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FAQs Intermodal Freight

What is 'Intermodal Freight'?

Intermodal freight is products and raw materials that are transported in a container by a variety of vehicles such as container ships, semi-trailer trucks and trains. Containers designed for intermodal freight often adhere to International Organization for Standardization (ISO) dimension guidelines, which allow the freight to remain in the container when transferred between modes of transportation rather than being moved into a container of a different size.

BREAKING DOWN 'Intermodal Freight'

The emergence of standardized shipping containers has allowed products and raw materials to travel faster and at a reduced cost. The United States military is often credited with the containerization of shipping during the 1950s when Department of Defense standards were adopted by the ISO.

Intermodal transportation should not be confused with multimodal transportation. Multimodal transportation is conducted under a single contract, whereas intermodal transportation is conducted according to multiple contracts with different carriers. In addition, multimodal uses different modes of transport but under one bill of lading, and the same carrier is responsible for moving shipments in all of the modes. 

The Advantages of Intermodal Freight Transportation

Businesses use intermodal freight shipping both domestically and internationally because it lessens the amount of handling performed with the cargo during the trip and can reduce costs. Intermodal freight transportation is also a safe and secure method because it eliminates the handling of the freight itself during transportation, which reduces damage and loss, drivers can handle more loads in a shorter period, and additional security is provided at terminals, rail tracks and ramps, which prevents theft.

Intermodal transportation is eco-friendly. Rail transportation is more efficient. According to Inbound Logistics, rail can move one ton of freight almost 450 miles on one gallon of fuel. This fuel efficiency creates less greenhouse gas and carbon pollution as goods are shipped from coast to coast.

The Intermodal Shipping Process

A typical import shipping process entails that after arriving from overseas, containerized cargo is moved from a container port to a rail yard for domestic shipment. The cargo is moved onto the rail and is transported to the next location, which could be hundreds of miles inland. Once the cargo arrives at its destination, it is placed on a truck to be driven to its final destination dictated by the original order.

Growth in Intermodal Freight Transportation

According to Freightquote.com, there are approximately 25 million containers moved each year by intermodal shipping. A market research report by Technavio predicts that intermodal freight transportation will grow at a CAGR of approximately 7% from 2018 to 2022. The report cites cost advantages for shippers as the reason for its expected growth. In addition, the cost of road as a single mode of transportation is increasing. However, multimodal transportation, where convenience is a significant factor because a single company is responsible for the movement of cargo across all modes, is expected to impede the growth of the intermodal freight transportation market in the future.

Read more: Intermodal Freight https://www.investopedia.com/terms/i/intermodal-freight.asp#ixzz5OMnnUpAv

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