Tips & Tricks for Intermodal Success
For those sitting on the intermodal sidelines, there is no better time than the present to bring intermodal into your transportation departments with the following issues on the docket:
Tightening Driver Market
Highway Infrastructure Congestion and Deterioration
Tightening Access to Capital
With rates holding steady, capacity well balanced, and service as good as it ever has been ensures the only variables to manage and evaluate is the ability to manage the new mode within a shipper’s organization and whether the mode is a good fit for the shipper and its customers.
With that said, below is an outline of potential pitfalls and items shippers need to familiarize themselves with for a successful implementation of intermodal into its freight strategy:
The number one and two issues for intermodal shippers revolve around weight and blocking and bracing. These two items alone are what cause shippers to abandon their intermodal aspirations.
The intermodal container and chassis combination is 2,500 pounds heavier than an over-the-road trailer; therefore the maximum bill of lading weight is 42,500 pounds for intermodal versus 45,000 pounds for truckload. There are some options to load heavier, but as a general rule, the figure 42,500 is the guideline.
The additional intermodal weight topic to cover is the distribution of the load within an intermodal container. There are specific requirements as to the weight allowed and aligned on each axle. With that in mind, an intermodal shipment could be legal on gross weight, but illegal on the distribution of the weight.
Blocking and bracing
Loads can and will shift in transit, as they travel on the rails and experience what is known as harmonic vibration. The vibrations are not intense but are consistent, and will move a freight load vertically and laterally within the container if not blocked and braced. Many shippers are under the belief the task of blocking and bracing is time consuming and expensive, but the reality is many loads require a couple of 2×4’s and 16 penny nails. There are also a number of inexpensive products that both effective and quick to implement at the loading dock.
The issues of weight and blocking & bracing come together as a single problem when a load shifts in transit because it is not properly block and braced. In this instance, the intermodal load that is under on gross can become illegal as the weight shifts to a point where it is over on its axles. Without a doubt, this is the biggest frustration for shippers, not well versed in intermodal.
Terminal storage and equipment per diem
Terminal storage and equipment per diem comes into play when the intermodal container does not exit or is not returned to or from the ramp during the allotted free time. Just know these charges are not intended to be a revenue source, but a means to encourage equipment turns.
Another fairly common accessorial charge a shipper can be assessed, but this too is not a revenue source, but a means to turn the drivers in and out of facilities.
Restricted versus prohibited commodity
A prohibited article is any substance that cannot be loaded onto a container under any circumstance. There are some prohibited commodities that will or will not be considered prohibited based on the owner of the container. Restricted commodities are acceptable to be loaded on a intermodal container, although with caveats and limits. The list of both prohibited and restricted can be confusing, so we recommend working closely with a reputable IMC to ensure your company’s commodities are appropriate for intermodal transport.
Maximum liability for cargo is $250,000, (or $100,000.00 for consumer electronics where the seal agreement terms and conditions are not met).
There are essentially three types of pricing options: guarantee capacity, spot rate and project rates. Guaranteed capacity rates are rates that will be consistent over the full year. The capacity is typically locked at a pre-determined level based on some type of rolling average. Shippers that are heavy outbound shippers in key retail markets, such as LA, will enjoy a consistent rate even during “peak season”. Financial people tend to enjoy a locked rate, so they can easily predicted their annual spend. A spot rate is whatever the market rate holds at that given time, within that given day. Spot rates can fluctuate within an hour based on capacity. Project rates are locked for the period of time a project is running.
Review transits and cut times
Intermodal transits are typically truck, plus a day, but two items should be reviewed before assuming such a transit: does the lane move every day and what is the time the intermodal container needs to make the ramp to be loaded and moving to make the expected transit.
Responsibility of the integrity of the load
Intermodal loads are touched by three three different parties: origin dray company; the railroad and the destination dray company. With that said, intermodal shippers are the only consistent party in the transaction, which make the shipper fully responsible for the integrity and safety of the load. Unlike truckload, there will be no IMC that will accept the safety and integrity of the load in a written or oral agreement.
Intermodal equipment types
Fifty-three foot domestic COFC (container on flat car) are utilized across North America. ISO Boxes (20′ / 40′ / 45′) are used primarily for international import / export commerce, but present opportunities for shippers having lanes that steamship lines want to reposition in their network. These boxes are also great for shippers that have freight that weigh out before cubing out.
Fifty-three foot COFC and TOFC (trailer on flat car) reefers are limited, but capacity continues to expand. TOFC is a better option for heavier shipments, as these are truckload trailers.
Rick LaGore is CEO if InTek Freight and Logistics.