BNSF Building Intermodal Business

Intermodal traffic on the BNSF Railway declined by double digits during last year's economic recession, but it is still one of the most important business units for the western railroad.

BNSF's international intermodal volume was down 23.1 percent in 2009 and its domestic intermodal traffic declined 12.8 percent compared to 2008. The drop in business added impetus to an argument in recent years that BNSF is de-emphasizing intermodal.

Nothing could be further from the truth, Steve Branscum, group vice president of consumer products and intermodal marketing, told the Los Angeles Transportation Club Tuesday.

BNSF continues to invest heavily in intermodal lift capacity, logistics hubs and expedited intermodal services despite declining revenue this past year.

Reports that BNSF is no longer interested in expanding its market share and is pricing itself out of the international market in competition with all-water ocean services from Asia to the East Coast are nothing more than a myth, Branscum said.

Intermodal accounts for about 50 percent of BNSF's business and 35 percent of its revenue. BNSF is investing billions of dollars to protect and expand its market share in competition with long-haul trucking and all-water ocean services to the East Coast.

BNSF continues to roll out expedited services that cover 800 miles per day, which is much better than single-driver long-haul trucking that covers about 500 miles per day, Branscum said.

He also emphasized that intermodal gives customers value for their transportation dollar as it costs shippers 15 to 25 percent less than shipping by truck.

BNSF since the late 1990s has invested billions of dollars to double-track its transcontinental route, triple-track high-volume corridors and expand lift capacity at West Coast ports. Also, the railroad has established 40 intermodal facilities, including logistics parks in Chicago, Kansas City, Memphis and Dallas that attract large distribution facilities for retailers and other cargo interests.

BNSF's intermodal network serves the 19 largest population centers that generate most of the nation's freight. It serves them with direct service or with interline arrangements with eastern railroads or by truck service to rail hubs within 200 miles of the cities.

Intermodal transportation will increase in popularity as cargo interests seek to reduce pollution, fuel consumption and their carbon footprint, Branscum said. Rail is two and one-half times more fuel efficient and its carbon emissions are 50 percent lower than truck transportation, he said.

- Bill Mongelluzzo, The Journal of Commerce.