The Dotted Line to Your Own Customers
Every business that routes through an intermediary for convenience eventually discovers the intermediary owns the customer. Here is what forty years of that looks like.
This article was written with the help of AI, but all editing, analysis, commentary, & opinion are mine.)
Signals & Switches | Channel Strategy & Infrastructure
by Paul Tonsager
There is a decision that businesses make — usually quietly, usually for good reasons — that takes decades to potentially regret.
It goes like this. A company builds something valuable. A product, a network, a service. Selling it directly to end customers is complex, expensive, and organizationally demanding. An intermediary offers to handle that complexity — aggregating demand, managing relationships, absorbing the friction. The company takes the deal. Volume grows. Efficiency improves. Everyone declares it a success.
Then, ten or twenty years later, someone asks: who are our customers? And the honest answer is we don’t really know. The intermediary knows. We know the intermediary.
This is perhaps one of the most common and most consequential errors in commercial strategy. It happens in technology, in consumer goods, in financial services, in media. The firm outsources the customer relationship for convenience and discovers, too late, that the relationship was the asset.
The clearest example I have ever seen of this pattern — the one that makes the mechanism undeniable — comes from the American railroad industry. Not because it is unique to railroads. Because the railroads have been running this experiment for forty years, at industrial scale, with quantifiable consequences, and the results are now fully visible.
This is a three-part series about what those results look like, why the structure that produced them is harder to unwind than it appears, and what any business facing the same choice can learn from it. The railroad is the case study. The principle is universal.
Two terms appear throughout this series. A BCO — beneficial cargo owner — is the company whose freight actually moves. Home Depot, Procter & Gamble, Conagra. The end customer. An IMC — intermodal marketing company — is the intermediary that sits between the railroad and the BCO, aggregating demand, owning the equipment, and managing the commercial relationship. JB Hunt, Hub Group, Schneider. The railroad sells capacity to the IMC. The IMC sells a door-to-door service to the BCO. When a Home Depot load is mis-billed, Home Depot calls their IMC. When a container sits at a ramp past free time accruing storage charges, Home Depot calls their IMC. When they need to know where their freight is, they log into the IMC’s visibility portal — not the railroad’s. The BCO is not in the railroad’s system. They are not a customer of record. They are the cargo behind someone else’s booking.
That last sentence is the problem this series is about.
The counterexample first
Before explaining how the railroads got here, it is worth starting with a company that made the opposite choice — because the contrast is what makes the mechanism visible.
Maersk built a salesforce for its most important customers. Not in a single declared strategic moment — this is different from the 2017 decision to reposition as an integrated logistics company, which generated its own industry debate. This was a commercial practice built over time: named account executives assigned to specific BCOs, bilateral service contracts, quarterly business reviews backed by the customer’s actual freight data, a dedicated service team that called the customer before the customer called them.
The alternative — the path most carriers took for all but their largest accounts — was to route everything through the intermediary channel, where freight forwarders sat between the carrier and the end shipper, aggregating demand and owning the commercial relationship. Maersk made a different judgment for its top-tier accounts: those relationships were too valuable to leave with a forwarder. Below that tier, the forwarder channel continued to function as it always had. The distinction was not which channel to use — it was which customers were too important to leave in it.
I saw this from inside Maersk. As VP of North American Procurement, my role was on the inland side — trucking, rail, chassis, drayage. The decisions my group made about carrier selection, contract structure, and service standards put me directly inside the commercial infrastructure connecting Maersk’s ocean business to its inland execution. Nike, Home Depot, Walmart — these were not courtesy call relationships. They were structured commercial engagements where Maersk walked in knowing the customer’s lane profile, their seasonal patterns, their equipment utilization, and their competitive exposure — and where the customer’s logistics team engaged with Maersk as a genuine strategic partner rather than a commodity capacity provider.
The friction this model created was real. Forwarders pushed back. Channel tension was high. The internal investment was significant — people, systems, pricing infrastructure, data capability. Maersk built it anyway, because they made a judgment that the BCO relationship was worth more than the organizational convenience of letting someone else own it. They wanted to know who their customers were. They wanted direct accountability — on both sides of the table — when service failed or commitments weren’t honored. They wanted control.
I will be direct about where I stand. The operators I have watched succeed over time are the ones who knew their customers directly, owned the commercial conversation, and were not dependent on an intermediary to tell them how their business was performing. Control of the customer relationship is the most valuable thing a carrier can hold, and it is the hardest thing to recover once you have given it away.
What controlling the customer actually means
The term gets used loosely, so it is worth being precise. Controlling the customer means three specific things.
First, who pays. In a direct model, the carrier invoices the end customer, sets credit terms, and knows that customer’s payment behavior, dispute patterns, and financial trajectory. That commercial intelligence shapes every subsequent conversation. Second, who negotiates accessorials — the fees beyond the base rate that govern the real friction in any freight relationship: detention, storage, expedite charges, fuel surcharges. In a direct model that negotiation is bilateral, transparent, and accountable on both sides. Third, who holds the service accountability. In a direct model, when the freight doesn’t move, the carrier’s account executive hears about it — not a service desk, not a functional team, but a person whose relationship with that customer depends on solving the problem.
Everything else — the account executive, the quarterly business review, the service escalation path — is relationship management. Important, but insufficient. Without the three above, the carrier is a subcontractor to the intermediary, regardless of what its senior leadership says at industry conferences about strategic customer relationships.
The railroad intermodal commercial model is the freight industry’s version of what corporate org designers call a matrix — the structure where accountability is divided between two authorities. The theory is that dual accountability produces better decisions. What it produces in practice is a structure where each authority assumes the other has handled the problem.
The IMC has the full line to the BCO. The railroad has the dotted line — the strategic relationship, the senior meeting, the annual capacity conversation. When a Home Depot load doesn’t move at a rail terminal, the full line owner fields the complaint. The railroad hears about it eventually, if at all. The IMC points at the railroad’s network. The railroad points at the terminal operator. The terminal operator points at the dray. Home Depot’s transportation director is still on hold.
The Maersk model eliminated the dotted line entirely. One owner. One P&L. One accountable party. When the Nike load doesn’t move, the account executive’s phone rings — a person whose career is partially defined by whether Nike renews. No ambiguity about who owns the relationship. No assumption that someone else is handling it.
This dynamic is not unique to freight. It appears in any industry where an intermediary sits between the producer and the end customer. The software company that sells through resellers. The consumer brand that sells through retail. The financial product distributed through advisors. In every case, the producer has a version of the dotted line — access without control. And in every case, the consequences accumulate quietly until they are large enough to be impossible to ignore.
The delegation decision
The intermodal marketing company model was available, it was efficient, and it moved volume. The IMC aggregated shipper demand, provided equipment the railroads didn’t own, coordinated drayage the railroads didn’t want to manage, and absorbed the service complaints the railroads didn’t want to field. One JB Hunt relationship instead of five hundred shipper relationships. One Hub Group contract instead of a customer service organization. Let someone else own the complexity.
The railroads took it. And in taking it, they handed over the one commercial asset that is hardest to recover: the customer.
I think the honest answer is that it was the easy choice — and easy and right are not always the same thing. The railroads took the path that minimized their near-term organizational burden and maximized near-term volume efficiency. They are now living with the consequences: they do not control their own commercial destiny. They cannot call a recession in domestic intermodal demand a shipper problem, because they don’t know who the shippers are. They cannot defend volume when a BCO converts back to truck, because the BCO’s loyalty was to the IMC, not to the mode. They cannot build the data-driven service accountability that sophisticated shippers now expect, because the data layer sits with the IMC.
The genie is not going back in the bottle. JB Hunt has more than 120,000 53-foot containers. The Hunt-BNSF alliance is more than thirty-five years old. Hub Group has 52,000 boxes and a dray network that took decades to build. These are not vendor relationships — they are the physical and commercial infrastructure of domestic intermodal. No one is unwinding them.
What is not structural — what is a choice, made every day in every railroad commercial organization — is whether to keep treating the customer as someone else’s problem.
The railroad that doesn’t know who Home Depot is cannot defend Home Depot’s volume. The railroad that has no direct relationship with Conagra cannot make the case for intermodal when Conagra’s transportation team is looking at spot truck rates. The railroad that operates entirely through intermediaries has outsourced not just the transaction but the conversation — and you cannot win a commercial argument you are not in the room to make.
Any business that has ever lost a customer to a competitor and found out from the intermediary — not from the customer — knows exactly what this feels like. The railroad version just plays out across forty years and $15 to $20 billion in annual revenue.
The operational consequence nobody talks about
The commercial argument above will be familiar to anyone who has thought seriously about channel strategy. But there is a second argument that may land harder with the people who actually run businesses — the operators, the planners, the executives responsible for cost efficiency rather than revenue growth.
The BCO relationship is not just a revenue problem. It is a planning problem.
At twelve months out, the BCO’s transportation team is setting lane strategy and mode split with their IMC — deciding how much freight goes by rail versus truck, on which lanes, at what volume. The IMC is in that conversation. The railroad is not. At ninety days, BCOs are sharing peak season volume forecasts with their IMC partners and reserving container capacity. The IMC uses that signal to position assets. The railroad gets no signal. At thirty days, dray capacity is being locked in the market based on the BCO’s rolling forecast. Again: the IMC knows, the railroad doesn’t. At twenty-four to seventy-two hours — when the IMC books the train slot — the railroad gets its first demand signal.
The railroad is the largest fixed-cost infrastructure provider in the chain. It is planning its network on the shortest available demand horizon. Every operational decision that matters — equipment positioning, locomotive deployment, terminal staffing — is made reactively, because the demand visibility that would make proactive planning possible belongs entirely to the intermediary.
This is not a railroad problem. It is the operational consequence of any intermediated model where the intermediary owns the customer relationship. The firm doing the physical work has no visibility into what is coming. The forecasting signal flows to the intermediary, not the network. And the network pays for that blindness in its operating budget every quarter.
The IMC is not just owning the customer. It is owning the forecast. And the railroad — and any business in the same structural position — is paying for that in ways that never appear on the channel management slide.
This is the first of three parts. Part Two, available to paid subscribers Thursday, covers twenty years of volume data, the operating ratio defense, the pricing transparency shift, and the three paths back to a direct customer relationship. Part Three, available to paid subscribers the following Tuesday, covers what a direct customer relationship unlocks beyond revenue, the operational cost of commercial blindness, and what the path forward actually requires. If you are not a paid subscriber and would like a copy to visit ims-advisory.tiiny.site and click, contact to request access
A note on sourcing: The commercial observations in this piece are based on publicly available financial data, industry knowledge accumulated over forty years as a freight practitioner, and reasoned inference about how the intermodal market structure operates. I am not party to any railroad-IMC commercial agreements, have no insider knowledge of their negotiating positions, and the financial estimates offered are educated assumptions, not reported figures. Where I have drawn conclusions about commercial incentives and structural dynamics, I have tried to say so plainly. Readers who know more than I do about specific arrangements are welcome to correct the record.
If this piece is hitting close to home, that’s probably worth a conversation. Integrated Multimodal Solutions works at exactly this intersection.
Paul.Tonsager@Multimodalsolutions.io — nearly 40 years across CN, Maersk, Coyote, Patriot Rail, and the emerging freight intelligence stack.
www.linkedin.com/in/ptonsager
Disclaimer
This publication reflects the author’s personal views and analysis based on industry experience and publicly available information. It is intended for informational purposes only and should not be relied upon as factual reporting or professional advice.
While efforts are made to ensure accuracy, no guarantees are made regarding completeness or correctness. Readers should independently verify information before making decisions.
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