transportation modes

8/7/2019 Transportation Modes

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Transportation Modes: An Overview

Authors: Dr. Brian Slack, Dr. Jean-Paul Rodrigue and Dr. Claude Comtois

1. A Diversity of ModesTransport modes are the means by which people and freight achieve mobility. They fall into one ofthree basic types, depending on over what surface they travel land (road, rail and pipelines), water(shipping), and air. Each mode is characterized by a set of technical, operational and commercialcharacteristics:

y Road transportation (Concept 2). Road infrastructures are large consumers of space with thelowest level of physical constraints among transportation modes. However, physiographicalconstraints are significant in road construction with substantial additional costs to overcomefeatures such as rivers or rugged terrain. Road transportation has an average operational

flexibility as vehicles can serve several purposes but are rarely able to move outside roads.Road transport systems have high maintenance costs, both for the vehicles and infrastructures.They are mainly linked to light industries where rapid movements of freight in small batchesare the norm. Yet, with containerization, road transportation has become a crucial link infreight distribution.

y Rail transportation (Concept 3). Railways are composed of a traced path on which are boundvehicles. They have an average level of physical constrains linked to the types of locomotivesand a low gradient is required, particularly for freight. Heavy industries are traditionally linkedwith rail transport systems, although containerization has improved the flexibility of railtransportation by linking it with road and maritime modes. Rail is by far the land transportationmode offering the highest capacity with a 23,000 tons fully loaded coal unit train being theheaviest load ever carried.

y Pipelines (Concept 3). Pipeline routes are practically unlimited as they can be laid on land orunder water. The longest gas pipeline links Alberta to Sarnia (Canada), which is 2,911 km inlength. The longest oil pipeline is the Transiberian, extending over 9,344 km from the Russianarctic oilfields in eastern Siberia to Western Europe. Physical constraints are low and includethe landscape and pergelisol in arctic or subarctic environments. Pipeline construction costsvary according to the diameter and increase proportionally with the distance and with theviscosity of fluids (from gas, low viscosity, to oil, high viscosity). The Trans Alaskan pipeline,which is 1,300 km long, was built under difficult conditions and has to be above ground formost of its path. Pipeline terminals are very important since they correspond to refineries andharbors.

y Maritime transportation (Concept 4). Because of the physical properties of water conferringbuoyancy and limited friction, maritime transportation is the most effective mode to movelarge quantities of cargo over long distances. Main maritime routes are composed of oceans,coasts, seas, lakes, rivers and channels. However, due to the location of economic activities

maritime circulation takes place on specific parts of the maritime space, particularly over theNorth Atlantic and the North Pacific. The construction of channels, locks and dredging areattempts to facilitate maritime circulation by reducing discontinuity. Comprehensive inlandwaterway systems include Western Europe, the Volga / Don system, St. Lawrence / Great Lakessystem, the Mississippi and its tributaries, the Amazon, the Panama / Paraguay and the interiorof China. Maritime transportation has high terminal costs, since port infrastructures are amongthe most expensive to build, maintain and improve. High inventory costs also characterizemaritime transportation. More than any other mode, maritime transportation is linked to heavyindustries, such as steel and petrochemical facilities adjacent to port sites.


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y Air transportation (Concept 5). Air routes are practically unlimited, but they are denser overthe North Atlantic, inside North America and Europe and over the North Pacific. Air transportconstraints are multidimensional and include the site (a commercial plane needs about 3,300meters of runway for landing and take off), the climate, fog and aerial currents. Air activitiesare linked to the tertiary and quaternary sectors, notably finance and tourism, which lean onthe long distance mobility of people. More recently, air transportation has been

accommodating growing quantities of high value freight and is playing a growing role in globallogistics.

y Intermodal transportation (Concept 6). Concerns a variety of modes used in combination sothat the respective advantages of each mode are better exploited. Although intermodaltransportation applies for passenger movements, such as the usage of the different, butinterconnected modes of a public transit system, it is over freight transportation that the mostsignificant impacts have been observed. Containerization has been a powerful vector ofintermodal integration, enabling maritime and land transportation modes to more effectivelyinterconnect.

y Telecommunications. Cover a grey area in terms of if they can be considered as a transportmode since unlike true transportation, telecommunications often does not have a physicality.Yet, they are structured as networks with a practically unlimited capacity with very lowconstraints, which may include the physiography and oceanic masses that may impair the

setting of cables. They provide for the instantaneous movement of information (speed of lightin theory). Wave transmissions, because of their limited coverage, often require substations,such as for cellular phone networks. Satellites are often using a geostationary orbit which isgetting crowded. High network costs and low distribution costs characterize manytelecommunication networks, which are linked to the tertiary and quaternary sectors (stockmarkets, business to business information networks, etc). Telecommunications can provide asubstitution for personal movements in some economic sectors.

2. Modal Competition

A general analysis of transport modes reveals that each has key operational and commercial advantagesand properties. However, contemporary demand is influenced by integrated transportationsystems that require maximum flexibility. As a result, modal competition exists at various degrees and

takes several dimensions. Modes can compete or complementone another in terms of cost, speed,accessibility, frequency, safety, comfort, etc. There are three main conditions that insure that somemodes are complementing one another:

y Different geographical markets. It is clear that if different markets are involved, modes willpermit a continuity within the transport system, particularly if different scales are concerned,such as between national and international transportation. This requires an interconnection,commonly known as a gateway, where it is possible to transfer from one mode to the other.Intermodal transportation has been particularly relevant to improve the complementarity ofdifferent geographical markets.

y Different transport markets. The nature of what is being transported, such as passengers orfreight, often indicates a level of complementarity. Even if the same market area is serviced, itmay not be equally accessible depending of the mode used. Thus, in some markets rail androad transportation can be complementary as one may be focusing on passengers and the otheron freight.

y Different levels of service. For a similar market and accessibility, two modes that offer adifferent level of service will tend to complement another. The most prevailingcomplementarity concerns costs versus time.

Thus, there is modal competition when there is an overlap in geography, transport and level of service.Cost is one of the most important considerations in the choice of mode. Because each mode has its ownprice/performance profile, the actual competition between the modes depends primarily upon the


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distance traveled, the quantities that have to be shipped and the value of the goods. While maritimetransport might offer the lowest variable costs, over short distances and for small bundles of goods,road transport tends to be most competitive. A critical factor is the terminal cost structure for eachmode, where the costs (and delays) of loading and unloading the unit impose fixed costs that areincurred independent of the distance traveled.

With increasing levels of income the propensity for people to travel rises. At the same time,international trade in manufactured goods and parts has increased. These trends in travel demand actdifferentially upon the modes. The modes that offer the faster and more reliable services gain overmodes that might offer a lower cost, but slower, alternative. For passenger services, rail has difficultyin meeting the competition of road transport over short distances and aircraft for longer trips.For freight, rail and shipping have suffered from competition from road and air modes for high valueshipments. While shipping, pipelines and rail still perform well for bulkier shipments, intensecompetition over the last thirty years has seen road and air modes capture an important market shareof the high revenue-generating goods. Road transport clearly dominates.

Although intermodal transportation has opened many opportunities for complementarity betweenmodes, there is intense competition as companies are now competing over many modes in thetransport chain. A growing paradigm thus appears to be supply chain competition with the modal

competition component occurring over three dimensions:

y Modal usage. Competition that involves the comparative advantage of using a specific or acombination of modes. Distance remains one of the basic determinants of modal usage forpassengers transportation. However, for a similar distance, costs, speed and comfort can besignificant factors behind the choice of a mode.

y Infrastructure usage. Competition resulting from the presence of freight and passenger trafficon the same itineraries linking the same nodes.

y Market area. Competition being experienced between transport terminals for using new space(terminal relocation or expansion) or capturing new markets (hinterland).

Modal competition can also been influenced by public policy where one mode could be advantagedover the others. This particularly takes place over government funding and regulation issues. For

instance, in the United States the Federal Government would finance 80% of the costs of an highwayproject, leaving the state government to supply the remaining 20%. For public transit, this share is 50%,while for passenger rail the Federal Government will not provide any funding. Under suchcircumstances, public policy shapes modal preferences.

The technological evolution in the transport industry aims at adapting the transport infrastructures togrowing needs and requirements. When a transport mode becomes more advantageous than anotherover the same route or market, a modal shift is likely to take place. A modal shift involves the growthin the demand of a transport mode at the expense of another, although a modal shift can involve anabsolute growth in both of the concerned modes. The comparative advantages behind a modal shift canbe in terms of costs, convenience, speed or reliability. For passengers, this involved a transition inmodal preferences as incomes went up, such as from collective to individual modes of transportation.For freight, this has implied a shift to faster and more flexible modes when possible and cost effective,

namely trucking and air freight.

There are important geographical variations in modal competition. The availability of transportinfrastructures and networks varies enormously. Some regions possess many different modes that incombination provide a range of transport services that ensure an efficient commercial environment.Thus, in contrast to the situation in the EU, rail transport occupies a more important market share inNorth America. In many parts of the world, however, there are only limited services, and someimportant modes may be absent altogether. This limits the choices for people and shippers, and acts tolimit accessibility. People and freight are forced to use the only available modes that may not be the


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most economic for the nature of the demand. Goods may not be able to find a market, and peoplesmobility may be impaired.

For these reasons, transport provision is seen as a major factor in economic development. Areas withlimited modal choices tend to be among the least developed. The developed world, on the other handpossesses a wide range of modes that can provide services to meet the needs of society and the

economy. Since 2000 the price of fuel has increased significantly as well as its volatility. All modes areaffected, from the individual car owner to the corporation operating a fleet of hundreds of aircraft orships. The higher costs are being passed on to the customer, either directly, as is the case of shippingwhere freight rates are climbing, or indirectly as is the case of airlines, where passengers are beingcharged additional fuel surcharges. These cost increases are likely to have significant impacts onmobility and trade, as well as on the modal split:

y Higher transport costs increase the friction of distance and constrain mobility. As a majorconsumer of petroleum the transport industry has to increase rates. Across the board increasescauses people to rethink their patterns of movement and companies to adjust their supply anddistribution chains. One of the expected effects of these cost increases is a decline in freightshipments and passenger carriers, such as airlines are anticipating a reduction in trips. Evenschool districts are anticipating reducing the number of busses and making children walk

further to school.y Because the impact of higher fuel costs hits the modes differentially, a modal shift is

anticipated. Road and air transport are more fuel intensive than the other modes, and so fuelprice increases are likely to impact upon them more severely than other modes. This could leadto a shift towards water and rail transport in particular.

y A further impact of fuel price increases is greater fuel economy across the modes. One of thebest ways for all modes to reduce consumption is to lower speeds. A future of high energyprices is likely to have a major impact on just-in-time deliveries, and lead to a restructuring ofsupply chains.

3. Passengers or Freight?

With some exceptions, such as busses and pipelines, most transport modes have developed to handleboth freight and passenger traffic. In some cases both are carried in the same vehicle, as for examplein the airlines where freight is transported in the cargo holds of passenger aircraft. In others, differenttypes of vehicle have been developed for freight and passenger traffic, but they both share the sameroad bed, as for example in rail and road traffic. In shipping, passengers and freight used to share thesame vessel, but since the 1950s specialization has occurred, and the two are now quite distinct,except for ferries and some RORO services.

The sharing by freight and passengers of a mode is not without difficulties, and indeed some of themajor problems confronting transportation occur where the two seek to co-inhabit. For example,trucks in urban areas are seen as a nuisance and a cause of congestion by passenger transport users.Daytime deliveries and double-parked trucks are a particular nuisance. The poor performance of somemodes, such as rail, is seen as the outcome of freight and passengers having to share routes. There are

also growing interests expressed at using segments of transit systems to move freight, particularly incentral areas. This raises the question as to whether freight and passengers are compatible. The mainadvantages of joint operations are:

y High capital costs can be justified and amortized more easily with a diverse revenue stream(rail, airlines, ferries).

y Maintenance costs can be spread over a wider base (rail, airlines).y The same modes or traction sources can be used for both freight and passengers, particularly

for rail.


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The main disadvantages of joint operations are:

y Locations of demand rarely match the origins and destinations of freight are usually quitedistinct spatially from passenger traffic.

y Frequency of demand is different for passengers the need is for high frequency service, forfreight it tends to be somewhat less critical.

y Timing of service demand for passenger services has specific peaks during the day, for freightit tends to be more evenly spread throughout the day.y Traffic balance on a daily basis passenger flows tend to be in equilibrium, for freight, market

imbalances produce empty flows.

y Reliability although freight traffic increasingly demands quality service, for passengers delaysare unacceptable.

y Sharing routes favors passenger traffic passenger trains are given priority; trucks may beexcluded from areas at certain times of the day.

y Different operational speeds passengers demand faster service.y Security screening measures for passengers and freight require totally different procedures.

The separation of passengers and freight on specific gateways and corridors is consequently a likelyoutcome.

4. A Growing Divergence

Passengers and freight are increasingly divergent activities as they reflect different transportationmarkets. In several modes and across many regions passenger and freight transport is being unbundled:

y Shipping. Mention has been made already how in the maritime sector passenger services havebecome divorced from freight operations. The exception being ferry services where the use ofRORO ships on high frequency services adapt to the needs of both market segments. Deep seapassenger travel is now dominated by cruise shipping which has no freight-handlingcapabilities, and bulk and general cargo ships rarely have an interest or the ability to transportpassengers.

y Rail. Most rail systems still operate passenger and freight business. Where both segments aremaintained the railways give priority to passengers, since rail persists as the dominant modefor inter-city transport in India, China and much of the developing world. In Europe thenational rail systems and various levels of government have prioritized passenger service as ameans of checking the growth of the automobile, with its resultant problems of congestion andenvironmental degradation. Significant investments have occurred in improving the comfort oftrains and in passenger rail stations, but most notable have been the upgrading of track andequipment in order to achieve higher operational speeds. Freight transport has tended to loseout because of the emphasis on passengers. Because of their lower operational speeds, freighttrains are frequently excluded from day-time slots, when passenger trains are most in demand.Overnight journeys may not meet the needs of freight customers. This incompatibility is afactor in the loss of freight business by most rail systems still trying to operate both freight andpassenger operations. It is in North America where the divorce between freight and passenger

rail business is most complete. The private railway companies could not compete against theautomobile and airline industry for passenger traffic, and consequently withdrew from thepassenger business in the 1970s. They were left to operate a freight only system, which hasgenerally been successful, especially with the introduction of intermodality. The passengerbusiness has been taken over by public agencies, AMTRAK in the US, and VIA Rail in Canada.Both are struggling to survive. A major problem is that they have to lease trackage from thefreight railways, and thus slower freight trains have priority.

y Roads. Freight and passenger vehicles still share the roads. The growth of freight traffic isincreasing road congestion and in many cities concerns are being raised about the presence of


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trucks. Already, restrictions are in place on truck dimensions and weights in certain parts ofcities, and there are growing pressures to limiting truck access to non-daylight hours. Certainhighways exclude truck traffic the parkways in the US for example. These are examples ofwhat is likely to become a growing trend the need to separate truck from passenger vehicletraffic. Facing chronic congestion around the access points to the port of Rotterdam and at thefreight terminals at Schiphol airport, Dutch engineers have worked on feasibility studies ofdeveloping separate underground road networks for freight vehicles.

y Air transport. Air transport is the mode where freight and passengers are most integrated. Yeteven here a divergence is being noted. The growth of all-freight airlines and the freight-onlyplanes operated by some of the major carriers, such as Singapore Airlines, are heralding atrend. The interests of the shippers, including the timing of the shipments and thedestinations, are sometimes better served than in passenger aircraft. The divergence betweenpassengers and freight is also being accentuated by the growing importance of charter and"low-cost" carriers. Their interest in freight is very limited, especially when their business isoriented towards tourism, since tourist destinations tend to be lean freight generatinglocations.


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Choose the right mode of transport for your goods

Businesses rely on transportation to receive goods from their suppliers as well as deliver orders to theircustomers. The type of transport your business uses will depend on a number of factors:

y The products you sell (eg perishables or non-perishables)y Supplier production lead timesy Product availabilityy Customer lead timesy Source of supply (eg UK or abroad)y Customs and Excise rules (eg duty or quarantine)y Volume

You can use one method for all your transportation needs or a combination. Here are the main types, andtheir advantages and disadvantages:

Air

Airfreighting is commonly used by businesses for the delivery of goods from distant suppliers. This mode of

transport is useful to deliver products with short lead times, fragile goods and products that are not bulky.

Products in high demand and in short supply may also be airfreighted in order to meet customer demands.

The bulk/value ratio will be a determining factor.

Advantagesy Fast delivery, usually between 24 and 48 hoursy Customer is not kept waiting for order fulfilmenty Reduced lead time on suppliery Improved service levels

Disadvantages

y Flight delays and/or cancellationsy Customs and Excise restrictionsy Cost

Sea

Sea transportation is used by businesses for the delivery of goods from distant suppliers. Most sea

transportation is conducted in containers which vary in size. Goods can be grouped into a container (LCL) or

fill a container (FCL). Sea tankers are used for bulk shipments of loose goods such as oil, grain and coal.Advantages

y Ideal for transporting heavy and bulky goodsy Suitable for products with long lead times

Disadvantages


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y Longer lead/delivery timesy Bad weathery ifficult to monitor exact location of goods in transity Customs and Excise restrictionsy Could be costly

Rail

Businesses use rail transportation for the delivery of a wide range of goods including post, coal, steel and

other heavy goods.

Advantagesy Fast deliveryy Capacityy Cost effectivey Safe mode of transporty Reliable

Disadvantages

y Subject to unforeseen delaysy Reliance on rail freight operator's timetabley Suppliers/customers are not always located near a rail freight depot and delivery to/from the depot

can be costly and time consuming

Road

A very popular mode of transport used by suppliers and businesses to deliver orders. Many transport

companies provide scheduled delivery days and next day delivery services, depending upon your needs.Goods can be packed/grouped in box vans or in containers which are also used for sea transportation.

Advantagesy Cost effectivey Fast deliveryy Ideal for short distances, national or mainland Europey Ideal for transporting perishables (eg fruit and vegetables)y Easy to monitor location of goodsy Easy to communicate with drivery Ideal for sending by courier shortages to customers

Disadvantages

y Transport subject to traffic delaysy Transport subject to breakdowny Goods susceptible to damage through careless drivingy Bad weathery riving regulations can cause delays


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transportation modes

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