The growing need for multimodal visibility

Aug 7, 2020
Innovation

The goal of real-time transportation visibility solutions is to provide a single, unified view across end-to-end supply chains. However, the journeys that a shipment or delivery is required to take to reach its end customer have become increasingly challenging to trace. In today’s global marketplace, a good will often travel across seas and borders, via multiple modes of transportation before it reaches its end customer. This makes multimodal visibility important for obtaining a comprehensive end-to-end view of a supply chain’s transportation.

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The state of freight

As 90 percent of all worldwide freight transportation is carried out via road or maritime, which are also the most prone to unforeseen delays, visibility providers should have strong expertise in these fields. Most transportation in domestic markets is carried out over the road by trucks. Trucks can get to places that other transportation methods cannot. Railways don’t connect all destinations, and air freight is expensive and limited in terms of weight and available airports. This makes trucks the default choice for moving large quantities of goods domestically. However, it’s ocean shipping that transports the greatest amount of freight globally. Of the 108 trillion tonne-kilometers transported worldwide in 2015, 70 percent traveled by sea, 18 percent by road, nine percent by rail and two percent by inland waterway. Less than 0.25 percent of global freight in tonne-kilometers is transported by air. By 2050, Sea and road freight will account for over 300 trillion tonne-kilometers of freight transported globally.

Projected freight transport demand by mode [Source: StatLink http://dx.doi.org/10.1787/888933972183]

The rise of multimodal

The trend towards multimodal supply chains is largely due to resulting efficiency gains. It’s often necessary for the long-haul transportation of raw materials and components from cheaper suppliers based outside of local markets, as organizations strive to reduce overall costs and outsource production processes to countries where labor is cheaper and sometimes more efficient. But multimodal transportation also helps increase product margins by lowering transport costs per unit. Shipping product in sea containers has a dramatically lower cost per unit than via air for example, which can in turn increase competitive advantage and affordability to boost market share. Likewise, ocean shipping helps reduce transport capacity constraints experienced by other transport modes, such as road due to truck driver shortages experienced in North America and Europe. Finally, multimodal helps to improve environmental sustainability, benefiting from lower emissions per kg or unit, particularly on longer-haul routes.

The complexities of multimodal visibility

Providing quality multimodal visibility is challenging, as each mode requires specific expertise. A visibility provider needs to be able to manage all types of flow; be it dedicated, regular or spot. Depending on an organization’s specific transportation requirements they should look for a provider who can give the granularity of information needed. For LTL, for example, having visibility down to the unit level (or SKU for retailers) could be mandatory. They also need to be able to handle preferred modes, such as road (FTL & LTL), parcel, pallet and maritime. Likewise, to get an accurate view of punctuality and the quantity of freight being picked up or delivered at warehouses, a provider should be able to handle complex warehouse integration. This can be achieved via pallet tracking and barcode scanning, using a mobile application for instance.

For road transportation in particular, the levels of complexity in terms of regulations, subcontracting, languages, etc., can vary greatly from region to region. Typically, providers whose solutions were originally developed for low complexity geographies like the US, where a majority of transport operations involve more simplistic FTL flows, might struggle in territories like Europe which are high-complexity markets. Ultimately, no visibility provider can claim to offer ‘one platform tailored to all modes and geographies’ with the same level of sophistication (taking into consideration the variations in regulation and language).

Shippeo’s multimodal transportation visibility network is connected to the largest network of carriers and telematics/ELDs in Europe, providing instant access to accurate and reliable real-time information for all over-the-road FTL and LTL deliveries. In addition, the Shippeo platform tracks containers across any ports and terminals and provides real-time location of shipments travelling through waterways, coastlines or across oceans. Last-mile parcel deliveries are also covered and alerts informing of a parcel’s delivery status can be sent automatically.

Get in touch with Shippeo’s team of experts to find out how you can take advantage of multimodal visibility across your end-to-end supply chain.

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