Intermodal transportation for the global supply chain is extremely important in this current economy and for the current political hot button issues such as the environment.
Bottom line driver for intermodal transportation is price and flexibility. In times of skyrocketing fuel prices, LTL’ only advantage is speed of delivery. Un-stable and fluctuating cost can turn a supplier’s books from black to red in very short time. Intermodal transportation is a cheaper way to transport and the prices rarely fluctuate.
Intermodal transportation has recently been hyped by many politicians because the volume of goods that can be moved via rail or sea helps reduce the carbon emissions that multiple trucking shipments produce which some scientist say is one of the leading causes of the greenhouse effect in the atmosphere. Levans states that eighty percent of all greenhouse gas emissions attributable to transportation come from trucks and passenger cars; whereas railroads contribute only 2.2 percent. Given that one intermodal train is equivalent to 300 trucks, the positive contribution of intermodal transportation on the environment is both obvious and immediate.
International VS Domestic Supply Chains
Supply chain management is more complex internationally than domestically or intra-state domestic. Different destination countries each have their own unique rules and requirements, depending on the specific commodity and value of freight being shipped. There are also a variety of export compliance issues that need to be addressed when it comes to international freight shipping.
International supply chains have some of the following government regulations that impact import and export of shipping good and service such as the FTR, EAR, and the ITARs, which are regulations, that doesn’t cause any domestic constraints.
The FTR – Foreign Trade Regulations, which is primarily concerned with the reporting of an export shipment. It is within these regulations that the exporter will find the details about the Automated Export System (AES) reporting requirements and exemptions. The FTR defines valuation; export powers of attorney and record keeping requirements. They also address the ever-vexing questions about the responsibilities of parties when the foreign buyer routes the cargo and selects the international transportation.
The EAR – Export Administration Regulations. While the FTR deals with statistical reporting of the shipment, the EAR addresses U.S. export control policy. The EAR controls the export of so-called dual use goods and goods that are not controlled by other regulations. Dual use refers to the idea that the product has a commercial function but it also may be used in applications or destinations the U.S. would prefer it not be used. Most commercial shipments are subject to the EAR.
The ITARs -International Traffic in Arms Regulations. The U.S. State Department’s Directorate of Defense Trade Controls (DDTC) regulates the export of defense articles under the Arms Export Control Act (AECA.) The details of this act are found primarily within the ITARs. Goods regulated by the ITARs are detailed within the munitions list and are subject to an export licensing requirement by the State Department. Logically this list includes weaponry and military equipment. A brief review of the munitions list would imply that it is a simple matter to determine if exports are subject to ITARs. For companies supplying components to the defense industry, however, it may not be as clear. Companies engaged at any level within the defense industry are cautioned about outsourcing production to other countries or exporting any of their goods before reviewing the ITARs.
The previous were a few of government-controlled issues that boggle down the supply chain not included was tariffs and other cost associated with shipping internationally. North American Free Trade Agreement (NAFTA) has eased some of the regulations and tariffs for the US border countries of Canada and Mexico and has made the supply chain easier to maintain when trading between NAFTA countries.
1. Levans, M. 2008 Intermodal Roundtable: Ready to get on board? Logistics Management Website, Mar 2008. http://www.logisticsmgmt.com/article/337331-2008_Intermodal_Roundtable_Ready_to_get_on_board_.php
2. Mentzer, J. T., W. DeWitt, et al. A Unified Definition of Supply Chain Management. Working paper. University of Tennessee, Knoxville, 1999.
3. Electronic Code of Federal Regulations (e-CFR http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&tpl=/ecfrbrowse/Title15/15cfr30_main_02.tpl
4. Border activities get a boost since NAFTA?Logistics Management (2002); Highland Ranch; Nov 2002; William Atkinson.
5. The 21st century freight yard: BNSF’s Logistics Park near Chicago Trains; Milwaukee; Jan 2003; Michael W Blaszak