The efficiency of inland transportation

Over the past two or three decades, consumers all over the world have become used to the immediate availability of products.

To support the continuous ever-growing demand, a lot of the production and manufacturing have gone for a push strategy, managing their supply chains with higher speed and – thanks to the advent of digitalisation - becoming really good at estimating the number of needed products from their target consumers. Today, from a logistics perspective, businesses are looking for ways to support this speed, minimise cost, and maximise their resilience to disruptions and risks, trying to find a balance between pushing enough to cover demand but also not too much that it constrains their warehouses and consequent delivery times.

Since COVID-19 the focus of companies on supply chains has grown to become part of their strategy. Long gone are the days when logistics used to be the last part of a product’s life, while now everything is analysed to be optimised to its full potential. Moreover, the attention to the requirements that their logistics partners need to have to truly add value in their supply chain, is increased. One of the biggest examples of this trend, is that businesses are becoming more interested in how they can optimise inland transportation, improving the connectivity with the rest of their supply chain. But how can this be done? Why would inland be an efficient choice for their supply chain? How can they gain ease from it?

Inland, intermodal, drayage.

There are different terms used to refer to the inland transportation of goods, depending on the scope within the supply chain, combination with other modes of transport and even transportation distance. When looking at a supply chain end-to-end, from the moment raw material is produced all the way until it is delivered to the final consumer, intermodal transportation covers containerized cargo transportation through barge, rail, or truck. On the export side, it encompasses the container transportation from the cargo’s production site (or warehouse) to an ocean terminal, for overseas shipping. Upon arrival at the destination port, intermodal transportation is deployed to move the full container from the port to an inland facility (whether that is a store door location, warehouse or a distribution centre for their key relevant markets) . The term “drayage” is also used in some geographies when referring to short-distance intermodal transportation.

Ocean transportation is characterised by fierce competition, driven by providers with specialised capabilities, investing a tremendous amount of time and money to establish their networks and presence. In the case of inland networks, financially and operationally, competition is tenfold with countless providers. Historically, the inland transportation market has been extremely competitive and continues to be so, where in order to stand out from the rest, the offer needs to be of real value – truly connecting and integrating supply chains with efficiency.

How is inland transportation contributing to efficiency?

Inland transportation is most efficient when everything flows perfectly undisturbed. When it is not a hassle. “When a business does not need to spend unnecessary time and cost on their inland transportation, that is where you know it can be called efficient for them ” – confirms Martin Patrick Debois, Product & Regional DTS Lead at Maersk. Using one provider that can take care of the entire container transportation and eliminate the handovers throughout their supply chain, supporting you through all the complexities. This ease is quite clear in good times when everything flows without challenges, but it is even more important during difficult times, where delays and contingencies put the whole supply chain flow at risk. Intermodal services increase the connectivity between ocean and inland transportation, eliminating the amount of handover points between parties involved with the end-to-end journey of container transportation. The efficiencies can be perceived all the all from procurement activities to invoice payment, passing by transport planning and execution. With less time and energy spent on non-value-added coordination, businesses can focus on the development and growth of their core activities” says Fernanda Veiga, Senior Commercial Enablement Manager at Maersk.

Inland transportation can bring ease

Logistics can be very complex for businesses. Starting with the procurement activities, where they need to find multiple providers for their supply chain: one for inland transportation, one for ocean, one for air, rail, and so on. They need to go into the whole contracting process, evaluate the price, make sure the vendors are aligned with their strategic criteria (e.g., is it a sustainable provider? Are they in line with procurement requirements?), receive multiple invoices to manage, deal with multiple customs requirements, etc. All of this takes time and energy that should be devoted to their core business. If brands instead combine their inland and ocean transportation into one, supported by one integrated provider, everything needs to be done just once, with one point of contact, drastically removing the number of related invoices – resulting in unmatched efficiency. This is particularly effective when done with an integrated provider that possesses a large global network, servicing many countries, that has suppliers available in all locations ready to follow any strategic change that might happen (e.g., COVID-19, disruptions) and offers expertise on possible optimisation all over the world for dry, refrigerated cargo, project logistics, dangerous cargo and more.

Finding the right partner for efficient inland transportation

Efficiency in inland transportation lies in achieved simplicity. Today, businesses are investing in integrated logistics between air, rail or inland, and they can see that connecting their entire supply chain with trusted providers that can simplify their business. To gain a good balance and a headache-free flow, a brand should therefore look for a provider that can take accountability, reduce complexity and that has their back during crises. That is where a logistics supplier becomes a partner that can efficiently support all their transportation combined, leaving companies to focus on their growth and success.