Modelling the impacts of ICT adoption for inter‐modal transportation

Abstract

PurposeThe purpose of this paper is to present a parametric model to assess the impacts of information and communication technology (ICT) applications on company freight transportation processes (i.e. “company” perspective). The aim is to support both internal monitoring procedures and the decision‐making process of ICT adoption, as well as increase managers' awareness of these solutions in improving their business. The model has been applied to inter‐modal terminal processes, which are particularly critical due to the high number of players involved and the need for integrating different modes of transport throughout the whole delivery process.Design/methodology/approachThe present study is part of a broader research on the topic of ICT adoption in the freight transportation industry. Based on the outcome of the previous stages of this research, the impact of ICT applications on inter‐modal processes has been modeled using an activity‐based costing approach. Interviews were conducted with both inter‐modal terminal managers and technology providers to collect the required inputs and validate the model. A case study has been performed to apply the model and a further sensitivity analysis has been carried out.FindingsThe application of the model to the examined inter‐modal terminal showed that the most significant “as is” costs are those connected to handling activities. Three different ICT scenarios have been also explored. Based on the company “as is” scenario, the model provides an assessment of how and when a positive return on investment can be achieved. Results proved that the benefits deriving from ICT adoption are considerable and depend on the level of technology adopted.Originality/valueThe paper addresses an identified need in the literature of quantifying the impact of ICT for freight transportation. It is one of the few attempts to model costs and benefits of ICT for freight transportation, taking into account the major factors involved. Additionally, the model can be a valuable support to practitioners in evaluating their investments, as well as monitoring their company current performance.