News & Insights

Rail freight is set to grow significantly across the UK and Europe, backed by government targets and multibillion pound rail infrastructure investment. As part of our work, we have been tracking how this growth is expected to materialise and share our views on how the intermodal supply chain sector – despite its importance – continues to be run largely on spreadsheets, phone calls and emails. 

What intermodal actually means. 

Most freight still moves by road, with one truck following one route, for one company. Intermodal is operationally more complex than that. A single container might be taken by truck to a rail terminal, moved by train to a second terminal, and then carried by truck again for the final leg. Each handoff brings in a different company, a different system and a different set of operating priorities. 

Road haulage has had the benefit of decades of software investment. Intermodal, by contrast, is still often held together by spreadsheets and manual workarounds that sit between systems never designed to work together. That is what is meant by the “messy middle mile”. It is the part of the freight supply chain where several companies have to coordinate under tight time pressure, and where the real constraint is often not transport capacity itself, but the ability to stay aligned. 

As Darren Palfrey, CEO of August portfolio company Fargo Group, puts it: “Most systems tell you what’s already happened. In intermodal, the value is in deciding what happens next and getting three or four parties to act on it before the window closes.” 

For example, a haulier may leave on time, the terminal may have the slot booked, and the rail operator may have the train scheduled. But if the driver gets caught in traffic and arrives 40 minutes late, the slot disappears and the container misses its departure. Suddenly, three separate companies need to respond even though none of their systems are linked. 

The problem is only getting harder.

That challenge is becoming more pronounced as the shift from road to rail accelerates. Driver shortages, decarbonisation targets and the economics of rail are all pushing more freight into intermodal flows. At the same time, investment continues to flow into the rail infrastructure that links ports, inland terminals and industrial centres across the UK and Europe. We think this will mean greater interdependence between disconnected companies as they each become more reliant on one another to keep freight moving. 

Where the value shifts.

We believe there will be a generation of logistics software that will win not only by tracking shipments, but by helping its stakeholders coordinate in real time, at each transfer point. 

At its core, this is a network problem. A haulier connects to a terminal, the terminal connects to a rail operator, and the rail operator connects to the next stage further downstream. When those connections sit within a shared platform, coordination can happen inside the system rather than through phone calls, emails and spreadsheets. The platform can flag delays, support slot rebooking and help keep everyone aligned in real time. 

That is what makes intermodal different from road haulage software, where customers often operate largely in isolation.  In intermodal, the value sits in the connections between them. 

Strategy in action — Fargo Group 

This is exactly the kind of opportunity August Equity looks to back: specialist software in underserved subsectors, where the product becomes deeply embedded in how customers operate and how they interact across the network. 

Fargo Group has built a platform that intermodal operators use to plan, dispatch and track container movements, as well as manage the terminals where freight transitions between road and rail. The platform now handles more than 80% of containers moved in the UK, and as adoption deepens and the more of a corridor that runs through the platform, the stronger its ability to coordinate becomes. 

As Darren Palfrey puts it: “Intermodal only works when you connect the network, not just the customer. Every additional partner improves the data, and that’s what starts to reduce the coordination failures that cost everyone time and money.” 

More broadly, this is what we are seeing across logistics software. As supply chains grow more complex and capacity becomes harder to access, value shifts towards systems that don’t just observe the network but help run it. 

The takeaway.

From our perspective, one of the biggest remaining prizes in freight is not better planning or tracking. It is solving the coordination tax within intermodal supply chains – an underserved and overlooked subsector, and one in which we are excited to be backing.