Inbound Logistics | October 2022

what this modal shift can look like.” For example, if you ship product to a retail chain that imposes penalties for late deliveries, that customer needs to know how a transition to intermodal will alter the distribution schedule. Remember the special needs of rail transport . Freight on the rails endures different stresses than a load on the highway. It’s important to block and brace loads accordingly.

While some shippers seek alternative solutions to help them temporarily in a tough environment, others might ask how to weave rail and intermodal transportation into their longer-term strategies. If so, they should include the railroads in their calculations as they decide where to site factories and/or distribution centers. “For example, say you need x number of facilities in certain locations,” Thompson says. “You might decide to move a facility 45 miles to the west to be close to an intermodal terminal that might provide an opportunity to use that kind of service.” It’s easier to develop a supply chain with intermodal in mind than to try to layer intermodal transportation onto an existing supply chain network. INTERMODAL MARKETING COMPANIES PLAY A ROLE Companies that want to use intermodal strategically would do well to form relationships with intermodal marketing companies. For instance, NFI and other third-party partners manage entire freight moves for shippers, reselling capacity they purchase from railroads and trucking companies. They can help shippers secure capacity for the long term. “Intermodal is not a spot business,” McKendry says. Railroads would rather give capacity to long-term customers than to “fair weather friends,” and they would rather turn freight away than reduce their prices. “If you ship canned foods, as an example, and you have volume, you can protect yourself by working directly through NFI with the railroads, ensuring that you have a certain amount of capacity per week,” he adds. Shippers who want to include rail in their long-term plans can also be encouraged by the operational improvements the railroads are making to make the mode more reliable. “As shippers think about their planning horizons, now is a good time to start utilizing some of these services,” recommends Simendinger. n

Maintain strong communications. Because a rail shipment takes longer and is more complicated than a truck haul, it’s especially important to keep everyone informed about mode shifts. “Identify the stakeholders who will be involved,” suggests McKendry. “Bring challenges to the surface and talk about them. Connect your logistics partners directly with the shippers and receivers, or their customers, so they’re aware of

INTERMODAL PICTURE IMPROVES Total intermodal volumes fell 4.3% year-over-year in the second quarter of 2022, according to the Intermodal Association of North America’s (IANA) Intermodal Quarterly report. Domestic shipments held positive ground at 4% growth, while international containers dropped 8.4% and trailers 25.2%. “Despite this quarter’s losses, it was an improved picture relative to the first quarter,” says Joni Casey, president and CEO of IANA. “Q2 volumes exceeded Q1 by 7.4 %.” The seven highest-density trade corridors, which collectively handled more than 60% of total volume, were all down in Q2. The Midwest-Northwest led the losses with a 20.1% decline, followed by the South Central-Southwest at 14.5%. The Intra-Southeast, Southeast-Southwest and Midwest-Southwest dropped 7.8, 5.5 and 5.3%, respectively. The Northeast-Midwest dipped 3.1%, and the Trans-Canada corridor held losses to 2.2%. Total intermodal marketing company (IMC) volume rose 1.3% year-over-year in Q2, with intermodal traffic down 7.4 %. Highway loads, two-thirds of total IMC volume, were up 6.3%.

42 Inbound Logistics • October 2022

Powered by