T he pandemic, along with consumers’ shift to purchasing more goods than services over the past two years, has changed the normal ebb and flow of intermodal volumes, says Joni Casey, president and CEO of the Intermodal Association of North America (IANA). International and domestic loads were uncharacteristically low at the end of 2019 and into the spring of 2020. Following stimulus legislation, however, volumes took off for the rest of 2020 well into 2021. Total North American intermodal volume rose 3.6% in 2021, IANA reports, halting the declines of the previous two years. Business was uneven, however, rising 15.4% in the first half of the year before dropping 6.4% in the second half, as terminal congestion, severe weather, and labor and equipment shortages took a toll.
Maharaj says. Intermodal tends to work best with routes of about 700 miles or more. Load choice is another consideration. Shipments of raw materials tend to be suited for intermodal, because they’re typically not subject to immediate sale, and can afford longer transit times at lower cost. It also makes sense to try to align shipments with rail schedules, and when possible, to time the quote process to avoid the typical fourth quarter peak season. Shippers also want to keep in mind “potential weight-dimension imbalances that could affect rail-to-road compliance,” Maharaj says. “Efficient transfers from container terminals to the transloading facility equates to improved product distribution,” says Raul Alfonso, executive vice president and chief commercial officer with Port Tampa Bay in Florida. Strong, collaborative partnerships are key as well. Fisher recommends choosing intermodal partners that offer visibility, on-time performance, cost stability, problem-solving and issue mitigation, and solid communication. Similarly, the best shippers “don’t overcommit to volume as a lever to gain more capacity, they don’t run an auction every time the market contracts by a few points, they don’t have unrealistic expectations, and, most importantly, they communicate,” he says.
That has become even more true over the past few years, as truck capacity has been constrained due to driver and equipment shortages. One train can carry the loads of approximately 280 trucks, according to a Stephens, Inc. report. What’s more, rail is about four times as fuel efficient as trucking, the report notes. MEETING INTERMODAL CHALLENGES Intermodal transportation, like most supply chain operations, has been challenged over the past few years. During the post-pandemic surge, it ran out of capacity, as high demand and lower velocity “vaporized supply,” says Lawrence Gross, president and founder, Gross Transportation Consulting. Once congestion builds, it’s hard to dig out absent a break in volume. This time, volume never tailed off. Transportation workers “got behind and never could catch up,” Gross says. The intermodal “pipeline” is only as strong as its weakest link, Casey notes. The links continue to change, based on a range of factors, including terminal and warehouse capacity, inland congestion, increased equipment dwell and turn times, and the return of empty containers. “Despite ongoing challenges, the system is working, just not as smoothly as it could,” she adds. Shippers can take steps to boost intermodal service. To start, consider the distance the shipment will travel,
Intermodal transportation refers to containerized products that travel via two or more transport modes. Often, shipments start and/or end on a truck or ship, and then shift to rail for the middle portion of the journey. While intermodal is sometimes perceived as more complicated than other types of transportation modes, it’s “as straightforward as any other mode these days,” says David Fisher, executive director with the Transportation & Supply Chain Institute at the University of Denver. “Big shippers have used intermodal since inception. They do so for obvious reasons: reliability, stable cost, and capacity.” Intermodal can be somewhat slower than over-the-road (OTR) shipments, but the variability is typically about one to two days, says Sean Maharaj, managing director in the logistics practice of consulting firm, AArete. The lower cost of intermodal when compared to trucking often more than offsets the longer time, he adds. In addition, shipment damage and/ or theft is rare, Maharaj says. Intermodal shipments pass through frequent checkpoints, providing tracking data. “Overall, intermodal has made strides in improving service through enhancements of facilities, tracks, and technology,” he adds, noting that shippers have started to see it as an indispensable option in the logistics toolbox.
May 2022 • Inbound Logistics 95
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