Drayage capacity — the short truck hauls that move containers to and from railheads — has become the binding constraint in an otherwise strong intermodal market, according to FreightWaves. STG Logistics CEO Geoff Anderman told FreightWaves his company left volume on the table in the second quarter because drayage capacity ran short, and the problem persists into summer. Demand for intermodal service was strong enough that the company could not serve all of it.
Restructuring clears the way
FreightWaves reported that STG Logistics, an intermodal marketing company, wrapped up Chapter 11 proceedings in early July with 90% less debt and new owners — Fortress, Fidelity and Invesco. Anderman said the restructuring removed a key constraint on growth just as intermodal demand accelerates. The company operates a fleet of 15,000 containers and provides internal drayage coverage on both ends of its rail moves, a combination the CEO described as an edge over pure-play competitors.
Drayage squeeze bites into Q2 volume
Anderman said the drayage crunch mirrors dynamics in the broader trucking market, where regulatory compliance actions have pushed capacity out. Dray costs are rising in lockstep with over-the-road rates, and the company is managing the squeeze in real time. Driver availability tied to the compliance crackdown is the primary driver, he said, echoing concerns raised by other freight executives.
“We could have done even more,” he told FreightWaves. “There was that much sort of demand for the service out there.”
“We could very easily put a significant amount of incremental drivers to work right now, given the demand we’re seeing in the marketplace,” he said.
Competition: trucks, not other intermodal providers
Anderman identified over-the-road trucking — not rivals such as J.B. Hunt, Hub Group, Schneider or Knight-Swift — as the primary competition for intermodal. He said all intermodal providers share an interest in pulling freight off highways by leveraging railroad partnerships to deliver a cost-efficient, energy-efficient alternative to trucking. He noted J.B. Hunt is the largest player in the space but called the other named carriers “formidable” providers as well.
| STG Logistics at a glance | Detail |
|---|---|
| Chapter 11 exit | Early July, with 90% less debt |
| New owners | Fortress, Fidelity, Invesco |
| Container fleet | 15,000 containers |
| Drayage model | Internal drayage coverage on both ends of rail moves |
| Q2 outcome | Firm left volume on the table |
| Primary competition | Over-the-road trucking |
Modal conversion gains traction
New shippers are trialing intermodal lanes they had not historically used, driven by tightening truck capacity, rising tender rejections and rate pressure, Anderman said. He cautioned that converting shippers takes time — network redesign is required — but customers who work through the learning curve tend to stay. “To the extent that our rail partners working with us are continuing to provide good service, I think there’s going to be go-forward opportunities to continue to execute on those conversion opportunities,” he said.
Tariffs and the Union Pacific–Norfolk Southern merger
On the pending Union Pacific–Norfolk Southern merger, Anderman said his company has seen strong rail service from all railroad partners over the past 12 months and wants any merger outcome to preserve competitive, reliable service. On tariffs, he noted port activity showed strength late in Q2 and into early Q3 but flagged uncertainty about how much of that volume was front-loaded ahead of tariff changes.
Investment plans and shipper implications
With its recapitalized balance sheet, STG Logistics plans to invest in logistics capabilities — including transloading, consolidation and deconsolidation inside warehouse walls — alongside its transportation assets, technology and go-to-market strategy, Anderman said. He cited a deal with a large West Coast retailer in which the company consolidated the shipper’s provider network around specific distribution centers, driving what he called “pretty meaningful costs” out of the supply chain while improving service reliability.
Watch list
- Drayage capacity: Anderman says the constraint persists into summer; he could put incremental drivers to work immediately if demand holds.
- Tariff front-loading: Port activity strengthened late Q2 and into early Q3, but it is unclear how much volume was pulled forward ahead of tariff changes.
- Union Pacific–Norfolk Southern merger: The CEO says any outcome must preserve competitive, reliable rail service.
- Rail service performance: Conversion opportunities depend on rail partners continuing to deliver good service.
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