1. RESEARCH PAPER (INTERMODAL TRANSPORTATION)
MODAL MAGNATES
SPRING 2015
Catalina Quinones Rios
Mary Catherine Schoals
Adil Sajan
Mathew Duke

2. 1
Table of Contents
Quick Summary..............................................................................................................................................2
Introduction ofthe Intermodal Market and its Players….……………………………………………………..……………………………3
The Evolutionof IMCs
The Early Stages (Model 1)...........................................................................................................................5
Transition Stage (Model 2).......................................................................................................................9
Consolidation Stage (Model 3)........................................................................................................... 14
Conclusion/Future ofthe Intermodal Market and IMCs………………..…………….………………………………………………….19
References................................................................................................................................................... 22

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Summary
Introduction of Intermodal Market and its Players. Although today intermodal “is one of the most
efficient, economic and environmentally friendly ways to move goods”, this was not the case about thirty
years ago. In the early stages of the first intermodal revolution (1980’s), trucking companies and railroad
providers were extremely competitive and they relied on the services of intermodal marketing companies
(IMCs). Intermodal marketing companies or IMCs “purchase rail and truck transportation services, utilize
equipment from multiple sources and provide other value-added services under a single freight bill to the
ultimate shipper.”1
Across all three intermodal periods of revolutions there are three distinct categories of
IMC’s that have developed. These are asset based, asset-light, and non-asset based.
The Early Stages (Model 1). Intermodal marketing companies began as a “brainchild” of the railroads
providers, with the sole purpose of focusing of the promotion of intermodal transportation. These intermodal
marketing companies acted much like a third party logistics provider (3PL), in that they were the middleman
between BCOs and the railroads; however IMCs and 3PLs had very distinct operational functions in the
market of domestic transportation. IMCs were typically whole companies operating own their own with a
specialized focus for rail movement. In the early stages IMCs were not first and foremost focused on
customer service as a core competency (like most players in the transportation market of that time); their
focus was on cost savings and capability of product movement.
Transition Stage (Model 2). The agreement between J.B. Hunt and Santa Fe signaled a major shift in
transportation. It showed that there were many advantages to getting the best of both motor and rail carriers.
Though the rail carriers had already seen the advantages, this agreement was a signal that over the road
(OTR) companies could also benefit from the use of intermodal. Deregulation also led to an explosion of
trucking companies. This, coupled with higher overall freight total tonnage coming from increased global
trade, was leading to bottlenecks in shipping that were causing delays along supply chains. Rail was not only
a way to help avoid these bottlenecks, but was also a more cost-efficient way to send long haul shipments.
As intermodal services became more readily available, it began to muddle the lines of services between 3PLs
and IMCs. IMCs still held direct contracts with these carriers, causing 3PLs to deal with IMCs for
guaranteed capacity in freight movement. Unlike the early stages, IMCs began to invest in infrastructure. It
was not uncommon to see an asset-light IMC in the marketplace.
Consolidation Stage (Model 3). The modern market has seen great expansion and adaptation to growing
trends in the intermodal industry. Globalization and e-commerce shaped the industry in a dramatic fashion
and led to improvement in speed of service, reliability, and cost savings. A major disruption in supply chain
management has been reverse logistics, or “return policies”, which have proven to have a significant power
over consumer behavior. The changes in the market created a new shift in intermodal transportation. Some of
these mergers led to providers that were capable of having fully integrated operations that could offer a
complete line of supply chain services. This has led to the rise of what is now referred to as a 4PL.
Conclusion/Future of Intermodal Market and IMCs. Some of the challenges that will need to be
addressed are: highway speeds not increasing to be able to handle the enlarged capacity in a given day, driver
shortages not improving, long-term patterns of the fuel market, and the effect of the population structure in
the future on highway congestion. Intermodal providers will have to balance these issues with the continued
demand from shippers to have a quicker, scalable, reliable and cost competitive supply chain performance.2
A closer look at the definitive roles of players like IMCs, 3PLs, and 4PLs will be needed for additional
insight into the potential degree of future shipper supply chain excellence.
1 Blog.idstransportation.com
2 http://blog.idstransportation.com/intermodal-transportation-into-the-future-better-faster-smarter

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Introduction of Intermodal Market and its Players:
Intermodal market consists of a system that provides access to various modal transportation
options and involves moving passenger or freight from point A to point B on a combination of these
modes.3 Although today intermodal “is one of the most efficient, economic and environmentally friendly
ways to move goods”, this was not the case about thirty years ago. In the early stages of the first
intermodal revolution (1980’s), trucking companies and railroad providers were extremely competitive
and they relied on the services of intermodal marketing companies (IMCs).
Intermodal marketing companies or IMCs “purchase rail and truck transportation services, utilize
equipment from multiple sources and provide other value-added services under a single freight bill to
the ultimate shipper.”4 In the early stages, IMCs emerged as a result of the railroads decision to operate
through a middleman to service beneficial cargo owners (BCO). Instead of reaching out to the customer
directly to move their cargo the railroads allowed IMCs to perform essential sales and marketing for the
intermodal services. One of the many benefits of using an IMC is the direct contract with rail for
exclusive rates and guaranteed service. Not to be confused with third party logistics providers (3PLs),
IMCs at the time were exclusively non-asset based, specialized companies that focused on movement
with the rail. 3PLs on the other hand had the liberty of being asset or non-asset based and either
choosing to specialize in one facet of the supply chain or all of it.
In the 1990s, the intermodal market experienced a second revolution: containerization.
Containerization brought forth an increased demand for freight movement at any one time and the
increased demand ended up on the asset based companies, the ones that owned the trucks, trains, and
ships. With increased demand with capacity in the market and higher expectations of customer service,
3 Intermodal Chapter Power Point Slides
4 Blog.idstransportation.com

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IMCs begin to evolve their services in the market through the acquisition of 3PL-like operations.
Although they remain differentiated on the function with rail movement. To be able to compete in the
global market, some IMCs domestically began moving towards an asset-light or asset-based status. In
2004, sustainability enters as a trend in supply chain management via a program from administrative
agencies like Smartway from the Environmental Protection Agency (EPA). The exponential growth of
intermodal transportation came to a hold in 2008 with the global recession.
Many industry professionals argue that we are and have been in a third intermodal revolution
since 2003. Currently, both the global and domestic economies have been recovering from the global
recession. Consumer confidence index (CPI) has been rising and if continues to do will result in more
disruptive capacity issues than are being experienced right now. Air cargo has become a major player in
the intermodal industry because of the rise in e-commerce sales and the phenomenon of just in time
delivery or JIT. JIT focuses on delivering the exact right amount needed at a specific time and place.
There are a lot of speculations on how the innovations of this current revolution will shape the
intermodal market in years to come.
Across all three intermodal periods of revolutions there are three distinct categories of IMC’s
that have developed. These are asset based, asset-light, and non-asset based. “An asset based carrier is a
company- like a trucking company, LTL carrier or rail road carrier- who has their own equipment and
works directly with customers to move their freight” 5 An example of an asset based carrier will be JB
Hunt and Schneider, both truckload intermodal carriers. In the case of an asset-light carrier, companies
create strategic alliances with asset-based providers to supplement their own asset status. For instance,
Hub Group and C.H. Robinson represents some of the big players in this category. Providers without
5 www.trinitylogistics.com

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any equipment, drivers, warehouses, etc. are considered non-asset based. These providers supply a bill
of lading and assume responsibility for BCO shipments; however, they use asset-based carriers to
provide physical aspects of transportation services. Some non-asset based companies in the market are
NT Logistics, Genco, Exel, Landstar and Transplace.
The Early Stages (Model 1)
Intermodal marketing companies began as a “brainchild” of the railroads providers, with the sole
purpose of focusing of the promotion of intermodal transportation. This was a way for railroads to, in an
essence, outsource marketing and sales operations for conversion of truck to rail. IMCs came about at a
time when there was a strong preference for over the road (OTR) trucking, and rail transportation was
not known for offering reliable customer service. These intermodal marketing companies acted much
like a third party logistics provider (3PL), in that they were the middleman between BCOs and the
railroads. Model one below visually displays the market breakdown for IMCs and 3PLs at that time.
Model 1: The Early Stages. Themodelabovedescribes thedifferences between3PLs and IMCs at thetimeor initial development.

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IMC vs. 3PL:
In the early stages IMCs and 3PLs have very distinct operational functions in the market of
domestic transportation. As portrayed in model one, IMCs were typically whole companies operating
own their own with a specialized focus for rail movement. Because the relationship between railroads
and these companies held direct and exclusive contracts for rail movement, these companies attracted a
certain client base. Users of IMC services also enjoyed the benefit of having a single point of contact for
their shipment as well as a single bill of lading. Unlike 3PLs, IMCs were strictly non-asset based,
meaning that they supplemented their lack of resources with either asset-based carriers or the rail
companies themselves. Although, asset-based 3PLs will normally have the advantage or guaranteed
capacity due to their control of infrastructure, the special relationship between IMCs and the rails
provided them with a competitive advantage in the market. Third party logistics providers, during the
introduction of IMCs, could be either asset-based or non-asset based depending on their expertise. 3PLs
could focus on managing a single aspect of BCOs transportation needs or they could assist with the
integration of the entire supply chain.
Customer Service:
In the early stages IMCs were not entirely focus on customer service like most players in the
transportation market of that time; their focus was on cost savings and capability of product movement.
Because of their exclusive relationship with the railroads in combination with their lack of customer
service priorities, IMCs in the early stages suffered the same problems as the railroads did.
Role in the Market:
Prior to 1980, economic regulation prevented railroads from any flexibility in setting the prices
needed to meet both intermodal as well as intermodal competition. Regulation also restricted carriers

8. 7
from modifying their systems. This included abandoning extra and light density lines, which was a
necessity for controlling cost. Added to these problems was the industry’s inability to raise rates needed
to cover inflation due to the regulatory time lag in rate adjustments. As a result, nine carriers went
bankrupt; the overall industry had a low return on investment and was unable to raise capital, and faced
a steady decline in market share6.
Trends:
The passage of the Staggers Rail Act and the Motor Carrier Act in 1980 deregulated both the rail
and motor industries, respectively, and led to a period of great transformation. The Staggers Act allowed
the railroads greater freedom to set their own rates, helped to streamline the process of mergers, and
made it easier for the rail companies to abandon random rail lines. The new rates forced major shifts in
the industry and this caused an increase in mergers and acquisitions. In 1980 there were over two dozen
class I railroads in operation, but by 1990 only 9 still remained7. Another aspect of the Staggers Act was
that the railroads no longer had to transport passengers. This allowed them to focus on the more
profitable freight movements. This coupled with abandonment of lines greatly increased their capability
to move freight easily and quickly.
The passage of the Motor Carrier Act led to similar series of mergers and acquisitions to that of
rail industry. The deregulation of prices led to fierce price wars, which was increased by the entrance of
thousands of companies into the market. Ten years after deregulation, one third of the one hundred
largest trucking companies were out of business8.
6 U.S Department of Transportation Federal Railroad Administration
7 american-rail.com
8 irs.gov

9. 8
In addition to pricing changes, motor carriers were no longer limited to operating in regional
areas, and were now able to serve any area of the United States. The Surface Transportation Assistance
Act of 1982 further helped the importance of national operation. This act standardized the length of
trailers to 48-53 foot lengths. This greatly increased the capacity of the motor carriers, and made for
greater competition to the rail industry.
The standardization of trailer sizes was not lost on the railroads, as they quickly adapted
their flat cars to be able to handle the new lengths of the trailers. Rail intermodal volumes increased
from a total of 3.1 million containers and trailers in 1980 to a total of 5.9 million in 19909. Trailer-on-
flat-car (TOFC) was still the preferred mode of shipping for freight companies shipping over the rails.
As both industries adapted to the new deregulations, they were able to see that there could be a
better way to utilize their services. Companies were looking to reduce transportation costs, and as the
price structures in the deregulated industries finally began to stabilize, it became clear that the savings
that could be attained through shipping using multiple modes could be very significant.
“In the 1980s, railroads began to view intermodal service as a potential growth area and began to
compete for freight that had deserted them for the highways. Railroads began establishing separate
intermodal departments and segregating intermodal traffic from regular freight traffic. They also began
offering more scheduled, dedicated intermodal trains, and put a higher priority on customer service.”10
This began to show shippers the true viability of utilizing multi-mode transportation within their supply
chains.
9 aar.org
10 Intermodal Freight transportation (combined Rail – Truck service offers public benefits, but challenges
remain)

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Shift in Market to Model 2 (Transition Stage):
Due to the effects of deregulation, companies were no longer prohibited from owning across
modes, which made intermodal cooperation a viable option. The inherent advantages of each mode
could be combined, to create a process where customers could purchase the service to ship their
products from door to door, without having to concern themselves of modal barriers. Clients could
obtain one quote for the entire haul of their shipment, as well as one main point of contact. The
advantages to intermodal cooperation were undeniable, and were confirmed “in 1989, (when) J.B. Hunt
and the former Santa Fe (prior to the BNSF merger) forged the “Quantum” deal that reignited
partnerships between railroads and motor carriers.”11
Transition Stage (Model 2):
The agreement between J.B. Hunt and Santa Fe signaled a major shift in transportation. It
showed that there were many advantages to getting the best of both motor and rail carriers. Though the
rail carriers had already seen the advantages, this agreement was a signal that over the road (OTR)
companies could also benefit from the use of intermodal. Since the 1950s, trucking had been taking on a
higher and higher percentage of freight shipments, and although the system was expanding, this was
putting a greater strain on the interstate highway system. Deregulation also led to an explosion of
trucking companies. This, coupled with higher overall freight total tonnage, was leading to bottlenecks
in shipping that were causing delays along supply chains. Rail was not only a way to help avoid these
bottlenecks, but was also a more cost-efficient way to send long haul shipments. As intermodal services
became more readily available, it began to muddle the lines of services between 3PLs and IMCs.
11
logisticsmanagement.com

11. 10
Role of the Market:
As the demand for intermodal services began to expand following the J.B. Hunt-Santa Fe
agreement, the market for companies offering intermodal services experienced a period of tremendous
growth. IMCs would work with many other companies to get freight moved across the country, even if
they did not operate as an asset-based provider. Other companies would only be involved in the
movement of freight, and would not be connected in any way to the company offering the intermodal
services. The complexity of the system began to lead to confusion about what services intermodal
companies were truly able to provide.
IMC vs. 3PL
At the time railroads began branching out to gain freight traffic, other providers were also
offering specialized, outsourced services. There were many companies that had specialized in certain
areas within the supply chain, such as drayage, warehousing, and last mile services. As the market
evolved, these companies began merging and combining their services to offer a more complete set of
services. This consolidation lead to the rise of the third-party logistics, or 3PL, companies. “Third party
logistics providers typically specialize in integrated operations, warehousing and transportation services
that can be scaled and customized to customer’s needs based on market conditions and the demands and
deliver service requirements for their products and materials.”12 As their services continued to mature,
they also saw the advantages that could be gained through using multi-modal services.
The aim of both IMCs and 3PLs during this stage was to offer services where customers could
have their products moved from door to door without worrying about managing multiple modes. One of
the advantages of IMCs is their ability to obtain quotes from all necessary modes and compute a single
12 http://www.intermodal.org/information/glossary.php#3

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bill of lading. Though the services offered by IMCs and 3PLs were similar at this time, there were a few
things that distinguished the two. Like the early stages, IMCs were still distinct from 3PLs in their
relationships with the railroads. IMCs still held direct contracts with these carriers, causing 3PLs to deal
with IMCs for guaranteed capacity in freight movement. Unlike the early stages, IMCs began to invest
in infrastructure. It was not uncommon to see an asset-light IMC in the marketplace, which led to
confusion between the roles of an IMC and a 3PL. Model 2 below, visually represents the marketplace
for both IMCs and 3PLs during this time of transition.
Trends:
“Through reduction of handling time, labor costs, and packing costs, container transportation
allows considerable improvement in the efficiency in transportation. Thus the relevance of containers is
Model 2: TransitionStage. Themodelaboveillustrates the services provided by IMCs and3PLs as wellas theoverlap in their customer relations.

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not what they are – simple boxes – but what they enable; intermodalism.”13 In 1990, containers
accounted for 44 percent of intermodal volume, but by 2000, the share was 69 percent. One of the main
factors that can be attributed to this growth was the increase in global trade. With more products being
manufactured overseas, carriers needed to be able to handle large volumes of freight in a timely manner.
The main component in this transformation was the adaptation to the use of standardized shipping
containers.
As the use of containers became the standard in international shipping, it helped to fuel a
transformation in the intermodal industry. As global trade increased, it caused an increase in the need for
a more integrated transportation services. Rail and motor carriers adapted by designing rail cars and
truck chassis that allowed for easier movement of containers between the modes. During this period rail,
intermodal growth was fueled by international trade, and in turn was absolutely critical to
globalization14.
Shipments originating from the Asian-Pacific region would arrive on the West coast of the U.S.,
needing transportation across the country. Railroads were in a much better position to handle the
increased demand for long-haul global trade. Rail carriers became a much more viable transportation
option because of their ability to handle the influx of containers, and because of recent innovations, like
the use of double-stacked movement. This (double-stacked containers) led to economies of scale, and
allowed the railroads to offer their services at a more competitive market rate.
The size standards of containers certainly helped to streamline the process of freight movements
for rail and motor carriers, and led to the decline of the use of trailer on flat car (TOFC). The increased
utilization of double stacking containers brought about a tremendous amount of growth and reliance on
13 https://people.hofstra.edu/geotrans/eng/ch3en/conc3en/ch3c6en.html
14 https://people.hofstra.edu/geotrans/eng/ch3en/conc3en/ch3c6en.html

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rail for freight movement. The adaptations related to containerization was one of the main reasons that
“rail intermodal traffic in North America grew 88.7 percent, from 6.2 million containers and trailers in
1990 to 11.7 million in 200515.
Shift in Market to Model 3 (Consolidation):
Intermodal transportation saw great changes in the 1990s as the market adapted to the increased
global demand and the introduction of e-commerce. Jeff Bezos, founder of Amazon.com, started his e-
commerce business in July 1995 selling books from his garage. Amazon.com began setting the standard
for a “customer-oriented e-commerce website”, where consumers could browse a catalog of items, then
pay to have them delivered to their home.16 E-commerce, now a common transactional practice, has
affected pricing, product availability, transportation patterns, and B2B/B2C behavior. During this period
IMCs and 3PLs adapted by altering their operations to best take utilize savings of time and money in
intermodal transportation. Due to the time-sensitivity aspect of e-commerce trade, many modal carriers
shifted to a customer-service core competency to be able to compete in the new, fast-paced market.
15 Drivers of intermodal rail freight growth in North America
16 http://money.howstuffworks.com/history-e-commerce2.htm

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Consolidation Stage (Model 3):
The second model saw great expansion and adaptation to growing trends in the intermodal
industry. Globalization and e-commerce shaped the industry in a dramatic fashion and led to
improvement in speed of service, reliability, and cost savings. This, coupled with the transformation to
containerization, further fueled IMCs and 3PLs in their quest for ever increasing customer service
options. The goal of offering more detailed service created a situation where it was optimal for
companies to merge and acquire one another to better compete in a more customer service driven
environment.
Customer Service & Role in Market:
The recent study Pulse of the Online Shopper by the United Parcel Service and comScore (a
digital retail analytics firm) shows the range of effects the rapid growth of e-commerce has had on
today’s market. Some of the results from the survey accurately portrays modern consumer behavior:
 “Although price is a major factor in the online purchasing process, AP&A survey
respondents said non-price features – such as the seller’s return policy, product selection
and shipping options – make up 60% of all comparison-shopping considerations.
 About 75% reported that they have added additional items to their shopping carts in order
to qualify for free shipping.
 Online shoppers are willing to wait up to seven days to receive their shipment in
exchange for no additional fees.
 Although 81% of AP&A shoppers surveyed were satisfied overall with the shopping
experience, they are the least satisfied with the amount of control and flexibility they
have when it comes to the delivery of their purchases.
 Shoppers are looking for more flexibility to choose delivery dates and times, ability to
pick up their order at a convenient retail location, flexibility to re-route packages and
environmentally “green” shipping options.
 Here’s a key factor: some 48% said they abandoned their online shopping cart if the
shipping cost was higher than they expected or if they discovered that their order wasn’t
large enough to qualify for free shipping.
 A whopping 96% of respondents indicated the ability to track their shipment is important.
 About 59% reported being satisfied with the ease of making returns and exchanges,
indicating there is room for improvement in this area.

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 Significantly, 71% of online shoppers said they are more likely to purchase from a seller
for the first time if that seller has a “hassle-free” returns policy.
 One in 10 AP&A buyers prefer to shop using a mobile device or tablet.”17
As mentioned several times in the findings of Pulse of the Online Shopper, reverse logistics, or
“return policies” have a significant power over the consumer. Many consumers drift toward the
companies that have a “hassle-free” policy for their returns, which has created an increasing challenge
for 3PLs and IMCs. Companies are now looking for their 3PL or IMC to offer support in this area, but
also to provide this management without a significant cost to the consumer. As IMCs and 3PLs entered
the competitive market of e-commerce logistics, a disruptive restructuring of warehouse management,
services, and relations with various carriers occurred. The advantage in the market shifted to the asset-
based or asset-light providers, or the ones that could guarantee capacity throughout the whole supply
chain.18 This, inherently, led to a period of consolidation where companies began to merge and acquire
one another in an effort to offer more integrated services. By acquiring a company that had already
established a competency in a particular modal aspect, they were adding knowledge and services that
would allow them to develop a sturdy portfolio of services provided to the modern market.
During this period of consolidation, shipper demands for capacity and trucker productivity grew,
coupled with cost issues, and combined to cause a higher reliance on intermodal service. As services
began to evolve, the benefit of minimizing container and equipment delays became apparent. This has
caused a trend towards more asset based, truly integrated, intermodal companies19. Providers saw the
benefits of having greater control over containers and equipment, as this would allow them to be able to
quickly respond to a customer’s needs.
17 http://fleetowner.com/blog/e-commerce-and-transportation
18 Interview with Kimberly Rossi-BNSF
19 http://www.intermodal.org/information/research/assets/tenyrsafter.pdf

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The Emergence of 4PLs:
The changes in the market created a new shift in intermodal transportation. Some of these
mergers led to providers that were capable of having fully integrated operations that could offer a
complete line of supply chain services. This has led to the rise of what is now referred to as a 4PL. “4PL
organizations act as a single interface between the client and multiple logistics partners, while managing
all aspects of the client’s supply chain.”20 4PLs are the newest addition to the world of supply chain
20 cerasis.com

18. 17
management, and they share many common characteristics with 3PLs (if 3PLs continued to invest in
new technologies and innovative services for the market).
SOURCE: Carl Fowler, senior director of operations, and leader of Menlo Logistics’ 4PL practice
There are many reasons why 4PLs are experiencing increased demand; businesses want more
authority over operational costs, shippers want more customized outsourcing solutions (like dedicated
fleets, Final Mile services, etc.), and BCOs do not wish to sacrifice “end-to-end” visibility and control
over their supply chain.21 Model 3 below displays the visual representation of a 4PL.
21 http://www.inboundlogistics.com/cms/article/4pls-take-control/

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Trends:
In the recent years, companies and consumers have been taking a closer look at the current
transportation system. Being that transportation is the core component that supports development of
socioeconomic systems, it is being evaluated now on the capacity in which it can support the mobility
needs of the market, with the least amount of damage to the environment. “The various outcomes for a
sustainable environment involve three steps: 1) transport operations must conform to local, national and
international regulations; 2) environmental costs of transport operations must be built into the price of
providing transport facilities and services; 3) environmental performance must be introduced into the
organization’s management.”22 Intermodal transportation has come a long way in the last 20 years, with
22 http://people.hofstra.edu/geotrans/eng/ch8en/conc8en/ch8c4en.html
4PL/Carrier
Drayage
Brokerage
Warehousing
Trucking
Freight
Forwarding
International
Services
Dedicated
Services
IMC Services
Model 3: Consolidation stage. Theillustration abovedisplays themerging ofservices that occurred inthemarket inorder toprovide
superior customer service.

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rail becoming more economically reliable, and environmentally friendly. Not only does the use of
intermodal shipping help to reduce costs, it also has the added benefit of reducing emissions. “Shippers
have the ability to reduce their carbon footprints by opting to use intermodal rail. This is due to the fact
that rails only emit 5.4 pounds of carbon dioxide per 100 ton-miles compared to the 19.8 pounds that
trucks emit over the same distance.”23
One of the major efforts in the drive to reduce emissions is the Smartway Partnerships. Launched
in February of 2004, it is a voluntary partnership between the EPA and the freight industry based on an
effort to reduce air emissions. Carriers, shippers, and logistics providers can all be Smartway members.
Carriers agree to work to improve efficiency and reduce emissions over 3 years, while shippers and
logistics companies agree to contract with Smartway carriers and furthering the Smartway program.
Currently all seven Class I railroads are members, as well as 300 other transport partners across the
United States and Canada.
Conclusion/Future of the Intermodal Market and IMCs:
“Having Rail service is being viewed more as a must by many retailers. It’s still primarily based
on the inbound supply of inventory, and not as much on the outbound side or getting it to the
customer.”24 Though this inbound function is a major function, IMCs have expanded their services so
that they are more than capable of offering outbound services and getting products to the customer. This
has been the driving force in the further development of intermodal industry.
Intermodal Marketing Companies have gone through three stages, or models, since the 1980s.
First the early stages, where IMCs emerged as a result of the railroads decision to operate through a
23 http://www.evansdist.com/blog/2015/03/intermodal-transportations-road-to-dominance/
24 logisticsmgmt.com

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middleman to service beneficial cargo owners (BCO). Instead of reaching out to the customer directly to
move their cargo the railroads allowed IMCs to perform essential sales and marketing for the intermodal
services. Then, the transition to a global market facilitated by standardized containers, where the market
for companies offering intermodal services experienced a period of tremendous growth. As global trade
increased, it caused an increase in the need for a more integrated transportation services. Rail and motor
carriers adapted by designing rail cars and truck chassis that allowed for easier movement of containers
between the modes. During this period rail, intermodal growth was fueled by international trade, and in
turn was absolutely critical to globalization. Finally, the current model of consolidation. The changes in
the market created a new shift in intermodal transportation. This led to mergers of different providers
that were capable of having fully integrated operations that could offer a complete line of supply chain
services, otherwise known as a 4PL.
As for the future of intermodal, it is slightly harder to predict. Some of the challenges that will
need to be addressed are: highway speeds not increasing to be able to handle the enlarged capacity in a
given day, driver shortages not improving, long-term patterns of the fuel market, and the effect of the
population structure in the future on highway congestion. Intermodal providers will have to balance
these issues with the continued demand from shippers to have a quicker, scalable, reliable and cost
competitive supply chain performance.25 4PLs and 3PLs of the future will have to “invest heavily to
increase their market capacity and build out their networks for further coverage.”26 IMCs, or 4PLs with
IMC services will have the advantage with rail due to their ability to keep up with needed improvements
to infrastructure faster than most carriers. For the railroads to increase their market share (and those of
IMCs), they need to add more track, more equipment (locomotives, containers, trailers, etc.), more
25 http://blog.idstransportation.com/intermodal-transportation-into-the-future-better-faster-smarter
26 http://blog.idstransportation.com/intermodal-transportation-into-the-future-better-faster-smarter

22. 21
crews throughout their intermodal network, more investments in innovative technology, and bring
additional intermodal ramps on-line. The unique conditions that intermodal operates in will only
expedite global trade and become more prevalent in the future market. However, to be able to mold the
intermodal network to better service future demand, a closer look at the definitive roles of players like
IMCs, 3PLs, and 4PLs will be needed for additional insight into the potential degree of future shipper
supply chain excellence.

23. 22
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