All That's Trucking

The Growth of Rail Intermodal

July 9, 2014

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"On April 27, 1984, a train operated by the Southern Pacific Transportation Co. left Los Angeles for South Kearny, N.J. This wasn't just another train, however. On board were containers stacked two-high on specially designed 'wellcars.' The lower boxes rested in a depression built into each car's center area, allowing the train to clear bridges and tunnels despite the higher cube."

So begins a great article on the growth of intermodal, "Getting Religion," in the shipper/logistics magazine DC Velocity.

"It's been a prolonged adolescence, but 30 years on, domestic intermodal—70 percent of which today moves in double-stack configuration—appears to have come of age."

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The past 10 years have seen dramatic changes in how intermodal is marketed. In a move to attract freight brokers, railroads have made intermodal available on the spot market, the world brokers live in. In addition, the rails now offer brokers door-to-door services by bolting drayage operations onto the traditional ramp-to-ramp business. While this has benefited all brokers, it has been a particular boon to smaller players, which had to find their own dray services but often lacked the scale or network contacts to do it economically....

Rail intermodal folk contend that the ability to sell a door-to-door product has demystified intermodal service for many shippers and has opened doors previously closed.

Author Mark Solomon notes that intermodal's growth rate is currently about four times that of over-the-road truck. FTR's Larry Gross is cited as saying the the year-over-year increase through 2014's first quarter is significant, with conversion from over-the-road making up an estimated 15% of that growth.

Indeed, as we reported this week, after hitting record high levels for two straight weeks, intermodal rail traffic set another new record during June.

However, it's still not an easy sell for those in intermodal, Solomon writes:

Intermodal executives aware their industry has a spotty track record of operational consistency focus more time these days on education than anything else. To newcomers, they tout intermodal's benefits (economies of scale, fuel efficiency, environmental friendliness, etc.). To former users that may have been burned years ago, they say that multibillion dollar investments in ramps and terminals have brought intermodal close to being cost and service competitive with single-driver truck operators, mostly in the East.

There are indeed many large fleets who are putting everything that makes sense on intermodal, as they try to reduce the irregular long-haul routes that are hard to find drivers for.

But railroads don't go everywhere, so despite the growth and continuing growth of intermodal, it still will only make up a very small percentage of the freight shipped in this country, the American Trucking Associations points out. It takes trucking nine days to move as many loads as move via rail intermodal in all of 2013, ATA says.

Read the full DC Velocity article here.


Related Stories:

Union Pacific Railroad Adds Premium Intermodal Service

Could Growing Popularity of Intermodal Actually Mean Fewer Drays?

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Author Bio

Deborah Lockridge

Editor in Chief

All That's Trucking blog is just that – the editor's take on anything and everything related to trucking, with the help of guest posts from other HDT editors. Author Deborah Lockridge's career as an award-winning trucking journalist started in 1990.

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