In the race to create more sustainable supply chains, businesses are exploring various options to reduce their carbon footprints. Two prominent solutions are intermodal shipping and the electrification of trucks. While both methods offer significant environmental benefits, they come with their own sets of advantages and challenges.
In this article, we'll dive into the details of intermodal shipping and electric trucks, weighing the pros and cons of each, and providing you with valuable numerical data to illustrate their impact on greenhouse gases.
By the end, you'll have a clear understanding of how these solutions can impact your business and sustainability goals.
A freight decarbonization study
What started me down the path of this particular article is a recent study conducted by Supply Chain Ecology entitled Decarbonization of Long Haul Freight. It really got me thinking about intermodal and all the discussions about the electric truck. The study estimated that a 20% increase in intermodal share of long-haul freight would reduce total truck fuel use by 6% and generate additional societal benefits such as safety, congestion relief, highway maintenance savings and labor shortage alleviation.
As an aside - and something our regular readers know - we specialize in intermodal transportation and logistics solutions for customers across North America, with more than 95% of our business in this area. So, it should come as no surprise that we are passionate about the topic of helping shippers convert truckload to intermodal or augment truckload freight lanes with intermodal transportation solutions to lower freight costs, enhance freight service capacity, and improve a company’s supply chain sustainability goals.
Back to the study, which also highlighted the role of intermodal rail in the U.S. decarbonization plan and the need for public funding, policy support and stakeholder collaboration to achieve the vision of intermodal growth. The study provided a blueprint for action to increase intermodal market share and reduce transportation emissions in the U.S.
I know I may be about to lose you on the comments that intermodal needs public funding and policy support, but please hold on before clicking off this article. It would be helpful to have policy support and funding, but it’s not required. Shippers recognize that fact daily by converting current truckload freight lanes to intermodal where it makes sense.
With this being an article on intermodal versus electric trucking, shippers should recognize electric trucks are not a mainstay and do require public funding and policy to get off the ground in a meaningful way, but I’m getting ahead of myself.
Understanding intermodal shipping
What is intermodal shipping?
Intermodal shipping involves transporting goods using multiple modes of transport, usually trucks and trains. The goods are moved in containers that can be easily transferred between these modes without need for handling the contents. This method optimizes the supply chain, making it more efficient and environmentally friendly.
Benefits of intermodal shipping
- Reduced carbon emissions: Trains are significantly more fuel-efficient than trucks. According to the Association of American Railroads, trains can move one ton of freight over 470 miles on a single gallon of fuel. This efficiency translates to lower carbon emissions per ton-mile compared to trucking. To put it in perspective, rail transport produces approximately 75% fewer greenhouse gas emissions than trucking over long distances.
- Cost efficiency: Rail transport is typically less expensive over long distances due to lower fuel costs and the ability to move large volumes of freight. This cost savings can be particularly beneficial for companies shipping goods across vast distances.
- Reliability: Rail transport is less susceptible to traffic congestion and road conditions, making it more predictable and reliable for long-haul shipments. This reliability can help businesses maintain consistent delivery schedules and improve overall supply chain efficiency.
- Sustainability goals: Adopting intermodal shipping aligns with corporate sustainability goals. It demonstrates a commitment to reducing environmental impact and can enhance a company’s reputation among eco-conscious consumers and investors.
Current usage of intermodal shipping
Intermodal shipping is a significant component of the 53' over-the-road trucking market in the United States. Let's break down the usage statistics based on the mileage of the shipping lanes:
- 0-500 Miles: Intermodal shipping is less commonly used for short-haul routes. This range is primarily dominated by traditional trucking due to the flexibility and speed of point-to-point delivery. However, intermodal can still be utilized for regional movements, particularly when it's an alternative to congested urban areas.
- 501-1000 Miles: For medium-haul routes, intermodal shipping becomes more competitive. Rail transport can cover significant portions of these distances efficiently, reducing the need for long truck hauls. This range sees a moderate uptake in intermodal usage, with companies balancing the cost savings and reliability of rail against the flexibility of trucking.
- 1001-1500 Miles: Over long-haul routes, intermodal shipping shines. Rail networks can efficiently transport goods across these distances with substantial fuel savings and reduced emissions. Intermodal is extensively used in this range, offering a cost-effective and sustainable alternative to trucking.
- 1501+ Miles: For very long-haul routes, intermodal shipping is highly advantageous. Rail transport can handle the bulk of the journey, significantly cutting down on emissions and costs. This range sees the highest adoption of intermodal shipping, as the benefits over long distances become increasingly pronounced.
Potential growth of intermodal shipping
Industry analysts and insiders believe that the intermodal market has significant growth potential. Currently, intermodal shipping accounts for a substantial portion of freight transport, but there is room for expansion. Experts suggest that with optimized usage and better integration into supply chains, the market size for intermodal shipping could potentially double.
According to the Intermodal Association of North America (IANA), intermodal currently handles about 25% of U.S. long-haul freight. If businesses fully leverage the benefits of intermodal, this share could increase to 50%, representing a massive growth opportunity.
This expansion would not only enhance sustainability but also improve cost efficiency and reliability across the logistics industry.
Electrification of trucks
What is electric trucking?
Electric trucking involves using battery-powered electric vehicles (EVs) for transporting goods. These trucks produce zero tailpipe emissions, making them an attractive option for reducing greenhouse gases and other pollutants associated with diesel-powered trucks - of which there are many.
Benefits of electric trucking
- Zero tailpipe emissions: Electric trucks produce no tailpipe emissions, which means they don't emit CO2 or other harmful pollutants. This can significantly reduce the environmental impact of freight transport. According to the U.S. Environmental Protection Agency (EPA), medium- and heavy-duty trucks account for approximately 24% of greenhouse gas emissions from transportation. Switching to electric trucks could drastically reduce these emissions.
- Lower operating costs: Although electric trucks have higher upfront costs, they can offer lower operating costs over time. Electric vehicles require less maintenance than diesel trucks, and electricity is generally cheaper than diesel fuel.
- Quiet operation: Electric trucks are quieter than their diesel counterparts. This can be beneficial for urban deliveries where noise pollution is a concern.
- Energy efficiency: Electric motors are more efficient than internal combustion engines. This efficiency translates to less energy use per mile traveled, contributing to overall sustainability goals.
- Efficiency gains: Electric trucks can achieve 63% lower emissions compared to diesel trucks, especially when charged using renewable energy.
Technology and infrastructure needs
Significant investments in charging infrastructure and advancements in battery technology are essential to support widespread adoption. The development of fast-charging networks along major highways and the improvement of battery range are critical to making electric trucks a viable option for long-haul freight.
Policy support
Implementing supportive policies and incentives can accelerate the transition to electric freight vehicles. Governments can play a crucial role in promoting electric trucking by providing subsidies, tax incentives and funding for infrastructure development. These measures can help reduce the financial barriers and encourage more companies to adopt electric trucks.
Comparing intermodal shipping and electric trucking
Environmental impact
- Intermodal shipping: As mentioned earlier, trains are highly fuel-efficient and can significantly reduce carbon emissions for long-haul freight. However, the initial leg of the journey (typically by truck) and the final delivery (also by truck) still involve emissions.
- Electric trucking: Electric trucks eliminate tailpipe emissions entirely, making them a cleaner option for the environment. However, the overall environmental impact depends on how the electricity used to charge the trucks is generated. If the electricity comes from renewable sources, the carbon footprint is minimal. If it comes from fossil fuels, the benefits are reduced. Trucks currently account for roughly 15% of global CO2 emissions, despite representing a fraction of vehicles on the road.
Cost considerations
- Intermodal shipping: Generally more cost-effective for long-distance transport due to lower fuel costs and the ability to move large volumes of freight. The infrastructure for intermodal transport is well-established, with rail networks connecting major cities and ports.
- Electric trucking: Higher upfront costs due to the price of electric trucks and the need for charging infrastructure. However, lower operating costs can offset these initial expenses over time. Incentives and subsidies for electric vehicles can also help reduce the financial burden. The question is will shippers be asked at the onset of electric trucking to pay more to cover the cost or will there be an incentive program in place to encourage the change when available.
Reliability and flexibility
- Intermodal shipping: Highly reliable for long-haul transport due to the predictability of rail schedules. However, it may lack flexibility for last-mile delivery, requiring coordination between different modes of transport.
- Electric trucking: Offers greater flexibility for short-haul and last-mile deliveries. Electric trucks can operate in areas where rail transport is not feasible, providing a versatile solution for diverse shipping needs. The fact holds true for diesel trucks also.
Challenges and barriers
- Intermodal shipping: Requires coordination between different transportation modes, but is easily overcome when working with one of the top intermodal providers. The initial and final legs of the journey still rely on trucks, which may not be electric. Infrastructure limitations, such as the availability of rail connections in certain cities, can pose a challenge.
- Electric trucking: Faces challenges related to battery range and charging infrastructure. While advancements are being made, current battery technology limits the range of electric trucks, making them less suitable for very long-haul routes. The availability of charging stations, especially along major highways, is still developing.
Additionally, the weight of the battery packs in electric trucks reduces their payload capacity. Despite allowance for an additional 2,000 pounds in the U.S. for heavier electric trucks, the additional weight of batteries means electric trucks may carry less freight compared to their diesel counterparts which are allowed to carry 80,000 pounds.
Timing and future prospects
Intermodal shipping: a solution for today
Intermodal shipping is a mature and widely available solution that can be implemented immediately to reduce carbon emissions and improve supply chain efficiency. The infrastructure for intermodal transport, including rail networks and container handling facilities, is well-established, allowing businesses to quickly integrate this method into their logistics strategies. Additionally, the nearer term adoption of electric trucks for shorter dray purposes is already happening, while long-haul electric trucking has a far longer runway.
Electric trucking: the road ahead
While electric trucking holds great promise, it is still in the early stages of widespread adoption. Several factors are holding back the mass deployment of electric trucks:
- Battery technology: Current battery technology limits the range of electric trucks, making them less suitable for very long-haul routes. Research and development are ongoing to improve battery capacity and reduce charging times.
- Charging infrastructure: The availability of charging stations, especially along major highways, is still developing. Building a comprehensive network of fast-charging stations is essential for the widespread adoption of electric trucks.
- Cost: The high upfront cost of electric trucks and the necessary charging infrastructure can be a barrier for many companies. However, government incentives and subsidies are helping to offset these costs.
- Weight: Electric trucks are heavier, thus reducing the amount of payload capacity. This is not an issue for all freight, but does come into the picture for a great number of shippers.
- Production and availability: Scaling up production of electric trucks to meet demand is a significant challenge. Manufacturers are working to increase production capacity, but it will take time to reach the levels needed for mass adoption.
Industry experts predict that it will take another 5-10 years for electric trucks to become mainstream in the freight industry.
In the meantime, businesses can start transitioning to electric trucks for shorter routes and urban deliveries, while continuing to rely on intermodal shipping for long-haul transport.
Practical applications and real-world examples
Retail giants and intermodal shipping
Large retailers like Walmart and Target use intermodal shipping to move goods from distribution centers to stores across the country. By combining truck and rail transport, these companies can lower their shipping costs and reduce their environmental impact while ensuring timely deliveries.
Electric trucking in urban areas
Electric trucks are becoming increasingly popular for urban deliveries. Companies like Amazon and UPS are investing in electric vehicles for their delivery fleets. These trucks are ideal for city deliveries due to their zero emissions and quiet operation, making them suitable for densely populated areas.
Small business perspective
A small furniture manufacturer in North Carolina can benefit from both intermodal shipping and electric trucking. For long-distance shipments to the West Coast, intermodal transport can save on costs and reduce emissions. For local deliveries within the state, electric trucks can provide a clean and efficient solution.
The takeaway
Hopefully we’ve been able to provide more understanding of the environmental benefits, costs and challenges of both intermodal shipping and electric trucking.
Both solutions offer significant advantages, but they also come with their own sets of considerations.
Key points to remember:
- Environmental impact: Intermodal shipping and electric trucking both offer ways to reduce carbon emissions, but the overall impact depends on factors like the energy source for electric trucks and the efficiency of rail transport.
- Cost efficiency: Intermodal shipping is generally more cost-effective for long-haul routes, while electric trucking offers lower operating costs over time that may be able to be passed to shippers as the technology becomes more widely available.
- Reliability and flexibility: Intermodal shipping is reliable for long-haul transport but less flexible for last-mile delivery. Electric trucking offers greater flexibility but faces challenges related to range and charging infrastructure.
- Practicality: Both solutions are practical for businesses of all sizes, from large retailers to small manufacturers. The choice between intermodal shipping and electric trucking depends on the specific needs and priorities of the business.
- Timing: Intermodal shipping can be implemented today, providing immediate environmental benefits. Electric trucking for long-haul is still developing and may take 5-10 years to become mainstream.
- Growth potential: Intermodal shipping currently handles about 25% of U.S. long-haul freight, but with optimized usage, this share could potentially double, offering significant benefits for sustainability and cost-efficiency. Long-haul electric trucking is expected to grow substantially, but it can't do so overnight.
Embrace intermodal shipping and electric trucking as part of a comprehensive strategy to achieve your sustainability goals. By leveraging the strengths of both solutions, your business can reduce its environmental impact, lower costs, and improve overall efficiency.
At InTek Freight & Logistics, Inc., we understand the complexities and opportunities of modern logistics. Our goal is to help you navigate these options to create a more sustainable and efficient supply chain. Whether you choose intermodal shipping, electric trucking, or a combination of both, we are here to support you every step of the way.
By understanding and leveraging the benefits of intermodal shipping and electric trucking, your business can not only achieve its sustainability goals but also gain a competitive edge in the market. So, why wait? Request a quote with us today to take the first steps to a positive impact on both your business and the environment.
