Having hundreds of Airports in one country is not going to improve the infrastructure. Rather, it is the multi-modal connectivity which matters the most. Most importantly, connecting different modes of transport is the key to building a robust ecosystem for the movement of cargo. Unlikely, the focus is on creating single-modal hubs rather than creating multi-modal connectivity which holds great potential in the future, with 60% of cargo moving between ocean and air.
Why Multi-Modal Connectivity?
Containerisation significantly improved the time performance, frequency and flexibility of Maritime transportation, enabling to support global supply chains. This infers that Maritime trade can compete more effectively with air transport, but also that both transport systems can reach a level of integration if they collaborate. The integration of Port and Airport terminals takes place over two dimensions; substitution where either a Maritime or an air transport segment is substituted for the other, and complementarity where they jointly support new forms of distribution.
Shippers could also be benefiting from low Maritime cargo rates because of an abundant capacity and in light of growing competition inciting them to look at more cost-effective shipping options. Multi-modal connectivity in any country will cut down Logistics costs and improve the competitiveness of local manufacturing. This combination of a global network and regional proximity to the customer is the key to providing the best possible quality of services.
Case in point
Due to its strategic location, Dubai has emerged in recent years as the world’s leading hub for sea/air cargo Logistics. Of the 2.5 million tons of cargo that Dubai’s Airports (Dubai International Airport and Al Maktoum International,) handled in 2020, 10% was related to sea/air Logistics. Since Dubai is the world’s 3rd busiest Airport in terms of passengers (86.4 million handled in 2019), it is highly connected to the global air transport network, particularly European and American markets that represent a large share of air cargo demand.
On an Asia/Europe trade route, the average transit time is about 1 week if air cargo is used and 4 weeks if the cargo is carried on regular container shipping services. This transit time is reflective of the delays resulting from bringing and consolidating the cargo at an Airport and booking available belly-hold carrying capacity.
Sea/air services using Dubai can connect Asia to Europe in about 2 weeks, which represents a value proposition for time-sensitive, but intermediate-value goods such as fashion products, electronics and car parts. Heavy cargo such as those related to the oil industry can also be airlifted to difficult-to-reach places in the Middle East and Africa. Within Dubai, sea-to-air transit can be done in about 8 hours, but the goal is to reduce this time to 4 hours by improving customs procedures. In particular, the transfer between a shipping manifest and an air cargo manifest can be problematic since both industries rely extensively on paper documentation. Although there is efficient sea-to-air connectivity, this connectivity is not yet seamless. Documentation for similar nature at both modes can be avoided to save more time for cargoes to be processed.
Role of Cargo Community System in Ensuring Multi-Modal Connectivity
Integrated Cargo Community Systems enable electronic communications amongst Ports, Airports, Customs, Freight Forwarders, Shipping Lines, Airlines, Transporters and other supply chain stakeholders. Exchange of electronic documents like e-Manifest at the Port and Airport can be facilitated by Customs through this single window. Custom clearance data can be reused for a single source of inbound and outbound cargo movement.
Benefits of Multi-Modal Connectivity with Cargo Community System
- Cost Reduction: Freight rates in Airports across the world could vary from country to country. In such cases, switching to Maritime at transhipment destinations could reduce the cost significantly. Cargo Community System serves as the electronic trade facilitator here in identifying a shipping carrier or an airline carrier accordingly.
- Time-Saving: Rather than waiting for the next flight, it is always good to be on the go. Rapidly moving it to the seaport and transporting it through Maritime will enable efficiency.
- Reduced congestion: Reduced truck wait times at the terminal with slot booking and advance shipment information to the cargo handler. Also reduced physical queues at Airport counters. Cargo Community System comes with digital applications and tools to identify the right channel.
- Improved efficiency: Faster processing of cargo with minimal manual documentation. Online payments to expedite shipment delivery. Real-time updates of various milestones through the Mobile Application. Optimal resource and warehouse planning with advance shipment notice.
- Sustainability and Compliance: Meets the sustainability goals of the Airport with paperless trade. Reduces carbon footprint by 75%.
- Visibility and Transparency: Business continuity even during pandemics with minimal touchpoints. Data available brings in the required business foresight with intelligence.
Wrap up
Precisely, multi-modal connectivity is the way ahead for the Logistics industry. While the entire scenario is shaping up currently, sooner or later an exodus will appear wherein the entire industry will have no choice left but to choose multi-modal transportation.
While some disagree by stating the limitations of multi-modal connectivity, it has to be remembered that with digitisation in place, all such challenges can be overcome seamlessly.
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