What is an IMC and what value do they bring to intermodal service?
Let us start with the Webster definition of an IMC, (an IMC is an acronym for Intermodal Market Company).
IMC's purchase rail and truck transportation services, utilize equipment from multiple sources, and provide other value-added services under a single freight bill to the ultimate shipper. Examples are: ship-rail, rail-truck. You are not alone if the above definition confused you more because there are many shippers confused on the subject topic of an IMC.
From a historical perspective, IMC's were created as a by-product of the railroads' decision, during the development of the intermodal service, that they did not want to sell to the retail shipper market or as some call them, beneficial cargo owners (BCO). Instead, railroads wanted to sell wholesale to companies that would perform the sales and marketing for their intermodal service. Over time, IMC's evolved to provide not only sales, marketing and pricing, but also:
- Secure container and/or dray capacity.
- Provide a layer of customer service support and reporting shippers are accustom to receiving from their other transportation mode purchases.
- Give shippers one call access to the West and East Coast railroads, since there is no one railroad that covers all the North American intermodal ramps.
As we see it, there are a number of different types of intermodal marketing companies: asset, asset light and non-asset. Don't be fooled. Brokers that do not purchase rail service direct from the railroads are not IMC's. (To learn more about the different classes of IMC's read Defining Asset & Non-Asset Intermodal Providers - Advantages of Both.)
Another shift in the IMC market occurred during the mid-2000's, which was revolutionary in nature. During this time, railroads developed their door-to-door intermodal service for IMC's. This change put a new and better twist on IMC's, for those that have taken the new door-to-door model and run with it. Let us explain by defining the old IMC model as an IMC that secures containers and dray capacity; provides a layer between the railroad and shipper that allows for a one stop shop for a shipper to access the entire North American intermodal network; and provides sales, marketing and pricing. As a note and surprise to many, not all IMC's have access to the entire intermodal ramp network. The asset IMC's, in particular, only operate on certain railroads.
To further explain the differences between the old model IMC and the newer door-to-door model, we have separated out the differences found in both in the areas of customer support, capital allocation and areas of focus.
Old IMC Model: Customers typically have a single customer service rep / dispatcher, with nights and weekends covered on a 1-800 number. The dispatcher is responsible for obtaining the equipment, managing the dray segments, handling the interchange at the intermodal ramps and all communications with the customer.
New Door-to-Door Model: Under this model, the IMC is customer service extraordinaire with their entire focus on reporting, communicating and following the shipment from origin to destination. The IMC is a second set of eyes on the shipment and will step in with communication to the railroad if they see a hiccup in transit. The reason the IMC in this model does not have any other responsibility is the door-to-door railroad division is obtaining the equipment; managing the dray work; and handles the interchange at the intermodal ramps.
Just think what that means for service. The railroads leverage the total dray purchase they have with the dray community across all their intermodal volume to get the best price and service and the interchange is managed by the railroads who own the ramps. While the railroads are doing the heavy lifting, the IMC is backing up the railroad work with communication to the customer; looking to ensure the shipment is tracking through the network properly; and supplying all the customized reports the customer desires. This is significantly better in the customer has a team of individuals from two organizations servicing each shipment for them versus the old model where one dispatcher has to do it all on each load.
Allocation of Capital:
Old IMC Model: The IMC has to allocate its capital to enhance all areas of sales, customer service, equipment, ops, finance, technology, etc.
New Door-to-Door Model: Under the door-to-door model, the railroad allocates their dollars on the operations and equipment to improvements the infrastructure and the velocity through it, while the IMC allocates their dollars on the visibility through technology and the customer service through competent and capable people.
Area of Focus:
Old IMC Model: These IMCs are laser focused on street turns and in doing so put the majority of their focus on people to manage equipment, which can take the eye off managing the customer's best interest.
New Door-to-Door Model: The new IMC model leaves the equipment management to the railroads, which then puts IMC resources into the technology and people to best service the customer.
The change brought about by the introduction of the door-to-door IMC model has been and continues to be a huge win for shippers considering intermodal because the concerns over service are being addressed through the new model in such a way that is essentially putting customer service on "intermodal steroids". An aspect of this model for shippers that have been going through IMC's under the older model is you do have the opportunity to communicate directly with the IMC and railroad on occasion for the bigger projects.
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