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1/31/2014



Rail News: Intermodal

IANA, AAR release Hatch's white paper on intermodal progress


The Intermodal Association of North America (IANA) and Association of American Railroads (AAR) recently released a white paper on the progress of intermodal transportation authored by independent transportation industry analyst Tony Hatch.

Titled, "Ten Years After: The Second Intermodal Revolution," the 15-page paper is sponsored by IANA and the AAR. In terms of market share and growth potential, intermodal still is in an "early innings stage," writes Hatch — a Progressive Railroading columnist and RailTrends® conference consultant — in the executive summary.

"Intermodal has allowed rails to move back up the value chain. Rails had for decades ceded value added and consumer goods to the highway," he wrote. "With the development of modern intermodal, all that has changed."

Now, railroads face new challenges, from outside the intermodal sector (such as the decline of domestic coal and rise of new energy sources) to within it (such as the Panama Canal expansion and a new focus on shorter-haul domestic goods), Hatch writes.

Hatch concludes that rail intermodal will resume its leadership role.

"In the final analysis, the domestic intermodal segment is leading the growth train and soon will drive rails to higher returns on investments, justifying the risks and the capital employed," he wrote. "For the rails, and for the shippers, etc., the biggest risk is rail execution and the high capital requirements."



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