Modes of Transportation in Logistics

Transportation infrastructure consists of the rights-of-ways, vehicles, and carrier organizations that offer transportation services on a for-hire or internal basis. The nature of the infrastructure also determines a variety of legal and economic characteristics for each mode or multi-modal system. A mode identifies the basic transportation method or form.

Since olden times, railroads have handled the largest number of ton-miles. As a result of the early establishment of a comprehensive rail network connecting almost all the cities and towns, railways dominated the intercity freight tonnage till World War II and in some cases of Europe, Asia and Africa they even connected the countries. This early superiority enabled railways to transport large shipments very economically.

The capability to efficiently transport large tonnage over long distances is the main reason railroads continue to handle significant intercity tonnage and revenue. Railroad operations incur high fixed costs because of expensive equipment, right-of-way (railroads must maintain their own track), switching yards, and terminals. However, rail experiences relatively low operating costs. The replacement of steam by diesel power reduced the railroads’ variable cost per ton-mile, and electrification offers potential for more reductions. New labor agreements have reduced workforce requirements, further decreasing variable costs.

These days’ rail transport only focuses on transporting specific products, which are best, suited to the requirement. Greatest railroad tonnage comes from raw material extractive industries located at considerable distances. Despite problems, Rail fixed-variable costs are still superior for long distances. Railroads basically concentrate on the container traffic and are becoming more responsive of the customer needs, emphasizing bulk industries and heavy manufacturing.

They have expanded their intermodal operations through alliances and motor carrier ownership. Railroads are even concentrating on development of special equipment. There are unit trains which are entire train carrying the same commodity, which are bulk products such as coal or grain. Unit trains are faster, less expensive to operate and quick as it can bypass rail yards and go direct to the product’s destination.

There are also various different types, such as articulated cars for extended Rail chassis, double-stack rail cars, have 2 levels of containers, thereby doubling the capacity of each car. It also reduces chances of damage because of their design. These technologies have are being applied by railroads to reduce weight, increase carrying capacity, and facilitate interchange.

Motor Carriers

Highway transportation has increased rapidly since the end of World War II. This is because Motor carrier industry results from door-to-door operating flexibility and speed of intercity movement. They are even flexible because they can operate on each and every kind of roadways.

In comparison to railroads, motor carriers have relatively small fixed investments in terminal facilities and operate on publicly maintained highways. Although the cost of license fees, user fees, and tolls are considerable, these expenses are directly related to the number of over-the-road units and miles operated.

The variable cost per mile for motor carriers is high because a separate power unit and driver are required for each trailer or combination of tandem trailers. Labor requirements are also high because of driver safety restrictions and the need for substantial dock labor. Motor carriers are best suited to handle small shipments moving short distances.

The characteristics of motor carriers favor manufacturing and distributive trades, short distances, and high-value products. Motor carriers have made significant inroads into rail traffic for medium and light manufacturing. This is also because of delivery flexibility, tat they have captured a major chunk of the market. In short, the prospect for maintaining a stable market share in highway transport remains bright.

This industry even has a few problems, and one of the primary difficulties relate to increasing cost to replace equipment, maintenance, driver wages, and platform and dock wages. Although accelerating, labor rates influence all modes of transport; motor carriers are more labor-intensive, which causes higher wages to be a major concern. One more threat for hire-motor carrier industry is over-the-road transportation by shipper-owned trucks or by specialized carriers under contract to perform transport services for shippers.