Process in Developing Intermodal Freight Strategies - Report Example

PROCESS IN DEVELOPING INTERMODAL FREIGHT STRATEGIES of the of the Table of Contents Table of Contents 2 0 Introduction: 3 2.0 Hypothesis of the Research: 3 3.0 Research Methodology: 3 4.0 Analysis of influencing factors: 4 5.0 Key issues in the intermodal transportation process: 5 6.0 Quality building strategies for intermodal transportation in Europe: 6 4 Cost Analyses: 7 7.0 Hypotheses Proving: 8 8.0 Conclusion: 9 Reference: 10 1.0 Introduction: Intermodal freight focuses on developing a chain of transportation system using different modes such as ship, rail and truck with the use of intermodal containers. The use of intermodal transport in the business segment has significantly reduced the security concerns of the freights and accelerated the delivery process (Wichser et al. 2006). The transportation among the eastern and western European countries is dominantly influenced by the intermodal transpiration process of freights. This report will focus on the role of reorganising transport chains and improving the co-operation among transport partners for increasing the efficiency of intermodal freight strategies. 2.0 Hypothesis of the Research: The hypothesis developed for this study is given below: Hypothesis0 (Null): Reorganising transport chains among transport partners with truck only transport will help in improving the intermodal freight transport process in Eastern and Western Europe. Hypothesis1 (Alternative): Reorganising transport chains among transport partners with truck only transport will not contribute in improving the intermodal freight transport process in Eastern and Western Europe. 3.0 Research Methodology: This research will be conducted by the researcher with the help of qualitative analysis of secondary data collected. The researcher will consider the interpretivism philosophy for developing an in-depth understanding of the research topic and the strategic decisions made by the transportation authorities in context of intermodal transport (Denzin and Lincoln, 2011). The research approach is deductive in nature and will help the researcher to develop a proper direction for the study. The researcher has considered qualitative study as it will help in gathering precise information regarding the contemporary state and strategies implemented in the intermodal freight transport of the Eastern and Western Europe. Moreover, policies and rules of the regulatory bodies such as the European Union can be brought under the limelight with secondary data collection process (Denzin and Lincoln, 2011). The researcher will ensure that the data collected for this study are from reliable and authentic sources and can relate to the contemporary situation of European intermodal transportation. 4.0 Analysis of influencing factors: In order to understand the mechanisms prevailing in the intermodal transport systems of Europe, it is necessary to identify the factors that are influencing the intermodal transport process. The researcher has considered three main external factors in this context, namely, market, legal and infrastructure. The market has again been segmented to five categories that are essential contributors in the intermodal transport process. The first part is economic condition of the continent. With a steady industry growth and high value for products in the international market, the economic condition of Europe is recovering from the global meltdown effects of 2007-08. The industrial sector is considered to be the second largest contributor in the GDP of Europe coming next only to the retail sector (Wichser et al. 2006). The foreign trade of the European segment has increased with more firms enhancing their operational areas into Asian and Latin American countries. The gross wages and the economic growth are both measured with the help of purchasing power parity in Europe, which reflects the relationship between the consumer stability and economic growth of the continent (Tyrinopoulos and Giannopoulos, 2006). The infrastructural facilities mainly rely on the railway efficiency, capacity and quality provided by the railway network. The intermodal freight system has been developed in a supportive nature to the railway process of the continent. The inter-operations process of the transport conditions is based upon internal factors such as number of locomotives, network density, quality of service and speed (Tyrinopoulos and Giannopoulos, 2006). While the external factors are related to the geographical conditions of the roads such as hilly, water transport or flat (Wichser et al. 2006). However, the number of corridors in the eastern and western European sectors is still being developed for facilitating the intermodal framework for transportation. The legal analysis reflected heavy dependency on the fiscal system governed by the European Union (European Commission, 2001). The transport operators have to develop their services based on the evaluation of their services and their impact on the intermodal transportation process. 5.0 Key issues in the intermodal transportation process: The key factors identified as the loopholes in the development of a truck only intermodal transportation method mainly reflects the increased cost of operations. The rising fuel prices are a source of concern for managing the synchronisation between the trucks only among various states across the European continent. Taylor and Jackson (2000) stated that countries operation within the coastal regions is yet to develop proper infrastructural facilities for supporting a truck only model of transportation. Prince (2006) added that the truck only model for intermodal transportation will decrease the speed of the process based on the conditions of the external road and routes condition. This also reduces the reliability of the consumers in operating and service hiring. On the other hand, business needs are increasing and truck only model may not be able to meet all the requirements of its customers hence reducing the growth of intermodal transportation between Eastern and Western Europe (Rodrigue, 2006). According to Bontekoning and Priemus (2004), truck only model reduces the security and engages in risks of in transit damages to goods. Furthermore, if the western and eastern Europe countries opt for a truck only model, then the service level has to be enhanced first. Most of the transportation is currently being conducted by rail and ships because of their extensive network accessibility. Overall, it can be stated that the truck only model can increase the cost of productions that the service structure will compromise. Krueger (2005) reflected that the competitive scenario, logistics firms are eating up the market space which will create competition for the intermodal transportation process. Deardorff et al. (2005) highlighted the complexity in the transportation chain. The intermodal framework in Europe mainly focuses on evaluating the suitable means for transport for a customer. This process reduces the cost of operations but also limits the process of connecting different transportation means together (Krueger, 2005). On the other hand, increase in cost of services will also influence the customer purchasing power and focus the service in a specific area reducing the chances of expansion. 6.0 Quality building strategies for intermodal transportation in Europe: According to Tyrinopoulos and Giannopoulos (2006), the importance of quality is more in transportation process in comparison to the cost. The quality issues can be categorised into three key reasons namely, priority on the main haulage, complex transport chain organisation and pre and post haulage inefficiency. The complete process of intermodal transportation is based on collaboration among various organisations to deliver the goods to the buyer from the seller (Taylor and Jackson, 2000). These companies act as independent partners in the chain. Tyrinopoulos and Giannopoulos (2006) opined that the complexity in quality development increases with the number of independent partners in the transportation chain. This is because the relationships between these partners’ changes in accordance with the markets, some firms acting as partners in one market can be competitors in others. It has been considered that the rewards for working together as a chain are not sufficient enough for attracting the owners to co-operate efficiently. Moreover, the structure of a chain cannot be developed because of the high number of independent partners in the process (Krueger, 2005). Speed, service frequency and scheduled consistency are the basic parameters of quality in developing a truck only model for intermodal transportation process. The primary requirement for developing a truck only model is based on the condition of the rail services (Baird, 2002). European railway, in the contemporary scenario has limited number of freight train and their focus on improving the passenger train experiences has decreased the number of the freight trains (Taylor and Jackson, 2000). The infrastructure of the railway segment is also changing. Rail operators serving as a government subsidiary can enhance their service delivery to foreign countries and act as an independent service provider (Baird, 2002). This will improve the quality of service by reducing the number of transfers within the transport chain. 4 Cost Analyses: The cost analysis process is based on evaluating the evaluation of the unit costs of containers in transit. Based on the nature of transportation modes and the resources such as roads, available to the shippers, the cost of transportation varies across the European region. Tyrinopoulos and Giannopoulos (2006) opined that intermodal transport is more expensive because of the time taken during the change of transportation mode. Moreover, security of the goods can be compromised during the change in the transportation means. On the other hand, truck only model is based on the aspect of aligning the management of the transportation and reducing the numbers of intermodal partners. However, the truck only model is less expensive which can attract the service providers for developing a better working intermodal transportation process. According to Wichser et al. (2006), the European transport is more focused on providing and improving their services on the medium distance transmits in comparison to short distance routes. For ensuring a better intermodal transport process, the government of the nations should have to intervene in the transportation process. They can create a managerial body for transportation that will function as a member of the chain in long haul transportations. The growth of the organisational logistics have pressurised the work process and the pricing of the intermodal transportation (Krueger, 2005). The demand for quality has to be met by reducing the cost of main hauls and also pre and post haulage. 7.0 Hypotheses Proving: The hypothesis of the study was to understand the contribution of truck only model transport for enhancing the intermodal transportation between Eastern and Western Europe. The truck model transport is less expensive in comparison to intermodal transport process. However, quality and speed of service delivery process is compromised in the truck only model. The excessive dependence on and support from the independent service providers in the chain slows down the speed of services. The cost analysis reflected that the cost of services provided can be decreased with truck only model when the value addition of services by reducing transit time is not considered. Another aspect that will not support the truck only model is the limited services offered between the Eastern and Western European. The growth of the intermodal transport is also paused due to limited routes offering the connection of various transport means. Thus, it can be observed that both truck only model and intermodal transportation when implemented individually will not be sufficient for improving the service structure of European transportation process. On the other hand, developing an efficient chain for improving the intermodal transportation process is not aligned with the consumer needs. The support from the governments and the regulatory authorise are not focusing on the industrial alignment. It has been noted that the transportation process must have an organised management process that will focus on bringing together the means of transportation by reducing the independence transport partners. From the above study it can be reflected that the truck only model will not be sufficient for improving the service structure of the Eastern and Western Europe intermodal freight transportation. Thus, the alternative hypothesis considered in the study has been proved right given the findings of the data analysis. 8.0 Conclusion: The above study focused on the efficacy of the strategies being implemented for improving the intermodal freight transportation process. The researcher focused on the strategy of truck only model and an organised managerial body for enhancing the service between Eastern and Western European nations. The truck only model will not be successful in increasing the intermodal transportation process because of lack of resources such as rail routes, locomotives, etc and excessive dependence on independent partners in the transport chain. Although, the cost of operating with a truck only model is lesser in comparison to intermodal freight transportation the service delivery process is slow. Apart from this, the growth of personalised business logistics processes will also reduce the demand for intermodal freight transportation process. Thus, the reorganisation of the transport partners is necessary but has to be on a larger scale including other modes of transportation for strengthening the intermodal freight transport between Eastern and Western Europe. Reference: Baird, A.J. (2002) The Economics of Container Transhipment in Northern Europe, International Journal of Maritime Economics, 4, 249-280. Bontekoning, Y.M. and Priemus, H. (2004) Breakthrough innovations in intermodal freight transport, Transportation Planning and Technology, 27. 5, 335-345 Deardorff, A.V., Y. Crozet, L.A. Tavasszy and N. Bruzelius (2005) Time and Transport, ECMT Round Tables No. 127, Paris: OECD. Denzin, N. K. and Lincoln, Y. S. (2011) The SAGE Handbook of Qualitative Research. 2/e. London: Sage Publications. European Commission (2001) European transport policy for 2010: time to decide, White Paper, Luxemburg. Krueger, O. (2005) Rail versus road: assessing the various modal options, The Adam Smith Institute’s Conference “The Future of Rail Freight in Europe”, Amsterdam. Prince, T. (2006) Theory of Evolution: Why Transloading Will Grow Faster than On-dock Rail, Journal of Commerce, 17-20 Rodrigue, J. P (2006) Challenging the Derived Transport Demand Thesis: Geographical Issues in Freight Distribution, Environment & Planning A, 38. 8, 1449-1462 Taylor, J. C. and Jackson, G. C. (2000),“Conflict, Power, and Evolution in the Intermodal Transportation Industrys Channel of Distribution,” Transportation Journal, Vol. 39, no. 3 (Spring, 5-17. Tyrinopoulos, Y. and Giannopoulos, G. (2006) Intermodal Freight Transport Between Europe and Asia: Structured Approach to Policy Making and Problem Solving, Paper presented at the Transportation Research Board’s 85th Annual Meeting, Washington, DC. Wichser, J., Besters, S., Bojanic, B., Bollinger, S. and Fries, N. (2006) Strategies for Increasing Intermodal Transport between Eastern and Western Europe, Final Report, IVT-Schriftenreihe No. 133, Zurich. Read More