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Use of worldwide multimodal transport within the face of globalization

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Use of worldwide multimodal transport within the face of globalization

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The new challenges of international transport

The supply chain today is subject to several factors that must be considered in order to offer the right transportation solutions. But what points need to be considered in order to meet the needs of consumers around the world?

New patterns of consumption

Consumption trends observed worldwide have a very significant influence on logistics services: different consumer habits according to country and place of residence, changed customer expectations at the point of sale and new delivery requirements.

The end of the “one size fits all” era

Contrary to what we thought in the past, globalization is no longer synonymous with standardization. The era of “one size fits all” is over. Consumption patterns vary greatly from country to country: it would be dangerous to ignore them.

Export companies must be able to meet local requirements as precisely as possible. The key to international success now lies in the individualization of the offer.

Variable customer profiles according to culture

In order to be successful internationally, brands have to deal with different consumption patterns according to cultural habits. Regional peculiarities must be taken into account in the company’s business strategies.

For example, although shared in Europe and the US, the e-commerce trend is taking completely different forms in different countries, especially when it comes to services. In China, businesses face the needs of two main categories of consumers: city dwellers who want quality and service, and rural dwellers who buy products in bulk at low prices.

In the promising African market, professionals expect a lot of catching up to do in the implementation of banking services and infrastructures. The Middle East and North Africa group is ideally located at the intersection of international highways. On the other hand, the political and social changes that are currently taking place in Libya, Syria and Yemen are good for the future.

Increasing urbanization and diversification of demand

Sociologically, the global trend is towards urbanization. According to a UN study published in New York in May 2018, the world population living in urban areas is expected to increase from 55% in 2018 to 70% in 2050. Hence, consumer expectations and needs inevitably change. Customers now prefer smaller shops, which in turn have less storage space, and are demanding more and more services such as home delivery or click and collect.

While convenience shopping is becoming more and more popular on the Internet, customers also want a different experience at the point of sale. As a result, brands that once focused on low prices and self-service have to question everything. They also need to adapt to a growing middle class whose needs, which are homogeneous in terms of basic offerings and services, are diversifying into products with better margins.

One of the greatest challenges of global transportation is undoubtedly the question of delivery times. A major problem for the actors in the supply chain, punished by capacity problems of the infrastructure and difficulties in finding workers.

To find out more, consult our TMS product sheet here!

Transport infrastructure capacity: a major challenge

Regardless of the means of transport used, all carriers are confronted with network congestion problems. Therefore, new solutions for the development of modes of transport, especially in terms of capacity, need to be invented.

Globalization and its Limits

Shipping, which covers more than 90% of world trade, is still the cheapest mode of transport today. But it is becoming less and less responsive to the challenges of today’s retail. The consequences? A capacity crisis that causes many delays with inevitable negative effects.

The increase in the capacity of container ships does not change this, as it also restricts the possibilities of accommodating cargo ships in ports. There are few infrastructures that can accommodate large ships and that have sufficient resources for loading and unloading.

Always inexpensive and flexible, road transport is the indispensable option for door-to-door deliveries. But the shortage of truck drivers in Europe and North America is limiting its development.
Rail transport is also reaching its limits, with heterogeneous infrastructures in Europe causing a high damage rate. Indeed, a global trade route war is currently being waged with significant financial investment.

How can one overcome the problem of road traffic?

Different approaches are being explored to address road traffic problems.

Invest in autonomous vehicles

Autonomous vehicles are undoubtedly the future of transport, provided that regulations are changed and this new mode of transport is accepted by the population. Although the technology is almost ready, there are still some bottlenecks. As proof: In the absence of a legal framework for environmentally friendly vehicles, Deret’s electric trucks were recently blocked at the entrance to Paris in the first days of swap traffic.

Development of rail transport

The railway began its offensive with the commissioning of a new railway line between China and the Netherlands. The first train with freight containers arrived in the port of Rotterdam in 2015. The journey was only 18 days compared to 44 days by sea.

The issues of punctuality and tracking have yet to be resolved, but the rail industry is testing new technology to reduce these risks. Such as the partnership between IDEO (a subsidiary of ID Logistics) and the Lille-based start-up Everysens to produce networked wagons with integrated IoT sensors on behalf of Danone Eaux.

Consider alternative solutions

Other interesting solutions have been developed to address specific problems. Take Steve Jobs, for example, who invested $ 50 million in air cargo space to ensure that his new clear blue iMacs are shipped by Christmas.

The revolution is underway. International companies cannot ignore it: in order to think globally, they must empower themselves to act locally according to the context and characteristics of the market.

Multimodal transport: an answer adapted to consumer needs?

Global trade also means international sourcing, distance from production sites and mass flows of goods. All of these are challenges for logistics. To meet this need, actors in the supply chain are increasingly using multimodal transport, which has many advantages.

A bit of history

A small leap in time. In the 1960s, the advent of the container was a real revolution in transportation. Thanks to this invention, it was possible to transport goods all over the world without breaking the cargo. This can be done by sea, air, rail, road or water. In this context, multimodal transport was able to take off.

Although globalization and the large production centers in Asia have accelerated the development of maritime freight transport, alternative modes of transport are still necessary today to reach the end user. Today, transport is mainly overseas (by ship or plane), but road transport is essential for ports and home deliveries.

So it is not only sea freight transport that has benefited from internationalization: road transport and other available means have developed in the course of this. In addition to the complementarity between sea and road transport, other forms of multimodality have emerged. Take Switzerland and Austria as an example, which developed railway highways to transport entire units of road by rail in order to improve regularity and limit pollution.

The advantages of multimodal transport

As an alternative to 100 percent road transport of goods, multimodal transport combines at least two different modes of transport, from the departure of the production units to the closest possible arrival to the end consumer. The handover takes place without a load break, as the same loading unit (the container) remains the same over the entire duration of the transport of the goods.

Its many advantages justify the excitement it generates in the supply chain:

1. Improved delivery times.
2. Increased security of the goods.
3. Optimizing the costs associated with the transportation of consumer goods.
4. Improved loading capacity, which is higher than that of road transport.
5. More respect for the environment.

Bringing urban logistics and quality of life into harmony

Delivering the last mile, which accounts for around 20% of freight transportation costs, is the current challenge for logistics professionals. No new organizational schemes have yet been found that respond to the commercial strategies of brands and meet the urban and ecological guidelines implemented in the territories. Multimodal transport could play a key role again here. Proof of this is the multiplication of multimodal traffic experiences and the structuring of common logistics platforms in urban areas.

Some examples of multimodal procurement

Several brands have already taken the next step and focused on new multimodal transport solutions. For example, Monoprix decided to combine rail and road freight for its deliveries within Paris.

From the exit of the warehouse to a logistics platform based in Bercy, the goods are initially transported by rail. The products are then transported on the road as close as possible to the consumers: in addition to electric vehicles for home delivery, gas-powered trucks are also used to deliver to the sales outlets.

Thanks to a partnership with XPO Logistics, Ports of Paris and Voies Navigables de France, the Franprix brand (Casino Group) has entered the urban shipping market.

Urban centers are multiplying

Logistics is not lagging behind when it comes to multimodal sourcing: several initiatives in Lille, Saint-Etienne and Paris show a strong will to offer innovative solutions.

A multimodal urban distribution center opened in 2015 in the port of Lille, for example, enables pre-transports and collective deliveries to be merged in the city center. In the same sense, the Saint-Etienne metropolitan area is a laboratory for urban delivery with the bundling of its goods distribution platform, which is transported into the city with a fleet of electric vehicles.

In Paris, too, the Chapelle International project is proving to be a courageous challenge in terms of urban logistics. Their goal: the reintroduction of rail transport in the capital through the construction of a 45,000 m2 logistics hotel on a former railway wasteland at the Porte de la Chapelle in the 18th arrondissement.

Given the many challenges posed by the globalization of trade, multimodal transport seems to be the solution of choice today. Experiments in this area are multiplying, each more innovative than the other. It remains to find the right level of regulation and innovation for the actors in the supply chain in order to implement the change effectively.

Generix Group North America offers a range of solutions within our Supply Chain Hub product suite to increase efficiency across the supply chain. From warehouse management systems (WMS) and transportation management systems (TMS) to Manufacturing Execution Systems (MES) and more, software platforms can offer a multitude of benefits that ultimately affect the warehouse operator’s bottom line. Our solutions are in use worldwide and our experience is second to none. We invite you to contact us to find out more.

This article originally appeared here. Republished with permission.

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