Leveraging Logistics Blog

Weekly discussion and analysis on the trends in the intermodal spot rate market.   For the week of May 16, 2022, domestic intermodal spot rate index: Up 0.1% from the prior week. Up 14.7% from prior year.

Freight shipping can be as fast as it needs to be, or can take lengthy amounts of time depending on the mode of transportation, the distance it's traveling, the price paid by the shipper and other factors. If product is needed tomorrow, there are freight modes that can accommodate such a need. If a shipment is working on a looser timeline, a month or more is not unusual for international freight. The fastest freight mode in a vacuum is air freight, while the slowest is ocean freight (not counting some type of horse-drawn, non-powered method). Staying on the ground, truckload is faster than intermodal, though not as drastically as some may think. Delays can of course happen to any type of freight, whether they be weather-related, due to congestion at ports or terminals, because of staffing issues, tied to failed equipment or related in some way - commonly these days - to Covid-19. So, long story short, freight shipping can be fast, or it can be less fast. Let's get to some more precise numbers.

A greater emphasis on intermodal freight usage offers several benefits, but perhaps the most impactful is how its use of rail can reduce shippers' carbon footprint. Intermodal freight carries far more loads on far less energy than its chief over-land competitor of truckload. Just how much environmental impact can a switch to more intermodal shipping have? According to CSX, rail is four times more fuel efficient than trucks when it comes to moving freight. In fact, if just 10% of long haul highway freight was shipped intermodally instead for a given year, it would save 12 billion - with a 'b' - gallons of fuel. And burning less fuel means a lower carbon footprint. Of course, for those also concerned about the bottom line, intermodal freight offers a variety of other benefits, too, including cost savings. And shippers may be surprised to know that intermodal options are more available than they may think.

Shipping and logistics are full of abbreviations and acronyms, and sometimes, the same one can stand for multiple phrases. In this case, IPI in shipping refers interchangeably to interior point intermodal and inland point intermodal. Regardless of which 'I' word is preferred, the term IPI covers inbound freight moves from a port to a shipper’s door within the country via a domestic or international intermodal container. So it's clear, the reason IPI can refer to either inland or interior is because the two words reference the same type of location. IPI shipments typically move via truck for short distances and intermodal rail for long distances. IPI and transloading are often intertwined, as while in some cases the load moves inland in its original ISO ocean container, it's often transloaded through a third party logistics provider (3PL) into a domestic intermodal container to continue its journey. The split may be about 50/50 in fact.

Dwell is a shipping term that primarily refers to the amount of time a container spends at a facility like a terminal or port between when it's unloaded from one form of transport and moved out of the facility. The issue of dwell comes into play in container shipping, so it's primarily associated with intermodal and ocean freight. Costs related to dwell may impact freight rates already, or they may be added on as accessorial charges if containers overstay their allotted time - a term referred to as demurrage. Containers that dwell for a lengthy period at a terminal are considered aging cargo. Beyond the primary form of dwell, street dwell describes the period containers spend when pulled out of the terminal by truck - typically to avoid demurrage. At any rate, dwell is a common issue especially as supply chain constraints abound.

The difference between a terminal and a port in logistics and supply chain parlance goes beyond maritime versus landlocked. In essence, a port refers to a waterfront facility - aka a marina - where vessels (steamships/freighters/container ships/etc.) dock to facilitate loading and unloading of goods (and people who use these ships as well).  A terminal on the other hand both refers to multiple locations within a port (more on that later), and using the more common - and still logistics-related - definition, a terminal can also refer to a facility independent of a port where trucks and/or railroads handle that same loading and unloading of goods.

Container shortages (as well as plenty of other supply chain shortages) are common knowledge at this point, but another key piece of freight equipment has also been running short for sometime - the chassis. A chassis in freight and logistics terms refers to a rubber-tired trailer under-frame on which a container is mounted for street or highway transport. Sometimes referred to as a container chassis or skeletal trailer, a chassis is a necessity to transport containers across the supply chain - from ocean or rail (see intermodal shipping) to truck - onto their final destination. There are chassis options to fit 20 foot and 40 foot containers, as well as chassis specially designed for overweight container shipments, called tri-axle chassis. To sum up their importance, even if containers became more plentiful, without enough chassis, those loads would be severely limited in options to get where they need to go.

The holiday season is in full swing, for Christmas shoppers and - for our purposes - those involved in freight and logistics. As hectic as this time of year can be - especially this year - it's important to step back and smell the roses (or evergreens - if you can get your hands on one). That's why we're sharing a special twist on a holiday classic. Feel free to make it a new tradition at your holiday gatherings. Enjoy our freight and logistics Christmas poem...

With the many supply chain issues facing freight and logistics today, it can be hard for businesses to see the forest for the trees. But in uncertain times, the certainty of a long-term strategy is even more important. While developing such a plan is tough for many businesses, making it a 3PL strategy (third-party logistics strategy) takes the burdensome part away. The shipper working with the right 3PL provider gets the best of both worlds, a coherent long-term vision, and responsive service when unexpected needs arise.

The advantage of transloading in today's supply chain cannot be limited to singular form. In fact, the benefits of transloading - put simply, the transfer of goods from one transportation mode to another (and often from one container to another) - can include cost savings, improved flexibility, faster shipping and more. With the caveat that every case has its own particularities, let's go over some of the general advantages of transloading: Faster customer transit times While the act of transloading does take time (think one to three days), by not limiting to one particular mode of transport, transloading allows you to take advantage of the various forms of freight transportation available to choose the fastest possible combination for your needs. Speed is also improved by other transloading efficiencies when well-planned. Flexibility for better product positioning Particularly for maritime freight, since it stops at a port for staging ahead of its next move, a shipper can shift the load based on current needs. So if a product is out of stock in one region and plentiful in another, the shipper can reprioritize the destination of the load. Distribution Center Optimization In some cases, you may not need distribution centers (aka DCs) at all, as you can group goods while transloading and ship them straight to their final destination. If DCs are still needed, at the very least, additional steps can be removed by performing a series of value-added services at the time of transload. Ability to reach more destinations This may seem obvious, but don't forget that transloading gives you options to use whichever combination of freight transportation options is best to reach a given destination. With these combinations, it also means loads can reach just about anywhere. Save container inventory, and cost Steamships are placing a premium on their maritime freight containers, with costs rising exponentially throughout 2021 partly due to supply and demand issues. By transloading at the port, you're using that container less than if it continued on over land, therefore you're paying a bit less. And as an added benefit, the container is returned to circulation faster for the next shipment.  And with all the above-listed benefits out of the way, you're probably thinking, "how much?" Read on to see more about how cost factors in.