Transportation Modes: An Overview

Authors: Dr. Brian Slack, Dr. Jean-Paul Rodrigue and Dr. Claude Comtois

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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. 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 are bound vehicles. They have an average level of physical constrains 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.
• 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.
• Pipelines. Pipeline routes are practically unlimited as they can be laid on land or under water. 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.
• Telecommunications. Telecommunication routes are practically unlimited with 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 in theory). 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

A general analysis of transport modes reveals that each has key operational and commercial advantages and properties. However, contemporary demand is influenced by integrated transportation systems that require maximum flexibility. 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 with the transport system, particularly if different scales are concerned, such as between national and international transportation. This requires an interconnection where it is possible to transfer from one mode to the other.
• 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.
• 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 the choice of mode. 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 levels of income 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. The modes 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 thirty years has seen road and air modes capture an important market share of the high revenue-generating goods. Road transport clearly dominates.

Although intermodal transportation has opened many opportunities for complementarity between modes, there is intense competition as companies are now competing over many modes in the transport chain. A growing paradigm thus appears to be 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 passengers 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.
• Market area. Competition being experienced between transport terminals for using new space (terminal relocation or expansion) or capturing new markets (hinterland).

Modal competition can also been influenced by public policy where one mode could be advantaged over the others. This particularly takes place over government funding and regulation issues. For instance, in the United States the Federal Government would finance 80% of the costs of an 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.

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 EU, rail transport occupies a more important market share in North America. In many parts of the world, however, there are only limited services, and some important modes may be absent altogether. This limits the choices for people and shippers, and acts to limit accessibility. People and freight are forced to use the only available modes that may not be the most economic for the nature of the demand. Goods may not be able to find a market, and people’s mobility may be impaired.

For these reasons, transport provision is seen as a major factor in economic development. Areas with limited modal choices tend to be among the least developed. The developed world, 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 the price of fuel has increased significantly as well as its volatility. All modes are affected, from the individual car owner to the corporation operating a fleet of hundreds of aircraft or ships. The higher costs are being passed on to the customer, either directly, as is the case of shipping where freight rates are climbing, or indirectly as is the case of airlines, where passengers are being charged additional fuel surcharges. These cost increases are likely to have significant impacts on mobility and trade, as well as on the modal split:

• 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. One of the expected effects of these cost increases is a decline in freight shipments and passenger carriers, such as airlines are anticipating a reduction in trips. Even school districts are anticipating reducing the number of busses and making children walk further to school.
• 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. A future of high energy prices is likely to have a major impact on just-in-time deliveries, and lead to a restructuring of supply chains.

3. Passengers or Freight?

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 example in the airlines where 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 bed, as for example in rail and road traffic. In shipping, passengers and freight used to share the same vessel, but 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 seek to co-inhabit. 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 whether freight and passengers are compatible. The main advantages of joint operations are:

• High capital costs can be justified more easily with a diverse revenue stream (rail, airlines, ferries).
• Maintenance costs can be spread over a wider base (rail, airlines).
• The same 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 – the origins and destinations of freight are usually quite distinct spatially from passenger traffic.
• Frequency of demand is different – 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.
• Traffic balance – on a daily basis passenger flows tend to be in equilibrium, for freight, market imbalances produce empty flows.
• Reliability – although freight traffic increasingly demands quality service, for passengers delays are unacceptable.
• Sharing routes favors passenger traffic – passenger trains are given priority; trucks may be excluded from areas at certain times of the day.
• Different operational speeds – passengers demand faster service.
• Security screening measures for passengers and freight require totally different procedures.

The separation of passengers and freight on specific corridors is consequently a likely outcome.

4. A Growing Divergence

Passengers 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 divorced from freight operations. The exception being ferry some 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 still operate passenger and freight business. 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, with its resultant problems of congestion and environmental degradation. 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. 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. In Europe, there are signs that the two markets are being separated. First, it is occurring at the management level. The liberalization of the railway system that is being forced by the European Commission is resulting in the separation of passenger and freight operations. This had already taken place in the UK when British Rail was privatized. Second, the move towards high speed passenger rail service necessitated the construction of separate rights of way for the TGV trains. This has tended to move passenger train services from the existing tracks, thereby opening up more daytime slots for freight trains. Third, the Dutch are building a freight only track, the Betuwe Line, from the port of Rotterdam to the German border, having already sold the freight business of the Netherlands railway (NS) to DB, and having opened up the freight business to other firms. It is in North America where the divorce between freight and passenger rail business is most complete. 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 trackage 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.