Multimodal Shipping Management Increases Touchpoints That May Increase Damage Risk

As with all transportation movements, multimodal shipping management comes with the issue of handling. Too many touchpoints can lead to an increased risk of damage to the freight. However, the benefits of multimodal shipping are simply too great to ignore. 

Multimodal Means More Paperwork

Multimodal and intermodal shipping are two terms that are often used interchangeably. Yet they are vastly different. In multimodal shipping management, a single carrier retains the liability for freight. In intermodal, another carrier is involved in the mix. In terms of paperwork, multimodal can be as simple as a single invoice from a carrier. Simultaneously, carriers may invoice for each leg of transportation, reflecting that mode’s cost. That’s where things get a little sticky. If the documentation does not align properly or is not matched together, it will cause settlement problems and become a cashflow nightmare for companies. Fortunately, advanced supply chain systems are turning the process of invoicing and settlement, particularly in multimodal shipping management, into an automated process. 

Multimodal Invoicing Can Be Also Add to the Trouble of Auditing

Even if the invoice is paid, it begs the question, “was it accurately billed?” To answer that question, shippers need an auditing system that can function in real-time, not just in retrospect. According to Global Trade Magazine, outsourcing auditing can reduce invoicing costs by up to 80% and ensure companies only pay for services provided. Again, that advantage carries over beyond multimodal and benefits all forms of transportation and logistics management. Therefore, multimodal invoicing becomes synonymous with supply chain auditing efficiency and automation. 

Multimodal Transportation Requires More Communication and Collaboration

The supply chain is rife with holes in communications and trouble maintaining collaboration in freight. Without the right information at hand, companies will inevitably make mistakes, including missed deliveries and errors. And cooperation is not just a “let the carrier handle it” need. According to Talking Logistics, “Most shippers, however, rely on freight forwarders and logistics service providers to plan and execute their ocean and air shipments, and oftentimes the inland moves too. Simply put, global multimodal transportation is not a “Do-It-Yourself” operation for most shippers — it requires effective communication, collaboration, and coordination with freight forwarders and 3PLs.”

Multimodal Supply Chains Can Suffer During Times of Disruption

Failures within communications and collaboration will result in significant hurdles for multimodal shipping management. During times of disruption, like the record-matching hurricane season of 2020, those failures become even more prominent and likely to cause additional shipping delays. As explained by Supply Chain Quarterly, “Today’s companies are wrestling with how to respond to ever-increasing political, environmental, and economic challenges, such as Brexit, natural disasters, and geopolitical instability in the Middle East, to name but a few. The impact of these events is widespread, rattling even industry titans. For example, Toyota has long been known for its supply chain efficiency, but the automaker was unprepared for the April 2016 earthquake’s aftereffects in southern Japan. At the time, its supply chain strategy included single-sourcing numerous components from Japanese suppliers and carrying minimal inventories in its supply chain. However, this strategy became a disadvantage when parts shortages forced Toyota to shut down production lines following the earthquake.”

With that in mind, it’s crucial not to overlook multimodal shipping as it provides a way to source more product, capacity, and capabilities than traditional, limited supply chains. Since it relies on multiple modes by the literal definition, it can more easily flex to meet the challenges of disruption. Thus, that challenge becomes a self-optimizing and supply chain-benefiting improvement.