Freight Intermodal Connectors Study
Chapter 2. Trends Impacting Freight Intermodal Connectors
Changes in logistics strategies and supply chains have affected the types and volumes of traffic on freight intermodal connectors in addition to creating new intermodal hubs. This chapter discusses several key trends in freight and logistics and their ongoing impact on the Nation's intermodal connectors. The key trends examined in this chapter are:
- Continued globalization and increasing global consumer population.
- Global manufacturing shifts, including near-shoring/resourcing.
- Emergence of e-commerce fulfillment centers.
- New sources of domestic oil and gas.
- Emerging use of liquefied natural gas as a marine transport fuel.
- Panama Canal expansion accelerating the use of ultra-large ships.
It is likely that trends in the overall economy and logistics patterns will continue to shift the usage of freight intermodal connectors across the U.S. The modes that will be most heavily impacted are rail and deep-sea marine as increased global populations, changes in manufacturing competitiveness, increased use of fulfillment centers, and the expansion of the Panama Canal combine to alter how these modes are utilized for domestic and international supply chains. Truck-truck facilities will also be heavily impacted by these developments as freight continues to cluster in more specific locations in metropolitan regions across the U.S.
Intermodal connectors to inland waterway ports, air cargo facilities, and pipelines will be somewhat less impacted by these trends. Overall, the continued fluidity in the usage of freight intermodal connectors will result in truck volumes that will increase significantly on some connectors and decrease significantly on others. Additionally, new connectors will continue to emerge, and some older connectors will cease to be utilized at all.
Table 3 summarizes the impacts of the six freight trends on freight intermodal connectors for each of the major freight modes.
Freight Intermodal Terminals and Traffic Volumes
Port Terminal Traffic
Figure 1 shows port intermodal container traffic from 1970 to 2014. Containerized traffic at U.S. ports increased from 30 million twenty-foot equivalent units (TEUs) to 45 million TEUs since the initial designation of port intermodal connectors in 2000. The Association of American Railroads reported that approximately 9 million TEUs of port intermodal containerized traffic was moved by rail. Therefore, it can be estimated that roughly 36 million TEUs (80 percent) of the port international traffic used highway connectors between the port and inland locations in the U.S.
Rail Terminal Traffic
There were approximately 189 intermodal rail terminals in the U.S. handling either container on flatcar or trailer on flatcar as of 2010. (University of Hoftra, The Geography of Transport Systems) The vast majority of the 2,270 rail facilities in the U.S. are designed to service industrial, resources, or manufacturing needs for bulk and break-bulk shipments.
Rail intermodal traffic has increased significantly over the past 25 years with a moderate decline occurring between 2007 and 2009 as a result of the most recent recession. The volume of containers and trailers moved on the railroads annually has more than doubled since 2000, rising from about 6 million annually in 2000 to nearly 13 million in 2013. Over that same time period, trailers decreased from half to around 15 percent of total intermodal flows (Figure 2). Rail intermodal traffic has increased by nearly 50 percent (roughly the same increase as containerized port traffic) since the initial designation of the National Highway System (NHS) freight intermodal connectors. Accommodating this growth in intermodal rail volumes has been achieved through a combination of expanding existing rail intermodal terminals and adding new terminals. This can be contrasted with the deep sea ports, which have accommodated new cargo volumes almost exclusively through expansion and modernization of existing facilities.
Air Cargo Terminal Traffic
The landed weight of all air cargo operations decreased from 2000 to 2012 from 74.7 million tons to 67.5 million tons (Figure 3). The lowest volume of tonnage occurred in 2009 with 63.2 million tons. Changes in truck volumes on airport intermodal connectors are likely to mirror the changes in the air cargo tonnages with slight dip in truck volumes since the 2000 designation of NHS intermodal connectors.
Pipeline Terminal Traffic
Pipeline-to-truck movements are dominated by tanker trucks using roadways to travel between gasoline tank farms and retail gasoline stations. Therefore, the usage of pipeline intermodal connectors is correlated to gasoline consumption. Due to increased fuel efficiency, gasoline consumption in the U.S. peaked in 2007 at 142.3 billion gallons and 2013 gasoline consumption is still lower than the 2002 consumption level. (American Fuels, American Fuels News and Commentary, 2013 Gasoline Consumption) The peaking of gasoline consumption indicates that the total demand for pipeline-truck intermodal connectors is also not likely to have increased significantly since they were designated in 2000. Consistent with this theme, overall liquid pipeline movements had limited growth since 2000 until the 2011 to 2013 period when crude oil pipeline shipments increased from 7.0 billion barrels to 8.3 billion barrels (Figure 4).
The recent increase in domestic output of oil and gas, as well as the recent lifting of the crude oil export ban by the U.S. Congress may result in shifts in the volumes of trucks on specific pipeline intermodal connectors, even as the overall truck volume remains relatively flat. However, much of the shale-based oil is not transported via pipelines due to lack of availability.
Figure 1. Graph. Containerized Traffic at U.S. Ports, 1980 to 2013—In Twenty Foot Equivalent Units.
(Source: American Association of Port Authorities.)
Figure 2. Chart. U.S. Rail Intermodal Traffic, 1989 to 2013—Millions of Containers and Trailers.
(Source: American Association of Railroads.)
Figure 3. Graph. Landed Weight for All-Cargo, Air Cargo Operations—In Thousands.
(Source: Freight Facts and Figures 2013, USDOT Federal Highway Administration and Bureau of Transportation Statistics.)
Figure 4. Graph. Liquid Pipeline Transportation in U.S.—2009 to 2013.
(Source: Freight Facts and Figures 2013, U.S. DOT FHWA and BTS.)
Emerging Truck-Truck Terminals and Traffic Volumes
Truck-truck terminals have emerged as a significant new terminal type since the initial NHS freight intermodal connector designation. These facilities include warehouses and distribution centers that are used to deconsolidate, sort, store, classify, and consolidate shipments typically from multiple suppliers to multiple receivers. These facilities also often shift cargo between 20-foot and 40-foot intermodal containers to longer 53-foot-over-the-road domestic trailers for medium and long-haul shipping. Many of these facilities are also located near ports and intermodal rail yards and serve as an extension to larger national and international supply chains. The growth in these facilities is exemplified by the growth in warehouse employment in the U.S. Table 4 shows warehousing employment in the U.S. rose from 572,000 to 744,500 between 2004 and 2014, an increase of 23 percent. This is particularly noteworthy as many of the newer facilities are highly mechanized and process more shipments per employee than older generation facilities.
Many of the newer truck-truck facilities have been located close to existing industrial areas or co-located with other similar facilities for one or more of several reasons: 1) to be located close to industrial customers, suppliers, and support services; 2) due to constraints based on land use availability and regulations; 3) to take advantage of municipal tax incentives; and 4) to ensure access to an existing workforce trained in needed industrial and warehouse skills. These clusters of industrial and truck-truck facilities have often been termed freight villages.
(Source: Bureau of Labor Statistics, 1998 data from The Rise of Mega Distribution Centers and the Impact on Logistical Uncertainty; Transportation Letters: The International Journal of Transportation Research, Andreoli, Goodchild, and Vitasek, 2010.)
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