Intermodal Freight: The Railroad’s livelihood

For a sixth time in seven years, intermodal freight set an annual record during 2002, according to the Association of American Railroads (AAR).

“2002 was a very challenging year for industries across the economic spectrum, including freight railroads,” said AAR vice president Craig F. Rockey. “Obviously, we’re pleased to have set another intermodal record — an indication that the intermodal partnerships between railroads, motor carriers, and steamship lines are working extremely well.”

Intermodal — the movement of trailers or containers on rail cars — accounts for approximately 20 percent of U.S. Class I rail revenue. Over the past 10 years, it has been the fastest growing major segment of the U.S. freight rail industry and now plays a critical role in making supply chains far more efficient for retailers and other firms and industries.

On the carload side, commodities with significant gains in January 2003 included metallic ores (up 18,930 carloads, or 38.5 percent), chemicals (up 7,898 carloads, or 5.8 percent), steel and other metal products (up 7,872 carloads, or 14.3 percent), and coke (up 3,432 carloads, or 19.7 percent). All told, 10 of the 19 commodity categories tracked by the AAR saw gains in carloadings in January 2003 compared with January 2002. Commodities with carload declines in January 2003 included coal (down 43,625 carloads, or 6.5 percent) and grain (down 5,044 carloads, or 4.5 percent.

“In recent years, U.S. and Canadian railroads have spent billions of dollars on intermodal-related investments in infrastructure and equipment, including new or expanded intermodal terminals, freight cars, state-of-the-art locomotives, and added track capacity and advanced signaling systems to accommodate faster, more frequent intermodal trains,” Rockey said. “The result is responsive, cost-effective, environmentally-friendly service that helps meet the increasingly demanding freight transportation needs of our nation.”

Canadian intermodal traffic in January 2003 was up 17.6 percent (28,441 units) compared with January 2002, while Canadian carload traffic was down 1.0 percent (3,075 carloads). Grain traffic on Canadian carriers was down 17.4 percent (6,928 carloads), and carloads of grain mill products were down 17.7 percent (1,637 carloads). Chemical traffic in Canada in January was up 7.4 percent (5,139 carloads), while carloads of metallic ores were up 12.2 percent (980 carloads).

In 2001, CPR Intermodal generated $801 million (Canadian) and 917,000 loads. Intermodal has been CPR’s leading revenue growth performer through the first three quarters of 2002, increasing $43 million or 7 per cent over the same period in 2001. Revenue has grown by nearly $200 million or 30 per cent in the last five years.

“We’ve been lucky to piggyback on to this service for 36 of its 50 years,” said Ron Tepper, president of Consolidated Fastfrate, Canada’s largest privately owned freight forwarder. “As a less-than-truckload carrier, we have to be able to tell shippers where their freight is every step of the way and deliver it with less than 15 minutes of leeway, even though it travels thousands of kilometers. CPR has created something no one thought possible even 10 years ago, let alone 50.”