Intermodal: A Smart Way to Ship (and Save)

If a logistics professional has a less-than-stellar experience with a specific trucker, they probably will move to another one. “But if someone has a bad experience with intermodal, they often give up on it altogether and go back to moving by truck,” says Christopher Brach, senior vice president and general manager, brokerage with Radiant Road & Rail.

Educating shippers on improvements to the intermodal product and addressing why it previously didn’t work as planned can help to work through that stigma, says Brach, who’s also a board member of the Intermodal Association of North America (IANA).

For those who have given up on intermodal or multimodal transport (see box for definitions), or have yet to use it, now is a good time to give it a try. Between 1980 and 2024, U.S. freight railroads invested approximately $840 billion—or close to $1.4 trillion in today’s dollars—on capital expenditures and maintenance expenses related to locomotives, freight cars, tracks, and other infrastructure and equipment, the Association of American Railroads reports.

These investments are helping to improve reliability and service consistency. For instance, CPKC’s $100-million expansion of the Patrick J. Ottensmeyer International Railway Bridge in Texas is doubling cross-border trade capacity.

“They’re trying to be as truck-competitive as possible,” Brach says.

Compared to over-the-road trucking options, intermodal tends to be less expensive by between about 8 and 18%, says Todd Davis, senior vice president, marketing, with STG Logistics. Another benefit: By shifting from over-the-road to intermodal, shippers typically can cut carbon emissions by about 75% while also reducing fuel consumption and highway congestion.

Plus, intermodal rates generally remain stable for 12 months, says Taylor Harrington, director, North American intermodal with C. H. Robinson. A committed rate removes some expense volatility.

Rail costs are less volatile than truck rates when the market changes, says Chris Hoffmeister, chief commercial officer and executive vice president with Hub Group. The consistency also makes it easier to budget transportation costs.

The flexibility intermodal can provide is another benefit, notes Michael Baumgardt, senior vice president of intermodal with Schneider National. Leveraging multiple modes of transportation can help mitigate potential capacity issues in one mode.

Rail Mergers Take Off

One of the most notable intermodal trends of the past few years has been the growing number of mergers. In 2023, Canadian Pacific and Kansas City Southern combined to create CPKC, the first and only single-line railway connecting Canada, the United States, and Mexico.

The average trip from Mexico to Chicago is now up to three days faster than the industry average of seven days, Schneider National reported in July 2025.

Earlier in 2025, Union Pacific and Norfolk Southern agreed to create America’s first transcontinental railroad. It will connect more than 50,000 route miles across 43 states from the east to the west coasts, and link approximately 100 ports.

While it’s too early to have firm data on the impact of the UP/NS agreement, it could promise greater efficiency. Harrington compares the previous cross-continental cargo rail trip to an individual trying to get from Los Angeles to New York: take a plane from Los Angeles to Chicago, disembark and travel from O’Hare to Midway, and then buy another ticket, from another airline, for the final leg to New York. The merger streamlines that process.

As shippers increasingly demand door-to-door billing under one contract and one bill of lading, some carriers are offering bundled intermodal products, says Karen Burchfield, a consultant with Praxichain. These end-to-end solutions are designed to remove the friction in the hand-offs between transportation modes by having a single point of contact managing the entire chain.

Among other features, the solutions may offer one contract or invoice across all service providers, door-to-door tracking, drayage management, and transloading.

“It’s all wrapped in a nice, green, and low CO2 delivery,” Burchfield adds.

AI’s Impact

Much as it is in other industries, artificial intelligence (AI) is beginning to impact intermodal transportation. One example is an AI solution that monitors equipment to get ahead of maintenance issues, Brach says.

One significant application will be to alert intermodal shippers to estimated delivery times. “The biggest application of AI right now is trying to build a better mousetrap, telling shippers when their box will get there,” says Andy Adams, senior solutions engineer with TransmetriQ, which delivers freight rail insights.

This is key, given that throughout much of intermodal rail’s history, the word ‘visibility’ typically was not associated with it. “It was mostly known as a black hole,” says Brian Kobza, chief commercial officer with IMC Logistics.

That’s changing, as technology provides greater visibility to container locations and a realistic estimate of when they’ll show up, so supply chain professionals can plan.

Challenges and Solutions

While shippers can cut costs and boost supply chain resilience by including intermodal as a transportation option, they need to be aware of several challenges.

By design, intermodal supply chains require multiple hand-offs between carriers and modes, and each carries the potential for delay, errors, or damage, Burchfield says. However, many of these risks can be addressed by using best practices for dunnage and bracing, and by providing supply chain data transparency, she adds.

As intermodal grows in popularity, congestion can be a challenge. Inland ports help move congestion from the terminals, allowing more time to prepare the freight for the next leg of its journey, Burchfield says. Inland terminals also keep marine containers closer to the ports and their next ocean trip.

These are some of the reasons why BNSF Railway recently announced plans to invest more than $1.5 billion in the Barstow International Gateway. The facility will enable the direct transfer of containers from ships at the Ports of Los Angeles and Long Beach to trains for transport to Barstow, where they’ll be processed, staged, and built into trains moving east via the BNSF network.

Organized cargo theft, another challenge, cost major railroads more than $100 million in 2024, the AAR reports, noting that industry estimates suggest the 65,000-plus thefts in 2024 represented a roughly 40% increase over the prior year.

“These are not just random people jumping on and breaking into trains,” Kobza says. “This is highly organized criminal activity.”

The Combating Organized Retail Crime Act of 2025, which has garnered bi-partisan support in both the House and Senate, as well as from industry groups, may help combat these crimes. The bill “offers commonsense solutions to identify and deter organized crime throughout the supply chain by enhancing legal frameworks, improving enforcement capabilities, and fostering collaboration across relevant federal, state and local agencies,” IANA said in a statement.

The greater visibility possible today through GPS and other technology can also help shippers and carriers understand where the breaches are happening. “Once you find out exactly what’s going on and where, you can help prevent it,” Kobza says.

Variations between intermodal equipment supply on different railroads can be another challenge. Some domestic operations require shipper-owned containers and trailers, while some container fleets are owned by both marine and rail carriers, Burchfield says.

Both options have trade-offs to consider. If a fleet is carrier-owned, the railroad will size it based on systemwide demand forecasts, so availability will depend on how the carrier balances needs across all shippers. If the fleet is shipper-owned, the shippers will size it to cover their own volumes with greater certainty, but then they take on the capital cost and risk of underutilization if cycle times stretch.

“The trade-off is essentially capital expense and control versus operating expense and reliance on carrier allocation,” Burchfield adds.

One historical challenge is slowly dissipating. Intermodal transport depends on efficient, solid drayage service, as a truck is typically required to move goods on both sides of the rail legs, Kobza says. Traditionally, the drayage and trucking companies and the railroads didn’t engage in much cooperation and coordination. Now, however, all recognize they need each other to create viable solutions.

Leveraging Intermodal Transport

These 8 steps can help shippers reap the benefits of intermodal shipping:

1. UNDERSTAND SHIPMENT VOLUMES AND FLOWS. You’ll have a better idea of which shipments are likely to be good candidates for intermodal, whether because of their volume or the lanes they typically travel, Brach says. You also want to know any cargo handling requirements and understand securement for intermodal transit; the railroads can assist with this.

2. USE A TRANSPORTATION MANAGEMENT SYSTEM (TMS). By using a TMS, whether internally or as an outsourced partnership with a 4PL, shippers are more efficiently able to identify intermodal opportunities within their networks than is typically possible with spreadsheets, says Jason Miller, senior vice president of sales with NFI.

A TMS, which could be purchased software and/or an outsourced solution, can automatically create routing guides based on mode and transit expectations.

3. CONSIDER SCHEDULING OPTIONS. Shippers gain flexibility and potential cost savings when using intermodal around weekends and holidays, often with the same delivery time frames that over-the-road trucks might provide, Miller says.

4. EVALUATE LOGISTICS PROVIDERS. They should be able to supply multiple solutions, be financially secure, and have the expertise and reliability to provide solid service and minimize ancillary costs such as detention or demerge.

“If your provider can’t create solutions quickly and be nimble, your transportation supply chain will run into a lot of speed bumps,” Kobza says.

5. GET COMFORTABLE WITH DATA SHARING. Logistics providers that handle freight door-to-door likely are working for multiple firms, potentially including competitors. “You have to get comfortable through your non-disclosure agreement and contractually that your information is not going to be shared,” Burchfield says.

6. TRY A HYBRID APPROACH. Using intermodal for some shipments helps to ensure access to another mode of transportation when capacity tightens on the truckload side. “It’s good to have another arrow in your quiver,” says Ben Enriquez, chief executive officer with Transport Capacity Services.

7. DECIDE WHETHER TO GO IT ALONE OR WORK WITH A LOGISTICS PROVIDER. Many companies outsource their intermodal function because logistics providers have invested heavily in the technology needed to manage the shipments and are experienced in negotiating contracts, Burchfield says.

In addition, the providers that consolidate freight likely are doing it across a volume that’s greater than a small shipper would have, giving them more power to negotiate, she adds.

8. OWN THE OUTCOME. Whether you invest in your own intermodal processes and technology, or work with a service provider, you need to be able to anticipate potential changes, and then pivot and be flexible and resilient should they occur.

“When you have multiple carriers, every handoff is an opportunity for a failed execution,” Burchfield says. “You have to know what you’re going to do if a failure happens.”

It’s also important to understand what external shocks could impact your intermodal shipments.

Continued Growth Expected

Intermodal volume rose by 8.5% in 2024, according to IANA, and more growth is still likely. Industry estimates show that about 10 million over-the-road shipments each year meet the criteria for intermodal, as they’re typically 750 miles or longer, Davis says.

Several factors are driving growth. Nearshoring is one, as Mexico traditionally has been underserved from an intermodal standpoint. “As more organizations locate there, they’re providing opportunities,” Baumgardt says.

Technology solutions that offer greater visibility and control also are boosting the intermodal market. “Customers want carriers that quickly pivot and provide multimodal solutions,” Baumgardt adds.

As companies trying to avoid the congestion at Los Angeles and Long Beach look to other ports, such as those in the southeastern U.S., many may also consider intermodal to move their goods inland, Burchfield says. Ecommerce, along with revolutionizing how people purchase, is also driving intermodal growth.

Sustainability is another catalyst, Burchfield says. Many companies have set carbon reduction goals, and intermodal can help in reaching them.

Enhancements to intermodal service and improvements in technology, visibility, and tracking are also driving the market. “These technology improvements combined with service enhancements are propelling the industry forward for a promising future,” Harrington says.

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Intermodal vs Multimodal

In general, multimodal refers to multiple modes, with one contract or bill of lading. Intermodal also refers to multiple modes, but they’re managed with several contracts.

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GPS vs CLM

As visibility to intermodal shipments has become more critical, so has the debate surrounding GPS and CLM, or car location messages.

A CLM is initiated by a reported rail event that happens at an Automated Equipment Identification scanner or is entered by a rail crew or clerk, says TransmetriQ. The CLM provides data showing, for instance, that a car or container received a certain event type, at this place, at this time, on this railroad with this loaded or empty status.

From an equipment-tracing perspective, a GPS “ping” by itself is a point in space, says TransmetriQ. When a shipment is moving, GPS provides up-to-date information about its location and speed. But when a shipment stops moving, GPS cannot provide information on whether the equipment has, for example, been held for some reason or been placed at its final destination.

“Someday GPS will tell you all of that,” says Andy Adams, senior solutions engineer, TransmetriQ. For now, he recommends using both solutions to obtain the best understanding of the location of a shipment.

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