As the U.S. trucking market tightens further under ELD compliance, shippers typically turning to intermodal for additional space will be greeted by high spot rates and cold shoulders as contracted commitments and service adjustments limit rail absorption capacity.
Spot rates for intermodal are over 50 percent higher, on average, year-over-year. High volume lanes to/from the West Coast and major central hubs such as Dallas and Chicago are experiencing even greater spot increases, closer to 100% year-over-year. Some railroads, such as Union Pacific, have already announced they will not be accepting any more contracts for domestic intermodal through the end of 2018 – and the upcoming peak season.
There is no easy or quick answer for shippers seeking to fulfill high consumer expectations – and unwavering demand. Instead, logistics managers are adjusting their supply chains to build flexible routings and seeking alternative ways of becoming preferred shippers (with priority).
Try these five strategies to ease delivery frustration for both sides of the supply chain:
- Evaluate and extend lead time
- Consider drop-and-pick versus live unload
- Adjusting or extending delivery windows
- Ensure cargo is fully Customs and freight released prior to pick-up
- If possible, consider domestic air versus intermodal
NOTE: the Commercial Vehicle Safety Alliance’s (CVSA) International Roadcheck initiative is scheduled for June 5-7, 2018. For more information, visit IRC Hours-of-Service Compliance.