How US intermodal operators are killing their own industry

Photo: Alan Stoddard, Dreamstime.com

The United States’ much-vaunted intermodal network is in an utter mess, according to a pile of testimonies delivered to the Surface Transportation Board, and detailed in this excoriating commentary, Material Handling & Logistics, by logistics consultant David Sparkman. He writes that the “six major freight railroads [in North America] appear to be committing slow-motion suicide”. Shippers are simply fed up with declining service levels, terrible schedule reliability and prices that relentlessly increase, and, in frustration, are using road as the mode of choice. The fault lies with ‘precision scheduled railroading’, which has become the darling of investors seeking to strip out as much cost from rail operations as possible, but which has left many services crippled.

“Today, shippers are turning to trucking to serve their freight transportation needs every chance they get, so they can avoid subjecting themselves to the unreliable service and rate gouging dealt out by rail lines. As a result, even in economic good times, railroad traffic has not kept up with the growth of the rest of the economy, the manufacturing industry, exports and imports and its main competitor – trucking.”