So, you have made the decision to transition some or all of your truckload freight to intermodal to take advantage of cost savings, scalability, reliable, predictable service and to reduce your company’s carbon footprint.
The big question to answer is how can one implement intermodal successfully, which is what we will cover next.
Truckload-like, Not “Like Truckload”
The first thing for companies wanting to implement intermodal lanes into their logistics strategy is to realize intermodal is truckload-like, not “exactly like a truckload.”
While intermodal has the same process of pricing, freight tender, track & trace and invoicing as truckload, there are key differences companies need to address at the start of the implementation to best move forward and avoid roadblocks or failure with their transition.
3 Issues to Tackle for New Intermodal Encounter
There are three issues all shippers should focus on when tackling intermodal:
In regards to load configuration, it is imperative for companies to educate themselves on the weight requirements previously discussed (42,500 for 53’ intermodal container) and the blocking and bracing to properly manage harmonic vibrations. Weight is the number one issue new intermodal shippers often have trouble with, making this a key component to understand and train the loaders on the dock. Not complying or understanding the weight and its distribution within a container can leave a shipper burdened with costly rework charges, fines, damage and delays - all of which are the responsibility of the shipper.
On the topic of transits, recall the rule of thumb is truck transit, plus a day, but that is not always the case. There are some lanes that are truck, plus two days, some lanes are similar to truck and still others that may be something altogether different. One of those altogether different examples would be for an intermodal lane that does not operate every day, which is not often found but they do exist.
Last but not least is selecting the intermodal marketing company (IMC), which is outlined well in our article entitled Best Intermodal Companies and How to Choose. Keep in mind the biggest is not necessarily the best for everyone because it is not a one-size-fits-all proposition, so if you are at the point of choosing, get through the entire article.
The Intermodal Shipping Process
Because intermodal is truckload-like, relatively all of the processes follow suit with a truckload from a service perspective.
Like truckload, the IMCs give intermodal shippers the advantage of making only one phone call to set up any shipment moving via an intermodal route. The IMCs negotiate rail and dray rates on behalf of the shipper for all North American intermodal traffic.
When determining intermodal requirements, shippers need the following information:
- Type of capacity required for either one-time all-in spot rates, project rates or contract rates.
- Origin and destination zip codes.
- List the BCO, in other words, who holds the title to the cargo.
- Hazardous or Non-Hazardous cargo.
- Live load and unload, drop container; build a drop pool of containers for larger volume lanes.
- Temp controlled.
Once price and credit are set, the process of shipping an intermodal load begins:
- The shipper will tender the load to the IMC.
- The IMC will coordinate to pick up the freight load from the shipper’s dock and dray the load to the origin ramp.
- (There may be a point where the intermodal shipment must be weighed)
- The container will be lifted off the chassis and loaded onto a rail wellcar.
- The train of intermodal containers will be built and rail segment will begin.
- Along the rail route, the container will pass various points where it will signal back to the IMC where it is along with the rail tracking.
- Once at the destination ramp, the IMC will coordinate the dray pick up and final delivery to the ultimate customer.
As previously mentioned, the intermodal container has great visibility along its route. The IMC can communicate this to the shipper via an FTP, EDI, or XML system-to-system connection or will be given visibility through the IMC website or through reporting pushed to the shipper.
After delivery to the destination ramp, the IMC will get an invoice and BOL (bill of lading) from the railroad, which will be the basis of the invoice for the IMC to bill the shipper.
The following is a step-by-step guide in beginning the transition to the intermodal process:
Begin the Education Process
- Education is key to success in gaining all the advantages and efficiencies of intermodal. It is important to research all aspects of the freight mode, such as service, the market, what makes a beneficial intermodal lane, top intermodal transportation providers, etc. The more the shipper knows, the more informed the decision will be.
Define Success and Obtain Operations & Management Buy-In
- Goal setting and defining success with management will be beneficial for the shipper because management will support the transition process from start to finish. Management buy-in is advantageous in its own right, but it is especially pivotal when obstacles appear during the transition process.
- The operations team also needs to be brought into the decision, so they are a part of the choice and understand its impact, so they can execute successfully.
Research and Evaluate Potential Providers
- IMC intermodal service providers are not all the same and offer various options to shippers, therefore education is crucial in this step of implementation. Asset and non-asset intermodal providers are much different in structure than truckload, so combining what was gathered in the education step with information about the providers can pave the way for shippers developing the optimal intermodal solution. Since it is recommended to educate yourself in all of the providers, it is recommended to not lock into a single IMC at this stage of implementation, rather have four or five companies in entering the next phase.
Intermodal Providers Perform Freight Analysis
- Freight analysis is not a price review, rather an analysis of dock operation and equipment requirements at origin and destination. It also an analysis in the company’s freight lanes and their location in relation to ramps. This step is also where shippers construct their RFP for intermodal providers to bid. It is important to note that not every shipping lane has an intermodal solution, so truckload is very much a part of the decision process.
Obtain Pricing and Transits in Freight RFP
- At this point, shippers should check in again with management to help walk them through the new vision of success and what caused it to change.
- Shippers should send out RFP (request for proposal) during this step of implementation. Multiple intermodal service providers should be incorporated in this step to cast the widest net, as not all IMCs operate in the same lanes.
Implement an Intermodal Solution
- The IMC will know what lanes have the best service levels, so let them take the lead because this is not the time to stumble and possibly lose the support of the goal. Once the initial pilot is up and operational, then pass in the other freight lanes.
- The recommendation in implementation is to not go all-in all at once. A phased-in solution starting with the simplest lane and dock requirements matched against the best intermodal service lanes should be done first.
Evaluate the Outcome Against a Success Goal
- It is important to ask: “Is this process outcome satisfying the success goal?” If not, then take corrective measures. If the answer is yes, then this still requires more evaluation to keep in a continuous review and improve the process. It is important to include the intermodal providers in the process to get an accurate evaluation based on what they are seeing and what other services they could provide to further optimize the program.
Comparing the Intermodal Providers
There are many more intermodal providers than shippers often think, so do not fall into the trap to think there are only five IMCs. Not only are there more than five, but there are various types of intermodal providers:
Types of Intermodal Providers:
While there are several options for providers, one of the most prevalent comparisons to make is between asset IMCs and non-asset IMCs.
Bi-Modal IMCs are also known as asset IMCs. Simply put, asset IMCs own assets: containers, chassis and the majority of their dray capacity in tractors and drivers. These IMCs do not own any of the assets on the railroad side of intermodal (ie. trains, rails, ramps, railroad team) because these type of assets are always owned by the railroads. Companies like JB Hunt own most of the dray assets listed above but outsource some of this work during peak times. In the event of TOFC (trailer on flat car) shipping, bi-modal IMCs can cater to this need. However, TOFC is less commonly used because of the efficiency COFC brings in double stacking intermodal containers versus single with TOFC service.
Non-asset providers do not own any of the dray assets or COFC boxes. InTek Freight & Logistics is an example of a non-asset IMC. These providers use the assets of the Class I railroads primarily and develop relationships with various dray companies.
Some non-asset companies will buy a limited amount of dray shipping equipment.