How Does the Shipping Industry Work? A Primer on Maritime Globalization and Intermodalism

Welcome to the blog series of our Shipping Methods Explained website. In this part, we’ll go deep into fulfillment methods — that is, how businesses get items to their clients after they’ve placed online purchases.Best Practices, Blog, Ecommerce, Fulfillment

In theory, it’s simple: grab your itty-bitty bike and go door-to-door handing out your product. But when your firm receives hundreds or thousands of orders every day, as well as skyrocketing shipping expenses that might put you out of the game altogether, think about how difficult things have become.

It’s a difficult process. It includes maintaining records, dealing with each carrier’s unique demands, and determining the lowest-cost shipping choices from hundreds of alternatives… It’s a tough job. As a result, more enterprises are choosing to outsource their fulfillment procedures. 

Are you interested in outsourcing your fulfillment? Let’s have a look at your alternatives so you can make an educated decision. In this post, we’ll discuss Multimodal and Intermodal Shipping.

What is Multimodal vs. Intermodal?

Transport of two or more modes under the same contract and facilitated by a multimodal transport operator (MTO) is referred to as “multimodal transport.” When two or more modes are used, it’s called “combined transportation.” The MTO is responsible for the entire trip, whether by road, sea, air or rail, or a combination of them all, but they frequently use sub-contracted carriers that specialize in each mode of transportation.

Intermodal transport entails the use of an intermodal container, which transports goods across the entire fulfillment process; regardless of the mode of transport, the same intermodal container will be offloaded from one method and loaded onto the next without ever moving the goods inside.

The primary distinction between multimodal and intermodal transportation is that multimodal transport transfers products across several modes, whereas intermodal transport negotiates contracts with each carrier.

Product Transfer

When moving, for example, between sea and rail, rail and ground, or between other modes of transport like air, goods or commodities are loaded and unloaded into shipping containers. Excessive product movement might cause product damage or loss; you may have heard the expression “fallen out of a truck” when inquiring about an expensive handbag from your relative. Product injury during transport costs up to $0.48 per pallet every year, which adds up over time with larger supply chains.

This is the advantage of multimodal shipping: it allows you to store goods in a single intermodal box, which may then be utilized for several modes of travel. Because the container is loaded and unloaded from a truck, train, ship, or air freight, the items will remain protected.

Using one intermodal container enables for safer packing of items, resulting in less damage and loss, as well as faster and more efficient movement between freight methods. As a result, intermodal shipping is typically less expensive than multimodal shipping.

Contracting Carriers

The shipper creates one contract with the Multimodal Transport Operator (MTO) for all multimodal transport, which is solely responsible for the cargo from origin to end destination. The shipper may streamline the communication procedure by working only with a single transport provider or agent. Furthermore, the simplified communications allow for more precise delivery information, tracking notifications, and possibilities for optimization. The shipper, on the other hand, must trust the MTO to choose the finest/lowest routes for their goods; flexibility is limited.

The shipper must sign numerous contracts with various carriers during an intermodal transportation. While there is only one intermodal container, it will be transferred among a number of liable parties, making communication and optimization across carriers more difficult for the shipper; nevertheless, the shipper has greater choice when selecting each stage of the fulfillment trip.

In summary:

Multimodal Transport

  • Multiple carriers, one contract with MTO
  • Product transfers containers between transports
  • Enhanced communication and optimization, but heavy reliance on MTO routes
  • More chance of product damage and loss

Intermodal Transport

  • One intermodal container, multiple contracts with carriers
  • Products remain secure in single shipping container
  • More flexibility to choose your own routes along fulfillment journey, but more complexity for the shipper
  • Less chance of product damage and loss

Last but not least, shippers must evaluate whether multimodal or intermodal delivery is the best option for them based on their situation, such as if their product is fragile or susceptible to damage/loss. Fortunately, knowledgeable fulfillment providers and 3PLs like Launch Fulfillment can assist you in determining the ideal way to transport your items.

Keep an eye on our Shipping Methods Explained series as we delve into the intricacies of delivery. Learn more about Launch Fulfillment’s industry-leading warehouse management system.