Intermodal 2012: Full Steam Ahead

Will 2012 be the year for intermodal?

All signs point to yes.

For starters, intermodal loadings have shown year-over-year gains for the past 25 months.  Of course it isn’t at the heights it reached in 2006, but this mode is racing ahead.  And, a host of industry factors will continue to fuel growth for, some say, the next three to five years.

We all know truck capacity is tightening as the supply of drivers and equipment struggles to keep pace with rising freight volumes.  Factor in changes to hours of service (HOS) rules and the FMSCA’s Compliance, Safety and Accountability program (CSA), and the over-the-road market gets tighter yet.  Of course decreasing capacity means increasing rates, so shippers begin to seek alternative solutions.

In years past, many shippers could not look beyond the highway to see intermodal on the horizon.  Intermodal service was questionable and rail infrastructure was weak.  Few shippers want to compromise their customer service to save money.  But today, shippers don’t have to compromise.

According to the Association of American Railroads, in recent years railroads have spent approximately $12 billion per year on tracks, signals and other infrastructure.  And last year, they invested more than $20 billion.  All of this was done in an effort “to grow and modernize the national rail network.”  According to many shippers, rail service is more reliable than ever.

And the trucking companies are right there, too.  It’s been more than two decades since J.B. Hunt and Sante Fe (now BNSF Railway) formed an unprecedented alliance that led the intermodal movement, and today truckload carriers are embracing this mode at a fervent pace.  Recently, we’ve seen a number of carriers adding intermodal capabilities to their offerings.

And why wouldn’t they?  They, like the rest of us, are here to serve the shippers.  Shippers are looking to secure capacity when the market is tight, and remain fiscally responsible as carrier rates and diesel fuel costs rise.  I haven’t even mentioned the environmental factor: Companies want and need to be in the black, but they want to be green, too. Add these requirements together and intermodal quickly equates to a “no brainer” for many manufacturers and retailers.

I am excited by the role intermodal will play in the coming years and I believe this mode is poised for significant growth – all signs point to it.

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