Gross Transportation Consulting Analyzes Intermodal Market Challenges and Opportunities

What's Happening?

Larry Gross, President of Gross Transportation Consulting, discussed the current state of the intermodal market, highlighting the complexity of intermodal activity and the challenges faced by railroads. According to Gross, only 14% of intermodal activity interchanges between railroads, with significant reliance on trucking transfers, particularly in Chicago. This complexity burdens users and cities, impacting service levels and costs. Gross emphasized the importance of partnerships, like the CSX-BNSF collaboration, to improve intermodal efficiency. He also noted the potential impact of mergers, such as the Union Pacific-Norfolk Southern merger, on intermodal growth, though he cautioned about regulatory and service risks.

Why It's Important?

The intermodal market is crucial for U.S. logistics, affecting transportation efficiency and costs. The reliance on trucking transfers and the complexity of intermodal operations can lead to higher costs and reduced competitiveness in shorter-haul markets. Partnerships and mergers could enhance intermodal service, potentially increasing market share and reversing carload losses. However, regulatory challenges and service risks must be managed carefully. The intermodal sector's performance impacts various stakeholders, including railroads, trucking companies, and businesses relying on efficient logistics.

What's Next?

Future developments in the intermodal market may include further partnerships and mergers to streamline operations and increase efficiency. Stakeholders will likely focus on improving service levels and reducing costs associated with intermodal transfers. Regulatory bodies, such as the Surface Transportation Board, will play a critical role in approving mergers and ensuring fair competition. The industry may also explore technological innovations to enhance intermodal operations and address current challenges.

Beyond the Headlines

The intermodal market's evolution could lead to significant shifts in logistics strategies, with potential impacts on urban planning and infrastructure development. As railroads seek to optimize intermodal operations, cities like Chicago may need to adapt to increased trucking activity and its associated challenges. The focus on long-haul intermodal moves may also influence regional economic development, as efficient logistics can attract businesses and support local economies.