Intermodal transportation is the use of two or more freights or carriers to deliver goods from a shipper to a consignee. Typically, intermodal transportation can take place on trucks, ships, and/or freight trains. Intermodal transportation takes advantage of special types of steel containers that make transferring between multiple modes of transportation safe and easy.
Intermodal Pricing Expected to Rise in 2021
Due to the COVID-19 pandemic, rates for intermodal transportation are likely going to increase by hundreds of dollars per container. According to the Intermodal Association of North America, domestic container volume has risen 8.5 percent every year, which has made railroads seek to increase rates for 2021.
Many truck drivers for intermodal transportation are in the older demographic, increasing their possibility of contracting COVID-19. Many of these truck drivers have stopped working in order to limit their exposure to the virus. Training new drivers is not an easy task and requires a lot of time, effort, and human-contact, making the process even more challenging during the pandemic.
More training resources are being used to train drivers. With this increase in cost, carriers are likely going to charge between 2 to 10 percent more per move made in 2021.
Some Intermodal Carriers Placing “Capacity Valves” on Shippers
The labor complications discussed previously are a huge reason why the transportation industry is struggling. This may be the first time that cargo is not being picked up due to the tight capacity in the market. Some of the biggest intermodal carriers are placing capacity valves on shippers in order to combat this problem.
Because of these capacity valves, the major parcel carriers are having great success. More than 90 percent of deliveries are on time, despite these increased volumes. However, these carriers are not looking for bigger customers, but better customers who are actually able to move products. The carriers are looking for freights that can add more packages per stop, not freights adding more stops.
Expect Intermodal Growth the Slow in the US Later in 2021
Should we expect continued growth for the rest of 2021? Unfortunately, the answer is most likely no. In 2020, the Q4 intermodal volume did not do as well as the previous three years despite the slight growth rate. Essentially, Q4 in 2020 was like a reset back to normal rather than growth.
In 2021, there is expected to be tremendous growth early in the year, mostly due to the contrast from the lockdown during the pandemic. However, big year-on-year gains against an unusual time frame can often feign inaccurate growth. Because many people have been stuck inside and have depended so heavily on goods, it has led to a more heavily used freight environment.
However, once things have settled down and things begin to go back to “normal,” it is likely that most growth will happen in the service sector instead of consumer goods. If this ends up happening, intermodal growth will likely slow and begin to correct sometime in the summer.
Conquer the East Coast’s New Intermodal Landscape with East Coast Transport, LLC
East Coast Transport has been in the freight transport business for 40 years. We have the equipment, technology, and knowledge to keep your products safe while quickly transporting them. Our team of professionals have a great understanding of the logistics of intermodal transportation and national and international regulations used in the industry. We tailor our transportation services to your business and its needs and specialize in customer satisfaction.
To find out more about our intermodal transportation services, you can call us at 800-257-7877, or contact us through our website.
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