As global supply chains continue to face unprecedented disruptions, meeting the ever-growing demand while optimising lead times and reducing inventory costs remains a challenge. As a result, companies are now willing to explore better alternatives to traditional logistics, which would provide improved economies of scale and a faster return on investment.
However, what is a better alternative to the conventional way? How can companies cost-effectively optimise their supply chain processes?
It’s here that an easy-to-use, intuitive, multimodal logistics platform steps in. As mentioned earlier, an effective logistics solution should optimise lead times and reduce inventory costs while also providing substantial cost savings to the company. This may not be viable through the traditional approach of managing transportations as it comes with its own set of challenges. But, on the other hand, multimodal logistics platforms enable visibility and cost-optimisation across modes paving the way for unprecedented scalability and efficiency.
Since ocean freight is cost-effective compared to air freight, most goods, around 80%, are transported by ships (source: Ocean shipping facts, Statista). According to Maersk, the world’s largest shipping company, global ocean-based freight shipping would grow by 7% to 9% this year, a percentage point more than previously expected. This clearly shows that opting for a multimodal logistics platform that would cover all modes, especially ocean freight, would be the best and cost-effective alternative.
What is a multimodal logistics platform?
According to Gartner, this segment of logistics and transportation platforms predominantly serves international transportation use cases, emphasising multimodal needs (air, rail, ocean, road). Similar to business networks, they provide a technology platform with the features of a network, logistics applications and community, yet having a narrower coverage compared to multi-enterprise business networks.
Solution categories and key characteristics in operations:
Why is multimodal logistics platform considered more efficient?
- Time-efficient: Multimodal logistics platforms can help in simplifying your cargo movement. It makes the whole process easier since the cargo moves from origin to destination under a single contract or bill of lading, thus eliminating the need to immerse yourself in a lot of paperwork and follow-ups. Besides this, reduced cargo transportation time, improved shipment tracking efficiency, and overall efficiency in delivery time make multimodal logistics platform more efficient than traditional transportation.
- Cost-effective: Multimodal logistics platform helps to use available infrastructure better and therefore helps to get competitive freight prices from vendors through efficient utilisation of vessels.
- Clear liability: Since a single carrier is responsible for the entire journey, that single carrier will be liable for any damages or unexpected costs incurred while in transit. It prevents unnecessary disputes and the need to deal with multiple carriers, should any problem occur.
- Agility and improved communication: Multimodal logistics platform helps deliver your customers’ cargo with great agility, as the same set of people will be responsible for monitoring your entire journey, which ensures better communication.
- Actionable shipping insights: Since multimodal uses the sea to cover the majority of the distance, it becomes easier to track the containers in real-time through a third-party multimodal logistics platform. This not only improves shipment visibility but also provides deeper shipping insights. Over a period of time, this valuable gold mine of data can be used to improve supply chain efficiency and make cost-effective business decisions.
A multimodal logistics platform can boost your logistical efficiency significantly as it offers real-time insights over your supply chain and uncovers opportunities to save costs. Only a few platforms like GoComet can provide such functionalities as against a typical visibility platform that focuses merely on visibility.
– Chitransh Sahai | CBO, GoComet
How to evaluate if your logistics vendor is truly multimodal
There are a lot of freight management software, transport management systems, and supply chain visibility platforms available today. It is easy to confuse these with a multimodal logistics platform. As Gartner says – Multimodal logistics platforms offer capabilities for supply chain operations, covering visibility and then an array of logistics/transportation management applications. Besides a TMS, it could be a more generic software for freight and transportation management, including shipment insights.
So, here’s a quick checklist of questions you should ask to ensure your logistics software partner is really multimodal:
- The software can manage all the modes in which you operate: Rail, road, sea, and air.
- The software should handle cross-border freight to provide a comprehensive freight tracking solution. It can present both your cross-border freight and domestic freight together for complete visibility.
- The software should support an extensive network of carriers across modes.
If you are looking to explore multimodal logistics platform for your supply chain operations, read our exclusive blog, ‘Four major things to consider when selecting a multi-modal logistics software,’ which features a checklist to guide your decision.
Feel free to reach out to us to understand how a multimodal logistics platform can help you build your supply chain resilience.