The Globnewswire has reported on the prospects of global multimodal freight transportation market from 2020 to 2025 that multimodal transport systems have become the backbone of international trade – with the objectives of reducing overall freight cost and improving cargo handling efficiency in general within the supply chain while responding to the demands for door-to-door cargo services.
Global trade entails international sourcing, utilization of production sites and flows of goods – each of which represents challenges on the logistics front. In order to overcome these obstacles, supply chain actors are increasingly turning to multimodal transportation.
Although globalization and major production centres in Asia have played an influential role in the fast-paced development of maritime transport, other means of transportation are still of necessity to approach end consumers. Although the majority of goods transit occurs overseas – either via ocean or air transport – road transportation is still indispensable during the process around trading ports and for home deliveries. Therefore, maritime transport is not the sole beneficiary of internationalization – road transportation and other modes of transportation have managed to flourish collaterally. Additionally, despite the apparent supplementation of maritime and road transports, multimodal one is becoming more diverse. For instance, Switzerland and Austria have developed high-speed rolling highways to carry gadgets, vehicle accessories by train, thus improving punctuality and reducing harms on the environment.
Major Market Trends
The growth of e-commerce stimulates market development
According to freight industry experts, multimodal transport has significant potentials to expand its role in supporting e-commerce.
E-commerce providers are attracted to multimodal transport because it provides a cost-effective option for transit on certain lanes and for certain commodities. Consistent service will be the most important requirement for multimodal transport to be a feasible option for retailers and e-commerce businesses.
Multimodal transport plays an important role in filling the gaps of supply chain and it is expected to be a strategic industry in the next few years as multimodal service complements other modes in completing order fulfilment, including last-mile delivery. The prioritized growth for multimodal services is represented when members continually reassess their strategy to meet the increasing demand for e-commerce.
In the past five years, the development of e-commerce has increased the demand for freight visibility and faster transit time. Although truckload freight service quickly adapted to customer demand, multimodal is strongly focusing on meeting those needs. The growth of e-commerce has increased the expectations for visibility through quicker tracking and faster trade documentation processing. More companies are experimenting on multimodal services while seeking a collaborative approach and capacity that include greater freight visibility and attempts to move more inventory closer to customers.
Multimodal transport develops the most in North America
In North America, multimodal rail includes shipping containers and truck trailers by rail. This has been a major rail traffic segment with the fastest growth over the last 25 years. Around half of multimodal rail services serve the purpose of imports or exports, reflecting the vital role of multimodal transport in international trade. The private freight rail industry owns the vast majority of the country’s rail infrastructure and continues to make a significant capital investment. The US freight railroads are classified into three types based on the distance served and earnings: seven large Class I railways, 21 regional/Class II railways, and 547 short line/Class III railways. The freight industry in the United States is highly competitive. By investing in this sector, multinational firms create a position to facilitate the flow of goods better throughout the world’s largest consumer market.
The freight railways in the US, together with trucks and maritime shippers, carry nearly 54 metric ton of freight per capita. The US multimodal volume has grown significantly over the years and rose from 5.6 million containers and trailers in 1990 to 9 million in 2000 and to 11.1 million in 2010. In 2018, the volume of multimodal rail in the US hit a record of 14.5 million units.
The multimodal market is fragmented with low barriers, allowing even very small enterprises to enter any segments of the market and compete effectively with the major counterparts and reducing margins.
With the wave of innovative technologies and business models, multimodal transport has been increasingly optimized to ensure effectiveness and sustainability. Many companies are also aiming for sustainable solutions in the multimodal market, which minimize environmental disruption and protect the overall health of workers and the community. These are outstanding features that exceed those of pure road transport due to the pollution and emissions released by road transport vehicles.
As the market for multimodal freight transportation has extended, the number of businesses entering the market is expected to increase.