Posted On July 18, 2022

It’s the unsung hero of the global supply chain: intermodal shipping.

Intermodal transport, also called intermodal shipping or just intermodal, is any shipping that involves multiple modes of transit.

In international intermodal shipping, 20- or 40-foot shipping containers move via ocean, rail and/or long-haul trucking, while domestic intermodal shipping primarily involves cargo in 53-foot intermodal containers being moved via rail and drayage carriers. However, “domestic” is somewhat of a misnomer, as intermodal transportation in North America can cross borders into Canada and Mexico.

Drayage plays an important role in intermodal. Essentially, drayage is the transfer of freight between modes of transportation. Essentially, drayage is a facet of intermodal transportation and involves the transport of cargo typically over a short distance, bringing freight to and from both rail facilities and ports.

Intermodal freight is often mistakenly confused with rail freight. In rail freight, cargo is picked up from its origin (a warehouse or manufacturing plant) via short line and uses only rail to make it to its destination. An intermodal shipment would involve that same cargo being picked up and transported via drayage truck to a railyard, where it’s loaded via rail ramp onto a train. The key difference is that rail freight only uses one mode (rail)

Here are some common examples of intermodal shipping:

• A 20-foot cargo container arrives by ocean vessel at the Port of Los Angeles. The shipping container is moved via drayage truck to a nearby warehouse where the cargo is unloaded and packed onto a 53-foot intermodal container. From there, it is picked up via drayage carrier and taken to a nearby rail facility where an intermodal train takes it to its final destination, a warehouse in Chicago. Once it’s unloaded, the empty intermodal container is returned to the rail—or wherever else it’s needed.
• A truck picks up a full truckload of cargo from a small manufacturer in Provo, Utah. It transports the freight to a rail yard in Salt Lake City, where the intermodal container is then loaded onto a rail car and transported to Columbus, Ohio.
• A 40-foot container arrives by ocean vessel at the port of Elizabeth, New Jersey. IT is brought to the nearest rail facility and sent to Memphis, Tennessee, where a drayage carrier delivers as consigned. Once it’s unloaded, the owner of the empty container (most likely the steam line) is responsible for transporting the container back to the coast, or wherever it’s needed.

It might sound overly complicated, but there’s a reason intermodal shipping transported 14.1 million units in 2021 alone.

Keep reading to find out why.

Benefits and challenges of intermodal transportation

The biggest reason many shippers choose intermodal transport? The price. Shipping freight by rail is cost effective—typically 10-15% less than trucking. It might not sound like much, but for a company budgeting tens or hundreds of thousands of dollars a year for transportation spend, a 10% discount equates to incredible savings.

Rail lines also tend to offer more available capacity at less volatile pricing, although this hasn’t always been true during the Covid-19 pandemic.

Companies focusing on lowering their carbon footprint will also find rail intermodal appealing. Moving freight by train instead of truck is more fuel efficient and reduces greenhouse gas emissions by up to 75%, according to the Association of American Railroads. Railroads account for approximately 40% of long-distance freight volume, but only 1.9% of U.S. transport-related greenhouse gas emissions.

However, intermodal shipping isn’t without drawbacks.

Freight transportation by rail often takes longer than trucking, making it less ideal for shipping products that are time-sensitive. And, of course, railroads require railroad tracks to access an area, so freight headed toward a location without rail terminals will need to add in an extra leg of transport via truck for the cargo to reach its destination.

Still, there’s a lot to gain from incorporating intermodal into your supply chain—it just needs to be done strategically.

Tips for using intermodal in your supply chain

Determine the lane.

Not all shipments will benefit from intermodal shipping, so analyzing the lane your shipment will use is the first step.

Transporting containers via intermodal is best for going at least 500 miles from one major market to another. Because drayage is typically the most expensive component of intermodal shipping per mile, the fewer miles an intermodal container needs drayage, the more cost effective it will be.

And while it’s possible to ship temperature-controlled cargo via intermodal transportation, doing so adds an extra layer of complexity as well as more risk, so in many cases, OTR is a better solution.

Consider the season.

As with other transportation modes, intermodal shipping is affected by seasonality. For companies that don’t have ongoing volume agreements with a carrier, finding capacity during peak season (typically between July and November) can be difficult.

Take weight and weight distribution into account.

The equipment used for intermodal transport can change throughout a container’s journey. The axle, chassis and even weight of the driver can influence the weight limits for intermodal containers being transported by truck. The general rule of thumb is to limit intermodal containers to 42,500 pounds. Weight distribution is also important, and rules can vary by state. Your logistics partner can help identify issues and solutions for ensuring weight distribution follows requirements.

Include proper blocking and bracing in intermodal containers.

While intermodal containers have relatively low damage rates (Union Pacific says its intermodal shipments have a 99.8% damage-free rate) they aren’t completely immune. Blocking and bracing plays an important role in preventing damage. Your third-party logistics (3PL) partner or intermodal marketing company (IMC) can evaluate blocking and bracing—and even go on-site to your location to inspect shipments—to make suggestions for improved blocking and bracing. Typical recommendations include air bags (also called void fillers), disposable straps and wooden bulkheads. Claims for damaged shipments without the appropriate materials will be denied by the railroads, so we always recommend strategies to prevent damage instead of gambling on the alternative.

Expect potential delays.

When trucks get stuck behind an accident or get a flat tire, they can usually replace the tire or try to take a different route. Those solutions aren’t as easy on rail, so when delays happen, there’s not much that can be done.

Unfortunately, that’s not all. Rail lines will occasionally annul trains when they don’t have enough shipping containers booked to make the journey profitable. In those cases, the entire trip is cancelled, and shippers are left to find an alternative or wait for the next departure.

If your cargo can withstand a few extra days in transit and doesn’t need to make it to its destination within a narrow window, you can breathe a sigh of relief. But if it’s imperative that the contents of the cargo container reach the destination on time, consider shipping a portion via OTR in case delays happen.

Track shipments.

Visibility into any supply chain is always important—and intermodal is no different, especially because intermodal transportation has potential for delays. Shippers should ensure they have access to tracking the location and estimated arrival of packages.

Tracking and tracing can be done online for domestic intermodal transportation, as most IMCs have access to Class 1 railroad platforms and are a party on waybills for shipments. However, import shipments for which the steamship line handles all bookings are another story. In those cases, the IMC or 3PL company will depend on the steamship company websites for updates, which have varying levels of up-to-date information.

Audit the intermodal invoices.

Similar to other transportation modes, intermodal carriers provide quotes before and bills after. But there’s no guarantee that the quotes and bills will always be identical. Consistent and comprehensive freight audits are the only way to ensure shippers are being charged accurately, so either your internal team or your 3PL should be conducting invoice audits on an ongoing basis.

Common charges to look out for include detention charges for drayage and fuel surcharges. Other less common fees might include a drayage pre-pull charge, chassis repositioning and more.

Partner with a 3PL.

Intermodal transportation has been around for decades—and is likely to stick around for centuries to come. But executing and optimizing intermodal freight requires coordinating with various intermodal providers, maintaining relationships with drayage partners and a good deal of industry expertise. An experienced partner can help you take advantage of all the benefits of intermodal while also navigating the challenges.

If you’re interested in learning more about intermodal transportation or want help improving your intermodal logistics, Flat World’s brokerage team can help. We have decades of experience and partnerships with a wide network of carriers to help you get the most out of intermodal. Contact us to get started.