Multimodal Transportation: Definition, Challenges, and Solutions
September 15, 2022
The transportation industry is huge. This is true for its market size, geographical reach, variety of modes of transport, types of transportation services, and the number of shippers involved in supply chains worldwide.
Today, we're looking at multimodal transportation: what it is, what's the difference between multimodal and intermodal transportation, and what some of the biggest challenges and solutions related to multimodal transportation are.
What is multimodal transportation?
As always, we start with the definition.
Multimodal transportation or multimodal shipping refers to logistics and freight processes that require multiple modes of transportation.
For example, one shipment may involve rail carriers, air cargo freight, as well as a truck carrier. These are three modes of transport used in combination to complete a shipment.
Multimodal transport is handled by a single carrier aka a multimodal transport operator or provider. The provider relies on a network of smaller carriers or contractors to do the job, but it's still a single-contract process for the shipper opting for multimodal transport.
Unlike intermodal shipping, multimodal shipping allows for the cargo to be handled differently depending on the responsible carrier.
E.g. the freight will be moved from a container to the pallets in a truck because of multimodal transport constraints.
What is intermodal transportation?
To fully define multimodal transportation, we need to establish what intermodal shipping means.
Intermodal transportation is a type of transportation that also requires the coordination of multiple modes of transport.
The difference is that you have to deal with multiple carriers and contracts too.
The key part of an intermodal shipment is that carriers handle one and the same freight container. Each carrier does their part in getting the container to the destination but they don't get to remove cargo from one container and put it in a different carriage.
The main benefit of intermodal shipping is that it's cheaper than multimodal transport. At the same time, it requires more time for negotiations with carriers.
Much like supplier relationship management, it can add a huge chunk of work to an already busy logistics operation.
Dealing with just one contractor instead of multiple carriers is the reason companies can opt for multimodal shipping. Let's look at some other benefits this type of freight can offer.
Benefits of multimodal transportation
In addition to making the entire shipping process easier in terms of contract obligations, multimodal shipping comes with more benefits.
First and foremost, we need to talk about coordination.
Multimodal movement wins over intermodal movement due to much clearer communication.
Talking to one carrier company or service is enough to make freight logistics complicated. Coordination with multiple carriers can decrease efficiency and lead to loading and shipment delays.
Keeping the movement down to a single contract means better overall control of transit and less contracts-related work for your legal department.
Speaking of contractual obligations, a multimodal movement also means that only one agent or provider is responsible for the movement of the freight. The tricky part of managing a supply chain is tracking and holding individual shippers and suppliers accountable for delays and wasted resources.
Having one agent responsible for the freight is even referred to as "door-to-door" coverage, meaning your shipment is secured by one company.
A single-contract mode will save you hours of freight management and bring the operational cost down.
Unless you're shipping fragile freight or any freight across the ocean, which entails movement between ports, keeping the cargo in one container means worse access for the carriers. Meanwhile, a combination of different modes of transport means that each mode comes with its own constraints.
Multimodal and intermodal shipping will both get the cargo to its destination. The question is, do you really need to limit each carrier's access to the transit options at the cost of delays?
Delivery is good when it's on time and in full (OTIF). Supply chain efficiency, logistics management, and customer satisfaction all depend on the shipping deadlines being met.
A clear benefit of multimodal movement is that you minimize delivery delays by giving one company control over the entire freight.
Door-to-door, after all, means that shippers and carrier providers are on the same page with shipments are order fulfillment. Going with multimodal shipping over intermodal shipping helps you reduce the risk of delays and keep customer satisfaction consistently high.
Multimodal transportation challenges & solutions
Now that we've gone over the benefits of multimodal shipment, let's see what challenges multimodal and intermodal transportation pose and what kind of solutions shippers and carrier companies revert to.
Even though intermodal and multimodal movements are different in terms of the number of contracts you have to deal with, multimodal shipping can still be bothersome in terms of paperwork.
For example, you've settled on a carrier company that handles multimodal transport for you. Your job as a shipper is done here, right?
The bad news is, the company can still invoice you for different services, i.e. each leg of transportation.
As you spend more and more time processing each paper invoice, the overall shipping cost keeps growing. This is a sign for the transport and logistics industry to go paperless.
Challenge: paper invoices for different services individually.
Solution: paperless delivery management systems that support e-sign and photo proof of delivery.
Poor tracking & coordination
In long-haul freight, tracking a single shipment can require a combination of resources even when transportation boils down to one shipper and one carrier. Even inland movement can be tricky to monitor, let alone air cargo freight and port-to-port ocean shipments.
Challenge: poor tracking and the need for constant updates.
Solution: track and trace as well as automatic shipment notifications.
Supply chain disruptions
In 2023, no shipper is immune to supply chain disruptions. The pandemic has posed many challenges to both intermodal and multimodal transport systems, and the logistics industry is still taking a blow to this day.
Especially with different modes of transport involved, shippers need to have security that in reality means being prepared for supply chain disruptions and having different intermodal and multimodal solutions as alternatives.
Challenge: safety concerns, disrupted service, and inflated shipping costs.
Solution: switching to local suppliers and investing in local distribution networks.
Every shipper needs to know their options when it comes to intermodal and multimodal transport. To ship cargo over long distances, a combination of modes of transport will be involved anyway. The tricky part is to decide whether to choose a single-contract service or go the intermodal way.
I hope this article gives you enough insight into multimodal shipping and how it moves cargo to the destination. If you're curious about specific logistics and transportation solutions for different modes of inland transport, explore the Track-POD transportation management system.