The freight market operates significantly under contracts, but in some cases, those contracts are worth little more than the paper they’re written on. In the intermodal market, however, upwards of 99% of freight moves under contractual agreements, making contracted freight data increasingly valuable compared to spot market data, which represents an extremely small subset of overall intermodal movements.
Intermodal contract rates, which can now be broken down into multiple granularities beyond just a national average, allow for benchmarking or identifying potential intermodal conversion opportunities. Intermodal contract rates within SONAR can be analyzed by national average, transcontinental, local east and 67 of the densest intermodal lanes across railroad networks.
The first and arguably easiest use case for intermodal contract rates is benchmarking. In the past, intermodal contract rates could only be benchmarked at a national level, which didn’t always represent the movements happening in the market. Transcontinental and Local East movements are priced dramatically differently, largely due to the length of haul and the relationship between intermodal and truckload.
For shippers importing into the West Coast, the transcontinental intermodal contract rate provides a more accurate representation of intermodal pricing than a national rate would. These granular views allow for better decision-making and can significantly improve contract negotiations, helping businesses gain a competitive edge.
Using intermodal contract rates by geography is a good way to benchmark, but expanding into the lane level offers not only enhanced benchmarking opportunities but also the ability to identify potential intermodal conversions. New intermodal contract rates within SONAR offer data for 67 different lanes. Combined with Market Dashboard, users can identify where intermodal contract rates are not only below truckload contract rates but also below truckload spot rates.
The Los Angeles-to-Chicago lane is one of the densest transportation lanes in the country for both the truckload and intermodal markets. Viewing intermodal contract rates alongside truckload rates on this lane reveals that the intermodal contract rate is more than 30% lower than the truckload rates. If time sensitivity isn’t a concern, this is a prime example of how intermodal conversions could benefit a shipper’s transportation budget.
In addition to the potential cost savings intermodal conversions can provide, they also help shippers advance their ESG initiatives.
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Explore SONAR’s intermodal contract rate data today. Request a free demo and discover how granular insights can revolutionize your transportation network.
