Every mode of transportation, either road, rail, pipelines, maritime, air or telecommunication, has key commercial and operational properties and advantages. The integrated transportation systems that require maximum flexibility in the respective use of each mode influences contemporary demand. Modal competition thus arises existing in several dimensions and various degrees. In terms of comfort, safety, frequency, accessibility, speed and cost amongst others, the modes can either complement or compete one another (Saeedi et al, 2014). The modes can only complement each other if the conditions of different transport markets, different levels of service and different geographical markets exist, the absence of either of the three results to intermodal competition.
In making a choice on the mode to take, cost is a fundamental consideration. Mainly because, every mode has its own performance profile and price making the actual competition to arise primarily on the basis of the value of goods, the quantities of the goods, and the distance to be travelled. Maritime transport offers the lowest variable costs for small bundles of goods and short distances, however, road transports have proved to be the most competitive (Saeedi et al, 2014). The terminal cost structure thus influences the modal choice by focusing on the delays and costs of loading and unloading a unit which is a fixed cost one would incur regardless of the distance to be covered.
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The propensity of people to travel has been on the rise with increase in income levels (Saeedi et al, 2014). International trade on manufactured parts and goods has also been on the rise. These changes affect travel demands for every mode uniquely. Modes offering a lower cost but slower alternative are outweighed by those offering the more reliable and faster alternative. For instance, the rail mode has difficulty in competing with the road mode for short distances and with air transportation for long distances. To every other mode, road transport has been dominant.
References
Saeedi, H., Wiegmans, B., & Zuidwijk, R. (2014). Modeling Competition on Intermodal Freight Transport Networks. SSRN Electronic Journal . http://dx.doi.org/10.2139/ssrn.2470999
