The Impact of Intermodal Transportation on Our Economy, Research Paper Example

Heinz ketchup is going intermodal. It seems that its traditional bulk-shipping container (otherwise known as a bottle), long a fixture in restaurants and kitchens and which required a sturdy palm and a tolerance for inexact portions to operate, will be replaced by a handy and much more cooperative pouch, a pouch with catchy cover-graphics and a shelf-life increased by one hundred percent (York, 2012). You can be sure that this will result in changes in how those pouches are packed at the factory and then presented locally on tables. But what happens between those two points isn’t likely to change. The ubiquitous industrial-colored ISO container will still be around, and will still be used to transport Heinz ketchup if it has far enough to travel. But containers are only half of the intermodal picture. People are the other half. This paper will discuss some aspects of both, and their past and future impacts on the American economy.

Changing Nature of Cargo

When you take passengers out of the equation, intermodal is about cargo and how it is shipped. But it is also about the changing nature of the cargo itself. What was once shipped in bulk and handled as bulk at every stop on its way to market has, over the decades, increasingly been shipped as smaller uniform components of a larger component, the standardized shipping container. Technology played a role, as in the case of (to cite just one example) former perishable liquids like milk and juices now vacuum-packed into what are essentially cardboard boxes with no need for refrigeration. But international trade routes also played a part, especially the opening up of new markets in Asia. Until then, countless manufactured items used by Americans were made in the US and purchased there wholesale and retail. They were shipped in branded trailer-trucks loaded by hand or forklift on pallets or differently sized boxes before being shipped to first local, then regional, and then national outlets, where the process was repeated during unloading. There was no compelling need to change that arrangement until an increasing quantity of goods began arriving in ports. Then most important new need was to reduce union-made handling-costs as the cargo was moved from ship to train, or ship to truck.

Effects of Unionized Labor

The effect of such unionization can be seen in comparing the history of the ports of San Francisco and Los Angeles. In the former, the ports were controlled by the highly powerful International Longshore and Warehouse Union union, under the direction of its militant leader Harry Bridges. By contrast, Los Angeles was controlled by the highly powerful Los Angeles Times, under the direction of its militantly open-shop anti-union leader, Harry Chandler. Unions liked pallets, loaded on and off the ships by crane and then unpacked by men earning union wages. Manufacturers and their customers were much more open to change. The result: the ports of Los Angeles and Long Beach are now the busiest in the nation, and the busiest container ports as well. San Francisco’s former loading docks along the Embarcadero, helped along by the removal of the earthquake-weakened Embarcadero Freeway, are yet another charming and popular tourist attraction, fronting one of the best harbors on earth and filled with cargo ships loaded with ISO containers, ships that sail by without stopping.

The Embarcadero Freeway is relevant to intermodal shipping in the following sense: it isn’t there anymore. Although it can be good to tear down a freeway, it would be better not to have to build another one or widen or lengthen freeways that you already have. Additional intermodal tracks can help bring those two non-events about, if you can find the space to build them. From the port of Long Beach you can see how that process can work, and in so doing see one of the directions that intermodal cargo shipping will have to go if it is to keep on going at all. I’m referring of course to the new workhorse on the intermodal scene, the Alameda Corridor.

The Alameda Corridor

This route connects the ports of Los Angeles and Long Beach with downtown Los Angeles (another one east of Alameda St. is under construction). Such dedicated cargo lines, threading above and below grade (the Alameda via a triple-track trench) through dense urban cores, remove thousands of trucks from congested freeways and freight-trains crossings from congested streets, reducing pressure on freeways and surface streets both.

Light Rail

For this process to reach its fullest expression, we must study how people travel intermodal too. They do so far more than freight does, and the routes that people follow to work are often the same historical routes the freight followed to get to where the people were and still are. So when we talk about the impact of intermodal transportation on our economy, we must increasingly talk about the future of light rail. Light rail as a specific term defines a host of different systems designed to move people within and between urban centers. In general we may say that light rail tends to have its own rail and right-of-way, unlike street cars, for example. But not all of them are directly intermodal in the sense of physically anchoring at a station that itself connects with buses, trucks, and even ships at port. As an example, the famed cable-cars of San Francisco are not intermodal (nor light rail) strictly defined (Yevdokimov, n.d), even if one line does end nearby the Ferry Building, which is itself the connecting point for ferries that in turn connect to the Amtrak system in Oakland. But the streetcar system is intermodal because the cars do stop directly in front (where there used to be a huge terminus for the entire system).

World War II

Throughout the nation, the building of the Interstate Highway System, starting in the Eisenhower administration, transformed the nation from a train-based system to an automobile-based one. In the process, it gutted cities of their urban-core housing (Kennedy 2006). This process facilitated the growth of suburbs, which in turn spurred the decline of public transit. The suburb-commuting public fled the inconvenience, discomfort, and (in some areas) personal danger of buses and street cars in favor of the automobile, ownership of which had been made easier by arranging loans through the dealerships (GM Financing, for example) instead of directly through a bank. The suburb was king. All this affected rail cargo too, as more of it was put on trucks using urban freeways and interstate highways. Rail traffic (cargo and people both) declined, and railroads as profit-making entities declined as well. They were partially rescued by the standardized container and its consequences, although the process, being essentially a political and legal one, was slow. The Amtrak system brought stability to the passenger side at the cost of government control (Amtrak 2012). Today in the U.S., the deregulation of rail freight transport, which began with the Staggers Act of 1980, is considered nearly fully achieved and successfully so (Caves, Christensen, & Swanson, 2010). Political consensus for deregulation held firm because costs fell and efficiency greatly improved. This is a big change from the 1970s, when railroads were in great financial difficulty, caused in part by excessive governmental regulation of rates. Today, gasoline prices make suburbs increasingly unsustainable, and so are plans to build, widen, or extend more freeways. Light rail is making a comeback, but there is a problem there too.

Re-regulation?

The problem facing light rail and the expansion of intermodal freight in general is the problem of how it will be paid for. Although freight rail was deregulated, as noted above passenger rail was effectively nationalized. This leads to a fundamental issue: to what extent will intermodal freight traffic be re-regulated? This will certainly depend in part on how much money rail companies and local governments need from the federal government beyond their own bond issues to build new tracks and facilities. The extent to which eminent domain will be used, and how courts will view attempts by local governments to use eminent domain (particularly after the notoriety of the Kelo vs. City of New London case, heard by the U.S. Supreme Court in 2005) is another issue (Kelo et al. 2005). Legal and financial complications for any one single substantial project are guaranteed to take many years, perhaps decades, to sort out before construction starts.

Environmentalism

Government re-regulation may also go green. If increasingly strict government mandates are imposed and if restrictions are placed on new freeways or expansions and extensions of existing ones then people will be forced to use existing or new track lines. The California High Speed Rail project exemplifies this dilemma to perfection. It is billed as being both essential for business development and for being environmentally green because will save billions in freeway and airport expenses, but at the cost of federal debt and taking farmland out of production and requiring the liberal use of eminent domain. (Sheehan, 2011).

Separate but Equal?

However, it will also likely have to use, in part, tracks owned by Union Pacific and Burlington Northern Santa Fe, tracks used for freight. Competition will be a factor between them (Slack, Rodrigue, Comtois, 2012). From this we can see that increasingly one question regarding the future hinges on whether expansion of intermodal for freight and people will increasingly have to be conducted on systems separate from each other, as is the case of dedicated freight lines like the Alameda Corridor and light rail systems. Or to achieve adequate government funding for either, must they both must be linked together at truly intermodal stations, compelling both systems to use the same tracks? Although it is natural to think of intermodal rail as the domain of freight alone, we can see from the above that the role of passengers in the system is decisive. In a nutshell, bond issues that propose freight-only expansions in urban areas will face problematic futures unless they promise to significantly help reduce automobile congestion. The Alameda Corridor did just that, and is considered a great success, both in planning, funding, and execution. The Alameda Corridor runs between the Harbor Freeway, one of Los Angeles’s most crowded arteries, and the Long Beach Freeway, another major commuter route. We can say that the expansion of freight lines and intermodal facilities now and in the future will be seen not only as solutions to their own infrastructure problems, but also to the problem of automobile overcrowding, by reducing freeway usage by trucks and street-level usage by trains. But again, considerable federal governmental funding will be required.

Conclusion

In the past, deregulation and intermodal shipping were two sides of the same coin because intermodal transport reduced the cost of loading and unloading, and that kind of labor has historically been subject to both labor union and/or governmental control. Once it was understood in the 1970s that the freight pricing needed to be deregulated for railroads to survive and grow, the next step was to amend the laws that put those regulations in place and replace them with new standards. The idea of a standardized container was the camel’s nose in the tent of deregulation, and its worldwide use was the practical result of such deregulation. Now the tide threatens to reverse, as costs and needs dictate increasing levels of governmental funding. The container is safe, but their carriers — trucks, trains, and ships, face legislative and statutory changes, either because of the money they will have to borrow or be granted, or due to public pressure. Money and votes call the tune. Taxpayers and voters will increasingly have a say in how to run a railroad.

References

Amtrak. (2012). Rail Passenger Service Act of 1970 creates Amtrak. Retrieved from http://www.amtrak40th.com/amtraks-history/1970s

Caves, D., Christensen, L., & Swanson, J. (2010). The Staggers Act, 30 Years Later. Cato.org publication. Retrieved from http://www.cato.org/pubs/regulation/regv33n4/regv33n4-5.pdf

Kelo et al. (2005). Legal Information Institute. Kelo et al v. City of New London et al. Retrieved from http://www.law.cornell.edu/supct/html/04-108.ZS.html

Kennedy, R. (2006). Wildfire and Americans. Lincoln, NE: University of Nebraska Press.

Sheehan, T. (2011). “Reports detail high-speed rail’s San Joaquin Valley impact”. Retrieved from http://californiawatch.org/dailyreport/reports-detail-high-speed-rails-san-joaquin-valley-impact-12001

Slack, B., Rodrigue, J., Comtois, C. (2012). Modal competition. Transportation modes: an overview. Retrieved from http://people.hofstra.edu/ geotrans/eng/ch3en/conc3en/ ch3c1en.html

Yevdokimov, Y. (n.d.) Measuring Economic Benefits of Intermodal Transportation. Retrieved from http://ncit.msstate.edu/PDF/7-Measuring-Economic-Benefits-of-IntermodalTransportation.pdf

York, E. “More packaged-food makers turn to pouches.” Los Angeles Times. Mar 19, 2012. Retrieved from http://www.latimes.com/business/la-fi-pouches-20120319,0,5493316.story