Both trucking and intermodal transportation have their proper place within the supply chain, but how does a shipper determine the best solution for their freight? It’s important to understand the strengths and weaknesses of each to make an informed decision.
Intermodal by definition is a transportation solution involving more than one mode of carrier such as truck, rail, ocean, and air. In North America however, it usually refers to the combination of trucks and railroads to move freight in shipping containers. It is potentially one of the fastest growing modes of transportation because it combines the best abilities of multiple transportation modes to deliver a more consistent, cost friendly, and fuel-efficient way of moving freight.
According to The Intermodal Association of North America (IANA), the general benchmark for where a shipper can see intermodal benefits is when the cargo is traveling domestically about 500 miles or more. Because intermodal cargo is transported in a single container for its entire journey, the transportation provider only needs to focus on moving one unit of freight versus individual pieces of cargo within the container. This drastically reduces cargo handling, improves cargo security, and reduces damages or complete losses. That’s a win-win for both sides.
Here are 6 areas to consider when adding an intermodal solution to your supply chain strategy.
1. High Volume + High Miles = Cost Savings.
According to the Council of Supply Chain Management Professionals, transportation costs make up approximately 65% of total U.S. logistics expenditures. If you continuously ship a large amount of cargo across hundreds of miles, intermodal could prove cheaper and more efficient than other transportation methods. Cost savings is probably the top factor for shippers to make the switch. One train can carry the freight of hundreds of trucks. According to InTek Freight & Logistics, picking a freight lane that is a good fit for your cargo can on average save approximately 10%-15% off total transportation costs, however there are opportunities to increase that percentage up to 40%.
2. Seeking More Capacity and Visibility.
Intermodal provides capacity advantages in more ways than one. Riding on rail, containers can be double stacked on well cars, allowing shippers to double their freight capacity while maintaining fuel efficiency. For trucking cargo to intermodal ramps, having the right equipment capacity can expedite your cargo’s exit off-port. The majority of intermodal ramps are located within either 50 miles of seaports or their final destination. Partnering with companies with equipment capacity and the ability to drop and hook or live load/unload, can make all the difference. These drivers have the ability to turn several loads per day opposed to 1-2 loads per day, saving shippers time and money, and avoiding accessorial port fees such as demurrage on equipment or storage.
Shippers that want increased lane visibility can also benefit from intermodal lanes. Traceability with intermodal cargo is very similar to tracking small parcels with transportation providers such as FedEx or UPS. The shipper has the ability to check the status of their cargo along the railway at any time providing a closer grip on managing the shipment, resulting in higher on-time delivery and pick-up scheduling.
3. Limiting Your Carbon Footprint.
Railroad transportation gives intermodal a boost in sustainability because they can transport one ton of freight approximately 480 miles on only one gallon of fuel. Transporting via rail also accounts for just 0.5% of total US greenhouse emissions, according to EPA data, and just 1.9% of transportation-related greenhouse emissions.
Lastly shipping by rail reduces economic costs of highway congestion and pollution. According to the Texas Transportation Institute’s 2019 Urban Mobility Report, highway congestion cost Americans $166 billion in wasted time and 3.3 billion gallons in wasted fuel due to congestion. Lost productivity, cargo delays, and other costs add tens of billions of dollars to this tab.
Now this is not to say intermodal is always the better choice for your shipping needs. That simply is not true. Domestic trucking might better suit your freight strategy if the following conditions come into play.
4. Transit Time and Length of Haul.
If duration of transit time is at the top of a shipper’s list, moving freight by domestic trucking wins this category. Transporting cargo by truckload to its destination averages approximately two or three days less than intermodal. Because railroads have a set schedule, it leaves zero room to make any adjustments. Trucking provides the option to expedite time-sensitive cargo, giving shippers the flexibility they may require.
If shippers are not moving cargo more than 500 miles, truckload transportation proves to be more beneficial for shorter distances. It ties back to those shorter transit times just mentioned as well as cost. Transporting high-volume cargo across long distances, allows you to leverage costs. If shipping low-volume across shorter distances, your cost comparison among trucking companies vs. moving by rail will be more competitive and budget friendly.
5. Hauling Heavyweight or Over-dimensional Cargo.
Domestic trucking is the preferred option to move heavyweight or over-dimensional cargo. Intermodal cars have locked dimensions, eliminating the option to transport high and wide cargo. In addition, the weight restriction for intermodal is 2,500 pounds less capacity than with truckload. Furthermore, truckload offers a wide variety of different types of hauls, such as flatbed, refrigerated, partials, and expedited. Depending on the cargo type, the shipper has an assortment of hauling choices for transporting their cargo to final destination.
6. Ability to Flex Your Schedule.
If a shipper must make a change in their transportation schedule, trucking can provide that flexibility. Under intermodal lanes, shippers have a greater responsibility to abide to ramp delivery times and it is also not as accommodating as truckload because once the train is in motion, your cargo cannot be re-routed until it arrives at the next railroad ramp. Additionally, transporting by truckload generally means you’re working with one contact, providing ease of doing business to move your freight. Because intermodal means moving with more than one mode, changing up pick up or delivery dates will require multiple touchpoints, opening the door for potential mishaps.
If you’re still on the fence deciding which mode of transport will work best for you, here’s the good news, Trailer Bridge has the support, expertise, and expansive network for both intermodal and truckload to create that custom solution. Logistics is ever-changing and complex. Whether you are looking for transportation guidance or a full-service logistics partner, rely on Trailer Bridge. We are here to guide you to the optimal solution for your transportation needs. All because it’s our business to grow your business, through logistics.