An Update on Intermodal: The Greener Way to Ship

Background image attribution: Richard Thornton / Shutterstock.com

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.

6 Reasons to Clean Up Your Supply Chain Now

As logistics and supply chain professionals, our decisions directly impact the environment on a daily basis. While more businesses, both large and small, are doing their part to make their supply chain “green” and to eliminate questionable practices, there is still room for improvement. Taking steps to clean up supply chains are critical not only for the Earth today, but for future generations. 

1. You’ll be ready to meet upcoming regulations 

 If you have not already taken steps to clean up your supply chain, you should know it may eventually be a requirement. While there are already many rules regarding pollution and waste, a number of new ones are being implemented. Making the necessary changes now means less work in the future when these regulations take effect. 

2. You’ll have a huge impact on the environment 

 Emissions from trucks, ships, and every other mode of transportation in the United States create a significant, measurable carbon footprint. Small changes like switching to energy-saving light bulbs do make a difference, but larger changes are needed to reduce the real impact. 

The best way for a company to go green and save money is by making better decisions within their supply chain in ways that reduce the negative outputs. A simple example is making routing decisions that most effectively minimize greenhouse gas emissions, such as intermodal freight shipping. It’s the daily decisions that will result in the largest environmental impact. 

3. It’ll improve your rankings 

Supply chains are also getting exposed for better or worse. In addition to new rules and regulations regarding emissions, businesses will soon no longer be able to conceal their lack of accountability within their own supply chains. The CDP (Carbon Disclosure Project) recently released a report detailing companies’ supply chain engagement and their efforts on emissions reduction. The CDP also plans to start ranking businesses based on their management of carbon and other materials that impact climate change. 

4. You can save money 

Creating a green supply chain is not all about making it harder to operate and creating more expense. Aside from it simply being the right thing to do, there are many other benefits to a sustainable supply chain. 

Many companies believe that “going green” will add additional costs to their overall logistics budget, and they therefore are reluctant to make changes. However, reduced emission systems, processes, and practices tend to be more energy efficient. This can save money in several ways, such as lower fuel, electrical, and maintenance costs. Remember that logistics is all about efficiency, so the motivation behind doing better for the environment should not be in conflict with doing what’s best for your supply chain. 

5. You’ll get a leg up on the competition 

Even if your company is not making eco-friendly changes (yet), it is certain your competitors are. Many businesses, especially larger ones, are making a concerted effort to dedicate resources to reducing emissions and eliminating toxic chemicals from their supply chains; therefore, don’t get left behind. 

With an increase in consumer awareness about where their goods are coming from, the need for transparency is greater than ever. Supply chain transparency helps foster an honest and caring public image to your customers. Companies that take steps to be more open have an advantage over companies that can be perceived as “hiding” something. 

6. You’ll educate the community 

Cleaning up your supply chain not only serves to educate company employees, but it helps to educate consumers and communities on the importance of being environmentally conscientious. Increased education will result in enhanced knowledge about current environmental issues that can even potentially open up new business opportunities. 

Now more than ever, the supply chains that drive our global economy have an important effect on the world and our environment. By taking steps toward going green, your business will not only operate better but it will help properly fulfill our collective responsibility as stewards of the Earth.