Intermodal and multimodal transport are the buzzwords of the industry. Many logistics companies engage in these forms of freight movement depending on the contract and optimisation of the freight process. In this article, we engage in a deeper exploration of these two forms of transport to understand their significance in moving goods between Asia and Europe. Furthermore, what interests us is the scope of these forms and what opportunities can be carved from them.
Intermodal freight transport is defined as the movement of the container via multiple modes of transport, such as road, rail, sea and air, without the actual handling of the cargo. Intermodal freight transport has been performed since the 18th century, especially to move coal via railways and canals in England and Europe. Post-1950s, with the development of standardised containers regulated and optimised the movement of containers. Sea freight, rail freight and trucking simultaneously adjusted their technologies to match the growth of standardised containers. Consecutively, the advancement of land bridges across large distances also contributed to the growth of intermodal transport. A relevant example of this is the Eurasian Land-Bridge.
Multimodal freight transport involves the transportation of goods via multiple modes as well; however, it is conducted under a single contract. This implies that the carrier is liable for the entire carriage even though it may be performed by several modes of transport such as rail, sea or road. Understandably, the carrier does not possess all the transportation forms in practice but engages ‘sub-carriers’ to perform them. The carrier who is responsible for the transport is called a multimodal transport operator (MTO). Like intermodal, multimodal is also associated with containers, however it also involves non-containerised cargo. Therefore, the MTO works for the supplier and assures them that the goods will be carefully delivered.
Pros and Cons, Rights and Wrongs
Essentially one of the only differences between intermodal and multimodal lies in the legality in the nature of the carrier or the entity responsible for the movement of the goods. Otherwise, they both share the same processes that include the movement of goods via different modes of transport. The advantage of these forms of transport is the cost and process optimisation. These days, many companies choose these forms to reduce their carbon footprint as a commitment towards a greener supply chain.
Opting between intermodal and multimodal depends on the needs and convenience of the customer. Within intermodal, the customer may be required to sign multiple contracts with different service providers. Whereas in multimodal, the customer signs a single contract with one carrier, who then is responsible for the transportation. The advantage of intermodal transport for the customer is the flexibility to choose the different carriers for different transportation legs, that way managing the price according to their convenience. At the same time, intermodal transportation allows the customer to halt the transport at any point; finally, overall flexibility and transparency can be gained. Conversely, multimodal is advantageous for the reason of liability, as only one carrier is responsible and, therefore, liable. At the same time, there is one point of contact for tracking and delivery that reduces the logistical pressure on the supplier or customer.
Intermodal and Multimodal along the New Silk Road
Most transportation along the New Silk Road is largely intermodal or multimodal. Since 2013, China has been investing in the development of multimodal networks between Western China and Eastern Europe under the Belt and Road Initiative (BRI). The growth of the Eurasian Land-Bridge, the Middle Corridor, the southern route through Turkey, China-Pakistan Economic corridor are all key examples of the infrastructural support for multimodal and intermodal transport. The New Silk Road’s association with rail gives way to intermodal and multimodal transport. For example, if a container is moved from China to Europe, it arrives at one of the central terminals in Europe; from there, it may continue its next leg via canal or trucks to its destination. Therefore, the development of terminals between these landmasses assists in the growth of intermodal and multimodal transport and offers an opportunity to explore more intricate and nuanced logistical challenges.
The New Silk Road offers diversity to suppliers and customers to engage in intermodal or multimodal transport. Moreover, the emergence of rail as an alternative offers companies to look beyond the traditional transport system and diversify their logistical requirements. Furthermore, as many terminals and ports have developed intermodal capabilities, the drive to opt for these forms of transport is critical to remain competitive in the future.
What the future holds?
Speaking of the future, one must understand that though intermodal and multimodal forms of transportation are not new, however they are still very much relevant. The options in the modalities make them flexible and, therefore, sustain their long-term growth. With incoming technological advents, the blockchain is an interesting development that supports intermodal and multimodal transportation of goods. It helps in the real-time tracking of goods and improves risk management. These benefit both the carrier and the customer in securing the cargo.
Members of New Silk Road Network (NSRN) have a plethora of knowledge about these transportation methods. We spoke to Przemysław Hołowacz, the Chief Development Officer of CSL Poland who spoke about the intermodal transport’s relevance along the New Silk Road and what possibilities can be utilized. He explains that, “…intermodal transport is gaining in importance, both on the Silk Road and in Europe. Intermodal is an alternative to sea transport, mainly due to shorter delivery times. It also ensures the security and continuity of the delivery of goods. This was evident during the pandemic.”
Further Mr Hołowacz shares an interesting observation, “recently, I have noticed that the proportions of import and export are leveling out, which means that not only Europe buys from China, but also China buys from Europe. The most important challenges facing the Silk Road are the change of trains from wide gauge to standard gauge and the exchange of information between customs duties at the borders. The lack of appropriate line and point infrastructure is also a challenge, but it improves every year”. At the same time he underlines that despite these challenges intermodal transport is gaining traction, he adds,” the European Union's Strategy is to increase the role of intermodal transport around Europe. In a few years, railway, terminal and infrastructure around the terminal, such as warehouses, will make intermodal transport across Europe more flexible and competitive compared to road transport. This may also convert into opportunities for further the development of the New Silk Road.”