When shipping to and within the continental US, it is important to consider all the factors when selecting whether to ship Intermodal or Truck.
Intermodal freight (INU) involves moving freight by two or more modes of transportation, i.e.., ocean vessel, rail, truck. Intermodal can be international or domestic. For international intermodal, goods are loaded offshore to either a 20’ or 40’ container, picked up by truck and unloaded to an ocean vessel. Once at the port, this same container is offloaded to a truck then either delivered to the final destination or loaded to rail, offloaded to a truck and delivered to the final destination. Domestic intermodal involves loading goods to a truck, unloading to rail, then transferring back to a truck for delivery to the final destination.
Truck freight (VAN) involves moving freight by only one mode of transportation, a truck. Truck freight can be Full Truck Loads (FTL) that take up the entire truckload, usually >36,000 lbs, or Less Than Load (LTL) that does not take up the entire truckload, usually 100 to 10,000 lbs in weight.
Pros and Cons
The chart below covers the pros and cons, of Intermodal vs. Trucks as well as the “even draw” between the two methods of transport. A plus sign (+) is a pro, a minus sign (-) is a con and an equal sign (=) means equal weight.
|–||Rail routes and stops limit routing options.||+||More freedom in routing options, but traffic congestion in some areas can pose an issue.|
|+||Trains are fast but can be slowed down when making pre-designated stops to unload and often a VAN (truck) is required for the final part of the journey to get to the final destination. They still are considered the faster method of transport.||-& =||Traffic congestion can result in slower progress toward destination, but alternate routes are also available which can alleviate the slowdown and congestion or obstructions. Still considered a slower method of transport unless looking at short distances.|
|+||Railways consume up to 9 times less energy than trucks per ton when moving goods the same distance.||–||Trucks consume more energy. but looking at alternate routes can help reduce energy consumption.|
|+||Railways may offer less space per carriage but can pull as many carriages as possible at the same time, making it easier to move more freight at the same time.||–||Trucks have space and load size limitations before requiring a second truck which ends up costlier. For smaller loads this would not be an issue.|
|+||Trains run cleaner and emit 60-75% fewer GHG emissions.||–||Emit greater emissions than rail.|
|–||Delays while waiting for all freight to be loaded, can cause scheduling issues and unpredictable delivery timing.||+||Trucks offer more predictable scheduling, providing fairly accurate delivery windows. Deliveries can be better planned.|
|+||Offer better cost-effectiveness when travelling long distances.||+||Can be more cost-effective when travelling shorter distances.|
|–||Rail requires that both the shipper and consignee have the ability to load and unload rail directly.
|+||Every shipper can load and receive materials by truck.
|+||Many modern trains are fueled by electricity, making it possible to power them with renewable energy. On average they are 4 times more fuel-efficient.||–||Fuel usage by Truck is significantly higher but by collecting data and looking at alternative routes, fuel can economize. However, rising oil costs do impact the price of fuel significantly.|
|+||Freight Rail (not passenger rail) has been more resilient relative to Covid19 and has not been as heavily impacted relative to staffing precautions.||–||Drivers and logistics staffing was reduced due to Covid19 precautions and are still trying to recover.|
|–||With IMU shipping specifically, less control over transfers between rail and truck and larger capacity for loss of goods.||–||Same issue with IMU as for rail.|
|–||With IMU, scheduling becomes less dependable. Can delay delivery timeframe.||–||Same issue with IMU as for rail.|
Class III shipping, also known as short-line carriers (which include terminal and switching lines), make up the bulk of today’s freight railroads, according to the Surface Transportation Board (STB). Class III carriers are more cost-effective for smaller loads and/or shorter distances. They can be more cost-effective because they carry 3 to 4 times the amount of freight that an 18-wheeler would carry. It is more fuel-efficient in that trucks average around 5 mi/gal where a train can move a ton of freight over 470 miles on a single gallon of fuel. Some trains are now electric powered as well and that reduces costs even further.
RSI Logistics did a study in April 2020 on the cost of shipping by Truck vs Rail. Here is one example from their study: Consider the movement of a bulk commodity from Houston, TX to Cleveland, OH. The truck cost in this example is approximately $ 5,159 per load, whereas rail would be $ 6,676 per car. However, providing you can fill the rail car, then the rail cost = $1669, since one railcar equates to four truckloads.
|Truck||Houston, TX||Cleveland, OH||1,378||24||$5,159||$20,636|
|Rail||Houston, TX||Cleveland, OH||1,378||95||$5,676||$1,669|
By choosing to use intermodal rail and truck transport compared to truck alone, you can cut transportation costs by more than half.
|Transport Method||Cost per Net Ton|
|Intermodal: a combination of rail and truck using bulk transfer terminal||$95.54|
|*Note these quoted prices are from a study done in 2020 and may differ in values but the formula still results in a reduction of costs when using an intermodal transport compared to over-the-road truck alone.|
According to the Wall Street Journal in December 2021, shipping costs both by Truck and by Rail are expected to increase in 2022.
Overall, domestic shipping rates by road and rail in the US are up about 23% (as of December 2021) from 2020, according to Cass Information Systems.
Trucking is looking at higher rates, following a sharp run-up of contract prices that businesses negotiate with trucking companies and freight brokers. In November 2021, the contract rate reached a record $2.51 per mile, excluding fuel surcharge costs, according to the online freight marketplace DAT Solutions LLC.
Some manufacturers are rolling over existing contracts with carriers for 2022 in exchange for moderate price increases, according to Chris Caplice, Chief Scientist at DAT and Executive Director of the MIT Center for Transportation and Logistics. He continued to say “if you go out to bid, you can expect your rates will be 10% to 15% higher, on average.”
The cost of storing goods also rose quickly with warehouse and labor costs increasing, as well as facility owners seeking price increases in lieu of expiring leases that allowed companies to sidestep rising rents in 2021.
Rail Dwell, Delays, and Cars Held Factors
RSI provided some valuable data in terms of how the rail industry performs as far as meeting timelines by tracking dwell times, delay times and cars held.
Rail Yard Dwell Time
As of Feb 13, 2022
BNSF had a yard dwell time of 34.48
NS had a yard dwell time of 31.51
CSXT had a yard dwell time of 27.05
UP had a yard dwell time of 24.60
CN had a yard dwell time of 20.98
CP had a yard dwell time of 20.75
KCS had a yard dwell time of 19.57
Rail Delay Time
As of Feb 6, 2022
BNSF had 113.5 trains delayed
UP had 110.0 trains delayed
NS had 88.0 trains delayed
CP had 15.0 trains delayed
KCS had 10.0 trains delayed
CSX had 8.0 trains delayed
CN had 7.0 trains delayed
Rail Cars Held
As of February 13, 2022:
BSNF had 13,078 cars held
NS had 7409 cars held
CSX had 6,220 cars held
UP had 3,726 cars held
CP had 1,605 cars held
KCS had 987 cars held
CN had 683 cars held
- Intermodal freight can be international or domestic and involves the transportation of freight using multiple modes of transportation (e.g., rail, ship, aircraft, and truck)
- Truck freight can be LTL, FTL and involves the transportation of freight using only trucks
- Intermodal will be the lowest cost, up to 15% less than truck
- From a transit time, however, intermodal will be longer; on an average 10-12 additional days than transporting via truck.
- In addition, intermodal is best for a full container FTL (approximately 36,000 lbs.).
- Intermodal is also best when transporting over longer distances (greater than 500 miles).
There are numerous freight brokers who can help determine the best method for transport. We include a few links here to some intermodal freight brokers who can assist:
- Top Image: https://www.comparefactory.com/trucking-vs-rail-transportation-part-1/