The good news is that intermodal growth is poised to achieve tremendous gains in the coming years. The question, however, is whether the infrastructure, including seaports, roads, and rail systems, as well as the various players such as carriers, ports, and government officials, can handle the growth.

"Traffic growth rates, in terms of volume, are projected to continue for the next 10 plus years," says Joni Casey, president of the Intermodal Association of North America (IANA). "This year has brought record import levels for many ports. The average annual growth for domestic service is approximately 4% to 6%, while international growth is averaging 8% to 10%." And, while trailer traffic is down, containerized traffic is booming. According to the IANA, containers accounted for nearly 75% of the intermodal total for the third quarter of last year.

Intermodal's Dark Clouds

Casey says, "The challenges for the intermodal transportation community can be categorized into changing distribution patterns, capacity constraints, and legislative and regulatory initiatives."

Industry executives agree, and they've added to the list lack of real estate for expansion, equipment and personnel shortages, environmental limitations, traffic and congestion, and the need for improved information systems.

M. John Vickerman of TranSystems Corporation (www.transystems.com), a consulting firm that specializes in planning, designing, building, and managing transportation facilities around the world, understands the industry's concerns. During last November's Transcomp 2000 seminar, Vickerman was part of a panel that addressed the challenges facing the intermodal industry.

Dwell time, or the average length of time an average container remains in the terminal, was one of the items discussed. Dwell time at US marine container terminals typically runs from six to eight days, while dwell time at US intermodal rail terminals usually averages one and one-half to two days. Vickerman claims that when you reduce terminal dwell by one half, you double the throughput without building anything.

"We need to increase throughput," acknowledges Don Wylie, managing director of maritime services for the Port of Long Beach in southern California. "Throughput is now running at between 2,800 and 2,900 TEUs. We need to increase it to over 5,000," he says.

Another difficulty confronting the industry is the lack of government funding for freight-related projects. The results of a US Department of Transportation study revealed that connectors to ports were in the worst shape compared to other highways, yet received the least funding. The report also noted that metropolitan and state planning associations many times give freight-related highway projects a lower priority than those involving passenger travel. "Freight don't vote," quips Wylie. "We must compete for funds, and passenger projects generally get more money."

IANA's Casey says, "The recent DOT report, a Congressional mandate under the TEA-21 (Transportation Equity Act for the 21st Century), is an accurate indicator of the inventory and condition of such road segments and highlights the absolute and immediate need for more and better funding for these roads." She adds, regarding legislative and regulatory initiatives, "There has never been a longer list of items that intermodal service providers will be dealing with in the coming year[s]." Among the items Casey identifies are low-sulfur diesel and ergonomic rules, truck-driver hours-of-service requirements, carrier anti-trust immunity, and merger guidelines. "Any of these issues will have direct impacts on how business is conducted," she notes.

Considering the complexities of today's supply chains and the variety of people and equipment it takes to transport a container, it's not surprising to find a few bottlenecks in the system. The seaports tend to experience bottlenecks at the terminal gate. However, bottlenecks can also be observed at "linking points" that connect the "ocean carrier, ports, and rail," explains Pete Mori, assistant vice president of intermodal for Union Pacific Railroad. Mori adds that "a concern of ours is the inland-destination infrastructure. Ocean carriers have expanded their capacity tremendously and West Coast ports have added several terminals with on-dock rail facilities. We're concerned that the infrastructure at the inland destination of the move may be lagging behind from a capacity standpoint. At the same time, we are equally concerned with the current free time and storage rule of containers [dwell time of loaded and empty containers at rail terminals] as well as chassis availability and management capability."

Mori says there are ways to improve the situation, though, starting with productivity. "To deal with the expanding market, we must more fully use our existing assets and eliminate various 'wastes' from the system. This includes our efforts to reduce destination dwell time. In addition, we must continue to explore cost-effective ways to expand our existing terminals and line-haul capacity." He also says that cooperation between the intermodal parties needs to be enhanced. In particular, Mori says that "bunching of vessel arrivals must be minimized" to better use the present facilities, and "accuracy of volume forecasts must be improved so carriers can be better prepared." This will help them offer "more efficient and effective service," he says.

Free Flowing Information: The Ray of Hope

While many intermodal executives have concerns about how well the industry will continue to perform, their primary solace lies in the promise of improved information. Specifically, they believe increased automation and better information systems are critical to maintaining the industry's viability. Naturally, the Internet has quickly emerged as the best facilitator for improved information and communication flows, and many companies are designing systems to address the challenges confronting the intermodal industry.

"When Farid Dibachi, the founder of Arzoon, asked himself, 'What problem can the internet uniquely solve?' the answer was transportation. Among other things, it was global and fragmented," remarks Kip Hawley, executive vice president of corporate development for the company. Arzoon.com's Transportation Management Trading Network service automates and synchronizes the full life cycle of the transportation workflow. Shippers, carriers, customers, and suppliers can use the transportation platform to work together in a networked community. Hawley contends that "information is intermodal's 'weak link.' Confusion occurs in the handoff of information."

While there are other companies with similar products on the market, one was launched largely in response to the 1996 trucker strike. "The strike made the intermodal community recognize the need for a communication platform such as eModal.com," says Don Wylie of the Port of Long Beach. The company is a data exchange that gives trucking companies access to information on container availability at marine terminals. More than 18 West Coast terminals use the service. It's designed as a central clearinghouse for terminals to post information on container availability, road closures, and terminal congestion to help dispatchers better schedule their drivers.

It seems almost certain that the intermodal industry will encounter some challenges in the near future. Bigger ships are on the horizon, trade volumes are forecast to grow, and yet, in many ways, the system is already operating at capacity. Although the different players in the industry may debate the various challenges, hardly anyone will argue that the real solution rests with improved information and communication.

Unlocking Gridlock: The Alameda Corridor

It's been years since the initial concept of a rail corridor linking the San Pedro Bay Ports to the rail yards south of downtown Los Angeles was conceived, but now the project is finally nearing completion. The $2.4 billion Alameda Corridor will be finished in 2002, and, given the forecast growth in cargo in the coming years, it won't be hard to attract business. Approximately 40% of the inbound containers shipped through the ports of Los Angeles and Long Beach move by rail to inland points, but that amount will grow to 50% within the next ten years. Meanwhile, the I-710 freeway, which handles 80% of the truck traffic in and out of the LA/LB port complex, is already congested, and some planners say it could reach the saturation point as earlier as 2006.

The Alameda Corridor will consolidate 90 miles of track into one 20-mile route and eliminate nearly 200 at-grade highway crossings. While the Alameda Corridor clearly offers many advantages for the intermodal industry and shippers, there are other economic and environmental benefits, too. Consider the following, which have been provided by the Alameda Corridor Transportation Authority:

Traffic delays at grade crossings reduced by 90%. Every day, over 15,000 hours of vehicle delay will be eliminated by consolidating rail traffic and eliminating highway grade crossings.

Noise and vibration reduced by 90%. The construction of tracks in the below-grade trench, track construction on new base material, and the use of continuous-welded track will help promote a quieter operation. In addition, noise walls will be constructed in appropriate areas to mitigate vehicle noise along Alameda Street, in residential neighborhoods, and other sensitive areas.

Train stopping reduced by 75%. By using the latest technology in centralized traffic control systems, the double-stack corridor will reduce the number of times trains have to stop and wait for other trains to pass. Today, when an 8,000-foot-long unit train stops, the congestion and pollution from train and vehicle backup can significantly affect the surrounding air quality.

Locomotive hours of operation reduced by 30%. Train speeds will double and the stopping and idling of locomotives will be reduced.

Truck traffic reduced by 23%. The construction of on-dock rail facilities combined with the increase in cargo containers that will move by rail will effectively cut truck traffic. wt