Multimodal transportation is also known as combined transportation in logistics circles.
A Guide to Setting Up Multimodal Transportation
This form of transport involves using more than one type of transportation for greater flexibility. Companies will usually deal with one carrier, simplifying the process for everyone involved with the shipping and ensuring faster delivery times.
A quality logistics software solution will help make the process as easy as possible. Read on to learn more about how this form of transportation works in the shipping industry and important considerations in the setup phase.
What is Multimodal Transportation, Anyway?
According to Research and Markets, multimodal transportation can make transportation 30% more efficient. How does this type of transportation differ from other models? What does this mean for your company’s freight and overall shipping times?
Multimodal or combined transportation helps individual shipments move through the supply chain through the use of a multimodal transport operator, also known as an MTO. The MTO is the carrier that the company will deal with, simplifying the process by being a single point of contact.
By acting as a sole contact point, the multimodal transport operator will handle contact with the other carriers and independent contractors involved.
The use of an MTO can be very effective for shipments that don’t require special handling. When shipping internationally, a multimodal transport operator can help the process go much more smoothly.
One of the most significant advantages is being able to avoid delays that could cost your company a lot of money and cause your customers to lose confidence.
One industry where multimodal transportation is in use and shows promise for future growth is the dropshipping industry.
Companies in the dropshipping industry rely on access to multiple warehouse locations to ship their stock globally. Multimodal transportation helps companies easily meet this goal and expand, as necessary.
Managing the accounts for multiple shipping companies and attempting to sync data across the platforms is often very frustrating for staff at companies with a high order volume.
Switching to multimodal transportation, when possible, eliminates many of these problems. Decision-makers will benefit from learning more about this option.
What Are Some Basic Features, Principles, and Schemes?
Multimodal transportation offers several key features and operates under certain vital principles. The different schemes available ensure that everything works as efficiently as possible.
Understanding how combined transportation works makes it easier for companies to determine if it is an ideal solution and how easily they could implement this type of system.
One of the most essential features of multimodal transportation is a unified bill that reduces the number of contacts required and the costs of billing different providers.
MTOs also benefit from a selection of multimedia products to let prospective clients know about what they can do.
Companies using multimodal transportation can also benefit from leveraging artificial intelligence to track trends for future shipments.
One of the key principles for multimodal transportation is planning transit routes, especially when using contractors who may rely on transportation to fulfill their part of the process.
The smoother the delivery process, the fewer delays there will be that can cause problems for your company. Deliveries made to areas with heavy traffic will require extra care in planning the routes.
Another important principle is having a clearly defined set of goals for all shipments, regardless of their size. Even though every shipment is different, companies can maintain a consistent quality by setting goals.
The more consistent you are about setting and keeping these goals, the better you will serve your customers.
Another important principle is the extended responsibility of the MTO for any delays. Other shipping methods may have variations in the type of insurance used to protect the load and deflect some of the responsibility away from the shipper.
Extended responsibility makes it easier for businesses to protect their assets at all stages.
When planning schemes for multimodal transportation, one of the most commonly used options are door-to-door transportation schemes, which allow for planning for each leg of the shipment.
Warehouse-to-warehouse transportation permits a supplier to ship to one or more warehouse locations. Depending on a company’s warehouse location and the location of most customers, on-demand shipping that uses local independent contractors may be reasonable in terms of cost and convenience.
What Are Some Advantages and Disadvantages of Multimodal Transportation?
According to MacAndrews indicates that multimodal transportation reduces businesses’ carbon footprint. This form of transportation offers advantages, as well as disadvantages. We will take a look at the top advantages, as well as disadvantages.
One of the advantages of multimodal transportation is that this system avoids the delays that often plague companies using long-haul trucking, such as restrictions on driving hours.
Many shipping delays happen because of driver fatigue and resulting accidents. Having access to different transportation options can help eliminate these problems.
The use of an MTO helps streamline transportation processes and provides for better communication. Putting the process into the hands of one source helps business owners shift their focus away from being too heavily involved in the logistical process.
The primary shipping company will be able to assume more responsibility.
Even if the cost of multimodal transportation is not always the lowest price, there are still significant advantages. A multimodal transportation operator knows how to select carriers in a way that saves money.
The amount of time saved will help your business become more productive.
A disadvantage that may occur with multimodal transportation is a lack of smaller carriers or contractors to pick up shipments. Delivery companies that use contractors may struggle to find enough drivers to pick up shipments.
When there is insufficient personnel for these tasks, shipments may be delayed.
Another disadvantage of multimodal transport is that there are fewer insurance options. What type of insurance your company has access to may determine the amount of protection available for the shipments.
Customer satisfaction may depend on how much protection you are able to offer if something goes wrong, which makes loss protection all the more important.
Which Milestones Must Be Reached in Multimodal Transportation?
When multimodal transportation is in the setup stages, there are important milestones that will happen along the way.
The sooner these milestones are reached, the greater your company’s chances of making your logistics plans a success. Let’s take a closer look at the necessary milestones that your company needs to reach.
One of the first things that any company using this model will need to do is determine their need to transition to this model. Although the multimodal way of managing transportation works well for many, it does not suit every company.
Key decision-makers at your company will need to think of how much of a return will be received.
When you are trying to decide whether intermodal transportation is suitable for your business, think of the distance involved with most shipments.
If most of your products are shipped within your region, multimodal transportation is unlikely to be of much help. Shipments that must travel several hundred miles will be a better fit.
You will also need to determine the maximum loading weights for the types of transportation involved at each step. One of the things that you will need to think about is how much of a hassle reworking loads might become.
Whenever you must rework a load, your shipments could end up delayed and take up much of your company’s time.
Once you have determined that multimodal transportation is right for your business, you will also need to make sure your data systems are up to the task.
Even with the assistance of an MTO, you will want to make sure everything works smoothly. Ensuring that your software is as up-to-date as possible will help you accomplish this task.
Multimodal transportation is an important part of the logistics world likely to keep growing in influence. An increase in the number of companies operating with a global presence has helped ensure that this transportation model will become increasingly important.
Making sure that your company is ready to meet these challenges will help give you an advantage when you start using multimode transportation.
Because many companies are relatively new to multimodal transportation models, getting acquainted with the basics helps ensure that you have a better foundation.
This transportation model will evolve as the market changes and better transportation options arrive.
Regardless of your company’s industry, there are excellent opportunities that you will see open when you consider multimodal transportation.