Looking at the Intermodal market with Larry Gross, President, Gross Transportation Consulting
Summary
LM Group News Editor Jeff Berman interviews Larry Gross of Gross Transportation Consulting about the current state and outlook for the US intermodal market. Key topics: the newly announced CSX–BNSF intermodal partnership, the limited interchange between railroads (around 14%), the effect of rubber-tire transfers in hubs like Chicago, the potential and limits of mergers (including UP-NS), current service performance, and how tariffs and trade uncertainty are softening peak-season expectations.
Key Points
- Only about 14% of intermodal moves currently interchange between railroads — a structural constraint on national intermodal reach.
- Rubber-tire transfers (cross-town trucking) in Chicago add cost and complexity versus steel-wheel transfers, limiting shorter-haul intermodal competitiveness.
- CSX–BNSF partnership is a pragmatic step toward better multi-line intermodal without a full merger; Gross supports more collaboration to raise interchange rates.
- Mergers (e.g., UP-NS) could grow intermodal but are costly, risky and not a magic fix — significant operational and go-to-market changes are also required.
- Current intermodal service levels are strong; terminal dwell and resource indicators are at historically low problem levels.
- Tariffs and related uncertainty are freezing investment and distorting seasonal buying — Peak Season is likely to be muted and uneven rather than a true surge.
- Long-term intermodal growth has lagged trucking (intermodal ~4% growth last decade vs trucking ~19%); PSR-era dynamics and strategy choices are factors.
Content Summary
Larry Gross praises the CSX–BNSF partnership as a useful move toward more seamless multi-line intermodal, noting it sidesteps some regulatory headaches of a full transcontinental merger. He highlights that true national intermodal requires raising the low interchange rate between railroads; otherwise intermodal remains regional and less able to compete with trucking’s national network.
Gross explains the costly nature of rubber-tire transfers — especially in Chicago — and that railroads prefer concentrated, long-haul, steel-wheel moves. While mergers could unlock opportunities, they are neither the only nor an easy way to grow intermodal; they demand substantial operational change and regulatory navigation.
Service performance is reportedly solid today — terminal dwell and held-train metrics are low and ports handled high volumes without major congestion. However, tariffs and the uncertainty they create have frozen investment and planning, distorted buying patterns (pre-buys and mini-surges), and likely dulled Peak Season demand. Gross worries tariffs could act more like a regressive tax and a long-term revenue source rather than a tool to reshore industry.
Context and Relevance
This interview matters if you follow freight networks, port/rail operations or supply-chain strategy. It crystallises why rail intermodal hasn’t reclaimed share from trucking despite technological and infrastructure improvements: interchange inertia, hub inefficiencies and strategy choices under PSR. It also links macro policy (tariffs) to practical operational outcomes, showing how trade uncertainty trickles down to capacity, investment and seasonal flows.
Why should I read this?
Quick and blunt: if you work with intermodal planning, port ops, or freight procurement, this interview gives you a concise take from a sector insider — what’s working, what isn’t, and why tariffs plus hub practices are the real headaches. It’s short, sharp and saves you the time of wading through data to get the practical implications.
