By: Tyler Wolfe
As manufacturers begin inching toward recovery and truck tonnage climbs, capacity shortages remain among the top of shipper’s concerns. With CSA regulations looming; some experts fear as high as 15 percent of trucks could disappear from US roadways threatening an already fragile capacity market. These capacity threats coupled with intense consumer cost pressures are leading many companies to rethink their supply chain strategies and consider expanding their service options in search of new cost containment opportunities.
It is for this reason that manufacturers and retailers alike are beginning to transition freight volumes traditionally managed by truckload carriers over to intermodal channels. This growing trend has led to double digit growth in the past two years and is picking up steam as reported by the Intermodal Association of North America. Benefitting from decades of fuel efficiency improvements rail carriers are able to move one ton of freight almost 830 miles on roughly one gallon of diesel fuel. This leaves intermodal service providers positioned to offer shippers significant transportation spend reductions while subsequently greening their supply chains through reduced carbon emissions.
Historically the primary objection indicated for not utilizing an intermodal service strategy was the lengthy and inconsistent transit times. This however has shifted significantly since 2007 as rail carriers have invested heavily in new infrastructure capabilities and additional container capacity. With new resources at their disposal as leverage intermodal companies have been able to drive up volumes while delivering reduced transit times, increased reliability, and providing more accurate electronic shipment tracking.
Fuel efficiencies, greater service predictability, and shorter transit times are all providing intermodal service providers a competitive edge as a more reliable and cost effective option for shipper’s supply chain needs.
Tyler Wolfe works in third-party logistics specializing in supply chain optimization & design.