Quantum's pace quickens - Quantum intermodal transportation service is very successful

Railway Age, May, 1991 by Gus Welty

When Santa Fe entered into its partnership with J. B. Hunt for what became the Quantum intermodal service, Santa Fe was taking a big gamble.

Santa Fe had excellent routes, with intermodal service to match, and it had excess capacity on those routes. It had obvious reasons to try to get more intermodal business.

But J. B. Hunt? Hunt, perhaps the premier truckload motor carrier in the country, had never used intermodal service. Its people had said that it probably never would. J. B. himself, the founder, was known as a man who wanted excellence and would settle for nothing less.

Santa Fe President Mike Haverty was ready to take the gamble, and in a celebrated trip over a part of Santa Fe's transcontinental line, Mike Haverty and J. B. Hunt had a handshake. Quantum service began in late February 1990, as a door-to-door, seamless service in which Hunt would do the marketing and pick-up and delivery and Santa Fe would do the long-distance linehaul operation.

Would it work? The nay-sayers kept saying it wouldn't, that it couldn't. They took every opportunity to predict that the partnership was falling apart.

They were wrong. Santa Fe and J. B. Hunt were right. And there was no better evidence of that than the announcement in March that "in light of the tremendous success of the Quantum program, we are committing virtually unlimited resources to further penetrate the market for premium transcontinental transportation service." Who said that? J. B. Hunt, the founder and the chairman of J. B. Hunt Transport, Inc.

At the outset, Santa Fe and Hunt committed modest amounts of equipment, including 500 trailers with the Quantum logo on them.

* A Quantum jump. Traffic built to about 200 trailers per week, plateaued, and then began growing again. Today, volume stands at about 500 trailers per week. By the end of the year, Santa Fe figures that it could be double that.

Don McInnes, vice president-intermodal, and Fritz Draper, director-premium services, see no reason why 2,000 units per week can't be attained.

It could happen. J. B. Hunt is now marketing the service on a nationwide basis through its network of field sales personnel, as opposed to the startup program in 1990 when a core group of people was assigned to get the program under way. In addition, Hunt',s customer-service representatives who used to handle just over-the-highway business will now be handling the customer's premium intermodal service needs as well.

Santa Fe is operating, along with Hunt, in the corridors between Chicago and Kansas City and California, and between Dallas-Fort Worth and California. Other corridors may be added.

J. B. Hunt does the marketing/sales with the customer, Hunt handles pickup and delivery, to and from Santa Fe intermodal terminals at Chicago, Kansas City and Fort Worth, and at California points. In addition, a joint logistics operation has been set up at Hunt's headquarters at Lowell, Ark., with one Santa Fe representative there now and more expected to go to Lowell to work with Hunt's people. This operation will involve 24-hour service monitoring, along with planning and coordination of the sales/marketing functions and the planning and coordination of equipment requirements.

And now, J.B. Hunt is making its entire fleet of trailers available for the partnership service with Santa Fe, a fleet that approximates 10,000 units.

With its own reputation for service quality on the line, and with its old distrust of railroad intermodal services, Hunt would not have entered into this partnership-and it surely wouldn't have continued and then expanded on it-if Santa Fe hadn't performed.

Don Mclnnes says that Quantum has run as advertised, reliably, without lading damage, and with consistent performance on all counts.

Actually, this should come as no surprise, with the emphasis Santa Fe has put on intermodal business-which accounts for between 35% and 40% of total freight revenues.

Santa Fe has long been geared to meeting the needs of such customers as United Parcel Service and other ltl motor carriers, and so it had the built-in ability to handle J.B. Hunt's truckload business.

But, what does it cost the customer, the shipper who has his trailer picked up by Hunt, line-hauled by Santa Fe and then delivered by Hunt?

Fritz Draper notes that the aim with Quantum was to price it at or slightly below what the customer would have to pay for all-highway movement.

That goal has been met. Santa Fe has also proved that intermodal doesn't deserve its rap so far as lading damage is concerned: The traffic moves on articulated railcars, and, Don Mclnnes says, there has been no damage.

Santa Fe's fleet of single-level intermodal cars capable of handling trailers will soon stand at close to 1,000 cars, or 5,000 platforms, all articulated.

J. B. Hunt says that the expansion of the partnership with Santa Fe "will make the transportation product much more convenient and versatile for America's shipping public to use. The broader intermodal focus promises to propel Hunt and Santa Fe into the 90s with the nation's most innovative and successful partnership ever formed between a railroad and a motor carrier."