5 Benefits of a Multimodal TMS

Multimodal TMS

The use of multimodal shipping is not a new concept – nor is a multimodal TMS.

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 TMS. Ultimately, the result is 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 in a volatile market 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 optimized multimodal TMS 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 TMS capabilities, as well as the ability to rate all shipments for all available multimodal lanes, at once.

FAQ: Additional Questions About Multimodal TMS

What is multimodal shipping, and how does it relate to a multimodal TMS?

Multimodal shipping involves using various modes of transportation, such as rail, road, air, and sea, within a single shipment journey. A multimodal TMS (Transportation Management System) plays a pivotal role in facilitating this process. It centralizes documentation, streamlines transitions between modes, and ensures compliance with regulations across different transport modes. Essentially, a multimodal TMS acts as a control tower for managing the complexities of multimodal shipping, optimizing efficiency, and enhancing visibility throughout the supply chain.

How does a multimodal TMS reduce overall shipping costs?

A multimodal TMS integrates different modes of transportation into a single platform, providing shippers and logistics service providers with a comprehensive view of their shipping operations. By consolidating processes and data, it minimizes the need for disparate systems and manual interventions, leading to cost savings. Additionally, the enhanced visibility and optimization capabilities of a multimodal TMS enable better decision-making, route planning, and carrier selection, further driving down shipping costs in a volatile market environment.

What risks does multimodal shipping help lower, particularly in specific transport modes?

Multimodal shipping, facilitated by a dedicated TMS, helps mitigate risks associated with specific transport modes. For instance, in less-than-truckload (LTL) shipping, there is a risk of delays due to multiple stops along the route. A multimodal TMS can address this risk by intelligently transitioning to more efficient modes, such as full truckload or intermodal, at strategic points in the journey. By optimizing mode selection and route planning, it reduces the likelihood of delays, damages, and disruptions, thereby enhancing supply chain resilience and reliability.

What analytics & reporting functions are included in multimodal TMS platforms, and how do they ensure profitability?

Multimodal TMS platforms offer robust analytics and reporting capabilities to track key performance metrics and assess the profitability of shipping operations. These functions provide valuable insights into transportation costs, carrier performance, transit times, and freight utilization. By analyzing this data, stakeholders can identify optimization opportunities, negotiate better rates with carriers, and implement cost-saving strategies. Moreover, continuous monitoring and reporting enable proactive decision-making and process improvements, driving long-term profitability and competitiveness in the market.

How does a multimodal TMS increase available connections within the supply chain?

A multimodal TMS expands the connectivity and flexibility of the supply chain by seamlessly integrating multiple transportation modes and carriers. This enables shippers to access a broader network of transportation options, optimize freight movements, and leverage available capacity more effectively. By consolidating shipments, coordinating logistics activities, and facilitating intermodal transitions, a multimodal TMS enhances supply chain agility and responsiveness. Ultimately, it empowers organizations to move freight faster, more affordably, and with greater reliability, thereby improving customer satisfaction and market competitiveness.

Discover shipping success with multimodal optimization.


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