Decreasing Mileage & Fuel Expenses with Intermodal Trucking
This is the first part of the DrayNow Diesel Series, covering the intermodal advantage in response to high diesel prices.
When it comes to fuel costs, all carriers want the same thing: to spend as little on fuel as possible while maximizing revenue. Fuel is already the greatest expense for owner operators, and rising fuel costs chip away at their net revenue.
With domestic intermodal, carriers are staying local and hauling freight that originates from railyards throughout America. This presents the perfect opportunity to show how carriers hauling intermodal freight can drive fewer miles and spend less on fuel compared to OTR. By using our technology, data, industry knowledge and interviews with carriers that use the DrayNow app, we have the experience to support this case.
No matter how many intermodal trips a carrier takes in a year, there’s no way they’ll drive more miles than an OTR carrier. There are a lot of empty miles that need to be factored in when a carrier travels long distances in OTR. If a driver is going from Chicago to Denver, at some point they’re going to have to make their way back, whether they’ve picked up another load or not. According to our own internal data, drivers working full time doing intermodal trucking average around 78 miles per trip. This is where the benefits of intermodal really show: carriers can pick up loads within a certain radius of their home and drive less miles overall.
It’s also important to factor in the financial benefit of driving fewer miles. Rolando V., owner of a Chicago based carrier, put it best: “The local moves [intermodal] are the ones that are better because with the long runs, the price per mile goes down and the expenses go up.” With the rate per mile being higher for shorter mileage runs, carriers can spend less money on fuel while making more per mile. Taking a look at our Spot Rate Tracker, which factors in all spot moves on the DrayNow platform at any mileage, it’d be difficult to find OTR runs where a carrier can earn this much per mile.
Steve M., a carrier in Atlanta, likes to have his drivers stay local so that he can fill up his trucks’ fuel tanks every day with the diesel he bought in bulk. This is so that the drivers don’t have to do so on the road and pay a premium. It’s a lot harder for a carrier to keep their fuel usage in check like Steve does when they’re thousands of miles from their home base.
The consensus among the carriers we spoke to is that with fuel being the greatest operating expense per mile, simply put, intermodal cuts down on that cost due to driving less miles. Combine this with the higher rates per mile on these trips, and it’s clear that intermodal provides an advantage to the carriers looking to stay local and use fuel efficiently.
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