Updated: Jun 23, 2021
First, let’s start off with a few definitions:
Multimodal: Multimodal transport (also known as combined transport) is the transportation of goods under a single contract, but performed with at least two different means of transport; the carrier is liable (in a legal sense) for the entire carriage, even though it is performed by several different modes of transport (by rail, sea and road, for example). The carrier does not have to possess all the means of transport, and in practice usually does not; the carriage is often performed by sub-carriers (referred to in legal language as “actual carriers”). The carrier responsible for the entire carriage is referred to as a multimodal transport operator, or MTO.
Intermodal: Intermodal freight transport involves the transportation of freight in an intermodal container or vehicle, using multiple modes of transportation (rail, ship, and truck), without any handling of the freight itself when changing modes. The method reduces cargo handling, and so improves security, reduces damage and loss, and allows freight to be transported faster. Reduced costs over road trucking is the key benefit for inter-continental use. This may be offset by reduced timings for road transport over shorter distances. Above definitions provided by Wikipedia.
Why choose one over the other and what is the difference? The major difference between Multimodal and Intermodal is the number of contracts the shipper has with various service providers.
In a Multimodal Shipment, the shipper has one contract of carriage, which covers all modes of transport from origin to destination, whether that is a door-to-port, port-to-door or door-to-door. This equates to one carrier for a one journey. This contract of carriage is with 1 carrier, whether that is a steamship line or international freight forwarder/NVOCC. The steamship line/ocean carrier or international freight forwarder/NVOCC issues a Combined Transport Bill of Lading or a Multimodal Bill of Lading.
Benefits: the shipper can hold the one carrier liable for movement should an issue arise, getting tracking and tracing updates is from one carrier and efficiency in delivery times can be met.
In an Intermodal Shipment, the shipper has multiple contracts, 1 with a freight forwarder or ocean carrier, another with a trucker or trucker and rail carrier in origin country and another with a trucker or trucker and trail carrier in the destination country. The carrier issues a Port to Port Bill of Lading each additional carrier involved in the shipment issues their own shipping document such as a Bill of Lading for Domestic Transport or Rail to the shipper.
Benefits: the ability to select your own carriers based on price or service for each leg of the shipment, the ability to stop the shipment at a certain point for any reason since you control each leg, and more agility on carrier selection if there are equipment or space issues with carriers.
What is the purpose of choosing Multimodal over Intermodal or vice versa? The decision of why you choose one mode vs another depends on several factors such as whether the shipper wants to have multiple independent contracts with multiple carriers, the total cost difference between both options, how it affects inventory turns and costs, the time savings involved in each mode for both transportation of the cargo and administrative coordination, the environmental impact of one mode over another, and how it alters or affects the paperwork involved in the shipment.
Discuss which option is best for you with your internal logistics team, carrier base and international freight forwarder. Contact us today at (800) 874 4748 or request a quote.