Understanding Intermodal Shipping: Five Common Questions

If your business frequently moves freight via shipping container or requires long-distance cargo transportation, there’s a good chance your supply chain already utilizes intermodal shipping.

Intermodal simply means moving cargo using multiple modes of transportation — typically some combination of truck, rail, and ocean freight — with cargo packed in standardized containers to facilitate seamless transfers from one mode to the next without adding any unnecessary handling.

Today we’ll take a look at five of the most common questions shipping partners ask when it comes to introducing intermodal to their existing supply chains.

1. What Qualifies As Intermodal Shipping?

In simple terms, intermodal shipping is using two or more modes of transportation to ship freight. There are four common modes of transportation:

• Truck: Usually the first and last legs of the shipping journey.
• Rail: Slower than other modes, but also one of the most efficient. A train can move hundreds of shipping containers at a time over thousands of miles and still have low shipping costs.
• Sea: Capable of transporting freight across rivers, canals, and oceans.
• Air: The fastest mode of transportation, air transportation can easily move freight across entire continents — but weight restrictions on aircraft limit how much cargo can be moved at a time. Air transportation relies on intermodalism (trucking) solely for its initial and final segments, and is not typically combined with other modes.

All intermodal shipping is considered either international or domestic. International uses two or more modes of transportation to ship freight across borders, while domestic intermodal shipments do not cross borders.

Intermodal is similar to multimodal shipping, but instead of all transportation modes falling under one bill of lading (like multimodal), intermodal shipping involves separate contracts and bills of lading for each mode of transport.

2. What Are the Pros and Cons of Intermodal Shipping?

There are many advantages to intermodal shipping, but the model may fit some businesses better than others. Some of intermodal’s key benefits include:

• Can Reduce Costs. Products are containerized so they don’t have to be individually loaded and unloaded at each hand-off. This saves on labor and reduces the chance of handling damages, both of which help control total shipping costs.
• Is Often More Sustainable. Shipping intermodal reduces emissions and improves fuel efficiency by grouping several containers onto one large transport, rather than moving each as an individual truckload. Railways, for example, can move one ton of freight nearly 500 miles on one single gallon of fuel.
• Adds a Measure of Security. Intermodal cargo endures minimal handling once it’s packed securely in a shipping container, effectively shielding products from damage. Container doors also discourage theft, as they are virtually impossible to open when loaded on trains and trucks — plus, containers are often double-stacked, putting your cargo even further out of reach from potential security risks.
• Diversifies Supply Chains. Using intermodal shipping reduces your business’s dependency on any one mode or route. Diversifying your shipping options makes supply chains less susceptible to disruptions.

As with any shipping model, there are some downsides. By nature, intermodal includes more moving parts within the supply chain, which can lead to chain reactions if one mode is delayed. Here are the major disadvantages to intermodal shipping methods:

• May Increase Transit Times. Compared to direct transportation methods, intermodal shipping often involves multiple transfers and coordination between different modes of transport. This can result in longer transit times, especially for complex or remote routes.
• Suffers From Infrastructure limitations. Intermodal shipping relies on a well-developed and efficient infrastructure, including ports, rail networks and intermodal terminals. In certain regions or locations, the availability and quality of this infrastructure may be limited, leading to potential delays and inefficiencies.
• Limits flexibility. Intermodal shipping requires careful planning and coordination due to the involvement of multiple carriers and modes of transport. This can restrict flexibility in terms of last-minute changes or unexpected circumstances, such as weather events or operational disruptions.
• Invites Transloading Challenges. Transloading, which involves transferring cargo between the different modes of transport, naturally introduces some risk to your cargo. While individual products or pallets remain within the container, the handling of the containers themselves during transloading operations requires careful attention.
• Isn’t Always Cost-Effective. While intermodal shipping can offer cost savings compared to exclusive truck transportation (as mentioned above), it may not be the most economical option for every shipment. Variables like distance, volume, lane availability and fuel prices impact the overall cost effectiveness of any shipping strategy.
• Documentation and compliance. Intermodal shipping involves compliance with regulations and documentation requirements specific to each mode of transport, such as customs procedures, weight restrictions, and hazardous materials regulations. This can add complexity and administrative burden to the shipping process.

Businesses must examine these pros and cons within the context of their specific shipping needs to determine whether the benefits of intermodal shipping outweigh the challenges.

3. Should My Businesses Utilize Intermodal Shipping?

Consider the following questions:

• Does your business regularly ship freight 700+ miles*?
• Are you consistently shipping freight to the same locations?
• Do you typically ship to and from metropolitan areas or regularly cross state or international borders?
• Is operating more sustainably a current goal or area of concern for your business?

If the answer to any of the above is “yes,” then intermodal shipping could be a major benefit to your business. Consider taking a closer look at how intermodal shipping can save you money and further diversify your supply chain.

*Note: Trucks tend to offer more competitive prices for distances shorter than 700 miles compared to intermodal options, though it is possible for intermodal shipping to be more cost-effective in certain circumstances.

4. Is There Anything You Can’t Ship Intermodal?

You can ship nearly any type of finished goods and even raw materials using intermodal shipping, however intermodal cargo must be compliant with the regulations set for each individual mode. For example, railways prohibit the shipment of personal belongings and living things, such as pets or passengers. Similarly, many air carriers cannot transport aerosol sprays and other explosive materials that may react poorly to changes in air pressure.

It is possible to ship perishables using intermodal shipping, but you’ll want to obtain a temperature-controlled container to ensure nothing spoils in transit.

5. What Level of Visibility Does Intermodal Shipping Provide?

Back in the old days, freight would be retrieved by an initial carrier and shippers would be left hoping it made it through each subsequent hand-off to arrive at its final destination on time.

Now, thanks in part to International Organization for Standardization (ISO) regulations, container sizes are standardized and each is required to bear clear identifiers that make it easier for each mode to register freight upon arrival — and track precisely when it departs.

Recent advances in technology also allow companies to easily connect and share shipping data across platforms through APIs. Today’s massive amounts of available shipping data also allow AI and machine learning to better calculate arrival dates and anticipate potential shipping delays.

By integrating different modes of transport, intermodal shipping can offer increased efficiency to businesses seeking alternative modes of moving full truckloads or long-distance cargo.

Contact our team to learn more about how intermodal shipping can revolutionize your logistics strategy and help your business thrive in the dynamic world of freight transportation.