All transportation modes will make gains in freight volume.
Recent reports of economic activity have indicated substantial gains in productivity for the U.S. economy. This is heartening since it leads to the potential for inflation to remain in check. And the ability to hold the line on prices leads to further investment in business equipment and systems - with the intent of further increasing productivity.
The pressure to contain and reduce costs further will grow as the economy moves to a slower rate of overall growth. The result will be an upstream move to reduce costs, not only activity by activity, but also through the total process.
Those involved in providing value-added services will be required to further identify the bottom-line impact of each service feature. As an example, it's generally accepted that receiver-carrier communications are important to maintain control over the scheduling of inbound freight. However, if the average wait time at the loading docks is 2.5 hours, with an additional 2 hours for actual unloading, it becomes more difficult to show why a simple phone call is not as valuable as satellite tracking.
Much has been published recently about the cost advantages of intermodal relative to highway transportation, assuming reasonable lengths of haul. While the per-mile cost for the rail portion of the move is considerably lower, the cost of hauling by truck at both ends of the move, as well as the waiting times, can prove prohibitive for time-sensitive freight.
Intermodal is expected to grow faster than any other form of transportation - air intermodal followed by rail intermodal. But this also means two more scheduling events with each shipment than with a straight highway move. The time delays at each end, as well as the handling requirements, may be more than enough to offset the hauling savings.
To offset the issues of throughput in the system, it may be advantageous to increase the allowable size of the containers moving the freight, for both rail and truck. The economy continues to push the move toward a greater portion of time-sensitive freight. Productivity gains in the intermodal arena will be in the best interests of trucking and shipping. With the expected increases in freight appearing as the economy grows, there must be some relief to the growth to allow for reasonable utilization of equipment and drivers.
The market will determine which freight is best suited for intermodal, regardless of the size of the transporting container. By allowing use of larger containers, both rail and trucking can expect to provide further cost savings to shippers.
Whatever mode is chosen, there will be pressure to reduce transportation and distribution costs. They will need to be competitive, not only with their domestic counterparts but also with those countries exporting here.
Initially, truckers would not be expected to embrace size increases since it's likely they will gain little revenue for an increased investment in equipment and maintenance. For some carriers, such as tank-truck operators, the increased investment would be very substantial. Dry van trailers may be able to be extended, but most dry van freight cubes out long before it grosses out. Rail remains concerned that increased carrying capacity will not allow the freight to move back to rail from trucking. Given the nature of distribution today, it is unlikely that the shift to prior modal splits would occur.
The projected volumes of freight over the next few years indicate there will be room for growth in all modes. The issue may be which mode will gain market share. If regulatory protection is required to maintain market share, the market will find a way to regulate that advantage. That could lead to unintended and unfavorable consequences for shipper-carrier relations.