Intermodal Train Services: a Business Challenge - Article Example

Name Professor Title Date A summary report of a journal article entitled “Intermodal train services: A business challenge and a measure for decarbonisation for logistics service providers” Introduction Climate change has become a key business driver and the determiner for success over the years. In the process, firms have faced strong pressure from business shareholders to decarbonise their actions. A research has indicated that transport and logistics is one of the businesses which heavily contribute climate change especially global warming. A research conducted by World Economic Forum and Accenture found out that transport and that logistics contributes about 25.1 percent of the greenhouse gas (Lammgård 55). As a result, more pressure has been put on transport companies and sector to find sustainable operations to reduce emission of CO2. According to Lammgård, some experts have recommended the use of intermodal road-rail transport as one effective measure in reduction of the emissions of CO2 into the atmosphere (48). Therefore, this paper summarizes the journal article “Intermodal train services: A business challenge and a measure for decarbonisation for logistics service providers”. The article analyzed and presented the experiences large transport and logistics companies undergoes when providing intermodal road-rail services, particularly with regard to the environmental strategies of the company. Literature Review The chapter analyzed literature applicable to the study problem and was directed by specific objectives. As a result, this chapter was divided into three major sub topics which include product transportation and how it impacts the environment, the preferences of the shipper for environmental factors and the intermodal transport, and the demand for the intermodal road-rail services and decarbonisation. In the recent years, product transportation has underwent an increasing interest among EU-27 due to the fact that this sector represents 25.1 percent of the greenhouse gas in which most of the emissions are contributed by the roads (Lammgård 49). In Sweden, the transport share is a bit lower and stands at 20.8 percent. In one spectrum, transport is regarded as one of the factors that help play an important role on labor and product specialization. On the other hand, transport in considered to negatively affect the natural assets globally. Lammgård claimed that in the recent past, logistics and the environment management has attracted attention because of negativity that comes with environmental pollution (49). Due to public concern and the need by the companies to gain competitive advantages, firms now implement environmental strategy through corporate environmentalism so as to realize their objective. Corporate environmentalism strategy ensures that four antecedents such as public concern, competitive advantage, top management commitment and regulatory forces. Lammgård stated that to adopt such strategy, supply chain and logistics play a critical role in the cost and identification of inefficiencies and reduction of carbon print (49). On the hand, Lammgård argued that shippers’ preference has been identified as drivers to adoption of intermodal train. This is because the environmental needs are only going to be fulfilled if the purchasing power of the shippers is high (50). However, a research carried out in the US claimed that intermodal road-rail services are feasible option for the shippers simply if they are both available to receivers and shippers, if the cost and quality are very competitive, and if it is used and accepted by the shippers (Lammgård 50). The article also reviewed various literatures in regards to demand for the intermodal road-rail services and decarbonisation. Lammgård stated that as earlier mentioned, intermodal road-rail freight transport is considered to be environmentally friendly as compared to the other modes of road transport (50). This manifested itself when an electrified railway is being used, and also when the country’s energy production relies heavily on clean sources of energy and not on fossils fuel. A research conducted by the World Economic Forum in 2009 indicates that, in the transportation and logistics section there is an approximate two thousand eight hundred million tonnes of carbon footprints of CO2 that represents 5.5 percent of total, while in the road transport it has more shares that is estimated at 57 percent (Lammgård 51). On the other hand, air freight is better in terms of carbon intensive unlike road when evaluated in the emissions intensify per tones kilometers, while ocean freights and rail are the best in terms of carbon intensive. In general, the literatures found that intermodal road-rail services were a more viable mode of transport based on computer model calculations about Swedish transport. This is an indication that intermodal road-rail services could increase in Sweden in the near future (Lammgård 51) Methodology In the research, Lammgård used interviews particularly, semi-structured one to collect data. The interview focused majorly on the respondents from two major companies, Bring Frigo and the TX Logistics which was contracted to supply Intermodal train services (Lammgård 49). All the respondents interviewed here were engaged on strategic issues which influence intermodal train services and the environmental operations as well as officers representing marketing and sales department. Lammgård carried out 8 interviews with five happening in march of 2010 at the head office of Bring Frigo in Helsingborg (Lammgård 49). The interview involved environmental manager, information manager, the sales manager and an officer at the Bring's hauling department. Another personal interviewed was the expert in IT systems and operated a fleet management System project which was used to analyze environmental data. To ascertain the research, Lammgård conducted two interviews two years later in 2012. Further, Lammgård conducted another long interview with Chief Executive Officer of TX Logistic which was a contracted company for intermodal service in 2012 (49). The preference of the interview in this research shows its advantage to the form of the information which was needed. Use of semi-structured form of interview in this research allowed the researcher to ask for detailed on the effectiveness of Intermodal train services in the process of decarbonisation. It also enabled Lammgård to seek more clarification on the question and capture personal opinion and feeling. Discussion (Findings) The article presented were several findings which were derived from the Bring Frigo case study. However, the overall finding established that the environmental perspective has transformed intermodal train services to a company’s competitive advantage. Lammgård claimed that first attempt to provide an intermodal road-rail transport services was implemented in 2004 (52). The first train began operating between Padborg, Denmark to Verona Italy in 2004 (Lammgård 52). This project was financed partially by EU in what was known as Marco Polo Project. It faced may challenges such as theft of products and even delays in product goods. However, the company underwent a turn-around when the customers started streaming in and the price became competitive after just three year of existence. The research claimed that the new train reduced emissions of CO2 between 40 and 60 percent and the company was awarded in 2009 for contribution towards the reduction of climate change by the Danish Transporters Organization. Another train was launched to operate between Rotterdam and Oslo and attained a massive reduction of CO2 emission of upto 95 percent. Large part of success is attributed to TX Logistics which managed Bring’s intermodal train. In his research, Lammgård also noted that there was a growing demand for environment policy by companies (52). According to Lammgård, the wind of change was also noted in another logistic company Norwegian Mail Company which had set its target of CO2 emission reduction at 30 percent by the end of 2015 (52). On the other hand, shippers also demanded for environmentally friendly transport. The situation is attributed to the fact that shippers are indirectly affected by greenhouse gases into the atmosphere. The customer demand therefore created a competitive advantage to companies like Bring Frigo which had brought intermodal train into operation. Lammgård held that any of the people who were interviewed confirmed rail infrastructure and development as major challenges to operations as they lead to delays and increase of transport in Sweden ((54). Attitude change has also been identified among the stakeholders. The shippers usually perceived intermodal road-rail services as complex task that was not well explained by the companies which provided such services (Lammgård 54). Conclusion The case study of Bring Frigo presents a successful project of reducing emissions of CO2 into the atmosphere. To some great extent, the process has managed to reduce emissions of CO2 by different amounts. The first launch of the intermodal train between Padborg and Verona saw the process reduce emissions of CO2 by 40-60 percent, while the another operation between Rotterdam and Oslo saw the reduction of emissions of CO2 by 95. What followed was the demand for environmental friendly transport both from the companies and shippers. In 2015 Bring Frigo and Norwegian Mail Company had set a target reduction by 30 percent. Beside reduction of emissions of CO2, companies which have adopted such mode of transport have benefited from increase of customers and competitive prices. However, the research claimed adoption of intermodal train service did not escape challenges. Some of the observed challenges include rail infrastructure and negative attitude by some shippers. If the challenges are minimized, intermodal train can be a success in efforts to reducing climate change. Recommendations or Future research Although the research results reported by the article seem to have more success than challenges, more research is highly needed to compare the success. In addition, Lammgård stated that more research will be required to enable market strategist know whether environmental friendly transport demands is growing in future (55). The situation will also enable companies particularly transport and logistics firm to make and develop more effective mode of transport or focus on low cost and ineffective approaches as Bring Frigo did at one point (Lammgård 55). The article also recommended that more survey research is required to know the shippers' preferences concerning for environmentally friendly transport in the last ten years. Lammgård only relied on interviews to conduct research about shippers’ preferences and more longitudinal researches will be needed to observe how patterns are changing in purchase of the transport services and considerations of environmental strategies (55). Work Cited Lammgård, Catrin. Intermodal train services: A business challenge and a measure for decarbonisation for logistics service providers. Research in Transportation Business & Management 5 (2012): 48–56. Print Read More