Today’s consumers want their products bigger, faster, and sooner than ever before. Traditional over-the-road (OTR) shipping – with its characteristic delays due to weather and human error – is ill-equipped to handle the heightened demands of today’s shoppers. Those demands, coupled with the fact that budgets continue to tighten across the board, are leading more supply chain professionals to consider alternative shipping modes. With its ability to generate savings in nearly every category of transportation cost, intermodal rail is quickly becoming the best option.

Cost Savings Through Technological Investment

Many believe that intermodal shipping can only cuts costs for cross-country hauls, but, in reality, cost-savings can begin at as little as 500 miles.  One catalyst for the enormous savings possible with intermodal shipping is the investment railroads are making in technological and infrastructural improvements.

Railroads are spending heavily to upgrade tracks, terminals, and freight handling equipment, and also implementing measures to remove potential delays caused by human error and/or Mother Nature.  Terminals have been outfitted with technologies such as automated gates and widespan cranes for speed loading cargo, which lowers product movement and minimizes congestion and product delays.

By investing in these improvements, railroads have increased overall velocity for better time-competitiveness with OTR.  According to Burlington Northern Santa Fe Railroad, an expedited rail service can travel 200 more miles per day than a single-driver truck service.

The improved infrastructure and efficiency will help rail providers transport goods to areas previously serviced solely by OTR. Furthermore, by coordinating with short-line railroads and short-haul (drayage) providers, intermodal shipping offers a true door-to-door service throughout the US without need to be near a rail yard or major urban center.

Dedicated Capacity

In addition to cost-savings, intermodal can significantly help supply chain managers escape the volatility of peak season OTR shipping.  With OTR, supply chain managers are susceptible to extra expenses caused by depleted fleets, driver shortages, fuels spikes, road hazards, and inclement weather. Shipping intermodal allows them to predict and secure capacity and pricing long before peak season arrives with the committed capacity programs many major railroads now offer.

By participating in these programs, shippers can save money and steer clear of delays caused by capacity shortages. Third-party facilitators are an intricate part of this process as they can help connect shippers with these committed capacity programs and make it even easier for them to get reliable and cost-effective service.

“Green” Shipping Alternative

Another important advantage of intermodal shipping is its fuel efficiency. Using less fuel to ship the same amount of product means less harmful greenhouse gas emissions entering our atmosphere. Technological advances in intermodal shipping have played a major role in helping increase fuel efficiency over OTR shipping.  Developments like new locomotives with multiple “smart” diesel engines, real-time energy management systems, and Automated Engine Start Stop (AESS) all contribute to better increase competitiveness.

Estimates from the FRA show that we could save approximately 1 billion gallons of fuel alone by reducing long-haul truckloads by 10%. That number may seem daunting, considering the amount of trucks on the highways today, but when we consider that every train has the capacity for 280 truckloads of freight, it becomes clear that it is truly possible.

Taking Action for the Future    

Converting to intermodal shipping means that supply chain facilitators can accomplish their top priority—providing cost-effective and reliable transportation. With the cost savings due to technological advancements and the ability to predict pricing and capacity, intermodal is quickly proving to be an important mode for the present and future of transportation.