Transportation News

Intermodal Growth Starting to Pay Off with Inland Ports’ Development

According to new JLL research, a looming capacity shortage in the trucking industry, coupled with rail’s high efficiency, is causing logistics suppliers and transportation providers to turn their focus to intermodal for their supply chain solutions.

Intermodal Resources

Companies

  • CSX Corporation, together with its subsidiaries based in Jacksonville, Fla., is one of the nation’s leading transportation suppliers. The company’s rail and intermodal businesses provide rail-based transportation services including traditional rail service and the transport of intermodal containers…

  • JLL is a leading professional services firm that specializes in real estate and investment management. Our vision is to reimagine the world of real estate, creating rewarding opportunities and amazing spaces where people can achieve their ambitions.

  • Company Quicklook

Intermodal Usage

As the United States intermodal volumes have been ahead of carload volumes in recent years, a report recently published by Chicago-based commercial real estate firm JLL explains that should this continue to remain that case.

Increased intermodal usage will not only see supply chains drive more cargo off of highways and onto rail, but it will also serve as a driver to increase real estate development in close proximity to inland ports.

A key thesis of the report, entitled “On the right track, growth in intermodal rail leads to new warehouse real estate,” explained that this type of real estate development is expected to see growth, should the U.S. shift to more export-oriented growth.

The reason for this, JLL explained, is the direct linkage between rail volume growth and warehouse inventory growth.

Using the inland port markets in heavy freight regions Atlanta, Chicago, and Dallas, it said that each has seen significant benefits from freight transportation connections, with warehouse inventory growth ranging from 3%-12% over the last five years.

JLL noted that intermodal facilities, and, by extension, inland ports, are an increasingly critical component of the U.S. transportation network, as coastal seaport connections to major cities and the long-haul movement of goods materials throughout the U.S. would be much less effective.

And it added that significant inland port destinations have become an essential part of the U.S. supply chain, as well as helped to enable the development of significant distribution and logistics real estate along major rail corridors, with a key focus in the top U.S. industrial markets.

“The inland port role has advanced and modernized significantly throughout the current economic expansion period, and its impact on industrial real estate development will only increase in the years to come, especially if the United States moves to more export-oriented growth,” the report stated.

Continued Intermodal Growth

Drivers for continued intermodal growth that can lead to increased inland port development cited in the report include: Class I railroads continuing to undertake massive infrastructure and technology improvements; major inland hubs benefitting from direct express rail service from major U.S. seaports; and the aforementioned direct linkage to rail volume growth and warehouse inventory growth.

Chad Buch, JLL Research Manager, explained in an interview that this JLL paper served as a “refresh” of a 2014 intermodal publication, entitled “The re-emergence of the iron horse.”

“This is really an expansion of some of the trends we looked at then,” Buch said.

“The sector has continued to grow tremendously and had a big impact on industrial warehousing and real estate, coupled with a big picture look at the supply chain like the Panama Canal, the driver shortage, and labor shortages. It is perfect timing with a combination of those factors and market growth and how intermodal intersects with the warehouse market.”

Given the solid volumes intermodal is seeing, JLL thinks there is a fair amount of room, on highways and trucking, for it to run into the future.

George Cutro, JLL Director of Industrial Research, said the current level of intermodal emergence is akin to the adolescent stage and is being driven by trucking and rail working more in tandem to deliver goods to the end user, or consumer.

“Ten years ago, a person would look through a catalog, order something, and it would arrive in a week’s time, now, that turnaround is down to two days or just a few hours, and with the driver shortage and a massive amount of goods moving more rapidly, the intermodal segment is more comfortable moving goods from point A to point B and able to leverage it for shorter runs to inland ports, too, to get goods to consumers.”

Trucking Lacking Significant Capacity

Walter Kemmsies, Managing Director, Economist and Chief Strategist of JLL’s Port, Airport and Global Infrastructure (PAGI) Group, explained that one reason that this segment is gaining traction now, as opposed to different periods in the past is that, the trucking sector lacks significant extra capacity, and when the sector felt it was losing a bit of market share, rates could be aggressively lowered in certain markets, like in New York, and, in turn, bankrupted the effort to shift away from trucks.

“There is not that kind of spare capacity today,” Kemmsies said.

Read: Walter Kemmsies Talks Economics, Supply Chain, NAFTA before Jump Start 2019 Conference

“Truckers are saying that warehouses, which stay open 24 hours a day, could get more usage if there were more drivers putting in those hours. They are coming up with ways to change the nature of logistics, just so they can acquire some more truck capacity. It is a clear indication it is just not there. The trucking sector does not have the same capacity to fight back and maintain market share that it did in the past. The trends and structure [for inland intermodal ports] are there. The timing is there because the trucking sector currently lacks the capacity to react.”

Looking at the current state of development for inland ports, JLL’s Buch said that, in terms of big box space, there is a bit of oversupply when compared with tenant demand, in some key markets, like Denver and Salt Lake City, for example.

“Those are big box markets, where intermodal is definitely a factor, and there is definitely a connection between intermodal traffic in those markets and growth and supply,” he said.

Related Article: “Intermodal Gives Shippers, 3PLs Relief from Tight Trucking Market” Jeff Heller, Norfolk Southern

“Intermodal Gives Shippers, 3PLs Relief from Tight Trucking Market” Jeff Heller, Norfolk Southern

Intermodal White Papers & Guides

Download the White Paper

Growth in Intermodal Rail Leads to New Warehouse Real Estate
Trucking is by far the predominant mode of shipping in the U.S., but it has its constraints, from driver shortages to escalating costs and roadway congestion, and while freight matching technology is improving, it also has helped the intermodal industry move into its next evolution as well. Download Now!


Download the White Paper

Supply Chain Trends
A pool of over 150 supply chain professionals was asked about their transportation plans, challenges and opportunities for growth, the results provide insight into a wide range of issues and shed light on what supply chain managers plan to focus on in the coming year. Download Now!


Download the Guide

The X’s and O’s of Intermodal Rail in Supply Chain Management
As the coach of your supply chain, you have the opportunity to turn to your playbook and choose from multiple transportation modes to maximize the efficiency of your freight network. Download Now!


Download the Guide

The Intermodal Rail Bracketology Guide
Learn how to identify sub-optimal full-truckload freight that is vulnerable to capacity constraints if and when a supply chain disruption occurs. Download Now!


Download the Paper

Practical Steps for Highway to Intermodal Rail
Learn how to increase access to capacity, reduce transportation costs and mitigate exposure to future trucking regulations. Download Now!


Download the Paper

Transportation Management Systems & Intermodal Rail
An interactive, personalized guide to learn more about the combined benefits of a TMS and intermodal rail. Download Now!


Download the Brochure

Highway to Intermodal Rail (H2R) Conversions Deliver Bottom Line Results
CSX Transportation has found that 96% of shippers have sub-optimized freight in their network. Does your organization? Find out and learn how to address sub-optimized freight in your supply chain. Download Now!


More: Intermodal Resources


Article Topics
Trends   Transportation   Intermodal   Intermodal   Ports   Rail Freight   All topics


Comments
Be the first to post a comment.
You must be logged in to post a comment. Login.

About the Author
Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman
 
Latest Transportation News
Trucking Ambassadors of Safety
As Landstar’s “ambassadors of safety,” Landstar Safety Officers (LSOs) are the representatives from each independent agency at the forefront of Landstar’s Mutual Understanding of Safety Together…

2019 Transportation Management Systems Market Update
The transportation management systems market is growing right along with the number of challenges that shippers face in today’s hectic freight transportation environment.

Transportation & Supply Chain Predictions for 2019
For 2019, we believe the U.S. transportation industry and supply chain professionals will place more emphasis on digitization within the supply chain to help them address future complex challenges.

Holiday Season Heightens Challenges of Online Returns for Retail Supply Chains
Although online retailers are coming to terms with the high return volume that comes with online shopping, reducing the cost associated with those returns remains a top priority.


 

24|7 Pro Team

The 24|7 Team is your direct pipeline to solutions for your business challenges. It's your opportunity to have supply chain and logistics experts look at your specific challenges and needs, and give you free, no-obligation advice, solutions, and information.

The 24|7 Team will simplify the task of creating a database of likely partners, building your knowledge base, and preparing your Request for Proposal list.

1
  Choose a topic for your RFP

Transportation RFP/RFI

The Transportation RFP is your direct pipeline to solutions for your transportation challenges. It's your opportunity to have logistics experts look at your specific transportation challenges and needs, and give you free, no-obligation advice, solutions, and information specific to your request.

Choosing the perfect software or system can be an indomitable challenge. Using this transportation/TMS RFP will simplify the task of creating a database of likely partners, building your knowledge base, and preparing your Request for Proposal list.

Warehouse/DC Management RFP/RFI

The Warehouse Management Systems (WMS) RFP is your direct pipeline to solutions for your WMS challenges. It's your opportunity to have logistics experts look at your specific WMS challenges and needs, and give you free, no-obligation advice, solutions, and information specific to your request.

Choosing the perfect WMS solution can be an indomitable challenge. Using this WMS RFP will simplify the task of creating a database of likely partners, building your knowledge base, and preparing your WMS Request for Proposal list.

Supply Chain RFP/RFI

The Supply Chain RFP is your opportunity to have logistics experts look at your specific challenges and needs, and receive free, no-obligation advice, solutions, and information. It simplifies finding a pool of likely partners, building your knowledge base, and preparing your Request for Proposal list. The companies in the Logistics Planner have agreed to respond to your request for in-depth information and follow-up, and your request is totally confidential.

Software/Technology RFP/RFI

The Software/Technology is your direct pipeline to solutions for your logistics information technology challenges. It's your opportunity to have logistics experts look at your specific technology challenges and needs, and give you free, no-obligation advice, solutions, and information specific to your request. Whether it's WMS, TMS, Mobile or Cloud, our pros can help.

The companies listed below have agreed to respond to your request for in-depth information and follow-up. Your request is totally confidential.

Executive Education RFI

The Logistics and Supply Chain Education RFI can help you identify the schools, coursework, continuing education, distance learning and certification opportunities available from leading logistics educational institutions.

Upgrade and improve your logistics and supply chain skillsets. Whatever route you choose—advanced degree, executive education, certification or distance learning—the time and money you invest in your education today can pay off in continued career success tomorrow. Contact leading universities and professional institutions for the information you need to prepare for the future.

Third Party Logistics RFP/RFI

This 3PL Request for Proposal (RFP)/Request for Information (RFI) can help you find the 3PL and 4PL providers that can meet your specific 3PL service challenges and needs. The 3PL companies below will provide free, no-obligation third-party logistics advice, solutions, and information.

Ask your 3PL questions, you'll get answers. Simply complete the information, and detail your 3PL challenges. Then, check off the third-party logistics companies that you want to review your request.

1. Choose an RFI topic.
2. Enter your contact information and challenge.
3. Select companies and optional categories.
4. Submit.


2

Your Information



Your Challenge, Problem or Request *

3

Select Transportation Companies

  • Select All

  • 3Gtms
  • BluJay Solutions
  • CSX Trans. Intermodal
  • Kuebix
  • Landstar
  • Legacy Supply Chain Svs.
  • One Network
  • Pitt Ohio
  • Purolator
  • Quintiq
  • SEKO Logistics
  • SMC3


Select Relevent Categories

  • Air Freight
  • Intermodal
  • Motor Freight
  • Ocean Freight
  • Rail Freight
  • TMS

Select Warehouse/DC Management Companies

  • Select All

  • 3PL Central
  • Apex Supply Chain Tech.
  • Honeywell Intelligrated
  • Kuebix
  • Legacy Supply Chain Svs.
  • Swisslog
  • Westfalia Technologies
  • Zebra Technologies


Select Relevent Categories

  • Auto ID & Data Capture
  • Automation
  • Conveyors & Sortation
  • Lift Trucks
  • Packaging & Labeling
  • Pallets & Containers
  • Shelving & Racking
  • WMS

Select Supply Chain Companies

  • Select All

  • 3Gtms
  • 3PL Central
  • Amber Road
  • Apex Supply Chain Tech.
  • APICS
  • BluJay Solutions
  • CSX Trans. Intermodal
  • Frontier Business
  • Kuebix
  • Landstar
  • Legacy Supply Chain Svs.
  • Logility
  • One Network
  • Purolator
  • Quintiq
  • SMC3
  • Synchrono
  • TAKE Supply Chain
  • Westfalia Technologies
  • Zebra Technologies


Select Relevent Categories

  • Global Trade
  • Inventory Management
  • Risk Management
  • Sustainability

Select Software/Technology Companies

  • Select All

  • 3GTMS
  • 3PL Central
  • Apex Supply Chain Tech.
  • BluJay Solutions
  • Honeywell Intelligrated
  • Frontier Business
  • Kuebix
  • Logility
  • One Network
  • Quintiq
  • SMC3
  • Swisslog Logistics
  • Synchrono
  • TAKE Supply Chain
  • Zebra Technologies


Select Relevent Categories

  • ERP
  • Sales & Operations
  • Sourcing/Procurement
  • Optimization
  • Transportation Mgmt
  • Warehouse Mgmt

Select Executive Education Choices

  • Select All

  • Graduate Courses
  • Online/Distance
  • Executive Education
  • Certifications
  • Undergraduate
  • Seminars
  • Associations
  • Conferences
  • Tradeshows


Select Third Party Logistics Companies

  • Select All

  • 3PL Central
  • Landstar
  • Legacy Supply Chain Svs.
  • Purolator
  • SEKO Logistics
  • Westfalia Technologies


4
 

24|7 Company Profiles