NFI Industries

Why More Businesses Are Shipping Intermodal

Intermodal shipping has been on the rise throughout the supply chain industry. With over 145,383 miles of rail throughout North America, intermodal offers capabilities to successfully move freight throughout the span of three countries, encompassing Canada, the United States and Mexico. In 2014, North American intermodal reached a record high of shipping 13.5 million containers1. Although the trend for intermodal shipping is increasing, there are still many reluctant shippers who haven’t optimized their supply chain to incorporate the rail.

Opportunities that Intermodal Shipping Presents:

Access Untapped Capacity

Capacity is one of the greatest challenges that face the supply chain industry. It’s vital to meet capacity demand and that your supply chain is optimized to meet these goals. One threat to the shipping industry is the shortage of drivers. It’s estimated that the driver shortage has now reached about 35,000 to 40,000 drivers2. As companies scramble to fill positions, others are looking to the rail lines to ensure that inventory continues to move and each shipment is full.

Advances in Technology & Service

Over time railroads have worked to continue to improve their service. They’ve even taken capacity to the next level, literally. Rail lines have the ability to double stack shipping containers to move even more freight. The rail lines are continuing to provide more capabilities and technological advances to improve customer service. In the past, transparency and security on the rail were concerns of shippers. Today intermodal shipments’ location and condition can be tracked throughout the entire delivery. Refrigerated intermodal containers can also report their temperatures ensuring that temperature-sensitive freight retains its quality. This level of visibility gives shippers more insight and control than ever before.

Increase Supply Chain Sustainability

Sustainability has been a popular issue among both carriers and shippers to meet regulations, improve their bottom line, and decrease their carbon footprint. Unfortunately, every movement through the supply chain uses some type of fossil fuel which is the main source of carbon emissions that negatively affects our environment. According to Climate Corps and the Environmental Defense Fund, the shipping process accounts for about 16% of corporate emissions and accounts for about 6% of human-generated emissions towards global warming. When it comes to shipping, fewer trips mean fewer emissions of greenhouse gases. However, what tends to be overlooked is the amount of emissions each mode of transportation emits. Trucks emit about 19.8 pounds of carbon dioxide per 100 ton-miles; on the other hand, trains emit a mere 5.4 pounds of carbon dioxide per thousand miles3. Additionally, railroads are four times more fuel efficient than trucks4. On the rail you can move more freight while being conscious of the effect on the environment. Recently, Ocean Spray has shifted a number of their over the road operations to intermodal and saw an improvement in their supply chain costs while decreasing their environmental impact5.

Partnering for Success

Many intermodal marketing companies, IMCs, and the rail lines have partnerships, providing customers with operational expertise. Positive relationships lead to increased service levels. Instead of shippers going directly to the rail lines, many take advantage of using their logistics partners to work out rates and find the best deals. The relationships also help to ensure that freight is taken care of at the rail yards so that your freight is never sitting. There is not a single rail line that reaches East to West and that’s where IMC’s manage the entire shipping process to make those transfers to reach your destination6. Using intermodal shipping opens you up to a network of routes, people and possibilities.

As companies across North America are faced with driver shortages and are looking for ways to optimize their supply chain, intermodal has been a successful solution. With seven major railroads there are many possibilities and routes for companies to take advantage of Intermodal. Intermodal shipping can improve your company’s capacity, operations, relationships, and sustainability initiatives.