Advantage and Disadvantages of different modes of transport on a global scale - Essay Example

Advantage and Disadvantages of different modes of transport on a global scale Introduction Freight transportation had its beginning even with the Old Stone Age man. When he hunted down a mammoth for his family he had to transport it to a safe place. He had to transport material to build his house. Freight transportation was the major reason why man invented the wheel. He could always perch himself on an horse or an elephant or sledge himself using his dogs for his own personal transport. But when it came to moving material that belonged to him, he found himself in a tough spot. He had to invent wheels which started off as large logs to all those modes of transport today that we are going to discuss in this paper. In order to appreciate the way the freight transport industry is progressing and the methodologies that they have been adopting, it is important hat we understand their history and hence get a total perspective of the whole industry. The freight industry was and continues to be most important economic requirement that any of the countries would need. Many times in the history of the civilization of Man we find that the country that had better logistics won many battles and hence the war. Many times they also won wars that they never fought both economical superiority and logistic superiority. When a country could produce and sell their products across the world then they end up superior to the people who are yet to come to grips with the logistics of movement of goods and services. 2. History of Freight transportation Let us trace the history of freight transportation from 1800 to the modern days. If we see today, there are five modes of transport that are very much in vogue. 1. The railways. 2. The waterways 3. The airways 4. The roadways 5. the pipelines. The ships had their major technology change when the steam engine was invented and they were mounted on the hitherto paddled or wind powered boats to make gigantic ships that could literally rush through the sea. The same invention also changed the way people and material traveled over the land as well in the form of railways. Steam engines altered the modes of transport on sea in 1807 and on land in 1829. Transportation now became cheap and fast over all the surfaces of the earth both land and water. This brought in a revolution that literally changed the way industry was looked at. The IC engines brought in another round of change with technological upgrade. The world became smaller and smaller with faster traveling and transport mechanisms, men could pack their material and send it over railroads that traveled over 5 times as fast an horse would. Soon there were the trucks and the vehicles that plied the roads. The roadways also changed the very approach to traveling by individuals. It also changed the way people started looking at manufacturing processes. With a reach that spanned every corner of the country, roads brought the neighborhoods as close as close can be. Central production with a distribution set up started forming across the country making cheaper products a reality. With IC engines another major development in technology was also ushered in. This was the aircraft. With the invention of the aircraft, we find the transport time getting reduced by more than 10 times across the world, leading time a world wide integration of manufacturing. This also was rising the scale of production and an economics of scale and the economics of logistics went together to make things possible in the country. Pipes and conveyors also formed another set of transporting mechanisms that helped in putting together an easy but effective way of transporting material over longer distances and huge volumes. 3. The Industry and how it works The logistics industry or transport industry has the following major constituents. 1. The supplier or the sender of the material 2. The buyer or the receiver of the material 3. Transportation in the mode of transport that is suited 4. In case of multimodal, arranging so that the time taken is accounted for. 5. Transshipment in between to take care of any change in vehicle at a specific place needs to be also taken care of. 6. Insurance companies to provide appropriate cover during transit. The risk of the transport has been substantially brought down by providing insurance cover to the transported material. The nature or mode of transport is decided based on various parameters. Many times the seller or the buyer of the material would decide the date of delivery. In case of material or goods that are perishable, the seller decides when the material should reach the buyer. In case of others, buyer will have the deadline for receipt of these goods at his work spot. This would decide on the time that the transporter could possibly make use of (Rushton, et al, 2000). This is one of the key factors deciding on the method of transit. The second key parameter is the nature of the material. The material could be bulky or voluminous. Say, we need to transport sugar or we need to transport crude oil. We need to adopt a transport method that suits the nature of the material. Nature of the material will vary sometimes with temperature. Therefore, that would also dictate the methods of packing and transport for the material. Table 1 shows a list of all parameters that affect the choice of the transport mode. S No Description Remarks 1 Time available for transit This would decide whether to adopt the fastest, the average or the modest mode of transport. Since this will have an overbearing impact on the pricing, this becomes an important part of the decision making process for the choice of mode of transport. There could be emergency need for material, say medicines in which case air lifting would be the only option even if the material turns out to be bulky. 2 Type of material Bulky, liquid or gaseous materials just cannot be transported over an aircraft unless it is in small quantities and is made safe. The nature of the material will decide very much on the possible options for transport. 3 Cost of transport Every mode of transit has a cost associated with it. It is normally found that the material cost will get unduly affected by the transport cost at any given place in the world. Therefore, cost of transport becomes a very important consideration that will decide on the transit mode. 4 Source and the destination The source and the destination both need to be reachable by the mode of transport selected. In many cases when this becomes difficult or the optimal route could be a combination of the modes. In which case multi-modal transports are chosen. 5 Political conditions Specific political conditions enroute to the destination would also affect the choice of transport. 6 Seasons and weather conditions The changing climatic conditions have overbearing impact in choice of mode of transport in specific places. Table 1: Parameters affecting the choice of Mode of Transport The decision on the mode of transport is made based on a multitude of parameters, both known and unknown. Such decisions are influenced by modal shift (Slack, 2006) that you are bound to experience when the government or private agencies that the decision is associated with influences the decision. 4. Government and its role Governments of most countries have a very significant role in improving a specific mode of transport and in disapproving certain others. Governments are the ones that maintain roads and in many countries, rail roads, harbors, airports, etc., They are also the ones that collect taxes at specific points on all these transport routes. Now some of the countries increase specific charges for air traffic thereby negating or discouraging use of air as a significant mode of transport by many of the people. Similarly, Governments play very viral role in all the aspects of the transport industry. They could also control the use of transport mechanism by increasing cess on fuel charges which is imposed on diesel or gasoline. This would grossly discourage the usage. In some places, the governments do not allow access to all the points in the city to freight carriers. This complicates movement of goods. The transporter needs to do a shunting from one location to another before he can load the entire goods on to a long distance road train or on a rail road to the goods final destination. This looks like a multi-modal transport even with in the road transport industry. All this influences the use of specific transport modes. 5. Modes of Transport The major modes of transport that is of interest to us would be: Railways Roads Seaways Airways Pipelines These are the five major transport modes available for a multitude of product transit that is happening across the world. While railways are still one of the fastest, cheapest and timely transporter of goods from a railway yard to railway yard on land, roadways remain still the unbeatable any point to any point transport on the road, specifically for once through requirements. Air remains the unbeatable option for any swift transfer of goods from any given airport to another which needs a last leg support most often from a road carrier. Seaways and waterways though slow invariably have their own advantage in terms of the large volume that they can carry and almost 20% of the cost of an airfreight. Tradeoff is the time that it takes to cover the distance. Pipelines remain the best option where there is a continuous flow of liquid or a gas or a semi solid is required over distances, over a long period of time. Let us take a closer look at all the options available for transit. 6. Railways a. Methodology This necessarily has to start from a known railway head or terminal or station as we call it. This might not be necessarily the point from the where the material originates. It is common practice for most large users of railways to have a rail head terminated in their factories. Now this will improve the performance of the factories and they get an entire lot of wagons or rakes as they call it for loading and unloading purposes. Similarly, the rail head at the receiving point may not be the one that might be the destination. As in the case of the origin, the destination could be a rail head if it is specifically made for that purpose. Otherwise, it might require an integration with road transport to provide a multi-modal point to point transit of goods. Invariably in all the harbors, rail heads are present and most of the multi-modal transports support rail to sea transshipments. b. Advantages and Disadvantages Advantages Disadvantages Rail offers in most countries cheapest mode of transport from one point to another on a specific route. Railways are not a point to point transport and would require road transport to deliver to the specific point where the material is required. Rail offers smooth transit of goods specifically good where we need the material to be handled dexterously. Railways are not convenient for moving goods in piecemeal and particularly in smaller lots. Railways offer bulky movement of goods in one stroke and all together. The entire lot reaches the destination. Railways are not comfortable for non standard equipment movement and would result in problems for all material that is larger than the size of the wagon. Bulk cargo handling is comfortable and can reach the destination with out any significant loss or theft. Railways have fixed time movement of trains which could hamper urgent requirements. Special trains are not provided under normal conditions. Containers can be handled much more easily and specific containers are available for railways. Trains, specifically goods trains are prone to delays and late deliveries due to various reasons that exist in railway administration. Table 2: Advantages and disadvantages of using rail You may summarize that railways are usable for inland traffic where time is not very critical, want a cheap cost of transit, have a bulky commodity (Rodriguez, 1998), does not mind doing transshipment at the rail head or has a rail head at the destination and / or source. 7. Waterways a. Methodology The harbor for the sea or a jetty for riverside travel becomes a necessity. This might not be necessarily the point from the where the material originates. There are a few large factories that end by the sea side or the river side so that they can transport their material in or out over the water way. There are a few power plants that get coal through the harbor and they have their coal conveyor terminating at the harbor. Now this will improve the performance of the factories. Similarly, there could be harbors at the receiving point which may not be the final destination. As in the case of the origin, the destination could be a harbor. Almost always the harbor integrates with the road and the rail for further transport of the goods. Invariably in all the harbors, rail heads are present and most of the multi-modal transports support rail or road to sea transshipments and vice versa. b. Advantages and disadvantages Advantages Disadvantages Waterways are the cheapest mode of transport for inland or for over the sea transport. They are not point to point transit systems and would need to integrate with other transport systems for a multimodal arrangement. They offer under most conditions smooth and reasonably safe transport passage. Seaways and waterways are not really the best option for small quantity shipments though there are bulk carriers that do offer this service. They are the bulky movers and they can transport goods of all nature. They have special tankers for chilling, liquid or gas transport. They are the best suited for most of the operations. Bulk cargo is safe except of course the harbors. There are harbors that are notorious for small time thieving. Ships move at fixed timings and this causes hardship in reaching any specific point at the time and date that the shipper might want. Containers are used for normal material movement. This provides safe and sure transit. Easy to track and easy to load and unload. Ships are bound to move through various political and climatic conditions that would cause immense trouble during the journey. This risk needs to be mitigated. Therefore an insurance policy is a must in case of a waterway mode of transport. Table 3: Advantages and disadvantages of using Seaways 8. Airways a. Methodology The material is moved to the airport using one of the standard modes of transport like roadways or the railways. The material is then loaded on to the aircraft which carries the material to the nearest airport. There could be intermediate transshipments that need to be done before the material could reach the destination airport. Subsequent to this, the material is again loaded on to a road or if it is rail to final destination then it is done so. The material again moves over the road in most cases to the final destination. Most of the last miles are on the road in most of the shipments that are done. The methodology naturally involves multi-modal transport organization. This would mean that a person booking on a air freight has to necessarily work on the other modes of transport as well to ensure safe passage of goods through out its journey. b. Advantages and disadvantages Advantages Disadvantages Airways are the fastest transport system available as of date. Airways are the costliest of the transport systems available and naturally is not a preferred one if there is time available and cost could be saved. They offer under most conditions smooth and reasonably safe transport passage. They offer transport up to the air ports and from there onwards they are further connected to the delivery points either through rail or road. Under specific requirements helicopters are used for point to point delivery. They can move bulky as well as individual covers, however small the cargo might be. Air traffic is highly security prone and the material go through a large number of security checks which costs time. Airlines are generally very well staffed and they do not mishandle cargo. They are well tracked and the systems they adopt are technically savvier than the others. Airlines though they handle containers are not very comfortable in using them. Airlines operate more on time schedules than any other modes of transport. They stick to the schedule that they commit. Airplanes are bound to move through various political and climatic conditions that would cause trouble during the journey. This risk needs to be mitigated. Therefore an insurance policy is a must in case of an airway mode of transport. Table 4: Advantages and disadvantages of using Airways 9. Roadways a. Methodology The Roadways are the true point to point transport systems. We might even call it desk to desk. The cargo is many times picked up at the customer location by the transporter which is normally the factories and then unloaded at the specific location where the customer wanted. Since almost all the points of deliveries are reachable by road, this becomes feasible and the transporter is able to realize the best benefits at a reasonable cost. The costing generally is almost on par if not moderately greater than the rail road costs for transport of the commodity. But when the quantity increases, the cost on the rail road comes down steeply while in case of road it is not so. Since in one truck there could be a limitation of about 20 MT going through and when the next truck is sought the cost gets doubled. There is no advantage of large quantities. Whereas in the case of rail, the effect is differs. When the quantity increases, the cost per unit weight keeps going down since more and more wagons can be included but the effort could be almost the same. b. Advantages and disadvantages Advantages Disadvantages Roadways is the only mode of transport through which point to point transit is possible. Roadways are not the cheapest mode of transport on the land. Most of the point to point connectivity is offered by the roads whether they are the major carriers are not. Long distance carrying using road transport is not preferred as it is not smooth and there is high possibility of damages. Road ways can handle containers and there are specifically made carriers for that. Limited quantity movement per trip is only feasible. Roadways can also handle equipments of varied sizes and shapes which may not be possible by other carriers like rail or air. Most of the people in the road transport industry are not professional handlers. They invariably make mistakes which leads to great losses sometime. Roads are closer to the ground and they can be protected in case of damages or problems causing damages occur. They offer the most wide multi-modal transport options possible. Climatic conditions and political conditions do affect the road transport industry. This has to be carefully monitored to get the best results. Table 5: Advantages and disadvantages of using Roadways 10. Other transport systems There are other specific to use transport systems like the pipeline or the conveyor systems. There are conveyor systems that run for 40 to 50 kms from the mines to the factory, from the harbor to the factory and so on transporting materials that are solids and powdered solids. There are pipes that run for hundreds of kilometers over which liquids and gases are pumped through to their destinations. All these transport systems are specific to an application and are made for that benefit (Slack, 2003). In the modern days, the petroleum pipes are the carriers of business. In and around the place where the pipe passes through a number of industries sprout and grow. Specific advantages exist and these can be used only for a specific purpose as well. Therefore, most often these pipes are privately held or held by the government for the common good. 11. Inter modal transport infrastructure It is absolutely impossible to adopt one specific mode of transport for all purposes. As a matter of fact, it is difficult to adopt one mode of transport for even one single purpose. The reason being, that no single mode of transport could be optimal in a global trading scenario. When the cargo has to move from Orlando to Shanghai, the best mode could be air freight. But then how does the material reach Orlando Airport or suppose what has to go is material of two containers, then how do we ensure that two containers are moved at the least cost. All these questions when they get answered we might find that it is optimal if we could move the material to the nearest sea port and then ship it to Shanghai which could work out at least five times cheaper. All this can be tried only if there is enough time to take this kind of a work load. Global Inter Modal or Multi-modal transport system is controlled by a variety of rules and regulations in a number of countries. This kind of multimodal booking of cargo is done through specific agents who take care of all the activities connected with the entire shipment and its routing. They would take care of the initial pre-carriage of the goods from the factory or the source point to the harbor or the airport or whatever be the transshipment point. From this the cargo is booked on to the vessel or flight that would haul it to the nearest port or airport to the destination. From this destination, the material is then moved on road to the final destination. Some times, there could be more than three modes of transport involved in the shipment. This becomes a necessity when the final delivery point is in weird locations and needs different kinds of transport mechanism to take care of all possible combination. Figure 1: Structure of a typical multi modal transport systems The inter-modal infrastructure requires that appropriate facilities exist for change over from one mode of transport to another without causing untoward damage to goods and not consuming too much of time and money. Normally, the rail heads are built into harbors and airports to take care of such multi-modal approaches. Rails also start from container terminals and then there are of course roadways well inside the tarmac of an airport to take care of any cargo handling requirement. There is more than one occasion when the government also creates a single customs clearing for the cargo that goes through a multi-modal transport system. This will improve the performance of these systems since customs clearances in most countries are a bottleneck that could disrupt traffic timings and delay operations. The multi-modal system normally looks at reaching a nation or leaving a nation using either maritime or airway systems. Once inside the country it uses any of the large modes to regional and then on to local distribution centers. Please see figure 1. The last mile is normally over the road so that the point to point concept is well adhered to. By using multi-modal transport we will be able to realize the advantage of all the types of transport and will be able to gain both financially and in timely delivery. 12. Future of Transport At this point in the history of the human development and growth, transport is playing a very important role. The large scale growth and technological innovation in transport industry has caused the shrinking of the world even prior to the internet revolution. The IT revolution then heralded another large scale shrinking of the world. This has also reduced the extent of travel that might be needed since more and more people are using the emailing, messaging and video conferencing services on the web. But still we find that the number of airlines and the aircrafts in the world are constantly increasing and the number of people in the queue are also consistently increasing for the tickets. This indicates that the world though it is evolving and making changes in the way we communicate and talk to each other, the need to travel and to transport goods is on the rise and will continue to rise. One of the other reasons why transport will play a major role in the coming years because the internet is bringing all the manufacturers and the consumers pretty close to one another. This will make sure that people buy just one item at a time or that every company will start addressing the consumer market rather than a distributor or a whole sale market. Transport industry will play a very important role in the future growth of the business in the world and countries in particular (Manhattan Associates, 2006). This is happening because of the large scale increase in international business that every business house is embarking on. They all want to be a multi national conglomerate at the earliest. There fore they will depend on the transport industry. Transport industry will be more technically savvy; they will be able to track every consignment where and how it is. Secondly, they will also be able to route the consignment through an optimal passage that will make use of the time and execute the job at the least cost possible. Multi-modal and inter-modal transport systems will be normal and standard way of executing a shipment. All these would change the way business is carried out in this age when business is done at the 'speed of thought'. Transport systems will also move towards more environmentally friendly (OECD, 1996); less polluting; less noisy and more efficient modes of transport. Fuel will change; the energy source itself could alter and move towards better and cleaner way of working. All these would finally bring down the cost of transport across the globe at the same time increasing the speed of operation. 13. Conclusion From the various points discussed so far in the preceding sections it is very clear that the transport industry has gone through a major metamorphosis and is going through another. They have given the world on a global scale options that would have been the dreams of business men fifty years back. Today most of them are realized and more are getting realized. Multiple modes of transport have come to stay. Some of them very specific to the application while others are general but yet economical; some of them are safe while others are just plain swift. We have an option for every need that we might have. All these points have been analyzed and the differences between the multiple modes of operation have been brought out and their advantages have been studied in close detail. 14. References Dr Jean Paul Rodriguez, (1998), The Geography of Transport Systems, Hafstra University, available at: http://people.hofstra.edu/geotrans/ Manhattan Associates, (2006) Reverse Logistics Management, available at: www.manh.com/library/MANH-Reverse_ Logistics_Management_Brochure.pdf OECD International Conference, Canada, (24-27 Mar 1996), Guiding principles for Sustainable transportation, available at: http://www.gdrc.org/uem/sustran/sustran-principles.html Rushton, A; Oxley, J.; Croucher, P. (2000). Handbook of Logistics and Distribution Management. Kogan Page Ltd., 2nd Edition. Slack, Dr Brian., et al., (May 25, 2006), Transportation Modes: An Overview, Hofstra University, available at: http://people.hofstra.edu/geotrans/eng/ch3en/conc3en/ch3c1en.html Slack, Nigel; Chambers, Stuart; Johnston, Robert. (2003) Publisher. Operations Management (4th Ed). FT Prentice Hall. Read More