Opinion: Intermodal: An Infrastructure Success Story

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Edward Hamberger, President and CEO, Association of American Railroads

This Opinion piece appears in the May 12 print edition of Transport Topics. Click here to subscribe today.

Moving America forward. Designed to move a nation. These aren’t just slogans — they’re mission statements for two industries that are critical pieces of the U.S. economy.

America’s trucking companies and railroads quite literally are the lifeblood of this economy; connecting farms to the dinner table, warehouses to stores and American businesses to consumers at home and across the globe. Without the hard work of millions of drivers, train crews and employees all across our industries, this economy would simply stop.

That’s because trucks and trains can boast a critical importance to the U.S. economy that is rooted in infrastructure investments. Last year, freight railroads invested more than $25.5 billion in private dollars, in line with a decadeslong trend of investing roughly 40 cents of every revenue dollar back into the nationwide rail network. The trucking industry in 2012 paid about $37.8 billion in state and federal highway user fees, on top of millions of dollars on new, fuel-efficient tractors and trailers.

However, this hasn’t been enough. The nation’s highways need more investment to ensure trucks and trains can serve intermodal customers, keep powering our revitalized economy and link America to the global supply chain.

This week, as part of Infrastructure Week, we’re coming together as the voices of freight transportation’s true heavyweight industries. We’re setting aside what policy differences we have to tell Washington what is needed to ensure we can meet growing demand for freight transportation. That includes making America’s highway system a funding priority — now and in the future.

Let’s start in the present: Among the fastest growing and most critical pieces of our supply chain is intermodal, which requires cooperation between trucking and the railroads. In fact, the trucking industry is among the largest customers of the railroads. When moving goods such as industrial components, canned foods, grain or frozen foods long distances, intermodal often is the best option for shippers. Typically, a single container or trailer is loaded onto a truck, taken to an intermodal terminal, hauled by train close to its final destination, and then loaded back onto a truck for the final leg of the delivery.

This kind of cooperation allows both modes to shine: the train handling the longest segment of the journey efficiently, and the flexibility of the trucking industry allowing for effective delivery to the store or distribution center.

American business is increasingly recognizing the value of intermodal transportation and reaping the benefits of allowing railroads, ocean carriers and trucking companies to take advantage of their strengths. The result: cost-effective freight movement and huge value to shippers looking to hold down costs in order to compete globally.

Intermodal growth has surged, solidifying the partnership between rail and trucking. This growth is the result of significant railroad investment in new intermodal terminals, track upgrades and other infrastructure necessary to make railroads a reliable partner for trucking companies. Thanks to today’s balanced regulatory system, railroads have been able to sustain billions in private investments, including those in intermodal rail. Investments made by railroads and trucking companies also underscore the support of the “user-pays” system for investments in infrastructure.

While intermodal transportation is projected to grow at a faster clip than any other freight sector, we believe the potential exists for more growth if federal investments are made where they can do the most good: the roads that join our industries and support businesses across America.

Infrastructure Week has given us the opportunity to remind people that the success of many other industries is directly linked to the ability of the trucking and railroad industries to move goods and products to market across the globe. Thanks to cooperation and competition for moving freight between our industries, trucks and trains will continue to help our nation’s economy grow — today and into the future.