Ten Years After: The Second Intermodal Revolution

Industry Overview: Intermodal – Ten Years After
Ten years ago Thomas Brown, now at UP’s Streamline, and I wrote a White Paper on Intermodal that captured the spirit of the times and the imagination of the business public as we sought to argue for the potential future success of the combined transport mode that, when operated correctly, captures the best of the capabilities, long haul to destination, of ship and rail and the first/last mile convenience of truck.

We startled observers a decade ago by noting that the central cog, railways, would soon feature intermodal as their largest commodity segment in the (very) near future. This meant re-penetrating finished and value-added goods most thought had been long abandoned to the highway and moving away from being “merely” a bulk carrier of raw or semi-finished materials (“not your father’s railroad.”)

Truly, the Railway Renaissance since the Staggers Act of 1980 was proving that it was no longer the bloated, obsolete, inflexible and near-bankrupt industry of the regulated era. In fact, the industry was a central player in the defining business activity of the late 20th and early 21st century: Globalization. Without a double-stacked network across the continent there would be no industrial outsourcing, no global sourcing, no big box retailers, no JIT, etc….and we were fortunate to be prescient.

Immediately after the issuance of the White Paper we were able to celebrate the mythical “Cross-Over Day”, when intermodal became the number one Rail commodity, and the intermodal growth explosion of 2003-2007 (and the move of intermodal from below to above average ROI) would redefine the freight rail industry – and the global supply chain.