Do You Really Know Intermodal? A Look At The Common Misconceptions
What do you think of when you hear the word ‘intermodal’…slow, unreliable, complicated?
There are many forms of intermodal transportation. The type of intermodal we are addressing is where a truck handles both ends of the shipment for a pickup and delivery, with the long-haul being run over the rail. The railroads have made and continue to make substantial investments in infrastructure, technology and people to give intermodal truck-like characteristics, while being cost and transit competitive on lanes over 700 miles. The investments have positioned intermodal as the fastest growing segment in domestic transportation and pushed what many call the highway-to-rail conversion to the next level.
With that said, there are still many shippers holding out on the tremendous value intermodal can bring to their organization because of many misconceptions that still exist in the marketplace. These misconceptions were created years ago and have since been corrected, but continue to live in the folklore of many transportation decision makers’ offices today. The image misconceptions is a contributing factor to shippers leaving an estimated 20 million loads yearly on the road that would be a good fit for intermodal.
Most Common Misconceptions of Intermodal
The first misconception we typically hear is rail equals slow. This is no longer true. We typically see transit equals truck, plus a day. There are some lanes with expedited service that have the same transit as truck. Transits do stretch when the shipment needs to be interlined between railroads. For example, the shipment is a cross country shipment that originates on the Union Pacific, then interlined to Norfolk Southern. In this case, you can expect a longer transit, but not the norm as many believe.
The belief that rail carriers are unreliable; aren’t able to follow through on their commitments; and drop the ball on making their deadlines is still the image for some. Today, rail is frequently used for big box retail shipments. This wouldn’t be possible if it weren’t for the reliability of service levels. Could you image the fines placed upon a shipper? In any case, reliability was a problem not so long ago, but with the investments made in infrastructure, technology and people the railroads have positioned themselves to gain the trust of the shippers.
Our experience has been that intermodal is more reliable than trucking the freight with our customers.
To speak more on the reliability, the largest truckload carriers now own 39% of intermodal boxes. These asset carriers made this investment because they believe intermodal service is reliable and is the replacement for long haul in the near future because of the various challenges they face with driver shortages, regulations, fuel, insurance, etc. that we’ve all heard and read in the articles on trucking’s challenges. These challenges are real and fast approaching a head.
The trucking advocates would like everyone to believe the combination of truck and the rail service will only heighten the possibility of damage, but that’s simply not true. With the blocking and bracing measures put in place, the chances of damage occurring to your intermodal shipment are no more than trucking alone. The railroads have damage prevention units that assist shippers along the way to help ensure damage free-delivery of your products.
Security is an advantage many bypass as a big plus for intermodal. For shippers having high value product, intermodal has a significant advantage since it is not on the road or not open to driver challenges. While farfetched, the example I heard at one conference is “have you ever heard of the train stopping at a rest stop, then running home to take care of an issue” does help bring some clarity to security. The majority of the shipment is on the rail with no access to others, thus making the security significantly better than trucking the product over hundreds of miles.
Another area of misconception is the railroads don’t need to compete. With the consolidations and mergers of the North American railways and with each specializing in certain corridors, there are very few carriers available to compete with each other. However, the railroads are focused on highway-to-rail conversion and know their potential customers are currently using trucks to haul shipments, and this is where they are competing hard for business. For this reason, the railways are working closely with trucking companies to offer truck and rail combinations with flexibility, improved speed and lower costs.
We’re almost to the end and you may be thinking great, but intermodal is all too complicated and will not fit into my TMS. This hesitation is also a relic of the past. Previously, shippers had to arrangement the origin dray, the line haul, the destination dray, multiple manifests, manage the hand-offs, do the tracking, and then reconcile all three invoices versus the one they would get with their truck shipments. In today’s world, the IMC and railroad work hand-in-hand to offer a door-to-door service that takes all the complication headaches away from the shipper. Operationally, the door-to-door service looks just like a truck. You tender the shipment to the IMC and they take care of the rest and at the end of a successful shipment send a single invoice.
Now do you know Intermodal?
Hopefully we’ve been able to help clear up some of the bigger objections. There are still circumstances when trucking alone is the best option for your shipment, but it’s worth taking a look at the opportunities and additional advantages that intermodal could create for your company: cost savings, competitive transits, shipment protection, enhance capacity requirements, decrease highway congestion, and with an improved carbon footprint.