Rail Study Claims Intermodel Transportation Up 8%
September 20, 2002
Freight rail intermodal transportation, which moves consumer goods and other products in a truck trailer or container on a rail car, posted an 8% growth over the past three months,
according to research conducted by intermodal industry expert Thomas R. Brown and independent Wall Street analyst Anthony B. Hatch.
Brown and Hatch project an annual growth rate of 5% for intermodal over the next several years, its highest rate in five years. And they claim it is poised to overtake coal as the top revenue source for railroads.
Intermodal is the segment of the railroad industry that competes most directly with commercial trucking.
With U.S. freight demand expected to double in the next 20 years, the Brown-Hatch study claims that intermodal is the most cost-effective means for handling the growth.
"By the conclusion of 2003, intermodal will surpass coal as the greatest source of railroad freight revenue assuming the current revenue trends for each continues, and that the U.S. economy maintains at least its moderate growth rate," Brown said. He claimed freight railroads are an increasingly significant delivery service for household products, in addition to bulk commodities like coal and grain.
In 1999 and 2000, the freight rail industry invested more than $14 billion -- representing one-fifth of its revenues for that period -- in intermodal.
Information systems were upgraded, terminals were added, and state-of-the-art locomotives and intermodal cars were purchased. This has led to an increase in service performance and capacity, which Brown said has spurred an increase in intermodal usage.