Industry Focus: Volatility, Ripple Effects Shaping Intermodal Trends
By its very definition, intermodal is a web of deeply connected functions. As one part is impacted, it often creates a ripple effect. Heading into 2020, though, intermodal trends have the added complexity of outside forces creating a lot of volatility.
Despite some of the current bumps—tariffs, we’re looking at you—some of the major issues impacting intermodal have been around for a while.
Mike Wychocki, president and CEO of EagleRail, points to “trends that everyone has been discussing for the past five-plus years: leaner transportation solutions, more automation, Internet of Things and data tracking…. and how intermodal dovetails in with smart city solutions.”
While those certainly are deeply ingrained macro trends—and their impact is not yet fully known—there are minor trends creating an urgency.
“I think one key issue is how the volatility of global shipping volumes is impacting the trucking industries,” said John McDermott, managing director of MHI member St. Onge. “A driver and chassis shortage in 2017-2018 has led to an abundance of trucking resources in 2019 heading into 2020. I believe this was caused by a positive recruitment effort in the industry combined with slowing global trade based on nervous markets and trade wars, real or perceived. The intermodal industries are trying to find that balance.”
Trucks and rail are at the center of these intermodal imbalances. Wychocki points to the potential for “reducing the number of short-haul trucking runs through city neighborhoods,” an area where EagleRail is currently focused. “I also see more use of national rail networks across the globe… the more trucks, driverless or not, that we can remove from shared public roads, even long-haul, the better for the supply-chain efficiencies and the environment.”
Raising the bar with environmental impact
As goods move from manufacturer to customer, the environmental impact is multi-faceted, from the major shipping lines all the way down to the truck in the driveway. The coming implementation of reduced sulphur in marine fuel will be the first impact as international shipping moves to reduce its carbon footprint. By January 1, International Maritime Organization (IMO) 2020 requires ships to use marine fuel with no more than 0.5% sulphur content, from its previous 3.5% sulphur.