[INFOGRAPHIC] Learn what is and what are the advantages and disadvantages of multimodal transport

  • 20/08/2019
  • 11 minutes

From point A to point B, we can trace several strategies so that a product arrives at its destination. Multimodal transport is what organizes various types of transport according to the needs of an operation. An intelligence in logistics that might revolutionize the way merchandise is delivered in Brazil and around the world.

When the distance to go is considerable or when the destiny is difficult to access, more than one type of vehicle might be needed for carrying the cargo from its point of origin.

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The traditional multimodal transport could combine means such as ships, planes, trucks, trains, or even other modes of transport according to the needs of the place (as, for example, tubular transport).

However, multimodal transport is not just a combination of modes of transport. It has an important figure who is responsible for planning and articulating all the means of transport into the single goal of carrying the merchandising in safety to its destination point: the MTO, Multimodal Transport Operator.

For Elias Sader, branch manager at Allink International Transport, the advantage of multimodal transport is the efficiency in combining various modes of transport and the cost reduction. The word efficiency is the key point in this modal.

“The efficiency comes from the cost reduction, because the best alternatives from point A to point B must be analyzed and multimodality is often the most efficient option, as is the case of the furniture industry, which has been using cabotage (through the waterway system) to get to the states in the North and Northeast of Brazil with competitive costs, even with factories located in the South and the Southeast of the country”, explains Sader.

He considers Brazil to still be practicing this system in a discreet way. “If we compare ourselves with places that have been using multimodality for years, such as Europe and the United States, we have a lot to improve in infrastructure so that we can develop multimodality in the country in an efficient way. An example of that is our rail network, which we have had for a few years with still timid investments, but there is indeed space and demand for the growth of this modal”, says him.

It’s more usual in Brazil for transport to be done between only two modals (plane and truck, or ship and truck), and not with multiple ones, as can be seen frequently in foreign countries (train, truck, ship etc.).

However, that doesn’t decharacterizes multimodal transport, since with at least two modes of transport the modality could already be configured if a MTO is present. Therefore, it shouldn’t be mistaken for intermodality.

The difference between multimodal transport and intermodal transport

When cargo arrives at the ports and needs to get to the Brazilian countryside, it must, forcibly, transit between at least two different modals. This might lead to the choice between intermodal or multimodal transport.

Intermodality differs from multimodality because there is a division of responsibility for transportation between the carriers of each modal.

“The difference is in the issuing of transport documents, being that in intermodality the issuing of the transport document happens for each modal, while in multimodality there is only one issuing of only one document by an MTO for several modals”, points out Sader.

When to choose multimodal transport

Multimodal transport can represent a series of benefits in the optimization of merchandise shipment. But you must know the moment to resort to it.

As we’ve mentioned in another article, Brazil has, between exporters and importers, more than 50 thousand companies, if we consider the economic groups. A big part of them transports its cargo by the maritime modal, due to it being safer and cheaper than other modals, such as by air.

In a situation of transport in short distances, or in regions that are extremely easy to access, there is no need for multimodality. In spite of it being highly efficient, multimodal is only profitable when the costs of using modal interfaces get to a competitive level. That is, when the operation is bigger or more complex.

“The first analysis to opt for using multimodality in Brazil is the geographical analysis of the demands for transport and if we have access to multimodality. Taking into consideration that we do have access, the first decision is cost reduction and, consequently, the increase of the product’s competitiveness”, states the manager.

If you observe an advantageous scenario of time, cost, and distances to be traveled, it might be the time to embark on multimodal transport!

The benefits of multimodal transport

For those who invest in multimodal transport, the benefits might be perceived much further than compliance with deadlines or cost reduction.

Easiness and safety

Multimodal transport presents a benefit that might facilitate the whole process, which is the one sole responsible, the Multimodal Transport Operator (MTO).

The whole transport combination service, search for routes, understanding of the merchandise’s transfer from one modal to the other stays on account and responsibility of the MTO, which facilitates the handling and analyzing of the whole transportation.

The exporter doesn’t need to worry about micro questions when there is an MTO, and is able to have a general vision on the main questions.

Multimodal transport around the world counts on the feasibility of one single transport documentation in its operations. In Brazil, this process goes to your unit, but a few other documents that don’t harm the exporter’s contract are still necessary, since the MTO is not responsible for bureaucratic matters.

The MTO is a legal person, who might or might not be also the transporter. His or her activities depend on the registering of a license from the National Land Transport Agency, or ANTT (from the Portuguese “Agência Nacional de Transportes Terrestres”). The MTO’s international license also requires registration with the Secretariat of the Federal Revenue, which is valid for ten years.

Deadline and prices

Multimodal transport unites the most efficient points from multiple modes of transport. It’s able to reduce cost and optimize inventory deadlines, thus making the merchandise prices more competitive.

Payment security also attracts the professionals along the route, which generates a chain of financial benefits for everyone.

Logistics intelligence

The combination of modals, in an intelligent way, leads to lower costs with transport, waiting and, consequently, fuel. Besides saving up for the market, it also results in a simple service for environmental sustainability.

The higher the logistics intelligence, the lesser the impact of the so-called ecological footprint of transportation.

Growth in Brazil

In the next few years, the concept of multimodality in transport will become even more latent. The growth of multimodality in Latin America sits around 10% (according to IPEA), but in Brazil and with every passing year, the concept expands more among the cargo transport stakeholders.

Also, considering the fears created during the truckers’ strike in May 2018, multimodal transport started being observed with more interest since it deprives a complete dependence in one single mode of transport.

The perception that this means of cargo transport offers several benefits leads the market to turn its eyes on other modes of transport and creates a propitious atmosphere for changing the mindset about cargo transit.

Learn more about sea freight shipping.