A major factor underlying this transformation of freight transport is represented by the changes in the scale, in the composition, and in the structure of the American and global economies. The demand for transportation services has grown in response to the generally brisk performance of the US and global economies in this period. The US economy is becoming dominantly services-oriented, and shifting from mass manufacturing to high value-added custom manufacturing. The resulting combination of increasing information content and decreasing material intensity of goods changes the character and value of goods being moved. Further, the US and other Organisation for Economic Co-operation and Development (OECD) countries, in search of lower overall factor costs, have created global and regional free trade regimes, and globally organized production systems and value chains, which require speedy and timely movements of goods. These flows of goods are coordinated across national and global transport nodes and links in order to support the smooth functioning of the globalized economy. Technological changes in the transport sector in the US have arrived in the form of the Interstate Highway System, the jet aircraft, the container and container ships, roll-on/roll-off vessels, and a variety of micro infrastructure to facilitate operations at seaports and airports. The use of information technology (IT) greatly enhances transport operator and system efficiency, offering not only speedier goods transport at declining costs but also the ability to ‘integrate’ goods supply chains regionally and globally, while maintaining lean inventories. The third factor underlying the major changes in the freight system is the institutional and organizational restructuring of the transport system since the 1980s. Public policies to reform economic institutions by deregulating and privatizing the transport sector have stimulated technical innovations and enhanced productivity in that sector – in the process lowering costs and improving speed and reliability. At the same time, two organizational innovations – business logistical systems and intermodalism – provide major sources of change in the freight sector.

Intermodalism is desirable since inefficiencies in the freight sector impact upon the competitiveness of US firms in the transport and transport-using sectors. Intermodalism seeks to enhance the performance of the transportation system by increasing safety, reducing congestion and decreasing delays, thereby enabling more efficient freight and passenger trips (Hickling 1995). Greater efficiency translates into lower costs and an increase in the competitiveness of US firms in the global marketplace. The Intermodal Surface Transportation Act (ISTEA) emphasizes the importance of intermodalism and challenged the transportation authorities, at the federal, state and local levels in the US, to increase interconnectivity between the maritime, air and land transport modes, and thereby enhances the effectiveness of the total network.