Intermodal Vs Multimodal Pros, Cons and Beyond

intermodal versus OTR

Navigating freight options presents a pivotal choice between intermodal freight and over-the-road (OTR) transportation. Each mode offers unique benefits, and the selection often hinges on specific shipment needs. But among these iconic logistics solutions are core differences that impact whether it’s genuinely the correct mode for your shipment.

What Is Intermodal?

Intermodal freight involves the transportation of cargo using multiple modes—such as trucks and trains—without handling the freight itself when changing modes. Conversely, OTR refers to goods moved primarily by road, from origin to destination, using trucks. For most North American trade, it’s used mainly to describe any movement in which the longest part of transport is handled by rail. 

Understanding the differences between these transportation methods proves critical, with far-reaching consequences on cost, transit time, and environmental footprint. FreightWaves explains that organizations must weigh these factors carefully when deciding which mode aligns best with supply chain objectives and customer commitments. 

Factor 1: Cost Efficiency

The economics of moving freight often highlight intermodal freight as a beacon of cost efficiency. Strategic use of rail transport within the intermodal mix can significantly reduce fuel expenses, as trains move a ton of freight nearly 500 miles on a single gallon of fuel. Further, The Journal of Commerce noted that Intermodal was approximately 25.7% lower cost than OTR transport in 2023. Of course, any well-respected shipper will need a detailed comparison of fuel costs, operational expenses, and overall cost implications for businesses.

Factor 2: Transit Time and Reliability

Transit time and reliability are critical performance indicators in logistics. Intermodal transport has made significant strides in transit time reliability. Investments in intermodal facilities, advanced scheduling systems, and cooperative agreements between carriers have enhanced the predictability of intermodal services. However, Intermodal still has a longer transit time than the typical truck. Intermodal shipments also need a longer lead time to handle loading, and they cannot typically be rerouted if a problem arises. 

Factor 3: Environmental Impact

The environmental footprint of freight transportation forms the basis of the third factor in deciding between intermodal and OTR. Intermodal transportation is well known for its reduced environmental impact. Meanwhile, recent reports have found that customers are willing to pay a premium to work with companies that prioritize eco-friendly policies and practices. Yet, that can be at odds with the demand for “fast” shipping. Fast shipping is neither free nor environmentally friendly. 

Create the Right Intermodal and OTR Combination With LOTTE Global Logistics. 

The decision between intermodal and OTR rests on evaluating cost efficiency, transit time and reliability, and environmental impact. Each mode carries its own set of advantages and considerations, and the right choice varies based on the specifics of each shipment. The future of freight transportation will likely see further advancements in intermodal and OTR options. And if you’re ready to implement a more intelligent and robust strategy to leverage intermodal and OTR transport, connect with a LOTTE Global Logistics team member now.