Intermodal Transport

In an effort to make up for some shortcomings of each mode of transportation, there has been a growing need for combining and mixing multiple modes of transportation without separating each. Such a need can be translated into intermodalism, which involves transportation of cargo or passengers using multiple modes (truck, rail, air, ship) under a single freight bill. For example, a train can haul much heavier loads such as automobiles at much lower cost than a truck, but is not

designed to offer “door-to-door” delivery services.

Intermodal transport is the movement of goods in one and the same loading unit or vehicle, which uses successively several modes of transport without handling of the goods themselves in changing modes.

Since the 1960s major efforts have been made to integrate separate transport systems through intermodalism, which took place in several stages, first with the setting of maritime networks which then better connected with inland networks. From a functional and operational perspective, two components are involved in intermodalism:

• Intermodal transportation. The movements of passengers or freight from one mode of transport to another, commonly taking place at a terminal specifically designed for such a purpose. In North America, the term intermodal is also used to refer to containerized rail transportation. Therefore, intermodal transportation in the literal sense refers to an exchange of passengers or freight between two transportation modes, but the term has become more commonly used to strictly related to container transportation.
• Transmodal transportation. The movements of passengers or freight within the same mode of transport. Although “pure” transmodal transportation rarely exists and an intermodal operation is often required (e.g. ship to dockside to ship), the purpose is to insure continuity within the same modal network.

Intermodal transportation network is a logistically linked system using two or more transport modes with a single rate. Modes are having common handling characteristics, permitting freight (or people) to be transferred between modes during a movement between an origin and a destination. For freight, it also implies that the cargo does not need to be handled, just the load unit such as a pallet or a container.

What initially began as improving the productivity of shipping evolved into an integrated supply chain management system across modes and the development of intermodal transportation networks.

This involves the use of at least two different modes in a trip from an origin to a destination through an intermodal transport chain, which permit the integration of several transportation networks. Intermodality enhances the economic performance of a transport chain by using modes in the most productive manner. Thus, the line-haul economies of rail may be exploited for long distances, with the efficiencies of trucks providing flexible local pick up and deliveries. The key is that the entire trip is seen as a whole, rather than as a series of legs, each marked by an individual operation with separate sets of documentation and rates. This is organized around the followings conditions:

• The nature and quantity of the transported cargo. Intermodal transportation is usually suitable for intermediate and finished goods in load units of less than 25 tons.
• The sequence of transportation modes being used. Intermodal transportation is organized as a sequence of modes, often known as an intermodal transport chain. The dominant modes supporting intermodalism are trucking, rail, barges and maritime. Air transportation usually only require intermodalism (trucking) for its “first and last miles” and not used in combination with other modes. Additionally, load units used by air transportation are not readily convertible with other modes.
• The origins and destinations. Distances play an important role as the longer the distance, the more likely an intermodal transport chain will be used. Distances above 500 km (longer than one day of trucking) usually require intermodal transportation.
• The value of the cargo. Suitable for intermediate cargo values. Low and high value shipments are usually less suitable for intermodal transportation. High value shipments will tend to use the most direct options (such as air cargo) while low value shipments are usually point to point and relying on one mode such as rail or maritime.
• The frequency of shipments. Intermodalism functions well when cargo flows need to be continuous and in similar quantities.

Forms of Intermodalism

Intermodalism originated in maritime transportation, with the development of the container in the late 1960’s and has since spread to integrate other modes. It is not surprising that the maritime sector should have been the first mode to pursue containerization. It was the mode most constrained by the time taken to load and unload the vessels. A conventional break bulk cargo ship could spend as much time in a port as it did at sea. Containerization permits the mechanized handling of cargoes of diverse types and dimensions that are placed into boxes of standard sizes. In this way goods that might have taken days to be loaded or unloaded from a ship can now be handled in a matter of minutes.

The emergence of intermodalism has been brought about in part by technology and requires management units for freight such as containers, swap bodies, pallets or semi-trailers. In the past, pallets were a common management unit, but their relatively small size and lack of protective frame made their intermodal handling labor intensive and prone to damage or theft. Better techniques and management units for transferring freight from one mode to another have facilitated intermodal transfers. Early examples include piggyback (TOFC: Trailers On Flat Cars), where truck trailers are placed on rail cars, and LASH (lighter aboard ship), where river barges are placed directly on board sea-going ships. A unique form of intermodal unit has been developed in the rail industry, particularly in the US where there is sufficient volume. Roadrailer is essentially a road trailer that can also roll on rail tracks. It is unlike the TOFC (piggyback) system that requires the trailer be lifted on to rail flat car. Here the rail bogies may be part of the trailer unit, or be attached in the railway yard. The road unit becomes a rail car, and vice-versa.

While handling technology has influenced the development of intermodalism, another important factor has been changes in public policy. Deregulation in the United States in the early 1980s liberated firms from government control. Companies were no longer prohibited from owning across modes, which developed a strong impetus towards intermodal cooperation. Shipping lines in particular began to offer integrated rail and road services to customers. The advantages of each mode could be exploited in a seamless system, which created multiplying effects. Customers could purchase the service to ship their products from door to door, without having to concern themselves of modal barriers.

The most important feature of intermodalism is the provision of a service with one ticket (for passengers) or one bill of lading (for freight). With one bill of lading clients can obtain one through rate, despite the transfer of goods from one mode to another. This has necessitated a revolution in organization and information control. At the heart of modern intermodalism are data handling, processing and distribution systems that are essential to ensure the safe, reliable and cost effective control of freight and passenger movements being transported by several modes. Electronic Data Interchange (EDI) is an evolving technology that is helping companies and government agencies (customs documentation) cope with an increasingly complex global transport system.

Intermodal transport is transforming a growing share of the medium and long-haul freight flows across the globe where large integrated transport carriers provide door to door services, such as the high degree of integration between maritime and rail transport in North America. In Europe rail intermodal services are becoming well-established between the major ports, such as Rotterdam, and southern Germany, and between Hamburg and Eastern Europe. Rail shuttles are also making their appearance in China. While rail intermodal transport has been relatively slow to develop in Europe, there are extensive interconnections between barge services and ocean shipping, particularly on the Rhine. Barge shipping offers a low cost solution to inland distribution where navigable waterways penetrate to interior markets. The limits of intermodality are imposed by factors of space, time, form, pattern of the network, the number of nodes and linkages, and the type and characteristic of the vehicles and terminals.

Containerization

The driver of intermodal transportation has undoubtedly been the container, which permits easy handling between modal systems. While intermodalism could take place without the container, it would be very inefficient and costly. At start, a distinction is necessary between containerization and the container.

Container is a large standard size metal box into which cargo is packed for shipment aboard specially configured transport modes. It is designed to be moved with common handling equipment enabling high-speed intermodal transfers in economically large units between ships, railcars, truck chassis, and barges using a minimum of labor. The container, therefore, serves as the load unit rather than the cargo contained therein. The reference size is the 20 foot box of 20 feet long, 8’6″ feet high and 8 feet wide, or 1 Twenty-foot Equivalent Unit (TEU). Since the great majority of containers are now forty foot long, the term Forty-foot Equivalent Unit (FEU) is also used, but less commonly. “Hi cube” containers are also common and they are one feet higher (9’6″) than the standard.

Containerization refers to the increasing and generalized use of the container as a support for freight transportation. It involves processes where the intermodal container is increasingly used because it either substitutes cargo from other conveyances, is adopted as a mode supporting freight distribution or is able to diffuse spatially as a growing number of transport systems are able to handle containers.

Intermodal Transport Costs

There is a relationship between transport costs, distance and modal choice that has for long been observed. It enables to understand why road transport is usually used for short distances (from 500 to 750 km), railway transport for average distances and maritime transport for long distances (about 750 km). Variations of modal choice according to the geographical setting are observed but these figures tend to show a growth of the range of trucking. However, intermodalism offers the opportunity to combine modes and find a less costly alternative than a unimodal solution. It is also linked with a higher average value of the cargo being carried since intermodal transportation is linked with more complex and sophisticated commodity chains. As a result, the efficiency of contemporary transport systems rests as much on their capacity to route freight than on their capacity to transship it, but each of these functions have a cost that must be reduced.

The intermodal transportation cost implies the consideration of several types of transportation costs for the routing of freight from its origin to its destination, which involves a variety of shipment, transshipment and warehousing activities. It considers a logistic according to which are organized transport chains where production and consumption systems are linked to transport systems. Numerous technical improvements, such as river / sea shipping and better rail/road integration, have been established to reduce interchange costs, but containerization remains the most significant achievement so far. The concept of economies of scale applies particularly well to container shipping. However, container shipping is also affected by diseconomies involving maritime and inland transport systems as well as transshipment. While maritime container shipping companies have been pressing for larger ships, transshipment and inland distribution systems have tried to cope with increased quantities of containers. Thus, in spite of a significant reduction in maritime transport costs, land transport costs remain significant. Between half and two-third of total transport costs for a TEU is accounted by land transport.

Public policy is also playing a role through concerns over the dominant position of road transport in modal competition and the resultant concerns over congestion, safety and environmental degradation. In Europe, policies have been introduced to induce a shift of freight and passengers from the roads to modes that are environmentally more efficient. Intermodal transport is seen as a solution that could work in certain situations. In Switzerland, for example, laws stipulate that all freight crossing through the country must be placed on the railways in order to try to reduce air pollution in alpine valleys. The European Union is trying to promote intermodal alternatives by subsidizing rail, and shipping infrastructure and increasing road user costs. Since intermodal transportation is mostly the outcome of private initiatives seeking to capture market opportunities it remains to be seen to what extent public strategies can be reconciled with a global intermodal transport system which is flexible and footloose.

While economies of scale enabled to reduce the unit costs of maritime, inland intermodal transportation costs account to about 50% of the total costs if terminal costs are included. With the deregulation and privatization trends that began in the 1980’s, containerization, which was already well established in the maritime sector, could spread inland. The shipping lines were among the first to exploit the intermodal opportunities that deregulation permitted. They could offer door-to-door rates to customers by integrating rail services and local truck pickup and delivery in a seamless network. To achieve this they leased trains, managed rail terminals, and in some cases purchased trucking firms. In this way they could serve customers across the country by offering door-to-door service from suppliers located around the world. The move inland also led to some significant developments, most notably the double-stacking of containers on rail cars. This produced important competitive advantages for intermodal rail transport and favored the development of inland terminals. It also required various forms of transloading between maritime and domestic container units.