5 Benefits of a Multimodal TMS

Multimodal TMS

The use of multimodal shipping is not a new concept.

On the surface, multimodal shipping refers to the contractual arrangements, rather than shipping mode itself, that allows carriers to move between modes without changing the contract with the carrier. Intermodal takes the process and creates complexity within true multimodal shipping to leverage both multiple modes and multiple carriers throughout the shipment journey.

While this may seem like unnecessary complexity, the application of multimodal shipping offers significant benefits that help shippers and logistics service providers (LSPs) realize cost savings, better freight rating, and timeliness of delivery. In addition, the use of a multimodal transportation management system (TMS) will go even further in promoting savings.

Shippers and LSPs gain these five benefits in using a multimodal transport supported by TMS, ultimately resulting in continuous improvement and performance measurement to validate and guarantee real results.

1. Multimodal TMS Centralizes Documentation and Boosts Compliance

Centralized documentation within multimodal shipping is an integral part of maintaining compliance with all applicable local, state, federal, and international regulations. Multimodal shipping directly results in the generation of more documents and records that require management. Using a multimodal TMS eliminates the hassle of tracking various bills of lading, invoices to the respective carrier, as well as determining when a single-carrier multimodal shipment would benefit from a transition to another carrier and effectively become intermodal.

2. A Multimodal TMS Reduces Overall Shipping Costs

The use of a multimodal TMS also goes a long way to reduce overall shipping costs. Since the TMS is used for both shipping products via a specific mode and through multimodal transport, shippers and logistics service providers gain a one-view approach to achieve improved freight transportation management. In other words, fewer systems amount to faster, easier processing of orders, shipments, and scheduling.

3. Multimodal Shipping Helps Lower Risks in Specific Transport Modes

Unlike a mode-specific shipment, multimodal shipping through a dedicated TMS lowers risks inherent in certain modes. For example, a leading risk with less-than-truckload shipping involves the increased addition of more stops on the journey, which may result in added delays to the delivery. If the LTL truck will arrive at a third-party location, and if freight can be successfully moved to a full truckload carrier at that point, the total shipping cost and time to ship a product may decline. It is this distinction that allows multimodal shipping to mitigate the risks of delays and even damage, giving shippers and LSPs peace of mind that multimodal shipping provides the greatest benefit—even when it’s not necessarily the lowest-cost option. The same process can work in reverse and apply to the transition between virtually any over-the-road mode.

4. Multimodal Platforms Include Analytics and Reporting Functions to Ensure Profitability

Another benefit of using a multimodal TMS involves the use of analytics and advanced reporting functions to continuously measure performance. Multimodal shipping is generally more complex. Even if multimodal shipping will save money, shippers still need the data to prove it. As a result, more organizations are turning to analytics to understand if current freight operations, including the use of multimodal shipping when appropriate, pays off. Meanwhile, the applications of analytics can be used to drive greater efficiency within the use of multimodal shipping and further improve overall service levels. The result is the same; customer service levels increase.

5. It Immediately Increases Available Connections to Move More Freight Faster and More Affordably

A final leading benefit of the use of multimodal TMS for shipping is the most simple and profound. Since multimodal shipping involves more modes, it immediately increases the number of available connections within the supply chain. Such connections may include finding available capacity for certain trade lanes, consolidating freight where appropriate, and if multimodal takes the added step and becomes intermodal, working with more carriers.

Reap the Benefits of a Multimodal TMS With a MercuryGate Partnership

Multimodal shipping, while more complex, gives supply chain leaders the competitive advantage they need to keep up with competitors and e-commerce giants. In today’s world, the slightest delay or upset within the supply chain could cost customers and destroy profitability. Ensure your organization does not succumb to these risks by choosing the power of an advanced transportation management platform that includes multimodal capabilities, as well as the ability to rate all shipments for all available multimodal lanes, at once.
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