Choosing between Multimodal and Intermodal transport is important for Shippers to optimize routing and total shipping costs. Sometimes a combination of different transport carriers is better to achieve best total shipping cost, but it requires more logistics coordination. Using only a single carrier may achieve the best routing and require less paperwork. Understanding the difference between Multimodal and Intermodal is important when choosing a carrier for your cargo, but the terms are sometimes used incorrectly or interchangeably. That’s why we take a look at the differences between multimodal and intermodal shipping with this article!
Multimodal transport (or combined transport) is per definition a combination of at least two or more different modes to move your cargo from a place in one country to another country. The main characteristic of multimodal transport is that even though it includes various modes for transportation, it still falls under one single bill of lading. That means the carrier is fully liable for the entire carriage even though it is performed by different modes of transport such as Air, Rail Road or Sea.
A good example for multimodal transport is Rail-Truck. Carriers like DHL or UPS are offering such a solution for example along China’s Belt-and-Road initiative for goods to move from Asia to Europe. Another example is Sea-Air which is less expensive than air but quicker than shipping only.
When shippers choose multimodal transportation for their cargo, it means that an agent or the carrier is responsible for the entire journey. Having only one contract minimizes coordination and communication expenses for you as a shipper, especially if something goes wrong which leads to high efficiency in delivery time. With Multimodal it is easy for you to track your containers because you only use once tracking interface instead of several ones. Access to remote parts of the world with responsibility and liability of the movement with only one carrier is another reason to choose Multimodal transportation. Multimodal is considered to be a timelier, cost-saving shipping resource.
Intermodal transportation is a combination of two or more modes of transport in order to move cargo from a place in a country to another place to a different country. The main characteristic of intermodal transport and the biggest difference to multimodal transport is that every part of the process it is contracted with a different provider.
Let us use an example that includes rail, truck and ship! Someone (maybe you) wants to move cargo from Munich to Singapore. In the beginning, a truck (hired by you) would bring you an empty container to pick up the cargo. Once you fully loaded the container with freight in Munich, the truck takes the container to a railroad yard to move your container to Hamburg. It is then put on a container ship; your carrier takes on full responsibility until your shipment reaches Singapore. At the destination, a truck picks up your container from the container terminal and delivers your cargo to you (the consignee) where the containers are unloaded. In this case, it is an Intermodal Operation as it involves several contracts, between different transport service providers (truck, rail, sea) and between the buyer and seller.
With Intermodal transportation, you can choose carriers on your own and leverage the lowest possible rates for each transport. It gives you better access to equipment and good control over transit schedules capacities. Looking at sustainability you can even choose environmentally friendly options to reduce CO2 emissions. Intermodal increases your flexibility, especially with handling, loading and unloading cargo at different ports.
When doing intermodal transportation, it is easy to chase the best terms separately with each company. However, this means more overhead for shippers, as they need to keep track of several contracts with different providers. The shipper is also responsible for handling the coordination of delays, as one company will not be aware of the delays that another company might be having.
Is Multimodal or Intermodal better for you?
If you choose multimodal transport, it means that you sign a contract with only one carrier that covers the entire journey of their shipment, regardless of the number of transport modes involved. The contracted carrier issues a Combined Transport Bill of Lading or a Multimodal Bill of Lading. The advantages include:
- The ability of the shipper to hold one carrier liable for the movement of their freight
- One contact for tracking a shipment
- One responsible entity for meeting delivery requirements
With intermodal transportation, you sign multiple contracts – one with a freight forwarder or ocean carrier, one or more with a trucking company, and one or more for rail transportation. Each carrier issues a separate Bill of Lading in intermodal shipping. The advantages include:
- The ability to select carriers for each leg of the shipment based on price or service
- Being able to stop the shipment at any point for any reason
- More flexibility in carrier selection when equipment or space issues arise
Both Intermodal and Multimodal transport have their own advantages and disadvantages with only one thing that sets the two transport modes apart: For Multimodal you sign only one contract, for Intermodal more than one. The two modes of transport optimize delivery times, reduce inventory costs and keep the level of freight costs under control. However, many people tend to lean towards multimodal transportation because it can provide shippers with a timelier, cost-saving shipping resource. Multimodal freight can also be easier to manage since it is through a single contract, unlike intermodal that is covered by various contracts. Intermodal shipping can provide shippers with lower costs and more predictable pricing, but obviously needs more effort to control and manage.