Intermodal solutions boost shippers’ options and offer key advantages. Here’s why intermodal transport remains key to efficiency and how one port stacks up advantages.
Like many logistics functions over the past few years, the intermodal market has faced several significant challenges. At the same time, these challenges offer an opportunity, and intermodal transit remains a valuable element in many organizations’ logistics operations.
More recently, the challenges have flipped. Among other changes, the domestic container fleet has grown by about 12% and equipment velocity has improved, “creating capacity out of thin air,” Gross says.
Yet demand is down. The shift benefits shippers but isn’t as positive for the intermodal ecosystem.
Recent train derailments, like the one in East Palestine, Ohio, have “shined a serious light on the rail industry from both an infrastructure and a regulatory standpoint,” says Michelle Comerford, project director and industry and supply chain practice leader at Biggins Lacy Shapiro & Co., a site selection and incentives advisory firm.
Taking Another Look at Intermodal Solutions
The Association of American Railroads says that more than 99.9% of all hazmat moved by rail reaches its destination without a release caused by a train accident.
In addition, the Biden administration has been pushing for greater investment in infrastructure, including in the nation’s rail systems. In June 2022, the administration announced $368 million in grants to improve rail infrastructure and strengthen supply chains.
Even for most truckloads traveling 500 miles or more, intermodal’s market share is less than 10%. “It’s small, but it can be a very useful tool,” Gross says. “It’s time to take another look at intermodal.”
For shipments of non-perishable goods that will travel more than 500 miles, intermodal can be a great way to cut transportation costs, Comerford says. This will be key if the economy tightens.
Shifting some trips from truck to rail can help organizations reach sustainability goals, Comerford says. The average carbon dioxide emitted per ton-mile of freight in 2019 was .4 for truck and .05 for rail, according to a December 2022 Congressional Budget Office report.