Shippers are constantly looking for ways to reduce their freight costs. While intermodal is often times an excellent alternative to over the road trucking, many shippers aren’t aware of the reach that domestic Intermodal has. There are hundreds of lanes available, and with railroads investing billions of dollars each year ($29 Billion in 2014 alone!), more intermodal shipping lanes are currently available than ever before.
What makes for a good intermodal lane?
Every shipper’s individual needs are unique, and each intermodal lane has its own quirks and nuances. While there is no definitive perfect intermodal lane, there are certain traits that the most efficient lanes share.
Length of haul
In most instances intermodal becomes a cost effective alternative to OTR trucking at around the 700-mile mark, though it becomes more lucrative as the distance increases. Coast to coast intermodal Lanes such as Newark, NJ to Portland, OR offer some of the highest cost savings. In some cases, it is possible for a shipper to save 30% on their shipping rates when converting to intermodal for coast to coast moves.
Shipper and consignee locations
In the best case scenario, both the shipper and consignee are located within 50 miles of the respective origin and destination intermodal terminals. Should either (or both) locations be located greater than 50 miles from the nearest intermodal ramp, it may still be possible to ship intermodal. The quoted intermodal rates may be providing enough cost benefit to absorb the added dray costs and still be a viable option.
Large metro areas
Most of the largest metropolitan areas in the United States have an intermodal presence by at least one of the class 1 railroads (CSX and Norfolk Southern in the east, BNSF and Union Pacific in the west). The major industry locations such as Los Angeles, Atlanta, Newark, and Chicago usually have multiple intermodal terminals present. This provides added options to increase the odds of your required intermodal lane being available.
In addition, most large metro areas have the highest flow of inbound and outbound freight which means rates for these intermodal lanes are usually the lowest. For example: Charlotte, NC to Chicago, IL may provide some cost benefit that makes sense, but an intermodal lane such as Newark, NJ to Chicago, IL will probably provide more cost savings due to the high amount of freight travelling between both locations.
While this isn’t something that most intermodal shippers are concerned with, it is worth it to mention. It’s no secret that the class 1 railroads interchange freight between one another. For example, a load originating in Newark, NJ and being delivered to Los Angeles, CA will start its journey on one of the eastern railroads, it will most likely first head to Chicago, IL to be interchanged with one of the western railroads. This makes perfect sense; no one railroad has reach to all locations.
Should an instance occur where the originating railroad has and intermodal lane with service from the origin to the destination on its own line, the freight will most likely arrive about a day earlier than if it were to be interchanged between railroads.
Intermodal’s reach has been rapidly growing in recent years. Though many factors may affect and intermodal lanes’ cost effectiveness and transit time, it still makes sense in most scenarios. Shippers often enjoy rates that are on average 19% lower than comparable over the road trucking rates, in addition to consistent capacity and detailed tracking capabilities.
If you are interested in receiving an Intermodal rate quote, please check out our colleagues over at IntermodalQuotes.com to get an Intermodal Rate today.