Cost Structures of Various Modes of Transportation
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Reference: Leva, M. A. (2013). The Cost Structure of Intermodal Transportation: The Chilean Case. Retrieved on November 16, 2022 from https://publications.waset.org/17333/the-cost- structure-of-intermodal-transportation-the-chilean-case
Summary:
Cost Structure Leva's (2013) aim was to provide a cost analysis of various freight transportation modes,
including rail, road, pipeline, and ship. The author gathered data and adjusted it to create a cost
structure for freight transportation modes in Chile. This structure would allow others to
compare costs for different scenarios. The author adjusted the cost figures to make them
comparable but noted that costs depend on who performs the comparison. For example, an
exporter would focus on mode tariffs, while a transportation operator would be more
concerned about operating costs. The author developed a cost structure from the operator's
perspective to ensure an objective comparison. The cost structure includes power consumption,
circulation cost, vehicle insurance, rights of way, maintenance, personnel, capital cost,
managerial cost, and other operational expenses.
Representative Vehicle Per Mode
The article discusses determining a representative vehicle for each mode of transportation. The
author analyzed Chilean railway characteristics and presented two train types to achieve this. A
car type was assigned based on towing capacity, load capacity, and the kind of freight. For the
maritime mode, the author selected specialized ships for each type of car, which was defined by
the designed use of the ship, DWT, or a measure of the weight of everything a ship is carrying
and the year of the ship. Large-capacity trucks were chosen for road modes to align with the
large capacities that other modes have. The trucks consisted of trailers, dump trucks, and tanker
trucks. Lastly, two slurry pipelines with specific diameters were chosen based on the type of
cargo flowing through for mining purposes.
Cost Analysis In the previous section, we established a cost structure and assigned vehicles to specific modes
of transportation. The article's final part involved analyzing each mode's operational costs using
two approaches: marginal costs and fixed/variable costs. Marginal costs help to determine
efficiency, while fixed and variable costs help to identify the lowest operating costs. For
instance, the author found that pipelines have lower marginal costs than rail and truck (Leva, 2013), indicating greater efficiency.
Critique:
