Best Domestic Intermodal Providers
Who is the "best" intermodal service provider is a question frequently asked by shippers.
The question does not have a cut and dry answer because the long and short of it is any given intermodal marketing company (IMC) is the best, when they play to their strengths and those strengths play to the requirements of the shipper.
With everyone's schedules booked and their to-do lists extending by the hour the tendency is to look for a quick answer, so the next question shippers ask is who is the biggest intermodal provider. This question assumes the biggest means everyone else is using them, which must mean they are the best. The logic of whoever is bigger is the best falls under the question Parents have been asking their children since bridges were invented … “If your friends jump off the bridge, does that mean you will too?” At the risk of belaboring the point of bigger equates being the best, another example comes from comparing Major League Team Baseball payrolls to the number of World Series Championships won. In this example, The New York Yankees would win hands down every year and MLB teams should stop wasting their time playing through the grueling162 game schedule and the sport channels should stop following the 2,430 games played over the entire season.
So, back to the question of who is the best intermodal provider. Since the answer is unique to a shipper, let’s walk through some questions and answers of how shippers can successfully find the “best” intermodal provider, which the industry calls intermodal marketing companies (IMC).
What is an IMC?
When the railroad industry first began offering intermodal transportation services they quickly realized they needed significantly more resources to sell intermodal service “retail” versus their carload business. At the same time, shippers wanted a one-stop call for all their intermodal service needs, which is not possible with no one railroad covering the entire North American network.
With those two dynamics in play, IMCs (Intermodal Marketing Companies) started popping up around the country, providing marketing and sales for the railroads. Over time, the IMC model evolved to where it not only provides sales, pricing, and marketing, but also secured container and draymen capacity. The other key ingredient IMC’s brought was customized service and reports needed for today’s sophisticated shipper.
Are there different kinds of IMC’s?
Most people break IMC’s into being either asset and non-asset, but I like to take it a step further and define IMC’s as: asset truckload intermodal carriers, asset IMC's, non-asset IMC's, rail retailers and brokers. Each has its strengths in the niche they carved out for customers.
Asset Truckload Intermodal service providers would include the likes of JB Hunt. JBH is clearly the dominant player in this market. They own containers and do the majority of their own dray work. The limitation of providers in this category is they ride on one West Coast Railroad and one East Coast Railroad. This limits the intermodal ramps these providers can offer solutions, but when the box capacity is in their "sweet spot lanes", they can offer high volume solutions at very competitive prices.
This group tends to be volume focused, so they can turn their containers in the high volume lanes.
Examples of Asset IMC’s are Hub and Pacer. They own containers and some of their own dray equipment, but they also dip into the railroads’ container pools and outsource a portion of their dray to complement their internal capacity to offer a wide range of solutions.
Non-Asset IMC’s would include companies like InTek Freight and Logistics and CH Robinson. CHR has some containers, but so minimal that it does not play into their volumes enough to put them in the Asset IMC classification. Non-asset IMC’s work directly with the railroads’ container pools for the majority of their capacity,but also tap into the asset truckload intermodal segment and asset IMC’s for additional capacity options. If a shipper is looking for a one-stop shop for their intermodal needs, the Non-asset of Asset IMC’s provide all the market options with the most control. The Asset and Non-Asset IMC also dip into the ISO re-positioning market for 40 foot capacity.
There are two remaining railroads that sell direct to shippers: CN and CP.
The last group of intermodal providers are truckload brokers. These providers work with all the above IMC segments for their clients. This group tends to be spot cost and capacity oriented, not necessarily a long term solution provider for clients seeking a long-term intermodal strategy.
For more on the topic of the various types of intermodal IMC's we recommend reading Defining Asset & Non-Asset Intermodal Providers - Advantages of Both.
What Differentiates an IMC?
With only nine North American Class I railroads, every IMC is riding on the same trains, so SERVICE IS the differentiating factor. The areas to look at on the service side includes: the personal interaction; control of dray activities; and the software platform for the execution of the loads and the delivery of information back to its clients.
What is the IMC’s Customer Base?
Does the IMC like to work with the large, high volume shippers or is their service more boutique oriented for small to medium size shippers. Both have their place in the market, but both do not fit the needs of shippers.
In many cases, high volume, also means the intermodal provider is looking to service certain markets to maximize their box turns, while ignoring other intermodal lanes.
What about Price?
Price gets an IMC in the door, but service is what keeps the shipper – IMC relationship alive. Our recommendation about price is to leave it on the bottom of your decision tree to not cloud the “best” long-term IMC service partnership decision.
For more on intermodal, follow us on our weekly intermodal blog.
If new to intermodal, we would recommend downloading “The Ins & Outs of Intermodal – eBook”. This eBook contains 60 pages of must know content to successfully implement an intermodal strategy.
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