Monday, April 23, 2007

Intermodal Will Not Save Us

National Industrial Transportation League's (NITL) Spring Policy Forum notebook: Are longer, heavier trucks the solution to freight capacity crisis?
There is a growing pile of freight forecasts over the next decade or so and the bottom line on all those reports is simple.

“It is up and up and up,” said Bill Graves, president of the American Trucking Associations, told a group of 75 shippers at the National Industrial Transportation League's (NITL) Spring Policy forum held just outside of Washington earlier this week. “There’s going to be enough freight for everybody. How the pie is sliced up really doesn’t matter. We’re obviously going to have a lot more trucks out on the road.”

Here are some of the forecasts: Commercial trucks to grow by 40 percent over the next 10 years. Intermodal growth forecast to increase by 80 percent over the next decade. ATA forecasts a need for 110,000 new drivers by 2014, with about half of those needed just to keep up with economic growth. Railroads are hiring 60,000 new workers to keep up with demand over the next three years. Over the next decade, there are forecasts of 30 percent increases in freight demand across all modes.

NITL President John B. Ficker said by 2035 there might be a doubling of freight volume. Even if that forecast is only half right, that will strain today’s current freight capacity system beyond its limit.

Even with Intermodal growing at twice the rate of truckload, the number of trucks on the road is going to increase, add in more congestion and the number is going to grow even faster (if you're not sure the truck is going to finish its last load on time, you might want to have another one on hand to pick up the next load). Bigger trucks are probably part of the solution, but so is increasing "door to door" rail traffic. A lot of the places I hauled to and from when I drove over the road still had rail sidings. It is better for railroad profit margins to run massive unit trains from yard to yard rather than moving carload freight from shipper to receiver but it is not necessarily better for the nation. The ATA supports a fuel tax increase (provided it is devoted entirely to roads) but there's no way we're going to increase lane-miles 40%). A Weight limit increase to 97K would reduce the speed of growth a bit, but most loads cube out before they scale out (and in fact tonnage has been growing slower than dollar value)

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