06/22/2022 by Christine Morris
There are several shipping options available for your freight. Sometimes it can be difficult to determine which mode of transportation will suit your needs best. One mode to consider for your freight is intermodal shipping.
If this mode has been one you’ve been interested in learning more about, we’re here to help. First, we’ll walk you through what intermodal shipping is, when you should consider this mode, its benefits, and how intermodal rates work, so you can be on your way to transporting your freight in a new way!
Intermodal shipping is the use of two or more modes to get the product from shipper to receiver. This could include any combination of ocean, air, rail, or truck transportation. However, in North America, intermodal often refers to the combination of using trucks and rail to move freight in shipping containers.
Another good term to know when talking about intermodal shipping is drayage. Drayage describes the trucking service from an ocean port or rail ramp. Drayage carriers are power only, meaning they only supply the truck or power unit. They pick up and drop off any equipment (the container and chassis) owned by the railroad, an intermodal provider, or ocean freight liners. Most often, drayage carriers will complete multiple loads in a day respective to their region.
Almost anything that can ship via truckload can be shipped intermodal. Here are some qualifiers on whether your shipments make sense to ship intermodal:
· You are looking to reduce shipping costs.
· You want to reduce risk during travel and have less handling of your product.
· You want your company to be more environmentally considerate with your shipping.
· You have long-distance shipments, over 750 miles.
· You have a lot of freight to move and a flexible delivery timeline.
· You have frequent shipments going to the same locations in similar quantities.
If any of the above qualifiers sound like you and your freight shipments, read on to learn about some of the benefits of switching up to intermodal shipping for your transportation.
A single train can move a load size equal to 280 truckloads. Essentially, you have an entire fleet at your disposal. As a result, high-volume shipments meet maximum efficiency when shipping intermodal. This can save you time and money by reducing fuel and labor costs.
Most people wouldn’t imagine intermodal shipping being quick enough. Not too long ago, a coast-to-coast shipment would take about two weeks. Now, it only takes about seven to 10 days, depending on the lane. If your delivery date is more flexible and not immediate, intermodal can make sense for your shipments. Additionally, intermodal sees fewer disruptions, making it more reliable than truckload. Intermodal does not have to worry about traffic patterns, weigh stations, checkpoints, or other issues compared to trucking.
Intermodal is more fuel-efficient than trucking since more products can be moved almost 500 miles on a single gallon of diesel fuel. According to the Environmental Protection Agency (EPA), replacing Over-The-Road shipments exceeding 1,000 miles with intermodal shipping reduces greenhouse gas emissions by 65 percent. Additionally, better fuel efficiency means savings on shipping costs.
When choosing to ship intermodal, shippers have far less exposure to roadway collisions, which means less chance of damage to your product. The risk of damage is also lowered because freight is loaded onto containers and not directly handled when changing between truck and rail. In addition, theft concerns are reduced as railyards are constantly monitored and no one can go in or out without documentation.
Intermodal shipping rates have three basic parts: an origin drayage rate, a rail linehaul, and a destination drayage rate. However, door-to-door rates are typically an all-in rate comprised of those three components.
Drayage carriers offer consistent rates since they start and/or end every load at a consistent location, the intermodal rail ramp. Like truckload, drayage rates are a flat rate plus a fuel surcharge. Drayage carriers often provide a point-to-point pricing matrix including pick-up and delivery rates from every intermodal ramp to dozens of destinations within their region. Unlike truckload spot rates, drayage rates are much less volatile because drayage carriers often update their pricing matrix once a year, unlike the spot market which fluctuates daily.
It’s important to note that when using drayage as a stand-alone service, you see other surcharges such as chassis fees or charges for port congestion or wait time at the rail or port.
There are seven Class I railroads in North America:
Your intermodal marketing company (IMC) will get pricing matrixes from these railroads, which include rates from their intermodal ramps to other ramps. Rail rates are a flat fee plus a fuel surcharge.
Important to note: Shippers cannot access intermodal rates directly from the railroads. You MUST work with an intermodal marketing company or third-party logistics company (3PL), like Trinity.
Because intermodal shipping depends on efficiency, accessorials are much more common than shipping truckload. Since intermodal shipping is very predictable and competitive, intermodal providers present shippers with the most efficient pricing, expecting to be compensated for any accessorials should they occur.
Because of this, ensure you understand your provider’s accessorial policy and find out how those fees are factored into their rates. Even still, there’s no need to fear intermodal shipping because of the accessorial fees. In the long-term, intermodal shipping, even with accessorials, makes the overall cost savings of the mode worth it.
If you’re seeking to increase efficiencies in your supply chain logistics and transportation, intermodal is one mode to highly consider. The idea of using intermodal shipping over truckload can be intimidating, but choosing an experienced and knowledgeable provider, such as Trinity Logistics, can make the change an easy one.
Connect with us by requesting a quote on your freight and start integrating intermodal shipping into your logistics strategy today.
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