1) Introduction
Rail transport, also known as train transport is one of the most commonly used and effective modes of transport of goods carriage over long or small distances. Rail transport is also one of the fastest modes of land transport and compared to other land transport methods is the one with the lowest costs. Another benefit of rail transport is that is not affected by usual weather turbulences, in addition with other mechanisms of transport which can be affected from rain, fog, wind etc. Also, rail transport has emerged as one of the most dependable modes of transport in terms of safety, and this is one of the most important advantages because the human life and safety cannot be compared to other issues. Rail transport has some constraints and limitations also. One of the biggest constraints is the heavy cost while the cost of build and construction of a rail network is very high. Also, rail transport cannot provide door-to-door service as it has to follow a specific track. As a result, loading and unloading of goods involves greater cost and wastage of time. The following report will provide some key issues affecting the railway industry and an introduction in Intermodal transportation and the role of rail in combined transport. Also, an explanation of trade-off concept will be mentioned and how this concept can affect the railway industry.
2) Railway key issues and technological development
According to UIC (International Union of Rail, 2015), rail has all the qualifications and the opportunity to achieve the required sustainability for the 21st century as it is a vital service in global level and an important transport system for a sustainable economy. In order for the rail system to respond to the society’s expectations the global rail sector has to rely on its innovative potential and provide solutions as regards safety, security, punctuality, availability, accessibility, seamless operation, capacity, connectivity, sustainability and more. The main goal for the rail system is to achieve all the above while remaining a low-cost transport system.
The demand for railway transport is expanding worldwide, especially in urban areas where the demand for public transport including rail, metro and tram is already capturing a large part of the market. This is not happening only for commuting but also for trips and this trend is expected to increase as urbanisation spreads. Also, the future predictions show’s that the speed on high speed lines is expected to increase up to 300km/hour in order to make travelling by rail more attractive and faster and also meet the needs of the modern society as the demand for long distance rail journeys is already increasing in many countries.
From a technological point of view, innovations are expected to operate towards more energy and resource efficient systems for rolling stock and infrastructure and to converge towards a worldwide more and more digital railway. It is also expected an improvement regarding to traveller’s information and guidance and also it is expected from the system to provide warnings in case of disruption.
Regarding to freight, rail will replace the road transport especially as regards dangerous and heavy goods. Also, predictions show’s that it will be an increase in competitiveness compared to other transport methods. Furthermore, nuisance factors, such as noise from blocs and vibration will decrease, thanks to technical innovations.
All these changes will provide a more accessible and modern transport system for the society whatever their social and income status. The cost is going to remain low while the speed and capacity of the rail vehicles will increase. Also, the close coordination with other transport modes and especially public transport will be the core of seamless and sustainable mobility.
3) Intermodal Transport
Intermodal transport is a very common system of transporting freight from the past until now days. Basically, intermodal transport describes a system of moving the same loading unit by using two or more modes of transport without handling the cargo when it changes transport mode. This system had brought many benefits in many aspects. Firstly, intermodal transport plays an important role in the reduction of infrastructure costs as it offers limitation of investment in the road infrastructure, results better sharing of volumes between the different transport modes and decreases the road traffic volume. Also, provides reduction of the external costs by decreasing the consumption of renewable energy sources and air pollution, and also, by improving the road safety and noise. (United Nations Economic Commission for Europe, n.d)
3.1) Combined transport system with respect to railways
Railway companies offer two types of intermodal transport. The first one is the unaccompanied transport which changes from one transport mode to another by using a purpose meaning terminal and the second is the accompanied transport which is also known as rolling road.
When the intermodal transport combines rail and road, there are several techniques used in orders for the transportation to be successful. For example, the use of lorries is crucial when it has to do with road and rail combined transport as they cover the short distances between factories and train stations. This combination of rail and road, piece together the speed and reliability of rail and the door-to-door flexibility of road. Another technique used for rail and road combined transport is the swap body which is one of the standard freight containers and, also one of the most widely used transport systems on the market. Swap bodies are mainly used in these transport modes because they are equally suitable in both of them and inexpensive (International Union of Railways, 2018).
When it comes to rail combined with ships, there are also some techniques in order for these transport methods to cooperate. Port terminals are located in seaports and their infrastructure enables them to handle both road-sea traffic and rail-sea traffic. They have one or more quays where ships can moor, with railway tracks running parallel to the quay so that loading units can be transferred directly from ships to wagons and the opposite. Also, there are specific wagons used for rail combined to sea transport, fitted with scotching systems for containers (UIC International Union of Railways, 2018)
As regards to the rail-air combined transport, the spread expansion of air cargo traffic cannot be absorbed by road transport alone and rail transport offers an effective alternative to road congestion, especially between airport Cargo Centres and distribution platforms.
An example for this can be the strategic cooperation agreement in Shanghai between Shanghai Railway Bureau and China Eastern Air Holding Co. The bureau signed an "Air-Rail Combined Transport" product cooperative agreement with China Eastern Airlines in order to launch the joint transport product and provide more convenient travel services for the travelling public (Kate Zhu, China Aviation Daily, 2013)
4) Trade-off concept
The trade-off theory of capital structure refers to a company which wants to balance the costs and the benefits by choosing how much dept finance and how much equity finance has to use. Basically, this theory describes that companies or firms are generally financed by both equities and debts and discusses the various corporate finance choices that a corporation experiences. The main purpose of this theory is to explain how the corporations are financed partly with debt and partly with equity. Modigliani’s and Miller’s theory (1996) was awarded with Nobel prize in 1995 and supports the idea, that, when it comes to financing with debt, there is an advantage for the firm or the company. This is due to the fact that it has tax benefits, but also, there is a cost of financial distress, which includes bankruptcy costs and non bankruptcy costs such as stuff leaving, bondholder/ stockholder infighting and others.
4.1) Trade-offs in Railway Industry
As a consequence of the European Legislation, Infrastructure Managers and Railway Undertakings has to adopt a more business like attitude and shift their focus to cost and performance instead of the technical approach. This new development forces the infrastructure managers to perform new trade-offs in order to be able to make right decisions with respect to the needs of the government, public, local authorities and rail operators.
Asset management is a highly complex decision-making environment that requires various trade-offs in order to comprise all systems, methods, procedures and tools to optimize costs, performance and risks for the complete rail infrastructure life cycle (Department of Industrial Engineering, 2017). This environment has 3 main types of management issues: infrastructure investment management, infrastructure maintenance management and infrastructure operations management. These management issues include systematic and coordinated activities focus on the performance, risks, and expenditures which help an organisation to manage its assets. The railway industry is observed to fall into two infrastructure asset management categories.
The first category related to rail, consists to maintenance, renewal and infrastructure improvement. A high-level strategy for the railway infrastructure assets extends from these decisions and activities through the delivery of work and the provision of train routes. Secondly, except the maintenance aspect, the scope of asset management includes the operation of the network which involves capacity planning and timetabling. An example of maintenance strategies employed in railway infrastructure asset management is corrective and preventive maintenance actions. Corrective maintenance regains a system from asset failure. With this approach, a system is operated until an asset within the system fails. On the other hand, preventive maintenance centres on scheduling maintenance tasks with the aim of reducing the likelihood of asset failures. If the condition of an asset can be monitored, condition-based maintenance can be employed. This strategy dictates that maintenance should only be performed when certain indicators inferred from the asset present signs of an impending failure.
In conclusion, asset management plays an important role in achieving infrastructure outputs that are coordinated with the requirements and desires of clients and stakeholders. This requires the constant gathering of information on the conditions and performance of assets according to organisational objectives in order to make the application of reliability-based techniques in infrastructure maintenance management possible (Department of Industrial Engineering, 2017).
5) Conclusion
To conclude, railway system is one of the most important and beneficial transport systems for every country, not only in terms of freight transport but also in public transportation. Several studies have shown that railway has all the qualification to become a more developed transport system and meet the needs of a modern society. All these future improvements will lead to a more comfortable, safe, accessible and sustainable transport system for the passengers and also for the freight transport. As regards to the intermodal combined transport, railway is going to remain a crucial piece of the coordination between the transport methods and also, is going to replace the road transport in many situations due to the sustainable and fixed routes without affections from traffic, weather etc. Furthermore, except the benefits in freight and passenger transport, railway brings and will continue to bring benefits to the government too. According to the UK government, railway is a major contributor to the country’s economic growth, both from their own profits and share price appreciation as well as through the utility they provide to other industries and the general public.