Multimodal Transportation in a Nutshell
The multimodal transportation industry has come a long way over the years. It is a safe, and efficient way of moving products internationally. As a huge bonus, it can provide sippers with reduced shipping costs and access to a strong carrier network.
Today’s multimodal services range from dual-carrier routing to air-ground-sea-rail operations. At the heart of this shipping process is the third-party logistics company, who works with a dedicated network of mode-specific carriers that work together to serve their clients.
In this blog post, we will be taking a look at what exactly multimodal transportation is, how it differs from intermodal and discussing a few of the benefits that 3PL-managed multimodal transportation offers shippers.
So, get your thinking caps on and let’s dive in!
What is Multimodal Transportation?
Multimodal transportation is a method of shipping that makes use of different modes and carriers to carry freight. As a matter of fact, the name is rather self-explanatory as it simply means multiple modes.
This type of shipping process is generally used by international shippers who need their goods to traverse a combination of land, air, or sea. However, regional or national deliveries benefit from it, as well.
Most shippers who have only shipped standard freight might be a bit apprehensive to the idea. After all, there is a lot about multimodal shipping that is different than a standard shipment and at first, it seems hard to wrap your head around. Plus, in standard shipping, this would generally mean multiple contracts and more paperwork.
However, this isn’t the case with multimodal shipping. Instead, it groups all the various modes of movement under a single contract, and most other parts of the process are fairly easy to research and enact. Of course, we always recommend partnering with 3PL and delegate the majority of the process to them.
How Does Multimodal Transportation Work?
Let’s say that you’re planning on moving a truckload (filling a 48-foot container) of products from Miami to Seattle. While it makes sense to ship the whole container in one dedicated FTL movement, it might be financially advantageous to ship as multimodal. This allows you to ship from your dock to a train station. From there, it is shipped via a railway until it reaches Seattle. Lastly, an FTL carrier delivers the goods to the destination.
Since the shipment moves through a variety of different transportation types or modes, it is multimodal.
And that’s it in a nutshell!
What is Intermodal? How is it Different from Multimodal?
It’s also quite possible that you’ve heard of the phrase intermodal. While it also involves the movement of freight using multiple modes of transportation, there are a few important differences between intermodal and multimodal.
- Intermodal will keep all products secured in the same container. This means that freight is not transferred, but only moved by unique carriers. Some multimodal shipments work the same way. Others yet require freight movement to different containers based on the logistics involved.
- Intermodal produces less risk of freight damage since the product rarely moves in the truck. Of course, proper packaging and stacking in the container makes a huge difference.
- Intermodal can be more affordable for the shipper, but the cost savings come at an expense of sweat equity. You see, when a shipper uses a multimodal MTO, it’s simple. In that case, you just set up a contract with one carrier, and only deal with a single agent. Intermodal, on the other hand, is much more complex. With intermodal, the shipper will set up individual service contracts for each carrier and mode. This is a great example of why many shippers use a 3PL to manage these movements.
What are the Benefits of Multimodal Transportation?
Now that you understand the various nuances involved in multimodal and intermodal But what are the benefits? Let’s take a look.
- Consistent deliveries: International shipments can be difficult for retailers mainly due to the inconsistent delivery expectations. When several, independent modes and contracts are involved, delays on communication, paperwork transfer, international and US-based tariff processing can occur. By working with a single MTO, a lot of these ‘potential delays’ are greatly reduced.
- Less Hassle: When you have a 3PL set up your multimodal movements, whether they are international or North American specific, you literally hand the keys of the movement to the 3PL. They deal directly with the MTO and provide updates on freight movement throughout the multimodal supply chain.
- Happier Customers: Running out of hot-selling, international products can be a huge PR nightmare for retailers – both brick and mortar and e-Commerce. While the multimodal movement is not perfect, it does reduce lag-time on international shipments and allows the retailer to better forecast sales along with expected arrival dates.
Multimodal transportation is a wonderful option, especially for international shipments. It can be a bit intimidating at first, but overall, it is a fairly straightforward process. Just make sure that you are working with a good 3PL and the process will be a piece of cake!
By maintaining a solid relationship with a third-party logistics company, you can trust them to select the best mode of transportation to keep the inventory level in the green. If you’d like to learn more about multimodal transportation, or intermodal movements, contact Redwood Logistics today.