Importance of Intermodal Transportation - Essay Example

Importance of Intermodal Transportation Importance of Intermodal Transportation Intermodal transportation has, on many occasions,been defined as the movement of passengers or goods from one given form of transport to another. It is identified as an integrated chain structure, which allows the movement of goods and passengers from one mode to another at terminals designed for that specific purpose. As compared to other systems of transportation, intermodal transportation integrates various types of services and modes of transportation, so as to improve on the good organization and efficiency of the entire process of distribution (Taylor, 2007). Currently, intermodal transportation has been identified as the cornerstone of trade. Its benefits assist trade in the sense that it increases the demand and supply of most goods, while at the same time, reducing the costs associated with such movement. This paper will examine the importance of this form of transportation structure, and some of the economic implications of the same in a region. Intermodal transportation involves the movement of people or goods with the use of at least two modes of transportation. This is unlike multimodal transportation, which requires different transportation modes to ensure that goods and people are transported effectively from their origin to their destination. Different players exist in the intermodal transportation networks, who then determine the overall performance of the system (Taylor, 2007). The main concept behind intermodal transportation is the combination of different consignments for long-distance transportation, taking into consideration the efficiency of the local operations after the initial haul. This form of transportation system is gaining popularity in the business world due to its effectiveness and safety, which allows businesses to bring forth a competitive edge in the market, hence; increasing their productivity. Several experts believe that intermodal transportation is a socio-economic event that points to the fact that some of the benefits of this transportation structure lead to the overall benefit of the society and economy. This is because all the tools present in an economy tend to benefit when an effective and efficient transportation system is in place. Some of the benefits identified by these experts include reduced costs in terms of operations and maintenance, and also a reduction in transportation overheads (Tumlin, 2011). The impact this has on the economy is an immediate drop in the costs of production in a given economy. Transportation systems, all around the world, offer infrastructure for various economic operations. This guarantees that the social and economic fronts benefit with the existence of more transportation systems in a region. The economies of scale tend to be magnified when it comes to intermodal transportation. This is seen with the increase in returns to scale, which tend to be of a specific nature. These returns to scale may, ultimately, lead to a cumulative growth of the economy. This is both at a regional and national level. Experts tend to identify this occurrence as the spill-over effect, where the transportation system has led to an eventual growth in the economy. Intermodal transportation may be seen as an enhancement on an economic system’s output, which works on improving operational purpose and utility of the system, and at the same time, expands and increases the functions present (Coyle, Langley & Gibson, 2008). These improvements are attained by utilizing the advantages of the various transportation modes available, which then lead to an increase in productivity and a reduction in costs. There are four elements of intermodal transportation that can be brought out to express the overall impact on the economy, and these elements include; improved openness to input and output markets, economies of scale related to an expansion of the transport network, expansion in the quantities of transportation, and a decline in logistic expenses. All these elements ensure that the economy of a region benefits in terms of productivity or output, and at the same time, guarantee that the costs of doing or conducting operations are at a minimum (Weiner, 2009). Take for instance the decline in logistic expenses. The optimal rate of service is the increased reliability that a business boasts of, coupled with the aspect of on-time delivery. These aspects ensure that any party in business enjoys a reduction in logistic costs, whereby the holding costs of goods are reduced due to the just-in-time aspect. Furthermore, the accessibility and openness to input and output markets allows businesses to sell some of the unsold inventories in different markets. Businesses often have unsold inventories that accumulate with time. This often translates to a reserve of unsold goods, which presents a challenge to the business and the economy that is meant to benefit from the sale of those goods. Intermodal transportation allows the sale of these goods to be much easier and faster, thus; increasing the sales revenue enjoyed by the different businesses available. The revenue accrued from these sales counts as a justifiable and permissible economic advantage, which ultimately leads to the growth of the economic system (Guangquig, 2010). This steady flow of capital from the sale of these inventories brings forth a steady rise in the business’s productivity, and in turn, the overall economy. According to various studies, holding costs contribute to a large amount of the total production costs. A decrease in the holding costs vastly progresses the output of an economy. The progress in output is from the impression that the same level, or more, of output in an economic system can still be attained, albeit at a lower cost. That being said, it is imperative to note that intermodal transportation requires special skills (Minzhou et al., 2004). This means that education programs are coming up to ensure that individuals are trained on intermodal modes of transportation. These specialists go on to provide the system with the necessary tools required in making it possible to increase productivity in an economic system, and at the same time, improve on the lives of individuals in the same economic system. This improves the standards of living in the region where average individuals better their conditions with benefits that emanate from intermodal transportation infrastructure and networks. Depending on the value of the goods being shipped from one destination to another, intermodal transportation ensures that the timely delivery of these goods attains the intended target. This may be in terms of the costs or market that the goods are meant to garner or acquire. That being said, security is one crucial element that intermodal transportation brings to the table. Security is necessary to allow for the safe transport of goods depending on their value from one point to another without any glitches. In order to provide security for the goods, labor and other security tools may be needed for the various modes of transportation available. That leads to an increase in the total cost needed in order to guarantee the safe transportation of the goods. There is a need to invest in quality security measures and even though this requires time and capital, the benefits are immense, for both the parties involved and the economic growth desired (Sky, 2011). In conclusion, the contribution made by intermodal transportation on the economy may be modest or reticent, but should not be ignored. They are not insignificant since they provide an avenue for all parties to benefit from the steady economic growth with the increase in returns to scale. The impact of intermodal transportation has been felt over the years, and now businesses are taking it upon themselves to believe in the fundamental efficiency of this transportation network (Bragdon, 2011). This is for the sake of their businesses, and the eventual impact on the economy. The recent innovations in the transportation system are paving way for the cumulative growth of the economy. Some of the benefits, for example; advancements in road safety and positive impact on the environment are benefits that come with a growing transportation network. It is only a matter of time before the world accepts the presence of the network in place, and acknowledges its importance in the business environment. References Bragdon, C. (2011). Transportation security. New York: Oxford University Press. Coyle, J., Langley, C., & Gibson, B. (2008). Supply chain management: A logistics perspective. New York: Hart Publishing. Guangquig, C. (2010). Assessing economic and demographic impacts of intermodal transportation systems. Oxford: Oxford University Press. Mingzhou, J., et al. (2004). System performance measures for intermodal transportation with a case study and industrial application. Washington, DC: The National Center for Intermodal Transportation. Sky, T. (2011). The national road and the difficult path to sustainable national investment. New York: Rowman & Littlefield Publishers. Taylor, G. D. (2007). Logistics engineering handbook. London: Macmillan Publishers. Tumlin, J. (2011). Sustainable transportation planning: Tools for creating vibrant, healthy, and resilient communities. New York: John Wiley & Sons. Weiner, E. (2009). Urban transportation planning in the United States: History, policy, and practice. New York: Springer Publishing. Read More