The maritime logistics supply chain has undergone a paradigm shift with the advent of containerization to transport cargo. Intermodal containers facilitate the transport of raw materials and other cargo on various transport means
This standardization of transportation allows smoother cargo handling by road, rail, air or oversea shipping. Experts believe that intermodal containers result in cost efficiency and reduced environmental impact. This article introduces the term and justifies the global shift into intermodal shipping.
What Is Intermodal Shipping?
Intermodal shipping refers to the process of using standardized intermodal shipping containers to transport cargo through one or multiple modes od transport. The rising fuel costs strain long-distance cargo transportation, and companies can find it difficult to reach their strategic targets. In sharp contrast, intermodal container shipping utilizes multiple transportation modes that save up to 30% on fuel costs and is suitable for long-distance travel.
The International Organization for Standardization (ISO) sets certain guidelines for container manufacturers which specifically focus on structural integrity.
To ease long-distance maritime or road transportation, containers should be 20 feet or 40 feet long and weather resistant. Intermodal shipping involves dry van containers and refrigerated ones to transport perishable food or beverages.
Who Should Use Intermodal Containers?
Loading and unloading cargo takes a lot of time and effort. Through standardization, companies involved in maritime transportation rely on intermodal containers to fast-track the process.
Unlike boxcars or trailers, intermodal containers are more stable and can fit together easily, thus saving space. Logistics experts suggest that the accumulation and dispersal of cargo is a multi-step process. Standardization of containers makes it inevitable for consignees to utilize their resources efficiently.
Hence, companies willing to transport cargo can choose intermodal shipping to explore the benefits of standardization, location tracking and anti-theft features of containers.
How Intermodal Shipping Works
Intermodal shipping works on a move or project-based approach. Parties determine the shipping rates on the spot or on pre-determined rates. Intermodal containers offer custom-made shipping solutions to facilitate inventory consolidation and heavy transport equipment.
Their price structure composes of linehaul charges and fuel expenses.
Fuel Expenses and Surcharges comprise the total fuel costs incurred during the voyage. Changes in oil prices also cause fluctuations in these expenses.
Drayage is the cost of loading and unloading cargo to and from the containers. It also includes accessorial services like terminal charges and temporary storage.
What is an Example of Intermodal Shipping?
For example, an furniture manufacturer from Jodhpur, India can receive a large order for exporting wooden furniture to Montana, Texas. Montana is a land-locked region and arranging for domestic transport or haulage services for an exporter from India is quite a tall order.
In such a case, integrated shipping companies, like Maersk, Hapag Lloyd & CMA CGM offer intermodal shipping services with multiple modes of transport for completing a shipment.
Therefore, in the example above, a shipping company can move the same intermodal container across transport mediums to the final consumer.
Logistics giants like Maersk calculate the Verified Gross Mass (VGM) to calculate intermodal shipping rates. International regulations require shippers to produce their VGM and shipping documents before loading and unloading.
Verifying the VGM of cargo is essential and may involve either of the two processes. Shippers may choose to weigh containers after they are filled with cargo. Or, they can calculate the container’s tare weight and add it to the weight of cargo and other contents.
However, weighing the cargo before loading is impractical for bulkier loads like grains and minerals.
Maersk’s weighing and VGM services for export shipments weigh containers and transmit VGM information immediately. They also offer intra-city intermodal cargo transportation.
Best Shipping Practices for Intermodal Shipping
Intermodal shipping requires strategic decision-making to avoid underestimation or imperfect implementation of tactics. Some of the best practices in intermodal shipping include:
Tracking Rail & Maritime Freight: To prevent lost or damaged cargo incidences, shipping companies hire freight specialist experts to track cargo in railway and maritime voyages. Railway transportation also delivers real-time location data by employing different algorithms and helps companies make crucial decisions on time.
Managing Demurrage and Other Charges: Intermodal shipping enables smoother loading and unloading of cargoes thus preventing container hoarding beyond the designated period. This helps avoid demurrage and detention charges. Incorrect trailer or cargo handling warrants huge accessorial fees.
Documentation and Analysis: Intermodal shipping companies are liable for data collection and analysis for future references. It also helps catalog issues and prevents the repetition of errors. Correct documentation and data analysis are crucial.
Proper Settlements and Auditing: All rail and maritime shipping involve revising data during EDI transmission. Care should be taken to avoid overbilling to prevent accessorial mismanagement. An ideal intermodal transport company identifies and rectifies these issues with ease.
What Are the Benefits of Intermodal Shipping?
1. Time-saving and Hassle-free
Intermodal shipping corporations handle the loading and unloading of cargo from ports and railway transport yards to their destination. Thus, they save on crane time, truck turnaround time and fuel expenses. Business enterprises prefer ISO containers as the most cost-effective means of transporting cargo.
Intermodal shipping containers can carry up to 40,000 pounds on 40-foot containers and about 16,000 pounds on a 20-foot intermodal container. Railway transportation also enables carrying these enormous loads, which can carry any cargo on board. The 53-foot containers can carry 60% more weight than 40-foot weight containers and are essential for carrying huge shipments, including vehicles and furniture, over long distances.
Intermodal shipping is safer than other forms of transportation like breakbulking. These steel containers can carry cargo for long distances despite weather conditions like rain and heat. With multiple metal or insulating layers, these can withstand water and protect goods against theft.
4. Proactive Packaging
Logistics companies offer a comprehensive pricing scheme for intermodal shipping containers, including packaging costs. Intermodal containers stay sealed until they reache the destination, and companies are liable to pay demurrage charges on late arrival or spoiled packaging.
Key Features and Characteristics: Intermodal Shipping Container
Transportation companies require various documents like bills of lading and commercial invoices before shipping cargo in intermodal containers. These are essential contract documents that include crucial information about the cargo. Invoices specify information about buyers and sellers and calculate the payable taxes and allowances.
This section discusses the configuration of intermodal freight containers, cargo types and ISO guidelines.
Container Configuration: Intermodal containers are measured in terms of a Twenty-foot Equivalent Unit (TEU) which classifies containers based on their size concerning the standard 20-foot.
Thus a 1 TEU container will have dimensions of 20 feet x 8 feet x 8 feet 6" while a 2 TEU container will measure 40 feet x 8 feet x 8 feet 6”. The containers undergo periodic checks to ensure quality preservation and adherence to ISO standards. Pallet-wide containers are wider than typical ISO standards and are more common in the European market.
Types of Cargo: ISO Intermodal Containers can carry a wide variety of cargo. These include consumer goods, heavy machinery and dry bulk cargo. To replenish their inventory, companies may choose to ship huge quantities of consumer goods like household consumables, packaged food items, etc. These containers also carry heavy machinery for construction and dry bulk, including grains and minerals.
Technology and Intermodal Container Shipping: The advent and usage of technology in container transportation fast tracks and simplifies the process. Artificial intelligence and machine learning have enabled analyzing shipping databases to optimize usage. Shipping corporations can perform predictive and prescriptive analyses to forecast future container usage. Logistics giants like Evergreen and Hapag-Lloyd even utilize IoT devices for real-time analysis and gaining further insight into supply chain management.
Types of Intermodal Containers
Depending on the cargo type and distance it will cover, there are 6 different types of intermodal cargo containers. They are as follows:
1. Dry Cargo
These intermodal boxes carry all types of cargo that do not require temperature control. Statistics show that 90% of shipped containers are dry cargo containers.
2. Insulated Cargo
These waterproof, ventilated containers have special layers of insulation to prevent cargo from being damaged by rain or heat.
3. Open Top
Shippers transport heavy materials like construction equipment and large machines in open-top containers because it increases the surface area.
4. Flat Rack
Unlike other container types, flat-bed ones have foldable sides. While loading and unloading, the sides can be expanded, thus allowing enough room for transporting wood, pipes, etc.
5. Temperature Controlled
Shippers can transport perishable food items and beverages in a refrigerated intermodal container. Normally they maintain a temperature of -65 to 40 degrees. Pharma companies transport huge medicine shipments in intermodal reefer carriers.
6. Tank Containers
Useful for transporting liquids and powdered substances, these containers can carry anti-corrosive materials over long distances. However, to prevent a sudden liquid surge and thermal expansion, these containers need to be 80%-95% full.
Why You Should Use Intermodal Containers
Intermodal containers require some documents to initiate and carry on with an order. Thus, certain pointers make logistics companies with valid invoices and sufficient load opt for intermodal shipping. They include:
Cargo weight below 25 tons and labeled with intermediate values.
The journey's length should be more than 480 km per day.
Cargo transportation on the mentioned route is regular and consistent.
Container shipping saves fuel costs and thus reduces carbon footprint.
Intermodal vs. Multimodal Containers
Despite the growing demand for other means of cargo transportation, intermodal containers are the most sustainable and cost-effective means of cargo dispersal. Companies often opt for marine cargo insurance to prevent cargo from being stolen or damaged.
Frequently Asked Questions
1. What are the required documents for intermodal shipping?
The documents depend on the transportation the dry containers are shipped on. Rail shipping requires a general bill in addition to the Material Safety Data Sheet. Containerized cargo ships require commercial invoices, customs clearances, certificates of organ and other relevant documents depending on the cargo type.
2. What are the costs of transporting intermodal containers on the rail?
Intermodal shipping via railways involves covering more than 1500 km distances between origin and destination. Transportation costs involve fuel costs, invoicing, intermediate storage, costs of loading and unloading cargo, etc.
3. What are some challenges faced by intermodal shipping?
Large carriers have invested hugely in scaling up their capacity. In a competitive market, it is difficult to enjoy higher profit margins. When manufacturers have their distributions close to their manufacturing sites, it sounds doom for these transportation companies.