Global trade necessitates the movement of goods from one corner of the world to another. An estimated US$ 48,018 billion worth of trade merchandise changed hands in 2023. The mode of transport used to move containers may depend upon the availability of transport slots, connectivity between trading centers, cost of transport, time factor, or a combination of these factors. Businesses generally go for the quickest and safest transport modes offered at the best price, according to Marine Insight.
About Intermodal Transport
Transportation of goods by intermodal containers using more than one mode of transport is called Intermodal transport. Intermodal containers are large shipping containers available in standard sizes and specifications. In this method of transporting goods, each mode operates under a different contract with the service provider.
In intermodal transport, the sender chooses the carrier offering the best rates and services. Each party must agree upon the various transport arrangements separately. As such, the sender of the goods will have to deal with a different party and enter into separate contracts for each mode of transport. In other words, there will be separate transport bills for each leg of the journey. By selecting different service providers, each with their knowledge and expertise, for each leg of the journey, goods can be transported more efficiently and economically.
Expedited Services
Suppose the sender of goods wants his cargo to reach the receiver or consignee quickly. In that case, they may opt for expedited services that are generally more expensive than the normal, slower service. Expedited services are usually dedicated services offered by the cargo operator.
Consolidation or Groupage
Consolidation or groupage that drastically cuts costs may be negotiated with the transporters. In the case of cargo that is not enough to fill a full container (Less than Container Load or LCL), groupage allows sending such cargo in a ‘pooled container’ that has cargo from other senders as well, going to the same destination or destinations en route.
Carbon Footprint
These days, all logistics stakeholders are equally responsible for reducing environmental pollution and damage. As such, they have to be wary when selecting the operator. Intermodal transport allows them to choose from environmentally friendly carriers that help reduce their carbon footprint. Here, the carbon footprint is the measure of greenhouse gases, such as carbon dioxide, methane, nitrous oxide, etc., that are released during transport.
Intermodal transportation is considered more flexible for companies that require flexibility in scheduling transport.
On the flip side, when many parties are involved, it may result in delayed lead times and decreased efficiencies. Each stage of the journey has to be coordinated with the next to ensure a seamless flow, and this, in most cases, has to be done by the sender or shipper of goods.
It may be more challenging to manage such contracts as they usually involve different parties in different parts of the world, especially when it comes to the international movement of goods. Each party will be responsible for the goods only for their specific leg of journey. So, insurance arrangements have to be well planned by the sender.
Without the synergies of all parties acting in tandem, there could be disruptions in the transport chain.
Some Examples
A consignment of industrial pumps is waiting to be moved from Coimbatore, Tamil Nadu, India, to the United Arab Emirates (UAE). A truck brings the empty shipping container to pick up the cargo from the manufacturer’s premises in Coimbatore.
After loading, the truck takes the container to the railway yard, where it is put on a goods train to Cochin, Kerala. At Cochin port, this is loaded on a container carrier to Jebel Ali, United Arab Emirates.
After the container is offloaded at Jebel Ali, a truck will haul it to the consignee’s final address in the UAE, where the shipment of industrial pumps will be unloaded.
As we can see here, each leg of the journey will be covered by a different contract and transport bill, which the sender has to work out separately with each transport service provider.
Multimodal Transport
Multimodal transport is very similar to intermodal transport because it uses more than one mode of transport. But the similarity ends right there.
In multimodal transport, goods are transported under a single transportation bill or bill of lading. This instrument is also referred to as the Combined Transport Bill of Lading, Multimodal Bill of Lading, etc. In logistics parlance, multimodal transport is commonly called ‘door-to-door’ delivery under the transport operator’s responsibility.
Key Takeaways
Intermodal and multimodal transport systems use road, rail, or sea transport or a combination of these modes, and both require efficient coordination for a seamless transport chain.
Intermodal Transport
- It involves separate contracts with different service providers and, hence, more points of contact to deal with.
- The option to choose appropriate carriers and to reduce costs is with the sender in intermodal transport.
- Disruption of one service may upset the entire chain of transport.
Multimodal Transport
- Single point of contact for the sender.
- In multimodal transport, the sender gets a single bill of lading from the point of origin to the point of final discharge.
- Multimodal transport offers the safety of the service provider taking complete responsibility for the shipment from the point of origin to the point of final discharge.
- Multimodal transport operators are in a better position to offer alternatives in case of service disruption.
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Source: MarineInsight
