Multi-modal transport combines rail, road, sea, and air under one plan for cost savings, speed, and adaptability.
Continuous improvement represents one of the foundational elements of effective supply chain management.
Businesses are constantly seeking ways to improve operational efficiency, reduce waste, increase resilience, and get goods into the hands of consumers quickly.
One of the most effective means of streamlining logistics processes is multi-modal transport. Below is a closer look at how organizations can use this strategy to realize meaningful shipping efficiency gains.
Multimodal transportation (typically shortened to multi-modal transport) refers to using two or more modes of transport to move freight from one location to another, all under a single bill of lading or contract.
This unified approach simplifies the logistics process by coordinating different transport modes like rail, sea, road, and air under one operation.
Intermodal transport requires a separate contract for each mode of transit, adding unnecessary complexity to the delivery process. Conversely, multi-modal transport strategies also integrate varied transportation options to provide better access to shipping capacity and significant time savings.
Here’s a quick breakdown of the processes involved:
The handoff is arguably the most important of these steps, as any missteps could offset efficiency gains achieved in the early phases of the supply chain.
Once you’ve implemented the new logistics strategy, continually monitor its efficacy and make targeted improvements to maximize your return on investment.
Multi-modal transport can have positive effects on both the productivity and bottom line of your business:
You can choose a combination of methods based on what makes the most financial sense for your business.
You’ll be able to reduce fuel, labor, and infrastructure expenses. For example, long-distance rail freight is usually cheaper than road transport.
You can choose the fastest and most reliable routes for your goods. For example, if you must send a large shipment from an offshore supplier to the U.S., sea-based shipping provides the best reliability and cost-effectiveness.
From there, you can transfer various orders within the shipment to a mix of air and road assets for the final delivery leg, helping ensure you meet customer expectations while keeping costs down.
Multi-modal transport allows you to quickly adapt to changes in the supply chain, bolstering supply chain resilience.
Say, for instance, that a particular route gets delayed. You could pivot to another method of transportation to minimize setbacks and keep customers happy.
Multi-modal transport can yield long-term efficiency gains and cost savings. Reducing your operating expenses can make your business more financially viable and stable.
You can also reallocate the additional capital to business improvements or expansion projects, fueling continued growth.
Multimodal transport helps reduce the environmental impact of shipping by integrating more environmentally friendly methods like rail or sea.
Lowering emissions can benefit the environment while boosting public perception of your company.
Like many complex methods, multi-modal transport has its own set of challenges. You’ll face a few initial barriers when implementing a multi-modal logistics strategy effectively, but they aren’t insurmountable:
Coordinating road, sea, rail, and air solutions can be complicated, especially with international shipping. Multi-modal models partially address the issue using a single contract, but that’s only half the battle.
You must also choose a reliable logistics provider with experience coordinating multiple means of transportation. Find out if a prospective provider has experience in multimodal transport and understands the regions where your trade partners operate.
There’s always a risk of delays due to weather and customs clearance. Each handoff point can also cause setbacks if the necessary exchanges are not correctly orchestrated.
To mitigate potential issues, you should invest in real-time tracking systems that offer visibility throughout the journey. By closely monitoring each leg of the product journey, you can proactively identify disruptions and work with your logistics provider to correct them.
Real-time tracking also helps keep customers informed about setbacks—this goes a long way toward building trust with your clients and bolstering your company’s reputation.
Implementing multimodal transport may require a higher upfront investment in infrastructure and software. Seeking out new logistics partners also takes time and effort.
However, these costs are typically offset by faster delivery times and long-term savings on fuel and labor.
Before making significant changes to your logistics strategy, carefully calculate the transition costs. Be realistic when setting goals and creating timetables to set your team up for success.
A phased implementation process can be a good choice, especially if you have a complex and diverse supply chain.
Compliance can be especially burdensome in multi-modal transport if you operate in a heavily regulated industry like food and beverage, energy, or pharmaceuticals. Different modes of transport often come with varying regulations, especially when crossing international borders.
Work with your logistics provider to help ensure your business complies with all legal and regulatory requirements.
A few exciting technologies have started to reshape the world of multi-modal transport.
Everyone’s buzzing about the potential of artificial intelligence (AI) and machine learning (ML) to optimize routing and scheduling, leading to better predictions for delivery times and measurable cost savings. These emerging technologies may also help businesses manage potential disruptions by predicting demand and optimizing logistics.
Blockchain represents another exciting development. It can provide a tamper-proof record of each leg of the journey, a valuable safeguard in tightly regulated sectors like food and pharmaceuticals.
Autonomous vehicles and drones may also play a significant role in multi-modal transport, reducing costs and potentially shortening delivery times in high-traffic areas.
Here are a few tips to help you transition to a multi-modal transport strategy:
A successful multi-modal implementation requires the right technologies, an experienced logistics partner, and a clear plan that defines your purpose.
Epicor and our innovative software solutions can help you effectively implement multimodal transport. We empower your team with state-of-the-art tools and capabilities that deliver unmatched visibility and scalability.
Contact us to learn more about integrating multimodal transport into your logistics strategy.
