What Makes for a Great Intermodal Lane?
A frequent question shippers new to domestic intermodal ask is what makes for a good intermodal lane.
Below is a list of the characteristics used to determine if a truckload freight lane would be a good opportunity to convert to intermodal, along with some commentary on how these characteristics are changing.
Length of Haul
The length of haul benchmark where intermodal starts to make sense is around 750 miles or more. The 750 mile benchmark is shortening with some intermodal lanes competitive against truck with as little as 450 miles. The primary factor for bringing down the length of haul mileage is investment in opening additional intermodal ramps within the North American Domestic Intermodal market. The majority of the new ramps have come east of the Mississippi.
The US DOT National Rail Plan, below, illustrates market share by mileage for both intermodal and truckload. The graph gives a projection of where the 53' market is headed, as it relates to mileage and market share.
Dray Distance from Intermodal Ramps
The distance of the dray on either the origin or destination side is another factor used to determine whether or not a lane will be a good fit for intermodal. The best intermodal moves have dray of 50 miles or less from the origin or destination ramps. As the length of haul increases, so too does the length of dray increase and still be a good fit for road-to-rail conversion.
An additional comment, which is ramp related, is shippers should evaluate the intermodal network against their freight lanes on a quarterly basis because what is not an intermodal lane this quarter may be an intermodal lane next month.
Weight is a factor that catches many new intermodal shippers off guard. Domestic intermodal loads have a weight capacity of 42,500. With the proper planning, opportunities for loads up to 44,000 pounds are becoming a possibility.
One suggested reading about with more on weight can be found in "Intermodal Weight - Most common issue for new intermodal users".
The typical intermodal transit is truckload transit, plus a day when the lane is within one railroad's network. If the ramp-to-ramp move requires the load to be interlined between two railroads, then the expectation is more truck transit, plus 2 or 3 days.
Listed below are transits of some major intermodal lanes compared against truckload.
High value does not always make the list of characteristics to look for in an intermodal shipments, but it fits right in the wheelhouse. Intermodal has very few road miles, so the opportunity for theft is greatly reduced and looked upon favorably by insurance carriers.
Appointed Loads and/or Retail Deliveries
With intermodal lanes having the rail ramp close to final destination, there are greater opportunities for success on appointed on-time deliveries as compared to truckload options. With that said, big box retailers deliveries are a great option for intermodal. More on the topic can be found reading the blog entitled "Intermodal for Retail Shipments".
Under the topic of appointed loads, morning pick-up appointments need to be mentioned. Frequently, OTR drivers will have a morning delivery, which can reduce the success for an on-time pick-up because they are delayed on the initial unload in the morning.
If a truckload lane needs capacity, then intermodal is a great option for either augmenting truck capacity or being used exclusively. It is quite a bit easier to find the dray capacity to drop and hook or live load / unload in a very short period of time because a single driver can turn several loads a day and by routing several draymen the capacity is exponentially improved over truckload.
The final characteristic that makes for a good intermodal lane relates to visibility.
For some shippers, visibility is holy grail of their supply chain. To the surprise of many, intermodal visibility looks similar to small parcel tracking and tracing with a multitude of scans occurring throughout the rail transit. The information gives shippers more control and provides them more opportunities to use the information for a competitive advantage.
Visit the InTek Freight & Logistics website for more information.
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