What Is Multimodal Shipping? + How to Master It in 2024

Transporting cargo across long distances isn’t always a simple pick-up and drop. 

To deliver to an international shipping destination, forwarders sometimes need to use multiple shipping modes — done through a multimodal shipping method.

But what is it, and is it the same as intermodal freight transport?

Don’t worry!

We’ll explore the ins and outs of multimodal shipping — its plus points, drawbacks, processes, and more to help you streamline this transportation method for your business.

What Is Multimodal Shipping?

As the name suggests, multimodal shopping involves using at least two or more shipping modes to transport freight or goods from point A to point B.

This means using multiple carriers to transport cargo, such as: 

However, the shipment is transported under a single contract and house bill of lading issued by a Multimodal Transport Operator (MTO), irrespective of the number of carriers involved. 

But doesn’t intermodal transportation also involve the implementation of more than one shipping mode?

Read on to see how they differ.

What’s the Difference Between Multimodal and Intermodal Shipping?

Intermodal shipping also comprises freight movement across more than one transport mode.

But here’s the thing:

Intermodal freight involves working with various carriers under multiple contracts. These operators are responsible for the goods and documentation only during their leg of the journey. 

All operators involved also need to coordinate with each other to ensure successful and timely freight delivery.

In contrast, a single operator is responsible for the complete delivery of the cargo in multimodal logistics.

Next, let’s explore the pros of multimodal transportation.

6 Advantages of Multimodal Transport

Here are some of the main benefits of multimodal shipping:

  1. Easier shipment booking: Booking multimodal transportation requires fewer interactions since customers only deal with one operator. The Multimodal Transport Operator (MTO) will then schedule and coordinate the entire shipment journey.
  2. Streamlined communications and operations: The MTO manages all aspects of the shipment journey and provides updates on its progress to the customer. This eliminates the need for customers to communicate with multiple carriers since their point of contact is the operator. It also enables a smooth supply chain process since carriers don’t need to communicate with each other.

  3. Faster transit time: Multimodal logistics is often faster than intermodal transport since the operator has the flexibility to choose the most efficient freight transport method. This includes choosing efficient modes, like air freight or sea freight, and reducing the number of times goods must be loaded and unloaded.

  4. Simplified carrier accountability: The responsibility to manage and deliver cargo from door-to-door falls under a single contract — aka with the multimodal freight operator. This includes providing shipment tracking to the customer. So, customers won’t have to worry about not receiving carrier updates or unaccounted cargo damage.

  5. Enhanced economic value: Although the multimodal shipping cost is often more than intermodal transportation, it still offers the best rate for the most reliable shipping mode.

  6. Greater geographical accessibility: Multimodal logistics operators often partner with a vast network of carriers across the globe to ensure delivery to even remote locations.

After exploring the benefits of multimodal transport, you might wonder if it has any drawbacks.

Read on to find out.

3 Disadvantages of Multimodal Shipping

Multimodal transportation can come with some cons. However, these issues can easily be resolved with the right tool. 

Here’s a look at the disadvantages of multimodal freight and how to overcome them:  

1. Administrative Complications

Efficiently administrating and coordinating the operations of multiple carriers can be complicated. The operator must account for various factors, like cargo visibility, security, and delivery time.

However, operators can use robust multimodal transportation software like Shipthis to plan and execute large-scale or international shipping operations. Shipthis digitalizes logistics operations to streamline the delivery of multimodal shipment, irrespective of whether it’s carried out via ocean freight, rail carrier, or road transport. 

2. Added Costs 

We’ve mentioned that multimodal transport is costlier than intermodal freight transport. 

Now, this isn’t solely due to the price of efficiency. 

Multimodal freight can also involve an added shipping cost related to the transportation service, transshipment (transfer of cargo between one vessel to another), or other carrier tariffs.

Fortunately, it’s possible to balance these costs. 

Shipthis is an AI-driven freight management software that lets you efficiently plan workflow management and automate operations to reduce costly manual processes. Thereby reducing your overall cost to run operations. 

3. Third-Party Dependency

Although multimodal shipment doesn’t involve multiple contracts, the main operator will often subcontract different segments of the transportation process to third parties.

A third-party service provider could include:

  • Shipping company
  • Customs broker
  • Logistics operator
  • Insurance provider

However, lapses in communication or collaboration between these parties can lead to supply chain issues. 

For example, let’s say an international shipping order needs a logistics operator in Hong Kong to coordinate the transfer of cargo from a warehouse to a rail carrier. If the operator fails to schedule the pick-up of goods that need to get to the Hong Kong rail transport, the supply chain could be delayed.

But that’s exactly where freight transport system software like Shipthis could help!

Shipthis gives the multimodal freight forwarder complete visibility and control across every part of the shipping process. 

With Shipthis, you can manage the different modes of transport to stay on top of your supply chain. Plus, our warehouse management module provides real-time tracking for outbound operations to keep you and your customers updated on the shipment process.

But what operations and processes does multimodal transport entail?

Let’s find out.

What Steps Are Involved in Multimodal Transport?

Here are the steps involved in multimodal freight forwarding:

  1. The multimodal freight forwarder or MTO schedules all the project logistics for the entire freight transport, including packaging, handling, and delivery.

  2. They issue a bill of lading that covers the various modes of transport.

  3. Once the combined transport is booked for multimodal freight, the cargo is loaded on a truck at the point of origin and transported to a terminal for rail, air, or sea transport.

  4. The goods are loaded onto the next transportation mode at the terminal and carried to the next destination in their journey.

  5. If it requires another transportation mode, the goods are again transferred to a different carrier and taken to their final destination hub.

  6. The goods are then loaded on a truck and transported to their final delivery location.

Note: In intermodal freight transport, each carrier only manages the coordination and documentation required for their leg of the journey. This also means each intermodal freight carrier requires separate documentation (like a port-to-port bill for sea transport and an airway bill for air freight).

Optimize Your Multimodal Operations with Shipthis

Multimodal shipping offers more convenience to customers while giving them the possibility of taking the best route for freight transport. Although it’s not as economical as intermodal transport, it offers a highly reliable transport mode that takes less time for delivery. 

The best part?

You can make it more streamlined and cost-efficient by digitalizing the process with Shipthis!

Shipthis is a freight forwarding solution that enhances the processing and planning of multimodal and intermodal transportation. 

Schedule a demo to see how it helps boost transportation management, shipping transparency, and customer satisfaction!

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