Temperature-Controlled Intermodal: Reducing Costs and Securing Capacity

As we continue through the hottest months of the year, thoughts begin to turn to ways to cool down and escape the heat. Supply chain professionals are no different—especially if they are moving temperature-sensitive freight. For years, truck presented the only option for temperature controlled freight moves; however, in recent years that trend is beginning to change. As the over-the-road trucking regulatory environment heats up and capacity begins to tighten, transportation managers are looking to other modes to move their temperature-sensitive freight.

According to the US Department of Agriculture, there are roughly 800,000 temperature-controlled loads hauled more than 1,000 miles annually1. At CSX Transportation Intermodal, we have analyzed thousands of shipping moves using our proprietary Highway to Rail Optimizer and have determined that 14% of freight moved over the road is sub-optimized by mode2. That means there could be 112,000 sub-optimized temperature-controlled loads on the road today. Are your temperature-controlled loads moving in the most efficient way possible? If not, how much is non-optimal modal selection costing your company?

Not just for dry-van any more

Historically, the shipping community has turned to intermodal rail for dry-van moves with a length of haul 1,000 miles or more. However, intermodal rail’s role in supply chains is rapidly evolving. Due to investments by Class 1 railroads into fluid and high-performing regional and interconnected national intermodal networks, the length of haul required to experience the benefits of intermodal rail has been reduced to as little as 500 miles.

In addition to advancements made by the railroads, intermodal carriers are responding to the needs of their customers by expanding their fleet of temperature-controlled equipment. According to the Journal of Commerce3, multiple providers are doubling their fleet of refrigerated units to keep pace with increased interest in temperature-controlled intermodal. The same article highlights that the growing demand experienced by one provider has resulted in double-digit growth on an annual basis of temperature-controlled moves since 2006.

Temperature-controlled— for more than food

Temperature-controlled intermodal has cross-industry applications and is not limited to frozen food items. Many industries that seek to regulate the temperature of their freight can benefit from integrating intermodal rail into their supply chain.

Temperature-controlled intermodal can be used for:

  • Confectionary products (chocolates, hard candies, gum, gummies)
  • Pharmaceuticals, nutritional supplements and medical supplies
  • Waxes, resins and adhesives
  • Health and beauty products

A temperature-controlled intermodal alternative

Technology is advancing not only the mode in which temperature controlled freight is transported, but also how shippers package and protect their goods. Shippers are considering alternatives to temperature-controlled containers, such as the use of blankets, quilts and pallet covers to maintain target temperatures in a dry-van container. This type of product is designed to allow shippers to move temperature-sensitive freight via dry-van containers, yet protect their product from extreme temperature variations. Astro-Cooler, a cargo insulation provider, conducted a six day, cross-country test of their insulation blanket during the summer months. The test results indicated that the products placed in the dry-van container under the insulator blanket experienced a temperature variation of nine degrees (76o -84o), while the space in the container outside of the blanket recorded a temperature variation of forty-three degrees (60 o -103o). Being able to regulate extreme temperatures allows shippers to protect their freight while still utilizing existing dry-van capabilities. Whether dry van or reefer, shippers find solutions for temperature-sensitive freight through intermodal.

Why use intermodal rail for temperature-controlled moves:

  • Lower cost: Reefer intermodal rates are generally 10 to 15 percent less than freight moved over the road1.
  • Access to experts: Class 1 railroads work with a network of channel partners that specialize in temperature-controlled moves. Channel partners are updating current equipment as well as expanding temperature controlled fleets to meet increased demand for reefer moves.
  • Expansive service offerings: Coast-to-coast rail service through seamless interchange with railroad partners.
  • Reduce cost and impact on environment: Environmental favorability reduces carbon footprint of supply chain.
  • Mitigate over-the-road risks: Secure capacity through reducing exposure to over-the-road risks including driver shortages, delayed transit times, and increased OTR costs that may result from increased federal regulation such as the recent change in hours-of-service.

Timing has never been better

Increased highway congestion, higher fuel prices and a shrinking driver pool make the transition from truck to intermodal rail more attractive for refrigerated cargo.  Intermodal rail service is at an all-time high and with the extended reach enabled by thousands of unique origin destination pairs, it is an opportune time for savvy shippers to consider intermodal rail. For more information on intermodal moves for temperature controlled freight or to connect with a CSXT Intermodal expert, click here.

Through partnerships with Class 1 railroads like CSXT Intermodal, Load Delivered offers premier refrigerated intermodal services. Recently, we were recognized by Food Logistics Magazine at a Top 100 3PL and Cold Storage Provider. To learn more about our refrigerated intermodal services, contact us.

1 Szakonyi, M. Journal of Commerce. "Intermodal's Reefer Prospects Heat Up." March 2013.

2 Based on >100 shipper truckload files analyzed in 2012 by the CSXT Intermodal H2R Optimizer.

3 Szakonyi, M. Journal of Commerce. "Intermodal's Reefer Prospects Heat Up." March 2013.

 

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