How Geographical Location Affects Intermodal Transport - Case Study Example

Abstract

Transport is an essential component in logistics because it carries the bulk of logistics cost. However, effective management of transportation cost can give an organization competitive edge in the global market. The aim of this document is to examine how geographical locations influence the intermodal transport. The study has established that the differences in geographical locations necessitate the use of different intermodal transports to enhance efficiency, sustainability, accessibility and reduce the cost of transport. However, geographical locations can have adverse effects on intermodal transport because it can result in delays, increased cost, and reduced efficiency. The document recommends careful selection and implementation of combinations of intermodal transports to achieve the desired objectives with as minimal cost as possible.

Introduction

Transportation of freight plays a crucial role in businesses and the entire global economy because it overcomes the space constraints to move the freight from origin to its destination (Rodrigue, Comtois & Slack, 2013). The selection of the mode of transport is essential because it enhances the competitiveness of the business as it affects the safety, reliability, cost and the quality of services. Freight carriers aim at maximizing revenue by selecting a combination of modes of transports that maximizes the line-haul in their control (Monios, 2014). The geographical location has a significant influence on the selected mode of transport because in some instances it is necessary to connect more different modes (intermodal transport) to get the goods to their destination. Also, the fact that different modes have different cost and capacity implies there is a need for selecting the right combination of modes to ensure to maximize revenue and improve efficiency. The selection of the best combination of modes of transport should aim at not only getting the freight to its destination but should have the least effects on the environment (Kumar, 2014). The geographical location of the activities from the origin to the destination influences the nature, distance, the movement to be recognized. This document examines how the geographical location influences the intermodal transport. The geographical location imposes significant constraints on the transportation structure thus influencing the selection of mode, reliability, the service level, capacity and cost of the transportation.

Overview of Intermodal Transport

Transport involves the movement of goods or people from the point of origin to their destination. Intermodal transport involves the connection of more than one mode to aid a single flow of freight. Transporting goods involves a transport chain or a succession of logistical activities that coordinate modes and terminals such as road transport, maritime and railway systems for linkage along the supply network (Rodrigue, Comtois & Slack, 2013). Terminals such as the rail, port, and the airport facilitate the effective movement of containers from the rails to track and to the ships or vice versa thus enhancing the smooth physical flow of goods. The selection of the mode of transport is essential because it affects the business competitiveness. In most cases the shipments involve more than one mode of transport to get the products to their destinations (Kumar, 2014). The considerations should be made regarding the quality, sustainability, economic and lead-time of various modes of transport or the intermodal transport. The main challenge is in determining the pricing strategy or the accurate tariff for the intermodal transport.

Transportation is an essential aspect of logistics because it links the demands and production. However, unlike other components such as inventory and warehousing that can be managed by preserving the unutilized capacity, this is not the case with transportation because once the capacity is not utilized effectively, then it is lost. Therefore, there is need to ensure effective management of the transport to minimize cost, increase efficiency and reliability. The choice of mode of transport depends on the transportation cost, efficiency, capacity and the public policy on safety, congestion and the environmental pollution (International Transport Forum, 2009). Most of the time it is not possible to ship the products directly from the source to destination using a single mode of transport because of the high cost of transportation or lack of adequate mode of transport that links the source with demand. The use of intermodal transport becomes critical to enhancing the movement of products the target destinations cost effectively and conveniently.

The use of intermodal transport is inevitable due to geographical variations that challenge the reliance on a specific mode of transport considered efficient for specific products hence requiring the use of combinations of modes of transport (Monios, 2014). Therefore, intermodal transport is advantageous because of lower cost, improved efficiency, reduced emissions when the freight changes from rail to sea transport, reduced energy consumption, and increased flexibility through the use of road transport. It enables transporters to move products in small bulk to or from one terminal to another to complete the transportation process and enhance the efficiency of transportation process. In other words, goods required in large quantities, but available can be moved in single containers by roads from various sources and shipped by water in large bulk (Rodrigue, Comtois & Slack, 2013). Similarly, different containers shipped by water can be moved to various destinations by road or rail from the sea port to inland ports or air terminals not served by sea.

The geographical locations are characterized by varying topography and weather conditions that influence the use of intermodal transport. Topography is about the physical landscape such as the mountains and valleys. They influence the nature of the transport network, feasibility, and cost of the transportation facilities (Rodrigue et al., 2013). The mode of transport chosen for a given area should experience the least constraints. Various geographical regions have different weather patterns such as the wind, rainfall, etc. Topography influences the mode of transport used in a given region or it influences the choice of mode of transport at the specific time. The geographical locations have various effects on intermodal transport as discussed in the subsequent discussions.

• Accessibility of Regions

The transportation involves linking the terminals or origin to destinations. In a globalized economy, there is a massive movement of goods over relatively long distances from one country or continent to another. The general terrains of various regions impose a severe impendent to free movement of freight within the targeted areas. Some places are inaccessible by roads because they separated by big mountains, lakes or rivers (International Transport Forum, 2009). These areas require a specific mode of transport such as air or water while other modes such as railway and roads are not useful. This can increase or reduce the cost of transportation of freight depending on the applicable. For instance, using the water as a means of transport to move bulk products such as heavy machinery across borders or over a long distance can be very economical and result in cost reduction. On the other hand, if air is the only mode of transport available and the goods involved are bulk or of low value this will be too expensive and will make the company dealing with such products less competitive. Therefore, the geographical location will dictate the means available for transporting the freight to a particular area hence the mode to be used to access the specific region.

• Cost of Transport

Transportation is an important component in logistics because it accounts for one-third of the total logistics cost. Organizations achieve competitiveness by managing logistics cost. The intermodal transportation cost varies across geographical regions depending on the distance between various terminals (Rodrigue et al., 2013). If the vehicles are required to move long distances before they get to the port terminals, this will result in increased cost of transportation and increase in lead time. Furthermore, moving the freight over long distances will require the products to be packaged with special materials or containers to minimize the risk of damages during transit (International Transport Forum, 2009). Additionally, where the organization is servicing a wide geographical region, they may require small tracks to move the products from the port terminals to various destinations. This reduces the economies of skill because the cost increases with increased number of tracks. An example is India where the tracks serve the large sparsely populated area. There is high logistics cost because the trucks sometimes move half-empty and over long distances to serve a small number of clients. Therefore, the size of the population in a given geographical region has a significant influence on the total cost of intermodal transportation.

• Speed of Transport

The speed of transporting goods is critical especially when the goods are perishable nature or for the company with Just-in-time (JIT) philosophy. The JIT inventory practices aim at maintaining the inventory levels at a minimum by synchronizing the flow of inputs with production process (International Transport Forum, 2009). The JIT increases the scheduled inbound delivery by minimizing the lead time and the volumes of inventories as well as adding value to timely delivery. The goals of JIT are achieved if the company can reduce the cost, lead time and increase the number or individual deliveries. To achieve these objectives the logisticians may have to use a combination of the mode of transport to enhance the speed of delivery by changing from slow to faster mode. For instance, changing from railway to air travel can enhance the speed of transportation. However, if the terrains do not allow for the construction of port terminals air transport may be unavailable. Also, in case, there is an ocean link the source and the destination the shippers may be limited to use railway or road and waterways (Monios, 2014). This affects the objectives of the company because they cannot achieve JIT philosophy. Therefore, intermodal transport can be essential for enhancing the speed of delivering freight. However, this is possible where the geographical locations allow for intermodal transport to give room for a combination of various modes to achieve the desired speed. Where the physical barriers dictate the particular mode of transport in a given route, the organization may not achieve its JIT objectives. Therefore, geographical location can improve or limit the use of intermodal transport.

• Congestion

Some regions especially urban areas are highly congested with vehicles. Congestion reduces the reliability, speed, and efficiency of road transport. In the recent past, there has been a tremendous growth in railroad traffic in the U.S. with the Association of American Railroads approximating a growth rate of about 8.6% each year since 1988 (Rodrigue et al., 2013). This unprecedented growth is associated with increased use of containers through the port due to increasing intermodal transport involving sea and rail or road at the port terminals. However, the increasing use of containers has caused considerable congestion at the seaports in the U.S. There are also unnecessary delays and increased costs associated with processing time at the port. This is a classic example of how the strategic location of the port terminal has affected intermodal transport through reduction of lead time and increasing logistics costs. The suggestion to ease the congestion at the sea port has been to establish inland ports whereby the containers will be transported directly from the sea port to the designated inland ports for clearance (Kumar, 2014). This will reduce the lead time and cost of transport along the supply chain. Several satellite inland ports have already been established including the Front Royal in Virginia and Inland River in Albany.

• Transportability

Climate varies with geographical regions across the globe. The components of climate include precipitation, the wind, and temperature. Climate can have devastating effects on the intermodal transport due to some perilous circumstances characterized by fog, snow, ice and heavy rainfall. Some modes of transport such as the air are severely affected by adverse weather conditions such as fog and heavy because they reduce visibility and can cause plane crash especially during winter (International Transport Forum, 2009). Also, harsh weather conditions can cause severe disruptions of road transport characterized by road congestions, road damages and so on. It is worth noting that some locations are prone to adverse weather conditions than others hence the effects of the same are experienced differently in different regions. Therefore, use of intermodal transport can experience major drawbacks if it involves roads and air transport because fog and heavy rainfall in some areas can result in flight cancellation thus affecting the free movement of freight across the regions. Similarly, bad weather can cause delays in vehicles or trucks moving the freight to the airport to connect with air transport (Kumar, 2014). It can result in increased cost of intermodal transport. While weather conditions have a severe impact in most of the region’s the severity, vary significantly across regions. The case of volcanic eruption that occurred in Iceland in 2010 had devastating effects in north-eastern Europe as it resulted in the cancellation of several flights due to the huge amount of ash released in the atmosphere (Rodrigue p.9). Also, it is evident that some areas are prone to strong winds that reduce the speed on the aircraft.

Conclusion

Intermodal transport is necessary for transportation across different geographical regions because it enhances the movement of goods to and from various regions cost effectively and conveniently. Proper management of transport cost can give a competitive business edge by ensuring effective management of logistics cost. The efficiency of various modes of transport depends on the availability and cost of that mode. However, the geographical locations, cost, efficiency, reliability and sustainability of various modes of transports determine the choice of intermodal transport. Careful selection of intermodal transport combinations is necessary for the organization to attain competitiveness.