Barriers to intermodal freight diversion: a total logistics cost approach

This paper analyses the intermodal freight diversion from road to inland water transport (IWT) for domestic transportation through ports in Bangladesh. The aim is to understand the barriers to intermodal freight diversion and examine the possible measures to make modal shift possible. The most significant factors regarding the modal choice are cost, time, reliability, flexibility, and environment. The related measures for facilitating modal shift are operational, organizational, fiscal and regulatory moves. Considering the most appropriate factors and the consecutive measures, the total logistics cost of transporting goods by three different modes along the main trade corridor namely Dhaka- Chittagong are estimated based on the inventory-theoretic model. Data on all the three different modes road, rail and IWT for a period of two months are collected from the operators. Empirical results indicate that IWT is in a better position than the road in terms of cost but in the unfavourable condition in terms of transit time. However, by taking appropriate actions, such as service quality and capacity enhancement, infrastructure development, the research reveals that IWT can gain competitive advantages in both cost and time. The research draws practical implementation for decision makers by redesigning the freight movement through the IWT corridor. Further, service providers and policy makers can specify the areas of improvement to facilitate the intermodal diversion and achieve the goal of reducing the applied cost and time.