;;;1111:1-- :1-111wMIW1HcesHoo.: . 9 9 9 - - - - - - - 1 ~99. 9 - 999999 999 - 9 9 - 9 1-1-.11;--1.11.111--111:11- 1. .1111111;.- >9>99< 999 9 .oz 9499999> .m9> - .1111. 99299 9999 n .92 9999999> -.9-9xv9xoc - 11111-11111131111111111-1-1--1111-11- 1112-1113....- .1. 999 4990» “NOOCMVOBOO 999999 m>999 999 9999 299999 99 99999999 999 _ 4.99» o oamnvmonoo 999- : .oz u4a999 999 2999 999 99 99299999 --1 . - x9999: 9>999 929 9999 299999 99 99299999 1.89: ”Em-«mum mm HmHAQQDm ucmEQHSvm u m 30m 999 9 9 999 . 9.299 chumBMOM unmwwum u v 30% . 99 9 9 99 .9 .1311 1:11:111-1 - 11:313. .21-! 9 .9 - mmcmwmcoo 0cm Hmmmwnm u m 30m 9 9 M w m - :11 111.111.2111 wwcm9mcou.u N 30m M w u w M 11-111 1- . I 111- 111..-11111.nm 1.911 9 11 99 c Hmmmflnm I a 30m 99 9 9 99 n --1 .111111- 11 3:1111113111111:.1-HW::11-11.. 11 99 9 9 - , 99 9 - -- -- $9 1-9-@999 - J-.. .. . 1. .. . oz n H CESHOU 9 9 9 9 9 -1111.311-1;33333333 . 3-9 911 1-291- 999.9 . 999999 999 9 - 111.- 1111111 1-11 113111111. >9>999 999 .91 992.99999999 1nm9911- -. --. . 1- 11111-1111-1- 1 9999999299 9 .92 9999999> 99 .92 99999 9~mwdvud1111111111111 -11111z111;;111-11-1111111111 -111111.:1:111:.1-:1-11111111131-11zz-1 9 99.~ mccoaz mu9>9uom unmflmum cam mwoom mo >UHHHQmuaumcwmucoo cmmzuwn @929209umamm .hm magma 304 HH Euom u m 30m . - -- il- H Show n H 30m .umwmnmm;~ .mwuwn. N “NNMNB. « coo.oom. ~ anonao. N ..mmms. « nvnuou. « mm.n.m.~ n.o.°~.n «nonda. m a - ononuo. ~.:Ioooovn. uztis~s~s«.~11-~o«omn. ~2:-canooo.«;l.oooovo.ulits~s~hs. anixaooono.Nlliooocco..uliluonono.Ntllnl- .a - .-px4>"uninl.monoculnlluucom4gznl:.«aquzw p.»¢*t|allamoxnun icpnp.uazllluua>ou||1|l¢aw>oplllnlz~unop.,li .;--- cm a" on “a a" n« a 3 « .onoon. .«nxsronommzu ononon. ~ ”sax“ -wiauNmNMwm m .zwmwmwo. n .onommwu «mm.mm-m- anvno~.« nvncnoua u -ononoo.wilzooconsaulluswsw~nswul.ononrfltullznvncoc.. wxlibpoanu. v.1:oooo.n. «Ilium.no~1~1rlbwo“nouullluononu w HI. n:u«w“o»:ll:1¢aauox.lliimwcoaw:sinuoumrzrnnizlczuox.alualmomuxm ro‘muxiilllm»m2umlllllktw>zklllllbrwzov o . II. I'- .I'- t» -I'ulu'l .runmam._..>-u¢.-nzz:Jou‘lulauguunmx.unaouuuupunz.uxnuuwo v wo‘n .l‘l llil.‘ ‘|| I'll! II ll-. II'IIID"-'I'V'|I“II'I" III II mxmou. on» o muuczzofirvmao zour4uv43t. muzzug mHHmcaoHummso HH Euom Ucm H Euom Eoum mman mumsam>m ou 6mm: mmsam> Cmmz .mm magma ‘305 mafiaamfi mgl3baaom u N 30m - mafiaame HmHuHcH u H 30% IImemw«.~ ooww.~.~ «vso.».« .amomm.~ n.n~ou.~ Nnoano.« .oooao.« .«nodn.~ c....c.n anamoauu . . w :-n.onn-~:|:occconm~‘|u~.noo.u«|||¢ooo«cp~|||¢oosnspwnlanuon..palluooasoahutnl.ncosn"willnonsnonnlllhovnwu.wllnaxalga; :‘ly¢4>.«alllnuoaooplllluzaoasunlllnzoJoxn.zllxy;m¢»xnlluumoxauanllrvxpnpa¢|||||uu¢>oollllucou>oalllllz~puorr|;|||a:t.:, on ad on gm 0“ a“ ca n“ «a a" :gomedm.~ mwmwmw.~ oomo.~.~ nomwmmnm meme.~ oooWoo.» ..cucc.~ ..oooo.~ oanoan.~ 000000." :ua. -a¢*oon«p~IIIHonouvaxlursnoowpwcuunnno.«hwnlxmnooo.w~|||v-oo”unluuocvonnhwnluoooo.'pwrl.«non“”hullnmnuwwwwullllllllwn. .||u«wno».ulanunmuoxnlnlnup“oxnlllllouurzu|||::¢znoz*.lllluom.cannulupmtmu¢.|||:upmzmonlllukzm>znul|lnnrwzor . c .1....‘U.’I..I...’.--W'...IU..‘....“I..HHII-....'....:..UU.. VIII +ry u- mmuo_.a.>:m¢¢snzxauoolla auuuurmz«onxoc-.unnnzauz.uumo v mac; II. ill-!l '00 III I nanny taoonmou no mum»4.z<.ua.4_p43: m‘zzwm- mmCHHHmE mau3OHH0m new umuflm Eonm mman How ummu ou 0mm: mmsam> cams .mm magma hue Hommqmmbwmw HHHHHH qmmhww O O O I O 18. 19. 20. Use Use Use GLOSSARY OF COMPUTER PROGRAM LABELS Questionnaire Factor or Variable NONSTANDARD CONTAINERS INVESTMENT REQUIREMENTS DISTRIBUTION OF BENEFITS DIVIDED CARRIER RESPONSIBILITY LACK OF LAND BRIDGE INTERMODAL OWNERSHIP FORBIDDEN INADEQUATE CONTAINER INTERCHANGE CONTAINER AND CHASSIS SHORTAGES TERMINAL HOLDUPS TOFC ALTERNATIVE EXISTING TOFC INVESTMENTS LACK OF GOVERNMENT LEADERSHIP GOVERNMENTAL REGULATION INADEQUATE RATE STRUCTURES EMPTY CONTAINER TRAFFIC AND TARIFFS LACK OF MOTOR CARRIER SUPPORT SHIPLINE LEADERSHIP LABOR RESISTANCE INEFFICIENT CONTAINER CUBE VS VANS INTERMODAL RIVALRY of containerization in domestic trade of TOFC piggyback in domestic trade of containerization in foreign trade Ownership of containers Goods are deemed containerizable Business size category (larger or smaller) Durable, nondurable, retailer, other type Freight activity (User, Carrier, Equipment Supplier and respective subgroups) 306 Label NONSTD INVSMT BENFTS RESPBT BRIDGE IMOWNR INTRCG SHORTS HOLDUP TOFCAL TOFCIN GOVLDR GOVRGL RATSTR DEDHDS MTRSPT SHPLDR LABORR LOCUBE RIVLRY DOMES corc DOMES TOFC FORN CONTR OWN CONTR- CONTRIZABL BUS SIZE BUS TYPE FRT ACTVTY APPENDIX C FOLLOW-UP INTERVIEW COMMENTS COMMENTS FROM THE FOLLOW-UP INTERVIEWS The interview questions were developed from prelim- inary analysis of the original questionnaire replies. Most of the interviewees were contacted while the writer was attending a container trade show. Before being asked to answer specific questions subjects were first shown a c0py of the questionnaire and were familiarized with generalities of the research program. The interview questions are listed below along with a condensation of replies. Question 1: About 98 percent of the freight users claimed that some or all of their goods was containerizable, but only about 40 percent stated they shipped or received containerized freight in domestic shipments. All respondent sectors listed the lack of adequate shipment rate structures among the top factors limiting development of domestic sur- face containerization. Would you comment on the limitations of present rate structures and do you have any suggestions as to how they might be adjusted to promote containerization? Comments: There is no rate incentive on the part of shippers to go to containers. There doesn‘t appear to be sufficient economic advantage to cover investment in new methods and to allow rate reductions at the same time. Going to containers increases Operating costs. The number of bogey/chassis required increases as points of service increase. Terminal handling devices are required. 307 308 Motor carriers don't feel pressure from ship- pers to move containers. Twenty foot containers present a problem to truckers and they haven't noted economies which offer reasons to reduce rates. The thrust of through rate structures is mainly directed to overseas traffic. Domestic rate scales are built around the 40 foot trailer. Some of the Eastern railroads are restricting COFC [Container on Flatcar] movements. We [a rail carrier] have found no limitations as a result of existing rate structures. You can load as much freight in a 40 foot container as you can in a 40 foot trailer and the same rates apply to either. Through rate bureaus are needed to determine what the fair rates should be. A shipper should be able to call any truck line and obtain a standardized rate. Question 2: Cost of “dead head" movements and non- standard empty container rates are also at the top of the list as problems in the development of domestic containeri- zation. Are you aware of any actions being taken and do you have any suggestions to relieve this problem? Comments: You have no more problem with dead heading containers than you have with dead heading trail- ers. You are going to be "out—of-balance" in certain cities and it would make no difference if you handled the traffic in a container or in a complete trailer. Unbalanced loads are a problem in any trans- portation system. Equipment doesn't change the problem. Balancing loads is a marketing problem. There are lenty of commodities to fill them [on back-hauls? if it is advantageous. Rates will have to include built-in coverage of the cost of dead head movement. Use of col- lapsible containers is not an answer. Container leasors will deve10p container pools to relieve dead head movement costs. This may reduce the problem by 50 to 60 percent. 309 Question 3: Is labor resistance to containerization going to be a long—term problem in the domestic freight area? Are there any encouraging develOpments in this area? Comments: There is no particular problem in the truck- ing industry. More business is welcome to the truckers. Piggyback [TOFC] has not been a problem. There is no labor problem in the domestic area as compared to the marine area. In the domestic area, the Teamsters Union would retain the work, whether containers or trailers are used. This eliminates the likeli- hood of interjuristictional disputes. Question 4: Nonstandard containers seem to be viewed as a major problem by all but the equipment suppliers. How may this situation be relieved as an impediment to growth of containerization in domestic shipments? Comments: By carriers buying equipment that meets stan- dard dimensions as approved by the American National Standards Committee MH-S. Standards efforts of ANSI and ISO are being pursued. The nonstandard prOportion of contain- ers will decline. Lengths of 24 foot, 25 foot, and probably 27 foot containers will be written into the standards and the 10 foot length will be eliminated. There is need to recognize the need for bimodal containers, such as "air/land," for example. The long—term trend is toward standardization. Heavier demand for 40 foot containers will force nonstandard carriers to change. The equipment suppliers are trying to make handling and hauling equipment more adaptable. I don't see any movement toward elimination of the existing nonstandard fleet. Differences in endwall strength, etc., is one area, as compared to another area of standardiza- tion in length and size. The fleet has to have 310 some mix to meet shipper needs. Standards on size should have flexibility. Standards on strength, etc., should avoid difficulties in handling. Standards must be adhered to, otherwise planning for handling equipment is a problem. Development and use of hi-cube domestic containers measuring 8 foot x 9% foot high x 40 foot long is needed in order to make contain- ers competitive in low bulk density. Question 5: Respondents believe that lack of an adequate national container pool is an important limitation to container movements. Do you feel that this problem will be overcome; if so, how will it be accomplished and how long would you expect it to take? Comments: A domestic pool is a long way off. We don't have a true national trailer pool. We have extensive interline equipment exchange agreements. We can eXpect the same type of develOpment for containers. It will come just as fast as industry can use containers to its economic advantage and just as rapidly as handling equipment becomes available. There is no advantage to an only domestic pool--you have to include marine carrier needs to be practical. The lack of a pool is a very serious retard- ing factor. An equipment interchange agreement would help. Lack of interchange agreements between Shiplines needs to be corrected. Economic pressure will force agreement and pools. The Department of Transportation is attempting to work out an agree- ment. Do not believe a pool will aid at all for the movement of domestic freight. A container pool would aid in the handling of foreign freight as it would cut down on the dead head miles necessary to secure an empty steamship container now. A pool situation would be created by a trailer/con- tainer leasing company becoming so large as to be able to supply the international industry the 311 equipment on a per diem basis such as exists now with Trailer Train, XTRA or REALCO for conven- tional TOFC moves. This company would supply the equipment to the industry I'at large" and then collect per diem from whoever had the equipment on a particular day through regular railroad accounting procedures of voluntary per diem payment. . There is no lack of an adequate national con— tainer pool. The leasing companies can easily fill any void. Question 6: The situation where responsibility for coordination of intermodal movements is divided among the carriers involved is viewed as an important factor, pri- marily among the carriers. Do you have any suggestions as to how this arrangement might be improved? Comments: Shipper associations and freight forwarders might help the problem. A neutral party of any kind to handle intermodal business would help. There are many legal ramifications to through bills of lading. Marine carriers are protected, while surface carriers are not [from liability claims]. There is a need for legislation to make distribution of damage claims equitable. The ICC and’Maritime Commission need to c00perate more closely. Specialists being assigned by the various modes and liaison developed between the modes will create communication, the lack of which is a problem now. Question 7: There is some agreement among carriers and equipment suppliers that Shipline leadership in develop- ing and promoting containerization has caused some of the problems in domestic containerization. Do you believe there will be a shift in responsibility for development to the domestic carriers: if not, how can this problem be reduced? Comments: There are two different standards for foreign and domestic service. Standards will have to be worked out jointly if the traffic is to be handled 312 jointly [intermodally] since each has certain requirements which are necessary for movement via his particular mode. For example: (1) the water and rail carriers need heavier end wall construc- tion [in containers] than do the motor carriers because of rougher rides via these two modes and (2) the water carriers need their containers con- structed of particular metals which will not deteriorate while around salt air or water. These requirements are not needed by rail or motor. The railroads will have to be the leader. Shiplines are going to have to share some of the savings with surface carriers. Domestic carriers want a bigger voice in establishment of standards in fabrication and marking. The trend is toward increased use of 40 foot containers; the 20 foot container developed as the result of marine leadership. Practically every container will be built for intermodal Operations. Longevity of equip- ment may help to offset the cost for marine containers. Increased domestic movement will cause increased participation by domestic car- riers in leadership activities. Shippers will force c00peration. Question 8: For the most part, governmental regula- tion and the lack of government leadership in developing domestic containerization are not considered serious factors. Is there likely to be any change in the role of government in this area of freight activity? What might governmental agencies do to help in develOpment of domestic containeri- zation? Comments: A "hands-off" attitude by governmental agen- cies would be helpful. However, more active interest in standardization groups would be helpful. Increased effort at coordination of the individual modes is needed. 313 The military has been making attempts at standardization. The Department of Transportation is taking an active part in container standardiza— tion. The Department of Agriculture, Labor Depart- ment, and others are active participants in con- tainer standards work. I see no way the government could aid domes- tically. This is strictly an economic situation which will have to be decided upon by a particular carrier. The governmental agencies are not sincerely interested in developing containerization. They will have to be pushed into it slowly, by all carriers. Question 9: After looking over the factors included in the questionnaire, do you have any additional suggestions on changes which might be made to aid in development of domestic containerization? Are there any additional factors which have not been discussed which are important to the problem? Comments: The key [at smaller freight centers] is the handling equipment. Unless a piece of equipment can be made available to compete with a piggyback ramp, you might as well forget about domestic containerization. The only piece of equipment presently capable of handling any containers at an inland point is the Steadman Side Loader. Both Canadian railroads use this for their domestic as well as intermodal shipments. The basic reasons for containerizing domestic freight are listed below and result in handling traffic more economically than if handled in a conventional trailer. (a) Less capital invest— ment to begin with. You buy fewer wheels than for trailers since you do not need wheels while the container is aboard a rail car. (b) Lower center of gravity for the rail move results in (1) less lading damage as a result of an easier ride and (2) less wind resistance enabling the locomotive to pull more. (c) Lower height of container loaded on car allows moves not possible for trailers because of clearance restrictions, i.e., low tunnels or bridges. 314 Lack of overall interest on the part of shippers. The National Industrial Traffic League has been very negative toward containers. Under- utilization of equipment is a problem: lack of coordination is a problem, especially with rail cars. The amount of freight in import/eXport tonnage is relatively small compared to domestic freight tonnage. A large prOportion of container freight originates close to the ports. The international and domestic container systems need to be inte- grated. The main problem is going to be the training of peOple--exposure of the art to the business community--solving the problem of availability of handling equipment. Anl; It'll] fl (lleIIWIIIHIIHU“WWII“ llllHltllllHMlHll‘ {I lei—fi------l