What is intermodal transportation and what are its benefits in international trade?

Answer 1

Intermodal transportation involves the use of two or more modes of transportation in moving a shipment from origin to destination. It is often said that international transportation is intermodal transportation because so many goods moving from one country to another involve the use of multiple modes and carriers. Virtually everything moving across an ocean will involve truck or rail carriers for product pickup and delivery and an air or ocean carrier for the linehaul portion of the trip.

Shifting freight between modes may seem inefficient and time consuming, but the improved reach and combined service advantages of intermodal transportation offsets these issues. The primary benefits of intermodalism include the following:

• Intermodal transportation facilitates global trade. The capacity and efficiency of ocean transportation allows large-volume shipments to be transported between continents at relatively low per unit costs. The rapid speed of air transportation allows perishable goods to flow quickly between countries. The final domestic leg of the delivery can take place via truck. The ocean-truck combination makes product competitive across global markets by keeping the landed cost in check. The air-truck combination facilitates expedited flows of high-value goods and rapid replenishment of fast selling products like trendy clothing.

• Greater accessibility is created by linking the individual modes. The road infrastructure allows trucks to reach locations that are inaccessible to other modes, especially air transportation, water transportation, and pipelines. For example, air transportation can only move freight between airport facilities. Trucks provide the flow between the origin and departure airport as well as the arrival airport and the customer destination. Railroads can also facilitate the use of domestic river transportation and international ocean transportation. Getting low-sulfur coal from a Wyoming mine to a utility company in Japan would be best accomplished through a combination of rail and water transportation.

• Overall cost efficiency can be achieved without sacrificing service quality or accessibility. In other words, intermodal transportation allows supply chains to utilize the inherent capabilities of multiple modes to control cost and fulfill customer requirements. If a furniture manufacturer needed to move 20 loads of furniture from North Carolina to California for export, a combination of truck and rail transportation would improve upon truck-only service. The speed and accessibility of trucks would be used for the initial pickup and final delivery, while the cross-country transportation would be handled by the cost-efficient railroads.