Role of Railways in Intermodal Choices for Efficient Transportation

INTERMODAL CHOICES ROLE OF THE RAILWAYS BIMSTEC Pramod Uniyal Academic Advisor IRT NAIR Vadodara 16.9.14

A THOUGHT SINCE THE DAWN OF HUMAN ACTIVITY TO THIS DAY, QUICK AND SAFE TRANSPOTATION OF PEOPLE AND GOODS HAS BEEN A CONSTANT GOAL OF EVERY ORGANISATION

ECONOMIC CYCLES AND TRANSPORT TECHNOLOGIES FIRST 1830 TO 1960 STEEL, COAL, STEAM RAILWAY, INORGANIC CHEMISTRY OIL, ELECTRICITY, ELECTRIFIED RAILWAY, PRIVATE CAR INTERNET, HIGH SPEED RAILWAY, INTEGRATED LOGISTICS, AIRPLANE SECOND 1910 TO 2010 THIRD 1960 TO ------

CHARACTERISTICS OF DEMAND FOR TRANSPORT--- SOME BASIC FACTS Spatial displacement of goods and persons over time Derived demand Variability in demand during the day and from day to day Perishibility Indivisibility

Contd. Providing transportation consumes time and energy, thereby incurring a cost Traffic volumes that would occur at different level of costs represent the demand for transportation Service characteristics of the transportation facilities constitute its supply characteristics

CONTD, Transportation demand analysis is the relationship between, i) traffic volumes ii) supply characteristics iii) socio economic activity trends Transportation investments are large and therefore projects have long gestation periods and have to be adequately factored in while analyzing demand vis- -vis its supply characteristics

DEMAND FOR FREIGHT--- THREE BASIC APPROACHES (a) Basic unit of analysis is the firm and transportation as one of the inputs into the production and marketing processes. Affected by:- (i) shipper s economic positivism of short term cost optimization (ii) technological positivism relationships between physical aspects of the transport system (e.g. speed, frequency) and physical aspects of the product (e.g. perishability, value weight ratio) (iii) perceptual approach the perceptions of members of shipper organizations, particularly transport managers

Contd (b) Aggregate in nature to explain the movement of commodities from areas of surpluses to deficits using gravity and optimization models

CONTD. (c) Macroeconomic, analyzing interrelations between sectors of economy using input- output model. Transportation being one of the sectors it is possible to analyze the transportation requirements of the other sectors and then to translate these into flows of commodities. This can also lend itself to multiregional demand analysis

PASSENGER DEMAND----BASIC DECISIONS Consumer has to decide, i) whether to make the trip ii) where to make the trip iii) when to make the trip iv) which mode to use v) what route to take

FORECASTING THE DEMAND Ability to understand the socio economic trends Define logically the exogenous factors constituting the demand model Specification of the functional form Short term easier Long term determined by the validity of the models as both ability to pay and the wisdom of paying transportation costs may undergo a radical change

CLASSIFICATION OF COSTS OPERATORS USERS SOCIAL

OPERATORS ALLOCATION joint/common INDIVISIBILITIES long/short term ECONOMIES

USERS GENERALISED COST C=F + vT, where F is the monetary value and T, the time spent converted to monetary value by the factor v, the value of time

SOCIAL COSTS RESOURCE COST opportunity costs allocative efficiency EXTERNAL COSTS congestion pollution safety

INTERDEPENDANCIES Unimodal Transport Intermodal Transport Multimodal Transport Logistics/Supply Chain Management Factors which may affect the intermodal choices are (i) Physical (ii) Social (iii) Historical (iv) Regulatory

PHYSICAL FACTORS LAND USE Problem of urbanization Problem of ribbon development Problem of Central Business District(CBD) - congestion pricing Growth of cities - suburban, conurbations Regional Development

Contd. SAFETY Economic loss Loss of image Increased costs Failure to meet targets

Contd.---Environment Question of noise pollution Question of air pollution Loss of value of property Increasing anxiety for use of facilities by a feeling of deprivation

SOCIAL FACTORS----ACCESSIBILITY Question of right to mobility Question of affordability Question of congestion leading to increased costs

Contd.-----SEVERITY Spoiling of the landscape Dividing communities Question of right of way conflicting with changing travel patterns of the population

HISTORICAL FACTORS---FINANCIAL VIABILITY Strategies for revenue generation Strategies for expenditure control Strategies for investment Tariff policy Capital output ratio

Contd.----FINANCING Federal or Budgetary Support Generation of Internal Resources Bilateral/Multilateral Aid Market Borrowings Alternate financing schemes Special Purpose Vehicles

Contd.---RESEARCH Commitment of resources, government or private Public versus private transport Use of IT

MODAL ASSIGNMENT---ALLOCATIVE EFFICIENCY Optimal use of resources Question of Public good Question of payment of user charges Question of marginal social cost versus marginal cost Question of subsidy----internal versus external Question of modal split

REGULATORY FACTORS Ayers and Braithwaites enforcement pyramid Command regulation with nondiscretionary punishment Command Regulation with Discretionary punishment Harder Law Enforced self-regulation Softer Law Self-regulation

ROLE OF THE RAILWAYS Increasing trade and commerce, the corollary of economic development, will necessarily require more and more socio-economic interactions both at domestic and international levels Increasing energy, land and social costs will make railways the most important factor in conceptualizing and designing intermodal transports

AFTERTHOUGHT It is almost impossible to exaggerate the profound impact of the railways. They transformed the agricultural economies, which had prevailed since mankind emerged from the caves, into the industrial age Blood , Iron & Gold How the Railway Transformed The World Christian Wolmar

ACKNOWLEDGEMENTS Demand for Transportation D Kanfini Transport Economics Stubbs C D Foster The Transport Problem Glaister Transport Economics Railway Management and Engineering

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