Rail/Intermodal: Transparency Will Be Key

Brooks Bentz, a partner in Accenture’s supply chain management practice says that intermodal shippers can shield themselves from unexpected rate hikes by negotiating contracts for a distribution network, rather than by picking lanes.

“Shippers really became good at this during the recession,” he says, “and they’ll continue to share information with one another – even friendly competitors – if it is of mutual benefit.”

Indeed, Bentz argues that the carriers themselves are becoming more transparent in their pricing.

“Given that a wide variety of rail and intermodal producers are charged with delivering door-to-door transportation, the challenge has been magnified,” he says. “That requires more integration and cooperation among carriers,” explains Bentz.

Meanwhile, intermodal growth continues to accelerate with the tremendous investments the railroads are making in infrastructure. According to the Intermodal Association of North America (IANA) domestic container volume recorded double digit growth for the fourth quarter in a row.

“Every IANA region reflected an increase in domestic containers which were responsible for the majority of total third quarter intermodal gains,” says IANA President and CEO Joni Casey.

Volumes were most impressive in the Midwest and the Northeast regions, with each recording nearly a 15 percent uptick. Overall intermodal volume increased a respectable 3.2 percent during a quarter that exhibited some economic slowdowns.

“The largest overall cause of modest international intermodal volume increases continues to be weak port volume, as many shippers have been unwilling to bring in substantial inventories,” says Casey. “Strong domestic container gains have kept overall intermodal volume growth positive, and an anticipated rebound in imports should deliver higher levels of overall intermodal performance in 2014.”

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