Intermodal: How Unexpected Alliances are Revolutionizing Freight Movement

America’s 21st-century economy rides on the back of a 21st-century intermodal network. Years in the making, this interconnected network of trucks, trains, and cargo ships has turned competitors into collaborative partners, and benefitted American consumers and businesses alike.

You might also likeYour Holiday Helper: Intermodal Freight RailFreight rail works to ensure you'll find everything you need to make each holiday season merry and bright.

Prior to the advent of intermodal, the competitive landscape of freight transportation was relatively simple: Trucks and trains engaged in a zero-sum battle to capture customers shipping freight across the United States, while waterborne carriers moved cargo overseas and along major domestic waterways like the Great Lakes and the Mississippi River. This diversity of shipping methods meant a diversity of shipping containers—truck trailers, rail cars and cargo ship holds. That, in turn, made transferring goods across modes of transportation complicated and expensive.

In the 1950s, the Alaska Steamship Company helped solve this problem by building vessels capable of carrying multiple containers—basically, big steel boxes—of freight simultaneously. This pioneering concept of containerization soon evolved, thanks in part to the leadership of shipping magnate Malcolm McLean, who established standard shipping container dimensions. This important milestone paved the way to easy and affordable movement of freight across all three modes of transportation and sparked decades of intermodal growth.

Harnessing the Strength of Each Mode

Today, the United States is home to the most efficient and cost-effective intermodal network in the world. The title was earned through the combined efforts of trucks, trains, and waterborne shippers, each of whom leveraged their unique strengths to drive down costs and shipping times for intermodal customers.

Freight railroads are the cornerstone of the intermodal network, providing cost-effective and reliable service for high volumes of freight across long distances in North America. Over the last few decades, railroads invested in this increasingly important segment of traffic by adding new track, raising tunnel heights and building intermodal terminals—often at port facilities. This, together with high-tech innovations, has made rail competitive for movements of 500 miles, and in some cases, as short as 250 miles.

Freight rail’s role as a long distance partner has enabled trucks to leverage their speed and agility for shorter hauls. Often, this means directly connecting manufacturers and other businesses to nearby intermodal facilities, where intermodal containers are transferred to freight trains or cargo ships for the long distance leg of the journey. Trucking companies like J.B. Hunt have embraced this short-haul specialization, particularly as volatile fuel costs, persistent roadway congestion, newly imposed regulations on drivers, and an ongoing driver shortage have made long-distance trucking more expensive. Today, more than half of J.B. Hunt’s annual revenue, for example, comes from partnering with other transportation providers.

Last but not least, maritime shippers who carry as many as 18,000 containers in a single ship, have worked with railroads and ports to build out on-dock intermodal facilities. These facilities quickly and efficiently transfer containers from ship to train, enhancing productivity while eliminating port congestion and pollution.

In the years to come, this collaborative relationship between cargo ships, trucks, and trains will prove even more vital. According to the U.S. Federal Highway Administration, freight shipments are expected to increase 41 percent by 2040. As they do, truckers, shippers, and American consumers can count on freight rail to remain an invaluable partner and an indispensable part of the world’s best intermodal network.

Your Holiday Helper: Intermodal Freight Rail

With Thanksgiving just around the corner, it’s time to deck the halls for another holiday season—whether you’re ready or not. Fortunately, freight railroads have been in the holiday spirit for months. Together with trucks and cargo ships, America’s freight railroads have worked since the dog days of summer to move thousands of containers filled with consumer goods to retailers across the country. Inside are countless holiday must-haves: from watches to tablets, rocking horses to ugly sweaters. Even Christmas trees! Thanks to freight rail and America’s intermodal network, you can be sure that no matter how last minute your shopping, you’ll find everything you need to make the holiday season merry and bright.

What is Intermodal?

Defined as the movement of freight across multiple modes of transportation, you may recognize intermodal by the big steel containers, or truck trailers, stacked on the backs of freight trains.

Railroads pioneered intermodal in the 1950s—and it quickly became a game changer. For the first time, cargo—including oddly shaped, small and fragile consumer goods—could be transported in bulk and quickly transferred across trucks, trains and cargo ships. This breakthrough helped smooth the handling of cargo at ports and inland terminals—one of the costliest and most time-consuming elements of shipping freight. It also meant that shippers could capitalize on the benefits of each mode—the global reach of cargo ships, the nimble nature of trucks and the unrivaled carrying capacity and efficiency of freight rail—to reach markets around the world more affordably and efficiently than ever before.

Scroll to the bottom of the page to learn more about intermodal transportation.

Putting the Happy in Holidays

Over the last half-century, America’s freight railroads have helped pave the path for this evolution in freight transportation. Since the early 1990s, railroads invested heavily to build and expand intermodal terminals across the country and outfit them with cutting edge technology designed to keep the transfer of freight between modes efficient. Railroads have also added track capacity to handle the steady stream of intermodal cargo from places like China and other parts of Asia, and have raised clearances and upgraded tunnels to allow containers to be stacked, effectively doubling the amount of freight each train can carry.

Investments like these allow freight rail to handle a growing volume of freight while driving down costs for shippers. Since 1980, freight railroads have doubled traffic volume and lowered average rail rates by 45 percent. This year is no exception: In September, freight railroads experienced their busiest intermodal week in history as they helped retailers prepare for the holidays. The National Retail Federation forecasts that 2017 holiday sales will increase four percent compared to last year. And, as holiday shopping habits have evolved with the ecommerce revolution, so too has railroad traffic. In 2016, holiday related ecommerce was up 11% over 2015 and freight rail was pivotal in moving the packing materials and boxes necessary to complete those shopping lists.

So this holiday season, whether you find yourself preparing a feast, shopping online or frantically wrapping presents, freight rail is by your side. And as you ring in a new year, we’ll already be hard at work, making our intermodal network even better so we can deliver happy cheer for years to come.

Need Solutions? Rail Always Comes Through

Have you been on an Amtrak train recently? If so, you might have seen our activity sheet, full of fun games and trivia about how railroads deliver for America. If you’re stuck on any of the crossword puzzle questions, or simply want to check your solutions, then look no furtherwe have the answers you’re looking for.

Want to test your train smarts? Click here to download the full activity sheet.

 

 

 

A stronger America flexes its muscle through trade

In today’s interconnected world, putting “America First” means embracing global trade.

The data are clear: Trade supports 40 million quality American jobs. One in four U.S. manufacturing jobs depends on exporting goods. And trade is now equivalent to roughly 27 percent of the nation’s GDP.

American consumers have benefited with access to cheaper goods, too.

Perhaps nothing exemplifies the benefits that come from trade as much as the free flow of goods between the U.S. and Mexico. Today, bilateral trade between the two nations exceeds $500 billion a year.

Like much global trade, the relationship is complex. Of all the goods imported to the U.S. from Mexico, around 40 percent of their value actually comes from parts and other components originally made in the U.S. To take just one example, American-made parts are exported to Mexico and used in the assembly of new cars and trucks. These vehicles are then sent back to the U.S. where they are sold—a win-win for businesses on both sides of the border.

The benefits of trade aren’t limited to just manufacturers, however. Aided by a familiar ally—freight rail—communities like Santa Teresa, New Mexico, are realizing new jobs, too.

In 2014, Union Pacific Railroad completed the construction of a $400 million terminal in this small town near the Mexico border. The railroad’s first delivery? Jobs. About 3,000 workers built the massive new facility, and today, 600 permanent jobs remain a windfall for this town of 4,200. Nearly a dozen new businesses have sprung up near the terminal too—from Penny’s Diner serving hungry rail workers, to ERO Intermodal Services, which maintains and repairs truck chassis and containers. State officials estimate that the Santa Teresa rail terminal has added nearly $500 million to the New Mexico economy since the terminal opened.

“Private rail investment was a critical and vital selling point for many businesses,” says Jon Barela, the former economic development secretary of New Mexico. “It signaled to the world that Santa Teresa was a strategic place to do business with the potential to be a vital part of the border and cross-border trade.”

Stories like Santa Teresa’s can be found in communities across the country that are thriving because freight rail enables global trade. Since 1980, North American railroads have spent more than $635 billion on building a modern, safe, and cost-effective freight rail network, and today, that network carries approximately one third of all U.S. exports (measured by volume). More than 35 percent of rail revenue is directly associated with international trade and about 50,000 rail jobs—worth over $5.5 billion in annual wages and benefits—depend directly on international trade, according to new research from the Association of American Railroads.

“The freight railroads’ extensive and improved network enables connectivity between buyers and sellers and facilitates trade both within the U.S. and between the United States and other countries,” says Clifford Winston, a senior fellow at The Brookings Institution in Washington, D.C., and an expert in transportation economics.

In 2014 alone, railroads carried 511 million tons of freight associated with international trade, including 329 million tons of exports. On board these trains were American-mined coal, American-made plastics and American-grown corn, all headed to U.S. ports and border crossings and onwards to foreign markets.

To see this supply chain at work, look to Miami, Florida, where freight rail has helped transform the city’s port, PortMiami, into a global gateway for trade. In recent years, Florida East Coast Railway has installed three 3,000-feet rail tracks directly onto the port’s docks. This investment allows the port to handle 225,000 intermodal containers per year and swiftly and seamlessly move goods across the country and around the world. In fact, thanks to the integrated freight rail network, the goods arriving at PortMiami are able to reach nearly 70 percent of the U.S. population within four days.

Putting up barriers to trade risks upending the U.S. economy and this carefully calibrated supply chain. While simultaneously working to address the negative impacts of trade, Washington can achieve its goal of putting America first by supporting open and free-flowing trade.

You might also likePolicy Issue: TradeLearn more about freight rail's role in enabling global trade and growing the American economy.

 

From Small Towns to Global Markets: How Freight Rail Drives Economic Growth

Nearly 150 years after the Golden Spike in Promontory Summit, Utah, completed this nation’s first transcontinental railroad, America’s freight railroad industry remains an emblem of innovation and a foundation for economic growth.

In fact, a recent study by Towson University’s Regional Economic Studies Institute found that U.S. freight railroads helped spur nearly $274 billion of economic activity and supported almost 1.5 million American jobs in 2014. This included $88 billion in wages and close to $33 billion in tax revenue—more than the annual tax receipts of 30 states.

Within the United States, freight rail’s consistent and strategic spending buoys once-stagnant desert towns like Santa Teresa, New Mexico, and quietly and efficiently serves the millions of people in a metropolis like Chicago. Meanwhile, Southern Florida has become a buzzing gateway to the global economy in part because of freight rail’s unique capabilities.

An infusion of cash, jobs in New Mexico

When Union Pacific Railroad decided to build a $400 million terminal in Santa Teresa, freight rail brought its first delivery: Jobs. About 1,600 of them. Today the terminal is complete, and more than 600 newly created permanent jobs remain a windfall for this town of 4,200. Additionally, nearly a dozen new businesses have sprung up near the terminal—from Penny’s Diner serving hungry rail workers, to ERO Resources, which maintains and repairs trucks chassis and containers. State officials estimate that the Santa Teresa rail terminal added more than $470 million to the New Mexico economy during the construction period alone.

“Private rail investment was a critical and vital selling point for many businesses,” says Jon Barela, the former economic development secretary of New Mexico. “It signaled to the world that Santa Teresa was a strategic place to do business with the potential to be a vital part of the border and cross-border trade.”

Santa Teresa’s story is a familiar one, as freight rail investments lift towns and cities from coast to coast. But sometimes the industry’s economic imprint shows up in surprising ways—such as helping the Windy City’s commuters get to work on time.

More than freight: Chicagoans on the move

Chicago and freight rail share a long and rich history, but when most Chicago commuters hear “rail,” they probably think of Metra. The city’s prompt and efficient commuter rail system powers 300,000 riders per weekday. Given Chicago’s role as a hub in America’s freight rail network, the cooperation of freight and commuter trains can determine whether hundreds of thousands of people have a good, productive workday.

Every week, Metra makes more than 750 trips across the Chicago Switching District’s 980-mile rail network, the majority of which is owned by freight rail. In addition to Metra’s traffic, the rail network hosts an additional 500 freight trains and dozens of Amtrak trains each day. In the face of so much traffic, freight rail executes a well-choreographed dance and helps facilitate open communications between all the railroads. This comprehensive proactive approach to managing the rail network in Chicago helped Metra achieve a 95 percent on-time performance for 23 consecutive months.

“The efficiency and effectiveness of freight rail transport in the Chicago region is critical to the economic development of Chicago,” says Jeffrey Sriver, director of Transportation Planning and Programming for Chicago’s Department of Transportation. “Likewise, the efficient and effective delivery of commuters to and from the city every day is also extremely important for the economic vitality of our city.”

This fine-tuning of the ebb and flow of rail traffic in Chicago is yet another example of railroads’ positive effect on American cities. Not only can rail rev a city’s economic engine with jobs, it can also keep its people and products moving efficiently. These efficiencies save time and money wherever the rails run, whether through our finest cities or into our most productive ports.

Go rail and go global

In southern Florida, PortMiami serves as a vital link between U.S. businesses, consumers and the global economy. Like its sister Port of the Everglades in Fort Lauderdale, PortMiami counts on the productivity gains that arrive by partnering with freight rail. PortMiami has worked with the Florida East Coast Railway to install three 3,000-feet rail tracks directly onto the docks. This investment allows the port to handle 225,000 containers per year, up from the 45,000 container maximum capacity before the tracks were installed. Thanks to the integrated freight rail network, the goods arriving at PortMiami are able to reach nearly 70 percent of the U.S. population within four days. This swift delivery benefits businesses in the U.S. and abroad.

A global marketplace facilitated by freight rail also serves American consumers.

“The freight railroads’ extensive and improved network enables connectivity between buyers and sellers and facilitates trade both within the U.S. and between the United States and other countries,” says Clifford Winston, a senior fellow at The Brookings Institution in Washington, D.C. “Without an efficient rail network, U.S. industries would incur higher costs, and those costs would raise the prices of a large share of consumer goods.”

A global marketplace and strong domestic economy are possible, in part, because of decades of private spending by American freight rail. And as Towson University’s recent study shows, the beneficiaries are not merely shippers or businesses or the freight rail industry itself. Every American–whether taxpayer, consumer or business owner–benefits from the incredible economic ripple effect of our freight rail network.

6 Milestones in the Growth of Intermodal

In many ways, it seems that demand for rail intermodal has skyrocketed overnight. In reality, its success has been more than a century in the making. Below are six unique milestones that have contributed to the development of the safe, innovative and cost-effective intermodal rail network that exists today.

1. Piggybacking

Also know as “circus style,” “piggybacking” of wagons was pioneered in 1872 by P.T. Barnum’s circus. Barnum developed a crossover plate that allowed horses to pull circus wagons onto and off of trains via a single ramp. Once onboard, circus wagons were rolled from train car to train car, a streamlined process that saved time, effort and money. In 1936, the Chicago Great Western Railroad built upon this approach when it modified several hundred truck trailers and loaded them onto its trains — making the railroad the first to move trailers and usher in commercial intermodal.

2. Container Intermodal Service

While intermodal piggybacking existed as early as the 1930s, it was the invention of a simple steel container that established intermodal as we know it today. In 1952, Alaska Steamship Company created the first intermodal shipping container by converting World War II victory ships into vessels capable of handling shipping containers that could carry virtually any product. Starting in 1956, Malcom McLean and his new company, Sea-Land, began working with maritime shippers, freight railroads and truckers to develop a common standard, which allowed the containers to be easily transferred across modes of transport. Today, the shipping container has largely eliminated the need for handling individual pieces of cargo, resulting in drastically reduced shipping costs and delivery time. Alaska Steamship and McLean’s invention directly shaped international supply chains still used today.

3. Double Stacking

Early rail uses of shipping containers were inefficient since only a very limited amount of cargo could be loaded on a single railcar or train. In 1977, Malcom McLean partnered with the Southern Pacific Railroad (SP) to create and test the first double stacked intermodal rail car. The test was a success, and by 1980, efforts to improve rail economics led to the ability to stack containers on rail cars across America. This process — logically known as “double stacking” — allows a single train to carry as much freight as hundreds of trucks. Over the years, freight railroads have raised clearances, upgraded tunnels and strengthened rail lines throughout most of America’s 140,000-mile freight rail network to accommodate double stacked intermodal trains. Since railroads are four times more fuel efficient than trucks, double stacking has helped reduce greenhouse gas emissions, while greatly increasing intermodal efficiency for the industry and customers alike.

4. Intermodal Terminals

The first rail terminals were established in the 19th century during the peak of railroad development. With the advent of intermodal and McLean’s shipping container, many of these original rail terminals were converted into intermodal facilities by 1960. The success of modern intermodal is largely built upon strategically located rail terminals where freight is transferred between modes. In recent years, railroads have spent billions of dollars to build and expand intermodal terminals and install modern equipment, including GPS-enabled cranes that can transfer intermodal containers between trains, trucks and ships in a matter of minutes. The strategic locations of these terminals — there are more than 180 intermodal facilities in the U.S. alone — have made railroads tremendously competitive for domestic freight shipments, and in turn, helped reduce congestion on our nation’s roadways while improving shipping times for rail customers.

5. Domestic Intermodal Growth

In 1989, trucking magnate Johnnie B. Hunt traveled from Chicago to Kansas City aboard a business train owned by the Atchison, Topeka and Santa Fe Railway. He was so impressed with the journey that he soon signed an agreement to move truck trailers on the railroad’s flatcars, a major leap forward in the movement of domestic freight. Since then, truck driver shortages, increased fuel costs and congestion on our nation’s aging highways — together with massive private spending and improved reliability and cost effectiveness — have resulted in railroads carrying an increasing share of domestic intermodal freight historically moved by trucks. In fact, this affordable domestic freight service has now become a competitive alternative to all-truck movements for journeys as short as a few hundred miles — proof of railroads’ commitment to keep America’s economy moving, whether it is across the country or around the world.

6. Tech-Enabled Intermodal

Freight rail’s massive investments in cutting-edge intermodal technology have helped drive down shipping costs while improving network efficiency. At ports and terminals, railroads have invested in zero-emission electric cranes, which speed container transfer between ships, trucks and trains while cutting pollution. Optical scanners and automated gates allow trucks to more quickly enter rail facilities, reducing idling time and enhancing security. A network of “smart tracks” outfitted with detectors provide real-time feedback on the health of rail infrastructure and equipment, ensuring millions of intermodal containers safely and reliably reach their destination each year. Freight rail’s continued investment in these types of high-tech innovations will drive intermodal growth in the years to come.

Intermodal Fuels the American Economy

Every day the intermodal network transports goods from around the world to the American consumer and American-made products to consumers around the world. Intermodal transportation is the seamless movement of goods utilizing multiple modes of transportation to produce the most efficient and cost-effective move possible. The efficiency gains realized by intermodal shippers help to make U.S. businesses more competitive in the global economy.  Freight rail is an integral part of this system, providing affordable and reliable long-haul movement of goods while working cooperatively with competitors like trucks who are better suited to short-haul freight movement.

Watch the video above for a complete overview of America’s intermodal network and learn how freight railroads are investing to keep America moving.

When America Goes Big, She Goes Freight Rail

America’s integrated transportation network of trains, trucks and barges carries 54 tons of goods and commodities for every American in a single year. This staggering haul contains the ingredients that are essential to the nation’s modern economy and our way of life: from the steel that frames our skyscrapers to the grain that feeds the world.

Freight rail serves a unique and integral role in this transportation network. When shippers need to go big, rail is ready. A single train can carry an incredible load of cargo efficiently, providing shippers a reliable and cost-effective way to meet their business needs.

The efficiencies achieved by freight rail benefit rail customers, consumers and the broader economy. To see an example of this, simply head over to your local car dealer or scan the many vehicles — cars, trucks, SUVs and minivans in every color, shape and size — on any highway or street. Each one has been designed by auto manufacturers to meet any driver’s taste and any family’s needs.

Such abundance and variety is possible because car manufacturers can roll out thousands of new vehicles in a single day. And that scale of production and delivery to consumers is possible because freight trains can move the raw materials, auto parts and millions of finished automobiles coast to coast seamlessly. At every stage of the production life of an automobile, freight rail serves a role. In 2015, automakers sold a record 17.5 million cars and light trucks in the United States, an achievement made possible by freight railroads and the larger integrated transportation network. How do you move that many vehicles? Well, a single train can move 750 vehicles at once.

Freight rail’s economy of scale serves car manufacturers, as well as industries and companies throughout the country — paper mills, power plants, big box stores and more. Today, rail customers can ship nearly twice as much freight for approximately the same price that they paid 35 years ago. That means manufacturers are better positioned to scale up to serve an existing market or to create a new one. Whether it’s to deliver auto parts for new cars or drywall for new homes, freight rail is ready to make it happen.

In business, reliability is critical, and freight rail customers can count on railroads to serve their transportation needs. In the last five years alone, America’s privately owned freight railroads spent an average of $26 billion a year to maintain and modernize their rail network — rather than relying on taxpayer funding. It’s just another way that rail feeds the infrastructure that feeds the economy.

So the next time you marvel at the endless gleaming options at a car lot, remember freight rail — and the work we do to deliver for our customers so that they can deliver for you.

Eight Unbelievable Facts About America’s Freight Railroads

Supporting the world’s largest economy is no small task. Every day, thousands of customers rely upon American freight railroads to safely and efficiently transport everything from the food on your table to the energy resources that power your home. What does it take to keep America’s economy moving 24 hours a day, 7 days a week and 365 days a year?

60 football fields: The length of the longest freight train in American history

4 American time zones: First established by freight railroads in 1883

107.3 billion pounds of steel: The amount of steel contained in America’s freight rail network

6,667 Eiffel Towers: Could be built with all that steel

489.4 million railroad ties: The number of railroad ties maintained by Class I freight railroads

5.6 trips around the Earth: The length of America’s freight rail network laid end-to-end

473 miles: How far a freight train can move a ton of freight on one gallon of fuel

75 percent: The reduction in greenhouse gas emissions achieved by moving freight by rail instead of truck

You might also likeWant to see what freight rail is moving for America?Check our our Rail Traffic Data on AAR.org

Rail Connects American Businesses to the World

A stretch of railroad track on its own may not be all that impressive, but the vast network that blankets America serves as a lifeline to the rest of the world. When U.S. goods are delivered to international customers, there’s a good chance freight rail played a vital role. That’s because America’s freight railroads carry one-third of all U.S. exports on their journey to markets around the world. Our investments in an efficient intermodal system are opening doors overseas and helping American businesses compete—and win—in today’s global marketplace.