Tag Archives: Shipping

Long-haul trucking has become more expensive and less logistically viable, making intermodal transportation an increasingly attractive alternative. Its market growth will directly affect industrial production and commerce, impacting manufacturers and business owners. Which trends should they prepare for in 2025?

Why Intermodal Transportation Is Becoming More Common

Intermodal transportation involves moving freight by multiple modes of transportation — rail, air, road and ship. Lately, its growth has been exponential. Experts project its upward trajectory will continue. According to a Research and Markets report, the intermodal freight transportation market will reach an estimated $103.78 billion in 2028, up from $58.85 billion in 2024, achieving a compound annual growth rate of 15.2%.

The cost of long-haul trucking is among the foremost driving factors. Geopolitical issues and inescapable inflation have driven fuel prices up. The ongoing labor shortage is also compounding this problem. According to the International Road Transport Union, more than 50% of trucking companies had difficulty filling driver positions due to the shortage in 2023.

Since far fewer younger people are entering the trucking industry, the supply of skilled drivers is diminishing. Many of those who remain are demanding higher wages. Employers can either comply or lose their staff to competitors, further driving up operational expenses.

Other factors besides the high cost of long-haul trucking are driving intermodal transportation growth. For one, the e-commerce market is booming. Urbanization and an increased demand for expedited delivery support heightened manufacturing output, which drives the need for intermodal transportation. Ultimately, while these factors are core growth drivers, other burgeoning trends have moved into position to cause dramatic, abrupt changes in 2025.

Trends Pushing Intermodal Transportation Growth in 2025

Three significant trends should support positive growth for the intermodal transportation market in 2025.

Emissions Regulations Are Tightening

Various countries worldwide are getting serious about greenhouse gases. For instance, the European Union set a carbon dioxide standard for heavy-duty vehicles, targeting a 15% reduction by 2025 and a 45% reduction by 2030. These emerging environmental regulations will likely drive firms away from long-haul trucking and toward other modes of transportation.

Interest Rates May Soon Ease

The Federal Reserve may soon reduce interest rates. Experts project it could carry out two rate reductions in 2025. This forecast is not as optimistic as the previous one, which projected up to four cuts. This change may be the culprit of an abundance of caution — officials are waiting to see the impacts of President Trump’s policy changes. His handling of trade and immigration could influence their decision-making process.

The freight market will see growth if interest rates ease. In addition to rebounding from the yearslong recession, industry professionals would experience heightened borrowing capabilities. These factors could increase their resiliency to disruption and give them a unique opportunity to explore intermodal transportation.

Logistics Technologies Are Advancing

Advanced logistics and management technologies can increase supply chain visibility, making managing multiple modes of transport more accessible. With real-time tracking, edge computing, telematics and global positioning systems, intermodal transportation is not as risky as it otherwise would be. Since these solutions are becoming more powerful and affordable every year, even small business owners can leverage them.

Trends Slowing Intermodal Transportation Growth in 2025

While industry leaders hope for a meaningful upturn in 2025, these concerning trends may hold back the intermodal transportation market.

Cargo Theft Is on the Rise

The more stops and handoffs there are, the easier it is for bad actors and malicious insiders to infiltrate supply networks unnoticed. Cargo theft already increased by nearly 50% from 2023 to 2024. Would a multimodal strategy introduce carriers to a heightened risk of stolen freight? This question does not inspire confidence.

Geopolitical Instability May Worsen

Geopolitical instability often follows elections. Roughly 50% of the global population lived in countries that held a national election in 2024 — the largest election year in history. Naturally, inevitable policy and party changes lead to trade tensions and restrictions, potentially disrupting supply chains. In other words, the entire world will likely feel the effects in 2025.

The Government Might Introduce New Tariffs

A shift toward higher tariffs often results in a reduction in import and export volume. Trade restrictions are another common by-product. These obstacles could complicate the Federal Reserve’s efforts to ease interest rates, potentially slowing the growth of the multimodal transportation market.

The Far-Reaching Impacts of Intermodal Transportation

One year may not seem like a long time, but it is. By the end of 2025, interest rates, labor market logistics technologies and the geopolitical landscape could look completely different. Whether supply chains experience a recession or congestion, multimodal shipping will likely remain a rising market. However, companies and manufacturers should remain observant — the trends that influence growth may indirectly impact their profits and business opportunities.

*This article is written by Jack Shaw. Jack is a seasoned automotive industry writer with over six years of experience. As the senior writer for Modded, he combines his passion for vehicles, manufacturing and technology with his expertise to deliver engaging content that resonates with enthusiasts worldwide.

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It’s no secret to most that since the COVID-19 pandemic began, there have been unprecedented economic and logistical disruptions experienced on a global scale. Supply chains were particularly hard hit by the pandemic as production and shipping were halted around many parts of the world.

In the United States, ports saw decreased demand and were forced to switch from working around the clock to minimal hours. While this led to a significant decrease in shipping times, it also resulted in ships waiting at sea for weeks before they could dock. For organizations that rely on these ports, this slowdown in productivity led to a great deal of anxiety about deliveries and customer service.

However, in the last several months, there has been a dramatic turnaround in the ports of the United States. Backlogs are starting to clear, and ships can dock in much shorter time frames than before. Does this mean that everything is back to normal? Not exactly.

The State of Global Shipping

At the height of the pandemic, there was a shortage of containers due to the decrease in demand for shipping services and ports operating at limited hours. This caused ships to wait longer than usual to dock, leading to a bottleneck in supply chains disrupted by COVID-19. As a result, many depots had difficulty meeting customer demands, and there was a corresponding drop in consumer confidence.

Now, there is a surplus of containers due to increased demand for shipping services, and ports are back up and running at full capacity. This has created a new challenge for container depots, as space is filling up quickly, and there is nowhere for the containers to go.

Perhaps one of the most positive changes since the pandemic began is the freight rates. During the first two years of the pandemic, cargo freight rates recorded the most significant spike, but shipping cost has returned to pre-pandemic levels. This is a welcome sign for those in the industry, making it easier for companies to get their goods out without destroying their margins.

Unlike last year, retailers now have more than enough inventory. As a result, warehouses are operating close to full capacity, and space is increasingly limited. This has led to a slight uptick in storage rates and an increase in the cost of warehousing, but these are expected to level off once the market stabilizes.

While the inventory situation may have improved for retailers and distributors, ordering has significantly slowed for manufacturing factories. Until current inventory levels return to normal, it’s expected that production facilities will have a difficult time ahead as work dries up and demand for resources is limited. This may mean closures or layoffs in the manufacturing sector, which could have a ripple effect on the entire supply chain.

Container repositioning and movement have also been disrupted, creating a new problem for supply chains. Container ships are now struggling to move empty containers from ports of loading to ports of discharge. This could result in congestion and delays, which is something that supply chains have been trying to avoid since the pandemic began. Now, blank or canceled sailings are on the rise ahead of the year’s most significant spending period.

What These Conditions Indicate for Shipping

Overall, it appears that while the situation has improved since the beginning of the pandemic, there is still a lot of work to be done before things return to normal. There are still backlogs, container shortages, and an increase in storage costs, which could lead to further production slowdown.

The mindsets of consumers are also drastically shifting. As inflation has increased this past year exponentially, customers may become more price sensitive and look for cheaper alternatives. This could mean that businesses will need to re-evaluate their pricing strategies to continue to remain competitive in the market while being forced to sacrifice their margins.

Another thing to consider is the total cost of shipping, which includes fuel costs, port fees, and labor. The increase in global demand for resources has raised these costs across the board. As a result, companies may be forced to adjust their budgets or look for alternative suppliers and routes to keep their operations running efficiently. While this may not be enough to cover the full cost of shipping, it could make a difference in the long run.

Shippers also need to prepare for new challenges with canceled sailings, and some ports skipped altogether. This could leave importers and exporters scrambling to find alternative routes or adjust their supply chains accordingly. Unlike last year, many ports are functioning at full capacity, but there is still a need for increased efficiency and cost-saving measures to ensure the smooth transportation of goods.

Looking Forward

It’s clear that the shipping industry is going through a challenging period, but there are still positives to take away. Freight rates have returned to pre-pandemic levels, and warehouses are operating close to full capacity. The biggest challenge right now appears to be coping with the new norm of consumer demand and figuring out how to balance cost with competitive pricing.

Regardless of the challenges, shippers should remain optimistic and continue to look for ways to adjust their operations accordingly. By leveraging existing technology, adapting strategies, and staying ahead of market trends, shippers can ensure that their supply chains remain profitable and efficient in the long run.

David L. Buss

*This article is written by David L. Buss. David is CEO of DB Schenker USA, a 150 year old leading global freight forwarder and 3PL provider. David Buss is responsible for all P&L aspects in the United States, which is made up of over 7,000 employees located throughout 39 forwarding locations and 55 logistics centers.

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