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12/1/2011 8:10:00 AM Write a Letter to the Editor Write a letter to the Editor

Shippers See Opportunities, Limitations In Assessing Intermodal’s Potential

By Rip Watson, Senior Reporter

This story appears in the Nov. 28 print edition of Transport Topics. Click here to subscribe today.

ATLANTA — Intermodal transportation is brimming with opportunities, suffering from routing limitations or possibly a mixture of both, industry officials said here.

Those diverse views were expressed by six shippers who spoke Nov. 14 here at a meeting of the Intermodal Association of North America, the Transportation Intermediaries Association and the National Industrial Transportation League.

“There are a significant number of additional [freight] lanes that we are looking at for intermodal,” said Michael Vannatta, director of transportation procurement for LXP, which manages food shipments. “We’d like more coverage for reefer,” Vannatta said.

He told TT that LXP could perhaps double the current 172 lanes where intermodal is used if the service were available.

Gary Palmer, senior director of transportation for hardware chain True Value, agreed.

“We have 13 distribution centers, and there are just eight to 10 corridors where rail serves us effectively,” Palmer said. “We have many other locations where it doesn’t make sense.”

While customers see some limitations, there is no question about intermodal’s continued growth. Domestic shipments are on a record-setting pace this year, rising 6.3% through the third quarter compared with same 2010 period, according to an IANA report. Total intermodal moves rose 5.2% over the same period in 2010 and trail the peak year of 2006 by about 5%.

“We are looking at how to use intermodal to remote stores,” said Wilson Lester, senior vice president supply chain for Rite Aid Stores, which has 4,500 stores nationwide. “I’m really excited about the expansion of intermodal capacity. We will keep looking at it.”

All four largest North American railroads have been touting capacity additions on existing intermodal routes, including public-private initiatives such as CSX’s National Gateway and Norfolk Southern Corp.’s Crescent Corridor.

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