What is Multimodal Shipping?

Multimodal shipping represents how companies can find new value within their supply chains and augment efficiency without dramatically increasing landed costs. While multimodal continues to change in the wake of disruption from the pandemic this year, interest in new shipping strategies has exploded. The supply chain has been suffering due to the growing conglomerates like Walmart and Amazon, that other companies have had to get creative with their cost reductions and their spending. One of the ways to do this is by integrating multimodal capabilities into the basic freight transportation strategy. Companies must precisely understand what multimodal logistics are and how they work for companies evaluating which shipping methods have the most significant benefits. 

Using Various Freight Tactics to Reduce Costs & Streamline Management

Defining Multimodal Shipping

The first step to understanding multimodal transportation and shipping is knowing what it means and what it entails. Multimodal shipping is using different methods of shipping that are all coordinated under the same carrier. That method helps eliminate any other middlemen associated with coordinating other transportation methods being outsourced each time.  As a result, shippers can save time, money, labor, and other resources.  

Why Multimodal Shipping Improves Freight Spend

Multimodal freight management and transportation also drive down individual costs associated with freight transportation, such as freight spending. When implemented correctly, multimodal shipping can reduce most shipping costs. Because it reduces the need to outsource to multiple carriers, multimodal shipping inherently keeps volume discounts and guaranteed capacity at their peaks. As a result, carriers are more likely to offer more competitive rates and prioritize a freight shipper. As explained by Jeff Berman of Logistics Management, the “economy relies on domestic and international freight making its way through our ports, railways, and intermodal hubs, which serve as gateways to the global marketplace for American farmers, manufacturers, and consumers. In the US, our freight network moves 49 million tons of goods every day, which is worth more than $52.5 billion.” While rail is usually viewed as an intermodal freight aspect, its introduction into new legislation means a significant improvement in the US’s overall infrastructure. Thus, more companies will look to take advantage of tax incentives or benefits with multimodal transportation. Also, multimodal usually results in a lower carbon cost for shipping too. Therefore, it provides immense benefits to both the companies and communities as well. 

Tips for Applying Multimodal Strategies

There are many ways companies can apply multimodal transportation to increase efficiencies. And like most other transportation management advancements, they surround the value of technologies and data in modern logistics. And a few tips for applying multimodal shipping to increase freight management efficiency include:

1. Connect the TMS with carrier systems. This will optimize the entire process and enable companies to keep an eye on their transportation of product transportation from start to finish. 
2. Use APIs to digitize the tendering and quoting processes. This is another way to fluidly move product throughout the supply chain while monitoring where it is and allows for the early detection of issues. 
3. Consider all modes for all shipments before deciding on a mode. It is essential to compare and choose the methods that will work best for you and your company. What works for one may not work for another. 
4. Consider freight consolidation to move between modes properly and avoid additional losses. Determine what size shipments are flowing throughout the facility at any given time. Is it a full truckload or less-than-truckload? Or what if it is a parcel? Knowing how to maximize consolidation/deconsolidation is a critical aspect of multimodal shipping. And shippers should adjust their plan accordingly. 
5. Avoid problems by using data-driven freight processes in all activities. Data-driven processes throughout multimodal methodologies are imperative to prevent any potential issues. Prevention is a significant money saver in the end. 
6. Share status updates in real-time and with contextual data. Knowledge is essential for all members of a team. The supply chain will only be successful through successful communication. Utilizing real-time data will help all involved to see what is happening and strengthen the transportation process. 

Use a TMS That Enables Multimodal Optimization and Transportation

One of the more critical steps to apply multimodal shipping is utilizing a TMS appropriate for your business. The right TMS will consolidate the software and paperwork, creating a more user-friendly experience that improves work. It also reduces labor costs by eliminating a lot of back-of-office paperwork and errors.