Intermodal freight is the future of logistics. Momentum is on its side, poising it to evolve from alternative to standard in the coming years. This news doesn’t surprise the industry because it promises more efficiency and sustainability than traditional long-haul trucking loads. It also meaningfully cuts drayage to reduce costs and is reliable enough to minimize the risk of cargo damage and loss.

Read also: US Intermodal Gains Momentum Amid Trucking Challenges

This freight transportation model isn’t without challenges limiting its potential. For example, it requires substantial capital to build the necessary infrastructure. Intermodal freight relies on the interconnectivity of distinct modes of transport and cranes to transport shipping containers between vehicles. Despite this, logistics interests are betting big on it because of one other, less-talked-about but significant advantage — versatility.

Intermodal Transportation’s Elegant Solutions to Logistical Pain Points

The primary beneficiaries of intermodal transportation are enterprises — especially those operating in retail, manufacturing, agriculture and construction — that move large shipment volumes over vast distances. Domestic shippers in large countries like the United States find immense value in it, and their international counterparts consider it an antidote to the complicated logistical challenges they face in business.

Considering the versatile nature of intermodal freight, it’s fathomable that more shippers would view it as a practical means of carrying their goods for these reasons.

1. Meeting Rising Demand for Goods Quickly

Sector observers estimate the global intermodal transportation market will balloon from $55.3 billion in 2022 to $197.59 billion in 2032, with a compound annual growth rate of 15.2%. E-commerce is the primary catalyst for this rosy projection. When you factor in globalization and sustainability, intermodal freight stands out as the most desirable means of transportation for massive quantities of physical goods from and to anywhere in the world as soon as possible while minimizing greenhouse gas emissions.

Although freight vehicles have dissimilar capacities, containerization renders them interoperable. Planes, marine vessels, trucks and trains have unique strengths that complement and neutralize each other’s limitations. Harnessing intermodal transportation can speed up deliveries to alleviate lengthy lead times whose economic consequences ripple around society.

Take construction as an example. Black swan and geopolitical events have negatively impacted the sector’s supply chains for years, causing contractors to pay more and wait longer for supplies to complete projects.

Imported materials such as timber and steel take four or six times as long to arrive on the jobsite as they used to pre-pandemic. Construction delays can hurt bottom lines, increase idleness, drive up rents and property prices, and undercut homelessness solutions.

Intermodal freight opens a world of possibilities for circumventing global supply chain issues. The logistics industry needs as many alternative transportation methods as possible to move trillions worth of shipments across oceans and enormous landmasses amid various hazards.

2. Increasing Avenues of Cargo Movement

Intermodal freight transportation opens new possibilities for shipping any conceivable item when long-haul trucking is inaccessible in an area. It empowers shippers to book truckers keener on same-day journeys than multi-day hauls.

In the U.S., a single day is usually sufficient to transport a commodity from its point of origin to the nearest rail yard. The country has Class I railroads and short lines running more than 92,000 and 44,000 route miles, respectively, across 49 states and the District of Columbia, totaling about 136,000 route miles. With this extensive infrastructure, intermodal freight allows shippers nationwide to use trucks for pre- and post-haulage only.

3. Mitigating Trucker Shortages

The trucking industry has an impending driver crisis. Older truckers considerably outnumber their younger peers, potentially leaving many commercial freight carriers severely understaffed when they retire. For instance, 29% of American truck drivers are at least 55 years old, whereas only 8% are under 25.

Autonomous vehicles may or may not offset this imminent labor shortage. Moving more cargo by rail and less by road is the safer bet to prepare for this nightmarish logistics scenario.

Intermodal freight can help fleet owners keep employee turnover figures low and soften the blow of acute talent shortages. Long-haul trucking can be a taxing gig because of exhausting schedules. Concentrating on shorter trips can benefit truckers’ overall health and generate more revenue by covering less ground to move more goods in less time and shrinking deadhead miles. This business model can enable commercial freight carriers to offer competitive wages to attract talent.

4. Easing Truck Modernization Transition

Decreasing the need for long-haul trucking lessens fleet owners’ barriers to hitting sustainability targets. Incorporating rail into haulage makes it easier to upgrade to more compact, fuel-efficient vehicles, concentrate on the last leg of the cargo’s journey and reduce carbon footprints.

Rail has superior capacity and fuel efficiency among all freight solutions. It accounts for just 2% of transportation’s total greenhouse gas emissions. When used to move more shipments by weight, freight rail can help the sector’s dirtier segments decarbonize more quickly and move the needle in sustainability.

2024 Intermodal Transportation Trends to Watch Out For

These ongoing trends will shape intermodal freight’s future.

1. Growing Cross-Border Trade

Regional trade growth is outpacing global trade. Rival countries engage in a battle of attrition, imposing restrictions on one another and strategically embracing protectionism. As a result, more nations seek to do more business with friendly neighbors than adversarial partners oceans away. These phenomena are fueling the appetite for intermodal freight.

For instance, the United States-Mexico-Canada Agreement boosts the economic interdependence of member countries on one another. This newly minted trading bloc gives American farmers alternative markets to sell their products to and prevent themselves from becoming collateral damage in the U.S.-China trade war. Intermodal freight facilitates more cross-border trade within these North American nations.

2. Electric Freight Trains

Rail is becoming greener by the year with the advent of 100% battery-powered heavy-haul locomotives. Although a zero-emission freight train already reached the finish line, the sustainability race continues. It has only strengthened the resolve of more technology companies to explore novel ways to retire diesel-burning trains for a low-carbon future.

3. Greater Supply Chain Visibility

Various innovations ensure better intermodal shipment tracking. More brands are embracing GPS systems and telematics technologies to monitor rail cars more closely, attracting shippers that typically use trucks and diversifying their clientele as they decouple from waning commodities like coal. Cloud-based intermodal software is also gaining steam.

Intermodal Transportation — A Versatile Logistical Remedy

Improving synergy between various freight vehicles makes financial sense on many levels. While logistics professionals still need to work out the model’s kinks to improve service, its bright outlook means the transportation sector has faith in its long-term viability and success.