Authors: Dr. Jean-Paul Rodrigue and Dr. Brian Slack
Intermodal transportation concerns the movements of passengers or freight from an origin to a destination relying on several modes of transportation. The container has become the dominant intermodal transport unit.
1. The Nature of Intermodalism
Most transportation modes are developed independently. Competition between modes tended to produce transportation systems that were segmented and un-integrated; in their own “silos”. Each mode, particularly the carriers that operated them, has sought to exploit its advantages in cost, service, reliability, and safety. Carriers try to gain market share and increase revenue by maximizing the line haul under their control. All the modes saw the other modes as competitors, often because of different regulatory regimes and competitive rules. The lack of integration between the modes was also accentuated by public policy that has frequently prevented companies from owning firms in other modes (as in the United States before deregulation) or has placed a mode under direct state monopoly control (as in Europe and East Asia). Modalism was also favored because of the technical difficulties of transferring goods from one mode to another, thereby incurring additional terminal costs and delays, mainly because the load unit needed to be changed, which is typical for bulk transportation.
Since the 1960s, major efforts have been made to integrate separate transport systems through intermodalism, which took place in several stages. The transformation first took place with the setting of maritime networks, which were then better connected with inland networks. From a functional and operational perspective, three components are involved in intermodalism:
Intermodal transportation. The movements of passengers or freight from an origin to a destination relying on a sequence of transportation modes. Each carrier is issuing its own ticket (passengers) or contract (freight). Transfers from one mode of transport to another are commonly taking place at a specifically designed terminal.
Multi-modal transportation. The movements of passengers or freight from an origin to a destination relying on several modes of transportation using one ticket (passengers) or contract (freight). Technically the same as intermodal transportation, but represents an evolution requiring a higher level of integration between the actors involved such as carriers and terminal operators.
Transmodal transportation. The movements of passengers or freight within the same mode of transportation. Although pure transmodal transportation rarely exists and an intermodal operation is often required (e.g. ship to dockside to ship), the purpose is to ensure continuity within the same modal network.
Intermodal transportation relies on an exchange of passengers or freight between two transportation modes. The term has become more commonly used for freight and container transportation across a sequence of modes. In North America, the term intermodal is also used to refer to containerized rail transportation. With intermodal transportation, what initially began as improving the productivity of shipping evolved into an integrated supply chain management system across modes and the development of multi-modal transportation networks.
Multi-modal transportation network. A logistically linked system using two or more transport modes with a single rate. Modes have 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.
Intermodalism involves using at least two different modes in a trip from an origin to a destination through an intermodal transport chain, which permits the integration of several transportation networks. Intermodality is expected to enhance 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 efficiency of trucks providing flexible local pick-up and deliveries. 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 system is organized around the following conditions:
- The nature and quantity of the transported cargo usually suitable for intermediate and finished goods are for load units of less than 25 tons. The mode with the lowest capacity usually defines the intermodal load unit. As such, intermodal transportation is constrained by the trucking load unit.
- The sequence of transportation modes being used must ensure a modal continuity. 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 requires intermodalism (trucking) for its “first and last miles” and is 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 of the movements where 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. Shorter distances are usually not suitable for intermodal transportation.
- The value of the cargo is of intermediate value as 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 rely on one mode, such as rail or maritime.
- The frequency of shipments needs to be continuous and in similar quantities.
Intermodal transportation is capital intensive, implying that it requires specialized equipment to transfer cargo from one mode to the other.
2. Forms of Intermodalism
Intermodalism originated in maritime transportation, with the development of the container in the late 1960s, 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 vessels. A conventional breakbulk cargo ship could spend as much time in a port as it did at sea. Breakbulk cargoes were handled by stevedores who used ad-hoc means to load, unload, and move cargoes between the ships, piers, and warehouses. There were no standard forms of cargo handling and equipment. Containerization permits the mechanized handling of cargoes of diverse types and dimensions 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 early 20th century, pallets became a common management unit. Still, their relatively small size and lack of a 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 an intermodal unit has been developed in the rail industry, particularly in the United States, where there is sufficient volume. A roadrailer is essentially a road trailer that can also roll on rail tracks. It is unlike the TOFC (piggyback) system that requires the trailer to be lifted onto a rail flatcar. In this case, the rail bogies may be part of the trailer unit or attached at 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 freed firms from government control and ownership, a policy that was adopted in many transport markets across the world. Carriers were no longer restricted from owning across modes, which developed a strong impetus towards intermodal cooperation. Shipping lines 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 being concerned about modal barriers. In many cases, cargo owners were not concerned about the sequence of modes, only that their shipments were carried in a timely and cost-effective fashion.
The most important feature of intermodalism is providing 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, information and distribution systems 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) was initially developed to assist companies and government agencies (customs documentation) in coping with an increasingly complex global transport system. This technology has now evolved, and with digitalization, crucial information can be shared across modes.
Intermodal transport is transforming the medium, and long-haul freight flows across the world. 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, intermodal rail 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 intermodal rail 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 interior markets. The limits of intermodality are imposed by factors of space, time, form, the network pattern, the number of nodes and linkages, and the type and characteristics of the vehicles and terminals.
The box (container) is what makes the world go round.
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. The begin with, a distinction is necessary between containerization and the container.
Container. A large standard size metal box into which cargo is packed for shipment aboard specially configured transport modes (ISO 668). 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 most containers are now forty feet long, the term Forty-foot Equivalent Unit (FEU) is also used, but less commonly. “Hi cube” containers are also common, and they are one foot higher (9’6″) than the standard.
Containerization. Refers to the increasing and generalized use of the container as a load unit for freight transportation. It involves processes where the intermodal container either substitutes cargo from other conveyances, is adopted as a mode supporting freight distribution, or can diffuse spatially as a growing number of transport systems are able to handle containers.
Containerization conveys a variety of benefits to the mobility of freight, namely lower transportation costs, lower inventory costs, and a higher service level, including reliability.
The development of intermodal transportation and containerization are mutually inclusive, self-strengthening, and rely on a set of driving forces linked with technology, infrastructures, and management. One of the initial issues concerned the different sizes and dimensions of containers used by shipping lines, a source of much confusion in compiling container shipping statistics. A lift could involve different volumes since different box sizes were involved. As a result, the term TEU (Twenty-foot Equivalent Unit) was first used by Richard F. Gibney in 1969, who worked for the Shipbuilding & Shipping Record, as a comparative measure. Since then, the TEU has remained the standard for containerized traffic, where cargo is measured in volume instead of weight.
The usage of containers shows the complementarity between freight transportation modes by offering a higher fluidity to movements and standardization of loads. The container has substantially contributed to the adoption and diffusion of intermodal transportation, which has led to profound mutations in the transport sector. By reducing handling time, labor costs, and packing costs, container transportation allows considerable improvement in the efficiency of transportation. Thus, the relevance of containers is not what they are – simple boxes – but what they enable; intermodalism. Globalization could not have taken its current form without containerization.
Containers are either made of steel (the most common for maritime containers) or aluminum (particularly for domestic containers), and their structure confers flexibility and hardiness. Another factor behind the diffusion of the container is that an agreement about its base dimensions and latching system was reached through the International Standards Organization (ISO 668) within ten years of its introduction. From this standard, a wide variety of container sizes and specifications have been put in use. The length unit for containers remains the imperial foot even if most countries use the metric system, a legacy that the standard was initially introduced in the United States. However, the most prevalent container size is the 40-foot box, which in its 2,400 cubic feet and carries on average 22 tons of cargo. However, transporting cargo in a 20-foot container is usually 20% cheaper than transporting cargo in a 40-foot container, but the 40-foot container offers at least twice the volume. Irrespective of the size, a 20-foot container requires the same amount of intermodal movements, even if it takes up about half the space during transport and at terminals. This explains why rates for carrying 20-foot containers are not half of those for carrying 40-foot containers.
Containers can be designed to carry a wide range of goods, which involves a level of specialization around five main types:
- Standard container. A container designed to carry a wide variety of general cargo. They are often labeled as dry containers because they carry dry goods either in breakbulk (most common) or bulk (less common). Cargo is loaded and unloaded through a double door, which marks the “backside” of the container.
- Tank container. A container designed to carry liquids (chemicals or foodstuff). It is composed of a tank surrounded by a structure making it the same size as a standard 20-foot container, including its four latching points.
- Open top container. A container with an open roof designed to carry cargo too large to be loaded through standard container doors, such as machinery. The container is loaded from the top with a tarpaulin used to cover its contents.
- Flat container. A container having an open roof and sides designed to carry heavy and oversized cargo. The cargo transported is left exposed to outdoor conditions.
- Refrigerated container. Also known as a reefer, it is a container designed to carry temperature-controlled cargo, often around or below freezing point. It is insulated and equipped with a refrigeration plant maintaining the temperature constant.
A significant share of international containers is either owned by shipping lines that tend to use them as a tool to help fill up their ships or by leasing companies using containerized assets for revenue generation. In the United States, a large number of domestic containers of 53 feet are also used. Doublestacking of containers on railways (COFC: Containers On Flat Cars) has doubled the capacity of trains to haul freight with minimal cost increases, thereby improving the competitive position of the railways with regard to trucking for long-haul shipments.
While it is true that the maritime container has become the workhorse of international trade, other types of containers are found in certain modes, most notably in the airline industry. High labor costs and the slowness of loading planes that require a very rapid turnaround made the industry very receptive to the concept of a loading unit of standard dimensions designed to fit the specific shape of the bellyhold. The maritime container was too heavy and did not fit the rounded configuration of a plane fuselage, and thus a box specific to the needs of the airlines was required. The major breakthrough came with the introduction of wide-bodied aircraft in the late 1970s. Lightweight aluminum boxes, called unit load devices, could be filled with luggage or parcels and freight, and loaded into the holds of the planes using tracking that requires little human assistance.
Containerization represents a revolution in the freight transport industry, facilitating economies of scale and improved handling speed and throughput. Containerized traffic has surged since the 1990s. This underlines the adoption of the container as a dominant means to ship products on international and national markets, particularly for non-bulk commodities, where the container accounts for more than 90% of all movements. Containerization leans on growth factors mainly related to globalization, substitution from breakbulk, and, more recently, the setting of intermediate transshipment hubs. Although containerization initially superimposed itself over existing transportation systems, it created its own unique system of exclusive modes and terminals. Thus, the container became a standard unit around which a new transportation system was built.
Globalization and containerization as closely interrelated. According to UNCTAD, between 1970 and 1990, trade facilitation measures accounted for 45% of global trade growth, while membership in global trade organizations such as GATT/WTO accounted for another 285%. The container accounted for an additional 790%, exceeding all the other trade growth factors combined. The diffusion and adaptation of transport modes to containerization is an ongoing process that will eventually reach a level of saturation. Containers have thus become the most important component for rail and maritime intermodal transportation. The challenge remains about the choice of modes in an intermodal transport chain as well as minimizing the costs and delays related to moving containers between modes. As the use of intermodal transportation increased and became more complex (e.g. international trade), transactional costs and inefficiencies became increasingly apparent. Innovations involve using blockchain technology, as distributed electronic ledgers, to support the complex array of transactions and information flows related to intermodal transportation.
4. Advantages and Challenges of Containerization
Containerization is a key benefit as a form of cargo transportation, particularly its standardization and flexibility. There are several factors supporting the advantages of containerization.
a. Standard transport product
A container can be handled anywhere in the world as its dimensions are an ISO standard. Transfer infrastructures allow all elements (vehicles) of a transport chain to handle it with relative ease. Standardization is a prevalent benefit of containerization as it conveys ubiquity in accessing the distribution system and reduces the risks of capital investment in modes and terminals. Irrespective of the geographical setting, a container can be handled.
The rapid diffusion of containerization was facilitated because its initiator, Malcolm McLean, purposely did not patent his invention. Consequently, all segments of the industry, competitors alike, had access to the standard. It necessitated the construction of specialized ships, lifting equipment, and terminal facilities. Still, in several instances, existing transport modes could be converted to container transportation, at least while a more effective transition to containerization took place. In time, the container became the standard transport unit of global trade.
b. Flexibility of usage
A container can transport a wide variety of goods ranging from raw materials (coal, wheat), manufactured goods, and cars to frozen products. There are specialized containers for transporting liquids (oil and chemical products) and perishable food items in refrigerated containers (which now account for 70% of all refrigerated cargo transported). About 3.1 million TEUs of reefers were being used by 2019. Discarded containers are often used as storage, housing, office, and retail structures.
As an indivisible unit, the container carries a unique identification number and a size type code, enabling transport management not in terms of loads, but in terms of units. This identification number is also used to ensure that it is carried by an authorized agent of the cargo owner and is verified at terminal gates, increasingly in an automated fashion. Computerized management enables to reduce waiting times considerably and to know the location of containers (or batches of containers) at any time. It assigns containers according to the priority, the destination, and the available transport capacities. Transport companies book slots in maritime or railway convoys that they use to distribute containers under their responsibility. As such, the container has become a production, transport, and distribution unit.
c. Economies of scale
Relatively to bulk, container transportation reduces transport costs considerably, about 20 times less. While before containerization, maritime transport costs could account for between 5 and 10% of the retail price, this share has been reduced to about 1.5%, depending on the goods being transported. The main factors behind cost reductions reside in the speed and flexibility incurred by containerization. Like other transportation modes, container shipping benefits from economies of scale by using larger containerships.
The 6,000 TEU landmark was surpassed in 1996 with the Regina Maersk, and in 2006 the Emma Maersk surpassed the 12,000 TEU landmark. By 2013, ships of more than 18,000 TEU became available, and by 2022 the market saw the introduction of 22,000 TEU ships. A 5,000 TEU containership has operating costs per container 50% lower than a 2,500 TEU vessel. Moving from 4,000 TEU to 12,000 TEU reduces operating costs per container by a factor of 20%, which is very significant, considering the additional volume involved. System-wide, the outcome has been cost reductions of about 35% using containerization.
d. Operational velocity
Transshipment operations are minimal and rapid, which increases the utilization level of the modal assets and port productivity. A modern container ship has a monthly capacity of 3 to 6 times more than a conventional cargo ship of the same tonnage. This is notably attributable to gains in transshipment time as a container crane can handle roughly 30 movements (loading or unloading) per hour. Port turnaround times have thus been reduced from an average of 3 weeks in the 1960s to less than 24 hours since it is uncommon for a ship to be fully loaded or unloaded at a port call along regular container shipping routes.
It takes on average between 10 and 20 hours to unload 1,000 TEUs compared to between 70 and 100 hours for a similar quantity of bulk freight. With larger containerships, more cranes can be allocated to transshipment; 3 to 4 cranes can service a 5,000 TEU containership, while ships of 10,000 TEU can be serviced by 5 to 6 cranes. The latest generation of 18,000 to 20,000 TEU containerships requires 6 to 9 cranes to be effectively serviced. This implies that larger ship sizes do not have many differences in loading or unloading time, but this requires more yard equipment. A regular freighter can spend between half and two-thirds of its useful life in ports. With less time in ports, containerships can spend more time at sea generating revenue. Based on Automatic Identification Service (AIS) data, a containership spends around 40% of its time stationary. Further, on average, containerships are 35% faster than regular freighter ships (19 knots versus 14 knots). With all the above velocity factors taken into consideration, it is estimated that containerization has reduced travel time for freight by a factor of 80%.
e. Warehousing and security
The container is its own warehouse and limits damage risks for the goods it carries because it is resistant to shocks and weather conditions. Therefore, the packaging of goods it contains is simpler, less expensive, and can occupy less volume. This reduces insurance costs since cargo is less prone to be damaged during transport. Besides, containers fit together, permitting stacking on ships, trains (doublestacking), and on the ground. The stacking height of containers is constrained by a permissible weight of 192 tons. With 30 tons per container, this would correspond to a pile of 6 containers in height. However, due to the operational complexity of high piles, staking usually superimposes three to four loaded and six empty containers on the ground.
The contents of the container are anonymous to outsiders as it can only be opened at the origin, at customs, and at the destination. Theft, especially those of valuable commodities, is considerably reduced, resulting in lower insurance premiums. It was a serious issue at ports before containerization, as longshoremen had direct access to the cargo they were handling.
Even if there are numerous advantages to the usage of containers, some challenges are also evident.
f. Site constraints
Containerization implies a large consumption of terminal space. To fully load or unload a containership of 5,000 TEU, a minimum of 12 hectares of stacking space is required. Conventional port areas are often inadequate for the location of container transshipment infrastructures, particularly because of draft issues as well as required space for terminal operations. Many container vessels require a draft of at least 14 meters (45 feet), and the later generation of larger ships require at least 15 meters (50 feet). The site constraints imposed by containerization have incited the development of new terminal facilities and migration towards better-suited sites. A similar challenge applies to container rail terminals, many being relocated at the periphery of metropolitan areas. Consequently, major container handling facilities have new location criteria where suitable sites are only found at the periphery and, at times, far from the original site.
g. Infrastructure costs and stacking
Containerization is a capital-intensive endeavor. Container handling infrastructures, such as gantry cranes, yard equipment, road, and rail access, represent important investments for port authorities and terminal operators. For instance, the costs of a modern container crane (portainer) are in the range of 4 to 10 million USD depending on the size. Several developing economies, as well as smaller ports, face the challenge of finding capital for these infrastructure investments.
The arrangement of containers, both at terminals and on modes (containerships and double-stack trains), is a complex problem. The possible stacking density is related to available yard space and equipment. When loading with a reachstacker or a gantry, it becomes imperative to ensure that containers that must be taken out first are not below a pile. Further, containerships must be loaded in a way to avoid any restacking during its numerous port calls where containers are loaded and unloaded.
h. Thefts and losses
While many theft issues have been addressed because of the freight anonymity a container confers, it remains an issue for movements outside terminals where the contents of the container can be assessed based on its final destination. The World Shipping Council estimated that, on average, 546 containers are lost at sea each year under normal operating conditions, a figure that climbs to 1679 containers if events such as ship collisions and sinking are included. Rough weather is the major cause of container losses, but improper container stacking also plays a role (distribution of heavy containers). Yet, the loss rate remains very low since 5 to 6 million containers are transported at any time.
i. Empty travel
Carriers need containers to maintain their operations along with the port networks they service. The same number of containers brought into a market must eventually be relocated, regardless of whether they are full or empty. On average, containers will spend about 56% of their 10 to 15 years lifespan idle or being repositioned empty, which is not generating any income but conveys a cost that is part of the shipping rates. Either full or empty, a container takes the same amount of space on the ship or in a storage yard and takes the same amount of time to be transshipped. Due to a divergence between production and consumption, reflected in the balance of trade, it is uncommon to see equilibrium in the distribution of containers.
About 2.5 million TEUs of empty containers are stored in yards and depots worldwide, underlining the issue of the movement and accumulation of empty containers. They represent about 20% of the global container port throughput and the volume carried by maritime shipping lines. Most container trade is imbalanced, and thus containers accumulate in some places and must be shipped back to locations where there are deficits, mostly those with a strong export function. This is particularly the case for American container shipping. As a result, shipping lines waste substantial amounts of time and money in repositioning empty containers.
j. Illicit trade
By its confidential character, the container is a common instrument used in the illicit trade of counterfeit goods, drugs, and weapons. At the global level, only 2 to 5% of all containers handled at ports are manually inspected by customs, leaving opportunities for illicit cargoes. This share can go as low as 1% for several large European ports. Manually inspecting a container requires physical resources such as inspection areas as well as labor resources. Thus, assessing if a container should be physically inspected is the outcome of careful considerations related to its origin, the customs declaration, the carrier, and the cargo owner. Concerns have also been raised about containers being used for terrorism.
These fears have given rise to an increasing number of regulations aimed at counteracting the illegal use of containers. In 2003, following US inspection requirements, the International Maritime Organization (IMO) introduced regulations regarding the security of port sites and the vetting of workers in the shipping industry. The US established a 24-hour rule, requiring all shipments destined for the US to receive clearance from US authorities 24 hours before the departure of the vessel. In 2008, the US Congress passed a regulation requiring all US-bound containers to be electronically scanned at the foreign port of loading, before departure. These measures incur additional costs and delays that many in the industry oppose.
Yet, the advantages of containerization have far outweighed its drawbacks, transforming the global freight transport system and, along with it, the global economy.
5. Intermodal Transport Costs
A relationship between transport costs, distance, and modal choice has for long been observed. With the three options available, road transport is usually used for short distances (below 500 km), railway transport for average distances (from 500 to 750 km), and maritime transport for long distances (above 750 km). According to the geographical setting, variations of modal choice are observed, but figures tend to show a growth in 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 related to more complex and sophisticated value chains. As a result, the efficiency of contemporary transport systems rests as much on their capacity to route freight as on their capacity to transship it, but each of these functions has a cost that must be reduced.
The intermodal transportation cost implies considering several types of transportation costs for the routing of freight from its origin to its destination, which involves a variety of shipments, transshipment, and warehousing activities. It considers a logistic according to organized transport chains where production and consumption systems are linked to transport systems. Numerous technical improvements, such as river/sea shipping and better integration between rail and road transport, have been set to reduce interchange costs. Still, 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, land transport costs remain significant despite a significant reduction in maritime transport costs. Between half and two-thirds of total transport costs for a TEU are accounted for 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 impacts. In Europe, policies have been introduced to induce a shift of freight and passengers from the roads to environmentally more efficient modes. Intermodal transport is seen as an option that could work in certain situations. For example, in Switzerland, laws stipulate that all freight crossing through the country must be placed on the railways 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 maritime unit costs, inland intermodal transportation costs account for about 50% of the total costs if terminal costs are included. With the deregulation and privatization trends that began in the 1980s, 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 pick up 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 by offering door-to-door service from suppliers located around the world. The move inland also led to 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. After more than half a century of intermodal development, the geography of freight terminals and supply chains has been transformed by sequences of modes and terminals that are time and cost-efficient.
- 6.1 – The Function of Transport Terminals
- 6.3- Port Terminals
- Inland Ports / Dry Port (PEMP)
- B.13 – The Containerization of Commodities
- Containers (PEMP)
- Terminals and Terminal Operators (PEMP)
- 5.3 – Rail Transportation and Pipelines
- 1.4 – The Setting of Global Transportation Systems
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