What picture do you see in your head when you hear the word intermodal?
The image I see is the world of containerized freight; a world where a shipper loads freight into an oceangoing 20’ or 40’ standard container at their factory in Korea, Finland, South Africa, Brazil or Australia, and then trucks that container to the nearest port in Seoul, Helsinki, Cape Town, Rio de Janeiro, or Melbourne to be loaded on a huge container vessel. That ship then travels to one of many North American ports where the container is offloaded to a truck, driven to a warehouse where the container is transloaded to a 53’ standard rail container. That rail container is then trucked to a railhead and loaded on a two- to three-mile-long train which then hauls it to an inland port facility like Fort Worth, St. Louis or Chicago. There, the container is offloaded to a truck and driven to a distribution center and unloaded. The contents are then sorted and loaded into urban delivery trucks and driven to the receiving customer.
I picture freight movement as an entire system.
There are many permutations of my picture. In some, freight never sees a train because the economics or the lane routing make the train less of an option. In some cases, the freight is hauled in on air transports to an airport and then transloaded onto trucks for local delivery.
My point is that delivering freight is a system of parts, in some ways as complex and intricate as a well-designed Swiss watch. All those individual gears working together to provide a value-added service.
In researching and writing NACFE’s 2023 report Intermodal & Drayage: An Opportunity to Reduce Freight Emissions, I was constantly aware that the rail industry, in general, views trucking as a deadly competitor.
There seems to be little recognition of the critical role trucks already play in making trains successful. It’s like rail dreams for a world where trains can somehow solely handle all freight. That is a world that existed briefly in the latter half of the 1800s when rail was largely the only way to transport goods across North America — before paved roads, before highways, before trucks and planes.
Many railroads today have forged partnerships with drayage trucking companies. This seems to be a grudging admittance that cargo cannot get to and from the railroad without trucks, an acceptance that train tracks do not go everywhere but trucks largely can. Still, trucks are viewed as the enemy of rail.
I have news for the rail industry: Your shippers don’t care how their loads get carried. They just want them delivered. They want this service to be reliable, predictable, safe, robust, and inexpensive.
From a freight system engineering perspective, shippers want the “what” not the “how.” The huge growth in third party logistics (3PLs) providers over the recent decade should highlight that many shippers couldn’t care less about how the freight moves. They just want it moved. Many are willing to subcontract out the “how” to experts who handle all those details, even warehousing. One 2022 estimate I found, amid the wreckage of our COVID economy recovery, was that 3PLs have a growth rate of 8% and that the 3PL market in 2020 was worth $1 trillion.
NACFE has reported in Run on Less – Electric Depot on the growth in trucks as a service, especially with respect to alternative fuel choices like hydrogen fuel cell and battery electric trucks. I believe this again is a sign that shippers don’t care so much about the “how” freight is delivered, only that it is delivered.
A recent Logistics Management interview with three rail industry analysts including Adriene Bailey, head of North American Rail Team at management consultants Oliver Wyman, stated, “Shippers express frustration with some of their experiences trying to do business with railroads and often question why it has to be so hard, so slow, and sometimes so frustrating. These things are all fixable.” Bailey emphasized the importance of rail improving how their customers perceive them “establishing more shipper-centric metrics reinforces that what matters to shippers also should matter to the industry. Ultimately, railroads that achieve a higher degree of sustained service reliability and offer a better customer experience will grow faster than those that don’t.”
Freight is a system of moving parts. Like any system, focusing on only one component to the exclusion of the others can lead to disappointment. Think of it in terms of doing maintenance on an ICE car. “But I replaced the spark plugs, wasn’t that enough?”
Rail needs to step out of its rail centric protectionist mode and embrace a freight system perspective. Those partnerships with drayage companies should be embraced. Focus on what the customer wants and needs.
In November 2023 the U.S. Department of Transportation created a new organization Office of Multimodal Freight Infrastructure and Policy (Multimodal Freight Office) to “oversee the maintenance and improvement of the nation’s freight network and supply chains.” The office is to oversee the development of the National Multimodal Freight Network, review State Freight Plans, and provide technical assistance to state and local governments, among other duties.”
There is a recognition at the federal level that freight is a system. Now if the railroads would just embrace that. How much market growth could rail get if it worked in partnership with trucking rather than in competition? What if energy to restrict trucking growth instead was spent growing the freight system? Would a rising tide raise all boats? Or a better analogy, when the freight system train comes in, wouldn’t everybody ride?
The rail vs. truck competition angle clearly hasn’t worked for rail over the last 50 years. Market share has fallen significantly over the decades. What does rail have to lose by adopting a win-win partnership approach? A “coopetition” approach, a phrase I learned assisting a FIRST high school robotics program. It means cooperative competition.
Several years ago, I was asked to the IANA Intermodal Expo to present on the potential of platooning trucks. I naively thought this was a sincere interest in a technology for improving freight movement. I realized afterwards that the point of the session was to warn railroads that platooning trucks might further erode rail market share. It didn’t seem to matter that many of those trucks would start their trips at railyards.
I have attended both ACT Research and FTR conferences where rail and truck representative regularly present information on critical freight industry topics. It would be great if future industry sessions like these could be held on how coopetition between rail and trucking could greatly improve the freight system for both parties.
A healthy, efficient freight system is clearly needed by all as evidenced by the U.S. supply chain challenges experienced during the COVID pandemic and recovery.
Both rail and truck are part of the solution to a robust freight system. Working together might prove better than working against each other.
