Intermodal Freight Transportation Market: An Insight On the Important Factors and Trends Influencing the Market

Intermodal transportation is the process of combining more than one mode of transportation for movement of people or delivery of goods. There are basically two types of intermodal transportation, namely, intermodal freight transportation and intermodal passenger transportation. Intermodal freight transportation is the process of transporting goods in vehicles by using various modes of transportation such as ship, rail or truck. This method of transportation allows faster transportation of freights, reduces the cargo handling activity and damages involved and therefore improves security. Reduced costs and faster delivery time are the prime benefits of implementing intermodal freight transportation.

The intermodal freight transportation system is implemented by various sectors. They are industrial and manufacturing, consumer and retail, food and beverage, pharmaceutical and healthcare, chemical, construction, oil and gas, energy and mining and others. The various modes of carrying out intermodal freight transportation are roadways, railways, airways and water/seaways.

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The intermodal freight transportation market is majorly contributed by the seaways because more number of goods can be transported over long distances at reduced costs. The intermodal freight transportation companies offer three types of services, namely, customized, managed and consulting. Geographically, intermodal transportation is efficiently implemented by regions, such as Asia-Pacific, where the transportation infrastructures include extended and efficient networks of roadways and railways and are surrounded by the oceans.

Increasing demand for on-time delivery of products and raw materials by potential clients is driving the business establishments to implement efficient intermodal transportation systems that enhance inventory planning and management. Implementation of such efficient systems also ensures that the warehouses are efficiently utilized as such transportation system decreases the time spent on managing freights and same time can be invested in performing warehouse duties.

Another factor that is contributing to the growth of intermodal freight transportation market is the rising trend of containerization of goods to be transported. These containers have standard dimensions that can be loaded, stacked or unloaded from one mode of transport to another without being opened. Business organizations are taking the advantage of such containers in intermodal transportations to safely transport goods to the desired destinations. In addition, favorable regulatory environment for global trade is further aiding the market growth.

International trade bodies like WTO (World Trade Organization) are encouraging ‘open door policy’ to promote international trade. Many business establishments are taking advantage of these policies and regulations to expand their businesses beyond national boundaries and opt for intermodal transportation systems for the purpose of exports and imports thereby triggering the growth of this market.

However, some countries like India are not implementing the open door policy to its complete extent, in efforts to protect their local manufacturers. This is to avoid dumping by competitors or other countries. In such cases, foreign goods with unique features and low price entice domestic consumers, creating possibilities that citizens of that country prefer buying foreign goods causing local manufacturers to shutdown their businesses.

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To avoid such a scenario, the governments of such countries impose heavy taxes on foreign goods due to which the manufacturers of foreign goods raise their prices to retain or increase the profit margin and comply with the tax system. The result is that the prices of imported goods and locally manufactured goods are almost same and the citizens are free to buy the goods of their choice without any price discrimination.

This also triggers the price rise in intermodal transportation systems making them unaffordable at times. Also, business establishments are reluctant to opt and implement new ways of intermodal freight transportation due to sky rocketing prices for various inflationary reasons. In addition to this, poor transport infrastructures in developing countries leads to unpredictable events such as traffic congestions and accidents affecting the operational capabilities of intermodal transportation systems. These are the factors that are adversely affecting the growth of this market.

The players in this market are consistently improving their operations and are being rewarded for satisfying their clients. For instance, on May 6, 2014, GE transportation, a division of General Electric, offering intermodal transportation services, was named as one of the top 100 logistics technology companies consecutively for the ninth time by the inbound logistics magazine for offering customizable and globally connecting enterprises. The other players that offer intermodal transportation services include Wise Tech Global, Agility Public Warehousing Company KSC, Profit Tools, Inc., TMW Systems and Trinium Technologies among others.