Maximizing Intermodal Transportation
Intermodal transportation involves endless service options and possibilities. Navigating through this tangled web of choices can be mind-boggling, especially for newcomers. To simplify the process for new intermodal users and overwhelmed veterans, here are some suggestions from Paul Kromberg, principal of Rail and Intermodal Consulting Services, Springfield, Va.
1. Explore all supplier alternatives. Check out all your options, including rail carriers, logistics and intermodal marketing companies, maritime carriers, and others. Even some motor carriers offer intermodal service.
2. Consider alternate lane options. Intermodal is at its best, in both service and price, in major high-volume corridors, particularly long-distance ones. Chicago to Los Angeles is the preeminent example. If your company is located in Milwaukee, consider your overall costs with a dray to Chicago and the subsequent high-volume lane advantage.
3. Get what you need, not what a carrier will give you. Do you really need all the 53-foot equipment that your motor carrier provides? A lot of 48-foot, and even smaller, intermodal equipment is available, particularly if you include marine containers. You can gain significant savings by using an international container that would otherwise move back to a coast empty. You also may want to consider equipment ownership. Use your own container or trailer, have the carrier provide one, or get one from a leasing company.
4. Consider all drayage options. From the rail or port terminals, your shipment has to move between the origin and destination facilities. Your carrier or third-party company can provide these movements as part of the overall transaction, or you can choose to have them performed separately.
5. Carefully consider the facts not the myths. It may be conventional wisdom in your circles that intermodal is slow, unreliable, or damage-prone. But intermodal has changed over time—service quality has improved, and your products and requirements may also have changed. Maybe you’ve historically used two-day service, but three-day would now be acceptable. Maybe slower service is now an option because the dramatic reduction in short-term interest rates has brought carrying costs down.
6. Do a cost differential. Perhaps you feel intermodal would be slower, less reliable, or otherwise less desirable than premium motor carrier service for your traffic. Analyze whether the impact of these factors actually equals or exceeds any cost differential between modes. Have you considered the non-price value of the benefits that intermodal may provide, for example, more flexibility in when you can load and unload?
7. Try to be flexible without compromising service. Individual intermodal options may or may not meet your ordinary speed and consistency requirements. If they do not, do you have some particular flows for which you can relax those requirements? What about weekends and holidays? If, for example, you use second-day truck service, but intermodal is third- day, shipments made on Thursday and Friday could give you Monday availability in either mode.
8. Use your own network. Talk to other intermodal users to find out what works well for them. Ask for advice and leads.
9. Make them an offer. If published and other services and prices offered won’t work for you, approach a service provider and make a proposal that would. Particularly as the economy has softened, it’s the rare provider that will turn down business where there is money to be made. The worse they can say is no.
10. Keep an eye out. It’s a dynamic business with the constant introduction of new and improved services, and frequently changing prices. If you can’t find enough intermodal advantage to ship that way today, keep checking. That may not be the case tomorrow.