Many have postulated what generates transportation corridor development, especially regarding new service options. Often, these discussions involve many users seeking someone to help them solve “their” problem. For example, the shipper will want service alternatives that are reliable and/or at a lower cost than their current operation. Carriers want more cargo on their network. Public sector groups want to see more economic activity, expressed as freight traffic, through their region. (The same could be applied to intermediaries, such as labor, freight forwarders, brokers, etc.). There seems to be no single word that encompasses the “why” regarding how transportation services start and continue over time.
In organizing my thoughts on this topic, I came up with two alternative lists to distill what maybe needed for a transportation service to begin and remain successful. I really don’t know which list is better, so they are presented here for your consideration.
First, the 7 C’s. (I was thinking of something catchy. I think this works..)
- Capital-It takes money to get something started. There are barriers to entry, costs of renting/purchasing equipment, etc., as transportation may require large upfront costs before the first shipment occurs.
- Carrier-A carrier (or multiple carriers) must be willing to offer that service, possessing the right equipment, skills, etc. to satisfy a shipper’s needs.
- Connectivity-The trade lane must service a network, or be tied to networks, so that the cargo does not stop at a midpoint. For example, there are many ports in the U.S., but not all are served by multiple Class I railroads. This could put these ports at a disadvantage for rail dependent cargos. (There are other connectivity issues related to pipelines, roadways, shipper locations, channel characteristics, etc., so don’t think I am only picking on railroads!).
- Cargo-There has to be cargo operating in both ways (to spread out the revenue costs for the carrier) or someone is willing to pay for the empty movement, but cargo must be available and willing to pay for that freight service.
- Collaboration-For the carrier, shipper and other engaged parties, the service must be seen as an important relationship, not a “one-off” item, to encourage shippers and carriers to be confident the service will continue into the future. This may also require a champion to ensure that everyone is working toward the same goal. (Yes, Champion is a “C” word, but in this context, it is a visionary pushing for collaboration.)
- Costs-There is no free lunch. Costs must be set at a level where carriers benefit while shippers receive their desired service levels, and where possible, there are little significant cost on other users/groups.
- Climate-Does the business climate support this service? Can the service handle any disruptions or adopt to changing conditions? Given discussions on resiliency, climate may be a good word when discussing risks outside of operational activity.
My alternative term is OARS (like row your boat?)
- Operations – The right equipment, permits, labor agreements, etc., to make a transportation service run,
- Assets – This category includes the actual transportation equipment and infrastructure (roadways, vessels, trucks, cranes, docks, etc.), and the labor (truck driver, train, customs, services…),
- Reliable– Everyone has to commit to making the service “work”, where service risks are minimized, and revenue streams can be managed so that everyone benefits.
- Support– Everyone involved understands their role, and works to ensure the cargo, equipment, service, etc., work as expected. In some ways, this final category may be the hardest to maintain over the long term as markets/costs, can change over time.
In reviewing these two lists, there exist many nuanced concepts, but one “C” word seems to be an unspoken, but vital, element: commitment. This requires a commitment to provide the service (carrier), use the service (shipper), and to support the service (public sector/other agents).