By Peter A. Buxbaum, AJOTChanges are coming to intermodal transportation in the United States. Once thought of as a niche capability useful in moving ocean containers from ports over the long haul to the hinterland, intermodal may finally coming into its own. Domestic intermodal traffic is driving growth in the sector, and, in a related development, intermodal has become increasingly competitive with trucking over shorter distances. The AJOT reported earlier this year that intermodal volumes grew by over five percent through the first three quarters of 2011, a nice rebound over the disappointing 2010 numbers. More significant was that domestic intermodal activity was up 8.7 percent while international traffic grew by only 3.5 percent during that period. “Domestic is by far and away the bigger opportunity for growth over the next year or two,” said Mike Reilly, director of intermodal business at the port of Tacoma. “As many as seven to ten million truckloads may be converted to domestic rail.” Domestic intermodal moves almost exclusively in 53-foot trailers and containers, as opposed to the 20- and 40-foot boxes characteristic of international trade. “Much of the freight that they move may actually be international freight but it is going to be moved after it is domesticated,” said Lee Clair, a partner in Norbridge, Inc., a management consultancy based in Concord, Mass. The contents of 40-foot international containers are often trans-loaded to 53-foot boxes. “This provides shippers with better cube utilization and increased capacity,” Reilly explained. “It also provides retailers the opportunity to load a better mix of products before delivering them to a store. It provides shippers more flexibility and efficiency in managing their supply chains.” Several factors have contributed to the growth of domestic intermodal. “From the perspective of the railroads, intermodal has been a growth engine,” said Clair. “It has evolved from being a small piece of their business to now being, in many ways, the largest piece of their business. Intermodal is now to the point that it is, in units, significantly larger than coal, which has always been considered the main driver of the rail industry.” The coming of age of domestic intermodal means that it is now being recognized as its own product. “It is not something considered as a low-cost alternative,” said Clair. “Customers are embracing it as an effective alternative in their supply chains. In the past, large shippers would design their networks based on trucks and then later decide that a given lane would be cheaper with intermodal. Now, we are seeing shippers evolve and move to designing their networks with intermodal in mind and incorporating intermodal right from the beginning.” The main reason for this turnabout has been the improvement in quality and reliability of the intermodal product. “The railroads have learned how to be extremely efficient,” said Gil Carmichael, a former Federal Railroad Administrator. “They are capitalizing on 20 years of experience on how to handle boxes and how to use technology. That has made intermodal more competitive on shorter hauls.” “Intermodal service quality is moving up,” added Clair. “Truck quality, which always used to be around 99 percent on time, is now becoming much more difficult to deliver and much more problematic. Trucking is still at a very high reliability level but it is inching down slowly. In comparison, the railroad service quality has improved.” Intermodal service providers are also now able to deliver higher door-to-door service quality. “Intermodal service providers are able to monitor and respond,” said Clair. “If the railroad has a 75 percent on-time percentage in a lane, they can plan on it, respond, and actually deliver at a 90 percent on-time rate to the customer. This helps close the service gap and improves the value proposition.” Other factors influencing the growth of domestic intermodal have been the escalating costs of trucking, due to spiking fuel costs, and the p