INTERMODAL ADDSVALUE
City Southern, now CPKC, creates a 20,000-mile network connecting Canada, Mexico, and the United States, the company said in its pres announcement. The merged company should be well positioned to participate in the nascent nearshoring initiatives occurring closer to American markets, Gross says. EFFECTIVE INTERMODAL TRANSPORT Several steps can help shippers ensure smoother intermodal transport. As in all areas of the supply chain, visibility tools can help shippers keep tabs on their cargo. Over the past few years, more intermodal service providers have offered the ability to track shipments, Comerford says. Collaboration is essential, given the complexity of the solutions and the number of entities involved. Intermodal shipments “can run very smoothly with the proper communication and participation from each of the stakeholders,” Austin says. Shippers that haven’t tried intermodal solutions or are looking to return to intermodal solutions will want to give it a try. “The rail network has plenty of capacity, and the railroads are excited for new opportunities to keep the trains moving on consistent schedules,” Austin says.
Factors internal to the intermodal market also have affected its performance. When volumes roared back after the pandemic lockdowns, the intermodal market was able to cope for a time. Then equipment shutdowns and chassis shortages interrupted operations. With fewer chassis on which to place containers, the system slowed. “Intermodal was capacity-limited at a time when demand was surging,” says Larry Gross, president and founder, Gross Transportation Consulting. In the meantime, the over-the- road trucking market was scaling up to meet demand, Gross says. The result? Intermodal lost market share to the truck market. More recently, the challenges have ipped. Among other changes, the domestic container eet has grown by about 12% and equipment velocity has improved, “creating capacity out of thin air,” Gross says. Yet demand is down. The shift bene ts shippers, but isn’t as positive for the intermodal ecosystem. Recent train derailments, like the one in East Palestine, Ohio, have “shined a serious light on the rail industry from both an infrastructure and a regulatory standpoint,” says Michelle Comerford, project director and industry and supply chain practice leader at Biggins Lacy Shapiro & Co., a site selection and incentives advisory rm. TAKING ANOTHER LOOK AT INTERMODAL SOLUTIONS The Association of American Railroads says that more than 99.9% of all hazmat moved by rail reaches its destination without a release caused by a train accident. In addition, the Biden administration has been pushing for greater investment in infrastructure, including in the nation’s rail systems. In June 2022, the administration announced $368 million in grants to improve rail infrastructure and strengthen supply chains. Even for most truckloads traveling 500 miles or more, intermodal’s market share is less than 10%. “It’s small, but it can be
a very useful tool,” Gross says. “It’s time to take another look at intermodal.” For shipments of non-perishable goods that will travel more than 500 miles, intermodal can be a great way to cut transportation costs, Comerford says. This will be key if the economy tightens. Shifting some trips from truck to rail can help organizations reach sustainability goals, Comerford says. The average carbon dioxide emitted per ton-mile of freight in 2019 was .4 for truck and .05 for rail, according to a December 2022 Congressional Budget Of ce report. DEBUNKING MISPERCEPTIONS What’s more, the perception that intermodal is slow and more prone to damage often doesn’t hold true, Austin says, noting that most intermodal lanes are truck plus one or two days. And cargo often is protected more in a rail move than during over-the-road transportation because of the blocking and bracing requirements. Shippers sometimes assume that to use rail services, their shipping location needs to be railsided—that is, next to or connected to the railroad tracks. That’s not the case, Austin says, as the intermodal solution is a truck-like product and picks up at a dock just the same as a truck pickup. The recently completed merger between Canadian Paci c and Kansas
Intermodal transport helps shippers cut transportation costs as well as reach sustainability goals. Additionally, the North American intermodal network has ample capacity for cargo.
86 Inbound Logistics • May 2023
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