The term "supply chain" has become ubiquitous in recent news cycles, often signaling systemic disruptions rather than progress. At the heart of America's logistical challenges lies intermodal transportation - the coordinated use of multiple transport methods to move goods efficiently. This system, which combines trucks, trains, and ships, now faces unprecedented strain with far-reaching consequences.
Understanding Intermodal Transportation
Intermodal transportation represents the backbone of modern logistics. Imagine a product's journey: manufactured overseas, loaded onto ships, transferred to trains at ports, then delivered by trucks to distribution centers. This seamless coordination between transport modes offers cost and efficiency advantages, with single operators managing the entire process through standardized containers.
The 2021 Breakdown: A Perfect Storm
Larry Gross of Gross Transportation Consulting recently characterized 2021 as "challenging" for U.S. intermodal systems. The year witnessed paradoxical "volume-rate divergence" - surging demand coupled with declining efficiency after March's peak performance. Multiple factors converged to create this crisis:
- The Polar Vortex disrupted domestic networks during critical months
- International inland intermodal (IPI) volumes declined for five consecutive months
- Port congestion created system-wide bottlenecks
Port Congestion: The Choke Point
American ports have reached maximum throughput capacity, creating a bottleneck effect. Gross compares the situation to "10,000 companies each making optimal individual decisions that collectively created disaster." The concentration of traffic through Los Angeles and Long Beach ports mirrors holiday travel congestion, where overwhelming demand paralyzes infrastructure.
The Shift to Transloading
Capacity constraints have prompted a strategic shift from IPI to transloading models. Rather than moving containers inland, goods are increasingly unpacked at coastal ports and transferred to domestic transport. This workaround, while less efficient, helps bypass inland rail congestion points like Chicago.
Trucking's Resurgent Role
Contrary to narratives about driver shortages, trucking firms have absorbed significant intermodal volume. Southern California trucking rates reached unprecedented levels as shippers prioritized speed over cost efficiency. Data reveals intermodal's market share in long-haul transport (500+ miles) has regressed to 2009 levels, eroding a decade of progress.
The Road Ahead: Challenges and Opportunities
Gross anticipates continued elevated shipping rates through 2022, with recovery dependent on reduced inbound volumes. Several factors will influence the timeline:
- Delayed arrival of Chinese containers originally slated for 2021
- Gradual normalization of trucking capacity
- Potential eastward redistribution of cargo flows
The consultant warns, "The damage from 2021 is reparable, but won't come easily. This represents both challenge and opportunity - if we can coordinate operations and avoid reverting to previous practices."
Rebuilding Supply Chain Resilience
The crisis has exposed vulnerabilities in lean inventory systems and globalized networks. Gross advocates for increased redundancy and operational flexibility, noting that maximum efficiency leaves no margin for disruptions. Equipment utilization metrics illustrate the problem - when chassis turnaround times double from 4.5 to 9 days, system capacity effectively halves.
Proactive measures will prove crucial. "Reacting to congestion means you're already too late," Gross emphasizes. While challenges persist, there are signs of improvement as supply chain issues become more geographically concentrated.
Lessons for the Future
The intermodal crisis underscores several critical lessons for supply chain management:
- The need for diversified transportation networks
- Importance of domestic infrastructure investment
- Value of strategic redundancy in logistics planning
- Potential for technological solutions to improve coordination
As the transportation sector navigates these challenges, the evolution of intermodal systems will significantly influence America's economic competitiveness and consumer experience in coming years.