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September 2016
One of the U.S. economy’s great strengths is its supply chain, which is the most efficient in the world and serves as a key competitive advantage for our country. But to maintain our supply chain advantage, all of us who contribute to its effectiveness must continue to evolve and invest in this vitally important infrastructure. The U.S. Department of Transportation estimates that by 2045, the demand for freight transportation will reach 25.3 billion tons annually — a 40 percent increase from 2015’s 18.1 billion ton demand. The truck driver shortage is on the horizon and regulatory hurdles in the permitting process for building new rail facilities that can add capacity threaten our industry’s ability to keep pace.
To find solutions to these challenges, the entire supply chain will have to work together to proactively develop freight transportation solutions that will allow us to create new capacity and better leverage existing capacity.
In 2015, U.S. intermodal rail volumes improved upon 2014’s record-setting numbers, moving 13.7 million containers and trailers — a 1.6 percent increase year-over-year. That record growth, in part, is enabled by capital investment that serves to not only expand capacity but also to maintain rail terminals, facilities and track so that rail continues its decades-long trend of safety and service improvements.
North America’s freight railroads are in excellent condition and in a strong position to drive the supply chain forward, but innovation, capacity and optionality solutions will be critical in maintaining the U.S. supply chain’s competitive advantage.
Improving efficiency at each possible point during the shipping process can create new opportunities in underutilized traffic lanes and can offer enhanced options in some of the industry’s busiest areas.
One example of innovations to improve efficiency is RailPASS, a mobile application BNSF Railway Co. introduced earlier this year. The RailPASS app allows trucking partners to input and view shipment details before arriving at the intermodal hub facility. Gate activity is also streamlined through the use of the truck driver’s mobile device and a Quick Response (QR) code.
Since implementation on Feb. 16, time in facilities has been reduced by 10 percent. Key to developing the mobile app was collaboration across the supply chain.
Intermodal is about giving shippers a range of options that no single mode of transportation on its own can provide. Intermodal solutions can offer shippers news ways to think about how their goods are routed, packaged and loaded in order to meet the ultimate needs of the end consumer. As rail has increased its efficiency, velocity, consistency and capacity over time, customers increasingly are understanding how they reduce the amount of time their goods spend in highway congestion in some of the world’s biggest cities, which also helps lower carbon emissions.
As our population grows and the wide range of consumer needs increases, the need to add additional freight capacity will be critical to meeting those growth requirements. To do that, freight carriers will need to continue their focus on building facilities that will reduce or eliminate bottlenecks. Public policymakers and regulators will also play an important role in ensuring that thoughtful, environmentally sensitive facilities, like the Southern California International Gateway, are fairly evaluated and constructed so as to ease congestion and improve the transfer of goods from one mode of transportation to another while seeking to improve air quality.
The future remains bright, especially when railroads, trucking companies and shippers work together to find solutions to accommodate the growing needs of our economy and keep the U.S. supply chain the envy of the world.
Katie Farmer is group vice president for consumer products at BNSF Railway Co. and chair of the Intermodal Association of North America (IANA). IANA will showcase this year's top industry solutions at Intermodal EXPO, which will be held Sept. 18–20 in Houston.
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