Picture this: Christmas Eve, mountains of goods stranded at ports, once-efficient supply chains resembling clogged arteries at a standstill. This wasn't a dystopian fantasy but the harsh reality facing intermodal transportation in 2021. At the RailTrends conference, Larry Gross, president of Gross Transportation Consulting, delivered a sobering diagnosis of an industry in crisis—and a roadmap for recovery.
Intermodal's Perfect Storm: Efficiency Collapse and Market Share Erosion
Gross began with a telling observation: when supply chain issues dominate headlines, it usually signals systemic failure. The year 2021 proved exceptionally brutal for intermodal transport. Despite booming demand, volumes began declining after March's peak. A cascade of disruptions—polar vortex weather events, port congestion, and rail bottlenecks—created domino effects that crippled system efficiency.
North American domestic transport never fully recovered from February's Arctic blast. International routes initially held steady, but International Inland Point Intermodal (IPI) volumes declined for five consecutive months starting October. The culprit? Overwhelmed ports operating beyond capacity, creating congestion that slowed entire networks to a crawl.
The Blame Game: Dissecting Systemic Failure
"Responsibility spreads like peanut butter across the supply chain," Gross noted wryly, implicating railroads, truckers, chassis providers, ocean carriers, and ports. The root cause lay in thousands of individual rational decisions collectively creating catastrophe. When every player funneled cargo through identical choke points—like Los Angeles and Long Beach ports—gridlock became inevitable.
As capacity constraints tightened, intermodal lost ground. Businesses increasingly bypassed IPI routes for transloading to avoid inland bottlenecks. Historically the supply chain's "pressure valve," intermodal saw roles reversed in 2021 as trucking absorbed overflow demand. Despite driver shortages, trucking firms boosted volumes, sending Southern California rates skyrocketing as shippers paid premiums to reach destinations faster.
Data from IANA and Gross Transportation Consulting confirmed the trend. Between Q2 and Q3 2020, intermodal's share of the 500+ mile dry van and reefer market plummeted. By Q3 2021, domestic intermodal market share bottomed at 6.3%—the lowest since Q4 2009—wiping out all gains achieved since the Great Recession.
Trucking's Counterattack: A Wake-Up Call for Rail
"Don't expect trucker shortages to drive traffic back to rails," Gross warned. "The trucking industry will eventually find drivers. Intermodal must compete on merit, not competitors' struggles."
He projected no traditional peak season rebound for 2021's final weeks, anticipating stagnation until import volumes decrease—likely not before 2022's first half. Meanwhile, elevated freight rates will persist as carriers offset rising driver wages.
2022 Outlook: Thawing the Frozen Supply Chain
Gross forecasts relief in 2022 as the endless freight wave finally breaks. Capacity will unlock, restoring market fluidity. A delayed flood of Chinese domestic containers—originally slated for 2021 delivery—will finally arrive. Trucking capacity utilization should normalize toward 2019 levels.
"Buckle up," Gross cautioned. "Recovering 2021's losses requires monumental effort. This is both crisis and opportunity. Operational improvements and lessons from this year's failures could catalyze meaningful progress—if we act wisely."
Building Supply Chain Immunity: Intermodal's Path Forward
Gross emphasized rethinking fundamental assumptions like just-in-time inventory and globalization. Offshoring and cargo velocity will slow, aligning import TEU growth with economic expansion—a paradigm shift making domestic markets intermodal's primary growth engine.
Resilience emerges as the critical differentiator. "Maximum efficiency leaves no margin for disruption," Gross noted. Climate events, geopolitical crises, or pandemics can paralyze over-tightened systems. Strategic buffer capacity becomes essential—when chassis turnover doubles from 4.5 to 9 days, twice as many units are needed for identical throughput.
Operationally, congestion creates self-perpetuating inefficiency. "Proactivity is non-negotiable," Gross stressed. "Waiting until gridlock hits means you're already too late."
Coastal Divide: Crisis Creates Opportunity
While pessimistic about near-term recovery without volume declines, Gross sees silver linings. What began as a national supply chain crisis is narrowing to a West Coast—primarily Los Angeles/Long Beach—problem. East Coast ports like Savannah and New York/New Jersey handle congestion more effectively.
"Trucking will gain share as freight migrates eastward," Gross predicted. "The moment bottlenecks break, conditions will shift rapidly—though timing remains uncertain."
The path forward? Elevating operational excellence, engineering resilient networks, and adapting to transformed market realities. For intermodal transportation, survival hinges on learning 2021's painful lessons—and emerging stronger.