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The railroad industry

Intramodal competition describes a situation, for example, when multiple railroads are moving the same goods along the same service corridors (Coyle, Bardi, Novack, 2004). As a result, the client has readily available choices when selecting a carrier. This can result in direct price competition and a lower cost for the shipper. Intramodal competition is subject to more regulation which can lower rates for the shipper, but not necessarily.

Competition, in this context, is dependent on several factors that may differ among the competing companies. More carriers within the same corridor can potentially increase competition. Meanwhile, the client must consider several factors other than price before making a choice. Examples include: a terrain survey of the particular routes, the condition of the track, cars and equipment, reputation of the company, and the accessibility of other transportation links (Illinois Commerce Commission, 2007).

Intermodal competition refers to competition among different modes of shipping. For example, a shipper may have a choice between rail and air service to a particular destination. Each of the individual forms of transportation is aware of the presence of the others. As a result they compete based upon prices, delivery speed or specialized services. For the shipper, intermodal competition is the most preferable. Shippers often need a range of different services.

Intermodal competition implies the presence of varied carriers and services. Intermodal competition is based on many of the same factors present in intramodal competition plus the presence of more than one type of carrier. This makes the decision more complex for the shipper. However, the increased number of options is ultimately good. Since no one form of transportation can rely on the shipper’s business, they must provide specialized services and reasonably-priced alternatives.

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