What’s Holding Back Shippers from Converting More Truckload Freight to Intermodal?

Intermodal shipping has long been touted for its ability to reduce transportation costs and improve environmental sustainability. Experts frequently highlight how intermodal can save shippers money, as demonstrated by the Intermodal Savings Index Report published quarterly by the Journal of Commerce , while also contributing to a smaller carbon footprint.

But if the benefits are so clear, why aren’t more shippers converting their truckload freight to intermodal? Let’s dive into the key factors holding shippers back and explore whether these concerns are truly justified.

1. The Perception of Reliability

One of the most common concerns among shippers is the perception that intermodal shipping is less reliable than traditional truckload. There’s a lingering belief that intermodal doesn’t provide the same consistency in delivery times and service quality.

Reality Check: While it’s true that intermodal shipping involves multiple modes of transport, which can introduce complexity, the industry has made significant strides in improving reliability across the various touchpoints that can cause service failures. Innovations in intermodal logistics management technology have narrowed the gap between intermodal and truckload reliability, making them virtually the same.

If your company is finding intermodal service inconsistent compared to long-haul trucking, it may be worth reviewing the dray network capacity and dispatcher engagement with your shipments. From our experience, these are the most probable causes of intermodal service failures.

2. Transit Time Considerations

Another concern is the potential for longer transit times with intermodal compared to truckload. Shippers worry that the additional time required for rail transport and transfers between modes could delay their deliveries.

Reality Check: It is true that transit times for intermodal shipments are generally longer, but this doesn’t have to be a dealbreaker. The transit times are known, so with proper planning and scheduling, a shipper’s intermodal provider—also known as an Intermodal Marketing Company (IMC)—can manage these timelines effectively. Additionally, ongoing efforts in the industry to streamline processes and enhance coordination among transportation modes are helping reduce transit times, making intermodal more competitive with truckload.

In most cases, when an intermodal shipment remains on the same railroad, transit is typically truck plus a day. For shipments interlined between two railroads, an additional three days may be added to the transit time compared to truckload.

3. Complexity and Flexibility

Intermodal logistics can seem more complex than truckload, especially when it comes to coordinating different transportation modes. Shippers may fear that this complexity could lead to execution issues, particularly when handling exceptions or changes in plans.

Reality Check: While intermodal does involve more coordination, this complexity can be mitigated by working with experienced IMCs. These companies specialize in managing the intricacies of intermodal logistics, offering a seamless experience that integrates smoothly with your existing supply chain. With the right partner, the added complexity can become nearly invisible to the shipper.

As a side note, I personally believe that IMC should stand for Intermodal Management Companies instead of Intermodal Marketing Companies because it better reflects the comprehensive service IMCs provide. IMCs coordinate and manage the entire intermodal shipment, including dray capacity at both ends, securing chassis and containers, and working with railroads for long-haul segments. IMCs also optimize 53' domestic capacity within the U.S., Mexico, and Canada, and when applicable, 40' containers.

4. Capacity and Accessibility

Concerns about the availability of intermodal capacity, particularly in regions far from major rail hubs, can deter shippers from making the switch. There’s also a fear that intermodal won’t be able to handle surges in demand or offer the same level of accessibility as truckload.

Reality Check: The intermodal network has expanded significantly, with increased capacity and improved accessibility across North America. Strategic planning and flexibility in scheduling can help shippers overcome these barriers. Additionally, the growing focus on regional intermodal services is making it a more viable option for areas previously underserved by rail. One could argue that a combination of truckload and intermodal is critical to building a more resilient and sustainable supply chain.

5. Cost Savings vs. Additional Costs

Another perceived barrier is that the cost savings from intermodal shipping may be offset by additional costs, such as those for blocking and bracing or for chargebacks due to early or late deliveries.

Reality Check: While there are additional costs for blocking and bracing, these are often minimal adds on labor and materials. For retail shipments that are subject to early or late chargebacks, it’s crucial to partner with a reputable IMC that understands the consistency of rail and dray services in specific freight lanes. They can provide valuable insights into whether intermodal will be a suitable option or if sticking with truckload is the better choice, especially for time-sensitive shipments or just-in-time (JIT) deliveries.

6. Misconceptions and Lack of Knowledge

Some shippers may simply lack knowledge about how intermodal works or may hold onto outdated misconceptions about the service. This lack of understanding can prevent them from exploring intermodal as a viable alternative to truckload.

Reality Check: Education is key. Many barriers to intermodal adoption stem from misconceptions that can be easily addressed through informed discussions and resources. By working with a knowledgeable intermodal partner, shippers can gain a clearer understanding of how intermodal can fit into their logistics strategy and improve their bottom line.

7. The Role of Relationships and Trust

Shippers often have established relationships with their truckload carriers, built on years of trust and familiarity. Making the switch to intermodal can feel like a leap into the unknown, especially if there’s uncertainty about the service levels of a new provider.

Reality Check: Building trust with an intermodal partner is crucial. By working with a reliable and experienced IMC, shippers can gradually build confidence in the intermodal process. Over time, this trust can lead to a more balanced and diversified transportation strategy that leverages the strengths of both truckload and intermodal.

Conclusion

While there are valid concerns about converting truckload freight to intermodal, the benefits often outweigh the drawbacks when managed properly. The key is to address these concerns head-on, understand the realities behind them, and explore intermodal options with a trusted partner. By doing so, shippers can take full advantage of the cost savings and environmental benefits that intermodal shipping offers without sacrificing reliability or service quality.

If you’re interested in exploring how intermodal could work for your specific needs, reach out to InTek Freight & Logistics. We’re here to help you navigate the complexities and unlock the full potential of intermodal shipping.