What is rail intermodal?
Date: Wednesday, January 1, 2020
Source: American Shipper
Intermodal is often a less expensive alternative to truckload, typically undercutting the price of the total shipment by 10%-15%
Rail intermodal is the transportation method of moving freight on the earth’s surface by two modes, by railroad and also by truck. The freight can be carried in either trailers or containers; containers has become the larger and faster-growing category. The freight is moved on a railroad during the long-haul portion of the move with local trucking (known as drayage) taking the trailer or container to its final destination.
Why would a shipper use rail intermodal?
It’s a less expensive alternative to truckload, typically undercutting the price of the total shipment by 10%-15%. In addition, rail intermodal is more fuel-efficient than long-haul trucking which is desirable for shippers wishing to save cost while also lowering their carbon footprints. As a result, the customer is only charged about half the fuel surcharge as they would be for a truckload shipment.
That sounds great, why doesn’t everything move via rail intermodal?
Volume density and robust rail infrastructure are needed for rail intermodal to be pragmatic. As a result, rail intermodal is dominated by the dense rail corridors that are anchored by very large (and far away) cities on either end of the rail long haul. In fact, about two-thirds of rail intermodal traffic travels in only seven intermodal lanes.
Los Angeles to Chicago is the largest rail intermodal lane because it meets several criteria: the Los Angeles / Long Beach port complex provides a steady and massive source of freight, Los Angeles and Chicago are both among the largest domestic consumption centers, the two cities are far away from each other, the lane is well-served by railways Burlington Northern Santa Fe and Union Pacific, and Chicago serves as a railroad hub, connecting the western railroads to the eastern railroads.
Intermodal volumes are Dominated by Cities on This List
In addition, rail intermodal is generally uncompetitive with trucking when the lengths of haul are shorter than about 500 miles. When the lengths of haul are shorter than 500 miles, the truck has an even more distinct service advantage since the entire truck haul can be done in one day. In addition, when lengths are haul is short, the cost advantage that rail intermodal typically enjoys diminishes because there are fewer lower-cost railroad miles to offset the cost of running trucks out of route, which is typically done in rail intermodal moves.
In addition, some freight is simply too time-sensitive to move via rail intermodal since an intermodal move typically takes one extra day in transit (as compared to a truck) and there is more potential for inconsistent service with more points of handling. Food and other products in need of refrigeration rarely move via rail intermodal due to the potential for spoilage, though some companies are beginning to address that historically unserved market.
What is international versus domestic intermodal?
The terms “international intermodal” and “domestic intermodal” refer to whether the equipment being used in the intermodal move is international equipment or domestic equipment, not whether the goods were manufactured overseas.
International intermodal typically refers to the movement of 40’ containers (owned by the containership lines or container leasing companies) which are the same containers that travel overseas on containerships. Meanwhile, domestic intermodal typically refers to 53’ containers or trailers that owned by domestic transportation companies, such as truckload-based intermodal providers. Domestic equipment does not leave North America.
Much of the freight that is counted as “domestic intermodal” shipments consists of imported goods that are “transloaded,” or taken out of smaller 40’ international containers and put into larger 53’ domestic containers. That makes the intermodal move more efficient and eliminates the need to reposition empty containers back to the ports.