European Combined Road-Rail Transport - an Analysis of Growth Potential and Management Issues
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EUROPEAN COMBINED ROAD-RAIL TRANSPORT - AN ANALYSIS OF GROWTH POTENTIAL AND MANAGEMENT ISSUES L. Sj&stedt Lars E. Sjâstedt Department of Transportation and Logistics Chalmers University of Technology S-412 96 Gothenburg Sweden 1. INTRODUCTION For environmental reasons the political interest in combined road and rail transport has increased rapidly. From a technical point of view, however, combined transport is not a recent innovation. There are many examples from the stage coach era of attempts to combine passenger trans- port by horse with the emerging rail technology. Already in 1830 the first system was inaugurated involving the transfer of a postal stage coach from a road carriage to its rail counterpart by means of a stationary crane (1). An example of combined transport between rail, road and sea from the early parts of this century is the movement of personal belongings to and from French colonies by the French company CNC1 ), using standardized containers, which were handled by cranes. During the post second world war period many systems have emerged. They can be assigned to one of three main groups; those that have grown out the practice to transport entire trucks and truck combinations in rail tunnels through the Alps, those created primarily to forward the standardized maritime containers to and from ports for transocean shipping and systems which were established to transport carriers designed for road haulage, such as semi-trailers and swap bodies, part of their way on rail. This paper attempts to analyze differences between markets, organiza- tional solutions and traffic development for these systems. One conclusion is that in order to reach maximum penetration there is a need for increased decentralization and specialization of marketing efforts, while production must increase in efficiency and be organized in such a way that the obvious large-scale advantages are taken care of. This demands a hierarchical production organization. 2. POLITICAL INTEREST IN COMBINED TRANSPORT Politicians in all European countries have for energy conservation and environmental reasons long hoped for and tried to create conditions, that would allow railways to win back a large part of the transport flows, which during the last decades have been lost to the highway. Lately there is a ') A brief account of the early history of CNC, at that time inter- preted Compagnie Nouvelle des Cadres, was given to the author during a visit to the company in 1974. 3-15-5 53 L.E. Sjoestedt growing understanding that this political goal is based on a misconception: Railways have only to a minor degree lost commodities to trucking compa- nies. What has happened is that new markets for high technology or specia- lized products have emerged, and that these markets have developed in close synergy with the growth of the trucking business. The products concerned are shipped in small quantities over large distances under strict time control, which badly matches classical part-load and wagon-load rail ' transport. The competition surfaces between pure road and rail transport are, in effect, rather small, although where these surfaces exist the competition is fierce2 >. Because of these insights politicians are increasingly tying their expectations to various forms of combined transport. Their main thought is to relieve the large thoroughfares in the highway net from long distance and heavy transports, and yet efficiently connect those numerous number of small and intermediate size transport customers, who cannot themselves at reasonable costs be served directly by the railway network. It comes without saying that there is a minimum distance under which combined transports cannot be motivated, irrespective of what arguments are used. Different sources have from time to time advocated as a rule of thumb a lower limit in the order of 300 to 500 km. In practice it is of course impossible to establish an unequivocal limit, as the prerequisites in indi- vidual cases vary strongly due to a great many factors. A special case are those combined transports that require only one transition between rail car and truck, i.e. to and from ports or where either consignor or consignee has a railway terminal. Here combined transport can compete at shorter distances. Clearly combined transport has its largest potential at long distances. In many cases the transport distances within the domestic markets of the European countries are too small to give combined transport a reasonable expansion potential. Except for the domestic markets in a limited number of large countries, it is thus the international transports that attract interest. This is accentuated by the EEC-92 reform, which is expected to strongly stimulate trade between the European countries. The trend towards longer transport distances is confirmed by the following data from the West German company Kombiverkehr3 >: Year: 1970 1975 1980 1986 Average transport distance - in km: 450 478 543 639 - in relative terms: 1.00 1.06 1.20 1.42 2) These arguments are well supported by data, at least for Swedish international transport as discussed in detail in (2). 3) Source: Kombiverkehr KG, Frankfurt 54 L.E. Sjoestedt 3. INTERVIEWS WITH OPERATORS OF COMBINED TRANSPORT The purpose of this paper is to discuss the expansion potential for European international combined transport by rail and road trying to identify such problems and barriers that - if unresolved - will retard and delay a politically desirable development. The background material was collected in the fall of 1987 during visits to a number of companies and organizations, which either themselves operate some form of combined transport or have made detailed studies of such transports. These are Okombi in Austria, Intercontainer in Switzerland, CNC and Novatrans in France, Transfracht, Kombiverkehr and Studiengesellschaft fair den kombinierten Verkehr in the FRG, Scanlink in Denmark and finally S- kombi in Sweden. Semi-structured interviews were carried out with senior managers using a guide containing 27 questions under the headings; general structure, network, marketing, production technology, production planning and control and general questions. 4. CLASSIFICATION OF COMBINED TRANSPORT The concept of combined road and rail transport can be given a more or less narrow definition. In figure 1 it is shown how some of the most common interpretations relate to each other. It is possible to distinguish between five main types of carriers in combined traffic. Combined transport in its narrow sense includes transport of complete highway vehicle combinations, semi-trailers and swap bodies. Combined transport in its extended sense also includes transport of standardized containers, as well maritime containers which fully comply with the ISO standard and containers that are only intended for transport within Europe and only partly agree with the ACCOMPANIED NON-ACCOMPANIED TRANSPORT TRANSPORT COMBINED TRANSPORT IN THE NARROW SENSE CONTAINER TRANSPORT HIGHWAY VEHICLE SEMI-TRAILERS SWAP BODIES INLAND MARITIME COMBINATIONS CONTAINERS CONTAINERS ROAD HAULAGE BASED MARKETING RAILWAY BASED SHIPPING MARKETING BASED MARKETING I COMBINED TRANSPORT COMPANY I I CONTAINER TRANSPORT COMPANY Figure 1 Schematic classification of various forms of combined transport. 55 L.G. Sjoestedt ISO standard. As there is yet neither an established standard for the latter type of container nor for swap bodies, the distinction between these two forms of carriers is somewhat vague. In figure 1 is also indicated the traffic mode that for historical reasons normally bears responsibility for marketing the transport. There are usually widely different conditions for a combined transport depending on whether this is a result of selling activities by a trucking company, a •railway or a shipowner. Each mode has its traditions and entrepreneurial culture and its representatives naturally compete for the direct contacts with the customer and thus the final responsibility for and largest profit chances from the transport. This is an important background factor which will be discussed later. It is also possible to classify combined transport in two groups depending on whether someone is accompanying the transport from end to end or not. In "accompanied traffic"4) the driver normally - after driving his highway vehicle combination on board the train himself - travels with the train in a separate sitting- or sleeping-car. This is a form of transport supply which is expanding in the countries around the Alps. It has its roots in the time period, when the Alp passes constituted a difficult or even impossible barrier to highway traffic during the winter, and railway tunnels therefore were seen as a more comfortable alternative. From the sixties and onwards this form of transport has enjoyed strong political support in the countries concerned. The payload is typically a comparative- ly small part of the gross weight of a train, which has frequently given rise to questions about energy efficiency and profitability. There are often accuses being made that this form of transport is subsidized, and that it distorts competition not only between rail and road but also between the various forms of combined transport among themselves. The limited railway loading gauge necessitates use of very low platform cars with specially built running gear, which makes them expensive. On the other hand the need for terminal investments is limited. It is beyond the scope of this work to try to verify or reject these accuses. To some degree any standpoint will always have to contain an element of political evaluation. 5. RAIL TUNNELS AND ROLLING HIGHWAYS The future of the "rolling highway"' does not only depend on direct political decisions, but also on the changes that the European infrastruc- ture will be subjected to in coming years. The Channel Tunnel will bring with an extensive ferrying of highway vehicles on board trains between terminals on the French and British side. As it will in any case be neces- sary for a highway vehicle operator to subject his vehicle to two terminal operations it should in many cases be attractive for him to keep the vehicle on the train also outside the tunnel section.