Intermodal Shipping: Lower Costs, Reliable Capacity

Welcome to Beyond Point to Point, the podcast where we go beyond pickup and delivery and dive deeper into the world of logistics, freight, and supply chain management. From industry trends to expert insights, we're here to help you navigate the complexities of modern shipping. Be sure to subscribe to Beyond Point to Point wherever you watch or listen to your favorite podcasts. And now here's your host, Joe Greek. Welcome to Beyond Point to Point, the podcast where we explore the strategies, services, and innovations shaping today's supply chains. I'm your host, Joe Greek. Today, we're talking about intermodal transportation, a solution that many shippers have heard about but often misunderstand. From cost savings and capacity advantages to common misconceptions around transit times and handling, intermodal can play a powerful role in building a more flexible strategy. Joining me today is Alison Phillips, Averitt's intermodal services leader who works closely with customers and our internal teams to design intermodal solutions that move freight efficiently across North America. Welcome to the show, Allison. It's great to have you here. Good. Thank you. Glad to be here. Well, before we get into all things complex about Intermodal, let's start simple. When is Intermodal actually a good fit for a shipper? Yeah. I would say for anybody that's looking for a dedicated door to door freight option. So anything with intermodal, we can do door to door. Yeah. A perfect example lane would be, like, seven hundred miles or more. Even sometimes five hundred to six hundred can be a good fit for intermodal. And then as well as anybody that's looking for like drop container options, those are good opportunities for intermodal as well. I guess one of the biggest misconceptions out there about intermodal is that it is just too slow. So how do you respond when a shipper says that? Yeah. So a lot of times I just say reach out to us at the intermodal team and just have us take a look at it, review what the options are. A lot of times customers think that intermodal means it's gonna be a two week transit when in reality, it's just one to two days extra compared to the over the road option that they might receive. And a lot of times, it will save the customer upwards of a thousand to fifteen hundred dollars. Whenever they're seeing those options side by side, they can review and say, oh, well, maybe just adding one extra day is worth saving five hundred to a thousand dollars. That is a pretty incredible savings right there. Exactly. I guess another question that comes to mind when thinking about the misconceptions with intermodal, I would assume that the trains are running on a very predictable schedule. So that should also factor into dependability. Right? Yes. And the schedules are very, like you said, predictable. They are ninety percent to a hundred percent on time all the time. So a lot of times they actually move faster than the the train schedule does show. But one thing I learned recently is that the over the road transit is usually about six hundred to six hundred and fifty miles per day, and the intermodal actually offers some solutions that are around five hundred to five hundred and fifty miles per day. So that transit time is really right in line with the over the road transit time that customers are receiving. Wow. Would you mind walking us through what actually happens from dock to dock? Is freight ever touched or transloaded? No. Actually, lot of our or all of our options are door to door. So what we do is we work with the drayage providers. They'll show up to the shipper with a fifty three foot rail container. It's essentially the same dimensions as a full truckload trailer. The shipper will then load the freight, and they'll place a seal on the container. And then we take that same container to the rail yard. That container is then loaded onto the train, and it travels via train to the final destination ramp. And then we actually coordinate with the, drayage providers on the receiving end, and they will pick up that same container and, deliver that same container to the receiver with the same seal so that's not touched once it gets to the rail yard or anything like that. So everything that we do is door to door. So during intermodal transit, are damages an issue that pop up frequently? No. Not at all, actually. We actually have a good success story from a customer that they were shipping auto glass from their glass company, and they were having a lot of damages through over the road where drivers may do, hard stops or quick turns. And that's actually all avoided through intermodal because the train is traveling at a consistent speed, at a consistent rate. And so that actually reduced all freight damages that were happening via over the road. Where are you seeing the biggest cost or capacity advantages right now compared to over the road? Yeah. So I would say, really, it's all over the US right now. We're starting to see truckload rates maybe climb a little bit. Capacity is getting more strained. So intermodal has been really successful lately for, like, anything moving to and from California, the West Coast, I would say, like, Oregon, Washington, as well as Salt Lake City. We've had a lot of success lately. And Chicago is a very good option. Anywhere in the south is really good. So, like, Georgia, Florida, we have really good options. And one of our really good options is for Florida through what we call TOFC, is trailer on flat car. So we actually will show up to the shipper with the Averitt Truckload trailer, and they load that freight on a Averitt trailer. And we load the same Averitt trailer onto the rail and travels to South Florida on a Averitt trailer. And we can work with our service centers or partner dray carriers to actually deliver the freight via an Averitt trailer in South Florida. So that's something we've had very good success with lately. And then some other good lanes, I would say, like Texas is a good option. Outbound Laredo is very good and competitive, and that's where we are starting to see truckload capacity maybe start to tighten. Anything in the northeast is very good as well. I guess that lane specifically from Chicago down through Atlanta Into Florida, that would be very competitive for for a intermodal because there's not as much truck capacity in Florida. Is that right? That is correct. Yes. So a lot of drivers for over the road, they try to steer clear of Florida just because it's hard to get a lane moving out of Florida for truckload drivers. So that does give us a good capacity option for intermodal. That makes a lot of sense. Well, how does intermodal connect to the bigger strategies within the supply chain like pool distribution or network optimization? Yeah. So LTL pool distribution, that's a very hot topic with us right now. I can tell a success story that we've had over the last few months where we worked with a customer in Chicago that was moving freight to South Florida through Miami. So what we actually did is we pulled the LTL freight in Chicago, and then we shipped it all at once to South Florida. And then our Averitt service center then delivers the LTL freight. And so that has been a very good success story. Another good option that we have for LTL full distribution is shipping from Chicago to Memphis. It's actually a one day transit, which is the same exact as over the road transit, and it gives a lot of capacity options for that as well. And we can ship from Memphis to lots of different places throughout the southeast, so it just gives us a good capacity option for LTL freight as well. And one thing that I would suggest, if you do ship a lot of LTL freight, just send us a list of all of your LTL lanes. We can take a list of upwards of ten to twenty thousand loads and look and see exactly where you ship LTL and where we can optimize that and give you good LTL options. That's very interesting points about shipping LTL via intermodal. Because it seems like it'd be easier to track one container or one trailer on a flat car. How do you track individual shipments moving like that by rail? Is it just you go to the website and you see all the shipments as one listing or we see individual shipments? We actually do see individual shipments that are updated very consistently. So whether you have one pallet on the training or ten, you can pull them up individually and look and see exactly where they are at all times. So I guess an example with this customer, their freight is consolidated at the origin and it's all tracking on the rail down to Florida. And then from there, we're taking it to our service center? Yes. And then it's being put on different city tractors going to out to different locations. So all the tracking is definitely individual and unique. Yes. Very much so. We actually also have that option for outside of our footprint. So we have partner carriers that can deliver LTL freight throughout like California, Pennsylvania, anywhere outside of our footprint really. Great. Well, what's something customers are surprised to learn about intermodal once they try it? I would say just how reliable it is, how consistent it is. The big thing that I hear, and actually I came from a full truckload background, is just how similar it is to that dedicated full truckload option that we have as well. It comes to shipping intermodal, what are the differences between insurance compared to traditional over the road? Yeah. So all of our loads are actually covered up to a hundred thousand dollars. So that is automatically included. If you have freight that is additional more than a hundred thousand dollars, we can always look at it and offer additional insurance as well through our insurance provider. Right now, what are some ideal transit lanes for intermodal versus over the road? Yeah. I would say, like, Chicago Midwest area to the south, that's a really good option. That actually just adds one extra day to the transit. So over the road is typically two days and the intermodal is three. So it just adds one extra day to the transit and it can be a massive cost savings to the customer. I would say anything moving into South Florida is very competitive on transit. Like the Northeast to South Florida is four days for intermodal. And a big one is anything moving out west, so like say from the south is a five day intermodal transit, whereas a lot of times over the road is four. So it's just adding one extra day. Well, I know that intermodal services occur all across our country, but does this service also tie into Mexico and Canada? Yes. We actually do ship all throughout Canada, and we also ship throughout Mexico. We go down to, like, Monterey, Mexico, Salau. Those are just a few examples. So if you ever have any options that are shipping from Mexico or Canada, we can definitely take a look at it. When it comes to shopping for intermodal rates, are you limited to just one provider on the rail or are there multiple options? So we actually do have multiple options, and that's very good question. So for example, one of our providers might offer a four day transit for x amount of dollars and then another provider may offer a maybe a eight day option that's way cheaper. So a lot of times what we do is we will offer both solutions to the customer. Some customers may be looking for a faster option and are willing to pay maybe a little extra versus maybe a slower option where they do have a very big cost savings. Alright. One final question for you, Allison. What is the biggest benefit of partnering with Averitt for intermodal solutions? Yeah. I would just say that we're very seasoned in intermodal. We're very experienced. And I would say we have lots of opportunities within Averitt. Like we say, we are the power of one. So we have lots of different service areas that we can partner with and just offer blended solutions to our customers as well. That is the power of one. That's right. Alright. Appreciate your time today, Allison. Thank you very much. Thank you, Joe. Thanks for watching Beyond Point to Point. Intermodal transportation continues to be an important tool for shippers looking to control costs, expand capacity options, and build more flexibility into their supply chain strategies. If you'd like to learn more about how Averitt can support your intermodal transportation needs, visit averitt dot com slash intermodal. And if you enjoyed this episode, be sure to subscribe and join us next time as we continue exploring the strategies and solutions shaping today's supply chains.