In a recent entry, we discussed the ins, outs, and benefits of leveraging LTL (less than truckload) shipping in the automotive supply chain as a critical driver in reducing freight costs, increasing efficiency, and enhancing visibility and agility from the production line to delivery at the customer’s doorstep. We also briefly looked at why some supply chain planners and managers are still reluctant to embrace LTL as a viable method of transportation management, dispelling some misconceptions about LTL as a key value proposition in today’s global supply landscape.
Today, in something of a part II of that discussion, we’ll examine another freight management strategy and its potential impact for companies seeking to optimize their transportation management via reducing costs and increasing productivity and reliability. Intermodal shipping, which has been viewed in the past as a problematic strategy for the movement of products, has in recent years become an increasingly viable and valuable component of a company’s freight platform.
Because intermodal shipping has the capacity to deliver transit times consistent with chassis freight, reduce fuel costs, expand shipping capacity without taking on additional capital, and enable entry into emerging markets like Mexico, companies across the automotive supply network need to reevaluate their views on intermodal to foster a more robust, sustainable transportation model.
Still not convinced? Well, how about these stats:
- Intermodal shipping has grown by double digit percentages since late 2014.
- Intermodal rail can move about 1 ton of freight almost 500 miles on a single gallon of fuel.
- 1 million intermodal loads results in more than 10,000 trucks pulled off the road.
Yet rumors, misunderstandings, and myths about the efficiency of intermodal still persist as companies remain somewhat sluggish in leveraging this method of shipping. To help correct these misconceptions, here are 3 common myths about intermodal shipping and truth behind them.
Myth #1: Intermodal shipping is not as reliable as other methods like chassis or air.
While the perception of many supply planners and managers is they’ll be at the mercy of rail lines in choosing intermodal shipping, the reality is the reliability and efficiency of combining rail and truck has increased significantly during the last few years, particularly with improvements to infrastructure in new and expanding markets. In addition, because companies are dealing with entire containers rather than loading and unloading individuals parcels of products, shipping times and delivery windows can actually be reduced when compared with other modes, which provides companies with greater maneuverability in moving products across the globe.
Myth #2: Intermodal shipping can’t provide the transparency necessary for today’s global supply stream.
Not quite - in fact, just the opposite. Given the wealth of integrated, intelligent transportation management solutions - not to mention the enhanced visibility provided by BOM management, Plan for Every Part (PFEP), and Every Part Every Interval (EPEI) - planners can track, evaluate, and even modify the quantity and conditions of parts or products throughout transit. This not only gives planners greater insight into timetables and transit windows, but it also provides peace of mind that products will arrive at their destination in the proper condition, which helps combat bottlenecks in the movement of containers between rail and chassis.
Myth #3: Intermodal shipping can’t account for the possibility products are damaged during transit.
As we just discussed, today’s smart transportation management solutions allow for companies to routinely and in great detail monitor and review the status of their products at any stage during the transit process. But recent advancements in container technology and the condition-stabilizing capabilities of intermodal shippers can enhance the capacity to secure optimal shipping conditions and maintain those conditions for the duration of the route. In addition, adherence to rail rather than the unpredictability of roads also provides for more consistent, error-free transit, which is a key driver in reducing the likelihood of bottlenecks or even large-scale disruptions.
The value proposition of intermodal shipping in today’s global automotive supply chain extends far beyond these 3 common myths - for example, intermodal shipping can also be leveraged as a replacement or supplement for LTL shipping wherein companies can combine orders into one container and utilize intermodal as a more cost-effective way to move disparate part orders. In today’s global, interconnected supply stream, companies can ill-afford to overlook strategies which reduce costs, increase productivity, and provide enhanced levels of visibility and agility across multiple touch points of the value chain - whether in terms of sourcing materials, planning, production, or, in this case, freight.
Because of its capacity to move scalable quantities of products cheaply and efficiently, intermodal shipping is a mode of freight planners and managers need to leverage as part of their transportation management strategy to remain lean and competitive in today’s automotive supply stream.