Driver shortages, government regulations, and increased fuel prices have pushed for innovation in greener supply chain practices. And as an industry leader in Canadian logistics since the 1950’s, the McKenna team continues to stay up to date on these changes, while also finding new ways to service our clients in the best and most cost-efficient ways possible.
In this article, we explore what an intermodal strategy is and how Canada’s improved railway system can save you money and increase your shipping productivity.
What is intermodal transportation?
Intermodal transportation is defined as using two or more different methods of transporting goods (rail, ship, truck), and it is often hailed as the best way to make the transportation aspect of your supply chain more:
- Cost-effective
- Flexible
- Efficient
This method of transport can reduce cargo handling, which can improve security while limiting damage and loss. This method of transportation can also allow freight to be delivered faster.
Why is intermodal transportation so effective?
The main advantages of intermodal methods of transportation come down to the use of railroads, which have seen much advancement in reliability, safety, and cost savings over the last decade.
Below are five reasons an intermodal strategy might work for you:
1. Improvements In Canada’s Rail System
There is much to be said about the improvements Canada has made to their railway system. More than ever before, rail transit is both reliable and affordable.
To increase service and performance, Canada invested 1.5 billion into its railway network in 2017 to coincide with the surge in freight volumes across various industries. And while many businesses are jumping on the chance to capitalize on the improved reliability of the Canadian rail system, this method is still relatively untapped, so competition is not yet fierce.
Canada’s railways have also become safer thanks to the new Rail Safety Improvement Program, which will provide substantial funding to improve rail safety. In 2017, only two accidents occurred per billion miles traveled on Canadian railways. Compare this to the number of truck accidents that occur each year, and we’re sure you’ll agree that the train would be your preferred way to travel.
2. Lower Costs
Compared to traveling by truck or car on a highway, traveling by railway provides more ‘bang for your buck’ as it is a more efficient way to transport. Not only “greener” (due to reduced emissions), switching to railways will also help you to save on high fuel prices – which are less costly for trains than trucks.
There is also less competition for securing freight transportation. Therefore, it typically costs less to ship by train than by truck. Through rail transportation, shippers experience lower shipping rates and reduced handling costs as goods are loaded and unloaded from a dropped trailer. Also, these costs are consistently and conveniently predictable, leaving less risk for the piling of unforeseen taxes and increased shipping rates.
3. Flexibility
Intermodal service plans are flexible in the way that they allow the shipper to choose from a variety of types of delivery and pick-up packages with the rail company. For example, shipping companies can arrange for:
- Rail delivery and pick-up
- The use of standard containers for loading and unloading
- The use of direct shipment transfers (from truck to railcar terminal)
An intermodal approach is also flexible in the way that railways are better prepared to handle surges in demand. As there is less competition for securing freight transport compared to using trucks, more capacity is available when needed – allowing your company to quickly and easily adapt during “busy seasons”.
4. Environmentally Friendly
Becoming “greener” is more than just a company initiative; it is an important global need. When trains transfer goods, a significantly less amount of carbon dioxide is emitted when compared to that of a transport truck or airplane. Sending goods by train also cuts down on emissions as trains can carry a higher mass of goods in one trip.
Through initiating intermodal services into their management practices, companies can significantly contribute to the reduction of harmful emissions in Canada and beyond – which is something to be proud of.
5. Improved Reliability & Safety
Due to standardized transit schedules, clients can track and have even more accessibility to their products and equipment as they ship. Railways provide better predictability, as there are significantly fewer risk factors during transport than compared to a truck traveling various highways.
Think about it: If your package is traveling by truck alone, that truck could:
- Get stuck behind traffic
- Be delayed by the driver sleeping or getting food
- Break down
- Run out of gas
- Get into an accident
A train, on the other hand, will get from point A to point B on a strict and expertly coordinated schedule – with no unplanned stops or delays (unless a very rare emergency occurs).
So, Should I Switch to an Intermodal Approach?
While the use of intermodal transportation is often essential, not all shipping initiatives require an intermodal approach. At McKenna, we are trained to identify if and when you may require this service and we work hard to customize transportation management solutions that are unique to our client’s needs and businesses.
Knowing if intermodal is right for a particular project comes down to:
- Geographic rates
- Location
- Service times
Once we determine if an intermodal approach fits our strategy for your business, we will price and provide you with our suggested plan.
Contact us today to learn more about our customizable logistics solutions.
Sources:
- https://www.inboundlogistics.com/cms/article/intermodal-transportations-strategic-advantage/
- https://business.financialpost.com/transportation/rail/canadian-national-railways-profit-jumps-20-due-to-surge-in-freight-volumes
- https://www.tc.gc.ca/en/programs-policies/programs/rail-safety-improvement-program.html
- https://www.plslogistics.com/blog/top-3-reasons-to-use-intermodal-transportation/