Intermodal transportation continues to grow as an efficient, cost-effective, and sustainable alternative to truckload shipping. However, many shippers hesitate to use intermodal because they don’t fully understand how the operational components work—from rail transitions to terminal procedures and equipment management.
This guide provides a comprehensive look at intermodal operations, explaining how shipments move between railroads, what happens at intermodal terminals, and how shippers can optimize their supply chains using intermodal transportation.
Intermodal Rail Interchanges: Steel-Wheeled vs. Rubber-Tired Transitions
Intermodal shipments often require transitions between different railroads to complete a long-haul move across the railroad North America network. These transitions occur at:
- International borders (U.S.-Mexico and U.S.-Canada)
- Domestic interchanges where multiple rail networks are needed (e.g., Los Angeles to New York may require a UNP to NS transition).
Railroads use two types of interchanges to transfer containers between networks:
What Is a Steel-Wheeled Interchange?
Definition: A steel-wheeled interchange keeps the container on a railcar as it moves from one railroad to another. The entire railcar is transferred, avoiding the need for drayage between terminals - making for a seamless rail to rail transition.
Where It Happens:
- USA - Mexico border (e.g., Laredo, TX and Eagle Pass, TX)
- USA - Canada border
- Major domestic interchanges (e.g., Chicago for East Coast-West Coast rail transitions)
Advantages:
- Seamless transition between railroads – No need for drayage.
- Faster border clearance – Avoids long truck lines.
- Less handling, reducing risk of damage – Container remains on the railcar.
- Lower transportation costs – No dray truck or extra terminal fees.
- More reliable transit times – No drayage scheduling delays.
Disadvantages:
- Only available at specific intermodal hubs – Not all rail interchanges support steel-wheeled transfers.
- Dependent on railroad agreements – If two railroads don’t have a direct steel-wheeled interchange, rubber-tired interchanges may be necessary.
What Is a Rubber-Tired Interchange?
Definition: A rubber-tired interchange requires a drayage truck to move the container between two rail terminals before continuing the journey on rail.
Where It Happens:
- Domestic interchanges where two railroads lack a direct connection (e.g., Atlanta, Memphis, Kansas City)
- On occassion in USA - Mexico transitions when rail interchange infrastructure isn’t available because of a back-up in the network.
Advantages:
- Increases rail network flexibility – Allows shipments to move even when railroads don’t have a direct interchange.
- Can work around network congestion – If a steel-wheeled interchange is backed up, rubber-tired moves can be an alternative.
Disadvantages:
- Requires additional handling and drayage – Higher risk of delays or cargo damage.
- Higher costs – Drayage fees increase total transportation costs.
- More complexity in coordination – Requires scheduling a dray carrier for the transition.
Key Takeaway for Shippers
Whenever possible, shippers should prioritize steel-wheeled interchanges to minimize costs, avoid delays, and improve transit reliability. At the U.S.-Mexico and U.S.-Canada borders, steel-wheeled interchanges eliminate long truck lines, making intermodal a superior cross-border shipping option.
Intermodal Terminal Operations
What Are Grounded vs. Wheeled Operations?
At intermodal terminals, containers are either stacked (grounded) or placed on chassis (wheeled) before delivery.
Grounded Operations
- How it works: Containers are stacked and require a crane for retrieval.
- Pros: More cost-efficient, reduces chassis usage.
- Cons: Longer lead time to retrieve containers.
Wheeled Operations
- How it works: Containers remain on chassis, ready for immediate pickup.
- Pros: Faster drayage turnarounds.
- Cons: Higher chassis costs, limited availability.
Shippers should factor in terminal operations when scheduling pickups and managing supply chain efficiency.
Chassis Management & Equipment Considerations
Chassis Pools & Availability
Chassis shortages can impact intermodal shipments, so knowing whether the ramp has pooled chassis or requires privately owned equipment is critical.
What Are Domestic vs. Marine Chassis Pools?
Domestic Pools
These are primarily used for 53-foot containers and are simpler to manage. Companies like DCLI provide chassis for Class 1 railroads and other domestic freight movements.
Marine Pools
Used for 20-, 40-, and 45-foot international containers, also known as ISO containers, these pools are more complex due to varying rules, contracts, and agreements between steamship lines and intermodal equipment providers (IEPs).
Challenges in Managing Pools
Balancing Supply and Demand: Ensuring that chassis are available where and when needed requires constant coordination between depots, rail terminals, and ports.
Migration Penalties: Moving a chassis outside its designated pool or market can incur fees, as this disrupts the balance needed to serve all customers effectively.
Accessorial Charges: Additional costs, such as split charges or repositioning fees, arise when chassis need to be retrieved or returned to specific locations.
Container Equipment Types
53’ Domestic Containers – Primarily used for shipments within North America, offering a reliable and standardized intermodal solution.
40’ International Containers – Designed for import/export freight, but also utilized for domestic shipments at significantly lower costs. Steamship lines often provide incentives to reposition these containers with paying freight rather than moving them empty back to port.
Refrigerated Containers – Specialized for temperature-sensitive freight, ensuring proper climate control throughout transit.
Security, Risk Management & Fraud Prevention
Cargo Theft Prevention
- Secure intermodal terminals with restricted access.
- Bottom-well placement on trains for theft protection.
- Rail tracking technology to monitor cargo movement.
Cargo Insurance Considerations
Unlike truckload shipments, which typically carry $100K in cargo coverage, intermodal shipments generally offer $250K in cargo coverage. However, it’s crucial not to assume coverage limits—always verify with your Intermodal Marketing Company (IMC) before finalizing pricing and loading freight.
Additionally, when shipping into Mexico, cargo insurance risk falls entirely on the shipper. If your IMC provides no coverage, consider purchasing additional cargo insurance or be prepared to assume the risk.
Fraud Prevention: How Intermodal Eliminates Carrier Fraud
Unlike truckload brokerage, where fraudulent carriers and brokers are a major risk, intermodal eliminates these concerns through strict security measures:
UIIA Agreement (Uniform Intermodal Interchange & Facilities Access Agreement)
- Ensures all intermodal drayage carriers meet financial and safety compliance.
- Prevents unauthorized brokers from accessing intermodal freight.
- Adds a layer of security and reliability to intermodal shipping.
With these protections, intermodal shippers avoid fraudulent double brokering and unauthorized carrier handling, a problem that plagues the truckload market.
Intermodal Knowledge Is Shipping Power
Shippers who understand how intermodal operates can take advantage of its cost savings, reliability, and efficiency. Steel-wheeled interchanges, strict fraud prevention, and structured terminal operations make intermodal a superior supply chain solution in many cases.
Want to optimize your intermodal logistics? Contact InTek Intermodal today to explore how we can help.
For more insights on intermodal logistics, subscribe to the Intermodal Logistics Podcast. Whether you're a seasoned logistics professional or new to the industry, understanding the intricacies of chassis management will enhance your ability to navigate the ever-evolving world of intermodal shipping.
Our team is here to guide you through the benefits and help you make the best choice for your logistics needs. We'll work with you on flexible solutions that fit you best. For more information about InTek, or logistics and supply chain issues in general, check out our Freight Guides.
