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intermodal transportation

The Cost-Saving Benefits of Intermodal Transportation and How Shippers Can Maximize Its Value

Nathan McGuire
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April 22, 2022
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The Cost-Saving Benefits of Intermodal Transportation and How Shippers Can Maximize Its Value
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In the early days of the United States, crossing the country involved horse hooves instead of horsepower. The creation of railroads soon followed to create an easier access point to purchase anything from plant seeds to catalog homes. Despite making a substantial impact on the supply chain through the years, railroads often are not top consideration for moving freight. As a result, many shippers miss out on the significant benefits of combining three primary transport methods: air, ground, and rail. Shippers need to understand the cost-saving benefits of modern intermodal transportation and its application to their operations.

Intermodal Transport Costs Less Than OTR 

Domestic freight transport today is dominated by over-the-road (OTR) transport. However, according to the Association of American Railroads (AAR), “On average, railroads are three to four times more fuel efficient than trucks.” By combining the drastic difference in fuel costs with splitting the shared costs of transport with the other freight owners on any given route, shippers can get their freight further distances for less than traditional truckload services cost. 

It’s More Sustainable

On April 4, 2022, the Energy Information Agency (EIA) reported that the average on-highway diesel cost per gallon is $5.144, $2.00 more than one year prior. The AAR shared that “U.S. freight railroads, on average, move one ton of freight more than 480 miles per gallon of fuel.” With traditional semi-trucks getting fuel mileage as poor as single digits per gallon, working with intermodal transportation companies can significantly reduce a company’s carbon footprint and be a viable source of supply chain optimization

It Carries More Security and Reliability

When the great American railroad began, businesses commonly did not receive their products for months due to limited technology and extended timelines. Today, one of the most significant benefits of intermodal transportation is the reliability of the rail schedule to depart and arrive on time. Additionally, because rail travels nonstop to its destination, there are fewer opportunities for products to be damaged or stolen. Partnering with intermodal transportation companies also provides steady capacity streams if shippers need to engage in reverse logistics

It Lowers Highway Congestion

With the rise of e-commerce and heightened consumer expectations for expedited shipping, highway congestion has expanded beyond traditional city limits. The corridors between major cities now fill with traffic, adding to pollution and providing more opportunities for freight delays. Shippers who maximize intermodal transportation can swap their truckload needs to drayage instead of OTR, cutting the costs and pollution accrued sitting in traffic.

It Isn’t (Partially) Affected by Driver Shortages

Although the supply chain talent shortage is not exclusively for truck drivers, many shippers have worked around the current industry limitations with intermodal transportation companies. By contracting with air and rail companies for long-distance transport, shipping companies only need to pursue drayage truck capacity. This approach benefits shippers amidst today’s industry outlook because drayage drivers are often easier to find due to their more traditional work schedule that allows for more home time.

It Has a Massive 53’ Capacity Available

As shipping companies deal with the freight market volatility, more are looking for efficient solutions that can move the most freight at one time. Intermodal transport solves this dilemma by offering a capacity of 53 feet long instead of the standard 20 or 40 feet options. The packing department feels this additional cost-saving opportunity since the commodities that could fit in two or three separate containers can combine into a larger container set for intermodal transportation. Plus, that capacity can more easily cross borders as it’s pre-inspected at loading time and isn’t subject to delays at checkpoints or points of entry or edit to the destination country. 

How Can Shippers Maximize the Value of Intermodal?

Despite the benefits of utilizing rail for shipping, intermodal transportation is not for every load. Shipping professionals can maximize the value of this transport method by ensuring they: 

  1. Know which shipments can endure the longer-transit times of rail.
  2. Assess the profitability of using intermodal versus OTR shipping.
  3. Get the data to understand the demands and risks of OTR shipping. 
  4. Use intermodal on the right long-haul moves.
  5. Let a broker handle the decision-making process for you.

Increase Access to and Use of Intermodal Transportation With Wicker Park Logistics

As more shipping companies consider the cost-saving benefits of intermodal transportation, it’s crucial that they also contemplate the benefits of partnering with a company that can guide them through finding the right carrier partnerships. Through their expertise in drayage and intermodal transport, Wicker Park Logistics can walk alongside you toward faster and more efficient shipping without sacrificing the personal element of a business relationship. To speak to an expert about what shipments you could be moving intermodal, contact Wicker Park Logistics today. 

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