Insight: Is Integrated Intermodal Shipping the Future?

After recent news that Maersk launched a new airport gateway in Atlanta, USA, it begs the question of multimodality of transport, and whether this is a viable model for the future of logistics.

In this piece, we first explore the benefits of integrated multimodality, or integrated intermodal transport, and then look at the challenges of its implementation.

Finally, the piece offers a conclusion on the likely future of the supply chain.

What is Intermodal Transport?

Put simply, intermodal transport is moving goods via an intermodal container utilizing different forms of transport, including (but not strictly limited to):

• Ships

• Airplanes

• Rail

• Trucks

What is Integrated Intermodal?

To understand why integrated intermodal is touted as the future, we have to understand what problems it solves.

Perhaps the biggest challenge of the supply chain is the smooth, uninterrupted flow of goods, this is made all the more challenging by disparate elements of the supply chain working to suit their own agenda instead of harmonizing.

Where intermodal simply means "different ways to carry a box", integrated intermodal means "different ways to carry a box with all key elements of the chain working in unison".

Benefits of Integrated Intermodal

Integrated intermodal promises a smoothly functioning chain in which disparate elements work together to achieve a desired end-result.

In practical terms, this means better strategic planning, real-time communications and data-sharing.

The unique benefits are then:

Efficiency

By using a variety of interlinked transportation modalities, goods can be moved faster, thereby reducing delivery times and improving customer satisfaction.

Costs

Integrated intermodal allows a company or companies to plan in advance, to avoid bottlenecks, and to lean on different modes of transport during peak times. Via the use of predictive analytics and AI, companies can acquire more service options and slash time and money wastage.

Sustainability

The inherent planning in intermodal allows for a streamlining of vehicles used and a maximisation of efficiency, thereby minimizing emissions.

Further, via integrated intermodal, we can utilise more fuel-efficient modes of transport, such as LNG shipping, rail, and electric vehicles, as well as utilising smart networks to avoid idle time.

Challenges of Integrated Intermodal

The main challenge of integrated intermodal is the eternal challenge of the supply chain: getting different companies to work together.

Naturally, for any company to work in unison with another, they must see huge benefits therein, and there is always risk when sharing intimate company data with another company, as when a given contract ends, one company still has knowledge of another company's data.

One solution to this could be a large company creating an integrated intermodal supply chain, very much in the mold of Amazon.

Insight: How Does Amazon Do It?

However, the problem with this is it fringes on monopolization concerns and, if a given chain got too big, it would likely be blocked on antitrust grounds.

Other major challenges include:

Implementation

While integrated intermodal logistics is something of a promised land, anything that involves cutting-edge technology and disparate logistical strands is notoriously hard to get right.

This has been a particular problem with automation in the supply chain, while it can work magic when it functions smoothly, it is very challenging, expensive and time-consuming to get it functioning in such a manner.

Further, there remains great risk in making large-scale investments if they don't pay-off.

Infrastructure

While we may develop revolutionary new models to handle cargo, we have to be aware that much of the global infrastructure is old.

This means that many ports, airports, road systems and railways may need physical and digital upgrades before they can play a part in a modern integrated chain.

Security

Security, especially cybersecurity, plays a huge role in the integrity of logistics in the modern era, and with huge amounts of data, cargo and individuals in an integrated chain, such chains could be prey for cybercriminals.

Before companies are willing to engage in any integrated chain, they must have full confidence in the security of the operation.

Yet can the industry offer that yet?

Conclusion

Integrated intermodal seems like something of a magic bullet, and like most theories, it seems much better on paper than in reality.

While, theoretically, the integrated intermodal model answers the challenges of the day, the practical obstacles are, as yet, insurmountable.

The conversation then moves to the visionaries, thought-leaders and tech-specialists that can overcome the aforementioned challenges, as well as the major companies in the logistics space to take a lead on this and pioneer.

Read more: How Connected Containers Can Create Smarter Supply Chains