The Rise of Intermodal Transport in India: Opportunities & Challenges

India's logistics sector employs over 4.5 crore people. With that large number, it is necessary to become efficient day by day to keep expanding.

To achieve efficient growth, the industry needs to ditch the old-school single transport model. They struggle to keep costs lower and are also bad at transportation optimization.

So, what's the option? The answer is Intermodal Transport System. It basically mixes road, rail, air, and sea under multiple contracts.

Every modern business is now shifting to intermodal transportation because it primarily serves as a means of saving money, accelerating deliveries, and with a wider coverage area.

However, its overall efficiency depends entirely on how well the logistics company manages the optimization between different transporters. 

So, without any delay, let's dive deep into inter-modal transportation, along with its benefits and how it shapes the future of India's logistics sector.

What Is Intermodal Transport?

Intermodal transport uses a combination of trucks, trains, ships, and planes to move goods in special containers.

In other words, an intermodal transport ship freight uses two or more transport modes, but the entire shipment stays safely in its container.

The container itself moves from truck to train or to ship without opening it. So, workers only have to shuffle the container, not the actual goods that are inside it. This makes shifting between modes (transport types) easier and faster.

Single Vs Multi Vs Intermodal Transportation

Single-mode transport: Sticks with a single vehicle type for the whole trip. Examples: trucks, vans, or trains from start to finish.

Multimodal transport: Uses different types of vehicles with a single contract and carrier, but unlike intermodal, goods have to be unloaded and reloaded at every switch.

Intermodal transport: Uses different types of vehicles, but instead of loading and unloading the whole goods, here the entire container is moved. In this model, there are multiple contracts and transporters involved.

Why Intermodal Transport Is Gaining Momentum In India?

India's economy is booming, and relying solely on one transportation model is a BIG NO. Companies are realizing that intermodal transport isn't just trendy; it actually saves money and time, and here is how:

1. Cost savings: Businesses can manage to cut the shipping cost up to 25-30%. For example, choosing rail and ships over trucks for a longer distance can cost around 30% less than trucks, then choosing trucks for the last mile delivery to warehouses or logistics hubs.
2. Good for the Environment: Switching transport wisely also cuts down the CO2 emissions and electricity. On average, trains throw out 75% less CO2 than a truck for the same cargo.
3. Traffic Jams: While moving goods between big cities by truck, there is a higher chance of traffic jams. Instead, choosing rail for the same distance is not only more fuel/power efficient but also saves time.
4. Digital Platform and Tracking: Use of digital tech for tracking shipments, planning efficient routes, and predicting delivery time can provide a reliable and efficient system.

Benefits Of Intermodal Transportation

Here are some of the major benefits of using intermodal transportation over single and multimodal transportation systems:

1. Sealed containers

Keeping cargo safe at the same time decreases the chance of mishandling during loading, unloading, and reloading.

2. Cost savings and efficiency

A business can save up to 30% when it mixes and matches transport modes correctly. This becomes more efficient for long hauls, such as choosing rail over trucks for heavy loads over 1000 km, and for the last mile, using trucks to ship containers to the final destination.

3. Industrial and e-commerce hubs

Online sellers and e-commerce hubs can grow faster and reach more customers with intermodal.

Similarly, factories and industries get easier access to ports and markets and can easily ship goods globally, with less hassle.

4. Sustainability and Green Logistics

Intermodal transportation is backed by an efficient network of different modes of transport that uses each mode where it shines.

This leads to better fuel efficacy than single and multi-mode systems. Examples: Rail pumps out fever emissions than trucks, and ships can move mountains of containers across seas.

5. Government support in Infrastructure

New freight corridors, better ports, and rail terminals not only make cargo transfer easier but at the same time faster.

The government majorly focuses on developing roads, rail, and ports as it can cut down logistic costs from 14% of GDP to around 8-9%.

Challenges Facing Intermodal Transport In India

Having or building a good intermodal system in India isn't easy. There are tons of roadblocks that slow things down and make life harder for businesses. These are listed below:

1. Poor Infrastructure

A good portion of ports, rail yards, and warehouses aren't connected well. On top of it, roads leading to these places are often in bad shape.

2. Tech and Tracking Visibility

Tracking FCL and LCL shipments is a major nightmare for those who still rely on using paper records to track/accept shipments. This not only leads to poor communication between modes but also leads to poor tracking.

3. Coordination and standardization

Taxes, rules, E-way bills and paperwork change from state to state, so B2B transport companies end up juggling between agencies for permits.

Without proper standardisation, two systems (let's say rail and road) often don't sync well, which causes more headaches to businesses. 

4. Cost trade-offs:

Building an intermodal system needs coordinating with different logistic companies and often requires upfront costs.

This can't be possible for most of the mid-to small business companies (for that, one must go with a 3rd party logistics service).

In addition, fuel and labour prices are always changing, which also adds to costs.

How Businesses Can Leverage Intermodal Transport

If companies play their cards right, intermodal transport can deliver serious benefits. The trick is mixing and matching the right modes for each shipment, and here is how it is done:

1. Choosing the Right Intermodal Strategy

Go with rail for long hauls, and use trucks for the local deliveries (up to 500km).

By doing this, you not only save fuel but also open your business to new markets with wider coverage and pan-reach.

2. Smart Planning Matters

One key necessity for any intermodal transportation to work well is planning while juggling multiple transport modes. Choose each mode wisely that suits best in its category.

For example, choosing rail is perfect for big and heavy shipments over longer distances, while trucks are best for delivering faster to end customers.

3. Technology and Automation

Modern logistics systems are backed by an analytics and tracking dashboard that not only provides real-time tracking but also automates picking:

(a) the best routes,

(b) best transport modes, and

(c) scheduling and predicting delivery timings.

4. Partnerships with 3PLs and 4PLs

Most businesses don't stress out on logistics as they use 3PL and 4PL providers that are good at transport and logistics. They make intermodal a lot less stressful as all planning, handling, and coordination among different transport companies.

The Future Of Intermodal Transport In India

The government is pouring money into developing better roads, railways, and ports, which finally helps to integrate and optimize all of these different modes efficiently.

In addition, technology is going into other integrated sectors that contribute most other than Infrastructure.

Most 3PL services now offer smart tracking systems to keep an eye on their shipments, along with better predicting delivery dates and choosing different modes during a shipment.

This all ties together to serve as:

• Better links between ports and inland areas
• Faster rail networks for goods
• Smart warehouses at big transport hubs
• Mobile apps for tracking and booking

Thus, the B2B logistics industry is already changing and no longer relies on a single transport mode. More companies are ditching the old "just trucks" or "just trains" approach and switching to intermodal transportation.

Lastly, if you're looking for a better logistics company that also offers intermodal transportation services with more than 20 years of experience, feel free to contact us.