Optimizing transportation with intermodal
There are a lot of factors that are considered when determining how freight is moved. Unsurprisingly, the cost of transportation often ranks very high on the list, along with the mode that can move it at the preferred price. For some shippers, the spot market is an alluring opportunity to get the best pricing. While solely using the spot market can offer financial advantages in a favorable market, when the market turns, it can result in major financial loss.
The fix? Developing strong, strategic relationships with carriers who have the capacity to incorporate additional modes into the mix. Layering intermodal into your transportation mix provides an opportunity for freight optimization and diversification. This will help you achieve your financial goals and get your freight delivered — regardless of how the market is moving. Here’s how intermodal can maximize your shipping needs.
Competitive pricing without a long-term contract
Contracts are a great way to get guaranteed capacity locked in at a market-fair price. For some shippers, long-term contracts can feel too restrictive. Those shippers may turn exclusively to the spot market to continuously try and find the best rates available. However, if the market turns, a shipper can be left paying extreme rates to move freight, resulting in a big hit to the bottom line. Plus, constantly turning to the spot market is a time-consuming task.
But there is a way to get the guaranteed capacity without the commitment of a long-term contract: Work with an intermodal transportation provider that offers promotion pricing contracts. These contracts are renewed every three months, which provides short-term stability in pricing and allows a shipper to move with the market more frequently than with traditional contract lengths — all the while knowing that capacity needs are met.
Avoid disruption dilemmas in the supply chain
The market is variable enough, let alone when a major disruption — extreme weather, port congestion or a loss of a carrier in the market — further restricts resources and capacity. Working long-term with an intermodal provider can help you stay in control and mitigate the worst when those occurrences happen.
Larger intermodal providers have established relationships with railroads, which helps in prioritizing and moving freight. Additionally, a provider that buys and maintains its own assets means there will be more reliability, predictability and capacity to keep loads moving safely and on time.
Regardless of the disruption, drivers are what make the industry go round — even in favorable market cycles, the driver shortage is real. The best intermodal transportation providers understand the tremendous impact that the men and women who get behind the wheel have and are prioritizing compensation and home-time opportunities. Without enough drivers, freight doesn’t move, and that is also a major disruption.
There is no one-size-fits-all solution to moving freight, and diversification is an integral way to optimize transportation. Diversifying transportation modes helps spread out risk and keep freight moving based on what’s best for a shipper’s freight type and network. Schneider does this through its two-pronged capacity stacking model.
- First, shippers have the benefit of using different services, technology and modes of transportation within their supply chain to drive more efficiency, productivity and cost savings.
- Second, shippers have access to supply chain management services, such as personalized logistics engineering, innovative technology stacks, digital optimization tools and dynamic pricing solutions to further unlock and realize supply chain strategy, agility and resiliency.
Diversification among transportation providers also helps a shipper find a provider that can best service the freight according to the lanes it runs and rail relationships it has. A transportation provider can assess your supply chain and network to find optimizations and efficiencies, using the spot market on lanes where it makes sense and incorporating intermodal for stability and guaranteed capacity. Shippers get the peace of mind that their freight is continuously moving and getting to where it needs to be.
Meet sustainability goals
If shipping green is a priority, not only is transportation one of the top areas of improvement for reducing your environmental impact, but intermodal is one of the best modes to help meet key sustainability initiatives. In fact, the average reduction in CO2 emissions when moving loads by rail is 30%. Intermodal transportation providers that take sustainability seriously have the ability to help you meet your green goals through a variety of options.
- Invest in battery-electric trucks: Battery-electric trucks produce zero direct emissions and are impactful in reducing CO2 per-mile emissions. Schneider announced its plans to operationalize 92 Class-8 battery electric vehicles in Southern California, with over half already in service.
- Set carbon emission reduction goals: As part of its own corporate responsibility in meeting emissions goals, a transportation provider can help a shipper find ways to green its routine and work together to meet it.
- Network optimization: A transportation provider can assess a shipper’s network and suggest alternatives that reduce empty miles.
- Freight consolidation: As part of optimizing the network, identifying opportunities to consolidate freight streamlines the supply chain and reduces environmental impact.
Intermodal transportation offers shippers a freight solution where cost, capacity, consistency and sustainability are top of mind. Incorporating this mode as part of a strategic transportation network can yield big results to the bottom line, while keeping shipments from going off the rails.
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