I ntermodal shipping can be an afterthought for some shippers, an option that they do not even consider when weighing their supply chain needs and challenges. In fact, sometimes shippers are completely in the dark about intermodal’s unique bene ts.
The more freight volume a shipper sends to an intermodal provider, the better its price will be. “When you think of where truckload rates are right now, intermodal is probably going to be a better option from a competitive price standpoint,” says Drew Herpich, chief commercial of cer for Transportation Insight Holding Company, a logistics solutions provider based in North Carolina. LEVERAGINGDRIVERRESOURCES Cost savings typically have been a key driver for shippers shifting to intermodal. But in today’s environment, capacity represents the greatest advantage to putting long haul freight onto an intermodal service. “Not only do intermodal shippers add capacity for clients, but they also enable them to get more ef cient use of existing driver resources by freeing them up from the long haul, which can take up to one week until they can return to help with another shipment,” Slawter says.
However, incorporating intermodal yields many success stories and rarely inspires regret. “We never have customers say they would rather send a truck across the country,” says Barbara Slawter, president, Odyssey Intermodal Bulk Chemical, part of Connecticut-based Odyssey Logistics & Technology Corporation. “We have had plenty of shippers over the years who never heard of intermodal before but now they look at pricing and consider intermodal for moves over 1,000 miles to see if it is a t.” Supply chain disruptions centering on the intermodal market have grabbed headlines during the pandemic. Demand surges for imported goods led to high-pro le delays at key high-traf c ports. Farther down the intermodal-based supply chain, congestion challenges arose from constraints on equipment, on space at rail terminals and intermodal warehouses, and on labor. Still, experts say that intermodal continues to be an effective solution for shippers with long lead times and long hauls. Intermodal volumes saw robust growth for four straight quarters, before a 2.9% year-over-year decline in the third quarter of 2021, according to the Intermodal Association of North America ( see chart ). “Organizations that can be exible and agile will nd opportunities within the existing infrastructure,” Slawter says. CAPACITY IS THENAMEOF THE GAME Intermodal is a vital tool to meeting the challenges of the moment. “In the current state of supply chain disruption, utilizing available capacity is the name of the game,” notes Steven Leonard, chief sales and customer engagement of cer for ArcBest, an Arkansas-based freight and logistics solutions provider. “Intermodal is a great way to get freight
where it needs to be—it’s typically more cost effective, requires less cargo handling and produces fewer greenhouse gas emissions than over-the- road transportation.” No matter the economic landscape, intermodal allows for the consolidation of large volumes, leading to lower shipment costs. The pandemic and constrained trucking capacity have helped accentuate the bene ts of intermodal for shippers. In particular, limited truck capacity has driven up spot market truck rates, says Jeff Trombly, Ph.D., clinical assistant professor of supply chain management at the University of Tennessee, increasing intermodal shipping’s cost bene ts over long trips. If the cost savings are there, just about any company can bene t from exploring intermodal, he adds.
INTERMODAL VOLUME COMPARISONS THIRD QUARTER 2021
-2.9%
5,000,000
4,000,000
3,000,000
-6.5%
0.9%
-5.7%
2,000,000
-11.2%
1,000,000
0
Domestic Containers
All Domestic Equipment
ISO Containers
Total
Trailers
2020
2021
Total intermodal volumes fell 2.9% year-over-year in the third quarter of 2021. International containers gained a slight 0.9% from 2020; domestic shipments, on the other hand, lost 5.7%; and trailers, 11.2%. Total IMC volume rose 10.6% year-over-year in Q3, with intermodal down 4.7% and highway loads up 20.8%.
Source: Intermodal Association of North America’s Intermodal Quarterly report
162 Inbound Logistics • January 2022
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