An Update on Intermodal: The Greener Way to Ship

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As a manufacturer or retailer, you probably already know that intermodal freight shipping can be the cheapest way to move your truckloads. This is largely due to the law of averages. When you contract a carrier to move a shipment you pay the fuel, fees, tolls, labor and other costs associated, but when you use an intermodal service, hundreds of containers are moved at a time lowering the cost per load.

What you might not know is that intermodal shipping is the most eco-friendly form of transportation.

In the spirit of Earth Day we wrote a blog post on the reasons why you should clean up your supply chain. One of the easiest ways to do that is to move freight by rail using trucks on the origin and destination ends – a service known as intermodal.

Intermodal is less expensive than just trucking for the reasons mentioned above, but also because an intermodal train can move one whole ton of freight over 400 miles on one gallon of diesel fuel. This fuel advantage, combined with the benefit of less frequent stops, makes trains the most efficient transportation vehicles. In fact, the Association of American Railroads (AAR) recently stated that on average, trains are four times more fuel efficient than trucks and produce 75% less greenhouse gas emissions.

According to AAR it’s estimate that if just 10% of the freight that moves by truck now was moved by rail instead, fuel savings would exceed 800 million gallons per year and annual greenhouse gas emissions would fall by more than 9 million tons.

So, why is intermodal freight continuing to decline for the first time since 2009?  

In the fourth quarter of 2015 intermodal freight declined for the first time since 2009 on a year-over-year basis and it hasn’t yet recovered. Factors such as low fuel prices that help competing truckers, a weaker economy and elevated inventories have had the largest impact on this sector of freight transportation.

While it’s unclear if this dip in intermodal shipping will continue to be a trend, some analysts are confident the industry will start to improve. This confidence is due to recent rail-service updates, such as improved freight car design, longer trains, advances in computer software system, the use of distributed power in trains and the improvement of rail lubrication. Class I rail consolidation between heavy hitters in the rail industry, such as the proposed Canadian Pacific Railway’s buyout of Norfolk Southern Railway, is also thought to fuel intermodal volume growth.   

In conclusion, while the intermodal industry is constantly changing, what remains is that is it oftentimes the most economical and eco-friendly transportation option. To ensure you get the best rates despite changes in capacity and regulations, request your quotes through a 3PL like FreightCenter.