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U.S. ENVIRONMENTAL PROTECTION AGENCY
Intermodal for Shippers
A Glance at Clean Freight Strategies
Case Study:
Kimberly-Clark,
SmartWay Partner
Since 2OO6, Kimberly-Clark:
+ Expanded intermodal
utilization byl2O percent
- 42,000 loads in 2006 to
95,500 in 2013
— 49 million miles to 12O
million miles
This intermodal utilization
has resulted in:
+ 56O,ooo trucks off the
highways
— Saved 62 million gallons
of diesel
- Reduced C02 by
63O,OOO metric tons
- Saved $355 Million
Intermodal shipping combines the efficiency of rail and barge u/ith the flexibility
of trucking. For shippers, using multiple modes can dramatically reduce emissions
while lowering transportation costs.
What is the Challenge?
Shippers face rising transportation costs, demand for quick product turnaround and delivery, and
pressure to improve the sustainability of their supply chain. These challenges are exacerbated
by the long distances and travel times involved in moving supplies and delivering products to
market.
One strategy that can address this challenge is to use a mix of modes in lieu of moving all of
your goods over the road, and choosing a combination that meets your needs for service, cost,
transit times, and sustainability.
Domestic ground intermodal traffic in North America is growing1 for a variety of reasons:
• Shippers are concerned about the effects of fuel prices and driver shortages on
truckload capacity.
• The number of domestic intermodal containers has increased 75 percent in the last
10 years, meaning intermodal services are better equipped to absorb growth and
seasonal surges2.
• Shippers are recognizing intermodal service improvements and network enhance-
ments, particularly on lanes that are traditionally considered regional truckload hauls
(500 to 1,500 miles). Service agreements with the country's largest truckload carriers
have opened dozens of new lanes or "corridors" running shorter and shorter lengths
of haul3.
Rail and barge shipping also create significant opportunities for carbon reduction in the supply
chain. An intermodal train can haul the equivalent of approximately 280 truckloads of freight4,
with each ton traveling an average of 473 miles on one gallon of fuel5. The relative energy
efficiency of rail is estimated at 1.5 to five times that of trucking6 and the ratio for greenhouse gas
(GHG) emissions is similar. Class I railway operations on average emit about 22 grams of CO2
per ton-mile compared to truck operations which emit approximately 65 grams per ton-mile7.
Similarly an inland barge can transport a ton of freight approximately 576 miles on a gallon
of fuel, corresponding to about 1 8 grams of CO2 per ton-mile8. Therefore, depending upon
the additional truck drayage required, rail and barge modes can offer substantial CO2
efficiency improvements relative to over the road freight.
What is the Solution?
Educate yourself about the cost advantages, services, and environmental
benefits involved with a shift from all trucks to intermodal. For example, the
International Association of North America (IANA) is a trade association
that represents the interests of the intermodal freight industry and provides
information on intermodal transportation and shipping9. For some
shipments, using rail corridors for domestic long hauls and trucks for
the "final mile" offers the best payoff, but other combinations of modes
(including barge services) may be better suited to your supply chain. Many
logistics services and software providers offer planning tools that can help
identify what works best for different shipping scenarios.
Consult with intermodal brokers to determine if a combination
of transportation modes is cost-effective and appropriate for
shipments based on distance, delivery time, and the type of
freight you move.
Continued
U.S. EPA SmartWay | EPA-420-F-16-006 | www.epa.gov/smartway
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MENTAL PROTECTION AGENCY »
U.S. ENVIRONMENTAL PROTECTION AGENCY
Intermodal for Shippers
A Glance at Clean Freight Strategies continued
Costs
In general, there are no capital expenditures associated with
using intermodal services; however, there are costs based on
fees charged by intermodal brokers.
There can also be costs associated with scheduling. The
inability to confidently schedule modal transfers often leads
to one of two outcomes10:
• If precise transfer schedules are maintained, many
intermodal transfers are missed, affecting operations
further down the logistics chain.
• Intermodal schedules have built-in slack time to account
for unreliable travel times. While this can prevent inter-
modal connections from being missed, it introduces
inefficiencies in the process and drives up total costs
for both shippers and carriers.
Savings and Benefits
A shift from trucks to truck-rail intermodal can lower your
carbon footprint and reduce your supply chain costs. For
example:
• Reduced emissions: Baxter International increased
the share of U.S. shipments using intermodal trans-
port from 24 percent in 2009 to 27 percent in 201 1.
Its 7,800 intermodal shipments in 201 1 resulted in
an annual reduction of 1 9,860 metric tons of GHG
emissions and saved more than 1.94 million U.S.
gallons of fuel11.
• Savings in the supply chain: By expanding the
number of intermodal shipments from 42,000 loads
in 2006 to 95,500 in 201 3, a 120 percent increase,
Kimberly-Clark estimates savings of $355 million in
transportation costs and 630,000 metric tons of GHG
emissions12.
Constellation Brands, a publicly-traded drinks company
with brands in wine, beer, and spirits historically relied
on rail for its long-haul shipping of wines and spirits but
was unable to include "rush shipments" by this mode
until recently. With the addition of "expedited intermodal"
service, the company is able to rely on rail even for rush
shipments, with product arriving at the destination nearly
as quickly as by truck at substantially reduced prices of
20-25 percent savings for expedited intermodal. The
company estimates 40-50 percent savings for non-
expedited intermodal transport relative to trucks13.
According to EDF's Green Freight report, Michael Kors,
a leading fashion designer of high-end hand-bags
switched from air freight to ocean freight, taking advant-
age of a single-source option that handled shipments
that do not entirely fill a cargo container (less than
container load "LCL"). Historically, partial containers
added significant transit time due to required resorting
of goods upon arrival at the port. However, the special-
ized intermodal single-source option improved ocean-
only transit time by 30 percent and saved $20 per
handbag while reducing carbon emissions compared to
air freight14.
Verified emissions data: Shifting from trucks to
intermodal can have a positive effect on your carbon
footprint but it's important to measure the impact.
Seek out reliable methods for calculating emissions
before you shift from truckload to intermodal15.
For example, SmartWay's Driving Dafa Integrity in
Transportation Supply Chains document presents data
quality assurance best practices and strategies to
help SmartWay partners in their own efforts to collect,
manage, and assure the quality of their SmartWay-
related data16. While this document is geared towards
SmartWay partners, shippers that are not program
partners can certainly benefit from the best practices
and strategies listed.
STEPS
IAsk your current
carriers if they offer
intermodal services. Many
provide these services
through a separate sub-
sidiary. If not, consult with
independent intermodal
brokers about their
offerings.
2 Perform an audit of
their current costs for
each shipment route in
preparation for Step 3
below. This audit process
can help you better under-
stand the carbon footprint
of the supply chain and
how it may be reduced.
3With your intermo-
dal partner, perform
"what-if" scenarios using
planning tool software
based on several combi-
nations of transportation
modes, balancing cost
savings and delivery time.
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