What Is Intermodal Transportation? Definition and Motivations

by Vector | Jul 1, 2020 12:00:00 AM

What Is Intermodal Transportation? Definition and Motivations

July 1, 2020
What Is Intermodal Transportation? Definition and Motivations

Intermodal transportation means moving large-sized goods in the same steel-based containers through two or more modes of transport. It's a typical way of moving goods in modern times. Intermodal transfer may involve truck, rail, ship, and then truck again. Basically, instead of shifting goods from one vehicle to the next in their journey, intermodal transport handles these special standardized containers instead. This process brings many benefits, such as increased safety for the goods and faster delivery.

This mode of transportation system dates back to 18th-century Britain. The British used it to move coal stored in containers over their canal network. But it wasn't until the 1960s that intermodal become the preferred choice for sea transport.

Logistics companies and international organizations made efforts to integrate the other modes of transport through intermodalism. Later, containerization and standardizing international container sizes made intermodal transport even more lucrative by enabling easy handling between modal systems. Currently, intermodal transport is the dominant mode for the global supply chain and logistics.

Thus, it's vital for anyone in the logistics business to understand this concept that drives the international shipping and trucking industry. In this article, we'll explore the features, benefits, and current market landscape for intermodal transport.

How Does Intermodal Transport Work?

At the start of the intermodal transport process, an empty truck arrives at the consignee point. The shipper or transporter in charge loads the goods onto the container at the back of the truck. Most likely, nobody will handle these goods from this point until they reach the destination.

The truck travels to a rail yard through the road network. Here, the logistics company transfers the containers onto a train. That train might transfer the container to a railroad station in the destination city, or it might go to a port for shipping.

The shipping company moves these containers through the maritime network to the destination port. People unload the container and transfer it to another truck. Or they may put it on another train for more inland transport and then to the truck. This truck may deliver the container to the destination modal station. The trucks used to transfer these goods are called drayage, a service that only certain companies provide.

What happens next? The logistics company now removes the goods from the container. Now, the container is empty and ready for a new load. Finally, the logistics company carries out the last-mile delivery to the end user.

Why do companies use intermodal transport? It allows a logistics company to benefit from the advantages of each means of transport. Using rail service is often cheaper for inland transport. Shipping allows faster international travel over long distances. And trucks are essential for the last mile of local pickups and deliveries.

Pros and Cons of Using Intermodal Transport

Intermodal transport has become the backbone of the trade and logistics industry because it offers so many benefits. Unfortunately, because of the long distance, some problems and situations are unavoidable. Here are some pros and cons of using intermodal transport.

Pros

  • Rapid service: By using intermodal transport, a company can reduce delivery times. The business can use the fastest mode of transport for long distances. Using containers also allows an efficient transfer of goods from one mode of transport to another. Reduced loading and unloading times also contribute to faster delivery.
  • Lower costs: Shippers enjoy lower prices, along with low handling costs. These prices are also more predictable. Thus, the entire intermodal transfer is cheaper. Choosing railway mode is also a good way to reduce costs, as it consumes less fuel while traveling a considerable distance.
  • Increased capacity: Because most industries use intermodal transfer, it's relatively easy to achieve economies of scale and ensure increased capacity. Companies can also use reverse logistics to fill up large containers.
  • Safety: The containers store the goods throughout the journey. They also don't need handling during shifting between the modes of transport. These containers are like a warehouse and limit the risk of damage to the goods. Thus, nobody has access to the goods while they're in transit. Using containers also reduces the chances of theft. Also, the container is also always under supervision, unlike an over-the-road shipment, thus providing the highest security for goods.
  • Eco-friendly service: Reducing a shipment's carbon footprint minimizes the environmental damage it causes. According to Breakthrough Fuel, trains emit 5.4 pounds of carbon dioxide per 100-ton mile, while trucks emit 19.8 pounds over the same weight and distance.

These are impressive advantages! But keep the disadvantages in mind as well.

Cons

  1. Structural costs: Can intermodal transport reduce your transportation costs? It largely depends on your product's structure. If your container is heavy and requires a crane to move it to trucks from rail, then shippers can manipulate the costs, leading to higher infrastructure costs. This issue is common in some developing countries where there's a lack of standardization.
  2. Delays: Although many companies prefer intermodal transport because of its low cost, it may be slower in some situations. For example, the railroad may not offer direct routes to all destinations, thus increasing the delivery time. The time to unload the carrier can also be frustrating if that facility is delayed.
  3. Reliability: Because intermodal transport depends on more than one transit mode, there's a high chance of the chain breaking at some point. Different businesses may be in charge for each mode of transport. This requires more logistical coordination and increases risk. Unexpected delays due to weather change and equipment failure are possible.

You must carefully evaluate intermodal transport by keeping your requirements and all the pros and cons in mind. When done right, this type of transport can really improve your logistics KPIs. It often makes sense to choose this mode of transportation for its high-quality and effective service and relatively low costs. Despite some unpredictability, intermodal shippers can provide a superior delivery system than other transportation processes.

Intermodal Transportation Is Growing

According to CNBC, intermodal transport moves containers and trailers about 25 million times all over North America each year. Globally, more than 20 million intermodal containers are in use. It has been strongly promoted and developed all over the world because of its efficiency, reduced costs, improved security, and faster delivery. And these numbers are only going to increase as trade routes and infrastructure reach all parts of the globe.

With technological developments, intermodal transport today is upgrading its standards. Many online businesses rely on shipments, so there's a need for intermodal transport every day as businesses continue to tap new market regions. Also, in developing countries, the transportation industry is transitioning to a more high-tech environment. This digitalization also favors intermodal transport because digital records are easier to access and keep.

Market Dynamics of the Intermodal Transportation System

How are markets making intermodal transport more popular? What factors, if any, will increase the adoption of intermodal in the next few years?

  • Intermodal transportation has some essential factors that drive its adoption, such as the adoption of containerization, reliability, safety, cost, market demand, and efficiency.
  • Expanding global trade and logistics networks will expand the intermodal transportation system as well.
  • Tank transportation, cargo, and containers face strict government rules. These rules can influence the growth of the intermodal transportation system.
  • Logistics players in the market are always looking for new and different markets. Coupled with economic growth, this desire to expand can lead to an increase in intermodal transportation.
  • Usually, intermodal transport consumes the least fuel. Nowadays, people are willing to move toward eco-friendly options.

Conclusion

Intermodal transport often leads to lower costs, faster delivery, safer goods, and improved sustainability. Due to these strong advantages, intermodal transport has become the preferred system of transport for most logistics companies. As global online trade and commerce grow, demand for intermodal transport will likely increase in the coming decades.

This post was written by Aditya Khanduri. Aditya currently handles product and growth at Cryptio.co, and he's also built a couple of B2B products. He's proficient in data analysis with Python and has worked with multiple startups in the blockchain and artificial intelligence sector.

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