Intermodal innovation?

I am an assiduous follower of Larry Gross for his informed and trenchant views on intermodal. In his March column he wrote: “A coast-to-coast national intermodal network, formed by pairing an eastern carrier and a western carrier, would put intermodal on a more even footing with truckload carriers that don’t face interregional obstacles.”

So, while there’s truth in this—see how well intermodal works in Canada with two truly transcontinental railroads—the odds are against another round of mergers on a large scale in the U.S. For one thing, it’s unlikely we’d only have a single combination. As an example, Union Pacific combining with Norfolk Southern would impel BNSF to marry-up with CSX. While a two-carrier system seems to work fairly well in Canada, the political climate here would preclude for some time—maybe forever.

That doesn’t mean there aren’t alternatives for achieving this vision. Late in the last century, I joined BN with the express mission of developing a domestic double-stack business. We were already running numerous stack trains with ISO boxes, but this would be a first, using domestic containers instead of trailers.

The vision I had at the time was to expand the strategy beyond the borders of BN and turn it into a true national network. I labeled it BN America and populated it with red, white and blue boxes to connote a broader footprint than the geographic borders of just our railroad. The network would have been a railroad-controlled national network akin to what Don Orris was attempting with APL Stacktrain.

The merger with Santa Fe was a little way off, but we did make a stab at solving the problems related to interlining boxes on joint routes. We held a BN/ATSF intermodal meeting in Birmingham on one of the ATSF business cars and discussed the idea of doing a de-facto merger of the two intermodal departments into a single “command center” so we could advance efficiency and service across a unified network.

The rapid development of electric and autonomous vehicles will arm trucking with competitive tools and advantages that they’ve not seen in quite some time.”

We even came up with a name and equipment graphics to match, playing off what we already had, calling it BSF America, in an effort to create a neutral third party staffed by both BN and ATSF. This would have allowed for close coordination and operation of all intermodal services in both networks. Parochial turf issues delayed any meaningful action until it got done for real with the merger of the two companies.

I raise this because, while I think the concept of true transcontinental mergers is a non-starter, there is nothing to say that the intermodal operations could not be operated jointly between willing key carriers to provide a seamless, national service. But, it will take executive vision and leadership along with what we used to refer to during my consulting days as the “strategic imperative” from on-high to make it a reality.

The rapid development of electric and autonomous vehicles will arm trucking with competitive tools and advantages that they’ve not seen in quite some time. This will provide quite a potential competitive challenge to rail intermodal services as it matures. Developing ways to combat this, other than merging, is going to be necessary, if profitable growth is going to continue. •