Intermodal rail transportation is an essential component of any shipper’s supply chain, helping direct goods from the ports to the country's interior in a cost-effective manner. It’s also important strategically for the Class I railroads. The Association of American Railroads has found that intermodal volume accounts for about one-third of a carrier’s revenue; in 2022, the domestic rails saw 13.5 million units, half of which were imports and exports. Intermodal is a vital link in the international supply chain.
While intermodal transport is important, challenges exist. A lack of container tracking and intermodal visibility has historically pervaded the mode. Visibility is crucial, as both ends of the intermodal journey involve transitions to ocean cargo or trucking. A lack of visibility can lead to delays, supply chain congestion, increased costs for the shipper, and worse.
The Benefits of Intermodal Rail Transportation
Proactive tracking and collaborative efforts can enhance operational efficiency and reliability in the global supply chain. Intermodal rail tracking lets users experience gap-free tracking from ocean to rail to truck but also enables users to access critical inland events to help optimize shipments. Visibility also aids risk management efforts, allowing shippers to identify, prioritize, and mitigate risks to intermodal shipments.
This visibility is extremely important when tapping into the benefits of intermodal shipping. Cost is usually foremost in the minds of shippers, and intermodal rail is the cheapest way to ship goods from the ports to the interior of the country. Look at current freight rates, realize that one railcar is the equivalent of between three and four truckloads, and the savings are clear.
Sustainable Intermodal Rail and Global Trade
Intermodal rail is better than truck freight when moving large, bulky items, and experts point to the fact that on the risk management side, transporting goods via rail is much more secure than trucking. It’s also the mode of choice when importing and exporting items, as rail offers a direct and seamless connection to the nation’s ports. Rail is a critical and highly efficient component of international trade, and shipping with Class I railroads protects shippers against truck capacity swings, shortages of truck chassis, and general congestion on the roads.
Intermodal rail shipping is also a significant tool in the quest for supply chain sustainability and emissions reduction. The Environmental Protection Agency has long held that choosing intermodal rail over a straight trucking journey of more than 1,000 miles has a drastic impact on greenhouse gas emissions in the supply chain. By eliminating truck fuel, choosing rail reduces emissions by 65 percent. The industry group Supply Chain Ecology is even presenting ideas to increase the market share of rail and intermodal transportation with the add-on benefit of improving supply chain sustainability.
Identifying Challenges and Risks in Intermodal Logistics
As with any shipping mode, intermodal rail transportation comes with risks. If shippers actively understand and manage those challenges, creating a resilient intermodal operation, the benefits of rail transportation far outweigh the issues.
Inherent Risks in Intermodal Transportation
One of the biggest issues stems from a lack of supply chain stakeholder collaboration. Rail carriers have historically lacked flexibility when dealing with intermodal shipments; schedule rigidity and an overall lack of communication can lead to missed shipments, delays, inconsistent service, and a host of other problems. Shipment and rail container visibility can be difficult to obtain — when it’s transmitted, the data might be incomplete or simply arrive too late in the shipment lifecycle to be useful — or missing entirely. Intermodal rail continues to take volume from trucking as shippers switch modes, and this increase in activity, currently focused on the automotive and consumer goods sectors, will only exacerbate current problems. Issues common when using other modes, like damage and theft, are also concerns in the intermodal rail universe – transitioning between modes invites security risks – and rail seems particularly susceptible to delays caused by equipment failure and poor weather.
Intermodal Tracking and Visibility Gaps
To manage a well-functioning supply chain and to ensure shipment predictability, shippers need access to accurate shipment ETAs. Historically, collecting ETAs has meant contacting railroads directly, but intermodal visibility tools that connect directly to carriers via API have vastly improved the data-sharing process. Visibility also comes into play on the return journey, when shippers might be able to utilize empty railcars returning to the ports for new shipments. Shippers have also lacked access to intermodal data analytics, which has led to gaps in reporting.
Visibility Enables Proactive Tracking and Management Strategies
Advancements in supply chain technology have given shippers more power over their rail intermodal shipments. From managing and tracking the end-to-end shipment of goods across multiple modes from a single dashboard to better predictions due to pinpoint ETA data, visibility solutions truly create a new dynamic for intermodal rail shippers.
Technological Advancements in Rail Container Tracking
With the rise of IoT devices, intermodal container tracking has gotten more robust, but GPS and RFID technology also play an essential role in ensuring shippers always know where their goods are located.
GPS provides real-time tracking of containers, but the trackers rely on batteries and strong satellite visibility is needed. This means tracking in indoor environments is limited. IoT devices may require infrastructure upgrades, and the cost of the trackers could be prohibitive. The richness of data provided by IoT devices, which can provide exact location and temperature data, among other information, is sometimes worth the cost. RFID trackers are more limited than GPS trackers and are best used as tracking devices on short journeys.
Data-Driven Supply Chain Decision Making
Shippers in the market for intermodal rail visibility solutions must carefully weigh all their options. Visibility technology across all providers is somewhat standardized; the difference comes in the strength of the data provided to their customers and the shipper’s ability to transform that information into predictive insights and proactive management. Accurate ETAs and rail congestion data contribute to supply chain resiliency, allowing shippers to strengthen their current operations during short- and long-term planning. The data derived from IoT sensors can alert shippers to potential issues with their goods, creating exceptions when a temperature threshold is exceeded or alerting the shipper to an open container door, preventing theft.
Intermodal Rail Container Tracking is a Competitive Advantage
The supply chain disruption experienced during the beginning of the pandemic was the true definition of a Black Swan event. Nobody could have predicted the logistics congestion that arose, leading to increased operational costs, unhappy customers, and a severe hit to brand reputation. Shippers really saw the need for enhanced visibility tools and greater stakeholder collaboration. While the pandemic disruption hopefully will not return, an increase in weather events and geopolitical and labor unrest have combined with an increase in e-commerce to create a perfect storm for more logistics disruption. Shippers must be prepared.
Fragmented information and communication inefficiencies certainly contributed to the supply chain crunch. Significant delays at intermodal change points compounded these issues. To remove those hurdles, shippers use a single-point visibility solution for end-to-end data collection, analysis, and sharing tracking and supply chain health with their providers and suppliers. Vizion gives shippers access to information instantly so they are aware of delays, route changes, and congestion as soon as possible. Data sharing also improves coordination and synchronization of shipments, ensuring timely and seamless handoffs between modes. Intermodal rail visibility enables a proactive approach to handling supply chain disruption and is an integral part of any supply chain resilience strategy.
H2: Implement Effective Risk Mitigation and Tracking Practices with Vizion
Since the onset of the COVID-19 pandemic, shippers have realized that shipment visibility should be an integral component of their supply chain operations. But the proliferation and commoditization of supply chain visibility doesn’t mean it can’t be a competitive advantage. Shippers can differentiate themselves by working with the right supply chain technology partner to deploy integrated IT solutions for enhanced visibility and logistics control. Choosing the right visibility provider also helps foster the collaborative and symbiotic relationships among carriers and other logistics partners needed for efficient intermodal transport.
Users of intermodal rail freight know that it’s not only cheaper than trucking and can be exponentially more secure but that rail transportation is a major driver of supply chain sustainability. And while that last point may not impact the bottom line directly, as consumers are thinking more and more about the environment when purchasing products and regulators are moving toward imposing emissions restrictions on carriers, supply chain greenhouse gas reduction will only become more important.
Vizion users say goodbye to poor data quality from intermodal shipments and unreliable tracking while automating manual processes, allowing them to redirect employees who spent their days contacting railroads to revenue-generating opportunities. Vizion enables shippers to better coordinate and synchronize their shipments among modes, and better manage the entire end-to-end shipping process. Vizon’s API, which seamlessly integrates into internal systems, provides all this without the time and money hassles of developing an in-house solution.
Improve ETAs, foster greater stakeholder collaboration, and optimize transportation spend with rail container tracking from Vizion, all while reducing the impact of emissions on the supply chain.