Intermodal Opportunities in Appalachia

by The Appalachian Regional Commission

Today, freight movement is undergoing revolutionary changes. Increased containerization of goods, combined with unprecedented advances in logistics technology, has made both intermodalism and multimodalism the new global standards in freight transportation. Because of this, adequate highways alone are no longer sufficient to serve the transportation needs of the new economy.

Without question, a region’s competitive position will depend on access to efficient, seamless intermodal transportation that features interconnected highway, rail, air and marine transportation capabilities. Because of its geographic position, Appalachia serves as a crucial “land bridge” for both north-south and east-west commerce. Its role in bridging the nation’s heartland to key international gateways positions the region to reap economic development benefits by improving transportation efficiency, expanding capacity, and taking advantage of strategic intermodal opportunities.

Historically, transportation investments have been valued based on efficiency gains such as travel cost and time savings. Recently, however, there has been a push to promote transportation infrastructure improvements to enhance economic development in terms of jobs, income, and tax base expansion. This is especially crucial in an economically distressed region like Appalachia.

The recent surge in the recognition of transportation infrastructure as an economic development tool is not a rebirth of the “build and they will come” theory that led to many misaligned investments in the past. Instead, this shift is in response to input provided by potential developers and industry experts. The underlying concept is that a lack of transportation alternatives can retard economic development potential, as commerce tends to flow to those regions offering the broadest and most cost-efficient options. For example, Appalachia stands to reap substantial economic gains from the increase in foreign trade, especially with Latin America. However, failure to invest in the transportation infrastructure necessary to maintain the region’s competitive stance and its ability to connect with the global supply chain will result in lost economic and employment opportunities.

As the economy of Appalachia continues to evolve, it will be essential to attract the industries of the “new economy.” The region is already experiencing the dislocation of key furniture and automotive supplier industries. As a result, many states in the region are turning their recruitment efforts to new industry clusters, including logistics and distribution services and high-tech manufacturing. The transportation requirements of these industries go well beyond the need for highways. The industries of the 21st century will require seamless intermodal connectivity with frequent and reliable deliveries. The attraction of these new industrial clusters will hinge on the region’s ability to meet their demanding and diverse transportation needs.

Intermodal transportation and opportunities

Technically, “intermodal” transportation refers to any service where two or more modes are combined to facilitate a single movement of either freight or passengers. In this article, “intermodal” refers to the coordinated, multi-modal movement of truck trailers or shipping containers over the region’s highway, rail, and waterway systems. From this point of view, the region of the Appalachian Regional Commission (ARC) suffers from very limited intermodal capabilities, resulting in increased transportation costs and a loss of competitive edge for the region’s business interests.

Intermodal rail

There are two principal reasons for the relative paucity of truck/railway intermodal combinations within the region. First, overall traffic volumes outside of urban areas have been modest, which has hindered the development of intermodal trans-load facilities. Second, many of the region’s urban centers, such as Pittsburgh, Knoxville, Chattanooga and Birmingham, historically have relied on trucking to move containers to and from major Atlantic and Gulf ports due to cost and reliability advantages. However, as highways become increasingly congested and as operational issues such as driver shortages, insurance and fuel costs combine to drive up trucking costs, the economic attractiveness of the region’s rail services is expected to grow.

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