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Guest Post: The X’s and O’s of Intermodal in Supply Chain Management

Intermodal in Supply Chain ManagementCooler weather, passion for the team, and the ongoing discussion of the next big game; it must be football season. For most, this means tailgating and spectating, but there are several takeaways that transportation and supply chain leaders can borrow from a successful football program’s playbook.

 

Offense

The goal of a football team’s offense is to deliver plays that ultimately put points on the scoreboard. Likewise, a company’s supply chain is charged with the task of delivering in a big way—both in the literal sense of reliably transporting goods and through reducing costs and increasing efficiencies to score on bottom line metrics.

The most successful football teams utilize the run game to pick up crucial short yardage and the pass game to go the distance.  Having well-developed run and pass capabilities complement each other and allow for maximum impact. Similarly, transportation managers have the ability to choose from multiple modes for transporting goods in their supply chain.

Just like successful football game play, an effective supply chain utilizes strategic modal selection to employ the best mode for each freight flow, and often for particular loads within a flow. For short moves, transportation managers are well-served by their “running game”, or trucking, to get products from point A to B.  But when going the distance, intermodal rail is a great play call. The intermodal rail play can be used for moving a wide range of products 500 miles or more, delivering savings of up to 10-40% over trucking. Utilizing a multi-modal approach allows a supply chain manager to leverage each mode in its respective sweet spot and improve the organization by reducing costs and driving efficiency.

Defense

Defense specializes in risk management, protecting a team from giving up valuable points. A strong defensive squad is ready for any play by the opposing team by having multiple defensive formations and schemes in their playbook.

In a similar way, proper modal selection—and an established intermodal plan—allows a transportation manager to protect the supply chain and defend against seasonal, environmental, regulatory, and industry factors that could negatively impact the transportation network and the organization’s bottom line. Intermodal rail provides supply chain managers a go-to double coverage option: the “double-stack” option provides scalable capacity that can flex to meet the dynamic needs of a shipper’s supply chain. A train can carry the load of 280 trucks, providing load coverage even when there are surges in demand.

Special Teams

Special teams, although not center stage throughout the game, can be the difference between good and great teams. To carry out the metaphor, intermodal rail offers added value to a supply chain in the form of environmentally friendly shipping practices. For instance, transferring 1% of truck freight to rail each year would reduce greenhouse gasses by 1.2 million tons.  Intermodal rail can meaningfully reduce the environmental footprint of a supply chain and advance corporate sustainability goals.

The Coach

Supply chain leaders must assume the role of coach within their organizations.  Incorporating intermodal rail into the supply chain opens up a new realm of play calls that result in offensive cost savings “points”, defensive strength that protects against tightening capacity and trucking head winds, and special team benefits that demonstrate sound environmental stewardship.  A great coach builds a forward-looking supply chain and aligns across functions on key benefits of incorporating intermodal rail to manage the game on both sides of the field.