Global trade has experienced an exponential growth in the 21^st century due, in large measure, to the ability to move component parts and manufactured goods in standardized containers, loaded onto ships of ever-increasing unit capacity.  The largest container ships now handle the equivalent of more than 20,000 twenty-foot equivalent container units.  Indeed, containerization has significantly lowered unit costs for international shipments, thus enabling companies to create complex and geographically dispersed supply chains covering multiple continents.

While the large container ships provide cost efficient ocean transportation, each container has a landside origin that must be connected by truck, rail, or barge, or some combination, to a coastal port and from the terminal coastal port to the ultimate landside destination, again by truck, rail, or barge, or some combination.  Clearly, the entire origin-to-destination movement relies critical on efficient and cost-effective landside transportation and efficient port terminal operations to load and off-load containers and seamlessly complete intermodal transfers with the truck, rail, or barge modes.

It is recognized that the overall efficiency and cost of the entire container movement from its origin to the ultimate destination is directly dependent upon the intermodal component.  Any delay or inefficiency in terminal operations and intermodal transfers negates the efficiency and cost advantage of containerization.  This course is devoted to a comprehensive and detailed understanding of global shipping, port terminal operations, and intermodal landside transportation. 

The global economy is highly dependent upon containerization as the engine that drives how goods are transferred between the manufacturers and the consumers.  The coronavirus pandemic has created immense disruption and an uncertain future regarding potential permanent impacts.  Even prior to the global pandemic there had been ongoing dynamics in global trade patterns.  The completion of the expanded Panama Canal and its ability to handle larger container ships created shifts in the flow of containerized shipments between the West and East Coasts in the United States.  The trade wars between China and the United States have resulted in some shifts in manufacturing capacity out of China into such countries as Vietnam, Indonesia Bangladesh, etc. opening up a favorable trade route through the Suez Canal to East Coast ports.  The message is clear global trade is facing a period of great upheaval and transition.  In this environment, there is a need to fundamentally understand all aspects of containerization to include global shipping, port terminal operations, and landside intermodal linkages.

To accomplish this understanding, our intermodal transportation course provides the following set of learning modules:

MODULE 1. Intermodal 101

This module discusses the Domestic intermodal rail operations in connection with both international containerized shipments (for import and export) as well as the domestic shipments (with US based origins and destinations).  The international containerized import shipments are handled by the railroads in either the standard international container (20 ft; 40 ft.; or 45 ft.) or in the 53 ft. domestic container (once the goods have been transloaded from the international containers to the larger domestic containers). 

The module discusses the evolution of Domestic intermodal rail movements from an historical perspective beginning with labor intenstive, expensive, and time-consuming transfers of merchandise into rail cars and leading up to more efficient means of goods transfers to rail cars.  Initially, railroads placed the entire truck trailer on a rail flatcar (TOFC), followed by the dominance of moving only the container itself, without wheels, on the rail car (COFC).  For efficiency purposes, where feasible, railroads double stack the containers (both international-sized and domestic-sized) on the rail cars.

The module explains that changes in government regulation, specifically, deregulation of both the railroads and the motor carriers, facilitated the growth in Domestic intermodal rail movements.  The US railroad industry produces over 14 million revenue moves annually, split evenly between cargo that originated in either international or domestic containers. Key factors affecting the Domestic intermodal rail market include the sector’s competitive economics versus truck, fuel prices (intermodal being more fuel-efficient and hence less sensitive to rising fuel costs) and available capacity in the truck market. Intermodal often acts as a safety valve when trucking capacity becomes tight. These factors are discussed in the module.

The module presents the key economic drivers for Domestic intermodal rail movements to include: length of haul proximity to the railroad; circuity; balance in flow of cargo; loadability; and scale. The module presents the perspective of the Beneficial Cargo Owner (BCO)/Shipper with regard to the use of Domestic intermodal rail.  These factors include, of course, freight charges; transit times; and transit service and its reliability.  The module end with a set of specific examples of the decision process that four representative BCOs, in distinct geographic areas with distinct mode choice option, use in evaluating whether or not to rely on Domestic intermodal rail movements to fulfill their transportation requirements.

MODULE 2. Global Trade

The global economy has emerged beginning in the late twentieth century and continuing at an exponential growth pace in the twenty-first century as a direct consequence of containerization.  The transportation of manufactured goods in standardized containers moved by mega-ships, capable of handling the equivalent of over 20,000 twenty-foot container units, stacked above and below deck, has fostered the growth of complex and geographically dispersed supply chains covering multiple continents.  This module provides the following elements: a fundamental understanding of the global economy trade flows through a discussion of the major trade routes and container flows; illustrations to demonstrate the rapid growth in the size of container ships;  a presentation of the various types of the container boxes used to transport manufactured goods as well as a discussion of the broad range of goods carried in containers; an analysis of import and export flows through major ports on the East Coast, Gulf Coast, and West Coast; an assessment of the impacts on trade flows resulting from upgrades to the Panama and Suez Canals; and a discussion of the impact of the Global Pandemic on global supply chains.

MODULE 3. Seaport Operations

From the perspective of the global economy, ports place an emphasis on having modern, efficient container terminals to facilitate the loading and off-loading of large container ships and the seamless transfer of those containers to truck, rail, and barge modes as well as having channel depths capable of accommodating the increasingly larger container ships plying in global trade.  This module provides a comprehensive analysis of ports and their role in the global economy.  It begins with an explanation of the two basic types of port management: one involving port manager as landlords who negotiate contracts with individual terminal managers to operate port facilities, and the alternative where the port managers provide direct operational control over port facilities.  An important consideration for port management is each port’s unique physical setting that represents either an advantage or an impediment to its ability to maintain current levels of economic activity or launch new initiatives.  Ports generate revenues from fees charged to various users of facilities, from berthing space to loading/unloading terminals.   Ports, to varying degrees, allocate their land to the following uses: container and bulk terminals (both public and private); warehouse and distribution facilities; residential and commerce uses; public open space and parks; and port administration and service facilities.  A major challenge for port managers involves comprehensive land use planning to allocate its land to these various alternative uses.  Ports are faced with difficult challenges as each of the alternative land uses has a different impact on the revenue of the port and the impact on the region’s economy.  Indeed, ports are major generators of economic activity in their respective regions.  Thus, how the ports allocate their land among the competing land uses will have consequences for the overall economic impact of the region’s economy.  Yet, ports also must recognize that the port land is valuable and there are important considerations regarding the use of port land for recreational and open space activities.  Land use choices and port economic impact, thus, represent important topics covered in this module.  Additionally, the module recognizes that ports compete with one another for the global trade.  The ability of ports to attract container shipments is, in part, a result of their physical setting and the capacity and efficiency of their operations.  In the US, there is no national port planning.  As a result, multiple ports compete for a fixed volume of global containerized shipments.  Finally, modern container terminals have a great deal of automated equipment.  However, the efficiency of container terminal operations is tied to labor contracts governing work rules.  The module discusses the history and current situation with respect to labor-management relationships on both the East/Gulf Coasts and West Coast.  On the East/Gulf Coast, the US Maritime Alliance (USMX) is the bargaining agent for the carriers, stevedores, and terminal operators, while labor is represented by the International Longshoremen’s Association (ILA).  On the West Coast, the management organization is the Pacific Maritime Association (PMA) and the labor organization is the International Longshoremen’s and Warehouse Union (ILWU).

MODULE 4. Container Terminal Operations

This module provides a detailed picture of container terminal operations.  There is significant variation in the physical layout of container terminals, in the equipment used for loading/unloading containers, in the container storage area within the terminal, and in the process of moving containers by truck, rail, or barge from the terminal areas.  To better understand terminal operations, the module looks in detail at the various types of equipment used in loading/off-loading containers from the container ships and moving the containers through the terminal on their way to final delivery points. The module has a detailed description of the following types of equipment: quay cranes; straddle cranes; automated guided vehicles; straddle carriers; rubber tired gantry cranes; rail mounted gantry cranes; reach stackers; top loaders; and terminal tractors. There are distinct differences among container terminals in their physical layouts as well as the type of equipment that is used to facilitate operations.  The module begins with description of a typical container terminal layout without providing the specific equipment used in the operations.  This discussion is followed by a more detailed presentation of specific terminal layouts, identified by the dominant equipment used in moving containers through the terminal on their way to final delivery points. The module provides a detailed presentation of the following terminal configurations: a straddle carrier terminal; a rail mounted gantry crane terminal; and an automated terminal.  In addition, the module provides fundamental measures to assess both the utilization and the productivity of container terminals.

MODULE 5. Truck Transport

Truck drayage firms provide the short-distance container pick-up and delivery services at port terminals.  In most cases, the drayage firms rely on owner-operator drivers, as opposed to employees, to perform these services.  Owner-operators are paid, in most cases, on the basis of a fixed fee per container pick-up and delivery.  Thus, owner-operator revenues depend upon the number of pick-up and deliveries they can accomplish in a single day within government mandated “hours-of-service.”  Owner-operator drayage drivers, hence, depend upon efficient terminal operations and congestion-free truck movements in the port areas.  Port authorities and terminal operators have devoted significant attention to even out the flow of trucks in port regions through the introduction of web-portals for scheduled appointments and other various incentives to reduce peaking of truck arrivals.  The module will discuss the overall profitability of truck drayage operations with an emphasis on the treatment of “owner-operator” drivers.

The module will also detail the entire process involved in picking up and/or dropping off containers at port terminals.  The process includes all of the following steps: verification of driver identity and proper licensing; proper documentation to pick-up and/or drop-off a container; any cargo screening required; and equipment “roadability” verification.  In the US, the drayage process is further complicated by the chassis issue.  In the US, the drayage drivers do not own a chassis (upon which the container is placed).  Instead, the driver must secure a chassis so that the container can be loaded onto it. Once a container is dropped off, the drayage driver must pick-up an inbound container or return the chassis at a designated point within the port area.  Chassis traditionally were owned by the shipping liner companies, but now most are owned by private companies and often held in “chassis pools.”  Further complicating the situation is the issue of the “roadability” of the chassis, i.e., a safety check to determine whether the chassis fully operational with no mechanical defects.  The module will analyze how the chassis delivery process at US ports impacts the overall efficiency of port terminal operations. The module will also detail the impact of the Pandemic on chassis operations as well as the impact of the imposition of high tariffs on Chinese manufactured chassis.  Since China is the source for an overwhelmingly large share of chassis, the tariffs intensified an already tight market for chassis availability.

Truck drayage operations are short distance in nature.  In many instances, the drayage firms deliver the containers to transloading warehouses.  At these points, the international containers (20 ft.; 40 ft.; or 45 ft.), are stripped and their contents stuffed into 53 ft. containers for ultimate delivery points within the US.  There are economies associated with the stripping and stuffing operation, since the contents of multiple international containers can be stuffed into a single 53 ft. domestic container.  If stripping and stuffing operation is involved, the drayage driver will return the emptied international container back to the port area. 

Long-haul trucking firms take the 53 ft. domestic containers and deliver them to landside US destinations.  Additionally, the drayage firms may transfer international containers to long-haul trucking firms for deliveries to regional US destinations. Indeed, if the ultimate US destination is regional, rather than a longer distance, the economics may dictate that no stripping and stuffing activity occur.  The module will explore the economics involved in the stripping and stuffing decision as well as characteristics of firms involved in the ultimate delivery of international and domestic containers.

MODULE 6. Rail Operations

This module provides a detailed picture of railroad operations in connection with international containerized shipments.  This discussion includes both the equipment used in loading and off-loading containers onto rail cars as well as the specific “well” cars used by the railroads to carry containers.  International containers are loaded onto rail cars at either “on-dock” rail facilities or “off-dock” rail facilities.  There are distinct advantages and disadvantages associated with both the “on-dock” and “off-dock” facilities.  If rail facilities are “off-dock,” truck drayage companies transport the containers to the “off-dock” locations so they can be assembled and made up into trains, consisting of containers with common destinations, for delivery to ultimate destinations or to a railroad terminal point, for intermodal transfer to trucks for final delivery. These “off-dock” rail terminal facilities are frequently labeled as Intermodal Container Transfer Facilities (ICTFs), located at some distance from the port, where sufficient land is available for train assembly and container storage.  If there are “on-dock” rail facilities at the container terminal, then, of course, the containers can be loaded directly onto rail well cars.  Ports can allow the individual trunk line railroads to bring their engines onto the terminal property to either deliver export containers or to move import containers to their ICTFs.  Alternatively, there can be restrictions on the rail operations within the port to specialized short-haul port terminal railroad operations.  If this is the situation, the line-haul railroads switch their locomotives at the port terminal boundaries to the short-haul terminal railroad.  Regardless of whether the individual long-haul railroads or port terminal railroads operate, limited space at the container terminals for on-dock railroad operations may require significant marshalling areas to assemble trains for long-haul operations and to distribute containers to individual container terminals at the port.  This is especially true as the railroads shift their operations to the Precision Railroad mode that requires trains of significantly longer number of cars.  The module will detail both the “on-dock” and “off-dock” terminal operations (ICTFs) as well as the role of the short-haul port terminal railroads.  The module will also detail the extent to which the major railroads have made investments to improve the share of international containers that move to the port or from the port by rail.

MODULE 7. Intermediaries, BCOs and shippers

This module identifies the nation’s leading Beneficial Cargo Owners (BCOs), also called consignees, who import goods using containers, and shippers who export goods using containers, on the basis of their total number of TEUs (Twenty-Foot Equivalent Unit container movements).  The module details the options for BCOs/shippers to arrange their import and export shipments with the ocean carriers. BCOs/shippers can arrange for their container movements through negotiations with an ocean carrier.  Alternatively, the BCOs/shippers can deal with a Non-Vessel Operating Common Carrier (NVOCC), who has made bulk purchases of space on container ships through its own direct negotiations with an ocean carrier.  The NVOCC “re-sells” capacity to the BCO/shipper at a margin above what the NVOCC paid to the ocean carrier, but, presumably, below what the BCO/shipper could obtain through its own direct negotiations with an ocean carrier.  A third option for the BCO/shipper is to rely on the services of an Ocean Freight Forwarder (OFF) to deal on its behalf with an ocean carrier or with a greater level of service.

The BCOs/shippers have options in arranging the landside portion of either the import container as it moves from the inbound port to the ultimate inland destination or the export container as it moves from an interior location within the US to the outbound port.  In “carrier haulage,” the BCO/shipper pays the ocean carrier for the ocean transit as well as the inland portion of the transportation of the container(s), including the chassis acquisition and use.  In “merchant haulage,” the BCO/shipper pays the ocean carrier for the ocean portion of the journey, exclusively.  The BCO/shipper selects, hires, and pays for the inland costs associated with the movements directly to the trucking companies/railroads involved.  The module discusses how the volume of the BCO’s/shipper's imports and exports plays a role in its decisions regarding these various transportation options.  There is a discussion of how the Pandemic has had an impact on the BCOs/shippers in terms of both service and transportation cost issues.

The module discusses in detail both types of Ocean Transportation Intermediaries (OTIs): Ocean Freight Forwarders (OFFs) and Non-Vessel Operating Common Carriers (NVOCCs).  Both the OFFs and the NVOCCs play a vital role in global containerized transportation as intermediaries between Vessel Operating Common Carriers (VOCCs) and Beneficial Cargo Owners (BCOs) or shippers.  The module describes each intermediary in some detail regarding the specific services offered as well as the advantages and disadvantages of each of the two options.

Regarding the landside transportation options for BCOs/shippers, the module discusses the role of Intermodal Marketing Companies (IMCs).  As a primary function, IMCs sell rail intermodal capacity and services to BCOs/shippers.  In fact, IMCs can provide door-to-door or ramp-to-ramp rail intermodal services by delivering some or all the following: the intermodal container, the truck chassis, and required drayage services.  In order to fulfill the totality of transportation requirements for BCOs/shippers, the IMCs have expanded their service offerings so that they could, in fact, offer the BCOs/shippers end-to-end services to manage the transportation requirements from origin to destination of both imports and exports.  Indeed, the BCOs/shippers required a “one stop shopping” experience so that the entire process could be managed and overseen by a single entity who would take responsibility to ensure timely and efficient delivery of transportation services at reasonable rates.

MODULE 8. Detailed US Port Information

While the Global Trade Module provides an overview of the container activity (imports and exports) at the major ports on the East Coast, Gulf Coast, and West Coast, this last module provides a detailed picture of activity at 11 different ports.  These port reports include maps showing the physical geography of the port, including major container terminals and the landside access (roads and rail) to the terminals.  In addition to a presentation of the overall volume of container activity at the port in terms of import and export containers handled, there is a discussion of individual container terminals at the ports in terms of the physical layout of the terminal and type of loading/unloading equipment used at the terminals. The reports document major port projects including ones recently completed and others that are underway or planned for the near future. These include projects to allow the ports to handle larger container ships through dredging initiatives as well as projects to expand existing container terminals or add new facilities. Some of the reports highlight initiatives by the ports to enhance landside access through the construction of new roadways or through enhanced on-dock or near-dock rail facilities. Finally, some of the reports stress initiatives at the ports to reduce the negative environmental impacts of activities at the ports. These include initiatives to reduce emissions by restricting access to the container terminals to drayage operators with newer, more environmentally friendly tractors, to initiatives to require zero-emission equipment at the container terminals by a future target date.