Today’s supply chains are complex. A product goes through several geographical locations, from the point of procurement of materials to the final consumer. Time and cost are key factors, as are the safety and security of the freight. Shippers have relied on a suite of resources to make the best decision and leverage both intermodal and multimodal types of freight transportation. Let’s look at the difference between the two.
Intermodal transportation uses multiple modes of transportation to move goods. Shippers using intermodal transportation must work individually with various carriers for every leg of transportation, whether by air, rail, or sea.
Multimodal freight shipping is also a type of freight shipping that uses multiple modes of transportation to move the cargo, but the difference here is that a single operator manages the entire journey with multimodal transportation. In multimodal transportation, clear communication serves as the fulcrum on which the diverse modes of transportation operate, leading to lower transit times and higher efficiency during loading and unloading.
Intermodal on the other hand, is a siloed method of transportation. That can become a big impediment to your logistics, as visibility of the shipments and collaboration amongst the different stakeholders in your supply chain is extremely important. Besides longer transit times, shippers may find managing multiple carriers and modes of transportation quite cumbersome. The pandemic and recent political upheavals have paved the way for logistics to raise their visibility, cost, time management, and safe freight transit standards. Freight management needs a transportation strategy that can integrate the systems of all the stakeholders in the supply chain and provide transparency and accurate information.
Furthermore, the demand for data analytics is rising in the supply chain industry. So, What’s a shipper supposed to do?
For instance, shippers using multimodal strategies to handle strain at ports need an alternative to simply hoping to find the right carrier to handle it all. They’re looking at working with a single overarching point of contact to handle the entire supply chain operation. It’s a delicate balance, and as shippers seek sustainable and efficient solutions following the disruptions of recent years, a new term has arisen–omnimodal logistics.
The problem with traditional logistics
Globally, the supply chain is evolving to meet manufacturing and shipping needs, but there is risk throughout the industry. According to McKinsey & Company, as of 2022, “many companies still lack a comprehensive picture of the risks lurking deep inside complex multitier supply networks.” From procuring raw materials to finding transportation to downstream distribution centers, the supply chain needs a better view and means of management. That’s absolutely essential to proactive planning of supply chain operations.
At the outset, the multimodal logistics plan of finding a carrier and sending the shipment seems like a time- and cost-saving solution, but many underlying problems in multimodal transportation need to be addressed. Here are some of the challenges posed by this method of transportation:
- Poor communication in the supply chain leads to confusion. The primary service provider shares all information, while the other stakeholders in the chain have little or no contact with each other. The lack of transparency and consolidated coordination among the players in the supply chain can lead to misunderstandings and a lack of trust.
- Multimodal logistics involves multiple touchpoints and disjointed systems, increasing the risk of damage, theft, fraud, or loss. However, you cannot simply forgo multimodal standards in transportation due to fear of more touchpoints. The trick is to see where the opportunity for improvement lies.
- Another issue is the complexity of managing shipment documentation. Every task and bill of lading added creates more chances for error in the supply chain. The solution is to digitize all documentation, but even that becomes a problem if you’re endlessly tracking through a list of emails.
Opt for end-to-end efficiency with omnimodal logistics
Omnimodal logistics is all about looking beyond a single load and how seemingly disparate parts of your supply chain affect one another. The benefit is even evident in the term itself, which has a common root, omni-, which means all. It appears in many other phrases, omnipotent, “all-powerful,” omniscient, and “all-knowing.” An omnimodal strategy is all modes with the omniscient view of supply chain visibility.
So, how do shippers recognize when omnimodal is truly better? The answer is simply that end-to-end visibility is always going to be superior, helping you see trends and correlations that might have gone unnoticed. However, this comprehensive view is only possible through advanced technical tools, such as business intelligence (BI) platforms and analytics, which allow for more strategic planning.
As a result, the best way for shippers to leverage omnimodal logistics and optimize their supply chains is to ensure they have an omnimodal solutions partner in place and a robust transportation management system (TMS) that can create an irrefutable degree of visibility into OTR logistics. In turn, you can better understand the scope of all needs throughout your supply chain.
The real-world benefits of omnimodal logistics
Omnimodal logistics service, in simple terms, is multimodal logistics on steroids! It combines all the integrated transportation features of multimodal and adds the power of advanced technology and analytics to the process. If one could compare the two, multimodal would be like a regional manager, and omnimodal would be like the CEO of a company. Omnimodal provides end-to-end visibility to your supply chain management strategy. Increased efficiency, cost savings, and sustainable development are just the basic advantages of adopting omnimodal logistics.
Remember, the key to smooth transportation operations is selecting the right logistics partner, and together, you can unlock these core benefits of omnimodal logistics:
- Enhanced flexibility - Flexibility is a no-brainer in supply chain operations. Since multimodal involves several modes of transportation, companies can adapt to unpredictable circumstances or scenarios. Optimizing routes and meeting the customer’s demands becomes more manageable than having only a multimodal form of transportation.
- Insight into trucking demand and capacity — Over-the-road (OTR) transportation can be unpredictable. When a trucking route is delayed, switching to rail or air can be a viable solution. However, rail has significantly longer lead times compared to air, and the costs are polar opposites.
- Reduced lead times — Optimizing your use of all modes on all shipments significantly saves time and fuel costs. The combination facilitates a smoother and more productive supply chain, meaning you can reduce lead times during stressful times.
- Environment-friendly, sustainable option - Better route optimization allows shippers to choose eco-sustainable options and mitigates environmental costs. Increased use of data analytics empowers managers and team members to make informed decisions.
Accelerate your logistics competitive edge with IL2000
Global connections and collaborations are the lifeblood of modern trade. In such a scenario, transparency, analytics, and product management can be the ultimate saviors for shippers. Omnimodal logistics offers flexibility across various modes and can help shippers streamline their everyday processes while handling anomalies proactively for better transportation management. The key is to partner with an industry leader who understands all the components of freight transportation while customizing delivery management to suit your needs. IL2000 can help you unlock the secrets to an anywhere, anytime, and all-knowing logistics strategy.
Contact IL2000 to get started today!