Shippers Turn to Intermodal for Savings

Choosing the best transportation mode is a crucial step in shrinking time and cost of moving freight between a shipper and a point of purchase. There are pros and cons to each mode of transportation, depending on the type of freight being moved, and there is an optimal route for every shipment.

Shippers are now turning to intermodal transport for their freight because of intermodal’s advantages. Some shippers are even locating or relocating their DC sites near railways for easy, cheap access to intermodal transport. If you’re unsure what the best method, or combination of methods, for your shipments are here are some pros and cons of each:

1) Road

The most basic and historical transportation mode.

Pros:

• Broad and flexible road network enables point-to-point service and connects specific activities
• Relatively small capital cost, especially on short distances
• Quick implementation of new technologies into industry infrastructure
• High competition creates low prices and many carrier options
• High speed of vehicles enables same- or next-day delivery option

Cons:

• Noise and environmental pollution
• High probability of accidents and breakdowns
• Growing driver shortage and stressful working conditions for drivers
• Limited capacity due to size and weight restrictions imposed by government and technical limits
• Congestion, often hard to forecast, which results in delivery delays
• Probability of freight damage due to careless transportation that depends greatly on each carrier/driver liability

2) Railroad

Ideal transportation mode for bulky freight and long distances.

Pros:

• Environmentally friendly (compared to other modes)
• Long-distance routes are cost-effective
• Strict timing schedule with minor congestion probability
• Suitable for bulky freight and raw materials, carrying capacity is high and elastic
• Safest form of transport, highly protected from bad weather impact

Cons:

• Lack of flexibility due to limited routes that cannot be adjusted quickly and easily
• Not widespread enough to provide full coverage across country
• Cannot provide door-to-door delivery, so requires intermediate loading and unloading that costs lots of time and labor
• Lack of competition and monopoly ownership due to huge costs of creating construction and maintenance

3) Air

The fastest yet most expensive type of transportation.

Pros:

• Fast
• Small possibility of freight damage due to airport handling and storing regulations
• Ideal for perishable goods with strict expiration date
• Often is used for quick 24-hour or 48-hour delivery, and additional costs are passed to consignee

Cons:

• Capacity is small, resulting in high transportation costs
• Unsuitable for vast majority of bulky and heavy freight types due to custom, security or capacity restrictions
• Strictly limited routes and timetable
• Additional costs caused by loading/unloading, handling, airport taxes and intermediate delivery
• Environmental pollution and dependence on fuel prices

4) Ocean

Effective for large freight amounts of non-perishable goods and for enterprises within cities with water access.

Pros:

• Less expensive than other modes, especially for large cargo volumes
• Cost doesn’t fluctuate greatly depending on size and shape of cargo
• High capacity lets shipper spread costs among other numerous shippers
• Can service large amounts of bulky freight at once

Cons:

• Inflexible routes and timetables
• Very slow and not suitable for perishable goods or fast delivery
• Limited number of ports
• Possible delays due to bad weather

5) Intermodal

Intermodal transport can be effective for just about any large shipment.

Pros:

• Secure and quick delivery thanks to standard container usage for all transportation modes
• Combine benefits of different types to create best-suitable solution for specific type of freight and delivery
• Less labor for handling of loading and unloading
• Reduce air pollution and transportation costs

Cons:

• Possible delays due to factors from each mode and loading/unloading setbacks; shipment cannot be time sensitive
• Not suitable for small shipments
• Sometimes, dock dues can be applied that increases total cost of transportation
• Unable to provide consistent service level

Demand for intermodal transportation is on the rise. Wal-Mart, Home Depot, and many other large companies have relocated their massive DC centers to be nearer intermodal hubs. As trucking capacity shrinks, shippers are trying to avoid the high prices of motor freight carriers. Intermodal transport has proved to be a valuable solution and will continue to grow in popularity.

What Should I Read Next?

• LTL Shipping Costs Set to Rise in 2015
• What to Know: Density Priced Shipping

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