Freight rail’s on-ramp to the global economy is intermodal
Global business today has never been more competitive, as barriers to the exchange of goods, knowledge and capital continue to decrease. In this new and smaller world, the success of a business is often determined by speed, efficiency and reliability. Recognizing the challenges and opportunities that globalization has brought, the freight rail industry is investing heavily in intermodal capabilities so that American businesses can quickly reach markets, whether around the corner or across the globe.
Intermodal freight — the shipment of cargo using multiple modes of transport — has grown rapidly over the past 20 years and, for many shippers, has been an on-ramp to an entire new world of business. These new avenues of commerce have produced significant customer savings as well, thanks in large part to the investments that freight railroads have made in intermodal innovations and infrastructure.
What’s intermodal? Check out the infographic at the bottom of this article to see how it works.
Though freight rail’s early intermodal growth focused on the global supply chain, today American businesses are also reaping the benefits of domestic intermodal rail service. Last year alone, American railroads transported a record 13.5 million intermodal shipments. Of those, around half were domestic shipments.
Freight railroads spend more than $500 million per week in private funds — not taxpayer dollars — to maintain, upgrade and grow America’s rail network. Much of this money is going to projects designed to increase intermodal capacity and efficiency, such as upgrading busy corridors so that railroads can doublestack intermodal containers and realize a 100 percent increase in the capacity of a single train.
Railroads have also raised tunnels, strengthened track and built new transfer facilities to support the growing volume of intermodal freight. Many of these new facilities are providing businesses in small and medium-size markets with easier access to intermodal for the first time, efficiently connecting them to the global economy.
The rail industry’s ability to reinvest in projects that facilitate intermodal have not only served rail customers, but also benefited the trucking and maritime industries. Freight rail’s enhanced productivity has made rail more competitive in the movement of intermodal domestic cargo. This, in turn, allows the trucking industry, which has been plagued by driver shortages and high fuel costs, to breathe a little easier. Trucking companies can now deploy fleets closer to home while expanding their capacity nationally. And, the public can breathe a little easier too, as a single freight train can take hundreds of trucks off our nation’s roadways.
However, intermodal investment is not just helping these kings of the asphalt. It is also supporting the giants of the ocean. Modern container ships, which can carry more containers in a single journey than ever before, are arriving at ports brimming with goods from around the world. In a sign of freight rail’s nimble and innovative approach, railroads are expanding intermodal terminals at or near ports around the country and installing cutting-edge technology to increase the efficiency of these facilities — the crucial juncture where modes of transport meet.
GPS-guided cranes enable swifter cargo transfers in intermodal terminals, and automated optical scanners quickly and reliably identify trailers, containers and trucks as they enter and exit a transfer facility. Railroads have also laid additional track within intermodal facilities to accommodate longer trains. The investments today will allow freight railroads to meet the growing needs of maritime and other shippers for years to come.
All this forethought, innovation and investment clearly produce dramatic time savings in a world where time is money. For many shippers, using intermodal is shaving days off deliveries. Today, international cargo can reach virtually 100 percent of U.S. consumers in 2-5 days via intermodal.
Since its founding, America has been an incubator of innovation and ideas that change the world. So it’s no surprise that this country is home to the most efficient and forward-looking intermodal network around, one that helps shippers and businesses do what they do best. That, in turn, feeds the growing U.S. economy and ultimately helps every business and consumer — including you.
To learn more, visit www.aar.org
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