“Intermodal shipping refers to moving freight by two or more modes of transportation, where cargo moves seamlessly between trucks, trains, barges, ships, and planes, although the most common pairing for general cargo and consumer goods in North America is truck-rail-truck.
It is particularly popular for long distances. The key factors driving the popularity of intermodal transport are reduced transportation costs, providing they come with reliability, security, and visibility. And this is where technology can help.
On the environmental side, intermodal transport is a clear winner since it contributes to having fewer trucks on our roads. One gauge often used in this context is that, on average, rail is about seven times more efficient than trucking, in terms of greenhouse gases emissions, although this varies depending on volumes and distances. In general, consumers are increasingly concerned about promoting sustainable transportation and reducing our carbon footprint. Although the continuous growth of e-commerce, particularly the increased market penetration of Chinese fast fashion sites like Temu and Shein that encourage overconsumption and generate waste, contradicts the notion that consumers are concerned about the environment. There are contradictions in regulations as well. Recently, the US Securities and Exchange Commission amended its reporting requirement for Scope 3 emissions: the new rules don’t require publicly traded companies to report certain indirect emissions, which could include the distribution and use of their products, such as coal or crude oil. Some business groups recently sued California over a state law requiring businesses to report their emissions, so the ‘’battle’’ to preserve the environment and save our planet continues.
Technology overall is helping companies to become more efficient. We see it across all industries, in particular it helps alleviate labour shortages and boost competitiveness. Transportation also benefits from technological advances. In the trucking industry, technology enabled the ELD mandate. The electronic logbook laws require all truck drivers to be connected and use their electronic logging device to record driver and vehicle activity, including hours of service and records of duty status. The electronic logging devices or ELDs, record data related to the operation of vehicles and driver activities. Warehouses and distribution centres are also using technology to improve productivity: warehouse automation, autonomous trucks, robotics, inventory management, barcode scanners, RFID tags, and QR codes are some of the tools and technological advancements used by the industry.
Due south
Before looking at how technology and connectivity can drive the growth of intermodal shipping, let us look at the current situation south of the border, where new trends generally start. According to the Association of American Railroads, intermodal transport represents approximately 27 per cent of revenue for major US railroads, more than any other traffic segment. About half of rail intermodal volume consists of imports and exports, reflecting the importance of international trade. The US freight railroads move nearly 61 tons of freight per American annually, with Chicago and Los Angeles/Long Beach leading in intermodal volume. The Intermodal Association of North America, which represents the interests of the intermodal freight transportation industry at large, values the North American intermodal market at US$59 billion. Their latest statistics show that 724,528 international containers moved on North American intermodal networks in February, a 25.8 per cent increase from a year ago. As the trucking industry struggles with driver retention and hiring, the use of intermodal solutions reduces these challenges, removing rucks from highways and helping with road congestion.
When we look at how technology is transforming intermodal shipping, it takes us to artificial intelligence, which is very much in style nowadays. But, in a way, it’s just a synonym for technology, or a branch of computing. One interesting aspect of intermodal transportation is that the large Class 1 railways, by their sheer size, have an advantage over trucking companies. These railways operate their own intermodal services, with their own trucks and trailers, connecting with their rail networks. This makes it easier for them to invest in the technological resources required to generate efficiencies. Technology provides great tools for companies but it’s not cheap and large networks have the advantage of economies of scale over smaller operators, particularly truckers. On the other hand, they are big machines, aligned to work on volume business, and it leaves room for small intermodal operators, who offer more flexible services, tailor-made to customer requirements.
What are the new tools that are reshaping intermodal transport? Autonomous or semi-autonomous vehicles is one of them. The topic has been around for a while and is still in the development stage. Proponents of autonomous vehicles point to the savings generated through greater fuel efficiency and reduced manpower requirements. Platooning, when one driver controls several following trucks, is often mentioned as well, and tested with some success. Some sources indicate platooning can generate costs savings of as much as 45 per cent. Positive train control systems, where trains can be monitored and stopped remotely, are already in operation in the US and Europe. It’s reported that the giant mining company Rio Tinto has fully automated one of its 1,500km railways in Australia. The technology to deploy autonomous ships is already in place, with pilot projects running in Europe.
A look at safety
In the long run, technology generates savings, but how about safety? The US Institute for Highway Safety recently tested partially automated systems and found that only one of 14 performed well enough to get an acceptable rating. Two were rated marginal while the rest were rated poor. No system received the top rating of good. The overall findings were that most systems don’t include adequate measures to block misuse and prevent drivers from losing focus on what’s happening on the road. The report also pointed to the lack of standards and the regulatory void, as technology evolves faster than the laws that should regulate it.
Weather intelligence is also mentioned as a useful tool, especially as we’ve seen many examples of how extreme weather can impact our supply chains, be it heavy rain, floods, drought, forest fires, or heat waves. When weather disruptions are factored in, the benefits of intermodal shipping can become disadvantages. Weather intelligence software is therefore being promoted to help companies anticipate possible delays and longer delivery times, and to take action to mitigate these delays and develop alternatives.
Data analytics solutions also help intermodal shipping, by collecting, centralizing, and analyzing data, that helps us take the appropriate action in response to changes. This requires having the necessary systems in place to collect the data and make the most of it, for example to be able to use it. Here, one of the challenges is to have different systems from different operators talk to each other, meaning connectivity. And there is no easy solution nor one technology that can achieve that. Rather, the interaction and adaptability of different tools and solutions are needed, and key to success.
Technology, or artificial intelligence as we often call it, is great and can generate savings, but we still need humans: skilled and well-trained operators, who will keep an eye on the system and make sure it works properly, and as planned. In other words, we still need human intelligence. Autonomous trucks, trains and ships are years away. And by the way, how would you feel about flying on an autonomous plane, with no pilot on board?”
*This article is excerpted from supplypro.ca website, published April 12, 2024