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BYLINE: By John Gallagher
A sputtering domestic intermodal market is turning into an opportunity for asset-backed companies such as Schneider National to increase their business.
The freight transportation industry received a wake-up call during the third quarter when the traditional peak shipping season turned out to be nothing more than a bump. While overall intermodal volume continued at a record pace, domestic numbers declined 0.5 percent.
With manufacturing starting to slow along with the once red-hot economy, those intermodal players that have invest in equipment will likely be the ones with enough flexibility to weather a long-term drought.
"The domestic market has been flat for the last two years, and that's our exclusive market," said Bill Matheson, president of Schneider's intermodal division.
"But there's also consolidation going on as well, where those that are bringing assets to bear are taking a greater share. A lot of the nonasset intermodal marketing companies that have traditionally relied on rail-controlled boxes are either using those asset providers themselves or they're moving on to other things such as truck brokerage. And large asset players such as Schneider, J.B. Hunt, Pacer and Hub Group are buying a larger share of the assets."
Most of the investment is going into 53-foot containers, which have become the intermodal industry standard. Schneider, Hub Group and Swift Transportation have made substantial container purchases in the last two years, responding to a shift in the intermodal market away from trailers, which require more handling and have fallen out of favor with the railroads.