Did you know that the global intermodal freight transportation market size was USD 55.3 Billion in 2022 and is expected to reach USD 197.59 Billion in 2032 ? This growth is driven by rising demand and the shift towards e-commerce, where more products are sold online than ever before.
Intermodal Transportation plays a key role due to its effectiveness in reducing costs. This makes it not only a popular choice for transporting goods, but also a very beneficial one for companies looking to improve fuel efficiency, find flexible transport options, and increase their revenue.
What is Intermodal Transportation?
Intermodal transportation is when different modes of transportation such as road, air, rail, and sea are combined to move goods from one place to another, maximizing the benefits of each mode of transportation depending on what’s more convenient for a specific product, shipment, and situation.
The benefits of intermodal transport are such that this method has become so popular due to its flexibility, and its ability to reduce costs. Just in the early 2024, it has increased 8.7% year-over-year just in the U.S.
Let’s take a closer look at this method and why it is so successful:
Key Components of Intermodal Transport
As mentioned earlier, intermodal transport combines all existent different modes of transportation, which are:
- Road Freight: Typically used for the first and last mile. It is the main mode used to move goods from the warehouse to the next mode of transportation for shipping or delivery. It’s perfect for domestic shipments and provides access to routes that are not easily accessible with other modes of transportation.
- Rail Freight: The preferred choice for fuel-savvy long-distance hauls, especially if they’re domestic.
- Ocean Freight: One of the most common modes used in international commerce and global shipping. It is well known for being efficient at handling large volumes of international cargo, as well as very heavy shipments.
- Air Freight: This is not usually the first choice for every type of business, as it is the most expensive one compared to other methods of transportation. However, its speed is incomparable, which is why it is often used for more high-value, time-sensitive goods and shipments.
You can learn more about these options and their benefits in this guide on modes of transportation.
Top 5 Advantages of Intermodal Transportation in 2024
We know that when it comes to logistics, focusing on efficiency, speed, reliability, and smart resource usage is critical, therefore, Intermodal Transportation brings huge advantages to businesses allowing them to improve their supply chain when adopting this method:
1. Cost Savings of Up to 40% for Long Hauls
One of the main benefits of intermodal transport, and one of the most attractive ones, is how it can greatly reduce costs.
Data suggests that when intermodal transport is used for long distances (over 500 miles) the cost reduction can equal up to 40% compared to when only road shipping is used, for example.
Key Cost-Saving Benefits of Intermodal Transportation:
- Internal Scaled Economy
- Reduced Labor Costs
- Lower Operational Costs
- Tailor Need Shipments
This is because when different methods of transportation are combined, companies can then benefit from economies of scale and reduced labor costs.
This allows companies to achieve lower operational costs because the right transport is selected specifically per shipment and according to the present needs.
At EP Logistics, we look into effective ways to reduce transportation costs for your business. We work with you to complement strategies related to intermodal shipping while optimizing your supply chain.
2. Significant Environmental Benefits
For most businesses, being environmentally conscious has become more and more important nowadays, and being able to choose transportation that improves cost efficiency and environmental sustainability is the goal.
Intermodal transport excels in supporting a company’s sustainability goals because, by choosing a combination of transport modes, fuel efficiency can be optimized.
3. Enhanced Operational Flexibility
Another reason why intermodal transport is popular is because it provides businesses with flexible transport options, which enables them to adjust operations to different freight sizes and according to their current market.
Having access to different dynamic transportation strategies keeps a company’s adaptability on point. We ensure that your business has access to the following benefits:
- Optimized and customized routing options that allow you to reduce transit times
- Enhanced speed
- Efficiently reduce costs
- Personalize operations to different freight sizes
We also offer adaptable multimodal and intermodal transport solutions, so you can easily respond to adapt to different shipping volumes or market demand.
4. Reduced Congestion and Faster Transit Times
Not to be overlooked, a very important advantage of multimodal transport is being able to adapt and respond to traffic congestion challenges that might arise by implementing an efficient route optimization that doesn’t rely on a single mode of transportation.
This allows your supply chain to keep running smoothly and your business to stay competitive in spite of unpredictable traffic delays and bottlenecks.
For example, handling delays or a blockage from sea freight becomes easier by switching to rail shipping. Or to quickly respond to a specific urgent or time-sensitive shipment, you would be able to choose air freight instead of road freight.
This is why the global market for intermodal freight transportation has been projected to increase from a size of $55.3 billion in 2022 to $197.59 billion by 2032, according to a report from Reports and Data.
5. Secure and Safe Cargo Handling
Another, not so-known, advantage is that containers used in intermodal shipping keep goods sealed and secure throughout all transit.
This is crucial, especially when handling high-value shipments, as it significantly reduces the risks of cargo damage and theft.
We, as a professional 3PL partner, take the safety of your cargo seriously, which is why we make sure that your freight logistics are always managed professionally and with the highest standards in cargo security in mind.
Top Challenges in Implementing Intermodal Transportation
While the advantages of intermodal transportation are evident, it also has its challenges in order to be efficiently adopted. Because it involves a combination of transport modes, it implies a lot of strategic planning, logistics coordination, and knowing well the advantages and challenges each transport mode has.
1. Logistics Coordination Across Multiple Modes
One of the key aspects. Being able to handle multiple schedules among different transport methods is crucial to avoid delays, miscommunications, and inefficiencies.
If this has been a pain point in your operation, worry no more, at EP Logistics, we provide you with carefully managed freight logistics, handling all aspects of intermodal operations for you so that you can have peace of mind knowing that from plan to execution, your deliveries stay reliable, consistent and on time.
2. Regulatory and Compliance Issues
Because intermodal transport is often used for import and export shipments in a global commerce landscape, being knowledgeable of and familiar with each country’s regulations is important to avoid compliance issues and penalties that result in delays.
This is why our customs brokerage services can be integrated to facilitate the smooth cross-border transport of your goods, ensuring your shipments stay compliant at all times, and saving you from unnecessary fees and penalties.
Why Intermodal Transportation is Crucial for the Future of Supply Chains
In an ever-changing and growing global world, international commerce keeps on growing, supply chains also continue to evolve, and intermodal transport remains a superior option for businesses looking for:
- Cost savings without compromising service and reliability.
- Optimizing their multimodal connectivity across the globe.
Intermodal Transport plays a big role in building supply chain resilience by ensuring that businesses can stay adaptable and efficient even when faced with disruptions.
EP Logistics: Your Partner in Intermodal and Road Freight Solutions
We provide made-to-order services for your business, including standard freight logistics. Backed by over 20 years of proven expertise, we manage all your transport needs with professionalism and care, from first and last-mile delivery to intermodal shipping.
We pride ourselves on our extensive experience handling both domestic and cross-border transport, especially between the U.S. and Mexico.
We integrate all transport modes according to your business needs, whether you are looking for efficient road transport for local deliveries or cross-border logistics and customs brokerage for international trade.
Find out how our team at EP Logistics can support you with reliable and efficient intermodal transportation solutions today.
Reach out to us and let us help you reduce costs and optimize your overall operations.
