Introduction to Intermodal Transport
Question:
Discuss About The Sustainable Intermodal Transport Dry Ports?
An intermodal transport is defined as the movement of goods in the same loading unit using two or more than two modes of transport. The benefit of such transport system is that it forms an integrated chain of transport by utilising the strengths of different modes of transport. A normal transport mode is more energy intensive than an intermodal freight transport, and hence needs to be promoted to sustain in the long run.
Logistics management is an important aspect of supply chain management, when considering the management in global sense. Transportation plays a very important part in achieving security in supply chain management. Transportation and globalization together brings an integration of modes of transport with it (Sahin & Yilmaz, 2014).
Earlier the focus for study on intermodal transport was more on the intermodal transport by rail, and now the focus has shifted to transport by water and roads. The purpose of this document is to study the factors and problems in development of intermodal transport, study the best practices to follow and understand the factors that help sustain in the long run.
Qube Holdings Limited, was founded in the year 2010, it operates as a logistics and infrastructure company in Australia, which also provides cargo supply chains services to import and export clients. Qube has freight handling facilities through its multiple subsidiaries at 29 ports in Australia. Its logistics subsidiary is Qube logistics, which has its operations on road and rails, has warehousing facilities, intermodal logistics hubs (Qube Holdings Limited, 2017). It holds four projects under its strategic assets, which are, Moorebank logistics, Quattro JV, joint venture with TQ and Minto properties. As on end of June 2017, the company has seen revenue growth of 7.61% from previous 5 years, however, the capital spending has been -8.98%, with increase of around 23.11% in Gross margin (Mudie, 2015).
The company Qube logistics in NSW operates in the Port Botany freight terminal, Port Botany Empty Park, Yen Nora Intermodal terminal and Macarthur intermodal terminal (Trevaskis & Ogilvie, 2017).
An intermodal could be termed as an ideal form of transportation for imports and exports. It serves as a simplified form of transportation and is always successful in any logistics plan. Its benefits lies in the systematic process of connecting and coordinating operators and parties who are involved in the trade process. The main aim of the organizations using intermodal transport, is to lower the transportation cost (IBISWorld, 2017).
Logistics Management and Supply Chain Security
- Low cost, including low fuel cost
Shippers are always in search of methods to reduce the cost and increase the service value, the intermodal transport helps them achieve this goal. Intermodal transport gives the shippers an advantage of low rates, better predictable pricing, reduced handling costs while loading and unloading of goods. It provides a better value proposition than a highway. The total savings from the fuel expenses also drastically reduce with the use of intermodal transport. This gives greater total savings considering high fuel surcharge that generally applies to freight rates.
- Reduced Carbon emissions
The use of intermodal transport by rail provides significant environmental benefits as compared to single modal transport by road. The carbon emission reduces by about half the amount. Carbon emission from train is approximately 5.4 pounds per 100 tonne-miles as compared to 19.8 pounds from trucks. This in turn also helps the organization achieve their sustainability goals by taking care of the environment.
- Better safety and security
Accidents then to occur more on roads. The number of accidents per ton-mile on railroads is recorded to be 1/4th of road accidents by trucks. The research also shows that delivery of hazardous material generally reaches its destination safely and that too without any release of hazardous material. Hence the rail transport can be termed as a more secure transport for hazardous material.
- Reduction in transit time
A relatively less time is required to move goods using an intermodal transport as the step of loading and unloading completely becomes irrelevant in an intermodal transport, reducing a huge amount of transit time and delivering the goods in a better condition without causing any damages.
- Truck Driver shortage
There exists a huge gap in the availability of truck drivers as compared to their demand from the organizations. Intermodal transport completely diminishes this challenge as the number of people required to move goods through trucks is much more than using an intermodal transport for the same quantity of goods (Mathisen & Hanssen, 2014).
- Better reliability and capacity
More and more organizations are moving their freight to intermodal considering the factors like reliability and capacity. Less capacity exists when the mode is rail or roads. Shippers on the other hand get an advantage of better equipment’s and standardized transit schedule. The savings organizations make by use of intermodal is generally used by them to streamline their reverse logistics, resulting in additional savings with the organizations.
The company Qube logistics is the largest import and export logistics organization in the region of New South Wales. It grows with a strategy of integrating local logistics companies and small size companies to create one big efficient company. This is the way Qube logistics keeps increasing its network through acquisitions.
Development of Intermodal Transport
The company Qube logistics operate across the Australia into freight depots, warehousing, empty container parks, etc. It also has its biggest rail terminal network in the region of New South Wales (Fullerton, 2014).
Logistic industry is highly unpredictable and competitive and thus it gets affected by numbers of internal and external factors challenging its system’s proper functioning. Issues like national level policies, regulatory issues, region wise planning and policies for development, strategies related to state transport and infrastructure investment, etc.
- Urban Congestion
Entire South Australia is deeply impacted with connectivity issues. The congestion results in delays, increase in fuel cost and vehicle operating cost, increase in pollution levels, etc. The travel time has increased drastically and is expected to worsen with increase of vehicles.
- Access to multi modal transport
There has been adjusting of modal spilt of containers which moves to and fro the port, due to the relocation of port activities between Port Jackson and Port Botany. For the freight transfer, usage of newly built roads was denied by the local council. Their emphasis on the use of railways for the transportation. On the other hand, specific routes were allotted by railways for the 70% transfer of containers (Smith, 2015).
- Conflict of Inland Depot
Nearly 65 hectares of unused area are connected through a track of railways to Port Botany. It will become an intermodal facility in the year to come. This factor caused a difference of opinions between local and state government and it became a point of conflict.
- Limited space in terminal and container storage
In a logistic network, the imtermodal boundary is the terminals. Reduction of cost and maintaining shipping records track are done by container handling. With the increase in demand on a daily basis, emergence of limited space problem will occur.
- Recycling of the asset and its privatization
Australia’s second largest port for container is Port Blair, whose port lease is with NSW Ports Consortium. The Australian Government has taken privatization as an assist recycling initiative. There was a plan to build a tunnel between 2 places for eliminating the congestion on present network, but with the change in local government post elections, toll taxes were introduced and the plan is yet to see any future.
- Downturn in commodity market
In the market of transportation, Qube is a new player, so to fight against the competitors, it has to provide best quality services. But due to the downturn in the present market for commodities, its operations can be affected unfavorably.
- Unfavourable weather conditions
Unfavourable weather conditions affect the activities of logistics badly by making the process of transportation slow. The flat tyre problem and expansion of rail tracks are common in high temperature area. Shipping lanes, harbour facilities and infrastructure at the coast can get affected the increase or decrease of sea level (Moniosa & Bergqvist, 2015)
Qube Logistics and its Subsidiaries
Logistics management involves a lot of steps and a lot of coordination. Its main objective plans to coordinate all necessary steps systematically to achieve better service levels at the lowest possible cost. Logistics management involves steps from picking up the goods from start point till dropping the goods at the end point (Tseng & Yue, 2005). With the changing factors and methods of supply chain management, logistics management strategies need to be designed for different kind of products, different strategies for different customers and for different locations. Care should be taken that the drafted design plan should be flexible enough to bring in last minute changes basis the requirements (Pontius, 2017).
Structural – A structural analysis of the organization is required to design a logistics strategy.
This covers analysing the number of warehouses, available area, distribution and channel.
Functional – Consider each functions excellence area to design a strategy.
Implementation – This element introduces new procedures and policies, brining changes in previous plans and configuring the system (Slade, 2017).
The above mentioned problems can partly be solved by urban solutions, but would require huge infrastructure investments along with generating social and environmental issues.
Logistic Alliance – To have effective operational strategies at low cost and least investment, the companies working in similar areas should collaborate and form an alliance that could be mutually beneficial and together increase their strength to fight with any issues.
Rolling Horizon Approach – Small container space is one of the main problems faced in the logistics industry, to resolve this issue, an approach of rolling horizon can be applied. This approach is used when a large number of inbound, outbound and transit containers are to be handled in a small place at the same time. When implementing, rolling approach, the leaving time of a container is noted and that space is allocated to another container on the basis of the work load at that particular time. This process is repeated for all the containers.
Reverse Logistics – This method is used for unusable products or for the products that are not required anymore. In such cases, these products are either re-used in some other activity or these products are moved to some other place. Reverse logistics work towards achieving substitution, recycling, re-use and reduction.
Limited Capacity – This phenomenon is used in the absence of warehouse space, drivers, machines, trucks, etc., by making use of empty space during return trips. This results in effective utilization of resources and saves cost.
Advantages of Intermodal Transport
Intermodal – This method or mode of transport for goods is also used efficiently at remote locations.
Transhipments – It happens in the freight vehicles which starts from the origin point, but does not reach the final destination on time due to consolidation or break bulk (Hu, et al., 2015).
Consolidation shipments if formed when many small shipments to get together to form a bigger shipment. On the other hand-break bulk shipments are the method of breaking a shipment into smaller shipments.
This method uses less number of vehicles for larger distances and areas, also different size of vehicles are used in this method in different phases of transit so as to achieve economies of scale.
Australia has strict guidelines for transportation. The entire country is covered under certain regulations, while the state also has their own set of regulations. In terms of logistics, the regulations are related to size of vehicles, loads they carry, type of packaging, type of goods, speed limits, etc.
Long term planning is required to achieve drastic changes in the state’s transport system rather than just investing in the infrastructure projects. Ways or solutions need to be identified to make use of existing infrastructure to its best possible. Long term identification should be done in terms of future transport routes to have sufficient time for the construction work and get it integrated with land use plans.
Infrastructure changes – An initiative of the government that could help Qube logistics would be, to take steps to reconstruct and expand the port areas as less space and less containers is available at many of the ports. A good investment would be required by government towards the infrastructure changes, hence private sector finance should be used to cater to this up gradation (Pemberton, 2008).
Better regulations – Streamlining the regulations that govern the road safety and heavy vehicle movements should be done as many of the orders covered under these acts are overlapping and does not solve the purpose.
Rail Network improvement – Australia’s freight is expected to increase two folds in next 15 years. Hence, a strong rail network is the need of the hour as large quantities of freight can be moved with low risk and low investment to big distances.
Future identification of key transport corridors should be done to ensure efficient land use and achieve better infrastructure provisions (Department of Premier and Cabinet, 2016).
Environmental and Safety Benefits of Intermodal Transport
Few Initiatives being taken by the NSW Government – The infrastructure department of NSW recommended some improvements to the NSW Government, on the basis of which the NSW government has reserved amounts for various projects.
|
Area of Work |
Initiatives |
|
Public Transportation in Urban region |
Amount reserved for Sydney rapid transit, Sydney rail future, Bus rapid transit and bus priority infrastructure, project to reduce travel time between Sydney and central coast, |
|
International Gateways |
Road freight connections to be assessed from Port Botany to West Connex, Rail freight assessment from Port Botany to Moorebank, Work towards increasing capacity on Southern Sydney freight line, continue the assessment at the congested ports to increase space. |
|
Urban roads |
Western Harbour tunnel, implement smart motorways, Integrated infrastructure planning, funding and delivery. |
|
Regional Transport |
Reserved amount for regional road freight corridor program, regional growth roads program, fixing the country road and rail program (Jarzemskiene, 2007). |
Companies are motivated to sustain and adjust themselves to the changing supply chain system requirements. Sustainability is a strategic achievement of an organization by integration of social, economic and environmental issues with the social, economic and environmental goals through a planned coordination of processes of different organizations to achieve long time goals (Roso, 2013).
Conclusion
Single mode of transport of goods consists of a lot of gaps in terms of security which affects the sustainability and development of the transportation system. Many regulating measures have been implemented by national bodies to fill these gaps, but the regulations do not improve the overall security issues of transportation. A lot of effort goes into planning of freight infrastructure and the government tries to make regulations for the proper operations management that could be beneficial to all.
There exists a lot of strategic advantages at regional, state and national levels that support development of intermodal. These strategic advantages are now being recognized by many companies operating in the logistics and transport functions.
References
Department of Premier and Cabinet, 2016. State Infrastructure Strategy, Available at: https://www.nsw.gov.au/improving-nsw/projects-and-initiatives/state-infrastructure-strategy/
Fullerton, T., 2014. Qube logistics quietly posts ten-fold growth in three years, Available at: https://www.abc.net.au/news/2014-06-25/qube-logistics-quietly-posts-ten-fold-growth-in-three-years/5548924
Hu, Q., Corman, F. & Lodewijks, G., 2015. A Review of Intermodal Rail Freight Bundling Operations. International Conference on Computational Logistics, pp. 451-463.
IBISWorld, 2017. Qube Holdings Limited – Profile Company Report Australia, Available at: https://www.ibisworld.com.au/australian-company-research-reports/transport-postal-warehousing/qube-holdings-limited-company.html
Jarzemskiene, I., 2007. The evolution of intermodal transport research and its development issues, Available at: https://www.tandfonline.com/doi/pdf/10.1080/16484142.2007.9638145
Mathisen, T. & Hanssen, T., 2014. The Academic Literature on Intermodal Freight Transport. Transportation Research Procedia, Volume 3, pp. 611-620.
Moniosa, J. & Bergqvist, R., 2015. Intermodal terminal concessions: Lessons from the port sector. Research in Transportation Business & Management, Volume 14, pp. 90-96.
Mudie, A., 2015. Read this before you buy Qube Holdings Ltd shares, Available at: https://www.fool.com.au/2015/08/03/read-this-before-you-buy-qube-holdings-ltd-shares/
Pemberton, C., 2008. Inquiry into Australia’s Future Infrastructure Requirements:Australian Government – Infrastructure Australia, Available at: https://infrastructureaustralia.gov.au/policy-publications/submissions/published/files/39_wingecarribee_shire_council_SUB.pdf
Pontius, N., 2017. Logistics Strategies for Business: 23 Experts Share Tips on How to Develop a Winning Logistics Strategy, Available at: https://www.camcode.com/asset-tags/how-to-create-a-winning-logistics-strategy/
Qube Holdings Limited, 2017. Qube official website. [Online]
Available at: https://www.qube.com.au/
Roso, V., 2013. Sustainable intermodal transport via dry ports – Importance of directional development, Available at: https://www.researchgate.net/publication/264818416_Sustainable_intermodal_transport_via_dry_ports_-_Importance_of_directional_development
Sahin, B. & Yilmaz, H., 2014. An Approach for Economic Analysis of Intermodal Transportation. The Scientific World Journal, p. 10.
Slade, S., 2017. 6 Strategies for Better Supply Chain Management in the Current Economy, Available at: https://blogs.oracle.com/scm/5-strategies-for-better-supply-chain-management-in-the-current-economy
Smith, K., 2015. Qube and Brookfield fight to acquire Asciano. IRJ Journal, Available at: https://www.railjournal.com/index.php/australia-nz/qube-and-brookfield-fight-to-acquire-asciano.html?channel=000
Tseng, Y. & Yue, W., 2005. The Role Of Transportation In Logistics Chain. Proceedings of the Eastern Asia Society for Transportation Studies, Volume 5, pp. 1657 – 1672.
Trevaskis, P. & Ogilvie, D., 2017. Norton Rose Fulbright acts for Qube Holdings on first major pre-commitment at Moorebank Logistics Park, Available at: https://www.nortonrosefulbright.com/news/155661/norton-rose-fulbright-acts-for-qube-holdings-on-first-major-pre-commitment-at-moorebank-logistics-park
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