In today's fast-paced world, product shippers increasingly demand efficiency from the transportation industry. They expect features such as better tracking of their shipment, online ordering facilities, timely and predictable delivery, and more transparent invoicing and billing information, among many others.
Companies are increasingly obsessed with delivering goods and services to their customers as quickly and inexpensively as possible. They persistently invest in resources and undertake initiatives to achieve greater speed and cost-effectiveness – the ultimate objectives of supply chain management. They spend much effort and resources investing in state-of-the-art technologies and hire top-notch talents to boost their supply chain performance.
Nevertheless, resources alone are not the be-all and end-all elements in supply chain management. Their quest for speed and efficiency can only be realised through an efficient overall transportation network anchored on good connectivity across various transport modes.
Modern supply chain management has exerted pressure on producers and manufacturers to embrace new concepts in doing business. To become competitive and retain and gain market share, they are constantly being driven to think beyond merely moving cargos from one point to another, as customers these days demand more than just straightforward transportation services. Given the globalised nature of business, there is greater need for transport services providers to meet more sophisticated customer needs and greater expectations.
To move goods speedily and efficiently, both locally and across borders, requires a combination of several transport modes in an integrated manner, the utilisation of a single document, efficient management and reliable service.
This task can be accomplished by using more than one transport mode. The growing size of trade, combined with the distance between markets – as well as trends such as globalisation and outsourcing – have spawned demand for integrated logistics services involving very complex arrangements of delivering huge volumes and variety of goods and materials across boundaries. It has also given rise to the need to carry cargoes using more than one transport mode, to ensure goods are delivered in the right quantity and quality.
It is no longer about delivering goods from one port to another port. It is now about door-to-door delivery to meet the demand of consumers and end-user, for a variety of goods at the most cost-competitive prices available across the globe.
In keeping with production trends such as zero inventory and Just-In-Time production, producers and manufacturers are now focused on delivering their products from the points of production straight to the point of consumption and the intended marketplaces. This has given rise to what is known as the 'door-to-door' or multimodal transport of goods and materials.
This is the essence of multimodal transport, a trend which is prevalent in today's world of globalised trade. It is a concept supported through a seamless network that allows stakeholders along the trade network to pool resources and harmonise their operations for greater efficiencies. Multimodal transport serves the growing need among companies and businesses to control costs across their supply chains and to provide the 'lowest cost network' to customers while generating revenues and market shares. It also promotes strategic partnership amongst players in the transportation industry dispersed and divided across various transport modes.
Multimodal transport operators (MTOs) provide the service to shippers to move goods across the supply chain using a combination of transport modes in a synchronised manner. MTOs often do not own a wide range of assets, vehicles and equipment but merely 'orchestrate' the entire task by arranging with specialised players along the supply chain like shipping lines, hauliers, railways and airlines to ensure goods are shipped from the door of the producers and manufacturers to the door of the consumers and end-users. By outsourcing the task of transporting their goods to MTOs, producers and manufacturers can focus on honing their core competencies and improving their products and services, and spare themselves from having to splash out capital expenditure on equipment, systems and manpower related to transportation of goods.
Seamless transport of trade, as espoused by multimodal transport, integrates transport modes, synchronises the activities of MTOs and improves the flows between customers and producers. It enables efficient management and facilitates better control over the flow of goods and services throughout the supply chain. This leads to producers and manufacturers gaining a competitive edge, especially in markets where competition is keen and choices are aplenty for consumers.
Multimodal, multibenefits
The emergence of reliable and competitive door-to-door multimodal transport services can contribute to and foster new trading opportunities as well as enhancing competitiveness of nations.
Multimodal transport can lead to the creation of a competitive environment in the transportation sector in which the following can be fostered:
• Encouraging the private sector to invest in infrastructure and in operating transport services.
• Improving the capacity, efficiency and productivity of transport modes.
• Creating trans-border partnerships and stimulating greater intra-modal and intra-regional cooperation and trade.
• Simplifying and harmonizing documentation and procedures.
This is especially important for trade dependent nations. Such countries which tend to have good infrastructures such as ports, airports, roads and railroads, must strive to enhance intermodal connectivity and linkage among these infrastructures. Smooth and seamless connectivity among them improve the 'last-mile connectivity' which is crucial to the speedy, efficient and cost-competitive delivery of goods from their points of entry to their final destinations.
The pressure to deliver more goods faster and cheaper has elevated the importance of transportation. An efficient transportation system delivers value to customers in the form of cheaper goods and more choices of goods available. But the drive to deliver more efficiently and effectively can be negated by a host of problems, namely inefficient planning and sub-optimal connections, poor utilisation of resources, higher operating costs and dwindling margins across the various transportation modes. In addition to pressures of globalisation, customer sophistication and the emerging trend to use IT to improve management, the transportation sector is continuously subjected to the pressure to integrate with other enterprises and supply chain processes.
This is where multimodal transport can give producers and manufacturers an advantage. The decision of deciding the route that cargos should take is be highly dependent on transit time, reliability and costs. Based on this premise, efficient organisation of the transportation path and components is crucial. Good transportation is key in the overall supply chain management of the producers and manufacturers, given that transportation cost can make up to half of the final costs of goods. Inefficient transportation leads to added costs, and this will translate into higher prices of goods and materials.
The fast-moving nature of today's world calls upon shippers to meet the demand of their consumers and marketplace fast. Late deliveries mean higher cost of inventory, deterioration of the quality of goods (especially perishable products), delay in meeting customers; demand, and even loss of business and market share. In this regard, multimodal transport can significantly contribute to efforts in lowering the cost of supply chain and help facilitate the relentless quest of manufacturers to deliver cheaper, faster and more.
Nazery Khalid