Intermodal transport represents an attractive mode of transportation for companies which are looking to improve the efficiency of their supply chain. In this article we put together a few resources, definitions and information related to intermodal transport.
The article is divided into six parts, with the goal of answering the following questions:
- What is intermodal transport?
- What is the difference between intermodal transport, multimodal transport and combined transport?
- Why using intermodal transport?
- Which are the main benefits of intermodal transport?
- Which are the main limitations of intermodal transport?
- Can intermodal transport be the right solution to address the logistics needs of my company?
What is intermodal transport?
Intermodal transport is a transportation modality which uses standardized cargo units (such as containers, swap bodies and semi-trailers) that can be easily moved across different modes of transportation (such as ships, trucks or trains) to be brought to destination.
What is the difference between intermodal transport, multimodal transport and combined transport?
The term “multimodal transport” is used to define a transport service which involves two or more transportation modes to deliver the freight to destination. A pallet which is loaded onto a plane and then moved to a truck; a transport which combines a rail leg and a road leg; a transfer performed partially by sea and partially by road, are all examples of multimodal transport, because they require different means of transportation.
By intermodal transport, we refer to a specific kind of multimodal transport, where standardized cargo units are used to contain the transported goods. The distinctive characteristic of intermodal transport is therefore its ability to avoid breaking cargo, which remains stored inside the same unit from the beginning to the end of the transport cycle.
Intercontinental intermodal transport of long-range import/export by sea (maritime transport) employs ISO containers and ISO tanks, which can be loaded onto container vessels, freight trains and intermodal trailers. When intermodal transport does not require the unit to be transported on a container vessel, other units, such as swap bodies, semi-trailers and non-ISO containers can be also used.
Combined transport is a subset of intermodal transport; for a transport to be defined as “combined”, most of its length must be covered by rail, barge or sea, limiting as much as possible the truck haulage.
In Italy, the legislative reference for combined transport is the Ministerial Decree of February 15th, 2001, which implements the European Community directive n. 92/106/CEE of December 7th, 1992. The Ministerial Decree defines a transport as ‘combined’ when the length of the journey made by rail, waterway or sea is greater than 100 km and the initial or terminal part of the journey, carried out by road, is included in a radius not above 150 km. as the crow flies from the railway terminal, the river port or the embarkation or disembarkation seaport.
Why use intermodal transport?
To transport goods means to satisfy the need to move cargo from an origin point to a destination point, in the most efficient and effective way possible. Transport is effective when it responds to the requirements of the customer (i.e. in terms of speed, safety, flexibility), and is efficient when it delivers the expected outcome minimizing the consumption of resources (money, fuel, labor, etc.).
Intermodal transport, when correctly planned and implemented, can achieve both goals, maintaining high the efficacy, as well as the efficiency of the supply chain.
What are the main benefits of intermodal transport?
Efficiency: intermodal transport avoids breaking cargo and enables the use of trucks within a smaller operational radius, centered around one or more container terminals. This allows to optimize the use of the truck fleet, through shorter and frequent road trips.
Economies of scale: when transported volumes are consistent, intermodality allows to achieve economies of scale, reducing the cost of transport for the single cargo unit, and consequently, the cost per transported ton. This opportunity is leveraged by Multimodal Transport Operators (MTOs), who aggregate demands, offering intermodal transport services to several clients.
Cost control: using intermodal transport solutions protects customers against sudden price surges and volatility of trucking costs, which are heavily affected by the unbalances between supply and demand arising during peak seasons and when there is scarcity of trucks and drivers.
Safety: using dedicated intermodal cargo units protects the freight during the transport cycle, reducing the risk of theft and damage to a minimum.
Sustainability: intermodal transport represents one of the most effective ways to move towards sustainable logistics, in terms of environmental, economic and social sustainability, through a smart combination of rail and road and a limited use of trucking for first and last mile pickup and delivery.
What are the main limitations of intermodal transport?
Relevance of volumes and distance: intermodal transport is effective to transfer significant volumes on medium to long distance routes. For “spot” operations and short distances, road is often preferred, as it tends to be more flexible and immediate.
Ability to organize logistics operations: intermodal transport requires an “industrial” approach to logistics operations. Customers who are looking for maximum flexibility of operations often consider the road the best option to address their transport needs.
Capillarity of service: the effectiveness of intermodal solutions available in a certain region is highly correlated with the presence of intermodal terminals and freight villages, as well as the availability of rail services connecting the origin and destination points which are relevant for the customer.
Transit time and speed: road transport can often provide a shorter transit time, compared to combined transport, on medium-range distances. This difference can be reduced or offset if highly frequent rail connections are present, with loading windows becoming available every 8, 12 or 24 hours. Value added services, such as Fast Corridors, can speed up intermodal flows, increasing rail competitiveness.
Nature and value of cargo: intermodal transport typically represents an attractive option for goods of middle value, which can be easily containerized and do not require special conditions, such as controlled temperature. High value cargo, small in size or lightweight, is usually shipped by plane, which is more expensive but faster. Nonetheless, new interesting solutions (such as intermodal connection China-Europe, as well high speed train to serve e-commerce logistics) are emerging.
Can intermodal transport be the right solution to address the logistics needs of my company?
When basic requirements are satisfied and the potential benefits of intermodal transport are identified, it is necessary to carefully analyze each customer’s needs, to understand if and how this mode of transport is the best solution.
This is why it is so important to get in touch with qualified independent operators, capable of providing a customized logistics consultation, to define with the final customer an organic medium-to-long-term project. This is a complex challenge, which requires specific know-how and the ability to correctly interpret the customer’s requirements, but that has also the potential to bring impactful results, often translating into a relevant and long-term competitive advantage.