Intermodal growth signs continue to look promising, say Class I railroad executives
November 29, 2011 - LM Editorial
As freight transportation volumes are primarily showing flat or modest growth levels, intermodal still is showing very strong growth prospects, with the very likely possibility that the drivers for future intermodal gains are very promising.
That was the consensus of two Class I railroad executives at the TransComp Exhibition in Atlanta earlier this month. Speaking on a panel entitled “More Capacity Through Intermodal Corridors,” Jim Bolander, group vice president, domestic intermodal, Norfolk Southern Corporation, and William Goetz, resident vice president, NYC-NJ-Philadelphia, CSX Transportation, shared their views, regarding the current intermodal landscape and how they see things shaping up going forward.
With some industry estimates calling for domestic railroad network volume to increase nearly 90 percent by 2035, a question the panelists heard was how well equipped are there networks to handle the expected surge in volume should it come to fruition.
“Right now, we are running about 3 million loads in our [intermodal] network,” said Norfolk Southern’s Bolander. “We can foresee through the reasonable near-term that would be about a 60 million unit network. The numbers are staggering in terms of the slightest uptick in rail market share from truckload volume. And the value of continuing to develop terminal capacity through public-private partnerships is likely to increase. There are probably not going to be many new highways built, and the railroads would be in a good position to work with state and federal governments on those partnerships.”
Bolander added that with NS building four terminals—in Birmingham, Alabama; Memphis, Tennessee; Charlotte, N.C.; and Greencastle, Pa.—that are scheduled to open next year, the carrier will be adding about 750,000 loads of capacity, which he said is a good start. But he stressed that more investment industry-wide is crucial, because if the investment is not there, the services provided by railroads ultimately ends up failing the expectations of their customers.
CSX’ Goetz explained that intermodal’s best days are before us” with some definitive fundamentals in the marketplace that help to make that case.
Two of these fundamentals, he said, have to do with highways in that it is very difficult to construct a highway and pay for highway repairs, noting that the models of the Eisenhower era do not work in present times.
“That requires an alternative,” he said, “and the business case for rail and intermodal is very strong. The people who use it pay for it. It pays taxes as opposed to consume taxes. These are the types of things that draw widespread bipartisan support.”
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