What is Multimodal transportation?

Multimodal transportation, also known as combined transportation, refers to a method of transporting goods using a combination of different modes of transportation such as ships, trains, trucks, and airplanes. The main characteristic of this type of transportation is that, despite the availability of different methods for the transportation of goods, the transfer of goods is carried out through contracts arranged by transportation companies. This means that multimodal transport companies are primarily responsible for the stages of transporting goods using this method.

Many combined transport and logistics companies offer additional services to their customers, such as customs clearance, warehousing, and even handling the transportation of goods from containers to wagons or trucks. For example, in Iran, multimodal transport companies are responsible for providing door-to-door services for containerized cargo via sea, rail, or road, as well as offering other services such as multimodal transportation services to all domestic customs points and transit to CIS countries (Turkmenistan, Uzbekistan, Tajikistan, Kazakhstan, Russia, Kyrgyzstan, Azerbaijan, Armenia, Belarus, Moldova), Iraq, Afghanistan, and other countries.

The advantages of multimodal transportation include reduced transportation costs, increased efficiency, improved security, and reduced environmental impact. The use of different modes of transportation enables transportation companies to optimize routes and reduce transit times, resulting in cost savings for both transportation companies and their customers. Additionally, the use of multiple modes of transportation provides greater security for goods in transit, as it reduces the risk of theft or damage during transportation. Finally, multimodal transportation can also help reduce the environmental impact of transportation by reducing the carbon footprint associated with the movement of goods.

Multimodal transportation shows how companies can find new value in their supply chain without significant cost increases and increase their efficiency. This is important because many customers have become more focused on reducing transportation costs after global disruptions such as pandemics, wars, etc. One way to achieve this is to integrate multimodal transportation capabilities into the basic strategy of transporting goods. Logistics companies must know exactly what this type of transportation entails and which transportation method or combination of methods offers them the best advantages.

The first step in understanding multimodal transportation is to understand its meaning and concept. Multimodal transportation uses different methods of transportation that are all coordinated under one transportation company. This method helps eliminate other intermediaries involved in coordination and other transportation methods that are deposited outside the country. As a result, carriers can save time, money, labor, and other resources.

The structure of the international transportation profession consists of numerous sub-branches, including the dimensions of cargo, rules and regulations, warehousing, technology, and packaging, which create suitable conditions for transportation with vehicles.

The transportation sector is one of the main components of the supply chain in developed societies and is considered one of the factors affecting the prosperity of the micro and macro economy of the country. Balanced development of the freight industry in all its forms and appropriate exploitation of it as a prerequisite for the development of all sectors will lead to national security and will also provide a basis for political and social development.

Multimodal transportation, also known as combined transportation, is one of the necessary infrastructure developments for the expansion of foreign trade and international and domestic transit services. Combined transportation is the intermediary of trade industries in every country, which sets the production wheel in motion and provides the means for business and economic development in society. If we have a suitable foundation for multimodal transportation, we can take advantage of shipping by sea for shorter routes, railways for longer routes where possible, and road transportation for shorter and specific routes.

In order to understand the level of government activity in the development of multimodal transportation and pay attention to this new system of freight transportation in international trade and economy, given the rapid development of container transportation in the world and Iran, it is necessary to provide suitable facilities to move large quantities of goods quickly, especially in ports. We need to create facilities to facilitate unloading and loading and customs procedures.

One of the helpful ways to develop this profession is to hold meetings and consensus among responsible individuals to conduct extensive research, gather documents, and propose executable solutions. The use of suitable infrastructure, advanced facilities in loading and unloading areas, and up-to-date technology are factors for the development of multimodal transportation industry.

Freight transportation is generally divided into four categories: maritime, air, land (road), and rail. Since no specific international convention has been accepted at the international level regarding multimodal transportation of goods, it is not easy to determine which laws and regulations are applicable in a legal dispute.

Although international transportation laws apply specifically to each of the logistics transportation methods, some of these conventions provide specific regulations for multimodal transportation. Therefore, it can be assumed that in certain circumstances, one of these unimodal transportation conventions can be considered applicable to the legal dispute in question.

One of the strengths of Saba Logistics Company is the use of specialists who have appropriate expertise in managing this method, making it one of the prominent benefits of the company.

Characteristics:

Multimodal transportation, also known as combined transportation, is one of the newest and most complex methods of transporting goods in recent decades that has brought about many changes in the development of global businesses. Among the most important characteristics of combined transportation, one can mention the increase in speed and time of transportation, cost-effectiveness and cost reduction, high reliability, regular and systematic contracts, and no restrictions on the methods of transferring goods to different parts of the world through ships, wagons, trucks, and airplanes.

Advantages:

One of the main advantages of multimodal transportation is its easy-to-contract and flexible cargo or shipment, which distinguishes it from other types of transportation methods. Multimodal or combined transportation is very effective for businesses and companies that constantly transport large amounts of cargo. The main reason these businesses prefer this method of transportation of goods and cargo is the less time and effort required. This transportation method also has other advantages, among the most important of which are as follows.

  • Cost-effectiveness: Traditional transportation methods involving various contracts and insurance policies can incur high costs. Coordination for transporting goods or cargo is much easier with multimodal transportation, and the associated costs are significantly lower compared to traditional methods. For example, our company currently transports cars from the UAE to Kazakhstan and Tajikistan. The cargo is shipped by land craft from the UAE to Bandar Lengeh, then transported by truck to Sarakhs, and finally by train to the destination. Each mode of transportation requires specific insurance coverage, which increases insurance costs. By negotiating with an insurance company and signing a comprehensive insurance contract for all modes of transportation from the UAE to Tajikistan and Kazakhstan, we were able to obtain adequate insurance coverage at a much lower cost, making the transportation more cost-effective.
  • Facilitation of communication: When using multimodal transportation methods for goods transportation, delays, updates, and interactions related to the transportation process are communicated through a contract between the company and the cargo owners, making communication with the cargo owner easier.
  • Fast transportation options: Since using wagons or ships for transporting goods or cargo may be limited and cause delays, multimodal transportation offers the possibility for cargo owners to send their goods to the destination in a shorter amount of time. This is one of the main services that cargo transportation companies offer their customers. In addition to accelerating the transportation process, these companies also provide services such as general warehousing and logistics to their customers.
  • Use of dry ports: With multimodal transportation, it is possible to use dry ports for cost-effective use of these systems and economic growth. In this regard, in accordance with the guidelines prepared, efforts have been made to coordinate with organizations such as the Road Maintenance and Transportation Organization, the Ports and Maritime Organization, the Islamic Republic of Iran Customs Administration, the Islamic Republic of Iran Railways, and others related to multimodal transportation to determine how a dry port can promote and develop multimodal transportation. In our country, with the focus on increasing capacity and efficiency under the Fifth Development Plan, the development of multimodal transportation has become possible and is among the government’s responsibilities for attracting private sector investment.

Reasons for the importance of multimodal transportation:

Businesses are always looking for cost-effective and efficient ways to transport their goods to their destination in a short amount of time. Multimodal transportation companies use a combination of different transportation methods, eliminating the disadvantages of traditional transportation methods and providing the best facilities for transporting goods to their customers. Multimodal transportation is important because it reduces transportation costs and speeds up the process of transporting goods to different locations, increasing the efficiency of transportation systems.

The success of multimodal transportation:

Multimodal transportation can reduce most transportation costs, including the cost of shipping cargo, and create volume discounts and guaranteed capacity. This reduces the need to outsource to multiple companies and allows transportation companies to offer more competitive rates, prioritizing the transportation of goods.

As Jeff Berman, a successful logistics manager, has pointed out, the economy relies on transportation, whether domestic or international, through ports, railways, or roads, serving as a gateway to the global market for US farmers, producers, and consumers. In the United States, the freight network moves 49 million tons of goods daily, valued at over $52.5 billion.

Developed countries usually provide tax incentives or significant benefits to develop multimodal transportation because they see it as a platform for their own development. This method also has a lower carbon transportation cost. Therefore, it provides many benefits to both companies and society.