Intermodal transport

What it means

Intermodal transport means moving goods in a single loading unit, such as a container, swap body or semi-trailer, successively by several modes of transport. When the unit moves between ship, train and truck, the goods themselves are not unpacked or handled; the whole unit is transferred.

It rests on the standard shipping container and uniform unit sizes, which let terminals transfer loads quickly and cheaply. In combined transport most of the route runs by rail or water, and road haulage covers only the short first and last legs to the shipper and the consignee.

Over long distances intermodal transport is often cheaper and has a lower carbon footprint than road-only haulage. The drawbacks are longer and less flexible transit times, dependence on train and ship schedules, and the risk of delays at transhipment terminals.

How it works in practice

Most companies do not organise intermodal transport themselves but use a forwarder under a freight forwarding contract. The forwarder books the carriers and terminal slots and handles customs formalities, and the company pays one price for the whole route from loading to unloading.

The split of costs and risks between seller and buyer is set by the chosen Incoterms rule. For container shipments FCA, CPT or CIP are recommended instead of the maritime rules FOB or CIF, because the goods are handed over at a terminal rather than loaded over the ship's rail.

Each leg may have its own transport document: an ocean bill of lading, a CIM rail consignment note and a CMR note for the road leg. Under a multimodal contract the forwarder issues a single document for the whole route. Freight costs form part of the acquisition cost of goods and, in foreign trade, of the customs value.

What to watch out for

Carrier liability is governed by different conventions with different compensation limits, so after a loss it can be hard to establish on which leg the damage occurred. Valuable goods are best covered by separate cargo insurance that applies along the whole route regardless of mode.

Containers can sit at terminals, and once the free time runs out storage and demurrage charges apply. Plan with a time buffer, track the shipment and arrange customs clearance in good time; otherwise these charges can wipe out the savings compared with road transport.