In a globalised world where the marketplace and production bases have become seamless, producers are obsessed with delivering materials and products to their end users in bigger volumes and higher speed at lower cost and across greater distances. As production activities are increasingly outsourced, as nations extend their trade with faraway trading partners, and as markets "flatten" and consumer tastes flatten, the need for speedy and efficient delivery across the supply chains have become more pronounced. The focus of producers and manufacturers has shifted from merely delivering goods on a "port to port" basis to a "door to door" basis.
The increasingly complex and extensive supply chain demands transportation of trade and goods to be handled by expert transport operators. Modern-day methods of producing materials and goods underline the emphasis given by producers and manufacturers to minimise transportation and inventory cost and to supply their ever-growing markets without delay. The increasing popularity of production methods such as just-in-time and zero inventory underlines the demand of producers for seamless transportation of goods.
The development of multimodal transport is partly fueled by this demand, as transport operators take up the challenge of their customers to deliver faster, more, further and cheaper. It is also a natural, and almost inevitable, result of developments such as globalisation, liberalisation, outsourcing and growing dependence of developing nations on trade as a major catalyst of their economic growth. In today's globalised world, markets are flattening, trade barriers are fast coming down and demand for goods come from all corners of the world. These require the transport sector to step up the plate to cater to the new dynamics in trade, logistics and supply chain management.
Multimodal transport and trade competitiveness : Carrying more, faster, farther
Multimodal transport involves the movement of goods through more than one transport mode using a single transport document. Multimodal is not the end of a development cycle of transport service but an intermediate concept which is increasingly supplemented by value-added logistics services such as packaging, labeling, transshipment, tracking and special handling of goods, among many others. Producers no longer just want transport and logistics service providers to merely deliver the goods but also want them to manage the entire supply chain on their behalf.
To realise the concept of a seamless, coherent transport network as envisioned by the proponents of multimodal transport, the various transport modes should not be viewed in isolation from one another. Ports, airports, railway stations and road transport terminals should not be perceived as being merely individual terminal points but as logistic centers providing value added services in a fluent, uninterrupted linkage with one another.
This might be a tall order for developing nations where basic transport infrastructure may not be adequate or even be in existence. For such nations which have other pressing socio-economic priorities, developing multimodal transport may not be topmost on their "to do" list just yet. They are more concerned about putting in place basic transport infra rather than attain the lofty goal of linking their transport modals in a seamless manner.
That said, developing nations which aspire to do more trade and enhance their trade competitiveness must work at improving their trade transport infrastructures and facilities. In a fiercely competitive global trade environment, nations unable to provide adequate and efficient transport and trade facilities will be left behind. Those harbouring serious ambition to become globally competitive and to attract and handle more trade volumes must view multimodal transport not just as a grand concept but as part of a differentiation strategy. Shippers these days are increasingly looking for total transport solutions that multimodal transport can provide. Such a demand warrants nations to adopt a serious and strategic approach towards linking their developing multimodal transport instead of conceptually viewing it as a utopian transportation objective.
Among the issues that warrant further exploration in developing multimodal transport are :
• Globalisation and its impact on multimodal development, especially in the context of developing nations.
• Sustainable development as a core issue in trade transport and multimodal initiatives.
• Multimodal transport policies for development in the national, regional and global context, more specifically the development of multimodal transport markets, operators, rules and policies.
• The role of supply chain and logistics management in multimodal services.
• The financial constraints arising from the credit crunch that has cut investments in transport and logistics sectors, and the grim business outlook and trade prospect that will halt development in the sectors.
There is plenty of room for improvement to enhance the level of supply chain and logistics management in developing countries, and to put in place a seamless and integrated logistics covering sea, land and air. Such efforts would provide the basis to increase the efficiency of the local logistics and supply chain management to make developing economies more competitive and to enhance their attractiveness as a trading nation.
In trade-dependent nations where policies in the general transport chain framework are fragmented and lacking in cohesion, serious attention should be given to improve their transport sector as a primer to attaining trade efficiency and competitiveness. Where transport services are too loosely regulated or overprotected, there will be inefficiencies that may result in the creation of bottlenecks along the supply chain, slow the movement of goods and increase the cost of trade transport. The competitiveness of a trading nation is measured, among others, by its trade infrastructures, the connectivity among its transport modes, and the efficiency of flow of goods along its supply chain.
Smooth operators: Facilitating trade the multimodal transport way
Multimodal transport is a complex process in which functions and organisations often intersect at various levels. Using a supply chain and logistics management approach could help unravel the intricacies of the process and provide aspiring trading nations with an analytical framework in the further development and improvement of multimodal transport. Supply chain management involves systemic, strategic coordination of business functions towards improving the connection between producer to end-user. Logistics management enables the fluent movement and storage of goods, services and information from point of origin to point of consumption. Both are vital in ensuring the effectiveness of processes and activities involved in delivering the products and services to customers. Hence, by focusing on the two areas, trading nations could facilitate the smooth flow of products, services and information to the end user. This is the ultimate objective in a multimodal environment.
Excellence in supply chain and logistics management involves a combination of logistic activities that contribute to lower cost, better quality, higher speed, enhanced security and to a certain extent, certainty in the movement of goods, services and information from producer to customer. This is especially important to countries whose economic growth are dependent on trade, and to developing nations which still depend on foreign direct investment to grow.
More than ever, the effective performance of the transport sector and the ability to efficiently manage the supply chain determine the competitiveness of trading nations. Hence, they must pull all the stops to synchronise the development of their transport sector and to create a conducive environment to facilitate smooth flow of trade.
Inefficiency in any one of the channels along the supply chain have a domino effect on the entire trade transport network, creating bottlenecks that hamper the flow of goods and increase the cost of transport. The supply chain and logistics sectors must be dynamically managed to respond to the globalised trade environment which increasingly emphasises on focus on customer service, time compression and organisation integration.
To meet the aspirations of a multimodal network to deliver goods seamlessly, a solid, proactive and dynamic set of policy and institutional support must be put in place. Trading nations must strive to reform archaic policies concerning trade and transport. Key to making multimodal transport work is regulating individual transport modes, providing market access, strengthening commercial capabilities and attracting investments to the transport and logistics sector. All these will contribute to significant improvement in the level of efficiency of the transport sector of trading nations. This will bring about enormous multiplier effects in the form of better flow of trade, cost saving, and all around economic prosperity to the nations.
Towards this end, the national transport policies of trade dependent nations, especially developing ones, should be formulated to promote optimal use of existing infrastructures, institutional capacity building, regulatory reform, application of ICT, human resource development and research and development.
The main actors – regulatory authorities, shippers, multimodal transport operators, ocean carriers, freight forwarders, terminal operators, Customs, ancillary service providers et cetera – must work in sync to create a holistic, seamless and efficient network of multimodal transport system. An integrated approach towards trade transport development would do no harm to trading nations in their effort to enhance their competitiveness.