Making Intermodal Transportation Work Starts With Creating a Common Vision
July 1, 2004
With intermodal movements increasing an average of 13% each year since 1996, the growing importance of intermodalism as a transportation option is without question. So is the growing frustration of many carriers picking up freight at increasingly...
With intermodal movements increasing an average of 13% each year since 1996, the growing importance of intermodalism as a transportation option is without question. So is the growing frustration of many carriers picking up freight at increasingly jammed intermodal yards and ports.
Is shippers’ infatuation with this lower-cost alternative more than the current infrastructure can handle? It’s a question worth considering; an issue requiring immediate attention. Many of the well- publicized intermodal transfer point delays – at both marine ports and rail yards – experienced over the past couple of years occurred while the Canadian and world economies were going at less than full tilt. The resurgence of the global economy, and our desire to capture a larger chunk of it, can only lead to more choke points.
Consider that although Canada has just 9.9% of the North American population and 6.6% of its retail sales, it handles close to 15% of North American containerized trade with the world. And it has emerged as a transhipment hub for US-bound cargo. Between 1990 and 2000, the value of US-bound cargo transhipped through Canada increased 210%, amounting to over $28 billion per year – that’s as large as the entire for-hire carrier industry. Much of this freight volume, of course, requires handoffs of product and information from ocean vessels and railroads to trucks, and intermodal efficiencies are a key advantage in a global economy that is shifting the competition among manufacturers and retailers to competition among entire supply chains.
It’s also a lot of business to put at stake if we can’t get our intermodal network bottlenecks worked out. Especially when you consider that our largest trading partner is already jittery about delays in moving product across the US border thanks to all the new security legislation since 9/11.
Getting to the root of the problem has thus far proved elusive. Is overall intermodal capacity the problem or is it more an issue of terminal yard capacity? Is it a scheduling concern or an inability to efficiently transfer necessary data between modes – what’s causing the most grief seems to change depending on which industry stakeholder you happen to be speaking to.
My best read on the situation is that the key stakeholders, well meaning though they may be, are still too focused on their own operations to think strategically across the entire supply chain. The strategic inter-mode alliances necessary to achieve seamless transfers between modes are still the exception rather than the rule. The lack of communication, coordination and integration among the modes is understandable given the size of the network in question, the complexities of data sharing across different partners’ IT systems and the sheer attitudinal change required for stakeholders more used to seeing themselves as competitors than partners.
But let’s be clear about two things: One, it is up to all transportation stakeholders (shippers included) to collaborate and ensure that the Canadian market is working to full capacity and able to exceed global expectations. And, two, the time for change is now. Aside from the fact the resurgence of global trade is about to make our intermodal issues that much more pressing, the timing is also opportune because Transport Canada is showing increased interest in intermodal transportation. As the transport ministry noted shortly before the election, Ottawa wants its future investment decisions to deal with transportation as a system rather than a collection of individual modes. It’s working on a new policy framework.
Essential at this stage is for industry leaders to come together to discuss issues and ideas and create a common vision. And so I would like to alert all carriers with a stake in intermodalism to an impressive two-day gathering (Sept. 22-23) of key industry participants in Toronto that’s sure to touch on the most pressing issues of intermodal transportation.
The conference is supported by the Canadian Industrial Transportation Association, the Shipping Federation of Canada, the European Intermodal Association and the Intermodal Association of North America. As the conference chair, I can’t tell you how impressed I am with a line-up of speakers which includes representatives from the Shipping Federation of Canada, the Canadian Association of Importers and Exporters, the Canadian Industrial Transportation Association, the Association of Canadian Port Authorities, the Canada Border Services Agency, both of our railways, Ron Tepper from Consolidated Fastfrate (who runs perhaps the most successful intermodal operation in the industry) as well as speakers from ports and major universities.
If you’re involved in intermodal shipping, this promises to be conference worth your while. To register, call 1-800-882-8684 or online at www.iqpc-canada.com