By Peter A. Buxbaum, AJOTWhile the intermodal transportation sector is likely to experience continued steady growth, its boom days are behind it, at least for now. So says Eric Starks, president of FTR Associates, a freight consulting firm based in Nashville, Indiana. Some intermodal marketing companies are much more bullish, he admits. But forecasters who are looking for growth of ten percent or more in the intermodal sector are not misreading the economic signs, he says, and are way off base. FTR Associates performs economic forecasts and applies them to the freight transportation industry, with an eye primarily toward projecting demand for various kinds of transportation equipment. The firm produces a variety of reports, and its clients include a broad spectrum of transportation stakeholders, from economists, to logistics professionals and shippers. “When it comes to intermodal, we look at the demand drivers and see how they will impact equipment demand,” Starks explained. “We are definitely not as bullish as some. We see intermodal rail growing this year somewhere in the three, four, or five percent range. That’s not bad considering that total rail growth will be two percent this year.” Most of the intermodal growth will come on the international end of the market, Starks predicted, meaning that the greatest demand growth for rail equipment will be for 40-foot rail cars. “Some intermodal marketing companies say the industry is looking at a five to 10 percent rate this year. In some cases, they are talking about even above ten percent,” Starks said. “The 2003 to 2004 time period saw intermodal growth ramping up to about ten percent, but then it eased back. It is definitely not going to ten percent this year. The biggest question in my mind is whether growth will be above five percent, or below. We are looking at growth rates of around four percent per year for the next five years.” Key to Starks’ less than bullish forecast involves a slowdown in the growth of imports. “Import containers at West Coast ports are up 6.2% this year,” he explained. “But that is down from the 10 to 15% growth of the last couple of years. This tells us that imports have started to hit their peak and that incremental growth going forward will be slower.” Many people misread the implications of the growth of imports from China, according to Starks. “China represents 14% of US imports in terms of value,” he said. “Even if this grew to 20%, it is likely that this growth will be offsetting imports from other nations. Some people reach the false conclusion that the growth in imports from China reflects growth in total imports.” Growth in exportsOn the other hand, the export side of intermodal is looking better than it has for a long time, according to Starks, thanks primarily to the growth in overall exports fueled by a weak dollar. “We are looking at six percent to six and one-half percent growth in export intermodal growth for the next two to three years,” he said. “We’re seeing a shift in the import-export imbalance although it is not enough to make a big impact on the trade deficit.” The growth in exports is taking place across a broad range of products, according to Starks. “High tech components are being shipped overseas via intermodal for reimport,” he said. “We are even seeing agricultural products, such as grains, being increasingly shipped intermodally.” While some of this growth in agricultural shipments may be attributable to specialized value-added agricultural products, Starks said, “Even some non-sexy commodities like soybeans and corn,” are being stuffed into intermodal containers. While he admits that he does not understand this phenomenon completely, he added, “It must come down to economics.” Intermodal transportation is more efficient for agricultural commodities, as for other products, because they can more easily be delivered to their final destinations. “When you ship it by bulk, you still have to figure out how to get it there,” Starks commented. Sta