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5.6 – Intermodal Transportation and Containerization

Authors: Dr. Jean-Paul Rodrigue and Dr. Brian Slack

Intermodal transportation concerns the

mobility of passengers or freight from an

origin to a destination relying on several

modes of transportation. The container

has become the dominant intermodal

transport unit.

1. The Nature of Intermodalism

ost transportation modes are developed

independently. Competition between

Contents › Chapter 5

– Transportation

Modes › 5.6 –

Intermodal

Transportation and

Containerization

CHAPTER CONTENTS

1. The Nature of

Intermodalism

2. Forms of

Intermodalism

3. Containerization

4. Advantages and

Challenges of

Containerization

5. Intermodal

Transport Costs

The Geography of

Transport Systems The spatial organization of

transportation and mobility

modes tended to produce transportation systems

that were segmented and un-integrated; in their

own silos. Each mode, particularly the carriers that operated them, has sought to exploit its cost,

service, reliability, and safety advantages. Carriers

try to gain market share and increase revenue by

maximizing the line haul under their control. All the modes saw the other modes as competitors,

often because of di�erent regulatory regimes and

competitive rules. The lack of integration between

the modes was also accentuated by public policy

that has frequently prevented companies from

owning �rms in other modes (as in the United

States before deregulation) or has placed a mode

under direct state monopoly control (as in Europe and East Asia). Modalism was also favored

because of the technical di�iculties of transferring

goods from one mode to another, thereby

incurring additional terminal costs and delays, mainly because the load unit needed to be

changed, which is typical for bulk transportation.

Since the 1960s, major e�orts have been made

to integrate separate transport systems through

intermodalism, which took place in several stages.

The transformation �rst occurred with the setting of maritime networks, which were then better

connected with inland networks. From a functional

and operational perspective, three components

are involved in intermodalism:

Intermodal transportation. The

movements of passengers or freight from

The Geography of

Transport Systems

FIFTH EDITION

Jean-Paul Rodrigue

(2020), New York:

Routledge, 456

pages. ISBN 978-0-

367-36463-2

doi.org/10.4324/978

0429346323

Sixth Edition

available April 2024

Follow @ecojpr

TABLE OF CONTENTS

1. Transportation

& Geography

2. Transportation

& Spatial Structure

3. Transportation,

Economy & Society

an origin to a destination relying on a

sequence of transportation modes. Each

carrier is issuing its own ticket

(passengers) or contract (freight).

Transfers from one mode of transport to

another are commonly taking place at a

speci�cally designed terminal.

Multi-modal transportation. The

movements of passengers or freight from

an origin to a destination relying on

several modes of transportation using

one ticket (passengers) or contract

(freight). Technically the same as

intermodal transportation, but represents

an evolution requiring a higher level of

integration between the actors involved

such as carriers and terminal operators.

Transmodal transportation. The

movements of passengers or freight

within the same mode of transportation.

Although pure transmodal transportation

rarely exists and an intermodal operation

is often required (e.g. ship to dockside to

ship), the purpose is to ensure continuity

within the same modal network.

Intermodal transportation relies on an exchange

of passengers or freight between two

transportation modes. The term has become

4. Transport,

Energy &

Environment

5. Transportation

Modes

6. Transportation

Terminals

7. Trade, Logistics

& Freight

Distribution

8. Urban

Transportation

9. Transport

Planning & Policy

10. Challenges for

Transport

Geography

A. Methods in

Transport

Geography

B. Applications &

Case Studies

more commonly used for freight and container

transportation across a sequence of modes. In

North America, the term intermodal is also used to refer to containerized rail transportation. With

intermodal transportation, what initially began as

improving the productivity of shipping evolved

into an integrated supply chain management system across modes and the development of

multi-modal transportation networks.

Multi-modal transportation network. A

logistically linked system using two or

more transport modes with a single rate.

Modes have common handling

characteristics, permitting freight (or

people) to be transferred between modes

during a movement between an origin

and a destination. For freight, it also

implies that the cargo does not need to

be handled, just the load unit, such as a

pallet or a container.

Intermodalism involves using at least two

di�erent modes in a trip from an origin to a

destination through an intermodal transport chain, which permits the integration of several

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transportation networks. Intermodality is

expected to enhance the economic performance

of a transport chain by using modes most productively. Thus, the line-haul economies of rail

may be exploited for long distances, with the

e�iciency of trucks providing �exible local pick-up

and deliveries. The entire trip is seen as a whole rather than as a series of legs, each marked by an

individual operation with separate sets of

documentation and rates. This system is organized

around the following conditions:

The nature and quantity of the transported

cargo usually suitable for intermediate and �nished goods are for load units of less than 25

tons. The mode with the lowest capacity usually

de�nes the intermodal load unit. As such,

intermodal transportation is constrained by the trucking load unit.

The sequence of transportation modes being

used must ensure a modal continuity.

Intermodal transportation is organized as a sequence of modes, often called an intermodal

transport chain. The dominant modes

supporting intermodalism are trucking, rail,

barges, and maritime. Air transportation usually only requires intermodalism (trucking) for its

“�rst and last miles” and is not used in

combination with other modes. Additionally,

load units used by air transportation are not readily convertible with other modes.

The origins and destinations of the

movements where distances play an important

role, as the longer the distance, the more likely

an intermodal transport chain will be used.

Distances above 500 km (longer than one day of trucking) usually require intermodal

transportation. Shorter distances are usually

not suitable for intermodal transportation.

The value of the cargo is of intermediate value as low, and high-value shipments are usually

less suitable for intermodal transportation.

High-value shipments will tend to use the most

direct options (such as air cargo), while low- value shipments are usually point-to-point and

rely on one mode, such as rail or maritime.

The frequency of shipments needs to be

continuous and in similar quantities.

Intermodal transportation is capital intensive,

requiring specialized equipment to transfer cargo from one mode to the other.

2. Forms of Intermodalism

Intermodalism originated in maritime transportation, with the development of the

container in the late 1960s, and has since spread

to integrate other modes. Unsurprisingly, the

Intermodal Transport Chain

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Conditions and

Outcomes of Intermodal

Transport

maritime sector has been the �rst mode to pursue

containerization. It was the mode most

constrained by the time taken to load and unload vessels. A conventional breakbulk cargo ship

could spend as much time in a port as at sea.

Breakbulk cargoes were handled by stevedores

who used ad-hoc means to load, unload, and move cargo between the ships, piers, and

warehouses. There were no standard forms of

cargo handling and equipment. Containerization

permits the mechanized cargo handling of diverse types and dimensions placed into boxes of

standard sizes. In this way, goods that might have

taken days to be loaded or unloaded from a ship

can now be handled in a matter of minutes.

The emergence of intermodalism has been partly

brought about by technology and requires management units for freight, such as containers,

swap bodies, pallets, or semi-trailers. In the early

20th century, pallets became a common

management unit. Still, their relatively small size and lack of a protective frame made their

intermodal handling labor-intensive and prone to

damage or theft. Better techniques and

management units for transferring freight from one mode to another have facilitated intermodal

transfers. Early examples include piggyback

(TOFC: Trailers On Flat Cars), where truck trailers

are placed on rail cars, and LASH (lighter aboard ship), where river barges are placed directly on

board sea-going ships.

While handling technology has in�uenced the

development of intermodalism, another important

factor has been changes in public policy. Deregulation in the United States in the early

1980s freed �rms from government control and

ownership, a policy adopted in many transport

markets across the world. Carriers were no longer restricted from owning across modes, which

developed a strong impetus towards intermodal

cooperation. Shipping lines began to o�er

integrated rail and road services to customers. The advantages of each mode could be exploited

in a seamless system, which created multiplying

e�ects. Customers could purchase the service to

ship their products from door to door, without being concerned about modal barriers. In many

cases, cargo owners were not concerned about

the sequence of modes, only that their shipments

were carried out in a timely and cost-e�ective fashion.

The most important feature of intermodalism is providing a service with one ticket (for

passengers) or one bill of lading (for freight).

With one bill of lading, clients can obtain one

through rate, despite transferring goods from one mode to another. This has necessitated a

revolution in organization and information control.

At the heart of modern intermodalism, information

and distribution systems are essential to ensure the safe, reliable, and cost-e�ective control of

freight and passenger movements being

transported by several modes. Electronic Data

Interchange (EDI) was initially developed to assist

companies and government agencies (customs

documentation) cope with an increasingly complex global transport system. This technology

has evolved, and crucial information can be shared

across modes with digitalization.

Intermodal transport is transforming the medium

and long-haul freight �ows across the world.

Large integrated transport carriers provide door- to-door services, such as the high degree of

integration between maritime and rail transport in

North America. In Europe, intermodal rail services

are becoming well-established between the major ports, such as Rotterdam and southern Germany,

and between Hamburg and Eastern Europe. Rail

shuttles are also making their appearance in

China. While intermodal rail transport has been relatively slow to develop in Europe, there are

extensive interconnections between barge

services and ocean shipping, particularly on the

Rhine. Barge shipping o�ers a low-cost solution to inland distribution where navigable waterways

penetrate interior markets. The limits of

intermodality are imposed by factors of space,

time, form, the network pattern, the number of nodes and linkages, and the type and

characteristics of the vehicles and terminals.

3. Containerization

The box (container) is what makes the

world go round.

The driver of intermodal transportation has undoubtedly been the container, which permits

easy handling between modal systems. While

intermodalism could occur without the container,

it would be ine�icient and costly. To begin with, a distinction is necessary between containerization

and the container.

Container. A large standard size metal

box into which cargo is packed for

shipment aboard specially con�gured

transport modes (ISO 668). It is designed

to be moved with common handling

equipment enabling high-speed

intermodal transfers in economically

Pallets Waiting to be Loaded in a Container, Shenzhen,

China

Piggyback and Doublestack

Train Cars

Triple Crown Intermodal

Network

Multimodal Transport

System

large units between ships, railcars, truck

chassis, and barges using a minimum of

labor. The container, therefore, serves as

the load unit rather than the cargo

contained therein. The reference size is

the 20-foot box of 20 feet long, 8’6″ feet

high and 8 feet wide, or 1 Twenty-foot

Equivalent Unit (TEU). Since most

containers are now forty feet long, the

term Forty-foot Equivalent Unit (FEU) is

also used, but less commonly. “Hi cube”

containers are also common, and they

are one foot higher (9’6″) than the

standard.

Containerization. Refers to the

increasing and generalized use of the

container as a load unit for freight

transportation. It involves processes

where the intermodal container either

substitutes cargo from other

conveyances, is adopted as a mode

supporting freight distribution, or can

di�use spatially as a growing number of

transport systems are able to handle

containers.

Containerization conveys a variety of bene�ts to the mobility of freight, namely lower

transportation costs, lower inventory costs, and a

higher service level, including reliability.

The development of intermodal transportation

and containerization are mutually inclusive, self- strengthening, and rely on driving forces linked

with technology, infrastructures, and

management. One of the initial issues concerned

the di�erent sizes and dimensions of containers used by shipping lines, a source of much confusion

in compiling container shipping statistics. A lift

could involve di�erent volumes since di�erent box

sizes were involved. As a result, the term TEU (Twenty-foot Equivalent Unit) was �rst used by

Richard F. Gibney in 1969, who worked for the

Shipbuilding & Shipping Record, as a comparative

measure. Since then, the TEU has remained the standard for containerized tra�ic, where cargo is

measured in volume instead of weight.

Using containers shows the complementarity

between freight transportation modes by o�ering

a higher �uidity to movements and

standardization of loads. The container has substantially contributed to the adoption and

di�usion of intermodal transportation, which has

led to profound mutations in the transport

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Driving Forces of

Containerization and

Intermodalism

sector. By reducing handling time, labor costs,

and packing costs, container transportation allows

considerable improvement in the e�iciency of transportation. Thus, the relevance of containers is

not what they are – simple boxes – but what they

enable; intermodalism. Globalization could not

have taken its current form without containerization.

Containers are either made of steel (the most common for maritime containers) or aluminum

(particularly for domestic containers), and their

structure confers �exibility and hardiness. Another

factor behind the di�usion of the container is that an agreement about its base dimensions and

latching system was reached through the

International Standards Organization (ISO 668)

within ten years of its introduction. From this standard, a wide variety of container sizes

and speci�cations have been put into use. The

container length unit remains the imperial foot

even if most countries use the metric system, a legacy that the standard was initially introduced in

the United States. However, the most prevalent

container size is the 40-foot box, which in its

2,400 cubic feet and carries, on average, 22 tons of cargo. However, transporting cargo in a 20-foot

container is usually 20% cheaper than

transporting cargo in a 40-foot container, but the

40-foot container o�ers at least twice the volume. Irrespective of the size, a 20-foot container

requires the same amount of intermodal

movements, even if it takes up about half the

space during transport and at terminals. This

explains why rates for carrying 20-foot containers

are not half those for carrying 40-foot containers.

Containers can be designed to carry a wide range

of goods, which involves a level of specialization around �ve main types:

Standard container. A container designed to carry a wide variety of general cargo. They are

often labeled as dry containers because they

carry dry goods either in breakbulk (most

common) or bulk (less common). Cargo is loaded and unloaded through a double door,

which marks the “backside” of the container.

Tank container. A container designed to carry

liquids (chemicals or foodstu�). It is composed of a tank surrounded by a structure making it

the same size as a standard 20-foot container,

including its four latching points.

Open top container. A container with an open roof designed to carry cargo too large to be

loaded through standard container doors, such

as machinery. The container is loaded from the

top with a tarpaulin used to cover its contents. Flat container. A container having an open roof

and sides designed to carry heavy and

oversized cargo. The cargo transported is left

exposed to outdoor conditions. Refrigerated container. Also known as a

reefer, it is a container designed to carry

temperature-controlled cargo, often around or

below freezing point. It is insulated and

equipped with a refrigeration plant maintaining

the temperature constant.

A signi�cant share of international containers is

owned by shipping lines that tend to use them to help �ll up their ships or by leasing companies

using containerized assets for revenue generation.

In the United States, a large number of domestic

containers of 53 feet are also used. Doublestacking of containers on railways

(COFC: Containers On Flat Cars) has doubled the

capacity of trains to haul freight with minimal cost

increases, thereby improving the competitive position of the railways with regard to trucking for

long-haul shipments.

While it is true that the maritime container has

become the workhorse of international trade,

other types of containers are found in certain

modes, most notably in the airline industry. High labor costs and the slowness of loading planes

that require a very rapid turnaround made the

industry very receptive to the concept of a loading

unit of standard dimensions designed to �t the speci�c shape of the bellyhold. The maritime

container was too heavy and did not �t the

rounded con�guration of a plane fuselage, and

thus a box speci�c to the needs of the airlines was required. The major breakthrough came with the

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introduction of wide-bodied aircraft in the late

1970s. Lightweight aluminum boxes, called unit

load devices, could be �lled with luggage or parcels and freight, and loaded into the holds of

the planes using tracking that requires little human

assistance.

Containerization represented a revolution in the

freight transport industry, facilitating economies

of scale and improved handling speed and throughput. Containerized tra�ic has surged since

the 1990s. This underlines the adoption of the

container as a dominant means to ship products

on international and national markets, particularly for non-bulk commodities, where the container

accounts for more than 90% of all movements.

Containerization leans on growth factors mainly

related to globalization, substitution from breakbulk, and, more recently, the setting of

intermediate transshipment hubs. Although

containerization initially superimposed itself over

existing transportation systems, it created its own

unique system of exclusive modes and

terminals. Thus, the container became a standard

unit around which a new transportation system

was built.

Globalization and containerization are closely

interrelated. According to UNCTAD, between 1970 and 1990, trade facilitation measures accounted

for 45% of global trade growth, while membership

to global trade organizations such as

GATT/WTO accounted for another 285%. The

container accounted for an additional 790%,

exceeding all the other trade growth factors

combined. The di�usion and adaptation of transport modes to containerization is an ongoing

process that will eventually reach a level of

saturation. Containers have thus become the most

important component for rail and maritime intermodal transportation. The challenge remains

about the choice of modes in an intermodal

transport chain as well as minimizing the costs

and delays related to moving containers between modes. As intermodal transportation increased

and became more complex (e.g. international

trade), transactional costs and ine�iciencies

became increasingly apparent. Innovations involve using blockchain technology, distributed electronic

ledgers, to support the complex array of

transactions and information �ows related to

intermodal transportation.

4. Advantages and Challenges of

Domestic 53 Foot Containers

Doublestacked Air Unit Load Device

World Container Throughput,

1980-2021

Containerization Growth

Factors

Containerization

Containerization is a key bene�t form of cargo

transportation, particularly its standardization and

�exibility. There are several factors supporting the

advantages of containerization.

a. Standard transport product

A container can be handled anywhere in the world

as its dimensions are an ISO standard. Transfer infrastructures allow all elements (vehicles) of a

transport chain to handle it with relative ease.

Standardization is a prevalent bene�t of

containerization as it conveys ubiquity in accessing the distribution system and reduces

capital investment risks in modes and terminals.

Irrespective of the geographical setting, a

container can be handled.

The rapid di�usion of containerization was

facilitated because its initiator, Malcolm McLean,

Advantages and Challenges of Containerization

purposely did not patent his invention.

Consequently, all segments of the industry,

competitors alike, had access to the standard. It necessitated the construction of specialized ships,

lifting equipment, and terminal facilities. Still, in

several instances, existing transport modes could

be converted to container transportation while a more e�ective transition to containerization took

place. In time, the container became the standard

transport unit of global trade.

b. Flexibility of usage

A container can transport a wide variety of goods

ranging from raw materials (coal, wheat),

manufactured goods, and cars to frozen products.

There are specialized containers for transporting

liquids (oil and chemical products) and perishable food items in refrigerated containers (which now

account for 70% of all refrigerated cargo

transported). About 3.1 million TEUs of reefers

were used in 2019. Discarded containers are often used as storage, housing, o�ice, and retail

structures.

As an indivisible unit, the container carries

a unique identi�cation number and a size type

code, enabling transport management not in

terms of loads, but in terms of units. This identi�cation number is also used to ensure that it

is carried by an authorized agent of the cargo

owner and is veri�ed at terminal gates,

increasingly in an automated fashion.

Computerized management considerably reduces

waiting times and allows the location of

containers (or batches of containers) to be known at any time. It assigns containers according to

priority, destination, and available transport

capacities. Transport companies book slots in

maritime or railway convoys to distribute containers under their responsibility. The

container has become a production, transport, and

distribution unit.

c. Economies of scale

Relatively to bulk, container transportation reduces transport costs considerably, about 20

times less. While before containerization,

maritime transport costs could account for

between 5 and 10% of the retail price. This share has been reduced to about 1.5%, depending on the

goods transported. The main factors behind cost

reductions reside in the speed and �exibility

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incurred by containerization. Like other

transportation modes, container shipping bene�ts

from economies of scale using larger containerships.

The 6,000 TEU landmark was surpassed in 1996 with the Regina Maersk, and in 2006, the Emma

Maersk surpassed the 12,000 TEU landmark. By

2013, ships of more than 18,000 TEU became

available, and by 2022, the market saw the introduction of 22,000 TEU ships. A 5,000 TEU

containership has operating costs per container

50% lower than a 2,500 TEU vessel. Moving from

4,000 TEU to 12,000 TEU reduces operating costs per container by a factor of 20%, which is very

signi�cant, considering the additional volume

involved. System-wide, the outcome has been cost

reductions of about 35% using containerization.

d. Operational velocity

Transshipment operations are minimal and rapid,

which increases the utilization level of the modal assets and port productivity. A modern container

ship has a monthly capacity of 3 to 6 times more

than a conventional cargo ship of the same

Container Shipping Costs and Cargo Value

tonnage. This is notably attributable to gains in

transshipment time, as a container crane can

handle roughly 30 movements (loading or unloading) per hour. Port turnaround times have

thus been reduced from an average of 3 weeks in

the 1960s to less than 24 hours since it is

uncommon for a ship to be fully loaded or unloaded at a port call along regular container

shipping routes.

It takes, on average, between 10 and 20 hours to

unload 1,000 TEUs compared to 70 and 100 hours

for a similar quantity of bulk freight. With larger

containerships, more cranes can be allocated to transshipment; 3 to 4 cranes can service a 5,000

TEU containership, while ships of 10,000 TEU can

be serviced by 5 to 6 cranes. The latest generation

of 18,000 to 24,000 TEU containerships requires 6 to 9 cranes to be e�ectively serviced. This implies

that larger ship sizes do not have many di�erences

in loading or unloading time, but this requires

more yard equipment. A regular freighter can spend between half and two-thirds of its useful life

in ports. With less time in ports, containerships

can spend more time at sea generating revenue.

Automatic Identi�cation Service (AIS) data shows that a containership spends around 40% of its

time stationary. Further, on average,

containerships are 35% faster than regular

freighter ships (19 knots versus 14 knots). With all the above velocity factors taken into

consideration, it is estimated that containerization

has reduced travel time for freight by a factor of

80%.

e. Warehousing and security

The container is its own warehouse and limits damage risks for the goods it carries because it is

resistant to shocks and weather conditions.

Therefore, the packaging of goods it contains is

simpler, less expensive, and can occupy less volume. This reduces insurance costs since cargo

is less prone to damage during transport. Besides,

containers �t together, permitting stacking on

ships, trains (doublestacking), and on the ground. The stacking height of containers is constrained by

a permissible weight of 192 tons. With 30 tons per

container, this would correspond to a pile of 6

containers in height. However, due to the operational complexity of high piles, staking

usually superimposes three to four loaded and six

empty containers on the ground.

The contents of the container are anonymous to

outsiders as containers can only be opened at the

origin, customs, or destination. Theft of valuable commodities is considerably reduced, resulting in

lower insurance premiums. It was a serious issue

at ports before containerization, as longshoremen

had direct access to the cargo they handled.

Even if there are numerous advantages to the

usage of containers, some challenges are also evident.

f. Site constraints

Containerization implies a large consumption of

terminal space. To fully load or unload a

containership of 5,000 TEU, a minimum of 12

hectares of stacking space is required.

Conventional port areas are often inadequate for the location of container transshipment

infrastructures, particularly because of draft issues

as well as required space for terminal operations.

Many container vessels require a draft of at least 14 meters (45 feet), and the later generation of

larger ships requires at least 15 meters (50 feet).

The site constraints imposed by containerization

have incited the development of new terminal facilities and migration towards better-suited

sites. A similar challenge applies to container rail

terminals; many were relocated at the periphery of

metropolitan areas. Consequently, major container handling facilities have new location criteria where

suitable sites are only found at the periphery and,

at times, far from the original site.

g. Infrastructure costs and stacking

Containerization is a capital-intensive endeavor.

Container handling infrastructures, such as gantry

cranes, yard equipment, road, and rail access, represent important investments for port

authorities and terminal operators. For instance,

the costs of a modern container crane (portainer)

range from 4 to 10 million USD depending on the

size. Several developing economies, as well as

smaller ports, face the challenge of �nding capital for these infrastructure investments.

The arrangement of containers, both at terminals and on modes (containerships and double-stack

trains), is a complex problem. The possible

stacking density is related to available yard space

and equipment. When loading with a reachstacker or a gantry, it becomes imperative to ensure that

containers that must be taken out �rst are not

below a pile. Further, containerships must be

loaded to avoid restacking during port calls where containers are loaded and unloaded.

h. Thefts and losses

While many theft issues have been addressed

because of the freight anonymity a container

confers, it remains an issue for movements outside terminals where the contents of the

container can be assessed based on its �nal

destination. The World Shipping Council

estimated that, on average, 2,300 containers are lost at sea each year under normal operating

conditions. Still, these �gures are subject to

signi�cant �uctuations since they are associated

with single incidents. Rough weather is the primary cause of container losses, but improper

container stacking also plays a role (distribution of

heavy containers). Yet, the loss rate remains very

low since about 250 million containers are

shipped every year. During an intermodal

transport chain, the carrier or the terminal

operator is responsible for any thefts or losses occurring during their handling.

i. Empty travel

Carriers need containers to maintain their

operations along the port networks they service.

Containers brought into a market through a port must eventually be relocated, regardless of

whether full or empty. On average, containers will

spend about 56% of their 10 to 15 years lifespan

idle or being repositioned empty, which is not generating any income but conveys a cost that is

part of the shipping rates. Either full or empty, a

container takes the same amount of space on the

ship or in a storage yard and takes the same amount of time to be transshipped. Due to a

divergence between production and consumption,

re�ected in the balance of trade, it is uncommon

to see equilibrium in the distribution of containers.

About 2.5 million TEUs of empty containers are

stored in yards and depots worldwide, underlining the issue of the movement and accumulation of

empty containers. They represent about 20% of

the global container port throughput and the

volume carried by maritime shipping lines. Most container trade is imbalanced; thus, containers

accumulate in some places and must be shipped

back to locations with de�cits, mostly those with a

strong export function. This is particularly the case

for American container shipping. As a result,

shipping lines waste substantial amounts of time

and money in repositioning empty containers.

j. Illicit trade

By its con�dential character, the container is a

common instrument used in the illicit trade of

counterfeit goods, drugs, and weapons. At the global level, only 2 to 5% of all containers

handled at ports are manually inspected by

customs, leaving opportunities for illicit cargoes.

This share can go as low as 1% for several large European ports. Manually inspecting a container

requires physical resources such as inspection

areas as well as labor resources. Thus, assessing if

a container should be physically inspected is the outcome of careful considerations related to its

origin, the customs declaration, the carrier, and

the cargo owner. Concerns have also been raised

about containers being used for terrorism.

These fears have given rise to regulations to

counter the illegal use of containers. In 2003, following US inspection requirements, the





Portainer, APM

Terminal Port





Stacked Upper Deck of

a

ONE Apus Cargo Loss, 2020





Containerized Cargo

Flows along Major Trade R t





North American

Containerized Trade with A i 1995 2020

International Maritime Organization (IMO)

introduced regulations regarding the security of

port sites and the vetting of workers in the shipping industry. The United States established a

24-hour rule, requiring all shipments destined for

the United States to receive clearance from US

authorities 24 hours before the vessel’s departure. In 2008, the US Congress passed a regulation

requiring all US-bound containers to be

electronically scanned at the foreign loading port

before departure. These measures incur additional costs and delays that many in the industry oppose.

Yet, the advantages of containerization have far outweighed its drawbacks, transforming the

global freight transport system and, along with it,

the global economy.

5. Intermodal Transport Costs

A relationship between transport costs, distance,

and modal choice has long been observed. With

the three options available, road transport is

usually used for short distances (below 500 km), railway transport for average distances (from 500

to 750 km), and maritime transport for long

distances (above 750 km). According to the

geographical setting, variations of modal choice are observed, but �gures tend to show a growth in

the range of trucking. However, intermodalism

allows combining modes and �nding a less costly

alternative than a unimodal solution. It is also

linked with a higher average value of the cargo being carried since intermodal transportation is

related to more complex and sophisticated value

chains. As a result, the e�iciency of contemporary

transport systems rests as much on their capacity

to route freight as on their capacity to transship

it, but each of these functions has a cost that must

be reduced.

The intermodal transportation cost implies

considering several types of transportation costs

for the routing of freight from its origin to its destination, which involves a variety of shipments,

transshipment, and warehousing activities. It

considers a logistic according to organized

transport chains where production and consumption systems are linked to transport

systems. Numerous technical improvements, such

as river/sea shipping and better rail and road

transport integration, have been set to reduce

Distance, Modal Choice and

Transport Cost

Intermodal Transportation

Cost Function





Time and Cost for

Moving a 40 Foot

Container between the American East Coast and

Impacts of River / Sea

Shipping on a Transport Chain

interchange costs. Still, containerization remains

the most signi�cant achievement so far. The

concept of economies of scale applies particularly well to container shipping. However, container

shipping is also a�ected by diseconomies

involving maritime and inland transport systems

as well as transshipment. While maritime container shipping companies have been pressing

for larger ships, transshipment, and inland

distribution systems have tried to cope with

increased quantities of containers. Thus, land transport costs remain signi�cant despite

signi�cantly reducing maritime transport costs.

Between half and two-thirds of total transport

costs for a TEU are accounted for by land transport.

Public policy is also playing a role through concerns over the dominant position of road

transport in modal competition and the resultant

concerns over congestion, safety, and

environmental impacts. In Europe, policies have been introduced to induce a shift of freight and

passengers from the roads to environmentally

more e�icient modes. Intermodal transport is seen

as an option that could work in certain situations. For example, in Switzerland, laws stipulate that all

freight crossing through the country must be

placed on the railways to reduce air pollution in

alpine valleys. The European Union promotes intermodal alternatives by subsidizing rail and

shipping infrastructure and increasing road user

costs. Since intermodal transportation is mostly

the outcome of private initiatives seeking to

capture market opportunities, it remains to be

seen to what extent public strategies can be reconciled with a global intermodal transport

system, which is �exible and footloose.

While economies of scale enable to reduce

maritime unit costs, inland intermodal

transportation costs account for about 50% of the

total costs if terminal costs are included. With the deregulation and privatization trends that began

in the 1980s, containerization, which was already

well established in the maritime sector,

could spread inland. The shipping lines were among the �rst to exploit the intermodal

opportunities that deregulation permitted. They

could o�er door-to-door rates to customers by

integrating rail services, and local truck pick-up and delivery in a seamless network. To achieve

this, they leased trains, managed rail terminals,

and in some cases, purchased trucking �rms. In

this way, they could serve customers by o�ering door-to-door service from suppliers located

around the world. The move inland also led to

signi�cant developments, most notably the

double-stacking of containers on rail cars. This produced important competitive advantages for

intermodal rail transport and favored the

development of inland terminals. It also required

various forms of transloading between maritime and domestic container units. After more than half

a century of intermodal development, the

geography of freight terminals and supply chains

has been transformed by sequences of modes and

terminals that are time and cost-e�icient.

Related Topics

6.1 – The Function of Transport Terminals 6.3- Port Terminals

Inland Ports / Dry Port (PEMP)

B.13 – The Containerization of Commodities

Containers (PEMP) Terminals and Terminal Operators (PEMP)

5.3 – Rail Transportation and Pipelines

1.4 – The Setting of Global Transportation

Systems

Bibliography

Bohlman, M.T. (2001) “ISO’s container

standards are nothing but good news”, ISO

Bulletin, Geneva: International Standards

Organization, pp. 12–15. DeBoer, D.J. (1992). Piggyback and Containers: A

History of Rail Intermodal on America’s Steel

Highway, San Marino, CA: Golden West Books.

Donovan, A. (2000) “Intermodal Transportation in Historical Perspective”, Transportation Law

Journal, Vol. 27, No. 3, pp 317-344.

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Economies and

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

Container Transport

Fremont, A. (2007) Le monde en boîtes.

Conteurisation et mondialisation, Paris: Les

collections de l’Inrets. Fremont, A. (2013) Containerization and

Intermodal Transportation, in J-P Rodrigue, T.

Notteboom and J. Shaw (eds) The Sage

Handbook of Transport Studies, London: Sage. Hayuth, Y. (1987) Intermodality: Concept and

Practice, Essex: Lloyds of London Press.

Levinson, M. (2006) The Box: How the Shipping

Container Made the World Smaller and the World Economy Bigger, Princeton: Princeton

University Press.

Levinson, M. (2020) Outside the Box: How

Globalization Changed from Moving Stu� to Spreading Ideas, Princeton: Princeton

University Press.

Muller, G. (1999) Intermodal Freight

Transportation, 4th Edition, Eno Transportation Foundation.

Slack B. (1998) “Intermodal Transportation” in

B.S. Hoyle and R. Knowles (eds) Modern

Transport Geography, Second Edition, Wiley: Chichester, pp. 263-290.

Spychalski, J.C. and E. Thomchick (2009)

“Drivers of Intermodal Rail Freight Growth in

North America”, EJTIR, Vol. 9, No. 1, pp. 63-82. van Klink A. and G.C. van den Berg (1998)

“Gateways and intermodalism” Journal of

Transport Geography, Vol. 6, pp. 1-9.

World Shipping Council (2023) Containers Lost at Sea – 2023 Update.

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Copyright © 1998-2023, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra

University, New York, USA.

Dr. Jean-Paul

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