Tense might be a good word to describe the transportation industry. As carriers adjust to enforcement of the U.S. Federal Motor Carrier Safety Administration’s hours of service rules, other challenges—including high fuel prices, driver shortages, new equipment requirements, highway congestion, and even parking restrictions—continue to affect the industry. For these reasons and others, some produce businesses are revisiting a more integrated approach to getting product from point A to point B: intermodal shipping.
Shipping cargo by a combination of truck, rail, sea, or air is nothing new, but today’s intermodal is a state-of-the-art experience from dock to destination. Supplementing traditional over-the-road transport with rail can cut down on fuel costs, alleviate driver restrictions, and reduce environmental impact.
“From a big picture perspective, intermodal has been (and will continue) enjoying several favorable macro trends,” explains Matthew Young, a transportation analyst with Morningstar, Inc. in Chicago. “The rising focus on supply chain optimization is driving shippers to seek lower-cost alternatives in transportation—particularly multimodal options.”
New Opportunities
To lure shippers into the realm of intermodal shipping, Young says rail companies have had to step up their game. “Class 1 railroads have been adding intermodal service in regions where it was not available before, giving shippers more opportunity to incorporate it into their transportation planning.”
Such expansion includes a number of regional and national projects aimed at increasing efficiency or adding capacity. Jacksonsville, FL-based CSX announced more rail lines on the I-90 corridor connecting the Midwest to New York; while Canadian National Railway planned expanded service to the West Coast through the Midwest with a new intermodal ramp near Chicago, one of the most highly congested distribution centers in the country.
“Some shippers have increased their use of intermodal to hedge against supply chain disruption should material trucking capacity shortages arise,” continues Young. Further, he notes, “truckload carriers are also increasing their use of rails, partly to compensate for limited driver availability.” Add the thirty-four hour restart and there are a host of reasons to take another look at intermodal. But can it really save produce shippers time and money?
To find the answer, we went to three experts in the field: Luke Gowdy, manager at FoodSource, a C.H. Robinson company, in Monterey, CA; Debra Sanford, vice president of sales at Clipper Controlled Logistics, headquartered in Chicago; and Sean McKenna, general manager for intermodal services at England Logistics, Inc., based in Salt Lake City.
Question
How has intermodal shipping changed over the last few years? What do you see as its key advantages versus traditional over-the-road trucking?
