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Intermodal Transport: Comparison Between USA and Europe Research Paper

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Updated: Apr 24th, 2022

Introduction

The 20th century witnessed increased transport needs and as this became evident, there arose need to device and adopt a transport mode that had capability to respond to problems of road congestion, environmental issues, and traffic safety. At the same time, majority of stakeholders envisioned a transport mode that had capacity to enhance speed and agility as far as supply chain was concerned. The convectional logistic services were becoming inappropriate as the transport needs increased. This led to emergence of intermodal transport concept, which involved combining at least two modes of transport in a single transport chain (Dewitt and Clinger, n.d). Intermodal transportation thus became the avenue for integrating multiple modes of transport, and this provided flexible response to the changing supply chain management that the world required, as global markets and distribution systems became key features of modernizing world (Dewitt and Clinger, n.d).

The end of 20th century and the start of 21st century saw intensified global activities to improve the efficiency of intermodal transport, and this is motivated by changing global supply chains. As it stands now, the new century is likely to witness growth of intermodal transport as logistics and global supply chain needs increase, congestion and environmental concerns accelerate, and also the advancement of ICT. More so, it is predicted that the new intermodal transport in modern world is going to build upon technology, information, customer service, and regulation, which require stakeholders’ comprehensive preparation for the new changes.

Intermodal transport in USA and Europe

America and Europe have maintained close ties for a long time. This can be linked to commerce activities between the two regions that have accelerated and continued to increase with time. According to some analysts, Europe remains a strategic partner to USA in terms of commerce and related activities (Tyrinopoulos and Giannopoulos, n.d). As the needs of transport between the two regions increase, there has been emergence of global dimension of freight transport between the two regions; this has led to increased cargo flows between Europe and America. Cooperation remains critical to the success of commerce in these two regions, and intermodal freight transport is seen as the avenue to realize transport needs of the two regions (Tyrinopoulos and Giannopoulos, n.d).

Intermodal transport in United States and Europe continues to be significant in the movement of freight, and this can be associated with growth being witnessed in this type of transport for the both regions. Transport needs, increasing population, and strenuous pressure that convectional transport modes experience are explained as the main reasons why intermodal transport system has become popular in both USA and Europe. Further, environmental concerns, coupled with increasing road congestion and the need to improve traffic security are cited as the main reasons and motivations as to why intermodal transport in the two regions continues to grow and become sophisticated.

Economic significance of intermodalism to both USA and Europe can be captured through review of intermodalism in the context of broader technological advancement in freight and logistics (USA-National Research Council, 1998). Accordingly, advancement taking place in technology and logistics as far as transportation is concerned are resulting into numerous economic benefits in the sectors of manufacturing and trade sectors of USA and Europe economy. For example, in USA economic gains in business logistics for 1995 were estimated to have reduced by about $23 billion representing savings of $100 per capital as compared to the previous year (USA-National Research Council, 1998). Further savings in 1995 as compared to 1989 were estimated to amount into $150 billion (USA-National Research Council, 1998). As it stands now, revenues generated from intermodal transport in USA and Europe will increase, as Intermodal transport becomes the avenue for shipment of different commodities both the bulky and semi-bulk commodities in USA, Europe and global (Konings, Priemus and Nijkamp, 2008). As a result, both USA and Europe will invest in intermodal modes that reflect lower overall factor costs, enhance regional and global free trade regimes, promote efficient global production systems, and facilitate speedy delivery of goods and products on time (Konings, Priemus, and Nijkamp, 2008).

USA and Europe: Similarities in freight intermodal transportation

USA and Europe have emphasized the need for sustainable intermodal transport policies that all respond to economic needs of the various stakeholders involved. Intermodal transport system for USA and Europe is premised on the paramount need to increase economic productivity, and at the same time, enhance and ensure environmental preservation (OECD-Intermodal Freight Transport Advisory Group, 2001). Given that transport needs between the two regions are increasing, intermodal transport is seen to offer rebalance among different conflicting needs, in that, it provides means to products and services while easing strain on the environment. In summary, the intermodal freight policies between the two regions pursue similar broad goals of efficiency, sustainability, and innovation.

The key connecting feature between the two regions’ intermodal transportation system is that, the overall intermodal system is regarded to be complex, which also involves multiple stakeholders and further presents multilevel system of governance between the local, state, national, and federal levels. As a result, development of intermodal freight transport in the two regions is largely reflected and ingrained in confluence of technological, economic, and social factors, environmental and congestion concerns, transportation financing, and also user behavior (Tyrinopoulos and Giannopoulos, n.d). Governments and related agencies in both USA and Europe have become more involved in encouraging explicit intermodal transport policy, although the nature and content of the policy frameworks vary across different countries (OECD-Intermodal Freight Transport Advisory Group, 2001). In most of the intermodal transport policy framework, government tends to get involved in initiating, promoting, and regulating key aspects of intermodal transport; however, major objectives for many European countries and USA remain largely at developing intermodal freight transport system through formal policy work (OECD-Intermodal Freight Transport Advisory Group, 2001). It can be evidenced that different countries across the two regions have beefed up efforts to initiate and implement varying levels of legislative and regulatory instruments, all of which function to motivate and encourage intermodal activities in the two regions.

Another key aspect that the two regions exhibit as far as intermodal freight transport is concerned is ingrained in the primary strategy that the two regions have adopted in developing intermodal transport, whereby, development is seen to be achievable through market forces with government regulation. The desire here is to encourage and enhance competitiveness through policy frameworks of deregulation and privatization (OECD-Intermodal Freight Transport Advisory Group, 2001). To an extent, this aspect has been reinforced by increasing adoption of bilateral agreements among many players in America and Europe, despite persistent absence of common approach among the different countries. The two regions recognize that adoption of the most effective practices of deregulation, privatization, and bilateral agreement possess the greatest likelihood of eliminating infrastructure bottlenecks and at same time, lead to sophisticated logistics systems that reflect enhanced and advanced technology (OECD-Intermodal Freight Transport Advisory Group, 2001).

Another reason for deregulation and privatization is born from the perception in the two regions that some of the “innovative intermodal systems and facilities are considered high-risk investments given their market and modal uncertainties” (OECD-Intermodal Freight Transport Advisory Group, 2001). As a result, there has been government effort in both regions to integrate the private sector in high-risk projects, and this is seen as a way to maintain, promote, and sustain competition in the sector for the benefit of various stakeholders. At the same time, it can be seen that, motivation for growth and development of intermodal freight transportation between the two regions has been promoted through subsidy regime, where both direct and indirect subsidies are used (OECD-Intermodal Freight Transport Advisory Group, 2001). In some instances, federal government and national governments in EU countries have provided direct financial support to intermodal transport. The major forms in which subsidy has been implemented include financial backing to the private sector, while the finances have been used by private stakeholders to purchase intermodal loading units and for reimbursement of operating deficits for international rail transport (OECD-Intermodal Freight Transport Advisory Group, 2001).

USA and Europe: Differences in freight intermodal transportation

The first major difference that manifest between USA and Europe with regard to intermodal freight transport system has to do with overall intermodal policy and planning. Both regions have contextual policies that differ in content, application, and implementation. For example, in Europe, intermodal transport policy has been an issue of great concern, where numerous objectives of intermodal system within the larger intertwined network of EU countries has been pursued for many years within frameworks of collaborative policy (USA-National Research Council, 1998). On the other hand, USA has been confronted with the issue of how well to integrate intermodal freight transportation policy in federal, state, and local government systems. Intermodalism is critical to US economy and this is supported by enormous intermodal infrastructural development taking place in the country. Development of intermodalism in USA has been captured in legislations such as NAFTA, ISTEA Act of 1991, and TEA21, which all emphasize the development of coordinated and efficient intermodal transport in the country, which has the potential to accelerate the economy of the country (United Nations-Economic and Social Commission for Asia and the Pacific, n.d, p.68).

Nevertheless, despite the numerous objectives the legislative policy work in USA intend to achieve, it has been identified that barriers exist that have hindered achievement of these objectives. Moreover, this has led to legislative policies to be termed ineffective. Some of the identified ineffectiveness of the USA legislative policy framework can be linked to overall organization of USA government. For instance, the USA’s Federal government is organized according to the transport modes, which render it unsuitable to develop structures that can encourage efficient intermodalism (United Nations-Economic and Social Commission for Asia and the Pacific, n.d). In addition, intermodal projects in USA have been competing unfairly with the long-established highway projects that traditionally receive funding boost from the federal government (United Nations-Economic and Social Commission for Asia and the Pacific, n.d). At the same time, USA policy ineffectiveness has been hampered by synergy problems aggravated further by the fact that, USA intermodal freight transport has grown based on private sector initiatives (European Commission and USA Department of Transportation, 1998). Such synergic problems include discrepant labor contracts, cultural differences, unmanageable scales, and many more factors (European Commission and USA Department of Transportation, 1998). On their part, majority of EU countries have built their intermodal freight transport systems with support from the government in terms of policy planning and development and influence of private operators has been minimized by EU organs and structures (Bontekoning and Netherlands Research School for Transport, 2006).

Another difference the two regions exhibit involves the evaluation methodology of intermodal freight transport system, which differs between USA and Europe. In Europe, tendency is leveled at evaluating new intermodal terminal based not only on business economic merits, but also on the contribution of the intermodal to the regional economic development of EU (Bontekoning and Netherlands Research School for Transport, 2006). In this way, many of intermodal planning activities in EU takes place around the terminal, and this has led to high-level automation of terminals. On its part, USA evaluation methodology employed with regard to intermodal system reflects only business economic merits and nothing else (Bontekoning and Netherlands Research School for Transport, 2006). Moreover, another aspect that indicates differences between USA and Europe’s intermodal freight system has to do with management, decision-making, and overall structure of the system. For instance, in Europe, there is tendency to pursue and promote intermodal freight policies through top-down approach, and this process is headed by European Commission. As a result, it is the EU integrated policy-framework that tends to regulate member country intermodal transport system, and the overall aim is to see members engaged in promotion of sustainable intermodal freight systems. On the contrary, USA intermodal freight system has been built and operates on bottom-up structure where market and business sector who possess large shippers and carriers, railway and shipping companies, forwarders and integrators tend to influence the intermodal transport sector, with less government subsidies (Horn and Toshinori, 2005).

Another difference between USA and Europe’s intermodal freight transport system is exhibited in terms of overall infrastructure, technology adoption, and formulation of guiding rules and standards. For example, in USA, intermodal freight system in terms of infrastructure is characterized by National corridor development, NHS intermodal freight connectors, intermodal cargo hubs, and comprehensive co-ordinated border infrastructure program (Horn and Toshinori, 2005). On the other hand, the infrastructural development of Europe’s intermodal freight transport system involves intermodal design of Trans-European Networks (TEN), initiation of intermodal priority projects in the missing links, and design of intermodal transfer points (Horn and Toshinori, 2005).

In terms of technology, USA again differs from Europe, whereby in USA, adoption of technology within intermodal freight sector has concentrated on ITS intermodal freight program, intermodal border clearance, and further, enhancement of research and design-R&D (Horn and Toshinori, 2005). On its part, EU technology adoption in intermodal freight sector fulcrums on initiating IT systems-ITS, adopting and enhancing satellite based communication system, adopting EDI and also having in place value-added logistics services like e-logistics (Horn and Toshinori, 2005).

Lastly, differences between the two countries have to do with adoption and implementation of rules and standards within the intermodal freight transport sector. In USA, the main rules and standards in the sector include freight facilitation, freight partnerships, freight analysis decision framework, education and training, and standards emphasizing size and weight of containers (Horn and Toshinori, 2005). In Europe, rules and standards appear to differ from those of USA in that, emphasis is put on intermodal competition rules, intermodal liability, work and regulation, common charging and pricing, and interoperable systems and equipment (Horn and Toshinori, 2005).

Conclusion

Evaluation of USA and Europe intermodal freight sector reveal that there exist similarities and differences, which are largely reflected in policy formulation. Commonality can be associated with the fact that policies in the two regions are formulated within the wider political framework that stresses the need for sustainable development. In this way, intermodal freight transport system is envisioned as one that promotes economic growth, environmental progress, and global competitiveness. Furthermore, differences between the two regions are again captured within the larger policy formulation and implementation, where areas of contrast include technology adoption, rules and standards implementation, infrastructure development, and customer service systems. Nevertheless, what is evident is that cooperation between USA and Europe and the wider global community is likely to increase, and this gives a clear picture of how intermodal freight sector is going to grow. Therefore, what is needed between the two regions is establishment of a seamless integrated intermodal freight transport network that addresses issues of key stakeholders.

References

Bontekoning, Y. M., & Netherlands Research School for Transport. (2006). Hub exchange operations in intermodal hub-and-spoke operations: comparison of the performances of four types of rail-rail exchange facilities. Delft: IOS Press.

Dewitt, W., & Clinger, J. (N.d). Transportation in the new millennium: Intermodal freight transportation. AIB05-Committee on Intermodal Freight Transport. Web.

European Commission and USA Department of Transportation. (1998).Toward improved intermodal freight transport in Europe and the United States: Next steps. Report of an Eno Transportation Foundation Policy Forum held November 18-20. Web.

Horn, B. E., & Toshinori, N. (2005). Intermodal logistics policies in the EU, the U.S. and Japan. Web.

Konings, J. W., Priemus, H & Nijkamp, P. (2008). The future of intermodal freight transport: operations, design and policy. UK: Edward Elgar Publishing.

OECD-Intermodal Freight Transport Advisory Group. (2001). Intermodal freight transport: institutional aspects. Paris: OECD Publishing.

Tyrinopoulos, T., & Giannopoulos, G. (N.d). Stimulating (sustainable) intermodal freight transport synergies between Latin America and Europe. Athens: Centre for Research and Technology Hellas. Web.

United Nations-Economic and Social Commission for Asia and the Pacific. (N.d). Promoting intermodal transport in the UNESCAP region. Policy framework for the development of intermodal interfaces as part of an integrated transport network in Asia. Web.

USA-National Research Council. (1998). Policy options for intermodal freight transportation. NY: Transportation Research Board.

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