Why Intermodal is a tough issue to resolve

Intermodal operations failed to move containers seamlessly almost overnight.

What once worked now fell apart.

The bottlenecks manifested themselves at every port. No port was spared the snarled backlogs of containers sitting at and stacking up at ports. Movement of cargo seemed to come to a halt.

Intermodal operations came into focus during the pandemic and its aftermath. Industry professionals and consumers alike gained insight into the complexities of seamless flows.

In this post, we’ll look at the significance of resolving the persistent bottlenecks at ports.

We’ll delve into why resolving this issue is important. We’ll present the status of intermodal operations. Then, we’ll look at resolving this issue sooner rather than later.

Moving on, we’ll discuss what capabilities a reliable 3PL needs to manage intermodal disruptions. Finally, we’ll explore how you can alter the operating landscape for competitive advantage.

That’s a tall order, but keep reading, and you’ll see resolving intermodal operations is within reach.

Why it’s important to resolve intermodal operations

Before discussing why resolving intermodal operations is important, we need some working definitions.

First, intermodal operations and transloading often get confused. So, here are two basic definitions. These definitions come from InBound Logistics (Feb. 2023)

INTERMODAL SHIPPING:

“Intermodal shipping means moving a product from one point to another while keeping the product in a single container. The transport in the original container might utilize several different transportation modes, but the same container holds the stock throughout.”

TRANSLOADING SHIPPING:

“With transloading shipping, freight is loaded and unloaded, depending on where the cargo is in the supply chain process and the mode of transportation. At each supply chain transfer point, freight moves via containment modules.”

“When shippers, rail carriers, or truckers approach a trans-load facility, cargo gets offloaded from one container into a different container. At either end, freight gets stored in a specific container, such as Rail car, Tank car Flat car, Box car, Container ship, Semi-truck, and plane.”

Now that we’ve sorted that out, we can get into why it’s important to resolve this issue.

The pandemic exposed points of congestion like never before. The bottlenecks in the supply chain were most evident at the ports globally.

So, how does untamed congestion unravel previously functioning supply chains?

The list is long, so we’ll itemize them for brevity.

• Negatively affected working conditions, resulting in increased disputes between workers' unions and businesses.
• Aggravated lack of integrated and synchronized automated solutions, exposing siloed operations.
• Undermined worker morale leading to threatened strikes and work stoppages.
• Adversely affected performance standards, extending delivery times.
• Compounded limited storage issues at yards and warehouses.
• Depressed sales, cutting revenues and profits.
• Aggravated by previously constrained capacity.
• Damaged customer loyalty.

This list highlights the complexities surrounding intermodal operations. Solving this problem is not something you can undertake by yourself. The problem is too big. It has too many tentacles, reaching into too many areas.

It affects performance, labor, costs, and capacity. Another issue not listed is intervention by local, regional, and national governments. Laws, policies, and regulations also affect intermodal operations. Coordinating each stakeholder’s position by itself is an epic challenge.

Now, let’s look at the status of intermodal operations with the pandemic in the rearview mirror.

Intermodal Operations Status

The question is: “Has the industry learned any lessons from the pandemic?”

To answer that, let’s review what’s happened since the pandemic.

First, industry stakeholders are benefiting from a more benign operating environment. That makes untangling the intermodal bottlenecks easier. Some favorable conditions allowing for grappling with intermodal issues are below.

• Reduced consumer demand as changing demand patterns favored services over products.
• Weakened consumer demand because of rising inflation.
• Increased availability of capacity (ships, planes, box cars, containers).
• Bloated, overstocked retailer inventories.
• Reduced transportation costs.

A supportive environment makes tackling this issue much easier. Norfolk Southern, for example, is building infrastructure in Georgia to relieve port congestion at Savannah and Charleston.

The installation of new cranes will enable an increase in container capacity while reducing congestion.

Along with a favorable operating environment and innovative solutions aimed at resolving intermodal issues, the future looks brighter than it did during Covid-19. That raises the question of when we can expect to see improvements take hold.

When Is Intermodal Expected to Improve?

Achieving consensus on most things logistics seems difficult to attain. However, a general survey of stakeholders seems to be quite consistent.

The consensus seems to indicate operations will normalize to pre-pandemic times in 2023 (JOC.COM). Some say relief will come in the third quarter of 2023.

• Hasbro, Inc.’s executives believe will improve without mentioning a specific timeframe.
• V Corp. President, Benno Dorer believes relief will come in 2023.
• Trane Technologies, PLC, stated on Feb 2, 2023, it would take several quarters for relief to set in.
• O’Reilly Automotive said it’s now seeing less pressure from transportation costs.
• CEO Helena Helmersson, CEO of retailer H&M, stated she expects operating conditions will improve in the second half of 2023.

Also, logistics companies concur with these assessments. Knight-Swift and J.B. Hunt see a brighter future ahead in 2023, signaling that the worst is over. That means progress should continue as enormous challenges come to an end.

Just as massive challenges converged during the pandemic, their resolutions are also converging.

What capabilities does a 3PL need to address intermodal’s unique issues?

A 3PL needs a combination of capabilities that include services, technology, and personnel.

Starting with services, an ideal 3PL has complete supply chain solutions. It should include an array of shipping capabilities. Specifically, they would include full truckloads, LTL, intermodal, and drayage, to name a few.

IT should have seamless technology solutions that support those capabilities. That technology should be user-friendly and allow for customized solutions.

Finally, an ideal 3PL has the people—employees and leaders—that can bring it all together. A 3PL’s employees can execute the delivery of cargo from the point of receipt to the point of delivery.

Employees are experienced and qualified transportation and logistics experts. That enables them to execute against customers’ requirements. Employees work individually and in teams to solve problems following a data-based approach.

Leaders understand what gaps exist, especially those at the ports. Just as important, they know how to leverage trucking and logistics solutions helpful to the customer. Orchestrating people and processes focused on resolving intermodal issues is a difference-maker.

While many gaps in seamless logistics flows exist along the pipeline, gaps in intermodal operations are dominant. If a 3PL can fix some intermodal issues, the advantages of those efforts would be beneficial.

They can lead to a competitive advantage compared to your industry competitors.

Conquering intermodal operations for competitive advantage

The pandemic revealed issues in global supply chains. One of the issues that stood out was the failure of intermodal operations.

The government's intervention to address the issues at the nation's ports further demonstrated the importance of addressing intermodal issues.

The complexity lies at the heart of many logistics issues. Achieving seamless intermodal issues is chief among those. That’s why it makes sense to outsource your logistics operations.

Better yet, partnering with a 3PL that has the capability to ease intermodal disruptions can pay big dividends. An experienced and qualified 3PL can keep your cargo moving while minimizing intermodal issues.

At American Global Logistics, we have the capabilities to deal with intermodal issues. We have the total package: services, technology, transportation and logistics experts, and leadership.

Our teams help improve your competitive —advantage, keeping your cargo moving.

Contact us to learn more about our unique capabilities. We’ll explain how we take the complexity out of intermodal operations for you.