Intermodal Transportation Industry

INTERMODALISM

The success that the intermodal transportation industry has seen in recent years can be attributed to two primary factors, the advent and effective use of containerization and governmental deregulation of the transportation industry. To fully grasp what Intermodal transportation is and the impact it has had on the global business community, you have to first start off with the understanding of it and how it can be used effectively to move products around the world. An easy to understand definition is that Intermodal transportation is used to move goods from one point to another using different modes of transportation, including rail, road, ship, and air and is an excellent choice when moving goods over a long distance. This means products can be moved in a variety of ways in a variety of different modes. For example, a car produced Japan can be shipped to the United States on a large transport ship, downloaded at any one of a number of ports located throughout the west and east coasts, and then loaded onto rail cars for further movement to a final destination, where it could be downloaded and again transported via a trucking company to a local car dealership. The same can be said for products loaded into standardized containers and moved throughout the world using the same means. The use of these containers to move products is made easier because they use the same dimensions which mean that ports and other transfer points can use the same types of equipment and can effectively move these containers quickly from one mode of transportation to another.

The use of containers shipped using the intermodal model can be traced back to 1937, when Malcolm McLean was credited with inventing the container and is credited with being a global force in today's business markets, as well as being an integral part of supplying troops for nations around the world. Between 1959 and 1976, the average tonnage of loading and unloading cargo grew from .627 tons per man-hour to 4,234 tons per man-hour. This efficiency growth was viewed by the military as a low cost way to move equipment and supplies in order to sustain ever increasing global operations, especially within the Vietnam combat theater. Since the Vietnam conflict, containers have continued to be used by every branch of the U.S. Military to move supplies and equipment globally. The logistical success seen during the invasion of Iraq in 2003, as well as the post-invasion phase of the conflict, can be attributed to the effective use of containerization. Annually, an average of 11,000 containers were received at the commercial port, transloaded from carrier-owned to Government-owned or -leased containers, and moved by convoy or contracted barge to the supply support activities (SSAs) and forward operating bases (FOBs) within the Iraqi battle space. A system of 10 empty-container collection points (9 in Iraq and 1 in Kuwait) receives, processes, updates automated records of, and re-circulates containers through a road network covering an area roughly the size of Texas. Deploying units arrive in theater at nearly the same time as their containerized and heavy organic equipment, which is efficiently moved with relatively few problems from the port to the training and staging areas and from there to the FOBs and SSAs in theater.

Recently, carrier companies began taking steps to reduce costs due to a projected moderate growth in the global container trades for at least two more years, and overcapacity keeping a lid on rate increases. APL, for example, will reduce its ocean, terminal and logistics costs by $500 million in the coming years without compromising service levels. U.S. trade with Asia got off to a slow start in the first quarter of 2012, with imports increasing 1 percent and exports up 1.8 percent. At the same time, the global container fleet is predicted to grow 7.3 percent this year and 9.1 percent in 2013, French economist Philippe Hoelinger says. Because carriers will find it difficult to implement general rate increases in this environment, they must find ways to take cost out of their operations. APL's AIM program is designed to reduce container repositioning costs throughout its system by matching import shipments moving to inland destinations with export or domestic loads from the same region. At the marine terminal level, carriers are using computerized systems to increase cargo velocity and eliminate redundant moves within the container yard. Terminals are also turning to automation to increase container lifts per hour. At its Pier 300 terminal in Los Angeles, APL has increased the average container lifts per hour to 27 from 22. The company intends to achieve even higher productivity numbers in its Middle East operations through the use of tandem-lift cranes that can lift two containers simultaneously.

Governmental regulation and more recently deregulation has been a highly discussed subject within the intermodal community, and the effects of both have been well documented and debated during the last one hundred and fifty years, beginning with the establishment of the first railroads in the mid-1800's. This establishment of railroads allowed factories to move into urban areas where the