The Names They are a Changin'

What we now know as “intermodal” was termed “piggyback”, or TOFC (Trailer on Flat Car) during the 1960s, since the vast majority of this type of service did consist of trailers on flat cars.  There was modest experimentation with containers, including New York Central’s “Flexi-Van” service, where containers were transferred off and on to over-the-road chassis for performing the non-rail portions of their journeys. The Southern Railway also experimented with containers along with piggyback operations during this era.

During this period, most of the trailers and containers traveling the rails were owned by the railroads, and accordingly, had the appropriate road name emblazoned on their sides.  Since the term “piggyback” was used frequently to describe this service, a number of railroads made references to pigs in their marketing, including the Seaboard Air Line’s “Razorback/Rarin’ to Go” moniker, the Southern Pacific’s “Golden Pig” service, and the Illinois Central utilized a stylized silhouette of a pig on wheels on their TOFC trailers.

Midwestern competitors C&NW and Milwaukee Road in later years both adopted avian names that suggested speedy passage for their premium piggyback operations, with the Northwestern referring to its “Falcon” service, while the MILW’s premier long-haul piggyback operation utilized the term “Thunderhawk”. 

Fast forward to the twenty-first century, and things have changed.  First, trailers are a minority of today’s intermodal traffic, while containers now constitute the vast majority of this type of service.  In addition, most containers are now owned by other, non-railroad entities, although CSX and EMP (owned by the Norfolk Southern and Union Pacific) are still in evidence.  

Today, it’s far more common to see the containers of major truck lines, including such entities as J.B. Hunt, and Schneider.  UPS and FedEx, which began as parcel carriers are also significant factors, with the former continuing trailer/piggyback services, as well.

A newer group, which can be described, in a broad sense as “3PLs” (Third-party logistics entities) are major players in today’s rail intermodal world, including companies such as Hub Group and XPO Logistics.

All of these entities, including railroads, truckers, parcel carriers and 3PLs have something in common, however.  They are moving goods that belong to other entities, in what is termed common carriage.

More recently, however, two other names have appeared, as can be seen in the photo above, of CSX intermodal train I016, at Wingerton, Pennsylvania on September 20, 2023, just north of Hagerstown, Maryland, on its way to the railroad’s intermodal facility in Chambersburg, where it and westbound counterpart I015 constitute the only operations currently.

Since they are labeled for Amazon Prime and Walmart, you’ll no doubt recognize these consumer-oriented entities.  What’s different about them is that these boxes are conveying goods belonging to the entities whose names are on the containers. Furthermore, these two companies have enough confidence that they can provide cost-effective transportation/logistics solutions without needing to put this traffic out for competitive bids from external entities.

The term of art for this kind of business organization is “vertical Integration”.  Wikipedia’s definition is useful: 

“…vertical integration is an arrangement in which the supply chain of a company is integrated and owned by that company.”

Consider some of the ramifications of this, from the perspective of railroad intermodal service.  The goods now being shipped by rail in Amazon Prime and Walmart-branded containers likely used to travel with truckers/parcel carriers/3PLs; some of these companies previously have been the largest rail intermodal customers.

Since these entities have generally been profitable, Amazon and Walmart were paying them rates that included that profit.  This change likely will have multiple effects, although the principal outcome from the rail perspective is that they will have two more very large, new (at least in a direct sense) customers with strong negotiating power; it’s also possible that this will decrease the negotiating strength of some existing customers. 

As they say, “May you live in interesting times”; it almost certainly will be interesting to see, in a figurative sense, the ramifications of these “new” customers going forward; at least in the short run, it’s a virtual certainty that we’ll be seeing more containers that look like these.