Intermodal shipping — the practice of using multiple modes of transportation such as rail, truck, and ocean to move freight — can unlock significant cost savings for businesses with complex supply chains. However, the benefits of this approach can quickly erode if companies don’t properly manage intermodal invoicing, which often involves multiple carriers, varied rate structures, and differing service terms. Understanding how to navigate this complexity is key to maintaining cost-effective logistics.
Intermodal invoicing challenges
One of the challenges of intermodal invoicing lies in the variety of rate structures that apply to different transportation modes. Each mode comes with its own pricing model, including specific accessorial fees, fuel surcharges, and tariff structures. For example, rail carriers may apply a mileage-based pricing model, while ocean carriers often charge by container volume or weight. This creates a problem for shippers trying to reconcile all these charges on a single invoice.
Without proper oversight, these different pricing methods can lead to confusion and hidden costs, especially when fees are bundled without transparency. Freight invoices may include accessorial charges such as demurrage, detention, or per diem fees, each specific to the mode of transportation and often applied retroactively. By the time these charges are identified, they can have a substantial impact on your bottom line.
Visibility and accuracy in invoicing
To effectively manage intermodal invoicing, businesses must ensure complete visibility into every leg of the journey. This requires detailed documentation and real-time tracking of freight as it moves through each mode. A key component of this visibility is verifying that the agreed-upon rates are applied consistently across all carriers involved. If a truckload leg is billed at a rate different from what was quoted, it can disrupt your entire cost model for the shipment.
Freight audit systems that integrate with a transportation management system (TMS) like nVision Global’s Impact TMS can provide the necessary visibility into every step of the shipment. These systems allow you to compare quoted versus actual charges in real time, giving you the power to dispute discrepancies before they escalate into costly surprises. Moreover, with automated tracking, you can monitor how long your freight sits at intermodal hubs or ports, which is crucial for managing charges like demurrage or detention.
Reducing costs with mode optimization
Another strategy for intermodal invoicing is mode optimization. Not all modes of transport are equal when it comes to cost efficiency. Rail, for instance, tends to be more economical than trucking over long distances, especially for high-volume or heavy shipments. However, rail might not be the best option for time-sensitive freight, where the speed and flexibility of trucking could be more appropriate.
The key is understanding the trade-offs between different modes and using data analytics to optimize your shipments. By analyzing historical shipment data, companies can identify the most cost-effective mix of modes for specific lanes and cargo types.
Mode optimization also extends to negotiating better rates with carriers. Leveraging data from past intermodal shipments can provide insights into where inefficiencies lie — whether in container dwell times, route choices, or the application of accessorial fees. Businesses that identify these patterns can negotiate more favorable contracts to reduce costs and improve service consistency.
Streamlining the invoice process
Manual intermodal invoicing can result in errors and inefficiencies. Instead, companies should consider automation tools that streamline the invoicing process. Automating tasks such as rate validation, charge reconciliation, and invoice approval guarantees all charges are correct and consistent with contracted rates. This not only minimizes the risk of overbilling but also frees up valuable resources that would otherwise be dedicated to manual invoice reviews.
Automating the intermodal invoicing process can even enhance collaboration between carriers and shippers. With real-time data sharing and invoicing updates, both parties can achieve transparency and accuracy throughout the shipment lifecycle, reducing the likelihood of billing disputes.
Improving operations
Intermodal shipping offers substantial cost savings but only when the complexities of invoicing are properly managed. By gaining visibility across all transportation modes, optimizing mode selection through data analytics, and automating the invoicing process, businesses can avoid hidden costs and improve their logistics operations.