The Economic Benefit of Intermodal Transportation - Essay Example

The Economic Benefit of Intermodal Transportation Introduction Intermodal transportation, by definition, refers to theprocess of transporting passengers and freight through an interconnected system of networks that combines various transportation modes, where all the components are linked and as such, efficiently combined (Meisel, Kirschstein & Bierwirth, 2013). The increasing importance of intermodal transportation stems from the fact that the modern business environment has become competitive and thus, the need to develop an integrated system for transportation because the contemporary economy is interdependent because of globalization. Technology is responsible for the improved global supply chains and the increased advancement in the technological sector is also marked with the improved as well as the most effective intermodal transportation framework (Chiambaretto & Decker, 2012). However, for the businesses with limited intermodal experience, moving forward to adopting this mode of transportation can be quite a challenge. Therefore, there is the need to highlight some of the many benefits of an integrated system of transportation or intermodal transportation and as such, offer to discuss how it can help businesses to improve their supply chains. Briefly, the aim of this piece is to expound on the thesis statement that claims that in todays transportation industry, intermodal transport has many advantages, and as technology continues to improve, the future of supply chains is becoming advanced thus the need to prioritize intelligent transportation. One of the benefits that business can boast of when using an intermodal approach to transportation is that the system is more cost-effective (Meisel, Kirschstein & Bierwirth, 2013). Taking cost into consideration, intermodal transportation is associated with high flexibility. The implication is that intermodal rates have been lowered in the recent years, considering that the fuel expenses that are related to the drayage have also been skyrocketed. For instance, when transporting goods to destinations exceeding 800 miles, it is cheaper through the intermodal transport as compared to road trucking (Chiambaretto & Decker, 2012). The current economy is yet to recover from the effects of the Great Recession, and for production to pick up, the transportation industry must prepare for the influx in transport. On the other hand, there is the driver shortage coupled with the increased fuel prices, implying that trucks alone are never sufficient to handle the transportation needs of a nation. As the trend continues, shippers are looking for the best alternatives and intermodal transportation has been identified as the best and affordable alternative (Chiambaretto & Decker, 2012). Conversely, a load traveling through rail requires diesel fuel or diesel to move compared to the one being transported through a truck cab. For instance, a train has the capacity of moving freight to 450 miles on a gallon of fuel. In this case, the there is efficiency in energy consumption and also, the reduction in the carbon footprint (Craig, Blanco & Sheffi, 2013). Throughout a company’s supply chain, an intermodal transportation provides the benefit of cost-control translating to additional competitive advantage (Meisel, Kirschstein & Bierwirth, 2013). The implication is that there is the reliability in service delivery, providing a company with the opportunity to manage its supply chains and this translates to the reduction in the inventory costs. In return, companies become more competitive to match the needs and the expectations of the modern consumers who are price-conscious because such is the characteristic of the modern economic environment (Chiambaretto & Decker, 2012). Intermodal transportation transport is advantages owing to the greater extent of environmental conversation and protection associated with the approach thus considered to be environmentally friendly (Chiambaretto & Decker, 2012). For instance, four trucks loaded with 40, 000 pounds each going for 3,000 miles are considered to produce carbon emissions of about 17.4 tons while on the contrary, the same number of trucks being shipped through rail car can only produce 7 tons of carbon emissions (Craig, Blanco & Sheffi, 2013). In this case, intermodal transportation is associated with lesser emissions and as such, is the best approach to addressing climate change. On the other hand, modern businesses prefer supply chains that have put in incentives for protecting and conserving environment because it has become a social obligation or responsibility through new concepts like Corporate Social Responsibility (Craig, Blanco & Sheffi, 2013). The implication is that environmental protection has become one of the factors that organizations look for before choosing their supply chains and as such, modern businesses believe that environmental conservation is the new way of achieving competitive advantage. Therefore, an intermodal transportation is not only meant to be environmental friendly but this environmental friendliness is the basis for achieving competitive; thus it increases an organization’s competitiveness in the modern business environment. Intermodal transportation is also associated with high degree of efficiency because shipping through an intermodal system saves time, which translates to saving monetary expenses (Meisel, Kirschstein & Bierwirth, 2013). For instance, the drayage transportation is faced with many challenges including traffic patterns, as well as the disruptive weigh stations, but the intermodal transportation is faced with fewer delays and distractions. In fact, the users of intermodal transportation agree that the use of this approach to transportation offers on-time services (Chiambaretto & Decker, 2012). In fact, the system can compete with the heavy truck transportation and still able to provide better services. Though intermodal service may take more than a day in the transportation corridors, railroads address challenge by providing expedited services to fill the gaps (Meisel, Kirschstein & Bierwirth, 2013). As such, the rails are equally efficient and also faster than road transit in every perspective. Nonetheless, intermodal transportation is associated with high scalability because, during the peak seasons, companies are always limited to the extent by which they can scale their logistical operations (Chiambaretto & Decker, 2012). However, the reverse is the case with the intermodal transportation because a single can move a load that can be carried by almost 280 trucks. In this case, companies can move almost a whole fleet of trucks on one rail. An intermodal transportation system is safer because shipping through rail is always safer as compared to other transportation methods (Meisel, Kirschstein & Bierwirth, 2013). For instance, the railroad police provide the much-needed security through consistent monitoring of the transportation. On the other hand, there is the possibility for the shippers to embed GPS trackers on their rail cars thus decreases the chances of losing the shipments and in this case, GPS enables a company to track the shipment through its own system thus monitors the direction travelled as well as theft conspiracy from the drivers (García et al., 2013). Nonetheless, safety in the intermodal transportation comes about because most of the time is spent in motion. The rail cars are transported bearing in mind that a freight that rest is at a greater risk. Moreover, double stacking also helps because when a container is dropped into the well car, it is impossible to open physically the door (Chiambaretto & Decker, 2012). Though carriers always slow at increasing their capacities and finding it difficult to keep the business running, intermodal transport, especially through railroads have the opportunity to invest heavily so as to increase their market capacities and also build their networks (Meisel, Kirschstein & Bierwirth, 2013). In this case, the intermodal system enables them to add more equipment like trailers, domestic containers, and locomotives. On the other hand, it is possible to hire additional crews though the intermodal network, thus the continual addition of tracks (Chiambaretto & Decker, 2012). Besides, using an integrated intermodal transportation system, thanks to technological advancement, enables companies to bring their intermodal networks online (García et al. 2013). Also, the intermodal networks enable companies to leverage their capabilities with the supply chains to invest more in technology as a way improving efficiency in transportation. Conclusion In a nutshell, there are numerous intermodal advances witnessed in the modern economic climate implying that the supply chains must have a clear understanding of the impact that it has on supply chain management. For instance, the approach is a positive implication for the environment because environmental protection is set to play a major role in supply chain management. Although some shippers are still reluctant to adopt the intermodal system, there is a huge demand for intermodal transportation that businesses are obliged to adopt the system as a way of becoming competitive in a globalized economy. Therefore, companies should focus their efforts on identifying the benefits of adopting an intermodal transportation because it is associated with cost-effectiveness, reliability, environmental protection through reduced carbon emissions, high level of security and the greater scalability. Therefore, there is the need to inspire shippers to use an intermodal transportation model so as to improve the excellence of their supply chains. References Chiambaretto, P., & Decker, C. (2012). Air–rail intermodal agreements: Balancing the competition and environmental effects. Journal of Air Transport Management, 23, 36-40. Craig, A. J., Blanco, E. E., & Sheffi, Y. (2013). Estimating the CO 2 intensity of intermodal freight transportation. Transportation Research Part D: Transport and Environment, 22, 49-53. García, J., Florez, J. E., Torralba, Á., Borrajo, D., López, C. L., García-Olaya, Á., & Sáenz, J. (2013). Combining linear programming and automated planning to solve intermodal transportation problems. European Journal of Operational Research, 227(1), 216-226. Meisel, F., Kirschstein, T., & Bierwirth, C. (2013). Integrated production and intermodal transportation planning in large scale production–distribution-networks. Transportation Research Part E: Logistics and Transportation Review, 60, 62-78. Read More