Domestic Intermodal Primed for Growth

(Journal of Commerce Online – Bill Mongelluzzo)

Rail likely to benefit as shippers cut transportation costs, carbon footprint

Domestic intermodal rail weathered the economic recession better than most transportation modes, and the industry appears now to be on the verge of experiencing unprecedented growth. The growth in domestic intermodal will be driven by shipper requirements to reduce transportation costs, improved reliability of intermodal services by all rail carriers and corporate America’s desire to reduce its carbon footprint.

“The changes are so profound I believe we are at an inflection point,” Brian McDonald, vice president of intermodal at Union Pacific Railroad, told the Los Angeles Transportation Club.

UP is a case in point. Domestic intermodal was the only sector of UP’s 40 commodity lines to grow during last year’s recession. In fact, UP handled a record number of domestic intermodal units in 2009.

Changing customer requirements will be a primary driver of domestic intermodal growth. Traffic managers are acting under a mandate to reduce transportation costs, and substituting domestic intermodal for over-the-road trucking is the quickest way to cut costs over longer distances, McDonald said. Read more here.