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, aiming to identify barriers to diversion and examine possible measures to make such modal shift possible. We find that the most significant factors are cost, time, reliability, flexibility and environment, while advisable measures include operational, organisational, fiscal and regulatory moves. To reveal the advantages of IWT, the total logistics costs of road, rail and IW transportation along the main trade corridor, namely Dhaka–Chittagong, are compared based on the inventory theoretic model. Empirical results indicate that IWT performs better than road transport in terms of lower costs, although longer transit time is the consequence. More importantly, by further improvement of infrastructure and service quality, we argue that IWT can gain more competitive advantages in reducing cost and time, thus making this mode more attractive vis à vis road and rail transport. The research findings have practical implications for decision-makers by redesigning freight movement through the IWT corridor. Further, service providers and policymakers can identify areas of improvement, such as service reliability and frequency, or efficiency and required infrastructure to facilitate the intermodal diversion from road to IWT, and achieve the goal of reducing transport costs and time.