Five Multimodal Logistics Challenges and How Businesses Can Address Them

As eCommerce continues to fuel cross-border deliveries across the world and customers become more impatient and demanding, businesses face an entirely new set of problems. They need to focus on making their logistics movements faster and more efficient while ensuring they meet stringent customer SLAs, reduce supply chain costs, enhance logistics productivity, and leverage eco-friendly means of transportation.

This is why multimodal logistics are emerging as an industry favorite to leverage economies of scale and efficiency across different modes of transportation. While multimodal logistics help reduce transportation costs by 20% and carbon emissions by more than one-third, it can also help promote energy savings and improve transportation efficiency by 30%. Further, stats suggest that multimodal logistics can also reduce cargo damage by 10% and highway congestion by more than 50%, which definitely makes it a bankable choice for businesses across the globe. 

Still, the effectiveness of implementation relies on taming the challenges that come along with the multimodal nature. 

Here, we discuss the top 5 challenges in multimodal logistics and how smart automation can overcome them.

Challenges in Multimodal Logistics: The Top 5 List

Poor Real-Time Visibility over Multimodal Movements

Transportation delays and lack of coordination among different vehicles or modes of transportation are two significant challenges in multimodal logistics. 

During the hand-offs between multiple vehicles, shipment tracking gets disrupted, and businesses struggle with real-time status because of poor coordination among the logistics service providers (LSPs). Further, the lack of standardized information, such as status updates, intensifies the severity of the problem. 

This disparity of visibility into the shipment movements gets amplified when the shipment is delivered by three or more types of vehicles. 

Extensive Documentation  

The exchange of hands during the end-to-end shipment movement leads to extensive documentation among the multiple carrier and logistics parties. This not only comes as an added responsibility for the shipper but also leads to confusion and chaotic management of shipment movements. 

This can also pose a hurdle in cases where businesses wish to gain real-time visibility into the granular shipment movements and share the same with their customers. Further, any single task, such as billing, can rely on multiple parties or processes. 

High Last Mile Delivery Costs

The global cross-border eCommerce logistics market is expected to be USD 55.47 bn by 2026, which, added to increasing fuel and freight costs, is going to amplify the Last Mile delivery costs. 
Further, in multimodal logistics, end-to-end shipment transportation is managed by a single provider, which means that businesses cannot bargain or opt for a more profitable carrier for the Last Mile deliveries. 

Finally, the dependency on a single service provider means less room for negotiations in terms of riders, type of vehicles, process optimization, and automation. All this can lead to higher operational costs attributed to high-priced vehicles, manual planning, dedicated fleet, etc.

Poor Coordination Among Stakeholders

In multimodal logistics, the businesses communicate with only the main service provider, which means collaboration and communication with the other subsidiary service providers are mostly absent. 

So, even if a purchase order or invoice is processed, businesses seem to struggle with a nagging feeling – ‘was it accurately billed?’ or ‘what if the service provider is adding its own commission?’ 

This lack of transparency and consolidated coordination among different stakeholders leads to mistrust, miscommunication, and overall reduced quality of operations. 

Multiple Touchpoints Increase Risk Susceptibility

As with all other transportation movements, multimodal logistics management comes with the larger-than-life issue of handling. There are multiple touchpoints involved in the entire journey of a shipment that can lead to an increased risk of damage, theft, compromise, or any other kind of business risk, such as fraud.

Poor control over the orchestration of multimodal transportation and lack of real-time visibility into the shipment movements spur such challenges for businesses. 

While the management, monitoring, control, and tracking seem to paint a glum picture, the benefits of multimodal transportation are too great to be ignored. 

This is where smart automation comes into the picture. 

Optimize Multimodal Logistics Using a Smart End-to-End Logistics Management Platform

A smart end-to-end logistics management platform helps reduce costs and drive end-to-end visibility across bulk shipments and multiple carriers without leaving gaps for inefficiencies or cost bleeds. With smart quote management, predictive alerts, and automated real-time notifications for all the stakeholders, such platforms increase transparency in the operations and instill trust among all the parties. 

Further, the automated biddings and ranking of logistics service providers (LSPs) based on their previous performances and automated comparison of rates, etc., help businesses get a bargaining edge over the service providers.

Other advanced offerings, such as digital document handling, smart invoicing & billing, seamless integrations across multiple platforms, and multi-channel functionalities, help businesses reduce the man-hours for shipment handling by 56% and manual ERP data entry by 65%. The ETA SLA breaches are reduced by 37%, and incidental costs are reduced by 34%, thereby increasing customer satisfaction by 64% and much more.

Hence, investing in a smart end-to-end multimodal logistics management platform that monitors, tracks, manages, and controls shipment movements without errors, is the right step forward.