Intermodality - Taking Logistics to a New Level

While challenges for true seamless operations in the Intermodal arena persist, with careful planning the concept is surely capable of revolutionising the transport sector
IN early days intermodalism involved movement of highway trailers and specially designed rail containers to move intercity freight over long distances. Specialised containers were successfully used to link the main freight corridors of various countries. The incursion of containers from ocean into land markets promoted combined transport and there was a significant increase in the number of services offered by rail-roads, rail-trucking groups and shipping lines. Over recent years, the use of road transport has increased while that of rail and inland water transport has declined as trucks can make doorstep deliveries; however, roadways being more expensive and more polluting further impose the need for intermodal services. However, a serious drawback to these was the fact that they required lengthy Port turn-around times.

Intermodal Logistics Definition and the Modes used

Intermodal freight transport basically involves the transportation of freight using multiple modes (rail, ship and truck) and without actual handling of the freight itself during the process. It effectively reduces actual cargo handling, and in the process provides better security. It also reduces damage and loss, and can help achieve faster delivery times. The concept is associated typically with containerisation, but in a more general sense, involves the movement of goods between modes without any handling of transported goods. To facilitate intermodality, containers are transferred directly from a containership onto rail cars, or on a highway trailer transferred from a truck onto rail cars. Although containerisation has played a major role in transforming intermodalism, it is not the sole factor responsible for the success achieved. Intermodalism, in a broader sense, is the movement of goods on two or more modes, involving either direct transfer (as in the case of containerised transport), or intermediate storage (truck-rail transloading or cross-docking at LTL terminals, where intermediate storage and handling of goods takes place). Intermodalism has gained importance over the past few years, both in terms of the public sector policies formulated, and from a business perspective for shippers and carriers. The concept aims at consolidating the benefits of several separate modes, while avoiding the disadvantages of each. A major challenge associated with this mode is the delay caused while transferring cargo between modes. However, this can be overcome with some efficient planning.

Types of Intermodal Freight Movements, based on the Modes Involved

Sea-Truck (Fishy Back)

This intermodal mode involves the movement of goods in containers which are transported on trucks to/from a seaport from/to their points of origin or their final destination. These containers are transferred directly between vessels and trucks at marine container terminals. It is one of the oldest modes of intermodal transport utilising the least expensive methods for line-haul movement. Sea-Rail (Land Bridge) Goods shipped in containers on oceangoing vessels are transported primarily by rail when on land. The process for the exchange of containers between containerships and railroad flat cars depends on the location of intermodal rail yards. In the case of on-dock intermodal yards goods are transferred directly between containerships and railroad flat cars. As with off-dock intermodal yards there is an additional leg of the container movement on trucks, which provides the link between the sea and rail modes. The land bridge concept uses an ocean-rail combination that offers a single tariff that is lower than the sum of individual costs.

Truck-Rail (Piggy Back) Truck-rail intermodal involves the shipment of trailers on railroad flat cars, with the trailers being transported by trucks between point of origin and destination, and intermodal ramps. Containers are placed on railway flat-cars and transported by rail from one terminal to the other. On reaching the destined terminal, the containers can be placed on trailers and transported on roads. This is the most widely used intermodal system today and provides a cost-effective efficient means to transportation a range to goods. Air-Truck (Birdy Back) Goods are moved in air-freight containers/Unit Load Devices, transported by trucks to or from air cargo terminals from or to their points of origin/delivery. Road and air services are combined to provide fast premium package moving services, mainly for International shipments. Over the years many air carriers have extended their motor freight range to provide services to expanded areas including smaller cities through tie-ups with domestic regional operators. Barge-Truck It involves movement of goods in containers or trailers on barges which are transported on trucks for the surface leg of the shipment. Roll-on/off barge transport is an example of barge-truck intermodal movement wherein wheeled containers or trailers are transported on barges, which are loaded and unloaded by the means of ramps, without using cranes. In addition to those mentioned, there are forms of movements involving modal exchanges of goods in the supply chain pertaining to cargo handling and/or storage at intermediate facilities. These include intermediate facilities like bulk transfer facilities, LTL cross-docking terminals, and transloading docks at warehouses and distribution centers. Marine terminals also can be used as bulk transfer facilities for modal transfer of bulk commodities between oceangoing vessels and unit trains. Organisations, companies and government bodies are increasingly realising the various benefits of intermodal transport solutions. These include:

Advantages of Intermodal transport

1. Reduced time and risk of loss, damage, pilferage and contamination 2. Reduced cost of transport 3. Documentation reduced to the minimum 4. Reduced damage to the environment 5. Flexibility in combinations of modes used 6. Safe and Secure due to being containerised.

Disadvantages of Intermodal transport

1. Slows down movement of goods on account of reduced costs 2. Lack of Reliability 3. Risk of damage on account of over-packing 4. High Infrastructure Costs.

Intermodal Transport in India

Although rudimentary beginnings in intermodal transport were made in the 1960s, actual progress towards implementation was made only in the 1990s, after the establishment of the Container Corporation of India Ltd. (CONCOR).

The Government had decided to set-up an independent fully government-owned corporate body under the Ministry of Railways, to facilitate and promote intermodal transport in the country. This paved the way for CONCOR, incorporated in March 1988. CONCOR was set-up specifically to provide comprehensive integrated intermodal logistics support for domestic and international trade by way of direct door-to-door services. It would use flexibility of road transportation in sync with the economical advantage of the countrywide rail network. It was the first to establish a string of ICDs and container freight stations (CFSs), and the new gateway at Nhava Sheva near Mumbai became the main container terminal on the West Coast due to linkages with Western, Central, Northern and North-western parts of the country. Rail and road links were established with 6 of the 12 (at the time) Major Ports, with dedicated container liner services between Delhi and the Mumbai, Nhava Sheva, and Chennai Ports. Linkages on all these networks incorporated the best features of road and rail together. The countrys extensive rail network was used for long hauls, while road vehicles were involved for door-to-door deliveries and short lead movements. Within two years of CONCOR being established, container handling doubled from 52,084 TEU in 1989-1990 to 108,277 TEU at the close of 1991-1992. Of this, 95,782 TEU were export/import containers. Container handling in the hinterland however, continued to be low, with a meager share of about 10-11 per cent. The countrys growing international trade, demanded greater sophistication in handling and transit, which containerisation represented. The extent of containerised cargo volumes handled at different ports depends on the requisite

infrastructure facilities available. As resources have always been hard to come by, infrastructure was developed in stages. This further helped conserve resources, cut costs of operations and to build speedily. Small-improvised facilities involving minimal resources and time were developed in stages, on a modular pattern as traffic grew. Terminals were by now working as one-stop, single-window facilities and an optimal mix of road-rail services from factory to Port was offered as a complete service package. Integrated full-fledged ICDs were developed and simultaneously, old terminals and depots were strengthened on a regular basis. Then in a move that gave a boost to the logistics industry in India, the IR allowed other private sector enterprises, in addition to CONCOR, to operate container trains. The 14 new entrants in the business helped augment the much needed capacity for container transportation, which is set to witness exponential growth in demand. The healthy, competitive environment has caused a steady increase in intermodal business and has attracted a large number of corporates including important global operators. While the new entrants would mean additional wagons and inland terminals, the saturated rail routes need to be unclogged in order to maintain the pace of growth.

Railways and Intermodality

The Indian Railways (IR) had its first stint with intermodality in the mid 1960s. But a major development for containerisation in India came when the first ISO container was brought to the Southwest coast, at the Cochin Port in November 1973. Developments in intermodality remained moderate for about a decade after this due to lack of adequate port and intermodal network infrastructure. In the meantime, the authority set-up a nucleus of makeshift inland depots with linkages to gateways for ISO containers. Basic infrastructure was developed at ports like Cochin, Chennai (Madras), Kolkata (Calcutta) and Mumbai (Bombay); and makeshift rail-fed Inland Container Depots (ICDs) were set-up at Delhi, Bengaluru and Coimbatore through the 1980s. The Bengaluru ICD was set-up within the rail freight handling siding at the station, in August 1981, and similar ICDs were set-up at Anaparti, Coimbatore, Guntur, Guwahati, Ludhiana and Pragati Maidan (New Delhi). The first four were linked for container movement to the Cochin and Chennai Ports, while the ICD at Guwahati was linked to the Kolkata and Haldia Ports, primarily for tea exports. The ICD at Delhi was connected to the Mumbai Port. Handling and transport of ISO containers from gateway ports into the hinterland was started by the IR in 1981-1982, with a 229 TEU throughput for the initial year. This figure surged to 43,065 TEU in 1988-1989. By this time, the domestic IRS container throughput had drastically reduced from the 1980-1981 peak of 14,549 TEU (9,300 TEU equivalents). The rapidly growing Indian economy, over the last few years, has created demand for additional capacity of rail freight transportation, which is likely to grow further in the future. This growth in demand has led to the development of dedicated freight corridors along eastern and western routes. Since their first use in the intermodal link, the railways have come a long way. The benefits of using rail transport are as follows: rail transport is relatively cheaper it reduces time taken to transport good rail usage reduces highway congestion loading processes are less labor intensive the use of electricity helps conserves conventional resources environment friendly: causes least damage to the environment as compared to other modes offers flexibility in loading operations (TOFC/COFC/DST/Carless). However, like with every other mode, rail haulage too has its set of disadvantages. Rail transport works out to be more expensive over short distances and also lacks adequate resources and equipment to handle volumes during peak seasons.

 technologies, operation and maintenance practices yet to be standardised lack of physical infrastructure at interchange points terminals are congested due to over-usage service levels are inconsistent missing rail links in parts of the country limit reach many bridges are old and therefore have load restrictions movement of open wagons and oil tankers is restricted One way in which the railways can compete with other modes of transport is by forming better linkages with them. Further, physical connections with container hubs, logistics centers, river ports and seaports need to be fortified. The railways should therefore focus not on replacing, but on enhancing coordination with potential partners, i.e. shipping companies, road haulage companies, freight forwarders and logistics services providers. Intermodalism can then be used by the railways to increase market reach without a physical increase in network length.

Rapid growth of maritime freight containerisation over the last few decades has provided the opportunity to carry more general freight, economically. This holds true particularly for routes to/from international ports where containerisation makes transhipment relatively cheap, when containerised freight needs to be transhipped inland, and where concentration of flows lead to high volumes of movement an opportunity the railways should exploit.

Railroads have come a long way in terms of stream-lining their operations to improve operational efficiencies and keep costs low. However there are a few areas of focus for the railroads especially in terms of Intermodal freight movement as detailed below: 1. Improvements for In-gate tasks at Intermodal hub including inspection, security seals, J-1 reporting, etc. 2. Need to reduce the flips of container from chassis to ground, chassis to chassis and ground to chassis saving time and cost. 3. Minimise costs and manpower needed for unit handling, ramp and de-ramp operations. 4. Minimise storage time/occupancy of the area at Intermodal hub. 5. Reduce/eliminate dry runs. 6. Special handling requirements for Hazmat. 7. Additional precautions for automotive units to prevent any damage to the units. 8. Storage, retrieval and reporting of the images of container units during the hub operations. 9. Forced free deliveries to customer due to lack of space at intermodal hub area.

10. Weight and packaging limitations of the container. Over the years continual improvements have happened in the operational tasks as evident in the shift of the railroads towards increased level of automation especially for areas such as Ramp planning, Train Planning and Car Planning. Some areas are still evolving and a few of the alternatives that may well catch momentum in near future are: JIT (just-in-time) entry of containers at intermodal hub and immediate pickup once train arrives at destination (factoring the lead time required for ramp and de-ramp operations). This could help handle larger volume with smaller space at hub. Integrated approach towards asset management with real time data availability. Enhanced mobility solutions ensuring improved crew productivity and better connectivity with third party vendor such as truckers. System checks and controls for auto stoppage of out gate of units based on issues of roadability of units/ bad orders. Systems with real time data availability and subsequent flexibility built in to allow additional containers for enhanced capacity utilisation. Usage of lighter and stronger containers with increase cargo capacity. Usage of RFID especially for automotive segment in Intermodal. While there are still challenges for true seamless operations in Intermodal area, it sure could change the landscape of transportation sector with its immense potential and savings in terms of cost and positive influence on environment. As per latest analyst report weekly railroad intermodal traffic has recently approached its volume to the ones pre-recession, which sure is sign of recovery and for sure no one is complaining. Freight transport across relatively small distance of 300-400 miles may be done economically by trucks, but for higher volumes and larger distance railroads are normally preferred. A more practical variation is Intermodal freight transport which involves the movement of the freight across different modes including rail, road and ship. Herein the actual freight handling is less. It's primarily contained in standard units (commonly referred as ISO containers) which are convenient in handling, storage and transport. This also assists in security and helps prevent damage to the freight. As per one of the statistics available if 10 per cent of current freight moving on trucks is moved by train it would save approximately 1 billion gallons of fuel per year. This goes on to highlight the ecosystem benefits of such intermodal freight movement.

The Way Forward

Logistics has acquired a new significance today as an essential and important segment of management and intermodalism has emerged as its cornerstone. For intermodalism to develop, simultaneous development of all modes of transport is essential, along with a policy framework to facilitate the development of intermodal services and the entry of such service providers. The potential of coastal shipping and inland waterways needs to be explored and nodal logistics centres for domestic containerised cargo need to be established.

Also, among other things, cross-border intermodal logistics services need to be developed across the SAARC region, along with a regional maritime hub on the countrys East coast. As the potential for expansion of intermodal traffic is majorly dependent on infrastructure and a facilitating policy regime, it would be essential to develop networks, facilitate expansion of ports, improve hinterland connectivity, and increase road and rail capacity. Coastal and inland waterways can be developed as effective alternatives. As far as rail freight is concerned, the IR would need to create large logistics hubs that would provide intermodal services for domestic cargo. Double-stack container trains should be used, in view of steadily rising volumes and the long distances goods are moved over, to further reduce costs of operation. Further, allied air-rail intermodal services would enable the railways to provide same or next day delivery at relatively cheaper costs. The benefits of intermodal transport over singular, conventional modes are numerous. While India has tremendous potential to develop intermodal networks, it lacks the funds and policy framework to expedite the process. Only with effective planning and implementation can we overcome this problem, over a period of time. Intermodalism will be a significant and critical factor in the success of hyper-competition among supply chains of the future. Its more significant role in global supply chains will require an understanding of supply chain management, the needs and requirements of the marketplace, the capabilities and advances in information and communications technology, and the continuing challenges and constraints on transport infrastructure. An increased awareness of the scope and magnitude of broadly defined and measured intermodalism will heighten the need for intermodal education and training for those being asked to manage and execute both new intermodal technologies and information-communications systems and the increasingly constrained infrastructure of intermodalism.