When it comes to freight transportation, certain modes tend to dominate the spotlight. Trucking because it carries the most freight; Ocean because it’s the gateway to global trade; and Parcel because it’s the fastest growing mode thanks to e-commerce. But there’s another way to transport freight that often doesn’t get the spotlight it deserves — that is, Intermodal. What are some key trends in the intermodal market? Why should shippers consider using intermodal? And how can technology and logistics service providers help shippers incorporate intermodal into their transportation operations? Those are the main questions I discussed with D’Andrae Larry, Head of Intermodal at Uber Freight, on a recent episode of Talking Logistics.
Intermodal Trends
I began by asking D’Andrae to share the current trends he sees in the intermodal market. Not surprisingly, he sees intermodal reflecting the market changes that have impacted most consumer goods sectors; namely, a softening in goods purchases and shipments as we come out of the craziness of the pandemic surge.
“I think we’re probably at the bottom of the trough of demand and will be range-bound in that area until consumer demand picks up again,” D’Andrae says. “When demand picks up, intermodal provides the opportunity for shippers to quickly scale up without being reliant on truck drivers, diesel fuel or new entrants in the market.”
Benefits of Intermodal
What benefits can companies gain by employing intermodal? D’Andrae says that companies should ask themselves a couple questions, which he shares in this short clip:
“So, if I’m the CEO or senior leader of any Consumer Goods, Automotive, or Retail company,” says D’Andrae, “I would ask my senior supply chain leaders, What is intermodal’s opportunity for us to address not just carbon emissions and cost savings, but also capacity and resilience in our supply chain as we move forward?”
If they ask themselves these questions, “most companies will find they have very low penetration in intermodal,” which means they’re missing out on big opportunities to not only reduce their carbon footprint and costs, but also to better position themselves for optionality, capacity, sustainability, and resilience.
With regards to sustainability, D’Andrae highlights that “with intermodal, you can get 400 miles per ton move with one gallon of fuel; you just won’t get that kind of utility from over-the-road.”
Leveraging Technology and Partners
What role does technology such as a transportation management system (TMS) play in intermodal? D’Andrae states, “It plays an important role. It’s the decision matrix that everything gets filtered through. If your vendor’s TMS doesn’t have functionality for intermodal, that’s a problem. You need that optionality and flexibility.”
Similarly, what value can logistics partners bring to companies’ intermodal operations? D’Andrae sees four areas where logistics partners can help. The first is in securing capacity, as he explains in this short clip:
Second, D’Andrae mentions the ability to reduce the amount of carbon needed to manage your supply chain. Companies who can show they can scale up capacity without significant increases in carbon will have an advantage going forward.
D’Andrae says the third benefit is agility. The ability to help clients scale up capacity as needed while minimizing the carbon footprint will provide competitive advantage.
The final area D’Andrae points out is helping companies to control and reduce costs over changes in the market. “The ability to help companies control costs, reduce their carbon footprint, increase agility and flexibility, and also scale up capacity as needed; those are the advantages a logistics partner can offer.”
How to Start, or Improve, Intermodal Usage
If you’re not using intermodal as part of your transportation operations, how should you get started? If you’re already using intermodal, what opportunities exist to increase the value you receive? D’Andrae provides many questions to ask yourself and your organization to determine the best path forward, so I encourage you to watch the full video for all of his insights and advice. Then keep the conversation going by posting a comment and sharing your perspective and experience with intermodal.
