Will Increased Intermodal Efficiency Encourage Greater Volumes?

Posted : 12/12/13 4:17 AM

It is well known that the intermodal network is the most efficient and cost-effective way to handle long distance freight. The maximization of energy efficiency that comes from the massive volumes of containers that can be moved by a single train or container ship takes advantage of the economy of scale, but this efficiency has always been seen as applying mostly to freight that is being transported over long distances. It is still widely perceived that for cargo that is traveling 1,500 miles or less, it is still more cost effective to use more direct methods to move goods. Part of the reason for this is the perception that once a container goes into the intermodal network, it will spend time being loaded and unloaded, waiting in terminals and may take a less direct route than more direct transport methods. This means that the vast majority of cargo that is shipped within the US is still riding on the back of a truck. This transport method is seen as more effective because of its directness, which sees cargo being picked up from its source and delivered straight to its destination, and the simplicity with which it can be tracked on its journey. The intermodal freight network is addressing these concerns and looking to attract more of the shorter distance cargo, by making improvements to the technology that it uses to manage freight movements. The overall efficiency of intermodal hubs across the US has also seen a lot of improvements to the facilities generally, as the industry leaders see that investing in intermodal facilities is an investment in their own future. All of this, coupled with rising fuel costs, increased regulation of the trucking industry and pressure that is being generated by the environmental concerns of the inefficiency of the trucking sector, have made using intermodal transport over shorter distances much more attractive. These factors have caused a revival of the rail networks and, supported by greater efficiency in the transfer of containers between trains and trucks, this has seen the cost-effectiveness of using the intermodal network fall from over 1,500 miles to well below 1,000 miles in recent times. While the intermodal network still accounts for only around 3% of domestic freight spending, it is hoped that the increased efficiency and improved freight handling technology occurring during the last few years will continue to make using intermodal transport more attractive to short-distance and domestic shippers.