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Shipper Best Practices

Tips for achieving cost and capacity beyond the spot market with intermodal shipping

Consistent freight cost & capacity can be achieved with intermodal shipping. Consider these best practices when finding a carrier to outperform the spot market.

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What is the spot market?

The spot market is a public financial market in which commodities are traded for immediate delivery and cost is based on the goods being shipped. Instead of rates being paid by the providers shippers are contracted with, the spot market rates are usually paid by brokers.

It’s true there are brief moments in time when railway freight capacity is generally available and cost-driven shippers may receive lower rates. However, using brokers or non-asset providers on the spot market is not a long-term strategy for successfully achieving consistent cost and capacity.

Keep these best practices in mind to help you achieve cost and capacity consistency with intermodal shipping.

1. Keep long-term freight with an asset carrier

As the cycle of supply and demand continues to prove, capacity inevitably tightens. As a result, spot market prices will spike and shippers will be forced to lean back on major, asset-based intermodal carriers to keep their freight moving within budget.

However, shippers that try to convert back to their intermodal carrier may find containers, drivers and capacity removed from areas they need it again.

By sticking with an asset provider over a non-asset provider during all market cycles, shippers can be assured that they will have the drivers, equipment and freight capacity needed to overcome all ebbs and flows of the market.

2. Make a cost-effective plan

The spot market has a history of fluctuation. With a long-term game plan by a strategic intermodal carrier, shippers should find their bottom line is more consistent over time, coming out ahead of where they would if they were to regularly jump between asset and non-asset providers.

A great attribute to look for in an intermodal carrier is if they have a dedicated intermodal onboarding team to set the business up for success from the start.

An expert provider should be providing the following for shippers:

  • Network alignment and assimilation into provider base.
  • Single channel of communication with a proactive expert.
  • Beneficial check-in routine to ensure loads are moving efficiently.
  • Series of resources to help become a shipper of choice.

Being strategic with intermodal carriers will result in long-term cost and capacity consistency in the supply chain.

Published December 2019

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