An article published in CSCMP's Supply Chain Quarterly present some interesting perspectives for managing current bottlenecks in intermodal operations. The article informs that typical approach adopted to accommodate current and future intermodal volumes is to build additional infrastructure. However, adding infrastructure is very expensive and doesn't really solve the problem due to conflicting economic and operational mandates among main players -v the railroads, the ocean carriers, domestic shippers, the container terminals, and the drayage carriers.
Rail economics:
- Growing network economics are affecting service
- Intermodal terminals' problems quickly become everyone's problems
- The railroads are not always able to provide needed equipment
- The varied equipment and service requirements of the customer base exacerbate operating challenges.
- Many terminals have nowhere to expand
The impact of carrier alliances:
As container ships have become increasingly larger and vessel alliances with as many as six distinct carriers sharing a single vessel, railroads serving U.S. West Coast need to carry 12,000 or more TEUs and manage as many as six lines. The following figure illustrates intermodal train plans before and after the advent of carrier alliances:
Impact of drayage:
Intermodal drayage refers to the trucking services that move containers between rail yards r container terminals and the shipper's or consignee's door. To compete with door-to-door truckload service, intermodal must replicate the service. However, the railroad intermodal service is expensive for inland shipments due to the circuity problem. The following figure shows the ideal competitive scenario:
However, in a non-ideal world the intermodal route is longer than the truck door-to-door mileage as shown below:
Even in ideal scenario the rail distance is often significantly greater than door-to-door trucking distance as shown below:
The solution is to reduce the drayage distance and unfavorable circuitry by serving more intermodal terminals that are closer to the customer (although the current trend is for fewer, larger terminals). Labor shortages (e.g. truck drivers) also pose challenges for drayage providers.
Two solutions:
1. BNSF Railway's proposed Southern California International Gateway (SCIG) represents one initiative to manage intermodal growth. The SCIG is a near-dock facility that complements on-dock facilities that were developed over the past 30 years.
2. CSXT's Northwest Ohio (NWO) hub feeds numerous on (and off) its network as sown below:
Source: Prince, T. 2015. Intermodal's big bottleneck: A possible solution. CSCMP's Supply Chain Quarterly, Quarter 2, 43-54.