Domestic intermodal shipping and traditional trucking are two popular options for businesses looking to transport goods within the United States. Choosing between the two can be a complex decision, with several factors to consider, not the least of which (and perhaps the most of which for many companies): cost and pricing. Let's break down some of those cost and pricing factors, as well as the differences between trucking and intermodal.
Traditional trucking involves shipping goods by road, usually using large commercial trucks. The primary advantage of trucking is the flexibility it offers in terms of delivery times and route options. However, trucking can also be more expensive than intermodal shipping, particularly for longer distances and heavier loads.
Domestic intermodal shipping on the other hand, involves a combination of transportation modes. The goods are transported in containers using both rail and trucking freight modes. Intermodal shipping is generally considered to be more cost-effective than traditional trucking, particularly for longer distances and larger loads. On the other hand, unlike trucking, intermodal has less flexibility as freight routing is centered around roughly 250 class I intermodal rail ramps, with dray being the most efficient when the origin and destination are within 300 miles of the intermodal ramps. One additional note on those 250 intermodal ramps - all combinations are not serviced routes.
Key cost and pricing factors to consider
One of the key factors that makes intermodal shipping more cost-effective than trucking is the lower cost of fuel. It's not that there's a special railroad fuel different that that used by trucks but rather that trains use less. In fact, trains are four times more fuel efficient than trucks, with trains able to move a ton of freight approximately 492 miles on a single gallon of fuel. Incidentally, intermodal also requires fewer driver miles, reducing labor costs and further increasing cost-effectiveness.
It is important to note that there are also other factors to consider when comparing the costs and pricing of domestic intermodal shipping and traditional trucking (and simply comparing the viability of each mode generally), including
- Delivery times (and deadlines)
- Route options
- Handling and storage of cargo
- Specific origin/destination (O/D) pairing
- Distance of shipment
- Type of shipment (commodity)
- Cargo weight and volume
- Dock operations times and needs
To illustrate that there is no one size fits all strategy, there are some caveats to generally accepted notions. For example, intermodal shipping may take longer than trucking due to the need for intermodal transfers between class I railroads crossing the USA, but it also offers greater reliability and consistency in delivery times. On the flip side, while trucking may be more expensive than intermodal shipping for longer distances, it may be more cost-effective for shorter distances and smaller loads.
Ultimately, businesses need to consider their specific shipping requirements and make a decision which is best for their business. Sometimes, costs and pricing are not the deciding factors. Whatever is the deciding factor for you - or even if you don't know it yet, reach out to us and we can work with you to find the right solutions for your company. For more information about us, or logistics and supply chain issues in general, check out our freight guides. For a more comprehensive look into the cost comparison between truck and intermodal, read Comparing Truckload vs Intermodal: 11 Differences Shippers Should Know.