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Home , Freight transport

th 14th ACEA Scientific Advisory Group Meeting p Brussels, December 7 2009

Freight modes: Competition, cooperation or areas of advantage?

Michel SAVY Professor, University of Paris East Director, Observatory of Transport Policies and Strategies in Europe Contents

1 Basic facts: modal split, differences and evolution 4

2 Rationale for modal split 6

3 Characteristics of different modes 9

4 Actual and potential competition 12

5 From modal split to modal shift? 15

6 Long range perspectives 16

Sources and references 19 The modal split i.e., the way traffic is shared between transport technologies (“modes”), is commonly considered to be the result of competition between several modes, among which the customer chooses according to his own criteria. Another, less confrontational, approach is to consider the various UNIVERSITY PARIS VAL-DE-MARNE prof. Michel Savy modes as complementary, putting the HERIOT-WATT UNIVERSITY prof. Alan McKinnon stress on cooperation within more or CLECAT Marco Sorgetti less integrated “multimodal” or even “intermodal” chains. Focusing on ESC Nicolette van der Jaegt freight transport issues, this paper will SCANIA Anders Lundström endeavour to show the limits of these DAF Jack Martens

two opposing approaches. On the one FORD Martin Eckner FREIGHT TRANSPORT MODES: COMPETITION, COOPERATION OR AREAS OF ADVANTAGE? OF AREAS OR COOPERATION COMPETITION, MODES: TRANSPORT FREIGHT hand, competition between modes is MAN Stefan Klatt

not as frequent as theory assumes. In SCANIA Jenny Johansson many (or even most) situations, only Toyota Motor Europe Vincent Legagneur one mode is available. On the other VOLVO Ulf Ehrning hand, integration of several modes CCFA Jean-Baptiste Baroni into intermodal solutions is rare, and VDA Michael Niedenthal accounts for only a small percentage EUROPE August Mesker of total inland transport. As for ACEA Fuensanta Martínez-Sans intercontinental transport, this is, by necessity, multimodal (successively ACEA Stefan Larsson using maritime or air transport and ACEA Céline Domecq final haulage), but is seldom integrated EUCAR Simon Godwin

into combined intermodal chains. EUCAR Alessandro Coda

1 3 1 Basic facts: modal split, differences and evolution

in referring to the following figures, note chart, members of the European Union have been that, depending on available data, some refer to classified according to the share of freight transport inland transport only, while others cover all modes. (measured in tonnekm or tkm) carried by road. For intercontinental transport (and more generally, Whereas some countries rely entirely (or mostly) every time inland itineraries are interrupted by on road for their inland transport (Cyprus, Malta, the ), maritime and air transport are the only Greece, Ireland, Spain, Portugal), others use inland available technologies. At the same time, though, waterways intensively (accounting for nearly one- one should also keep in mind the degree to which third of freight traffic in theN etherlands), while still local traffic is handled by coastal shipping in certain others rely more on rail (particularly among Member parts of the world (Europe, Japan, China, etc.). States in Eastern Europe, such as Lithuania and Poland, but also Sweden and Austria; Switzerland, Modal split data show a great variety at an which is not an EU Member State, shows a similar international level (considering national statistics, modal split to that of Austria). which can cover even stronger differences between regions inside the same State). In the following

Figure 1. Modal split - EU 2007 (inland transport, tkm) Pipeline | IWW | Rail | Road Total

s o u r c e EU Energy and transport in figures, statistical pocketbook, 2009

80%

60% FREIGHT TRANSPORT MODES: COMPETITION, COOPERATION OR AREAS OF ADVANTAGE?

40%

20%

0%

CY MT IE EL PT ES LU IT UK SI DK FR FI CZ RO HU BE BG PL DE SE SK NL LT AT EE LV EU27

4 1 Figure 2. Modal split intercontinenta l compa risons ( a ll modes, t km ) s o u r c e EU Energy and transport in figures, statistical pocketbook, 2009 (for China, inland waterways includes coastal shipping; for the US, does not include local traffic)

Sea (domestic/intra-EU27) Oil Pipeline 80% Inland Waterways Rail Road 60%

40%

20% Figure 3. Modal split in Japan 1955-2005 (%, tkm)

Truck | Railway | Coastal Shipping 0%

EU27 USA JAPAN CHINA RUSSIA 80%

Intercontinental comparisons show even greater 60% differences, even between developed regions, such as the United Sates, the EU and Japan. 40% Such differences have yet to be explained, but, considering they affect otherwise comparable 20% countries (concerning the type and level of development), they infer that the freight transport 0% mode strongly depends on the context in which 1960 1965 1970 1975 1980 1985 1990 1995 2000 it takes place, including geography, as well as a F igure 4. Moda l split in Europe

strong path dependency process (history matters), ADVANTAGE? OF AREAS OR COOPERATION COMPETITION, MODES: TRANSPORT FREIGHT 1970-2004 (ECMT, 44 members, %, tkm) and not on a universal, uniform mechanism. Rail | Road | IWW | Pipeline

Over the long run, there is a shift taking place in 60% most countries, including Japan, from rail and inland waterway to road. If we consider the entire 50% European continent, including the 44 member 40% States of the European Conference of Ministers of 30%

Transport (now the International Transport Forum), 20% then, contrary to what is occurring in the Western 10% part of the continent, rail remains the primary , and this remains true even at the pan- 0% European scale, when both parts of the continent 1970 1975 1980 1985 1990 1995 2000 2005 2010 are combined. Nevertheless, there is a clear trend, s o u r c e over the last 30 years, in terms of a shift from rail – Yoshi Imanishi, Freight Transport Policy and Measures in Japan, Public Planning & Policy Studies, 2004 to road. – Trends in the Transport Sector, 1970-2005, ECMT, 2007

1 5 2 Rationale for modal split

Most firms seek to minimize production The divide between road and rail solutions takes

costs and the freight transport sector is no place according to a threshold distance, D0, exception. This effort to reduce costs explains, to whereby, road is cheaper for short distances, rail a large extent, the choice between modes. We shall for long distances. The value of this threshold look at the choice between road and rail (though, is debatable, although the average of 500km comparisons between other modes are possible, or even 800km is often quoted (surprisingly, following the same methodology). The main idea considering the average length of rail haulage in is that transport cost varies (admittedly, in a Europe is only 240km; source: Statistics in Focus, linear way) according to the distance of haulage n° 17, Eurostat, 2007). (mileage), but not proportionally. It also comprises a fixed cost, independent of distance, covering such When one considers the average cost (per operations as packaging, loading and unloading, kilometre), it depends of course on the distance, preparation of the vehicle, invoicing, organisation and the comparison between the average costs of and transaction costs, etc. For railways, this road and rail. It is a misconception to contend that fixed cost is particularly important when taking shippers accept a higher cost from road carriers, into account collecting the individual wagons to compared with rail carriers, because the quality of form a , or the pre- and post-road haulage service of road haulage is better. Since the bulk of between transhipment yard and final destination in freight traffic by road travels only a short distance multimodal solutions, given that many origin and/ (in terms of tonnes, 56% of freight carried by road or destination sites are not directly linked to the in Europe covers a distance shorter than 50km), rail network with their own siding. In contrast, at the choice of road is the result, first and foremost, least for FTL (full truck load) , road of the difference in transport cost, reflected in does not require any time-consuming and costly its price; the fact that the average price for road transhipment. is about four times higher than for rail results from the fact that they correspond to different transport distances: on the following graph, each F igure 5. Tr a nsp ort cos t according to distance (y = ax + b) mode appears as cheaper than its competitor, in its own area of advantage (comprising the bulk of Road cost | Rail cost FREIGHT TRANSPORT MODES: COMPETITION, COOPERATION OR AREAS OF ADVANTAGE? its market). 8000

7000

6000

5000

4000

3000

2000

1000 Fixed cost

0 distance COST/KM

DO 200 400 600 800 1000

6 1

20% Figure 6. Transport average cost (per kilometre) according to distance (y/x = a + b/x)

Road cost | Rail cost | Bulk of the market road and rail

80

70

60

50

40

30 Road

20

10 Rail

0 distance COST/KM

DO 200 400 600 800 1000 Figure 7. Shipment weight and transport distance

700

600 Considering this sketch, one would expect that 100% of freight is consigned to road, up to the 500 400 threshold distance D0, and 100% to rail, beyond this limit. This is obviously not the case, however, 300

since road, indeed, has a near-monopoly on short 200 distances, as well as remaining dominant for long 100 distances. The first reason for this discrepancy is 0

that the value of parameters is not the same for KM Less 50 100 500 750 1 000 10 000 50 000 100 000 every product or every transport operation and than to to to to to to to Ibs or that, on a macro level, the divide between road 50 Ibs 99 Ibs 499 Ibs 749 Ibs 999 Ibs 9 999 Ibs 49 999 Ibs 99 999 Ibs more

and rail according to distance is a gradual ADVANTAGE? OF AREAS OR COOPERATION COMPETITION, MODES: TRANSPORT FREIGHT curb and not a “staircase step”, suddenly jumping Figure 8. Shipment weight and value density ($ / t) from 0 to 100. In addition, this sketch does not take into account other determinant factors, 60 which result in different values for parameters and different behaviours from the shippers. The 50 size of the is an important : a 40 small load requires light transport means, even 30

for long distance haulage – lorry or airplane – and 20 large consignments call for heavy means, such as 10 block , river , etc. At the same time, there is a close link between the size of shipments, 0 Less 50 100 500 750 1 000 10 000 50 000 100 000 the value of goods (in terms of value density) and than to to to to to to to Ibs or the length of haulage. For small consignments, 50 Ibs 99 Ibs 499 Ibs 749 Ibs 999 Ibs 9 999 Ibs 49 999 Ibs 99 999 Ibs more road is commonly preferred to rail, even for long s o u r c e 2002 Commodity Flow Survey, United States, Bureau of distances. Transportation Statistics, 2004

1 7 In some cases, quality of service can be a key Another non-negligible element is that inland concern, which justifies a costlier solution, such as waterways, rail, short sea shipping (and road, or even air, rather than rail, for long distances, combinations of these various modes with final road for reasons of speed, safety, flexibility, etc. haulage) must all be able to consolidate important quantities of goods in order to reach sufficient More generally, a growing proportion of shippers levels of productivity to compete with road prices. tend to seek to optimise their comprehensive Economic geography matters, and explains why logistics costs, and not just to minimize their road is also used for long distances, when the transport cost. Optimisation means that the amount of goods transported is not sufficient to best solution is not necessarily the cheapest; it justify the use of other, heavier means. corresponds to the requirements of the customers () and to their willingness to pay for it. Finally, in many cases, road is selected for long Optimising logistics, rather than just transport, distance freight transport just because it is the means that a total cost, comprising transport, only solution available to shippers: there is no inventory and information systems, is taken into alternative supplier on the market. In this case, account, particularly in the context of today’s “just competition between modes, even if feasible, in time” management practices. This means that simply does not exist in actuality. a more expensive transport solution can result in a lower inventory volume and therefore an overall cheaper logistics solution.

Figure 9. Traditional (“push”, supply driven) and contemporary (“pull”, demand driven) flow management, structure of logistics comprehensive cost

s o u r c e Highway Administration, Office of Freight Management. http://ops.fhwa.dot.gov/freight

Demand Driven FREIGHT TRANSPORT MODES: COMPETITION, COOPERATION OR AREAS OF ADVANTAGE?

Supply Driven

Inventory Transport System Information System

20% 40% 60% 80% 100%

8 1 3 Characteristics of different modes

the result of this specialisation process In the comparison between transport costs by road is that modes have very distinct characteristics, and rail, a second threshold, therefore, appears, considering the type of commodity, the size of together with distance D0 and influencing it: the shipment, the distance of transport, and the size of shipment. A big shipment allows important geographical coverage they provide (road being economies of scale, not only on the haulage factor able to serve the entire territory, while waterways (the variable cost of transport related to distance), are limited to a few axes [natural geography also but also on the fixed factor, dealing with terminal matters] and rail tends nowadays to be limited to operations and interface transaction costs. trunk lines), etc. Each mode is strongly focused Consolidation of freight and rationalisation of on a specific market: the average distance is supply chains is a crucial condition for rail (as well shorter for truck than for water transport, for water as waterways, or short sea shipping or intermodal transport than for rail, etc. In the United States, the inland transport) to be competitive vis-à-vis all- average mileage for truck and water, as well as for road solutions. Comparing the following charts, air transport, is nearly 2000 miles, whereas it is reducing fixed costs appears to have a stronger only 64 miles for private truck (own account road influence on competitiveness than transport). The same relative taxonomy can be reducing haulage costs. established in Europe, although absolute mileages are shorter. Simultaneously, it is notable that the value density of goods (in terms of $/t) carried by air is about 2000 times higher than that of goods carried by rail or water! FREIGHT TRANSPORT MODES: COMPETITION, COOPERATION OR AREAS OF ADVANTAGE? OF AREAS OR COOPERATION COMPETITION, MODES: TRANSPORT FREIGHT

Figure 11. Value density by mode Figure 10. Average miles per shipment by mode (1000 $ / t, logarithmic scale)

2 000 10

1 50 0

1

1 000

0,1 500

0 0,01

Truck Air Truck Rail Parcel Air Parcel Truck Truck Rail and (incl truck and and U.S.P.S. For-hire Private (incl truck U.S.P.S. and For-hire and Private and Water and air) rail Water or courier Rail Water truck truck and air) or courier rail truck Water truck Pipeline Rail Water Water s o u r c e 2002 Commodity Flow Survey, United States, Bureau of Transportation Statistics, 2004

1 9 Figure 12. Rail and road comparison: Figure 13. Rail and road comparison: reduction of rail marginal cost reduction of rail fixed cost

Road cost | Rail cost Road cost | Rail cost

8000 8000

7000 7000

6000 6000

5000 5000

4000 4000

3000 3000

2000 2000

1000 1000

0 distance 0 distance COST/KM COST/KM

D1 DO D1 DO 200 400 600 800 1000 200 400 600 800 1000

In the following diagram (figure 14, page 11), we The table is quite intuitive, mixing differentiation have represented the core fields of these two in the size of letters and colour blending. For inland transport modes according to two key criteria: the transport, road is the dominant – if not exclusive distance of transport and the size of shipment. – mode today in Europe for short and medium Both parameters, as seen earlier, are linked to the distances, as well as for small and medium-sized nature of the commodity and its density of value. shipments. Rail is only used for large quantities Considering distance of transport, a distinction and over long distances (with some exceptions must be made between inland transport (on short, to this rule, such as successful medium distance medium and long distances) and intercontinental rail shuttles), but is no longer dominant, even in transport. When considering the size of shipment, this segment. On continental long distances, air a technical and economic segmentation comes into transport is used only for courier traffic, “air” play between: small consignments, at a scale much general being carried by road (possibly with smaller than the capacity of a vehicle and therefore an air !). For intercontinental transport,

FREIGHT TRANSPORT MODES: COMPETITION, COOPERATION OR AREAS OF ADVANTAGE? requiring a complex process of consolidation so as is by far dominant in terms of to preserve transport productivity (courier, parcels, tonnes carried (at the same time, with only 0.3% up to LTL); medium shipments (corresponding to of total , air transport carries about 25% of the capacity of a lorry or of a : FTL, FCL) worldwide trade in terms of value). and large consignments, often exceeding several hundred tonnes and carried in bulk. For sake of This table provides a generic framework, which clarity, other modes have been omitted from the could be applied to various contexts when table, to wit: inland waterway, pipeline, short sea adequately qualified: average distances are longer shipping, and various multimodal and intermodal for all modes in the US than in Europe, which combinations. partly explains the difference already mentioned

10 1 concerning the modal share. It is, in particular, questionable whether, with the gradual decrease of the “border effect” in Europe (a coefficient which diminishes exchanges between two regions if they belong to different countries, even inside the single market), European average transport distance will go on increasing, and whether European modal share will get closer to the American level…

Figure 14. Transport modes: main fields of operation, according to distance and size of shipment road | rail | air | sea

large, bulk road, rail road, rail road, rail SEA

medium: FTL, FCL ROAD ROAD ROAD, rail air, SEA

small: parcel, LTL ROAD ROAD ROAD, air AIR, sea

size of shipment distance inland short inland medium continental long intercontinental FREIGHT TRANSPORT MODES: COMPETITION, COOPERATION OR AREAS OF ADVANTAGE? OF AREAS OR COOPERATION COMPETITION, MODES: TRANSPORT FREIGHT The differences between modes are so distinct that it leads to the inescapable conclusion that there is very little overlap between the realms on which different modes are operated. Freight transport is divided into different segments, with a single mode of transport tending to be best placed to serve each segment.

1 11 4 Actual and potential competition its poor quality, shortage of capacity, or due to long route mileage (road is more likely to go “as Actual competition takes place only on the crow flies” than rail and river, since it accepts the fringes of the respective areas of advantage tougher slopes). To make sense, v ir tual competition of different modes, and the change in modal split requires being at least feasible, i.e., that physical will result from a shifting and broadening of these conditions exist to make it possible, if not actual. fringes. The key role of Competition: transport is an industry where an important within modes or between modes part of productive capital, infrastructure, is mainly Competition in the freight transport market provided by public authorities. The building of a is therefore mainly within modes (among firms network (in recent history, motorways/highways) implementing the same technology of transport) requires about two human generations and large and much less between modes (firms offering amounts of financing, the profitability of which is different technological solutions for the same flow hardly assured (as the Channel tunnel, entirely of goods). financed by private funds, has shown). The availability of infrastructure is, therefore, a matter In Europe, competition within railway transport both for institutional and public economics, as exists only where the “unbundling” of infrastructure well as for evolutionary economics, considering and services will likely allow network access for the path dependency of infrastructure building, several carriers (historical as well as new entrants), operation and efficiency. Today’s practice of thus facilitating intra-modal competition. In other inland waterways in the Netherlands is the result parts of the world, rail transport remains vertically of centuries of constant efforts to control rivers. integrated, with each carrier controlling its own infrastructure. In the US, two overlapping pan- On a local basis, many modern production and American networks compete, covering the same distribution sites are only accessible by road territory with more or less parallel tracks. (whereas, in the 19th century and first half of the 20th century, they were systematically located When there is no actual competition between along a and/or equipped with a railway modes (in fact, when road is the only available siding). The choice of a freight transport mode is

FREIGHT TRANSPORT MODES: COMPETITION, COOPERATION OR AREAS OF ADVANTAGE? mode), one might expect a degree of virtual now pre-determined by real estate developers, and competition to arise, for example, a new supplier, the modal split is biased long before shippers have relying on another mode, could compete with road to make any decision. haulage (thus putting the present single-mode situation into question). This situation certainly In other words, actual competition between modes exists and justifies attempts, here and there, to explains only a part of the modal split, given develop alternative solutions to all-road haulage. that this competition requires an adequate, pre- existing context, which is not the case in every Still, in many cases, an alternative supplier is just country or along every route, particularly as far as not feasible, due to the lack of infrastructure, or infrastructure is concerned. Switzerland provides

12 1 a relevant example. In this country, rail’s share policy issue, which will be addressed below, of total freight transport is about 30%, i.e., more together with the modal shift question. than twice the EU average. This is due to public support of the railways, including two additional – Cooperation between modes and costly – tunnels under the Alps, in operation or Multimodal and intermodal transport are under construction, so as to alleviate road transit. popular causes in both political and academic Britain provides a contrary case in point, where little literature. The reasons for this infatuation include investment at all has been devoted to rail (before a a cooperative vision of the relationship between new renovation effort was recently launched). different transport modes, the optimal use of Far upstream from the modal choice by shippers, each mode, and their contribution to sustainable the framework for such a choice has been development. Intermodal is therefore a political established, decades in advance, by public policies. as well as business matter. Still, the volume of For this reason, facilitating competition between intermodal transport represents only a small modes (and not only within modes) is a long-term portion of total transport and is presently stagnant

Figure 15. Main rail-road intermodal transport in Europe s o u r c e UIRR

Unaccompanied international traffic in 2001 (without alpine traffic) Unaccompanied international traffic in 2001 (alpine traffic) FREIGHT TRANSPORT MODES: COMPETITION, COOPERATION OR AREAS OF ADVANTAGE? OF AREAS OR COOPERATION COMPETITION, MODES: TRANSPORT FREIGHT

4.000-10.000 10.000-20.000 4.000-10.000 20.000-50.000 10.000-20.000 50.000-100.000 20.000-50.000 100.000-200.000 50.000-100.000

1 13 or even declining, representing roughly 5% of total The contrast with existing complex solutions freight in Europe, 25% of railway transport (tkm), is sharp, all the more so as the following chart 5% of waterway transport and 10% of maritime provides only a simplified vision of a traditional transport. It remains a niche market, mainly at intermodal arrangement, as it comprises only the international level and, in Western Europe, one border, two modes of transport (road, rail), concentrated in a few corridors, particularly across and ignores technical discontinuities in terms of the Alps. energy, signalling, gauge, etc., resulting in a poor “interoperability” outcome. Additional factors The reasons for this situation are complex. One are also ignored, such as wagon, container and factor is the inefficient performance of traditional locomotive renting companies, freight-forwarders operators, who are hampered by a fragmentation of and 3PL, real estate owners, local and State intermodal organisation among many autonomous authorities, infrastructure regulators, etc. actors. This encourages newcomers to set up simple, integrated arrangements, often dedicated The common characteristics of these new to one type of traffic, or even one single shipper, arrangements are, beyond their simplicity, that they consisting of a shuttle service between two fixed promote internal coordination rather than external points. They abandon the notion of network and market driven cooperation; planning rather than create bespoke intermodal transport chains, transaction; integration rather than vertical organised under a single agent’s control (a shipping competition. Here, again, the basic explanation company like for ERS, chemical industry for of freight organisation through competition and Rail4Chem, steel industry for CFL Cargo, etc.). market mechanisms is challenged.

Figure 16. Traditional intermodal arrangement of actors

s o u r c e RECORDIT, 2001.

shipper

intermodal transport operator FREIGHT TRANSPORT MODES: COMPETITION, COOPERATION OR AREAS OF ADVANTAGE?

yard operator road carrier

border

origin destination (shipper) ()

railway company A railway company B

rail infrastructure rail infrastructure operator A operator B

14 1 5 From modal split to modal shift? railway network, since its acme in the 1920s). As a result, road haulage is often the only available overlap between freight modal markets mode and there is little actual competition. is the exception; segmentation and specialisation In the long run, this situation can be reversed, are the rule. Is this situation satisfactory or but will require weighty decisions. To make sustainable? competition feasible, even only in a virtual way (a simple threat by another competitor to enter the In the short run, transport supply is a given, and market ), it has to be possible – this means the modes compete only where they co-exist. The infrastructure must exist to enable an alternative general expansion of road haulage at the expense solution. The provision of a new transport mode, as of other modes, which occurred in recent years an alternative to road, requires massive, indivisible in Europe, but not in America or Asia, reduces and irreversible investments, which rarely reach actual competition to a few corridors where heavy private profitability rates and have to be provided, modes such as train or demonstrate their or at least guaranteed, by public authorities competitive advantage: increased productivity (States, European Union, etc.). History matters and for massive shipments and long distances. Rail countries where the rail system has been kept up has lost the general coverage function it provided to date differ from those where most investments, up to the middle of the 20th century and has been over recent decades, have gone to road and where reduced to a “core” trunk line network (as shown a shift to other modes will require a complete with the example of the shrinking of the French renewal of competitive solutions.

Figure 17: Rail network in France around 1920 Figure 18: Rail network in France 2008 FREIGHT TRANSPORT MODES: COMPETITION, COOPERATION OR AREAS OF ADVANTAGE? OF AREAS OR COOPERATION COMPETITION, MODES: TRANSPORT FREIGHT

1 15 Taking into account new concerns, such as energy 6 Long range perspectives consumption and climate change due to the greenhouse effect, governments can be expected the conclusions of a recent long-range study to match their words with actions, and develop carried out on freight transport in France (which alternative solutions to road. However, they should also took into account European integration as well not just support any type of project willy-nilly - as globalisation), entitled Fret 2030 (Freight 2030), rather, they should spend their scarce resources can be extended to most European countries. The in an efficient way by focusing on projects likely study proffers different scenarios, based on the to succeed, i.e., to capture a significant share extent to which two main assumptions, concerning of freight. Supporting abstract competition the rhythm of European economic growth and the mechanisms is not enough, as demonstrated by the way transport is “coupled” to it, are impacted by European railway reform effort to open the market the degree to which a sustainable development to intra-modal competition, launched in 1991, strategy is applied to freight transport policy. This which has yet to result in any broadening of rail’s results in four schematic perspectives. modal share. Real competition must also be made possible, by setting up adequate infrastructure In the following table, S1 corresponds to a high rate and up-to-date operational technology, along long of growth of transport with little public regulation, corridors serving substantial traffic markets. S2 to high growth but strong public intervention so as to promote “sustainability”, S3 to a low rate Some 50 years ago, a comparable situation of growth of freight volume and little public policy, existed for transport, when traditional and S4 to low growth of transport and strong railways had reached their peak development and public policy. Figures are only given for likely new modes (private car and plane) represented orders of magnitude and do not represent extreme the future. The invention of the high speed train, possibilities, such as an energy shortage due to an based on a large capacity dedicated line, enabled international military crisis, a pandemic, a global a real breakthrough, which provided rail a new economic crisis or collapse in area of advantage and put it back into the market (such events may not be all that improbable and of passenger transport in the following decades. Is would merit further study). They merely provide such a change in store for freight? limits for a possible, non-chaotic evolution.

FREIGHT TRANSPORT MODES: COMPETITION, COOPERATION OR AREAS OF ADVANTAGE? Transport volumes are expected to continue increasing, either at a slow rate (+21% over a quarter of a century) or a more rapid one (+49%), depending on the scenario. No “decoupling” of economic growth and transport growth is envisaged, as the White Paper of the European Commission proposed in 2001. But the elasticity linking the two phenomena will diminish: this was recently much higher than 1 (transport growing quicker than GNP), but is now lower. If decoupling

16 1 did not seek to slow down transport, but, instead, through solutions other than road, where relevant, to reduce traffic or nuisances due to transport, should not be sought. then more room for manoeuvre would exist and an ambitious policy could achieve its objectives. Thus, In any event, there will be no absolute modal progress in transport technology and organisation shift, as road transport will grow under each of the could sustain the same amount of transport (tkm) scenarios (with a growth ranging from 6% to 60% with less traffic (vehicle-km) and less greenhouse within the relevant time period). Any modal shift, gas (tons of CO2) emissions. if it happens, will only be relative, with a change in proportions of various modes benefitting In all the above scenarios, road will remain the alternatives to road - the biggest such change dominant mode in Western Europe, as its share occurring under scenario S4. of transport will fluctuate between 72% and 88% of tkm, depending on the hypothesis. Moreover, However, all these assertions ignore the essentially there are no realistic transport solutions that spatial dimension of transport. Non-road solutions could accommodate expected transport flows and a possible modal shift are only relevant in and respect for the environment without including precisely defined corridors, where conditions, road transport. The margin of progress will be such as long distance transport of heavy flows greater, at least for short ranges, with incremental of goods, rely on available infrastructure. These progress in road transport, rather than with a conditions can notably be met for servicing main radical development of alternative modes, given harbours to and from the hinterland and for major the difference in relative starting positions. At metropolitan areas. the same time, this does not mean that progress FREIGHT TRANSPORT MODES: COMPETITION, COOPERATION OR AREAS OF ADVANTAGE? OF AREAS OR COOPERATION COMPETITION, MODES: TRANSPORT FREIGHT Freight transport in France – long-range perspectives (tkm)

Billion tkm 2002 2030 S1 2030 S2 2030 S3 2030 S4 Road 257 412 340 296 272 Rail 50 50 80 76 87 IWW 6.9 7 20 15 20 Total 314 469 440 387 379 with SSS* 427 419 *SSS = short sea shipping

Freight transport in France – long-range perspectives (modal split, %)

% 2002 2030 S1 2030 S2 2030 S3 2030 S4 Road 82 88 77 76 72 Rail 16 11 18 20 23 IWW 2 1 5 4 5 Total 100 100 100 100 100 s o u r c e Fret 2030, 2008

1 17 The presentation of the choice between infrastructure, serving important sources or different modes of freight transport as being destinations of heavy traffic. In such cases, settled according to neoclassical mechanisms they should not be considered as hostile to road of competition is, as a whole, unrealistic. transport; shrewd road carriers will understand Segmentation is the rule; actual competition (i.e., that such measures will alleviate traffic on where alternative supply modes exist in the same congested trunk roads, while leaving them with market) is the exception. Modes of transport are the value added terminal operations. According to broadly specialised in specific and separate area all plausible scenarios, road transport will go on of advantage, and they are more complementary increasing in the coming decades. than rival. Intermodal combinations only play a limited role, due to their complexity and fragility, Going forward, efforts to reduce greenhouse gases as well as the non-cooperative attitude of their will have to use all available tools, simultaneously: actors, unless one of them integrates the complete technology and standardisation, organisation and chain under his control. management, regulation and taxation, etc. In any case, the modal shift will only provide a limited Till now, policies to change the modal split have, in part of the solution, and the main prospects for Western Europe, mostly failed. This does not mean progress will remain within road transport itself. that attempts to increase the use of alternatives The European road industry, including vehicle to all-road long distance haulage have no chance makers as well as carriers and logistics service to succeed. However, they require demanding providers, should take up this challenge and turn it conditions, which are seldom fulfilled, and must into a crucial competitive advantage in the global only be supported where they are meaningful: market of the future. that is, on a few corridors, equipped with adequate FREIGHT TRANSPORT MODES: COMPETITION, COOPERATION OR AREAS OF ADVANTAGE?

18 1 Sources and references:

EU Energy and transport in figures, statistical pocketbook, Brussels, European Commission, 2009. http://ec.europa.eu/energy/publications/statistics/ doc/2009_energy_transport_figures.pdf

Trends in the Transport Sector, 1970-2005, Paris, ECMT, 2007.

CLECAT Statement in the Area of Policy Making in the Field of the European Logistics Sector, CLECAT, 2006. http://www.clecat.org/dmdocuments/ PP017OSECR061130StatLogistics.pdf

Yoshi Imanishi, Freight Transport Policy and Measures in Japan, Public Planning & Policy Studies, 2004.

2002 Commodity Flow Survey, United States, Washington, Bureau of Transportation Statistics, 2004.

RECORDIT project (REal Cost Reduction of Door-to- door Intermodal Transport), WP8 Intermodal transport in Europe: Cost reductions possibilities and options,

European Commission (DG TREN): ADVANTAGE? OF AREAS OR COOPERATION COMPETITION, MODES: TRANSPORT FREIGHT http://www.recordit.org, 2001.

Bulletin Transport / Europe: 24 issues available, in English and French, from: www.cnt.fr

Savy Michel, Le transport de marchandises, Paris, Éditions Eyrolles, 2006.

Savy Michel (dir.), Questions clefs pour le transport en Europe, Paris, La Documentation française, 2009.

1 19 Association des Constructeurs Européens d’Automobiles

European Automobile Manufacturers Association

Avenue des Nerviens 85 B-1040 Bruxelles Belgium tel +32 2 732 55 50 fax +32 2 738 73 10 www.acea.be