Nowadays transportation costs occupy an essential part of total costs, and efficient transportation management can be a huge opportunity for savings. Transport systems face requirements to increase their capacity and to reduce transportation costs. Freight transportation has been observed to absorb between one-third and two-thirds of total logistics costs. Unfortunately, however, often transportation management as whole, as well as its significant parts, for example, routing or transportation modes remain without proper attention. Costs of implementing different modes of transportation tend to be undervalued, which can lead to inefficiency and inequity of distribution system. Efficient transportation management can possibly decrease base costs of goods, at the same time increasing competitiveness of those goods and profitability of the whole supply chain.
Frequently, enterprises must answer the question about how to route freight through the transport system. Despite that, it’s essential to take into consideration overloaded traffic conditions in the Nigeria region, as well as legal and environmental aspects of transportation. Breaking rules related to both above mentioned aspects can lead into fines and penalties, which in turn will decrease the efficiency of distribution system.
1. A Diversity of Modes
Transport modes are the means by which people and freight achieve mobility. They fall into one of three 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 commercial characteristics:
- Road transportation – Road infrastructures are large consumers of space with the lowest level of physical constraints among transportation modes. However, physiographical constraints are significant in road construction with substantial additional costs to overcome features such as rivers or rugged terrain. While historically road transportation was developed to support non-motorized forms of transportation (walking, domestication of animals and cycling at the end of the 19th century), it is motorization that has shaped the most its development since the beginning of the 20th century. 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 batches are the norm. Yet, with containerization, road transportation has become a crucial link in freight distribution.
- Rail transportation – Railways are composed of a traced path on which wheeled vehicles are bound. In light of more recent technological developments, rail transportation also include monorails and maglev. They have an average level of physical constraints linked to the types of locomotives and a low gradient is required, particularly for freight. Heavy industries are traditionally linked with rail transport systems, although containerization has improved the flexibility of rail transportation by linking it with road and maritime modes. Rail is by far the land transportation mode offering the highest capacity with a 23,000 tons fully loaded coal unit train being the heaviest load ever carried. Gauges, however, vary around the world, often challenging the integration of rail systems.
- Pipelines – Pipeline routes are practically unlimited as they can be laid on land or underwater. The longest gas pipeline links Alberta to Sarnia (Canada), which is 2,911 km in length. The longest oil pipeline is the Transiberian, extending over 9,344 km from the Russian arctic oilfields in eastern Siberia to Western Europe. Physical constraints are low and include the landscape and pergelisol in arctic or subarctic environments. Pipeline construction costs vary according to the diameter and increase proportionally with the distance and with the viscosity 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 for most of its path. Pipeline terminals are very important since they correspond to refineries and harbors.
- Maritime transportation – Because of the physical properties of water conferring buoyancy and limited friction, maritime transportation is the most effective mode to move large 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 the North Atlantic and the North Pacific. The construction of channels, locks and dredging are attempts to facilitate maritime circulation by reducing discontinuity. Comprehensive inland waterway systems include Western Europe, the Volga / Don system, St. Lawrence / Great Lakes system, the Mississippi and its tributaries, the Amazon, the Panama / Paraguay and the interior of China. Maritime transportation has high terminal costs, since port infrastructures are among the most expensive to build, maintain and improve. High inventory costs also characterize maritime transportation. More than any other mode, maritime transportation is linked to heavy industries, such as steel and petrochemical facilities adjacent to port sites.
- Air transportation – Air routes are practically unlimited, but they are denser over the North Atlantic, inside North America and Europe and over the North Pacific. Air transport constraints are multidimensional and include the site (a commercial plane needs about 3,300 meters of runway for landing and take off), the climate, fog and aerial currents. Air activities are linked to the tertiary and quaternary sectors, notably finance and tourism, which lean on the 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 global logistics.
- Intermodal transportation – Concerns a variety of modes used in combination so that the respective advantages of each mode are better exploited. Although intermodal transportation applies for passenger movements, such as the usage of the different, but interconnected modes of a public transit system, it is over freight transportation that the most significant impacts have been observed. Containerization has been a powerful vector of intermodal integration, enabling maritime and land transportation modes to more effectively interconnect.
- Telecommunications. Cover a grey area in terms of if they can be considered as a transport mode since unlike true transportation, telecommunications often does not have a physicality. Yet, they are structured as networks with a practically unlimited capacity and very low constraints, 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 light). Wave transmissions, because of their limited coverage, often require substations, such as for cellular phone networks. Satellites are often using a geostationary orbit which is getting crowded. High network costs and low distribution costs characterize many telecommunication networks, which are linked to the tertiary and quaternary sectors (stock markets, business to business information networks, etc.). Telecommunications can provide a substitution for personal movements in some economic sectors.
2. Modal Competition
Each transportation mode has key operational and commercial advantages and properties. However, contemporary demand is influenced by integrated transportation systems that require maximum flexibility in the respective use of each mode. As a result, modal competition exists at various degrees and takes several dimensions. Modes can compete or complement one another in terms of cost, speed, accessibility, frequency, safety, comfort, etc. There are three main conditions that insure that some modes are complementing one another:
- Different geographical markets. It is clear that if different markets are involved, modes will permit 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 of different geographical markets.
- Different transport markets. The nature of what is being transported, such as passengers or freight, often indicates a level of complementarity. Even if the same market area is serviced, it may not be equally accessible depending of the mode used. Thus, in some markets rail and road transportation can be complementary as one may be focusing on passengers and the other on freight.
- Different levels of service. For a similar market and accessibility, two modes that offer a different level of service will tend to complement another. The most prevailing complementarity 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 modal choice. Because each mode has its own price/performance profile, the actual competition between the modes depends primarily upon the distance traveled, the quantities that have to be shipped and the value of the goods. While maritime transport 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 each mode, where the costs (and delays) of loading and unloading the unit impose fixed costs that are incurred independent of the distance traveled.With increasing income levels, 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 act differentially upon the modes. Those that offer the faster and more reliable services gain over modes that might offer a lower cost, but slower, alternative. For passenger services, rail has difficulty in 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 value shipments. While shipping, pipelines and rail still perform well for bulkier shipments, intense competition over the last decades have seen road and air modes capture an important market share of the high revenue-generating goods. Road transport clearly dominates.Although inter-modal transportation has opened many opportunities for a complementarity between modes, there is intense competition as companies are now competing over many modes in the transport chain. A growing paradigm thus involves supply chain competition with the modal competition component occurring over three dimensions:
- Modal usage. Competition that involves the comparative advantage of using a specific or a combination of modes. Distance remains one of the basic determinants of modal usage for passenger transportation. However, for a similar distance, costs, speed and comfort can be significant factors behind the choice of a mode.
- Infrastructure usage. Competition resulting from the presence of freight and passenger traffic on the same itineraries linking the same nodes. Each level of capacity used by a mode is therefore at the expense of the other mode.
- Market area. Competition being experienced between transport terminals for using new space (terminal relocation or expansion) or capturing new markets (hinterland).
It is generally advocated that a form of modal equality (or modal neutrality) should be part of public policy where each mode would compete based upon its inherent characteristics. Since different transport modes are under different jurisdiction and funding mechanisms, modal equality is conceptually impossible as some modes will always be more advantageous than others. Modal competition is influenced by public policy where one mode could be advantaged over the others. This particularly takes place over government funding of infrastructure and regulation issues. Roads are usually provided by the public sector, while many other transport infrastructures are financed by the operators using them. This is the case for rail, air and maritime transportation. For instance, in the United States the Federal Government would finance 80% of the costs of a highway project, 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 such circumstances, public policy shapes modal preferences.
3. Modal Shift
The technological evolution in the transport industry aims at adapting the transport infrastructures to growing needs and requirements. When a transport mode becomes more advantageous than another over the same route or market, a modal shift is likely to take place. A modal shift involves the growth in the demand of a transport mode at the expense of another, although a modal shift can involve an absolute growth in both of the concerned modes. The comparative advantages behind a modal shift can be in terms of costs, convenience, speed or reliability. For passengers, this involved a transition in modal 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 transport infrastructures and networks varies enormously. Some regions possess many different modes that in combination provide a range of transport services that ensure an efficient commercial environment. Thus, in contrast to the situation in the European Union, rail freight transport occupies a more important market share in North America but passenger rail has a negligible share. In many parts of the world, however, there are only limited services, and some important modes such as rail may be absent altogether. This limits the choices for passengers and shippers, and acts to limit accessibility. People and freight are forced to use the only available modes that may not be the most effective to support their mobility. Areas with limited modal choices tend to be among the least developed. Advanced economies, on the other hand possesses a wide range of modes that can provide services to meet the needs of society and the economy.Since 2000 fuel prices gave increased significantly as well as their volatility, illustrated by significant price declines in 2009 and 2015. All modes are affected by fuel price volatility, from the individual car owner to the corporation operating a fleet of hundreds of aircraft or ships. Different pricing mechanisms are used namely direct rate adjustments, as is the case of shipping, or indirect adjustments as is the case of airlines, with the reliance on fuel surcharges when energy prices are increasing. In the context of higher energy prices, and therefore higher input costs for transportation, the following can be expected:
- Higher transport costs increase the friction of distance and constrain mobility. As a major consumer of petroleum the transport industry has to increase rates. Across the board increases causes people to rethink their patterns of movement and companies to adjust their supply and distribution chains.
- 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 fuel price increases are likely to impact upon them more severely than other modes. This could lead to a shift towards water and rail transport in particular.
- A further impact of fuel price increases is greater fuel economy across the modes. One of the best ways for all modes to reduce consumption is to lower speeds.
4. Passengers or Freight?
There is a complementarity between passenger and freight transport systems. With some exceptions, such as busses and pipelines, most transport modes have developed to handle both freight and passenger traffic. In some cases both are carried in the same vehicle, as for instance in air transport where about 80% of the freight is transported in the cargo holds of passenger aircraft. In others, different types of vehicle have been developed for freight and passenger traffic, but they both share the same road infrastructure, as for example in rail and road traffic. In shipping, passengers and freight used to share the same vessels and often the same terminals. 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 the major problems confronting transportation occur where the two compete for the use of scare transport infrastructure. 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 some modes, 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 in central areas. This raises the question as to what extent and under which circumstances freight and passengers are compatible. The main advantages of joint operations are:
- High capital costs can be justified and amortized more easily with a diverse revenue stream (rail, airlines, ferries).
- Maintenance costs can be spread over a wider base (rail, airlines).
- The same modes or traction sources can be used for both freight and passengers, particularly for rail.
The main disadvantages of joint operations are:
- Locations of demand rarely match since the origins and destinations of freight flows are usually quite distinct spatially from passenger traffic.
- Frequency of demand is different as for passengers the need is for high frequency service, for freight it tends to be somewhat less critical.
- Timing of service. Demand for passenger services has specific peaks during the day, for freight it tends to be more evenly spread throughout the day. Several freight operations prefer night services since they insure that shipments arrive at their destination in the morning.
- Traffic balance. On a daily basis passenger flows tend to be in equilibrium, irrespective of the distance involved (e.g. commuting or air transportation). For freight, market imbalances produce empty flows that require the repositioning of assets.
- Reliability. Although freight traffic increasingly demands quality service, for passengers delays (diversion from posted schedules) are unacceptable.
- Sharing routes favors passenger traffic with passenger trains often given priority or trucks excluded from specific areas at certain times of the day.
- Different operational speeds where passengers demand faster service but specific cargo, such as parcel, facing similar requirements.
- Security screening measures for passengers and freight require totally different procedures.
The ongoing separation of passengers and freight on specific gateways and corridors is consequently a likely outcome, involving a growing divergence of flows, modes and terminals.5. A Growing DivergencePassengers and freight are increasingly divergent activities as they reflect different transportation markets. In several modes and across many regions passenger and freight transport is being unbundled:
- Shipping. Mention has been made already how in the maritime sector passenger services have become separated from freight operations. The exception being ferry services where the use of RORO ships on high frequency services adapt to the needs of both market segments. Deep sea passenger travel is now dominated by cruise shipping which has no freight-handling capabilities, and bulk and general cargo ships rarely have an interest or the ability to transport passengers.
- Rail. Most rail systems improved passenger and freight services. Where both segments are maintained the railways give priority to passengers, since rail persists as the dominant mode for inter-city transport in India, China and much of the developing world. In Europe the national rail systems and various levels of government have prioritized passenger service as a means of checking the growth of the automobile. Significant investments have occurred in improving the comfort of trains and in passenger rail stations, but most notable have been the upgrading of track and equipment in order to achieve higher operational speeds. Freight transport has tended to lose out because of the emphasis on passengers since such systems were optimized for passenger flows. Because of their lower operational speeds, freight trains 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 a factor in the loss of freight business by most rail systems still trying to operate both freight and passenger operations. It is in North America where the separation between freight and passenger rail business is the most extensive. The private railway companies could not compete against the automobile and airline industry for passenger traffic, and consequently withdrew from the passenger business in the 1970s. They were left to operate a freight only system, which has generally been successful, especially with the introduction of intermodality. The passenger business 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 track-age from the freight railways, and thus slower freight trains have priority.
- Roads. Freight and passenger vehicles still share the roads. The growth of freight traffic is increasing road congestion and in many cities concerns are being raised about the presence of trucks. Already, restrictions are in place on truck dimensions and weights in certain parts of cities, and there are growing pressures to limiting truck access to non-daylight hours. Certain highways exclude truck traffic – the parkways in the US for example. These are examples of what is likely to become a growing trend; the need to separate truck from passenger vehicle traffic. Facing chronic congestion around the access points to the port of Rotterdam and at the freight terminals at Schiphol airport, Dutch engineers have worked on feasibility studies of developing separate underground road networks for freight vehicles.
- Air transport. Air transport is the mode where freight and passengers are most integrated. Yet even here a divergence is being noted. The growth of all-freight airlines and the freight-only planes operated by some of the major carriers, such as Singapore Airlines, are heralding a trend. The interests of the shippers, including the timing of the shipments and the destinations, are sometimes better served than in passenger aircraft. The divergence between passengers 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 is oriented towards tourism, since tourist destinations tend to be lean freight generating locations.
Impact of Science & Technology
The way we make our daily travel decisions is set to change dramatically over the next 20 years. One of the key drivers of this change will be technology and, in particular the proliferation of internet enabled, location sensitive mobile devices and the data they produce. These devices both provide transport information users and provide network operators with data and a platform to manage and improve services, monitor and manage traffic flows and build customer relationships.
Another key element is the availability of open transport data sets to smart phone app and website developers. Transport data sets in particular are driving exciting new mobile app developments that focus on journey planning – including pushing real time departure information to people via smart phone and text messaging. This new approach to information dissemination is beginning to look far more financially attractive to local authorities, with the focus on data rather than investment in on-street infrastructure such as digital displays. We’ve been working with Dundee City Council, Bristol City Council, Shropshire Council and Brighton and Hove City Council to ‘push’ key data sets to the general public via mobile apps and web travel portals.
It’s not just public transport users that are benefitting from open data and smart phone apps – Open Street Map (OSM), the ‘Wikipedia of mapping’ is beginning to integrate key cycle links and cycle friendly routing information around the world. What makes open data attractive is that it can be edited by anyone – including cycling and community groups – and it’s global. It gives people ownership over the mapping of their local area, and if you update a link to indicate the availability cycle lane, this will automatically be picked up by OSM powered journey planners and will provide a more quality result. We have also been working with Swindon Borough Council as part of its Travel Choices project to train local cycle groups and council officers to edit OSM data – with a view of maintaining a cycle map and providing accurate journey planning data.
- What is the impact of science and technology on transportation system?
- What are the disadvantages of joint operations?
- What are the 3 main conditions that insure that some modes complement each other?
- Explain the characteristics of the following mode of transportation:
- Road Transportation
- Maritime Transportation
- Inter-modal Transportation
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