Rail intermodal utilizes both rail and truck freight transportation modes to complete a door-to-door shipment for a shipper's surface transportation requirements. By merging the efficiency of railroad transport with the flexibility of trucking, products can move vast distances at reduced freight costs and with a more favorable carbon footprint than trucking.
Why Opt for Rail Intermodal?
Exploring the topic of rail intermodal reveals not just the economic advantages but also the inventive approaches that have put intermodal rail into a leading position in moving freight cargo.
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Cost-effectiveness: Shippers gravitate towards rail intermodal as it offers substantial savings compared to traditional truckload shipping with typical cost savings of 15%.
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Eco-friendliness: With superior fuel efficiency to its road-bound counterparts, rail intermodal stands out as a more environmentally friendly option that aligns with corporate sustainability goals.
The allure of moving freight via rail intermodal is undeniable; however, it thrives under specific conditions such as volume density and robust railway infrastructure. Intermodal is particularly strong in dense corridors connecting major urban centers where there's a constant flow of freight traffic. This is where intermodal conversion from truck occurs most frequently.
A great corridor for transporting freight that illustrates this model's success is from Los Angeles to Chicago. The freight demand on this route is bolstered by factors like massive port-generated freight volumes, significant consumption markets at both ends and because Chicago is the largest inland port in the USA.
Chicago connects western railways with eastern networks making this lane emblematic of efficient cross-country cargo movement through rail intermodal. The presence of leading western railways Burlington Northern Santa Fe (BNSF) and Union Pacific ensures seamless connectivity along this crucial lane with eastern railways Norfolk Southern and CSX.
Diving into the benefits and nuances of intermodal rail reveals its indispensable contribution to worldwide trade for the global economy and domestic freight routes with origins or destinations in the U.S., Canada and Mexico.
Integrating railway and intermodal rail with alternative transport methods stands as a cornerstone in optimizing the fluidity, flexibility, sustainability and reliability of global supply networks.
The Fundamentals of Intermodal Rail Transportation
What is Intermodal Rail?
Intermodal rail, a pivotal component in contemporary logistics networks, combines rail and truckload shipping options to transport commodities and streamline the movement of cargo over expansive stretches. Weaving together rail lines with over-the-road trucking guarantees that cargo flows smoothly from start to finish. Intermodal's strength stems from combining the extensive reach of trains with the adaptability of trucking into a cohesive transport solution.
U.S. rail intermodal volume continues to climb, with current volumes averaging 1.1 million containers and trailers a month. This figure is a testament not only to the reliability but also confidence in this method for transporting everything from consumer goods to agricultural products in the supply chain ecosystem.
A closer look at intermodal transportation's components reveals an intricate network involving containers standardized for easy transfer between modes, specialized vehicles like container well cars for rails and chassis for trucking - all working together like clockwork.
Components of an Intermodal System
An intermodal system thrives on coordination among various elements, with product moving via containers designed for secure access during transfers standing out as its linchpin. Intermodal boxes are built to withstand multiple journeys by sea or land without opening until reaching their final destination.
Railroad well-cars are tailored specifically for these containers to ensure smooth conveyance on trains, with intermodal chassis used on dray trucks to move the intermodal containers to their final destination.
Intermodal box transition from one railroad to another, often called interlining, can either be steel-wheel or rubber-tire-to-steel-wheel conversion.
Steel wheel is when a container is transitioned from one railway to another to allow for intermodal shipments to move across the country. Consider a shipment from Los Angeles to New York. A Union Pacific train carries it on the first lengthy leg to Chicago, where Norfolk Southern will take over. This occurs by moving the container from the UP to NS in the Windy City via rail tracks that connect the two railroads. NS then takes the container the duration of its eastward journey for final delivery in New York.
Using this same shipment example, a rubber-tire interline, would have the box be moved from one railroad to the other by pulling the intermodal container off the UP train altogether. A truck with a chassis would then drive it to the NS ramp to be loaded on the Norfolk intermodal train to continue onto NY.
A 53' domestic intermodal container is the primary method to convey product versus a 53' trailer used in truckload operations. There are some instances where trailers are used, called TOFC for trailer on flatcar, but the 53' container or COFC intermodal dominates domestic intermodal shipping today. The reason containers have won out over trailers is the ease of transfer between modes, scalability, and twice as much equipment per intermodal well car (as intermodal containers can be double-stacked).
The essence of rail intermodal lies in its dual-mode approach: long-haul movements are predominantly conducted via railways which capitalizes on their capacity for moving large volumes over long distances at lower costs, while local trucking handles last-mile pickups and deliveries.
Advantages of Choosing Intermodal Rail for Freight
Perhaps the two biggest advantages of choosing intermodal rail for freight are the cost savings and the reduction of the shipment's environmental impact - which can both be substantial when compared to over the road.
Economic Benefits
Blending various transport methods, like rail, intermodal rail significantly boosts the effectiveness of supply chains leading to economic benefits for the shipper. Incorporating intermodal strategies substantially cuts costs - typically to the tune of 10 to 15% compared to truckload-only. Over time, regular use of intermodal can make a major difference to a company's freight bottom line.
Eco-Friendly Logistics Solutions
The push for greener logistics strategies is picking up speed, as the integration of intermodal rail becomes crucial in this evolution. By leveraging the efficiency of double-stacked containers, this mode of transportation significantly minimizes carbon emissions per freight unit and cuts fuel surcharge fees.
Adopting this eco-friendly freight transportation method is becoming crucial in a market that values sustainability. A recent study published by Harvard Business Review found Gen Z and Millennial customers were 27% more likely to purchase products from environmentally conscious companies than older generations.
To better understand these advantages, connect with us here at InTek by filling out our brief form, and we'll analyze your freight for potential conversion from truckload to domestic intermodal shipments.
Enhance and Diversify Shippers’ Freight Capacity Requirements
Intermodal brings shippers supply chain efficiencies, diversification and scalable capacity options by either augmenting their truckload strategy or fully implementing an intermodal strategy on individual freight lanes.
Executing an intermodal strategy not only brings additional capacity, but also diversifies a shipper's logistics strategy, so as to not rely on one freight mode.
Leading Firms in the Intermodal Rail Industry
The handful of pivotal firms leading the charge in the intermodal rail sector are the class 1 railroads themselves, so let’s take a closer look.
CSX
Headquartered in Jacksonville, Fla., the CSX transportation network extends about 21,000 route miles, connecting customers to major ports, distribution centers, and every major metropolitan area in the eastern United States.
Santa Fe Burlington Northern (BNSF)
BNSF Railway operates one of the largest railroad networks in North America, with about 32,500 route miles in 28 states and three Canadian provinces. It is headquartered in Dallas, Texas, and is owned by Berkshire Hathaway.
Union Pacific (UP)
Union Pacific Railroad connects 23 states in the western two-thirds of the country by rail, providing a critical link in the global supply chain. UP operates from all major West Coast and Gulf Coast ports to eastern gateways, connects with Canada's rail systems and is the only railroad serving all six major Mexico gateways.
Norfolk Southern (NS)
Norfolk Southern operates a railroad freight transportation network across 19,000 route miles and has the most extensive intermodal network in the eastern United States, with connections to every major container port on the Atlantic coast as well as the Gulf of Mexico and Great Lakes.
Canadian Pacific Kansas City (CPKC)
CPKC is the first transnational railway with unparalleled port access throughout North America from Vancouver to Port Saint John in Atlantic Canada to the multiple ports on the Gulf of Mexico to Lázaro Cárdenas, Mexico. CPKC gives shippers single-line, direct access to ports across key markets in the U.S., Canada, and Mexico.
Canadian National (CN)
CN spans coast to coast in Canada and has a presence in mid-America, too - additionally connecting ports on three coasts. The CN network penetrates deep into resource-rich and manufacturing-intensive regions to move raw materials, intermediate goods and finished goods to market over its 20,000 miles of track.
Ferromex
Ferrocarrill Mexicano “Ferromex” is the largest railroad company in Mexico and has the widest coverage. Ferromex has a network of 5,040 miles of tracks that covers approximately 71% of Mexican territory. Ferromex lines connect to five border points with the United States, and also to four ports on the Pacific Coast and two on the Gulf of Mexico. Ferromex is controlled by Grupo México 55.5%, Union Pacific 26% and Grupo Carso-Sinca Inbursa 18.5%.
The Global Impact of U.S. Intermodal Rail Networks
The U.S.-based intermodal rail network plays a pivotal role in bolstering international trade, facilitating the efficient movement of goods within the US and across borders with Canada and Mexico. The rails act as the crucial arteries ensuring the world's supply chains remain interconnected and fluid.
Roughly 50% of the intermodal cargo transported is tied to international trade, underscoring its critical role in global commerce activities, not just domestic commerce.
Leveraging the rail network guarantees the swift and secure delivery of items, ranging from everyday retail merchandise to essential agricultural commodities demanded globally.
Trends in Domestic and International Container Use
Shippers are increasingly opting for scalable solutions that not only reduce transportation costs but also keep the supply chain running smoothly, which aligns well with worldwide trade. That choice shines the spotlight on the importance of efficiency, sustainability and flexibility.
For 2023, IANA (Intermodal Association of North America) reported the total U.S. intermodal box volume was 12.7 million units, while total North American intermodal volume was 16.8 million containers.
Domestic Containers
The utilization of domestic containers has seen an uptick due to their flexibility in moving goods across vast distances efficiently. This trend is particularly noticeable when considering that these containers are designed specifically for the unique dimensions of the U.S rail network and as a direct alternative to truckload freight capacity.
Besides trimming expenses, employing domestic intermodal grants shippers access to freight capacity often thought to be truckload only. Additionally, converting freight from road to rail transport not only champions environmental stewardship by cutting down on the carbon footprint linked with extensive truck journeys, but also paves the way for a more sustainable freight pathway.
Even with all the great strides made by railroads and the IMCs (intermodal marketing companies) serving the market, there is tremendous growth on the horizon with an estimated seven to 11 million truckloads that could be converted to intermodal for cost improvement and sustainability gains.
International Containers
The landscape for international containers is equally dynamic but navigates different challenges such as customs regulations, commodity restrictions and political instability between nations. Despite these hurdles, there's been steady growth driven by globalization and an increase in consumer goods needing transport from overseas manufacturers directly to inland destinations via intermodal methods.
Intermodal Rail FAQs - Frequently Asked Questions
What is intermodal in rail?
Intermodal in rail incorporates multiple modes of transportation to efficiently ship goods. Domestic rail intermodal combines trains for long haul with trucking for the short haul to deliver goods for customers, while international intermodal involves ocean transport, rail and short haul trucking dray.
What is FTL vs intermodal?
FTL or full truckload means a truck carries one shipment fully over-the-road from origin to destination.
What is an example of intermodal transport?
An example of intermodal transport involves a container traveling by train that's then transferred to a truck for final delivery.
What are the differences between trailer and container intermodal?
A trailer hitches to trucks and sits atop a flat car on a train, while intermodal containers move via various transportation methods, using well cars for rail movement (which allows for double-stacking) and chassis for land transport.
Conclusion
Intermodal rail isn't just another option for shippers moving product via 53' truckload; it's the smarter, greener choice for shipping. By reducing expenses and diminishing greenhouse gases, it demonstrates the synergy between cost-effectiveness and eco-friendliness.
In the end, the right freight provider partner should be able to leverage multiple modes when possible - whether land or by sea for truckload, intermodal, ocean or a combo - to get the job done in the most efficient manner. And it should incorporate the latest technology to plug in to market conditions, capacity availability, license and safety information, and shipment track and trace (shared with the shipper as well).
All of these components may sound like a big ask, but at InTek, we've got you covered. Just reach out to us, and make our Request a Quote form the last one you'll need to fill out for a long time. For more information about InTek, or logistics and supply chain issues in general, check out our Freight Guides.
