Freight Yard Logistics: A Case Study - Essay Example

YOUR FULL YOUR Freight Yard Logistics: A Case Study The new high-capa intermodal terminal known as Logistics Park-Chicago, Burlington Northern Santa Fe's (BNSF) showcase logistical facility, has the ability to integrate key services and capabilities on a huge scale (Blaszak 18). Taking BNSF's core intermodal, vehicle, and carload services and combining them with transloading and warehousing, the facility is expected to position the company to accommodate an anticipated influx of containers carrying imported goods. The scope of this paper, after having read the assigned article, is to discuss what logistical advantages this facility gives to BNSF. The advantages for the company are clear. The decision to invest in Logistics Park-Chicago will result in an increased capacity, enhanced efficiency, rapid integration, and growth positioning that will give BNSF a significant logistical and competitive advantage in the industry. The first and most obvious logistical advantage provided to BNSF is that of significantly increased capacity. Given the fact that the company intends to bring services like vehicle and carload into an integrated relationship with transloading and warehousing, there is no doubt that when it comes to space more is better. The task of modern supply chain management and logistical efficiency is greatly assisted when capacity is leveraged in conjunction with logistics management and operational efficiency. Obviously, simply increasing capacity is not sufficient; particularly when it overwhelms the processing, distribution, and transportation systems attached to it. In this case however, the product-handling, distribution, and integration systems are either already in place or are being developed in conjunction with the facility's planning and implementation. The fact that once this facility comes fully online BNSF is contemplating an increase in the number of annual lifts at a rate approaching 50%, demonstrates what can only be described as a highly significant operational and competitive advantage. Particularly given the fact that the company anticipates significant growth, increasing capacity will allow BNSF to do more with more. A second clear advantage provided by the facility is that of overall efficiency. As the case study notes, inbound containers from ocean carriers will now be able to be routed directly to Logistics Park and bypass Burlington's other more antiquated facility. By reducing even one step in the process, supply-chain efficiency is enhanced and costs are reduced as processes are streamlined. Intermodal solutions to surface transportation issues are properly focused on increasing the efficiency of the overall system (Dilger 147). In the case of BNSF's new facility, combining the previously-mentioned increase in capacity with streamlined intermodal efficiencies will not only produce an advantage in time-to-delivery, it will allow the benefits related to economies of scale to be realized more fully. It should be properly expected that such enhanced efficiency will have a very positive impact on the organization's bottom line. Another considerable advantage represented by this facility is the integration of storage, loading, and distribution. The American rail system plays a very important part in the product distribution chain, not the least of which is that the highway system would never be able to handle the volume of traffic that would ensue from trying to move these containers by truck. As a result, "the rail industry has been more involved in state and regional transportation planning efforts, [and] public support has increased for infrastructure projects to ease highway congestion and stimulate economic development" (Plant 18). It would be hard to imagine a more effective method of achieving these goals than the construction of a logistical facility that has a high-capacity and is specifically designed to store, load, and distribute these types of supply containers. The integration represented by this facility also significantly contributes to supply-chain distribution efficiency. The ability to house containers or vehicles on such a large scale, and then move that stock in a direct, efficient manner will provide such an advantage that it will induce BNSF to build more facilities of this type. The final advantage represented by Logistics Park-Chicago is the way that it positions the company for growth in the future. Since the United States government has focused on a policy of total deregulation of this type of intermodal traffic (Stone 136), organizational competitive advantage does not just impact operational efficiencies but also has the potential to dictate organizational viability. Management of BNSF is wise to anticipate a dramatic increase in the volume of imports over the next decade. Its move to build capacity, efficiency, and integration through the construction of a mega-facility should position the company for industry leadership in the years to come. The logistical advantages obtained by BNSF through the construction of this facility are individually significant, but make their most powerful impact when taken together. A high-capacity logistical facility that facilitates operational efficiency and process integration so that its organization can be properly positioned to take advantage of a major industry growth trend brings more than a logistical or competitive advantage to the table; it brings dominance. Works Cited Blaszak, Michael W. "The 21st Century Freight Yard: BNSF's Logistics Park near Chicago." Trains 63, (1) (2003): 18 Dilger, Jay. American Transportation Policy. Westport, CT: Praeger, 2003. Plant, Jeremy F. "Competing Models for Enhancing Railroad Security." The Public Manager 34, (3) (2005): 13-20. Stone, Richard D. The Interstate Commerce Commission and the Railroad Industry: A History of Regulatory Policy. New York: Praeger Publishers, 1991. Read More