“Any realistic discussion of the future of global transportation in this century … requires an understanding of the dramatic changes that have occurred in freight transportation during the past 25 years. A revolution has taken place, the general public is unaware of it, [and] far too many transportation professionals fail to understand its scope and significance.” –Gilbert Carmichael, founding chairman of the Intermodal Transportation Institute at the University of Denver
I’ve had the distinct pleasure to talk with Gilbert “Gil” Carmichael in person, a former U.S. Federal Railroad Administrator from 1989-1993 and founding chairman of the Intermodal Transportation Institute (ITI) at the University of Denver. Soft spoken and always well-poised, Carmichael is one of those forward thinkers in the transportation industry – someone that never stops looking to the future and asking “what if?” time and time again.
It’s because of that forward thinking that he helped found the ITI, for Carmichael realized far too few people entering the world of freight got a good, solid, in-depth understanding of transportation and logistics. Beyond mere theory, he wanted to make sure people entering this industry were equipped with real-world knowledge of all modes and how those modes interconnect with each other – and how that interconnection underpins the global economy.
“This global movement of freight is sharply focused on speed, safety, reliable scheduling, and economic efficiency,” he said in a speech this week at the 15th World Congress on Intelligent Transportation Systems in New York City. “It builds on the strengths of each mode – ship, rail, and truck – who have become partners in offering service.”
Carmichael stressed that each mode has a specific and vital role to play in the global intermodal freight network – though his view not all truckers may agree with. That’s one of the other interesting things about him – he’s not afraid to court controversy when looking into his crystal ball.
From his perspective, cCargo ships and airplanes span the oceans, while freight railroads are the high-speed, long distance, lowest cost, transportation artery on land. The truck provides local feeder service at origins and destinations, while cargo airplanes deliver high-value, specialized freight.
“Overall, the operational and economic efficiency of freight’s intermodal network dramatically conserves fuel, reduces other environmental impacts, and is significantly safer,” he said. “It represents the most economically, fuel efficient, and environmentally sustainable approach to transportation.”
The reason Carmichael believes trucks should become more regionalized, with railroads taking on more long haul freight, relates directly to the question of energy supply and cost – an issue that can no longer be ignored.
“Petroleum was established as transportation’s fuel of choice for two reasons,” he said. “Historically, it’s been available at relatively low cost. Equally important – or perhaps more so – petroleum provides a portable source of motive power. Today, we worry about both the cost and future availability of petroleum fuels. Somewhere out in this century we know that the supply will start to fall dramatically. [That’s why] building more highways is definitely not the solution.”
Carmichael also pointed out that the intermodal concept was designed at a time when oil prices were near 40 dollars a barrel. Prices dropped sharply in the mid-1980s, but rail intermodal expanded anyway. “The recent whipsawing of oil prices has people wondering about capital investment,” he said. “Intermodal freight movement makes sense irrespective of fuel prices. It is the energy-efficient service provider. If prices drop the container will still represent the lowest-cost option. If energy cost again double, intermodal simply will gain more market share. Intermodal systems have become a whole new transportation science.”
And technology has a serious role to play here, in terms of helping optimize utilization of facilities while tightening cargo security. “The intermodal system requires efficient terminals. There have been significant improvements, but inefficiencies and bottlenecks remain,” Carmichael stressed. “Remember, too: A safety problem in one mode affects the overall performances of all modes in the intermodal system.”
He also believes re-regulation of the freight world is a bad idea. “Some industry experts argue – and I agree with them – that intermodal has succeeded because it was a private-sector, customer-driven initiative,” Carmichael said. “I believe that we must be very cautious in defining the future role of governments as participants in this process. In particular, there is talk in the U.S. of re-imposing the type of governmental economic regulation that existed prior to 1980. Had that regulation remained in place I seriously doubt that the U.S. would now be part of the global intermodal revolution.”
Whether you agree with Gil Carmichael or not, I'll tell you this – he sure puts a lot on the table to think about. And mark my words – many of these issues are going to crop up next year as debate begins on the reauthorization of the next highway bill. So it's best to keep our minds open to different views on global freight transportation as we move forward.