Intermodal demand is accelerating, but drayage capacity constraints are capping volume growth across the sector. Geoff Anderman, CEO of STG Logistics, detailed what is driving this momentum and how the company's recent restructuring and new ownership are positioning it to capitalize on emerging market opportunities, in an interview on FreightWaves Today.

Recapitalized Balance Sheet Removes Growth Constraint

STG Logistics, an intermodal marketing company (IMC) — a type of intermediary that arranges rail-based freight transportation and typically provides door-to-door service by combining rail line-haul with truck drayage on both ends — wrapped up Chapter 11 proceedings in early July and emerged with 90% less debt under new ownership: Fortress, Fidelity, and Invesco. Invesco is also an investor in FreightWaves.

Anderman described the new ownership group as very supportive and enthusiastic about the company's future.

"Expect that they're going to support us as we continue to grow our business, continue to ride the wave of enhanced interest in intermodal service, and expect a lot of good things coming out of this process that we just wrapped up earlier in July," Anderman said.

The restructuring has eliminated a key constraint on growth at a time when intermodal demand is accelerating. With its recapitalized balance sheet, the company plans to invest in logistics capabilities — including transloading, consolidation and deconsolidation inside warehouse walls — alongside its transportation assets, technology, go-to-market strategy, and workforce.

Demand Outstripping Drayage Capacity

The company operates a fleet of 15,000 containers and provides internal drayage coverage on both ends of its rail moves, a combination Anderman described as a competitive edge over pure-play providers.

Despite that vertical integration, demand for intermodal service was strong enough in the second quarter that STG Logistics left volume on the table. Drayage capacity — the short truck hauls to and from railheads — was the binding constraint, and Anderman said the problem persists into the summer.

"We could have done even more. There was that much demand for the service out there," he told FreightWaves. "We could very easily put a significant amount of incremental drivers to work right now, given the demand we're seeing in the marketplace."

The drayage crunch mirrors dynamics in the broader trucking market, where regulatory compliance actions have pushed capacity out. The FMCSA's Drug & Alcohol Clearinghouse, which went into full enforcement effect in late 2022, has removed tens of thousands of truck drivers with prior violations from the road, contributing to a nationwide driver shortage that is particularly acute in short-haul drayage, where long wait times at railheads and ports reduce driver productivity and earnings. Anderman confirmed that driver availability tied to the compliance crackdown is the primary issue, echoing concerns raised by other freight executives.

He noted that dray costs are rising in lockstep with over-the-road rates, and the company is managing the squeeze in real time.

"Not unlike what's happened in the over-the-road market, many of the things that have happened there to drive capacity out of that market, they've certainly impacted the drayage market as well," Anderman said. "For intermodal, you have a truck move, a dray, on each end of a rail line haul. That obviously requires a driver with equipment to be able to pull that container to or from the railhead."

Over-the-Road Trucking Is the Real Competitor

Anderman identified over-the-road trucking — not rival intermodal providers — as the primary competition for intermodal services. This framing reflects the structural reality of the freight market: intermodal's share of long-haul volume has historically hovered below 20% of total truckload freight, meaning the vast majority of convertible freight still moves by highway.

"Broadly speaking, we view the trucks as our biggest competition," he said. "Trucking, over-the-road trucking, is obviously the most clear and largest substitute for intermodal service."

He acknowledged that companies such as J.B. Hunt, Hub Group, Schneider, and Knight-Swift are all active in the intermodal space — with J.B. Hunt being the largest player — and called those carriers "formidable providers." However, he emphasized that all intermodal providers share a common interest in pulling freight off highways by leveraging railroad partnerships to deliver a cost-efficient, energy-efficient alternative to trucking.

"We do view them as competition, but obviously have tremendous respect for them," Anderman said. "I think all of us are very much interested in taking freight off the road and using intermodal capacity and leveraging our partnerships with the railroads to provide an efficient, reliable, and obviously energy-efficient solution as well."

The observation comes as J.B. Hunt, a publicly traded company whose results provide a window into broader freight conditions, reported exceptional intermodal performance.

Modal Conversion as a Growth Engine

Modal conversion from truckload is emerging as a significant growth driver. Anderman said new shippers are trialing intermodal lanes they had not historically used, driven by tightening truck capacity, rising tender rejections, and rate pressure — trends extensively covered by FreightWaves. The freight market has been cycling through a prolonged downturn that began in 2023, when excess truck capacity flooded the market and depressed rates; the recent tightening marks a turning point that is pushing shippers to evaluate rail alternatives, particularly on lanes exceeding 500–700 miles where intermodal's cost advantage is most pronounced.

"I'd say it's both," Anderman said, referring to whether growth is coming from new or existing shippers. "We are seeing opportunities for modal conversion. Some of my publicly traded competitors have obviously mentioned that that's something that they're seeing as well and a focus."

"Particularly with truck capacity tightening, tender rejections and all that, and then the rate pressure that's creating, I think you're starting to see some people come around and say, 'Hey, might make sense for us to try intermodal, maybe in lanes or regions that we had not historically,'" he continued.

Anderman cautioned that converting shippers takes time because it requires network redesign. However, he said 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.

FreightWaves hosts noted that once shippers discover intermodal, the transition typically takes a few months as they build infrastructure and redesign their networks. Once shippers understand how railheads work — or have a provider managing door-to-door service — they tend to remain with intermodal as long as they are comfortable with transit times.

Union Pacific–Norfolk Southern Merger: A Measured View

The pending Union Pacific (UP)–Norfolk Southern (NS) merger has drawn significant attention in the rail industry. The CEOs of both railroads appeared at FreightWaves' Future of Rail Symposium, where they expressed strong optimism about what the merger would mean for connecting the full U.S. rail network and driving efficiency.

Anderman was more measured in his assessment.

"I understand why they're excited. Obviously, the idea of connecting two railroads so that you can connect the full continent — the full U.S., I should say — so that you take handoffs out of the equation, potentially drive more efficiency — I get the excitement," he said. "Ultimately, for us, we have long-term relationships with all the railroads that are operating in the U.S. today. For us, we want to be able to provide competitive, cost-efficient, and reliable services to our customers."

FreightWaves noted that intermodal providers face a natural pricing ceiling because trucking always provides a competitive alternative. Bulk shippers, rather than intermodal users, are widely seen as having the most concern about the merger's implications — largely because bulk commodities like grain, coal, and chemicals move in rail cars that cannot easily be diverted to highway transport, leaving those shippers with far fewer options if a merger reduced competition on specific routes. BNSF's Chief of Staff also appeared on FreightWaves Today and was openly critical of the proposed merger.

Anderman acknowledged those dynamics and said his company is still learning how UP and NS plan to integrate their networks.

"To the extent that it allows folks like us, other IMCs, other users of intermodal service and the railroad in general — to the extent that it allows those things to happen or enables that advantage — we're certainly open to learning more about that and understanding how it can support growth in our business," he said.

Regardless of the merger outcome, Anderman stressed that rail service quality has been strong across the board.

"Whether you attribute this to what UP and NS are trying to do or not, I think we've seen excellent rail service over the course of the past 12 months from all of our partners," he said. "You can attribute that to the focus the railroads have put on enhancing service and making sure they're truly a viable and reliable mode versus truck coming out of the COVID boom times. We need that rail service to be there, and it has been."

Port Activity, Tariff Volatility, and Consumer Demand

Given STG Logistics' port-to-door service footprint, Anderman offered a broad view of conditions flowing through the ports. He flagged continued volatility driven by geopolitical developments — including tensions in the Middle East affecting fuel prices — as well as shifts in tariff policy. Potential tariff increases on goods from China and other trading partners have been a recurring theme in 2024 policy discussions, and some importers have accelerated orders to bring inventory in ahead of possible changes, a dynamic that has historically distorted port volume patterns.

"We're a heavily imbalanced economy from an import-export perspective, regardless of what the tariff policy has done over the past couple of years," he said. "The consumer obviously has a heavy impact on what we see from a demand perspective and what you see flowing through the ports."

Port activity showed strength late in Q2 and into early Q3, but Anderman flagged uncertainty about how much of that volume was front-loaded ahead of anticipated tariff changes or efforts to get ahead of fuel cost increases.

"We'll see what the back half of the year brings in terms of how much of that was front-loaded activity ahead of incremental changes in tariffs, how much of that was trying to get ahead of fuel — some of those things that can make things a little bit more unpredictable," he said.

On consumer sentiment, Anderman said demand appears to be holding up relatively well, though he noted that housing continues to be soft — a sector that has historically been a significant driver of freight demand. Housing-related freight, including building materials, appliances, and furniture, represents a substantial share of domestic containerized volume, and the sector's prolonged downturn under elevated mortgage rates has been a headwind for intermodal providers even as other consumer categories hold firm. FreightWaves noted that other recent guests have reported strong consumer sentiment, with sector-specific variations; for example, apparel has been particularly strong while housing remains weak.

Anderman highlighted a critical dynamic: with truck capacity tight even as demand remains moderate, any meaningful uptick in demand could trigger significant rate increases.

"Capacity is tight, particularly from a trucking perspective, and that's with demand that I'd say is just okay," he said. "To the extent that there is any meaningful inflection in demand, I expect that to be a pretty significant catalyst for upward pressure on freight rates from carriers to customers or shippers, given how capacity seems to be relatively tight because of all the regulatory things and compliance things that have been done over the past 12 months or so."

Logistics Capabilities as a Differentiator

Anderman pointed to STG Logistics' ability to combine asset-based intermodal service — including its 15,000-container fleet and internal dray coverage — with sophisticated logistics expertise as a key differentiator. Those capabilities include transloading, loading and unloading containers, and consolidating and deconsolidating freight inside warehouse walls. This combination of asset ownership and value-added warehousing places STG in a category that blurs the line between traditional IMC, drayage carrier, and third-party logistics provider (3PL) — a model increasingly relevant as shippers seek fewer, more integrated partners to simplify supply chain complexity.

He cited an example involving a large West Coast retailer served across multiple locations. STG Logistics consolidated the shipper's provider network around specific distribution centers, driving what Anderman called "pretty meaningful costs" out of the supply chain while improving service reliability as a single-source provider.

"Those are capabilities that honestly allow us to do more for our customers and provide better outcomes and efficiency for them," he said. "Talking to our customers about how we save them money, how we provide them a better service, and how we drive better outcomes in their supply chain — leveraging both our intermodal and our drayage capabilities, but also our logistics capabilities to make their lives easier and make their supply chains more efficient."

Looking Ahead

With a recapitalized balance sheet, STG Logistics plans to continue investing across its platform.

"We're going to continue to invest in our logistics capabilities aligned with our transportation capabilities — asset-based intermodal, drayage. We're going to continue to invest in our people," Anderman said. "We're going to continue to invest in building the growth engine here. That could be through our go-to-market strategy, through technology — all those good things that help us be a better partner to our customers and a better partner to our key partners at the railroads and anybody else that we're relying on heavily to execute on behalf of our customers."

Source: FreightWaves