Introduction
The fragility of global supply chains became painfully evident in 2021 as disruptions cascaded through transportation networks, creating significant obstacles to economic recovery. In the United States, intermodal transportation—the critical link between ocean shipping, rail, and trucking—played a pivotal role in addressing these supply chain challenges. However, the performance of U.S. intermodal systems raised serious concerns, with surging demand coinciding with declining efficiency, port congestion, and capacity shortages.
Chapter 1: Current State of Intermodal: Surging Demand Meets Declining Efficiency
1.1 Market Demand Outpaces Capacity
As the U.S. economy rebounded in 2021, consumer demand surged, driving significant freight volume growth. However, intermodal freight volumes and operational efficiency failed to keep pace. Industry analyst Larry Gross noted that after peaking in March 2021, U.S. intermodal performance began deteriorating, exacerbated by February's polar vortex impacts that disrupted domestic transportation networks.
1.2 International Transport Bottlenecks
In international transport, inland point intermodal (IPI) volumes for 20-, 40- and 45-foot containers declined for five consecutive months beginning October 2021. This contraction reflected how global trade bottlenecks were constraining goods movement through key U.S. gateway ports.
1.3 Port Congestion: The Supply Chain Chokepoint
Port congestion emerged as the most severe challenge facing U.S. intermodal networks. Multiple factors contributed to the gridlock: labor shortages across ports, trucking and warehouses; equipment deficits including chassis and cranes; information gaps between supply chain partners; and aging infrastructure ill-equipped for modern logistics demands.
1.4 Distributed Responsibility Creates Systemic Failure
Gross likened the supply chain crisis to "peanut butter"—with responsibility thinly spread across railroads, shippers, chassis providers, ocean carriers and ports. This fragmentation created systemic dysfunction as each participant optimized for individual benefit while collectively worsening congestion.
Chapter 2: Trucking Emerges as Temporary Relief Valve
2.1 Trucking Absorbs Intermodal Overflows
With intermodal capacity constrained, trucking unexpectedly assumed the role of supply chain relief valve. Despite driver shortages, truckload carriers absorbed significant freight volumes diverted from congested rail networks, particularly in Southern California where spot rates reached unprecedented levels.
2.2 Intermodal Market Share Declines
Data from the Intermodal Association of North America revealed intermodal's domestic market share for shipments over 500 miles fell to approximately 6.3% in Q3 2021—the lowest level since Q4 2009—erasing a decade of market share gains.
2.3 Trucking's Advantages and Limitations
Trucking's flexibility, speed on short hauls, and extensive coverage area enabled it to compensate for intermodal shortcomings. However, chronic driver shortages, fuel price volatility, and urban congestion continued challenging trucking efficiency.
Chapter 3: 2022 Outlook: Challenges and Opportunities
3.1 Elevated Freight Rates Expected to Continue
With driver wages rising and equipment costs increasing, analysts anticipate sustained high freight rates through 2022. Fuel price inflation and environmental regulations may further pressure transportation costs.
3.2 Private Container Fleet Expansion
Thousands of domestic containers ordered by private operators from Chinese manufacturers—delayed by 2021 congestion—are expected to enter service in 2022, potentially alleviating equipment shortages.
3.3 Intermodal at an Inflection Point
The industry faces both significant challenges and transformation opportunities. Simply reverting to pre-pandemic operating models would represent a missed chance to address systemic vulnerabilities exposed during the crisis.
Chapter 4: Rebuilding Supply Chain Resilience
4.1 Rethinking Inventory and Globalization Strategies
The crisis prompted reevaluation of just-in-time inventory management and globalized production networks. Gross anticipates slowing momentum for offshoring as companies prioritize supply chain resilience over pure cost optimization.
4.2 Regionalizing Supply Chain Problems
While pessimistic about quick resolution of systemic congestion, Gross noted improving conditions as supply chain problems become more regionally concentrated—particularly around West Coast ports—rather than nationally pervasive.
4.3 East Coast Ports Demonstrate Better Performance
Eastern ports like Savannah and New York/New Jersey handled congestion more effectively than West Coast counterparts, potentially driving freight diversion and modal shifts in 2022.
Chapter 5: Strategic Recommendations
5.1 Operational Efficiency Improvements
- Implement port automation and appointment systems
- Optimize rail network velocity and terminal operations
- Reduce equipment dwell times through better coordination
5.2 Strengthening Collaboration
- Develop shared visibility platforms across modes
- Establish joint contingency planning processes
- Align incentives across supply chain partners
5.3 Infrastructure Modernization
- Accelerate port capacity expansion projects
- Invest in rail network upgrades and intermodal terminals
- Improve first/last mile connections
5.4 Digital Transformation
- Deploy IoT for real-time container tracking
- Implement predictive analytics for capacity planning
- Adopt blockchain for documentation efficiency
5.5 Building Resilient Networks
- Diversify routing options and gateway ports
- Develop strategic buffer capacity
- Implement robust risk monitoring systems
Conclusion
The U.S. intermodal sector stands at a critical juncture following the supply chain disruptions of 2021. While significant challenges remain, the crisis has created opportunities for meaningful transformation. By addressing operational inefficiencies, strengthening collaboration, modernizing infrastructure, embracing digital tools, and building more resilient networks, the industry can emerge stronger and better prepared for future disruptions.