By definition, the term ‘modes of transportation’ refers to the means by which people, goods and services achieve mobility. In logistics and geography, the wide diversity of transportation modes falls under one of the three major categories- land, water and air. In addition, each mode is adapted to serve certain requirements of mobility for freight and people. The result is a marked difference in the use and deployment of the various modes of transportation.
In the recent times, technology and costs have made authorities and institutions attempt to integrate various modes through linking them closely. The aim is to enhance production and distribution of resources (Winston, 2005). Therefore, it is necessary to develop an understanding of how the different modes of transportation compare with each other in terms of costs, capital requirements, government actions and cash requirements.
Surface (land) Transport
Land transportation includes three systems- roads, railways and pipelines. The three systems are some of the most advanced and useful forms of transport because they provide connection between communities, societies and institutions (Washington, Karlaftis & Mannering, 2011). In addition, they provide a cheap way of connection over short and long distances and a convenient way of providing mobility of passenger, energy and freight of varying weight, size and nature.
According to Anderson and McCullough (2011), road cost allocation is the analysis model that shows the roadway costs to different road users within the context of the share of cost imposed on each group. With this model, it is possible to determine the cost of using roads in the United States. It provides analysts with an easy way of estimationg the cost of road transportation.
This depends on the vehicles used and the level of government involved in imposing costs (Washington, Karlaftis & Mannering, 2011). For instance, the 2010 estimates indicate that automobile users meet a federal cost of about $0.011 per mile and state costs of about $0.018 per mile (National Research Council, 2011). In addition, they must meet user payments of $0.036 per mile and external costs of $0.12 per mile (Anderson & McCullough, 2011).
Thus, the total cost of using an automobile is about $0.149 per mile in the US. Similarly, the total cost of using pickups and vans is $0.421 per mile while the cost of using other vehicles such as unit trucks, combination trucks and buses is $0.162, $0.256 and $0.144 respectively (Anderson & McCullough, 2011). These estimates indicate that the cost of using vehicles depend on size- the heavier the vehicle, the higher the cost of using roads
Apart from the facility costs, using roads in the United States as a mode of transport requires additional costs due to policing, planning, street lighting and court fees (National Research Council, 2011). Accordingly, some motor vehicle costs are set and imposed by municipal governments, including street-parking ($12.9-21.56 billion USD), fire protection (0.9-3.4USD) and policing (9.4-14.2 billion USD) (Margreta, Ford & Dipo, 2011).
In addition, road usage requires extensive use of fuel, which is primarily in the form of petroleum products (gas) obtained from gas stations throughout the country. In this case, road users must bear the cost of fuelling their vehicles. For instance, automobiles and pickups use the least fuel per mile while heavy vehicles such as trucks and buses use more fuel.
Construction and maintenance of roads in the US is one of the most important but expensive tasks used to enhance logistics in the country. Statistics provided by institutions such as FHWA indicate that roadway expenditures by all levels in the US are estimated at $217 billion (Margreta, Ford & Dipo, 2011).
This includes the cost of construction and maintenance of all roads. According to estimates, road construction costs, including grading and paving, ranges from $320,000 in good conditions to $2,800,000 per mile in difficult conditions (Margreta, Ford & Dipo, 2011). In rural areas, it is estimated that the cost of constructing roads ranges from $2,400,000 to $4,400,000 (Hummels, 2007).
In addition, it is worth noting that roads occupy extensive land. Therefore, land value must be determined when estimating the cost of road transport in the United States. Estimates indicate that the cost of land devoted to roads in the country exceeds $500 billion, with an annualized value of about $40 billion (National Research Council, 2011).
Apart from these costs, road transportation mode has a number of regulations. For instance, each motorist must obtain a valid driving licence. Moreover, it is a legal requirement that children under the age of 16 years should not drive. This also applies to people under the influence of alcohol and other drugs as well as people with mental problems.
Railway transportation mode
Railway transportation is similar to road transport because can accommodate a wide range of passengers and freight. Nevertheless, railroads are efficient in transporting heavy freight along great distances at low costs. In addition, rail transportation mode is more efficient in fuel usage compared to road transportation modes.
According to estimates, the cost of transporting freight such as oil or petroleum products in the US using railroad is about $10.3 billion between Bakken, ND, and Gulf Coast (Government Accountability Office, 2010).
When using roads to transport an equal amount of freight over the same distance, it would cost $3.21billion above the amount spent on railroad transport (Government Accountability Office, 2010). In addition, railroad transportation is time efficient because the causes of delay are fewer than those affecting road transport.
The cost of building and running railway lines is cheaper than the cost of building roads. For instance, estimates indicate that the cost of building a single-track freight line with a low number of locomotives, running on flat ground and with simple signalling system is about $2 million per kilometre, which includes mechanical and electrical equipping costs (Government Accountability Office, 2010).
High technology and high-speed railway lines cost the government about $200 million per kilometre (Anderson & McCullough, 2011). This shows that the cost of building high technology and speed railways is higher than the cost of building highways. However, the amount of freight and passenger that each can hold differs, with railway transport being the most efficient and less costly (Winston, 2005).
It is also worth noting that companies, rather than individuals, operate railway transport. Therefore, government regulations are mostly directed towards these companies.
For instance, the regulation on weight (rail truck units) and length of a single engine train affects individual companies involved. In addition, the security requirements for freight and passengers affect companies because they are supposed to provide such services to freight and passengers. This differs from regulations in road transport that affect both individuals and companies.
Pipeline transportation mode
Pipeline transport has become an efficient means of transporting liquid and gaseous substances in the recent past. This is due to its ability to transport heavy and risky commodities over long distances. In addition, it operates at low costs. In the US, the cost of transporting crude oil between Bakken and Gulf coast is about $9.3 billion for pipelines and $10.3 billion for roads (Hummels, 2007).
Similarly, it is estimated that the cost of transporting crude oil from Alberta to Gulf Coast is about $13.7 for pipeline and $15.7 for rails (Margreta, Ford & Dipo, 2011). Thus, it is important to note that the cost of using pipelines is less when compared to both rail and road transport.
In addition, the cost of building pipelines differs significantly with the cost of constructing railroads and roads. For instance, the cost of constructing a gas pipeline of 12-20 inches is about $961 per mile and $835 per mile for a 22-30 inch pipeline (Winston, 2005) For crude oil, the cost of constructing a 12-20 inch pipeline is about $516 per mile and $530 per mile for a similar pipeline designed for oil products.
In total, it is estimated that the cost of building all types of pipelines for crude oil, gas and petroleum product is about $4,469, $6,163 and $4,726 per mile respectively (Hummels, 2007). This shows that the constructing pipeline is more efficient than constructing roads and rails to transport the same product.
Water transportation modes
Water transportation is the oldest mode of transport. It is divided into inland and external transport systems. In the United States, inland transport includes the transportation of freight and passengers between cities and towns along the American coastlines and in the great lakes. Domestic water transportation in the country accounts for 30 per cent of the total amount of freight and passengers transported with this mode.
The cost of transporting freight and passengers using ships and other marine vessels is about $29.0 billion per year, which compares to $542 billion, $50.0 billion, $10 billion and $ 29 billion for road, rail, pipeline and air transportation costs respectively. It is also estimated that the price of fuel for marine vessels range between $60 and $160 per mile (Margreta, Ford & Dipo, 2011).
The cost of constructing facilities for ships and marine vessels is less than that of roads, rails and pipelines because vessels only runs on the water surface. They only need docking and control facilities.
In most cases, water transport for freight and passengers involves companies and not individuals. However, some individuals own or operate domestic ships and other vessels for transport and leisure. As such, they are equally affected by government regulations and policies.
For instance, in the US, there are regulations on the amount of freight and number of passengers (weight) that can be transported on a ship at a time. In addition, the age of a vessel and fuel usage are regulated. Licensing is one of the most significant methods of government control and policing in water transport. Security for passengers and freight must be guaranteed by the company offshore and at the docks.
Unlike other forms of transportation, water transportation modes have the capacity to accommodate large and bulky freight over long distances.
Capital considerations include the cost of the vessels and the cost of constructing docking facilities. For instance, the cost of a cruise ship known as Queen Mary, a typical ship, is about $800 million (Hummels, 2007). A typical container ship costs about $75 million. This is an indication that capital considerations must always revolve around the cost of the vessels and its maintenance because docking facilities are provided by the government at a cost.
Air transport is the most recent and most efficient in terms of duration. The method requires extensive infrastructure, security and legal regulations. In addition, it requires expertise and large amounts of capital to operate.
The economics of air transport compares with that of other types of transportation. For instance, air transport has contributed to globalization because aircrafts provide real-time connection between continents. In fact, aircrafts spend between 5 and 10 hours to travel from Europe to America.
It is estimated that air transport contributes to the transportation of 1 million people per year, and the number is increasing. The cost of air transport is about $29.0 billion per year, which compares to $542 billion, $50.0 billion, $10 billion and $ 29 billion for road, rail, pipeline and water transportation costs respectively (Margreta, Ford & Dipo, 2011).
Air transport is the most risky and sophisticated mode of transportation. Unlike other modes of transportation, air transport is regulated to enhance security for the crew, passengers, freight and people on the ground. For instance, the issue of terrorism is a threat to modern air transport. As such, several regulations and restrictions have been developed. In addition, licensing of flight companies and their crew is an important aspect of air transport that affects operators.
Anderson, D., & McCullough, G. (2011). The Full Cost of Transportation in the Twin Cities Region. Minneapolis, MN: University of Minnesota, Centre for Transportation Studies.
Government Accountability Office, (2010). Freight Railroads: Industry Health Has Improved, but Concerns about Competition & Capacity Should Be Addressed, 2006. New York: U.S. Department of Transportation.
Hummels, D. (2007). Transportation costs and international trade in the second era of globalization. The Journal of Economic Perspectives, 21(3), 131-154.
Margreta, M., Ford, C., & Dipo, M. A., (2011). U.S. Freight on the Move: Highlights from the 2007 Commodity Flow Survey Preliminary Data, 2010. New York, NY: Cengage
National Research Council, (2011). Technologies and Approaches to Reducing the Fuel Consumption of Medium- and Heavy-Duty Vehicles. Washington, DC: National Research Council.
Washington, S. P., Karlaftis, M. G., & Mannering, F. L. (2011). Statistical and econometric methods for transportation data analysis. New York: CRC press.
Winston, C. (2005). Conceptual developments in the economics of transportation: an interpretive survey. Journal of Economic Literature, 23(1), 57-94.