Multimodal transportation, known in the world as multimodal transportation, is a method in which a combination of several modes of transportation or means of transportation such as ships, trains, trucks and airplanes is used to transport and ship goods. The basic feature of this type of transportation is that although there are different methods for transporting and transferring goods, the transportation of goods is carried out through contracts arranged by transportation companies, which means that transportation companies are primarily responsible for the stages of transporting goods using multimodal transportation. Many combined transportation and logistics companies also provide services to their customers in addition to transportation, such as moving shipments from containers to wagons or trucks, clearances, customs formalities or even warehousing of goods, etc., in which cases customers can entrust their goods to these companies without worrying about transportation.

For example, multimodal transportation companies in Iran are responsible for providing door-to-door services for containerized shipments by sea, rail, or road, and provide other services in this manner, such as multimodal transportation services to all domestic customs points in the country, as well as foreign transit to CIS member countries (Turkmenistan, Uzbekistan, Tajikistan, Kazakhstan, Russia, Kyrgyzstan, Azerbaijan, Armenia, Belarus, Moldova), Iraq, Afghanistan, and other countries.

Multimodal transportation shows how companies can find new value in their supply chains and increase efficiency without significantly increasing the costs they incur. This is important at a time when most customers have paid more attention to reducing shipping costs after global disruptions such as pandemics, wars, etc. One way to do this is to integrate multimodal transportation capabilities into their core freight strategy. Logistics companies need to know exactly what the logistics of this form of transportation are and which transportation method or combination offers them the best benefits.

First group:

This group includes large industrial owners and shippers in the oil, iron and steel, chemical, paper and forest products, automotive, food industries, etc. Their cargo is equal to the full capacity of the ship and there is a need for regular and continuous transportation. Therefore, this group either owns the ship itself and uses its fleet for transportation or takes over the management of the ship through long-term lease. This method of shipping is called industrial shipping.

It is estimated that about half of the tanker fleet is either owned by oil companies or is on long-term charter by them. And in the dry bulk market, about 30% of the available ship capacity is owned by large industrial companies. Assuming that these private fleets have the same productivity as the rest of the fleet, we conclude that about 1600 to 2000 million tons of cargo are carried by the industries themselves, which means that this amount of cargo is outside the free shipping market.

The second group:
Bulk cargo owners and shippers who have a large cargo but whose need for transportation is irregular or even regular and continuous but does not justify owning a private fleet. The cargo owners in this market are basically small and medium-sized commercial and industrial groups and owners of seasonal goods such as grains, fertilizers, coal, timber or other dry or liquid bulk goods such as oil, ore, etc. These types of goods are transported through tramp shipping.

The size of this market is large. The entire liquid or dry bulk market, other than that carried by industrial shipping, is in the tramp shipping market. In addition, a portion of miscellaneous (general) cargo is also moved by tramp shipping. It is impossible to say exactly how many tons of cargo belong to this market (tramp shipping). However, we can estimate that this cargo volume constitutes approximately 45% of the total cargo transported in the world.

Group 3:
This group is made up of owners of goods and packages whose cargo is much smaller than the space available in the ship's holds, whether they require regular or irregular transportation. These types of goods are called general cargo or general cargo in maritime transport. Shippers of these goods must use liner shipping services - regular lines. Miscellaneous goods transported by liner services constitute 10-15% of the total world maritime trade and approximately 800-1000 million tons of cargo in each of the recent years. Most of the ships used in liner shipping are general cargo ships (carrying miscellaneous goods), ro-ro ships (Roll On-Roll Off) and container ships. In the maritime transport industry, the shipping market is a competitive market. Because a large number of shipowners and shippers can freely enter or exit this market. Tramp shipping – irregular lines – and liner – regular lines – are such markets, although the level or degree of freedom in its true sense is different between these two markets. But unlike these two shipping markets, industrial shipping does not constitute such a game market. Because in this type of shipping, the shippers or cargo owners are the same as the ship owners. Our discussion here will focus on liner and tramp shipping.

The above analysis is based on the demand for maritime transport. That is, the characteristics of maritime transport demand require occasional (temporary) tramp shipping services for large and bulky cargoes, and regular and continuous liner shipping services for packages and small cargoes. We will now take a closer look at tramp and liner shipping from the supply side of maritime transport.

The status of container transport in the world
Containerization is a function of two important trends: economic globalization and commercialization of transport. The image below shows the status of global trade in goods in terms of the current value of exports in trillions of dollars (blue line) and trade volume as a percentage of world GDP (green line) during the years 1960 to 2019. In 1977 (2 years before the start of the Islamic Revolution), the amount of global exports exceeded one trillion dollars and reached $16 trillion in 2008. After the global economic crisis in 2018, this amount has reached close to $20 trillion. During the same period, the ratio of global trade volume (total imports and exports) to total world GDP has increased from about 30 percent in 1977 to more than 52 percent in 2008. This growing trend has been fully correlated with the increase in the volume of goods moved by global transport (especially containerized). Of course, during each stage: sourcing raw materials, processing them, industrial manufacturing, assembly, and finally final consumption, it is possible that more than one shipment may occur.

As shown in the chart above, the relevant trend has taken place in the form of three periods: regular and slow growth of world trade until 1980, rapid growth in the period 1980-2000, accelerated growth and reaching the initial peak in the period 2000-2008. Of course, after the last period, a serious imbalance of foreign trade was created in some countries (in favor of their exports or imports). China's entry into the World Trade Organization at the end of 2001 had a significant impact on the increase in the volume of global trade. In any case, over the past four decades, the realization of such a huge growth in world trade and, consequently, transportation (which has mostly been in the form of container transportation), has not been well reflected in the transportation of Iran (especially rail transportation).

Trade imbalance, empty containers and freight tariffs
North America's trade with East Asian countries (especially Japan, South Korea and China) has long had a large imbalance. In 1995, trade between the two regions was almost equal. But first in 2006 and then in 2018, the imbalance reached about 2.8 times. This amount of inequality has had a special impact on the container system (in terms of the number of full and empty containers and the related costs). So much so that experts consider this trade imbalance and the decline in the parity of some currencies against the US dollar to be one of the reasons for the East Asian financial crisis in 1997.

In the chart below, the light blue column shows the volume of imports and the dark blue column shows the volume of exports (from/to) East Asia in million TEUs. The dashed line shows the ratio of imports to exports for this group of countries. Due to the huge increase in trade volumes in the 1990s and the creation of economies of scale, the cost of shipping containers from Asia to the United States was halved. However, due to trade imbalances and the accumulation of empty containers in North America, these reductions in shipping costs and tariffs have been passed on to American and Canadian traders. Given the global economic structure, it does not seem likely that such inequalities in trade in goods will disappear anytime soon.

The state of container traffic in different periods almost reflects the inequality of trade at the global level. East Asia’s trade with Europe is also highly unbalanced. The return of empty containers imposes 15 to 20 percent on the operating costs of international shipping. In the trade between the two sides of the Pacific Ocean, the cost of each TEU going east (i.e. America) is generally higher than going west (i.e. Asia). Therefore, cargo planning becomes a complicated task for container shipping companies. The same is true for East Asia’s trade with Europe. Thus, trade inequality is reflected not only in the physical flow of containers, but also in the amount of freight tariffs. In parallel with the increase in world trade and the improvement of the physical flow of containers, the number of empty containers is constantly increasing, which means wider docks at terminals and larger ships. The growth of trade inequality between East Asian countries with North American and European countries is well reflected in the chart below.

As can be seen in the chart above, between 1995 and 2018, East Asia’s exports to North America increased from 4 to 20.9 million TEU (an average annual growth rate of 7.13 percent) and exports to Europe increased from 2.4 to 17.4 million TEU (an average annual growth rate of 8.61 percent). Meanwhile, during the same period, East Asia’s imports from North America increased from 3.5 to 7.4 million TEU (an average annual growth rate of 3.17 percent) and imports from Europe increased from 2 to 7 million TEU (an average annual growth rate of 5.4 percent). This trade imbalance has led to a continuous imbalance in the direction of intercontinental full and empty container traffic over the years.

According to data from the U.S. Census Bureau, the U.S. trade imbalance in goods over the period 1992-2020 is well illustrated in the figure below. The brown, green, and blue lines represent the trade balance in goods, services, and total (goods and services) in billions of dollars, respectively. While the trade balance in goods has been steadily declining, the trade balance in services (especially new technologies) has been on the rise, except for the last few years. However, it seems that the total trade balance (goods and services) of the United States is less affected by the size of the trade balance in services and is highly correlated with the size of the trade balance in goods.

Important points in this regard:

The highest improvement in the trade balance was achieved during the severe economic recession of 2008-2009 (due to a sharp decline in imports).
The worst period of trade imbalance in goods (86.36) and total goods and services (68.14) billion dollars) occurred in November 2020. In this month, even the decline in the trade balance in services reached the level of 2012.
In the same month, imports of consumer goods amounted to 61.2 billion dollars and imports from China amounted to 44.9 billion dollars. This is a confirmation of the ineffectiveness of the trade war policy (based on increasing tariffs on imported goods) and the adoption of an economic protectionist strategy in recent years.

The direction of change towards containerization of transport
has been moving towards containerization of transport, logistics and supply chains for more than half a century. First, we will review the important characteristics of containerization of transport that have made it so popular.

Characteristics of containerization of transportation
Although the container itself was the product of a global need to facilitate transportation, after its standardization by the ISO organization, all means of transportation, including airplanes, ships, trains and trailers, as well as docks, warehouses and loading and unloading equipment, have changed their shape and technology in proportion to the size and weight of containers. On the other hand, with the emergence of containers in the world, vehicle manufacturers (especially ships) have tended to become larger and heavier. This trend has also caused port managers around the world to deepen basins and increase the length and width of piers. These coordinated international measures, in addition to increasing speed and reducing energy consumption, have significantly reduced transportation costs in the supply chain.

The chart below shows four factors: throughput (blue line) and shipping volume (brown line), as well as the number of full and empty containers (dark and light blue columns, respectively) in million TEUs from 1980 to 2017. As can be seen, except for the global trade crisis in 2009, throughput and shipping volume have been on the rise in all other years, and this trend is expected to continue in the coming years, except for 2020. Based on this outlook, huge investments will be made in increasing the capacity of containerized vehicles (ships, trains, trailers and aircraft), expanding the capacity of infrastructure (ports, airports and land roads) to accept such vehicles, and, along with them, improving the relevant software systems.

Benefits and Challenges of Containerization
Containerization (as shown in the image below) has benefits such as:

Reduction of transportation costs (due to lower transportation tariffs due to economies of scale, lower insurance rates due to reduced theft and damage to goods, acceptance of containers as the minimum unit for exports and imports to/from world markets).
Reduction of logistics costs (due to lower warehousing, packaging and inventory accounting costs, acceleration of asset turnover).
Improvement of service levels (due to reliability of scheduling, acceleration of goods movement and return).

Thus, containerization has led to an increase in the level of combined transport and a major leap in transportation.

A- Advantages of containerized transportation
Standardization: Due to the application of the ISO global standard on the size of various containers, they can be used in all parts of the world in the same way. The harmonization of infrastructure and vehicle specifications allows all modes of transport worldwide to be able to move containers easily. In fact, the globalization of standards is the main advantage of containerization. Because it allows easy access to various distribution systems and minimizes investment risk in all modes of transport and terminals.
Ease of use: Containers can be used to transport a wide range of goods such as bulk materials (coal and grains), industrial products, perishable foods and frozen cargoes and vehicles. Tanker containers can also be used to transport liquids (petroleum and chemical products). In 2018, 2.9 million TEUs of refrigerated containers transported about 70 percent of this type of goods.
The number on the container and its size have made it possible to manage the transport not based on the goods, but on the container unit. At the entrance and exit gates of the terminals, the authorized representative and the owner of the goods are identified in a fully automated manner. Computerized management systems reduce the waiting time and make it possible to determine the location of containers at any time. In this way, containers are allocated according to the priority of the destination and the carrying capacity. Transport companies, in contact with those responsible for moving containers, reserve space for their transport on trains, planes and ships. In this way, the container has become the main unit of goods production, transportation and distribution. The concept of container numbering is shown in the image below.

Economies of scale: Containerized transportation of bulk goods has sometimes reduced costs by up to 20 times. Before the containerization of transportation, the cost of transporting such goods by ship alone accounted for 5 to 10 percent of the retail price, which has subsequently been reduced to 1.5 percent. One of the main factors in this reduction has been the possibility of creating greater speed and ease of movement of goods by container. Another factor has been the ability to carry a large volume of containers by ships, which has brought economies of scale. So that the largest container ships in 1996 were about 4,000 TEU, in 2006 about 12,000 TEU, and in 2013 about 18,000 TEU. A 5,000 TEU ship has about half the operating costs of a 2,500 TEU ship. Thus, shipping with a 12,000 TEU ship is about 20 percent less economical than a 4,000 TEU ship.
High speed: Since containerization has increased the speed of movement, the efficiency of transportation has increased accordingly. On the one hand, container ships have a cargo capacity of 3 to 6 times that of conventional ships. On the other hand, the speed of cargo movement has also increased. For example, a crane can perform an average of 30 unloading or loading movements per hour. Thus, unloading or loading goods along the route, which took three weeks in the 1960s, is now done within 24 hours. On the other hand, unloading 1,000 TEUs takes about 10 to 20 hours, while for bulk goods of the same size, it takes about 70 to 100 hours.
In addition, larger container ships have more cranes for unloading or loading, and as a result, they spend more time at sea. With the help of information from the Automatic Identification Service (AIS), a container ship spends only 40 percent of its time in ports, which means longer voyages and increased revenue. Therefore, the productivity of container ships with an average speed of 19 knots (compared to conventional ships with an average speed of 14 knots) is 36 percent higher and the total voyage time is 80 percent shorter.

Storage and safety: One of the important characteristics of the container is that it is considered a type of storage. It is resistant to impact and weather conditions and prevents damage to the goods. For this reason, the type of packaging of containerized goods is simpler, smaller and cheaper. In addition, due to these features, the costs of transporting goods are also lower. Considering that the containers are fastened together and their sufficient strength, the containers can be stacked on top of each other in trains, ships and docks. The maximum height of stacking containers is up to 192 tons. Thus, considering the average weight of 30 tons per container, 6 of them can be stacked on top of each other. However, due to limitations due to the capacity of the cranes, stacking of 3 to 4 full containers or 6 empty containers (or 5 containers with a combination of them) is allowed. In addition, since no one except at the origin and destination knows the contents of the container, theft of valuable goods has decreased and insurance has become cheaper.
B- Challenges related to
site limitations: Containers occupy a relatively large area of ​​the terminals. To unload and load ships with a capacity of 5,000 TEU, at least 12 hectares of land are required. Conventional ports do not have such a large area. In addition, large container ships have deep drafts and therefore require 14 to 16 meters deep basins.
Infrastructure, equipment and stacking costs: Containerization requires large gantry cranes (about $4 to $6 million), dock equipment, and a port road or rail network. Container stacking should be planned according to their unloading priorities so that subsequent movements are not required.
Empty container: Almost half of the container's life (10 to 15 years) is spent empty, i.e. without earning any income, and is therefore simply a cost. An empty container takes up as much vehicle and dock space as a full container. Due to the diversity of cargo origins and destinations, there is usually an imbalance in the distribution of containers. Approximately 2.5 million TEUs of empty containers are stored in the world's docks, which is about 20% of the operating efficiency of shipping lines.
Illicit trade: Due to the confidentiality of the container's contents, counterfeit and smuggled goods, drugs and weapons may also be transported by them. Currently, 2 to 5% of the world's containers (especially in less developed countries) are controlled by customs inspectors in the form of personal observation. The need for human presence due to the time-consuming nature of the waiting containers

The first step to understanding multimodal transportation is to understand what it means. Multimodal transportation uses multiple modes of transportation, all coordinated under a single shipping company. This approach helps eliminate other intermediaries involved in coordination and other modes of transportation that are outsourced each time. As a result, shippers can save time, money, labor, and other resources.

The international transport profession consists of many sub-disciplines that examine its various aspects such as the dimensions of the goods, laws and regulations, warehousing, technology and packaging that enable the creation of suitable conditions for transport by vehicles. The transport sector
is one of the main components of the supply chain in developed societies and is considered one of the factors affecting the abundance of micro and macroeconomic indicators of the country. The balanced development of the transport sector in all its forms and its proper exploitation as a prerequisite for the development of the sectors as a whole will lead to increased national security and will also pave the way for political and social development.

Multimodal or combined transport is one of the examples of expanding the infrastructure needed to develop foreign trade services and international and domestic transit. Combined transport in each country is a medium of trade between the industries of that country, which sets the wheel of production in motion and provides the basis for the development of business and the economy in society. If we have a suitable basis for multimodal transport, we can use ships on routes that are shortened by using the maritime fleet, railways on long routes where possible, and road transport on short and special routes.

In order to be aware of the government's activity in the development of combined transportation and to pay attention to this new cargo transportation system in international trade and economic relations, given the increasing development of container transportation in the world and in Iran, it is necessary and essential to use appropriate measures to be able to move a large number of goods quickly, especially in ports; we need to create facilities to facilitate unloading and loading and customs formalities.

One of the issues that is useful for the development of this profession is holding meetings and consensus of responsible persons in order to create extensive research, collect documentation and implementation proposals. The use of appropriate infrastructure, advanced facilities in loading and unloading areas and up-to-date technology are among the factors for the development of the combined transport industry.

The transportation of goods is generally divided into four categories: sea, air, land (road) and rail. Since there is no specific internationally binding convention on the multimodal transport of goods, it is not easy to determine which laws and regulations are applicable or which are the governing law in a legal claim.

Although international transport laws apply specifically to each of the logistics methods of transportation, some of these conventions provide specific provisions for multimodal transport, so it is conceivable that in certain circumstances one of these unimodal transport conventions could be considered to govern the dispute in question.

One of the strengths of Sabal Logistics Company is the use of specialists who have the appropriate knowledge in managing this method, so this is considered one of the clear advantages of this company.

Features
Multimodal transportation is one of the newest and most complex methods of transporting goods in recent decades, which has led to many developments in the field of global business development. Among the most important features of combined transportation are the increase in the speed and time of transporting goods, cost-effectiveness and cost reduction, high reliability, regular and principled contracts, and the absence of restrictions on the methods of transporting cargo to different parts of the world via ship, wagon, truck, and airplane.

Advantages
Among the main advantages of multimodal transportation are the simplicity of the contract and the flexibility of the cargo or shipment, which distinguishes it from other types of transportation methods. Multimodal or multimodal transportation is very effective for businesses and companies that constantly transport large amounts of cargo. And the main reason why these businesses prefer this method of transporting cargo and goods is less time and effort. This method of transportation also has other advantages, the most important of which are the following.

Making transportation economical: Transportation and transfer of cargo or goods through conventional methods that include various contracts and insurances involve a lot of costs. In multimodal transportation methods, coordination for the transfer of cargo or goods is much easier, and the costs related to it are much lower than in conventional methods. For example, this company is currently active in the transportation of passenger cars from the origin of the UAE to the destinations of Kazakhstan and Tajikistan, since the shipments are transported from the UAE to the port of Lengeh by ship (Landy Craft), from the port of Lengeh to Sarakhs by truck, and from Sarakhs to the destination by wagon, and for each mode, specific insurance is required for that method, which in total increases the insurance costs. By negotiating with the insurance company and concluding an insurance contract for goods from the origin of the UAE to the destination of Tajikistan and Kazakhstan for all modes of transportation used, this company has provided appropriate insurance coverage at a much lower cost, making this transportation economical.
Facilitation of communication: When using multimodal transportation methods to transport goods, delays, updates, and related interactions are handled through a contract concluded between the company and the owners of the goods, which makes the process of communicating with the owner of the cargo easier.
Fast transportation options: Since the use of wagons or ships to transport cargo or goods faces limitations and the time of transportation of goods may be delayed, multimodal transportation allows the owners of the goods to send their cargo to their destination in a shorter time, and this is one of the main services that freight transportation companies offer to their customers. In addition to accelerating the process of transporting and transferring cargo, these companies provide services such as general warehousing services and logistics services to their customers.
Use of dry ports: By using combined transportation, this possibility can be provided in dry ports for cheap use of these systems and economic growth. In this regard, in accordance with the prepared guidelines, an attempt has been made to coordinate with organizations related to multimodal transportation, such as the Road Administration and Transportation Organization, the Ports and Maritime Organization, the Customs of the Islamic Republic of Iran, the Iranian Railways Company, and the like, so that they can become the pillars for deciding how a dry port can advance and develop combined transportation. In our country, according to the Fifth Plan Law and the issue of increasing the capacity and efficiency of the current situation, the possibility of developing combined transportation has been provided, and it is one of the government's duties to attract private sector investment.
 

Reasons for the importance of this type of transportation:
Goods owners are always looking for ways to transport their goods that are cost-effective and can send the goods to the desired destination in a short time. Multimodal transportation companies provide customers with the best facilities for transporting and transporting goods by combining different transportation methods, eliminating the disadvantages of public transportation methods, and using several different methods. Multimodal or multipurpose transportation is important in that it reduces the relevant costs and accelerates the process of transporting goods to different points, and also increases the efficiency of transportation systems.

Reasons for the Success of Multimodal Transportation
Multimodal transportation can reduce most transportation costs and reduce the separate costs associated with transporting goods, such as freight costs. This mode of transportation reduces the need to outsource to multiple companies and creates volume discounts and guaranteed capacity. As a result, transportation companies are likely to offer more competitive rates and the transportation of goods is prioritized.
As Jeff Berman, a successful logistics manager, points out:

“The economy is fundamentally dependent on transportation, both domestic and international, through ports, rail, and road, which provides a gateway to the global market for American farmers, manufacturers, and consumers. In the United States, the freight network moves 49 million tons of goods daily, valued at more than $52.5 billion.”

Developed countries usually provide tax incentives or benefits to develop multimodal transport because they consider it a platform for their development. This method also brings lower carbon costs for transportation. Therefore, it provides many benefits for both companies and society.