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Transportation Modes, Modal Competition and Modal Shift

Author: Dr. Jean-Paul Rodrigue

Transport modes are the means by which passengers and freight achieve mobility. They are mobile transport assets and fall into three basic types; land (road, rail and pipelines), water (shipping), and air.

Transport modes are designed to either carry passengers or freight, but most modes can carry a combination of both. For instance, an automobile has a capacity to carry some freight while a passenger plane has a bellyhold that is used for luggage and cargo. Each mode is characterized by a set of technical, operational and commercial characteristics. Technical characteristics relate to attributes such as speed, capacity, and motive technology while operational characteristics involve the context in which modes operated, including speed limits, safety conditions or operating hours. The demand for transport and the ownership of modes are dominant commercial characteristics.

a. 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. While historically road transportation was developed to support non-motorized forms of transportation (walking, domestic animals and cycling at the end of the 19th century), it is motorization that has shaped the most its development since the beginning of the 20th century.

Road transportation has an average operational flexibility as vehicles can serve several purposes but are rarely able to operate outside roads. Road transport systems have high maintenance costs, both for the vehicles and infrastructures. They are mainly linked to light industries and freight distribution where rapid movements of freight in small batches are the norm. Yet, with containerization, road transportation has become a crucial link in freight distribution.

b. Rail transportation and pipelines

Railways are composed of a traced path on which wheeled vehicles are bound. In light of recent technological developments, rail transportation also includes monorails and maglev. They have an average level of physical constraints 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. Gauges, however, vary around the world, often challenging the integration of rail systems.

Pipeline routes are practically unlimited as they can be laid on land or underwater. Their purpose is to move liquids such as petroleum products over long distances in a cost-effective fashion. 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 environments. Pipeline construction costs vary according to the diameter and increase proportionally with the distance and with the viscosity of fluids (from low viscosity gas to high viscosity oil). 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.

c. Maritime transportation

With physical properties such as 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 its discontinuity, but such endeavors are highly expensive. Comprehensive inland waterway systems include Western Europe, the Volga / Don system, the 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 operate. These high costs also relate to maritime shipping where the construction, operation, and maintenance of ships is capital intensive. More than any other mode, maritime transportation is linked to heavy industries, such as steel and petrochemical facilities adjacent to port sites. Yet, with containerization, maritime shipping has become the linchpin of globalization, allowing trading a wide range of goods and commodities.

d. 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.

e. Intermodal transportation

Concerns a variety of modes used in combination so that the respective advantages of each mode are advantaged. Although intermodal transportation applies for passenger movements, such as the usage of the different, interconnected modes of a public transit system, it is over freight transportation that the most significant impacts of intermodalism have been observed. Containerization has been a powerful vector of intermodal integration, enabling maritime and land transportation systems to interconnect.

f. Telecommunications

Cover a grey area in terms of if they can be considered as a transport mode since telecommunications often do not have an apparent physicality. Yet, this physicality is real since they are structured as high capacity networks with very low constraints, which may include the physiography and oceanic masses crossed by fiber optic cables. They provide for the “instantaneous” movement of information (speed of light). Wave transmissions, because of their limited coverage, often require substations, such as for cellular phone and data networks where WiFi connections are of even more limited range. 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 mobility in some economic sectors, but the major impact is related to e-commerce, which has opened a whole range of commercial opportunities.

Each transportation mode has key operational and commercial advantages and properties. However, contemporary demand is influenced by integrated transportation systems that require flexibility in the respective use of each mode. 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 ensure that some modes are complementing one another:

  • Different geographical markets. If different markets are involved, modes will enable a continuity within the transport system, particularly if different scales are concerned, such as between national and international transportation. This requires an interconnection, commonly known as a gateway, where it is possible to transfer from one mode to the other. Intermodal transportation has been particularly relevant to improve the complementarity and connectivity of different geographical markets.
  • 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 on the mode used. Thus, in some markets, rail and road transportation can be complementary as one may be focusing on passengers and the other on freight.
  • Different levels of service. For a similar market and accessibility, two modes that offer a different level of service will tend to complement another with niche services. The most prevailing complementarity concerns costs versus time.

Thus, there is modal competition when there is an overlap in geography, transport markets and level of service. Cost is one of the most important considerations in modal choice. Because each mode has its own price/performance profile, competition between the modes depends primarily upon the distance traveled, the quantities shipped and their value. While maritime transport might offer the lowest variable costs, road transport tends to be most competitive over short distances and for small bundles of goods. A critical factor is the terminal cost structure for each mode, where the costs (and delays) of loading and unloading a unit impose fixed costs that are incurred independent of the distance traveled.

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