How to Take Advantage of Intermodal Transportation
Looming truck driver and capacity shortages, freight rate increases, Hours-of-Service and CSA regulations, and sustainability mandates are compelling many shippers to consider domestic intermodal solutions for the long haul. Perceptions are changing. There are fewer excuses and less resistance. Market constraints aside, rail services and intermodal transit times have become more dependable, making it easier for companies to make the leap. A decade ago, transit time was important, but not a critical factor—which made rail intermodal suitable for a select group of shippers. Today, however, carriers and third-party partners are scorecarding and benchmarking performance to the minute as they move toward time-definite expectations.
On the East Coast, for example, the Crescent and Heartland intermodal corridors are helping to speed throughput on and off port while providing greater hinterland connectivity. More telling, intermodal is no longer simply a long-haul play. Many shippers are reaping gains by using rail transport in certain regional lanes and markets where inbound-outbound freight imbalances require better use of over-the-road assets to reduce deadheads or alleviate congestion.
With greater visibility to demand and upstream moves, shippers and consignees can make more informed decisions about actual speed-to-market requirements. They can use transloads to mix and match truckload, less-than-truckload, and rail options, creating latitude and deploying highway resources where they are needed most.
If, for example, a shipper is using team service for long-haul truck moves from the East Coast to the West Coast, it might make sense to convert that to intermodal. Although transit times will be two days slower—and the shipper will pay inventory and handling costs—there are considerable transportation cost savings to be had.
As capacity becomes a bigger concern and freight rates continue to rise, shippers will have to open the transit window farther to take advantage of intermodal solutions.
In Search of an ISP?
Any shipper that is making single-stop pickups or deliveries in the transcontinental market should consider converting over-the-road movements to intermodal—especially as capacity in certain lanes begins to tighten. Here are four factors to consider when searching for the right intermodal services provider.
- Technology capabilities. Visibility is paramount when working across modes. Intermodal used to be a communication black hole, especially when product came off the rail. But that's not the case anymore. Intermodal service providers can provide a steady stream of information and visibility through continuous GPS tracking. In addition, they can take data, add value to it, and provide shippers and consignees with actionable information that enables them to optimize their transportation moves—improving dwell times, for example.
- Financial stability. Make sure the intermodal partner is viable. Are finances in order? Ask for references from rail and motor freight carriers, as well as other shippers.
- Assets. Does your prospective partner have containers and/or drayage assets to move shipments? Some non-asset-based companies sell product they buy from underlying carriers. Prospective shippers should ask questions. Find out who the broker is working with, and properly vet that chain of custody.
- Future growth. The intermodal market is changing at a rapid pace as services and technology capabilities continue to mature. Make sure your partner is thinking ahead. Does it have a five-year plan? Is it making investments? What industry partnerships is it involved with?