Why Rail and Intermodal Remain Integral to Supply Chains

Supply chains continue to evolve in a variety of ways to meet the demands of a rapidly changing global business environment.

And yet, despite the prevalence of substantial digitisation and modernisation programmes, both rail and intermodal transport remain crucial, offering numerous advantages that contribute to efficiency, cost-effectiveness and sustainability.

Ultimately, businesses want a reliable and responsive supply chain. Orders that have to wait, arrive late, are damaged or even lost will eat into a business’ margins and, worse still, impact negatively on reputation. 

“As part of an intermodal system, rail provides capacity,” explains Simon Whalley, Associate Partner and transport expert at PA Consulting. “It means road, air and maritime capacity can be used where they are the best option, meaning more choice and better price points are available to customers.”

Coupled with a lifelong interest in rail, Simon specialises in supporting transport organisations with developing and implementing commercial and procurement strategies to resolve the complex challenges they face or realise the opportunities available to them.

In practice, this means helping them understand the market and how to effectively access it. 

Mitigating risks amid turbulent times

Global supply chains have, of course, been detrimentally impacted by numerous major events over the past few years. 

Demand for increased resiliency has surged following a litany of disruptions to global trade – most notably the COVID-19 pandemic, the blockage of the Suez Canal and conflict in Ukraine and the Middle East. 

More recently, the tragic collapse of Francis Scott Key Bridge in Baltimore once again demonstrated the vulnerability of global supply chains, although contingency plans already put in place by transportation and logistics leaders helped avoid far-reaching ripple effects. 

Shedding light on how firms and getting round ongoing and impending challenges, Paul Brashier, VP – Drayage and Intermodal at ITS Logistics, says rail and intermodal transportation is coming into play. 

“With the recent headwinds facing ocean container shipping in the world – Red Sea diversions, closure of the Port of Baltimore and potential International Longshoremen's Association (ILA) strikes on the horizon – rail is very important to the movement of goods,” he adds. 

“With those three challenges, shippers are moving significant volumes to ports on the US West Coast and then using interior point intermodal (IPI) to get those goods to the US east coast to be absorbed into those distribution centres and warehouses.”

Rail and intermodal provides numerous sustainability benefits

Already a strategic priority for organisations based around the world, conversations surrounding environmental preservation look set to amplify in years to come.

Paul’s belief is that sustainability and decreasing costs are today the two largest benefits of rail and intermodal transportation, with shippers embarking on determined efforts to reduce their fossil fuel consumption. 

Meanwhile, Simon’s take is that rail will increasingly become a default choice for high-volume, long-distance needs given its ability to move large volumes of freight in a sustainable manner.

In short, it remains an essential component of an intermodal supply chain.

“Large volumes of goods can be moved long distances – and safely,” Simon continues. “This means reducing congestion on our roads and reducing emissions, a benefit to not just rail users but society in general.

“Rail also offers higher levels of security for the movement of goods, so high-value or sensitive materials are well suited to this movement.”

Also worth highlighting is an increase in rapid city centre to city centre overnight freight, which aligns with the growing demand among supply chain partners and consumers for fast-moving and next-day delivery. 

It’s a process that takes advantage of the rail network once passenger services have stopped for the night, before smaller, electric vehicles carry out the last-mile delivery within the cities themselves.

“This not only helps the environment,” Simon goes on, “but means businesses aren’t paying concession or emissions charges.

“Similarly, one train carrying goods takes several HGVs travelling between cities off the roads, reducing congestion and environmental impact.”

Harnessing the power of AI

For the most part, rail providers have lagged behind the rest of the transportation and logistics industry when it comes to technology, especially in the realm of visibility.

Of course, enhancing visibility and gaining a more comprehensive understanding of all elements of the supply chain is important because companies will find themselves better positioned to identify potential pitfalls – before they escalate and damage operations. 

“At ITS Logistics, we actually created our own proprietary visibility platform, ContainerAI, to give our operators and our clients visibility into those rail milestones,” says Paul. 

This AI-driven solution – backed by two-and-a-half decades of operational excellence and more than two years of development – is at the heart of the US-based organisation’s industry-leading drayage and intermodal services.

Stretching beyond rail transport to ocean voyages and trucking milestones, ContainerAI equips firms with the foresight to reduce costs, avoid fees and optimise their supply chains. 

Expanding on the benefits AI can bring to transportation, Simon points out that the emerging technology is enabling organisations to tackle issues which previously made intermodal more challenging – such as helping those with accessibility needs to better navigate the transport network. 

From a supply chain perspective, the sector has seen investment in the development of solutions which allow freight trains to better coexist with passenger services during the day.

“This means freight trains can slot in ahead and behind passenger trains, so there will be more options available to run a freight service,” concludes Simon. “The net result is more choice, more options and more capacity for customers.

“Technology continues to advance, helping to ensure the reliability of services, detecting faults with equipment and helping to maintain performance in adverse conditions. This means higher levels of reliability – and customers can be confident their goods will arrive on time.”

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