How to Choose the Best Intermodal Transportation Provider


How to Choose the Best Intermodal Transportation Provider

This is a question that many customers ponder on a daily and weekly basis. If you are a shipper or manufacturer utilizing intermodal (rail shipments) as a means of moving your freight, no doubt you already have a list of items that you consider when selecting the best intermodal logistics provider. Humor me and please keep reading anyway, I may possibly add one or two items that you haven’t considered in the past.

What’s an IMC?
First, let’s discuss what an “IMC” (Intermodal Marketing Company) is today versus what they were in years past. Many years ago when intermodal movements were just beginning on the railroads, the rail carriers quickly realized that it was very difficult for them to “retail” their service directly to potential customers. The railroads were accustomed to dealing with a shipping public with locations on their property with rail tracks running direct into their facilities! These were customers that moved grain, paper, lumber, steel, and automobiles as a few examples of the commodities that worked well for the rails.  There was untapped opportunity for new shippers and manufacturers to move their freight by train, but they didn’t have to be located close to the railroad. In fact, many rail customers are several miles from the nearest railroad tracks.

IMCs (Intermodal Marketing Companies) started popping up around the country, providing marketing and sales for the railroads. Railroads readily accepted the IMCs’ help for marketing and selling their intermodal service! Originally the functions and responsibilities of an Intermodal Marketing Company were very limited. Over time those responsibilities have changed greatly to the point they not only provide sales, pricing, and marketing, but are also responsible in many cases for securing the container to move the load as well as the draymen to pick up the load at origin and destination. The Intermodal Marketing Company also provides one other key function today they didn’t provide in years past, and that is customer service.

The #1 Differentiator
Customer service is one function that truly differentiates one Intermodal Marketing Company from another.  Some intermodal marketing companies have nearly eliminated the customer service function, relying heavily on cheap pricing to secure freight for shipping intermodal. I strongly recommend you consider customer service as a required function whether you’re renewing intermodal contracts, doing spot quotes, or just starting to move your freight by train. Let me paint a picture for you. There are only a few “Class I” railroads left in the United States and Canada, in fact only two Class 1 railroads in the West, only two in the East, and one in the Midwest. This means all of your intermodal freight will move on one of these five railroads and you’ll likely experience either good service the rail carriers provide, or you’ll suffer from issues the railroads are having. These include wash outs, derailments, hurricanes, mudslides, etc.

The element that separates the best Intermodal Marketing Company from the “less than best” Intermodal Marketing Company is how well they communicate the issues with you, the customer, and how that may affect your movement on a train. Many IMCs simply provide an online tracing tool, leaving it up to the customer to find out if any delays are going impact their shipment. Other IMCs will have automated faxes or emails broadcast to the shippers with very generic information about the issues. The “best” IMCs will create the type of communication you value. They will offer the online tracking combined with a personal touch and contact when you prefer it, letting you know about the issues that might affect your pick-up or delivery, and also offering alternatives when solutions are needed. They keep your freight and your best interests at the forefront of every conversation and interaction.

Asset Based or Non-Asset Based
Another consideration when selecting an IMC is to weigh the importance of being an intermodal asset owner or a non-asset owner? While this is an item that certainly differentiates the IMC’s, this element should not be one of your main deciding factors on which IMC you select. There are several excellent IMCs that move a lot of volume on trains do not possess intermodal equipment. Being an asset based Intermodal Marketing Company will provide only a small amount of leverage on pricing. I have heard many asset based carriers make the sales pitch that their company is better than company “XYZ” because they own assets, thus they have the ability to guarantee equipment for all shipments. The downside is the asset based IMC is more concerned about “turn times” or “trips per month” on their assets than they are about providing good customer service to you. The IMC without assets in most cases has access to just as many intermodal containers (in some cases even more), but if solely focused on your needs and serving the best interest of your shipment rather than their equipment.  This is certainly an item that differentiates IMCs, but I feel it should be weighted very lightly when choosing the “best” intermodal marketing company for your needs.

All Aboard the Green Train
Issues are affecting our environment, the fact is not surprising anyone reading this blog. Chances are your company has even launched a “go green” initiative, whether it’s recycling office paper or joining the EPA’s Smartway Partnership. Moving your freight by train will result in a tremendous reduction in the carbon emissions into our atmosphere. When you are looking for the best intermodal provider, this is an item you should certainly consider. Are they a member of Smartway, do they have active programs in place to help the environment today and tomorrow?

Where Do You Rank?
Another element that certainly tells the story about an IMC is their current client base. Who do they currently do business with? Several IMCs tout that 80-85% of their volume and revenue comes from 10% of their customers. What this tells me is how much they like doing business with very large companies. Other IMCs prefer to do business with small to medium sized customers so their distribution of volume and revenues are spread over a much larger customer database. Typically the IMC catering to smaller clients has a natural knack for making the smallest customer feel just as important as their largest customer. Which type would you prefer to deal with? Who would you think values your business more?

Continuous Improvement
The final deciding factor on how to select your best intermodal marketing company involves the dreaded word “change”. There are many IMCs that are happy with the way things are now, while others are continually looking for ways to embrace change, either in processes or technologies. They’re doing this in order to improve how they are doing things for the betterment of the customers (for you)! I will certainly concede that change for the sake of change isn’t good, but change for improving service to the customer is something that differentiates a complacent intermodal provider from one striving to be the best.

It is my sincere hope that the list of items above will stimulate some thoughts for you the next time you need to move an intermodal shipment. No doubt you have noticed that I didn’t include much in my blog about price. Trust me, leave it on the bottom of your decision criteria and you will be able to select the best intermodal provider for your business needs without concentrating on price.

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