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Talking Logistics: “Combating Intermodal Market Challenges & Costs”

May 10, 2018
It’s both an interesting and rather chaotic time in the intermodal market. The electronic logging devices (ELD) mandate is in full effect, and there have been some widespread market changes as a result. For carriers, with the new ELD regulations come subsequent training needs and changes to drivers’ hours – creating a number of additional costs, which are in turn being passed along to shippers. So, what can shippers do to combat the ongoing market challenges of 2018?Shorter Routes and Added Costs

According to the Journal of Commercethe ELD mandate is “making a bad situation worse for shippers,” and forcing them to “pay more, speed up loading and unloading, and dig deeper into routing guides to find capacity.” Due to the restrictions placed upon carriers by ELDs, the farthest freight from the ramp is being scrutinized in the drayage community, and these carriers are exercising choice when it comes to longer haul lengths. This is having a direct impact on capacity and rates, and rates on length of haul are steadily increasing – the drayage space is seeing cost increases from 3-10% that are purely associated with the ELD mandate.

Additionally, carrier preference has swung toward local freight (i.e. within 100 miles), which has caused a strain in some markets. From a carrier perspective, if a driver has a longer route and has to take an overnight due to the ELD mandate, that automatically increases the carrier’s cost for that particular load. Truckload routes are getting shorter as a result, and shippers with longer routes may need to turn increasingly to rail and intermodal options.

Read more here.