Intermodal traffic surges in 2004

BY ALL indications, the past year was very good for the intermodal transportation industry in North America. All aspects of the sector, including truck-rail transfer and tank container, benefited from a surge in cargo shipments that came with a strengthening economy.

Intermodal traffic in the United States increased by more than 10% in 2004, and third-quarter data from the Intermodal Association of North America shows that the growth spurt has been continuous for 10 consecutive quarters. Rail intermodal activity in Mexico in 2004 was up a whopping 24%, and Canadian railroads reported a 0.9% increase.

These aren't abstract numbers. Titan Terminal & Transport, a chemical transloading facility in southern California and our cover story in this issue, is in the final stages of a multi-million-dollar expansion that was needed to keep up with growing demand. In addition, the company is developing new transloading locations in Salt Lake City, Utah; Las Vegas, Nevada; and Chandler, Arizona.

BNSF Transload Services broke ground for two mega-transload facilities at the beginning of the year. Kansas City Southern Railway opened a new TransLoad Center in Siloam Springs, Arkansas. And the list goes on.

Mexican and US companies have been especially active in developing transloading facilities in Mexico. Transloading entered that market in a big way less than 10 years ago, and the growth has been non-stop. Information on the Transportacion Ferroviaria Mexican SA de CV railroad web site lists 27 transloading locations for bulk cargoes across the northern half of Mexico. More are under development.

Tank container activity also has been brisk this year, although most of the focus remains on oversea shipments. US tank container depots have been busy. For instance, Boasso America just opened a new $14 million headquarters and container depot in Chalmette, Louisiana, to keep up with demand.

A number of factors seem to be driving the growth in demand for intermodal services. Certainly, overall economic growth has been a major reason. The US economy posted 4.4% growth in 2004, and is expected to expand by at least 3.3% in 2005.

A shortage of truck drivers, exacerbated by the new driver hours of service rules in the United States, encouraged more intermodal shipments. Rail shipments between the United States, Canada, and Mexico appear to be experiencing fewer border delays than truck shipments.

Even without those issues, transloading and other intermodal activities have been seen as a way to lower overall transportation costs while enabling shippers to meet the just-in-time needs of their customers. Tank truck carriers remain an integral part of the transportation process, handling final delivery to the consignee.

Another economic benefit of intermodal operations is the ability to provide secure short-term product storage close to the consignee. In addition, a growing number of intermodal operations provide customized services that include warehousing, bulk storage, repackaging, and blending.

Probably the biggest challenge facing the intermodal industry today is finding the managers and skilled workers needed to meet future demand. The industry must develop strategies to attract new people, especially managers, to the business.

The future demands people who understand the diverse nature of the intermodal business. They need the skills and training to operate intermodal distribution centers that are increasingly sophisticated and diversified. They also must be able to deal with an increasingly international market.

Without doubt, though, they will be working in a business that offers tremendous opportunity and tremendous growth potential.

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