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FACULTY OF ECONOMICS, SOCIAL AND POLITICAL

SCIENCES AND SOLVAY BUSINESS SCHOOL

Intermodal Transport Policy:
A GIS-based Intermodal Transport
Policy Evaluation Model

Ethem Pekin

Proefschrift ingediend met het oog op het behalen van de
wetenschappelijke graad van doctor
in de Toegepaste Economische Wetenschappen

Promotor: Prof. dr. Cathy Macharis
Acknowledgments
Now that I have done it, I learned that a PhD study is an art of making a long story short.
With this dissertation, a dénoument of work that has taken place over a period of almost five
years (2005-2009) is presented. It is often acknowledged that the research process in social
sciences, including economics, is an individual effort and a PhD dissertation is the ultimate
outcome of this devotion. While it is the authors’ name written on the cover, there are a lot
of people that have supported me to finish my PhD studies.

First of all, I would like to express my gratefulness to my supervisor, Professor dr. Cathy
Macharis. Your strong encouragement, your to the point feedback, your visionary ideas, your
endless supervision, revealed the secret ingredient of motivating myself during this period. I
have challenged my intellectual boundaries thanks to our academic inquires, primarily as a
researcher but also as a human being. I am also thankful to you for standing right beside
me for overcoming the practical problems I have gone through in Belgium. It was you that
always made me feel home.

I would also like to thank Prof. dr. Frank Plastria, Prof. dr. Bart Jourquin and An Caris for
their valuable comments and feedback on the earlier stages of my dissertation, which
enriched my research perspectives to deliver this final result.

I want to acknowledge the following institutions for their generous funding: Belgian Science
Policy for the financial support for the project “Decision Support System for Intermodal
Transport Policy” and the European Commission for the financial support for the project
“Training Tools in Logistics and Transport”. My gratitude also extends to the project partners
for their fruitful collaboration during the execution of the projects. A special “thank you”
goes to the organisations for their support in providing material for the study. I am
especially grateful to Alim Kucukpehlivan from Basarsoft for providing the datasets for
Turkey and Omer Celik from Turkish State Railways for sharing high-level strategic reports.

I would also like to express my gratitude to my colleagues, Astrid, Annelies, Ellen, Fré,
Kenneth, Koen, Laurence, Ollie, Tessa and Tom, for all the laughs and making me feel at
ease during the preparation of this dissertation. Especially to Ellen and Tom for the
discussions we had on externals costs and fuel prices and how to incorporate them in the
model. Frankly, the worst part of finalising period of this dissertation was to be staying away
from the university. I will always cherish the colourful atmosphere at work thanks to your
presence.

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My intense thanks are addressed to my father, my family and my friends, for their support
and encouragement. I would like to thank for their empathy concerning the duration of a
long time staying away from them, especially during the last six months. With memories
engraved deep in my heart, my dear mother, your wisdom has remained shining to my life. I
finally like to thank Gizem for her patience and endurance. I promise that there will be no
more pleasure delaying between the two of us.

Brussels, December 2009

Ethem Pekin

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Table of contents

Acknowledgments .................................................................................................... i

Table of contents .................................................................................................... iii

List of figures ........................................................................................................ vii

List of tables ........................................................................................................... ix

List of abbreviations ............................................................................................... xi

1. Introduction ........................................................................................................ 1

1.1. Background to the research .............................................................................. 1
1.2. Research problems and research questions ......................................................... 3
1.3. Scope and approach ........................................................................................ 4
1.4. Outline of the dissertation ................................................................................ 5

2. Intermodal transport in general .......................................................................... 7

2.1. Introduction ................................................................................................... 7
2.2. Containerisation .............................................................................................. 8
2.2.1. A breakthrough with the box ....................................................................... 9
2.2.2. The containership ..................................................................................... 12
2.2.3. Global containerisation .............................................................................. 13
2.3. Intermodal transport systems .......................................................................... 14
2.3.1. Defining intermodal transport ..................................................................... 15
2.3.2. Intermodal transport chain......................................................................... 16
2.3.3. Transport modes ...................................................................................... 16
2.3.4. Actors in intermodal transport .................................................................... 19
2.3.5. The role of information and communications technology ................................. 22
2.3.6. Intermodal transport market ...................................................................... 22
2.4. Intermodal terminals ...................................................................................... 29
2.5. Benefits and costs of intermodal transport ......................................................... 35
2.5.1. Economic aspects of intermodal transport .................................................... 37
2.5.2. Quality aspects of intermodal transport........................................................ 45
2.6. Environmental aspects of intermodal transport ................................................... 47
2.6.1. Environmental dimensions of transport ........................................................ 48
2.6.2. Types of environmental impacts.................................................................. 49
2.6.3. Environmental performance of transport modes ............................................ 52
2.6.4. External costs of transport ......................................................................... 56
2.6.5. External costs calculation ........................................................................... 56
2.7. SWOT........................................................................................................... 61
2.8. Conclusion .................................................................................................... 62

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3. Intermodal transport policies ............................................................................ 63

3.1. Introduction .................................................................................................. 63
3.2. European transport policy................................................................................ 64
3.2.1. “Slow progress” - phase 1 from 1957 to 1992 ............................................... 64
3.2.2. “The objectives of the CTP” - phase 2 from 1992 to 1995 ............................... 65
3.2.3. “A more coherent CTP” - phase 3 from 1995 to 2000 ..................................... 65
3.2.4. “Time to decide” - phase 4 from 2000 to 2006 .............................................. 67
3.2.5. “Keep moving” - phase 5 from 2006 to 2008 ................................................ 69
3.3. Intermodal transport policy ............................................................................. 71
3.4. Trans-European transport networks .................................................................. 73
3.4.1. A need for infrastructure ............................................................................ 74
3.4.2. Creation of a trans-European transport network ............................................ 74
3.5. Research and technological development ........................................................... 79
3.5.1. The Framework Programmes ...................................................................... 79
3.5.2. The COST-Transport Action ........................................................................ 81
3.5.3. The PACT Programme................................................................................ 82
3.6. Financial support for “modal shift” .................................................................... 82
3.6.1. Subsidies................................................................................................. 82
3.6.2. National initiatives .................................................................................... 83
3.6.3. Marco Polo ............................................................................................... 87
3.7. Charging and pricing policies ........................................................................... 88
3.7.1. Charging principles ................................................................................... 88
3.7.2. Charging on transport modes ..................................................................... 89
3.7.3. Fuel taxes................................................................................................ 90
3.7.4. Cross modal financing for railways .............................................................. 90
3.8. A change of seasons in the markets .................................................................. 90
3.8.1. Road transport ......................................................................................... 91
3.8.2. Inland navigation...................................................................................... 91
3.8.3. Railways.................................................................................................. 91
3.8.4. Shortsea shipping ..................................................................................... 92
3.9. Other policies that favour intermodal transport ................................................... 92
3.9.1. Operational measures ............................................................................... 92
3.9.2. Intermodal transport promotion .................................................................. 93
3.10. Conclusion .................................................................................................. 93

4. GIS-based intermodal transport model.............................................................. 95

4.1. Introduction .................................................................................................. 95
4.2. Modelling methodology ................................................................................... 95
4.2.1. Literature review ...................................................................................... 96
4.2.2. Towards new models and approaches for intermodal freight transport ............ 108
4.3. The LAMBIT methodology .............................................................................. 113
4.4. Futher development of the LAMBIT methodology .............................................. 115
4.4.1. Model set up .......................................................................................... 117
4.4.2. Assumptions .......................................................................................... 121
4.5. Operation of the model ................................................................................. 121
4.5.1. The LAMBIT framework ........................................................................... 123
4.5.2. Analysis of scenarios ............................................................................... 123
4.6. Conclusions ................................................................................................. 125

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5. Scenario-based analysis for Belgium ............................................................... 127

5.1. Introduction ................................................................................................ 127
5.2. Reference scenario ....................................................................................... 128
5.3. Scenario-based analysis ................................................................................ 130
5.3.1. Subsidy scenario .................................................................................... 130
5.3.2. Internalisation of external costs scenario.................................................... 142
5.3.3. Fuel price scenarios ................................................................................ 150
5.3.4. Future terminal scenario .......................................................................... 154
5.4. Further refinement of the model ..................................................................... 160
5.5. Conclusions and policy recommendations ........................................................ 162

6. Scenario-based analysis for Turkey ................................................................. 164

6.1. Introduction ................................................................................................ 164
6.2. Need for intermodal transport in Turkey .......................................................... 165
6.2.1. Containerisation ..................................................................................... 166
6.2.2. Location of Turkey in intermodal transport networks .................................... 169
6.3. Current state of intermodal transport in Turkey ................................................ 174
6.3.1. Shortsea shipping ................................................................................... 174
6.3.2. Railway transport ................................................................................... 179
6.4. LAMBIT methodology applied to Turkey ........................................................... 187
6.4.1. Current situation .................................................................................... 189
6.4.2. Future scenario ...................................................................................... 192
6.4.3. Subsidy scenario .................................................................................... 194
6.5. Conclusions ................................................................................................. 196

7. Conclusions ..................................................................................................... 198

7.1. Introduction ................................................................................................ 198
7.2. Main research findings and conclusions ........................................................... 198
7.3. Policy recommendations ................................................................................ 200
7.4. Perspectives for further research .................................................................... 201

References .......................................................................................................... 205

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vi
List of figures

Figure 1-1: The cascading outline box of the dissertation ............................................... 5
Figure 2-1: 20-foot ISO container .............................................................................. 10
Figure 2-2: Swap body ............................................................................................. 11
Figure 2-3: Semi-trailer ........................................................................................... 11
Figure 2-4: Six generations of containerships .............................................................. 12
Figure 2-5: World container traffic ............................................................................. 13
Figure 2-6: European container traffic growth.............................................................. 14
Figure 2-7: Intermodal transport chain ....................................................................... 16
Figure 2-8: Container Ro-Ro ship............................................................................... 17
Figure 2-9: Inland waterway vessels .......................................................................... 18
Figure 2-10: Intermodal actors ................................................................................. 20
Figure 2-11: Performance by mode for freight transport ............................................... 23
Figure 2-12: Transport flows generated by inland navigation ......................................... 25
Figure 2-13: Total of ton-kilometres on the Belgian waterways ...................................... 26
Figure 2-14: Evolution of the number of TEUs on the Belgian waterway terminals ............. 26
Figure 2-15: Transport flows generated by railway ....................................................... 27
Figure 2-16: European intermodal rail traffic: Total UIC traffic ....................................... 28
Figure 2-17: Combined transport traffic: Total UIRR traffic ............................................ 28
Figure 2-18: Evolution of the number of TEUs on the Belgian rail terminals...................... 29
Figure 2-19: Types of intermodal terminals ................................................................. 31
Figure 2-20: Overview of intermodal terminals in Europe 2003 ...................................... 33
Figure 2-21: Intermodal terminal landscape in Belgium ................................................ 35
Figure 2-22: Intermodal cost function ........................................................................ 38
Figure 2-23: Internal costs by mode of transport ......................................................... 40
Figure 2-24: Break-even point .................................................................................. 43
Figure 2-25: Transport activities with environmental impacts......................................... 49
Figure 2-26: Potential environmental impacts of transportation activities......................... 53
Figure 2-27: CO emissions........................................................................................ 54
Figure 2-28: NOx emissions ...................................................................................... 54
Figure 2-29: Greenhouse gas emissions of transport modes .......................................... 55
Figure 2-30: The effect of marginal social cost pricing in €ct/tkm ................................... 57
Figure 2-31: External costs of freight transport............................................................ 58
Figure 2-32: Marginal external costs of different vehicles for freight transport .................. 59
Figure 2-33: External costs on the intermodal corridor Genova-Manchester ..................... 59
Figure 2-34: Average external, internal and full costs of unimodal road and intermodal
transport................................................................................................................ 60
Figure 2-35: SWOT analysis for intermodal transport market ......................................... 61
Figure 3-1: Intermodal policy framework .................................................................... 72
Figure 3-2: TEN-T priority axes and projects ............................................................... 76
Figure 4-1: Location models ................................................................................... 104
Figure 4-2: Information flows in the GIS-enhanced transportation planning process........ 113
Figure 4-3: Overview of the LAMBIT methodology ...................................................... 115
Figure 4-4: Architecture of the LAMBIT model ........................................................... 117
Figure 4-5: Network layers and nodes ...................................................................... 118
Figure 4-6: Market price functions for Belgium .......................................................... 120
Figure 4-7: The LAMBIT framework .......................................................................... 123
Figure 5-1: The reference scenario .......................................................................... 129
Figure 5-2: Break-even analysis: Reference scenario .................................................. 129
Figure 5-3: Regional and federal subsidy schemes ..................................................... 131

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Figure 5-4: Subsidy scenario for the inland waterway transport ................................... 133
Figure 5-5: Break-even analysis: Subsidy scenario ..................................................... 133
Figure 5-6: Subsidy scenario on rail transport 2008 ................................................... 135
Figure 5-7: Subsidy scenario on rail transport 2009-2012 ........................................... 136
Figure 5-8: The effect of rail subsidies on modal market area ...................................... 138
Figure 5-9: Subsidy scenario on inland waterway and rail transport 2008 ...................... 139
Figure 5-10: Subsidy scenario on inland waterway and rail transport 2009-2012 ............ 140
Figure 5-11: The effect of rail and barge subsidies on modal market area ...................... 141
Figure 5-12: Marginal external costs (MEC) versus taxes – heavy truck diesel, Flanders,
1991-2002, 2002 prices ......................................................................................... 144
Figure 5-13: Internalisation of external costs: all modes of transport ............................ 147
Figure 5-14: Break-even analysis: Internalisation of external costs .............................. 147
Figure 5-15: The effect of internalisation of external costs on modal market area ........... 149
Figure 5-16: Internalisation of external costs barge and rail transport ........................... 149
Figure 5-17: Fuel price scenarios ............................................................................. 152
Figure 5-18: Break-even analysis: Fuel prices ........................................................... 152
Figure 5-19: The effect of fuel price increase on modal market area ............................. 153
Figure 5-20: Future terminal scenario without subsidies .............................................. 156
Figure 5-21: Future terminal scenario with subsidies .................................................. 158
Figure 5-22: Container flows analysis from the Port of Antwerp.................................... 160
Figure 5-23: Ratio analysis ..................................................................................... 161
Figure 6-1: Map of Turkey and its neighbours ............................................................ 167
Figure 6-2: Container handlings at the Turkish ports ................................................. 168
Figure 6-3: Modal split in Turkey ............................................................................. 169
Figure 6-4: Core network for Turkey ........................................................................ 171
Figure 6-5: Priority projects: Railways, seaports, terminals ......................................... 172
Figure 6-6: TRACECA network ................................................................................. 173
Figure 6-7: Cargo handling figures at Turkish ports .................................................... 178
Figure 6-8: Container handling figures at Turkish ports ............................................... 178
Figure 6-9: Cabotage container handling at Turkish ports............................................ 179
Figure 6-10: Turkish economic growth and rail transport............................................. 180
Figure 6-11: Freight villages in Turkey ..................................................................... 184
Figure 6-12: Freight traffic in tonnes ........................................................................ 185
Figure 6-13: Freight traffic in ton-kilometres ............................................................. 186
Figure 6-14: Container transport in tonnes and in ton-kilometres ................................. 186
Figure 6-15: Container transport in tonnes and ton-kilometres .................................... 187
Figure 6-16: Network for Turkey ............................................................................. 188
Figure 6-17: Market price functions for Turkey .......................................................... 189
Figure 6-18: Current situation ................................................................................. 190
Figure 6-19: Future scenario ................................................................................... 193
Figure 6-20: Subsidy scenario ................................................................................. 195

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List of tables

Table 2-1: Link between containerisation and intermodalism .......................................... 8
Table 2-2: Link between containerisation and intermodalism ......................................... 15
Table 2-3: Intermodal transport market ..................................................................... 24
Table 2-4: Intermodal terminals in Belgium ................................................................ 34
Table 2-5: Benefits of intermodal transport for stakeholders .......................................... 36
Table 2-6: Environmental impacts linked to the transport sector .................................... 50
Table 3-1: Policy and regulatory framework of the European intermodal transport policy ... 73
Table 3-2: Selected FP projects on intermodal freight transport ..................................... 80
Table 3-3: The COST-Transport Actions ...................................................................... 81
Table 4-1: Overview of publications ........................................................................... 98
Table 4-2: Boundaries of the model set up ................................................................ 104
Table 4-3: GIS analysis and modelling ..................................................................... 111
Table 4-4: Methodological advancement of the LAMBIT model ..................................... 116
Table 4-5: LAMBIT scenarios ................................................................................... 124
Table 5-1: Overview of the subsidy scenarios ............................................................ 131
Table 5-2: Market areas of terminals in terms of the number of municipalities for the barge
subsidy ................................................................................................................ 134
Table 5-3: Market areas of terminals in terms of the number of municipalities for the
different rail subsidy scenarios ................................................................................ 137
Table 5-4: Market areas of terminals in terms of the number of municipalities for the
different subsidy scenarios ..................................................................................... 141
Table 5-5: Marginal average external costs per transport mode from various sources...... 145
Table 5-6: The marginal external costs in €/TEU ........................................................ 146
U

Table 5-7: Market areas of terminals in terms of the number of municipalities for the
internalisation of external costs and the different subsidy scenarios .............................. 148
Table 5-8: Effect of crude oil price increases on diesel fuel prices ................................. 150
Table 5-9: Market areas of terminals in terms of the number of municipalities for the
different fuel price scenarios .................................................................................. 153
Table 5-10: Overview of the new terminal scenarios ................................................... 155
Table 5-11: Market potentials of terminals ................................................................ 157
Table 5-12 Market potentials of terminals for the period 2010-2012 ............................. 159
Table 6-1: Road network in Turkey .......................................................................... 165
Table 6-2: Market areas of terminals: Current situation .............................................. 191
Table 6-3: Market areas of terminals: Future scenario ................................................ 193
Table 6-4: Market areas of terminals: Subsidy scenario .............................................. 196

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List of abbreviations
AoN All-or-Nothing assignment
BTX Benzene and volatile components
CFC Chlorofluorocarbons
CH4 Methane
CO Carbon monoxide
CO2 Carbon dioxide
CTP Common Transport Policy
EC European Commission
ECU European Currency Unit
EIA Energy Information Administration
EILU European Intermodal Loading Unit
ERTMS European Rail Traffic Management System
EU European Union
FEU Forty-foot Equivalent Unit
FP Framework Programmes
GIS Geographic Information System
HC Hydrocarbons
ICF Intercontainer – Interfrigo
ICT Information and Communications Technologies
IFB Inter Ferry Boats
ILU Intermodal Loading Unit
ISO International Standards Organisation
LAMBIT Location Analysis Model for Belgian Intermodal Terminals
MoS Motorways of the Sea
N2 O Nitrous oxide
NARCON National Rail Container Network
NOx Nitrogen oxides
PACT Pilot Actions for Combined Transport
Pb Lead
PETrA Pan-European transport Area
PETrC Pan-European transport Corridors
PFC Perfluorocarbons
PM Particulate matter
PPP Public Private Partnership
Ro-La Rollenden-Landstrassen or Rolling Road
Ro-Ro Roll-on/roll-off
RTD Research and Technological Development
SDI Spatial Data Infrastructure
SF6 Silicon tetraflouride
SO2 Sulphur dioxide
TCDD Turkish State Railways
TDI Turkish Maritime Administration
TEN-T Trans-European transport network
TEU Twenty-foot Equivalent Unit
UIC International Union of Railways
VOC Volatile organic compounds

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1. Introduction
This introductory chapter of the dissertation outlines the
Introduction (1)
background of this dissertation and its research questions.
Intermodal transport First, the main research object is described considering the
in general (2)
current trends in transport. Second, the main research
Intermodal transport problems and questions are discussed. Then the scope of
policies (3)
this research is defined and the research approach is
analysis for Belgium (5)

analysis for Turkey (6)

introduced. Finally, the outline of the dissertation is
GIS-based intermodal
transport model (4)

provided.
Scenario-based
Scenario-based

1.1. Background to the research

It can be argued that transport has evolved along with
humans. Serving a vital role in the economic development,
freight transport is an important component of society at
large. Europe has witnessed a significant growth in freight
Conclusions (7)
transport over the past thirty years, mainly parallel to its
economic growth. The long-term evolution of European freight transport in tonne-kilometres
over a period of thirty-two years, shows a modest increase of inland waterway and vigorous
growth of both continental shortsea shipping and road transport while railway volumes
decrease. Volume of freight transport in Europe increased with 38 percent during the period
between 1995 and 2007 (Eurostat, 2009). Unfortunately, the reflection of this growth on
individual transport modes is not even. Road transport is dominating with a further 46
percent increase.

While transport is capable of offering significant benefits, it also causes many negative
externalities. This situation emphasises the need for transport policies, which are designed
to maximise the benefits and minimise the negative effects of transport. Evolution of the
European transport policies has culminated to a strategy to stimulate a better use of the
existing transport resources and to take better advantage of the different transport modes.
This strategy can only be achieved when there is a balance between transport modes. Hence
intermodal transport plays a pivotal role to obtain balanced transport flows in Europe.

Intermodal transport is the combination of at least two modes of transport in a single
transport chain, without a change of loading unit for the goods, with most of the route

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travelled by rail, inland waterway or ocean-going vessel, and with the shortest possible final
journey by road (ECMT, 2003). Intermodal transport may include various types of transport
modes. In this dissertation, the main focus is on a maritime based intermodal transport
chains which includes intermodal rail and inland waterway transport systems.

There is a relationship between containerisation and intermodalism. In parallel to the growth
in freight transport, there has been a growing use of containers that enabled the operation of
intermodal transport systems. Intermodalism can be built upon two phases. First phase is
the growth of container transport at the maritime side. Freight is containerised and
transported more and more by containers. Consequently the containerised traffic has almost
tripled from the 1990s to the early 2000s. Focusing on the important northern European
ports, an average annual growth rate of 9 percent is seen. The Belgian ports of Zeebrugge
and Antwerp have sustained an average of respectively 11 and 9 percent growth between
1980 and 2008. According to Hayuth (1987), the rise of intermodalism can be considered to
be the second phase of containerisation, which is characterised by organisational changes
resulting in integrated transport concepts (van Klink and van den Berg, 1997). The second
phase of intermodalism can be found at the landside, where containerisation is extended to
the hinterland of the seaports.

Intermodal transport is gaining increased policy attention thanks to the possibilities to lower
costs, decrease the environmental pressure and congestion and by providing an alternative
way to ship containers to the hinterland. Its market is growing the last decades, although, in
absolute numbers of freight transport, road transport is still the most dominant mode for
hinterland traffic. This research looks at the hinterland transport from the seaports. The
enormous growth of maritime containers leads to pressures on the collection and distribution
systems of the seaports. The start up of rail and inland navigation shuttles from the ports to
the hinterland and back made it possible to release this pressure on the ports. In this view
intermodalism can be seen as a further extension of the containerisation on the landside.
Several new inland terminals were started up and a vicious cycle is created between the larger
volumes of containers that need to be handled in the seaport and these satellites in the
hinterland.

Intermodal transport is promoted through policies being addressed at all political levels. The
policy maker’s role in intermodal transport policies is to assure an environment for a smooth
functioning market, maintain a complete and interoperable multimodal transport network
and promote its optimised use to minimise environmental externalities. The intermodal
transport policy in Europe is based on a co-modal approach: the efficient use of different
modes on their own and in combination to achieve a high level of both mobility and

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environmental protection (EC, 2008). Addressed to potential customers, who mainly use
unimodal road transport, policy aims to create awareness of the capabilities and advantages
of intermodal transport.

Policy measures can help to further increase the market share of intermodal transport. Policy
measures may include amongst others, the provision of intermodal infrastructure, research
and development activities, subsidies, charging and pricing policies. Various combinations of
policy instruments or packages can be formulated along the intermodal transport chain. This
requires a close co-operation among the stakeholders in order to create synergies. The
intermodal policy of the European Commission (EC) sets the guidelines for a structured
approach to intermodal freight transport. On the other hand, different transport policies are
launched in the Member States to stimulate the use of intermodal transport e.g. Belgium,
where the transport policy is scattered over different policy levels.

This research will address the intermodal transport policy measures through the main
research question:

What are the impacts of the policies to stimulate the growth of intermodal transport?

In the next section, this background information to the research and the main research
question will be used to derive specific research problems and associated research questions
of the dissertation.

1.2. Research problems and research questions

Policy measures are expected to have an impact on different aspects of the intermodal
system. In Europe, all levels of governments have supported an intermodal freight
transportation policy for several years. Certainly in Belgium, where federal and regional
governments are active in intermodal transport policy formulation, this situation requires a
need for integrated formal ex-ante and ex-post evaluation of these transport policies.

The modal split of containers from the port of Antwerp can be used to illustrate the
development of intermodal transport in Belgium. In looking at the hinterland distribution of
containers, most of them are transported by road (55 percent). Over the last decade, rail
transport and inland waterway transport gained extra market shares. A growth of the
container handled at the terminals can also be observed. In parallel to the intermodal
transport market development, the intermodal terminal landscape in Belgium also evolved
rapidly. Given the scope of this dissertation, the focus is on inland terminals. In total, there
are 19 inland terminals in Belgium at the moment of which there are 12 rail terminals: 6
rail/road terminals and 6 trimodal terminals also offering rail services. There are 13 barge

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terminals: 7 barge/road terminals and 6 trimodal terminals. The inland waterway terminal
landscape in Belgium became very dense due to the introduction of a number of terminals
since the mid 1990s. Over the last decade, several private actors took initiatives to operate
new inland container terminals in Belgium.

It is evident that intermodal transport plays a vital role in the Belgian transport system.
Despite the fact that intermodal transport is gaining increased policy attention, no formal
evaluations of the policy measures are taken in Belgium. One has to question if the policies
are effective and if alternatives are necessary to stimulate the growth of intermodal
transport. The problem is to assess the impact of policy measures on intermodal terminal
landscape. A transport model may serve as a policy assessment framework to make ex-ante
and ex-post assessment of policy measures. The general objective of the research is thus to
develop a geographic information system (GIS)-based intermodal transport policy evaluation
model. The dissertation aims to fulfil the following research objectives:

- To further develop a GIS-based model for assessing policies intended to enhance the
growth of intermodal inland waterway and rail transport. Both intermodal alternatives
have a particular market structure and operations, but it is necessary to analyse them
together in order to avoid any potential distortions of competition.

- During the execution of the research, the complete intermodal transport chain is taken
into consideration. Attention is focused on the impact of suggested policy measures,
taking into account multiple indicators such as total prices for all transport modes, the
market areas of intermodal terminals, modal shift and potential volume of new
intermodal terminals.

- To develop scenarios, based on policy measures in order to investigate the intermodal
terminal landscape.

- To perform ex-ante and ex-post analysis for intermodal transport policies for Belgium
and Turkey. The outcomes of the methodology will be interpreted as policy
recommendations for the decision makers.

1.3. Scope and approach

Transport constitutes a vivid example, where various parties enter into decision making
processes. Usually decision makers and stakeholders try to identify the key factors that
influence the outcome of any action (Hensher and Button, 2000). Considering this purpose,
one can acknowledge the role transport modelling plays in enabling the users to aid their
analysis based on computing technology and a range of software and mathematical

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algorithms. As a very young field in transportation research, a significant number of models
have been and will be developed to address research problems in intermodal freight
transport (Macharis and Bontekoning, 2004).

Macharis developed the LAMBIT (Location Analysis Model for Belgian Intermodal Terminals).
In the beginning, it only focused on the location of inland waterway terminals. The model of
Macharis on the location analysis of Belgian intermodal barge terminals served as a starting
point for this research. Considering the main research question in this dissertation, the
methodology is further developed to explore the relative attractiveness of three
transportation modes including rail (road, rail and inland waterway transport) through a
price (cost) minimisation model. Several scenarios which receive larger attention by the
academic, but also by policy markers and people in the field will be analysed such as the
internalisation of external costs and the fuel price increases. The methodology was also
applied to Turkey in order to see if it is possible to use it in other setting.

1.4. Outline of the dissertation

The dissertation consists of seven chapters. Throughout the dissertation a so-called
“cascading outline box” is used for indicating which core chapter is brought out (Figure 1-1).

Introduction (1)

Intermodal transport
in general (2)

Intermodal transport
policies (3)
analysis for Belgium (5)

analysis for Turkey (6)
GIS-based intermodal
transport model (4)

Scenario-based
Scenario-based

Conclusions (7)

Figure 1-1: The cascading outline box of the dissertation

Source: Own setup

5
Following this introduction, chapter 2 defines intermodal transport systems. It contains a
background description of the intermodal transport systems in general. Once the link
between containerisation and intermodality is established, the chapter clarifies what
intermodal freight transport is. It aims to introduce the concepts that will be used later on in
the model. Chapter 3 presents an overview of the European policy measures that support
the further development of intermodal transport. It aims to establish a link between the
concepts that are explained in chapter 2 and the policy evaluation model. In order to
facilitate a comprehensive understanding of intermodal transport research problems and
theories, a literature review on modelling in intermodal freight transport is presented in
chapter 4. The main aim of this chapter is to lay the foundation for the model and to sketch
its role in solving research problems in this field. Chapter 5 aims to show the possibilities of
the model for analysing different policy measures through a scenario-based analysis for
Belgium. In chapter 6 the methodology is applied to Turkey. It aims to emphasise the
importance of intermodal policy and ex-ante evaluation methodology through various
scenarios for Turkey. This final application chapter of the dissertation shows that the LAMBIT
methodology can be applied to new countries, prescribing future research perspectives for
developing the applications on a European scale. Finally in chapter 7 the main results of the
research are being drawn in order to answer the main research question of this dissertation.
The concluding chapter also aims to formulate recommendations for policy purposes and to
underline an outlook on research implications.

6
2. Intermodal transport in general

2.1. Introduction
Introduction (1)
Intermodal transport was defined in chapter 1 as a
Intermodal transport
in general (2) transport system, which includes various types of transport.
Roson and Soriani characterise intermodality by the
Intermodal transport
policies (3) combination of different technologies into a unified
transport process. Although a variety of transport modes
analysis for Belgium (5)

analysis for Turkey (6)
GIS-based intermodal

like shortsea shipping, inland waterway, rail and even air
transport model (4)

transport are included, intermodal transport has the unique
Scenario-based
Scenario-based

characteristic of performing transport operations as single
integrated processes, where transhipment time and costs
are substantially reduced through an extensive
standardisation (Roson and Soriani, 2000).

This chapter contains a background description and
Conclusions (7) literature overview of the intermodal transport systems in
general. Once the link between containerisation and intermodality is established, the chapter
clarifies what intermodal freight transport is. It aims to introduce the concepts that will be
used later on in the model (see chapter 4).

The outline of this chapter is as follows. In section 2.2 the utilitarian box, container is
introduced. Building block for intermodalism, containerisation and the importance of scale
economies are shown. In section 2.3 intermodal transport systems are described. Detailing
an intermodal transport chain, special attention is addressed to the intermodal terminals in
section 2.4. Section 2.5 and section 2.6 describes in detail the economic, quality and
environmental aspects of intermodal transport. A SWOT (Strengths, Weaknesses,
Opportunities, and Threats) analysis to summarise the market opportunities for intermodal
transport is performed in Section 2.7. Finally, in section 2.8 the conclusions are formulated.

7
2.2. Containerisation

The success of intermodalism depends upon the more general internalisation of standards
that has facilitated globalisation. From this perspective, the dimensions of a sea freight
container can be linked to the technical specifications of the nearly universally available
computer operating systems and office software suites that emerged in the 1980s and 1990s
(Borrus, 2000). The container itself does not explain its importance. The value of a container
is understood by how it is used, namely moving goods from origin to destination at a
minimum cost through a highly automated system. The introduction of containers
contributed to lowering freight charges by improving the port handling efficiency, but the
real outcome of containerisation was a boost in trade flows, with major effects that are even
noticed by the man in the street. Everyday at every major port, thousands of containers
arrive and depart to carry goods that we are depending on (Levinson, 2006).

In chapter 1, the relationship between containerisation and intermodalism was presented,
which is based on two phases. Summarised in Table 2-1, this section introduces the first
phase of containerisation, which focuses on containers and the immediate effects on the
sea-side. First, the concept of a container is defined. Then it is extended to intermodal
loading units (ILU). In parallel to containerisation, the occurrence of economies of scale in
container ships are discussed. Finally, the attention is converged to the seaports, where the
containerisation degree and volumes are presented. In the next section, the land-side
effects of containerisation will be explained.

Table 2-1: Link between containerisation and intermodalism

Containerisation Intermodalism

Standardisation “the box” Intermodal chain

Intermodal loading units Modes and actors

Information and communications
Container ships
technologies
Seaports Intermodal terminals

Source: based on Macharis, 2000

8
2.2.1. A breakthrough with the box

Throughout history, mankind has sailed across the oceans from one land to another. Not
only discovering new places, but also expanding their activities in the sea trade.
Nevertheless shipping goods was not an easy process. The loading and unloading of goods
from ports to ships required a high amount of labour. This slow and troublesome task could
easily force a ship to spend more time in the port. Even compared to the strongest sea
storms, the ship was exposed to high risks of accident, loss and theft in the port.

Aiming for an efficient process and for achieving a smooth, onward movement of goods,
various types of boxes were used before the container shipping industry emerged. From the
late 1920s, the developments in rail transport in the United States also endorsed a need of
containers. However the major breakthrough can be attributed to a trucking executive,
Malcom McLean, who realised that it would be much easier and quicker to move one
container from a vehicle directly on to a ship without first handling its contents. On April, 26,
1956, the Ideal X, a converted tanker sailed from Newark, New Jersey to Houston, Texas.
Carrying 58 metal container boxes on its specially adapted decks. This journey initiated the
container revolution (Levinson, 2006).

The container revolution resulted in a new sub-industry, namely the container manufacturing
and service industry. Containerisation not only resulted in the construction of containers but
it also induced leasing, maintenance and repair to become important businesses.

Acting as a common denominator among units, the same container, with the same cargo,
can be transported with a minimum of interruption via different transport modes during its
journey (WSC, 2009). Meaning that containers could be moved seamlessly between ships,
inland waterway vessels, rail wagons and trucks through a system of intermodalism. In
order to establish a complete intermodal freight transport, a broader perspective of the
logistical chain is considered: not just the containers, but the container ships, intermodal
terminals, trucks and trains would need to be adapted to carry them so that containers can
make their way into hinterland transport (WSC, 2009).

Developments in the containerisation were followed by a need to standardise containers and
container handling equipment. In 1961, the International Standards Organisation (ISO)
reached an agreement to set standard sizes, 20-foot (6.1 metres) and 40-foot (12.19
metres) lengths. The 20-foot long or TEU (Twenty-foot Equivalent Unit) container, is used to
count container traffic and measure ship capacity. The 40-foot long or FEU (Forty-foot
Equivalent Unit) is equal to 2 TEUs. Both containers are 8 feet wide (2.44 metres) and 8.6
feet (2.59 metres) high.

9
The need for greater capacity led to the introduction of larger containers. In the 1980s, 45,
48 and 53-foot containers were used by some ocean carriers in the United States. However,
because of the dimension restrictions in other countries, they were not preferred among
foreign shipping lines. Only the 45-foot container has been accepted by some European
countries. Especially preferred by the European shortsea shipping, these container have an
external width of 2.55 metres, allowing to hold more pallets than an ISO container.

In addition to the standards for dimension, ISO also defines a set of criteria for strength
parameters and transhipment handling systems. ISO containers must be resistant to be
stacked on ships and must be able to be transhipped from the top. An example of a 20-foot
container is shown in Figure 2-1.

Figure 2-1: 20-foot ISO container

Source: VTC container, 2008

Maritime containers are the main types of ILU but other types of units are widely used
especially in the road transport system. Swap bodies, which are not permanently fixed to
the road chassis, are used for intermodal transport by road and rail (Figure 2-2). Two types
of swap body classes exist. Class C, with lengths of 7.15, 7.45 and 7.82 metres and Class A,
with lengths of 12.50 and 13.60 metres. In each class, the swap bodies have a width of 2.55
or 2.60 metres. In Europe, longer Class C swap bodies, which are designed for carriage on
road trains, dominate the market. Most swap bodies are non-stackable although they can be
stored standing on their own legs. The ones with roller systems make them compatible with
shortsea Ro-Ro (Roll-on/roll-off) transport.

10
Figure 2-2: Swap body

Source: Fraconti, 2008

Similar to swap bodies, semi-trailers (Figure 2-3) are also common in the road transport
system. With a length of 13.60 metres, semi trailers are used in long-distance road
transport. Providing more capacity and flexibility compared to swap bodies, semi-trailers are
perfectly compatible with shortsea Ro-Ro transport. However semi-trailers have to meet
certain parameters in order to be used in rail transport. Requiring additional investments to
be liftable, they have higher operational costs. In Europe, only a small percentage of the
semi-trailers are liftable.

Figure 2-3: Semi-trailer

Source: Fraconti, 2008

The variety of ILUs point out the need for reaching a harmonisation of standards for sizes,
weights and other features across modes (COM(1997) 243). In 2003, the EC proposed the
development of a new type of unit: the European intermodal loading unit (EILU). In line with
the general objective of increasing the competitiveness of intermodal freight transport, the
Commission envisaged a framework for a better use of ILUs throughout transport modes.
Compatibility in transhipments is the core characteristic of the EILU, which is a pallet wide
stackable unit, that can also be top-lifted. Promoted as an alternative to swap bodies and
ISO containers, the EILU aims to further integrate road and rail with shortsea shipping and
inland waterway transport at a European level. Facilitating a smooth change, the
Commission’s Directive (COM(2003) 155) allows the use of existing ILU with a length that is

11
compatible with Directive 96/53. The legislative progress for the EILU is still on-going
process (see section 3.2.4.1).

2.2.2. The containership

The first containerships, like the Ideal X, were converted bulk vessels or tankers with a
maximum capacity of 1,000 TEU. Once the experimental container shipping was succeeded
at the beginning of the 1970, the construction of the first containerships (second generation)
started. During the 1980s, containerships also began to grow in length and size. Figure 2-4
summarises the scale growth in containerships, usually in increments of 1,000 TEUs.

Figure 2-4: Six generations of containerships

Source: Rodrigue et al., 2006

Although economies of scale lead to benefits as ship sizes further increase, operational
limitations also exist. The first limitation is on the landside: only a limited number of ports
are able to handle the fifth generation containerships, because these ships require deep
water ports. Furthermore, new containerships need special transhipment equipment in the
ports. Limitations also exist on the maritime side, such as problems for when passing
through the Panama canal. Today, containerships with 5,500 to 6,000 TEU capacity are the
most flexible ship type, serving a variety of ports. Meanwhile, developments in larger ships
continue. In 2006, a new class of 14,500 TEU containership was introduced. Technological
advancements are also observed in engines, increasing the average speed of containerships
up to 25 knots. Energy consumption and high fuel prices constitute a limit for further
increases in containership speeds.

12
Marchese et al. (1998) studied the role for ports in intermodal transport and global
competition by means of a survey of Italian container terminals. Analysing the economies of
scale of the ship, they underline the importance of productivity in port operations, which has
a negative correlation with the period of stay of the ship.

2.2.3. Global containerisation

The growth of container traffic follows the logistics curve, which is “S” shaped. Four stages
in its development are observed. Introduction of containers in the late 1960s to 1970s is
followed by its adaptation till the 1990s, when the containers became a transport product
and containerisation gained impetus. Figure 2-5 shows the growth of world container traffic.
It can be argued that the container traffic maintained its growth stage, especially over the
last decade. Linked to the trends in the global economy, the container traffic will enter
maturity as from 2010 (Rodrigue et al., 2006). In their 2005/06 Container Market Review,
the Drewry Shipping Consultants indicated a solid growth of container activity, reaching 400
million TEU. Growth of international trade, particularly with the entry of China in the global
economy and hinterland distribution of containers, help to explain the surge in container
traffic.

700

600

500
Million TEU

400

300

200

100

0
1990 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

East Asia Americas Europe/Med Mid East/Southasia, Africa, Australasia/Oceanica

Figure 2-5: World container traffic

Source: Ocean Shipping Consultants and Drewry, 2006

A similar trend is also observed in the European ports. Focusing on the important northern
European ports, an average annual growth rate of 9 percent is seen. The Belgian ports of
Zeebrugge and Antwerp have sustained an average of respectively 10 and 9 percent growth
between 1980 and 2008.

13
12

10

8
Million TEU

6

4

2

0
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08

Hamburg Rotterdam Antwerpen Zeebrugge

Figure 2-6: European container traffic growth

Source: Own setup – data based on the statistics of the Antwerp port authority

2.3. Intermodal transport systems

Growing use of containers enabled the operation of intermodal transport systems (Magee et
al., 1985; Norris, 1994). In section 2.2 the growth of container transport at the maritime
side was explained. As mentioned in chapter 1, the second phase of intermodalism is found
at the landside, where containerisation is extended to the hinterland of the seaports.
Referring to Table 2-2, this section will introduce intermodal transport systems. First, a
definition of intermodal transport will be given. Once the intermodal transport chain is
depicted, transport modes and actors in intermodal transport are explained. Next, attention
will be paid to the organisational contribution of information and communication
technologies.

14
Containerisation Intermodalism

Standardisation “the box” Intermodal chain

Intermodal loading units Modes and actors

Information and communications
Container ships
technologies
Seaports Intermodal terminals

Table 2-2: Link between containerisation and intermodalism

Source: based on Macharis, 2000

2.3.1. Defining intermodal transport

Bontekoning, Macharis and Trip (2004) assert that intermodal freight transportation
research is emerging as a new transportation research application field (Bontekoning et al.,
2004). Intermodal transport is a complex system that has unique characteristics that
distinguish it from other transport systems. The development of the intermodal freight
transport sector is followed by an increase in a myriad of academic research. Despite the
prevailing interest on intermodal transport, a common definition of intermodal transport
does not exist. The characteristics of intermodal transport will enable us to formulate a
definition. Based on the multimodality characteristic of intermodal transport an intermodal
transport system can be defined as the transportation of goods involving more than one
mode of transport during a single seamless journey. This is called the multimodality
characteristic of intermodal transport. Another distinctive characteristic of intermodal
transport is the use of an ILU. The European Conference of Ministers of Transport defines
intermodal freight transport as the “movement of goods in one and the same loading unit or
vehicle which uses successive, various modes of transport without any handling of the goods
themselves during transfers between modes” (ECMT, 2001).

In its policy, the European Union (EU) positioned itself in favour of intermodal transport as
an alternative to road transport. A slight change in the perception of intermodal transport
has taken place in 2006 with the introduction of co-modality. Instead of promoting a modal
shift from unimodal road (road-only) transport, the new notion enables to exploit
advantages of each transport mode. From a broader policy perspective, co-modality will also
aim at gradually uncoupling economic growth and transport growth. See chapter 3 on
European intermodal transport policy.

15
In this dissertation, intermodal transport is defined as the combination of at least two modes
of transport in a single transport chain, without a change of loading unit for the goods, with
most of the route travelled by rail, inland waterway or ocean-going vessel, and with the
shortest possible final journey by road (ECMT, 2003).

2.3.2. Intermodal transport chain

Figure 2-7 describes an integrated intermodal transport chain, which can be divided into
three distinct operations: drayage, transhipment and main (long) haulage. Drayage, usually
done by road transport, exists in two ways. Pre-haulage is the transportation of goods from
the origin to an intermodal terminal and post haulage consists of the transportation of goods
from an intermodal terminal to the final destination. Transhipment takes place in the
intermodal terminals, moving the ILU from a truck to a wagon, inland waterway vessel or a
shortsea ship and vice-a-versa. Finally, the main haulage between intermodal terminals is
done by rail, inland waterway or shortsea shipping. Higher capacity and energy efficient
transport units provide economies of scale in the main haulage.

Figure 2-7: Intermodal transport chain

Source: Own setup

2.3.3. Transport modes

Intermodal transport systems include a variety of transport modes like shortsea shipping,
inland waterway, rail and air transport. Road transport is used only in pre - and post -
haulage. Given the growing volumes of maritime containers transhipped, the seaports
represent an ideal starting point to stimulate intermodal transport (Klink and Berg, 1997).
Development of intermodal transport not only enables an extension of the hinterland
potential of seaports but also contributes to improving the efficiency of the transport system.
Therefore, combination of the strengths of the transport modes serves as a threshold to
build integrated intermodal transport systems (Marchal, 1995). In this section, a brief
overview of transport modes is given.

2.3.3.1. Shortsea shipping

In Europe, shortsea shipping is used to transport maritime containers with feeder services.
The EC’s policy towards creating “Motorways of the Sea” (MoS) aims to eliminate

16
infrastructural obstacles and bottlenecks, including the formulation of intermodal interfaces
(see chapter 3). Shortsea shipping in Europe is mainly international between countries but
domestic services and sea-river shipping is also possible. The European shortsea ships have
capacities between 200 and 800 TEU. Multipurpose shortsea ships enable to transport
containers with a high degree of flexibility.

Ro-Ro ships provide intermodal services to transport cargo such as automobiles, trucks,
semi-trailer trucks, trailers or railroad cars. Variations of Ro-Ro ships also exists. Ro-Pax
combines freight and passenger ferry functions and the ConRo ship is a hybrid between Ro-
Ro and a container ship (Figure 2-8). Ro-Pax ships, which have a lower capacity, allow the
truck drivers to accompany their vehicles. A European Ro-Ro ship has a capacity between 80
and 150 semi-trailers.

Figure 2-8: Container Ro-Ro ship

Source: Container Handbook, 2008

Marchese et, al. (1998) indicate the potential of Ro-Ro systems in rapid processing of cargo
units in ports. Although requiring high fixed investment costs, the Ro-Ro transport enables a
decentralisation of port operations. Compared to a big containership, a Ro-Ro ship can
achieve higher frequencies of stays in a port, resulting in an acceleration of the inflow and
outflow of cargo units in port are accelerated.

2.3.3.2. Inland waterway transport

Inland waterway transport can be defined as a transport mode which combines high mass
transport capacity with low operating costs, an average predictability and good traffic safety.
However it is limited in terms of speed, network development potential and frequency of
service (ECMT, 1999).

More than 35,000 kilometres of waterways, of which half is accessible to 1,000t vessels,
connect many European cities and regions. 20 out of 27 Member States have inland
waterways but only 10 of them have an interconnected waterway network (EC 2008).

The main network is fed by a network of smaller waterways to form a very dense transport
network, which provides a competitive transport system for the hinterland. The inland
waterway network in Europe consists of four main corridors: North-South, East-West, South-
East and Rhine corridor.

17
The inland waterway network is also linked to shortsea routes, resulting in a complete
European waterways system that covers almost all destinations from East to West and North
to South.

Although many inland waterway barges have multi-purpose properties, recently specific
container barges have been built. Trends in container ships had a spread effect on the inland
waterway vessels. Figure 2-9 shows the different types of inland waterway vessels based on
their dimensions and capacities. Traditionally, most of the vessels in Europe have a capacity
of around 90 TEU. Since the 1990s, 200 TEU vessels began to operate on European
waterways. Today, convoys consisting of a self-propelled barge coupled with push barges
are also used to maintain higher capacities in excess of 500 TEU (Vrenken et al., 2005).
JOWI-class ships are specifically designed for container transport but their size is suitable
only for the Rhine region. On the other hand, specific container vessels are designed to
serve smaller waterways. 63 meter long, the Neo Kemp has a capacity of 32 TEU to be
employed on smaller waterways.

Figure 2-9: Inland waterway vessels

Source: Promotie binnenvaart, 2008

2.3.3.3. Rail transport

The European rail network is very dense because of geographical topology. Historically
controlled by national governments, the European railways faced a declining trend in the
modal share. A key obstacle for the further integration of rail markets, is the organisation of
rail systems along national lines, leading a lack of interoperability. Another problem is the
competitiveness of the railway undertakings in attracting and maintaining their customers.

18
Nevertheless, revitalised railways in Europe provide high potentials for the integrated
intermodal transport systems.

Intermodal railway transport is conducted by wagons and locomotives, which are diesel or
electric. Containers and swap bodies are transported on flat wagons. The wagons have a
capacity of 3 or 4 TEU or Class C swap bodies. Low-bed wagons allow semi-trailers to be
lifted. Several other railway wagons are also designed to use Ro-La (Rollenden-Landstrassen
or “Rolling Road”) although to a lower extent.

2.3.4. Actors in intermodal transport

A typical intermodal transport chain consists of road drayage, rail, shortsea or inland
waterway transport, independent companies handling transhipment at either side of the
main haul and an intermodal operator integrating all these activities. The customer may be
the shipper, the owner of the cargo, but often intermediate companies such as freight
forwarders, shipping liners or other logistics service providers are also involved. In
intermodal transport, different logistics chain configurations may involve different types of
actors, or actors of the same types but playing different roles. In order to describe
intermodal transport, the roles of each player should be defined (Vrenken et al., 2005).

Users of intermodal transport - the demand side - include shippers, forwarders, ocean
shipping lines and logistics service providers. Shippers initiate the movement of cargo
between locations directly or by means of contracts on their behalf. Intermodal transport
services are optimised by freight forwarders on behalf of shippers. As described in section
2.2, maritime transport, and more in particular ocean shipping lines, can be found at the
demand side in the hinterland maritime container shipment segment. Furthermore, logistics
service providers offer a wide range of services such as warehousing in order to ensure
cargo is available on time for the customers.

On the supply side, terminal, rail, inland navigation, shortsea, road and intermodal transport
operators are seen. Operational organisation places terminal operators in the core of the
intermodal transport chain because of their role in transhipping ILUs between the main haul
and drayage. Transport operators handle the movement of the loading units between
terminals via rail, inland waterway or sea routes respectively and road transport operators
arrange the local transportation of cargo from origin and destinations. Offering door-to-door
or terminal-to-terminal transport, intermodal transport operators procure transport and
transhipment services. In addition to these purely commercial market players, the public
sector can also be included at the supply side of intermodal transport. Infrastructure
managers, port authorities, regional and national public authorities and international

19
institutions contribute to making the best possible use of infrastructure and provide an
environment to encourage intermodal initiatives. The roles to be played at the supply side of
intermodal transport are complementary: Each player has to contribute to be able to
produce an intermodal transport service.

Intermodal transport systems assemble a complex web of actors. Figure 2-10 represents a
rail-based intermodal chain, where 13 individual actors can be detected. Additional actors
such as container and locomotive leasing companies, freight forwarders and 3PLs (third-
party logistics providers), real estate owners and public authorities can also be added.
Transportation between two countries (one border) and only two modes (road and rail)
make this sketch a simplified one.

Figure 2-10: Intermodal actors

Source: Savy, 2007

Today, specialised companies fulfil various activities involving more than just one of the
actors. Vrenken et al. (2005) define an intermodal transport market with six key segments,
where different actors are involved.

- The carrier haulage market. The shipper carries out and manages the hinterland
transport. In order to gain hinterland access, the largest ocean shipping lines often
participate in major seaport terminals. Ocean lines aim to optimise an integrated door-
to-door transport chain. Some lines also have shares in inland terminals to serve the
hinterland efficiently. Examples include the participation of Maersk by its sister
company APM and shares of Hapag Lloyd in CTA seaport terminals in Hamburg. In
carrier haulage, shuttles are designed to conduct dedicated transport services by rail or

20
inland waterway that maintain uninterrupted services between origin and destination
(van Klink and van den Berg, 1997).

- The merchant haulage market. The carrier holds the responsibility for the whole
door-to-door transport. Shippers, forwarders or logistic service providers connect the
seaports with the hinterland. More players are involved with the aim of access to
seaport terminals, compared to the carrier haulage market. Forwarders and logistic
service providers interact with the inland navigation or shortsea shipping.

- Seaport terminal market. Since the mid 1990s, concentration in the seaport
terminals in Europe is observed. Many of the largest container terminals are part of
global consortia, such as PSA, P&O, Eurogate and Hutchison Port Holdings. These
networks make it easier to integrate transport chains on a global scale. The network of
seaport terminals offer advantages of flexibility, productivity, management and ICT
(Information and Communications Technologies) development. According to Phillips
(1993), the deep sea container market has become very competitive. Therefore land
services from origin to the seaport or from a seaport to an inland destination have
become a critical factor in maintaining a market edge for global container lines, making
that seaports terminals are positioned in the core of organising efficient hinterland
services.

- The railway operator market. The historical characteristics of the European railways
imply a role for national railways in the hinterland distribution of maritime containers.
The national railway companies founded ICF (Intercontainer – Interfrigo), which serves
as an international network. In addition, subsidiaries of the national railway companies
serve the domestic hinterland, such as IFB (Inter Ferry Boats) in Belgium.
Liberalisation of the railway sector enabled new railway companies and intermodal
transport operators to enter the market.

- The continental shortsea market. Ro-Ro or container operators provide shortsea
shipping services in Europe. Although most of the companies focus on shortsea
shipping, only the door-to-door transport operators are being formulated.

- The continental rail-road transport market. In 1970, rail and road companies
elaborated the International Union of Combined Transport operators (UIRR). Offering
international combined transport services, UIRR companies provided rail access to road
operators.

21
2.3.5. The role of information and communications technology

Information flows and the availability of real-time data have pivotal roles in solving a wide
range of transport problems. The capacity to provide real-time information is heavily
dependent on the availability and use of ICT, which transport planners use to control the
intermodal chain (Vanroye and Blonk, 1998). The role of ICT in the intermodal chain
includes:

- Infrastructure and traffic management

- Tracking and tracing of ILU

- Administration

- Optimisation of operations

An application of ICT in intermodal transport is the design of a virtual transport chain, where
the roles of different actors of the intermodal chain are defined. Simulations of the transport
chain would enable users to identify inefficiencies and thus to introduce measures to
optimise the intermodal transport chain.

2.3.6. Intermodal transport market

Over the past thirty years, a significant growth in freight transport has been sustained in
Europe, mainly parallel to its economic growth. Beuthe (2007) points to the long-term
evolution of European freight transport in tonne-kilometres over a period of thirty-two years,
which shows a modest increase of inland waterway and vigorous growth of both continental
shortsea shipping and road transport while railway volumes decrease.

Considering the period between 1995 and 2007, volume of freight transport increased with
38 percent (Eurostat, 2009). This growth is unevenly distributed among individual transport
modes. As seen in Figure 2-11, road transport is dominating with a 48 percent increase. The
increase in market share of road transport is explained by its growth rate above the growth
rate of total freight transport. In this section, the current status of the intermodal transport
market is shown. For each intermodal market segment, characteristics of the market and its
evolution are given. This section concludes by providing an overview of the market
environment of intermodal transport systems.

22
billion tkm
2200

2000

1800

1600

1400

1200

1000

800

600

400

200

0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Road Sea Rail Inland Waterway

Figure 2-11: Performance by mode for freight transport

Source: Eurostat, 2009

Throughout its development, intermodal transport has been facing various obstacles to fully
compete with mature unimodal road transport. The economic benefits of intermodal
transport, which will be discussed in Section 2.5, appear more often on longer distances
(Reynaud, 2003). The European integration offers a great potential for a further growth of
intermodal transport, as a result of the elimination of borders in the EU and a dramatic
increase of trade between Member States. In reality, the development of intermodal
transport is to date much lower than expected.

Complexity within the intermodal transport chain also exists in the intermodal market
structure, making it difficult to obtain and compile data to predict the overall market figures
for intermodal transport. According to Savy, 5 percent of total freight in Europe is done by
intermodal transport (Savy, 2007). The EC also indicates a 5-6 percent range for intermodal
transport (Vanderhaegen, 2009). Representing only a small portion of the total freight
transport, intermodal transport takes up an important share within specific corridors,
particularly in the North-South corridor (Alpine traffic for rail transport) and the modal split
in the seaports. Serving mainly international routes (60 percent), intermodal transport
constitutes a market for niches.

Referring to the intermodal market segments that is defined in section 2.3.5, intermodal
transport demand in Europe can be analysed as shown in Table 2-3. Hinterland traffic leaves
from the seaports. Therefore it is linked to the carrier and merchant haulage market.
Intermodal transport establishes a network between seaports and inland terminals. Three

23
segments of hinterland services are shortsea shipping, inland navigation via inland waterway
terminals and rail transport via rail terminals. On the other hand intra-European trade and
international production systems require continental traffic, which is conducted by shortsea
shipping through the MoS and continental intermodal rail transport.

Table 2-3: Intermodal transport market

hinterland traffic continental traffic

shortsea shipping 1 4

inland navigation 2

rail 3 5

Source: Vrenken et al., 2005

2.3.6.1. Shortsea shipping market

Following an annual average growth rate of 3.2 percent, shortsea shipping has obtained an
important share in European freight transport, almost 43 percent in 2006 (Beskovnik, 2006).
The ports in the Hamburg – Le Havre Range and the United Kingdom provide shortsea
feeder traffic for the ports in the Baltic Sea, the North Sea and the Mediterranean Sea.

Ro-Ro throughput reached 415 million tons in 2005 (ESPO, 2007). The largest Ro-Ro ports
include Dover, Calais, Zeebrugge, Lübeck, Immingham, Rotterdam, Trelleborg and
Göteborg. Especially in the Northern port range, the market for unaccompanied freight
transport by shortsea is growing and container transhipments are expected to increase.
However, the North-South market faces a severe competition with road transport. This
situation emphasises the importance of the MoS programme of the EC.

2.3.6.2. Inland waterway transport market

Inland waterway plays an important role in connecting the hinterland with seaports for
transporting containers. 5 percent of the Europe freight transport is done by inland
navigation. Due to the natural characteristics of inland waterways there are certain
limitations such as width, depth and bridge heights of a waterway. Although only a small
part of Europe is served by such waterways, opportunities exist for inland navigation. Except
for high value or perishable goods “hot boxes”, which require rapid pick up and delivery,
most containers can benefit from the economies of scale in the inland waterway network
(Charlier and Ridolfi, 1994).

24
Inland waterway transport is strongly related to the container transport. More than 30
percent of the sea tonnage is carried to the hinterland by inland navigation from two major
European container ports, Antwerp and Rotterdam. Figure 2-12 presents the transport flows
generated by containers in 2007. In France, an increase of 10 percent is observed,
especially in the Seine Basin area (+30 percent). This growth is mainly due to the increase
of the automobile production industry in this region. The map shows that container traffic is
densest on the Rhine area.

Figure 2-12: Transport flows generated by inland navigation

Source: CCR-ZKR, 2008

In 2007, 141 billion ton-kilometres of freight were transported by inland waterway
(Eurostat, 2009). Over the last decade, an average annual growth rate of 1.2 percent is
maintained although a stagnation is observed for the last three years.

Belgium represents a unique country with a satisfactory performance in inland waterway
transport. In 2008, more than 6.6 billion ton-kilometres was transported on the Belgian
waterways. Figure 2-13 shows an increasing trend for both the Flemish and Walloon

25
waterways between 1997 and 2004, when a peak point was reached. The slight decrease in
2005 is followed by an increasing trend until 2008.

7000

6000

5000
Million tkm

4000

3000

2000

1000

0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Flemish waterways Walloon waterways

Figure 2-13: Total of ton-kilometres on the Belgian waterways

Source: Own setup - data based on the statistics of PBV and OPVN

When looking at the container transport in inland waterway, there is also an increasing trend
in the number of TEU transported (see Figure 2-14). Especially the 38 percent increase in
2004 is impressive. In Flanders 507,769 TEU was transported in 2008.

600

500

400
Thousand TEU

300

200

100

0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Figure 2-14: Evolution of the number of TEUs on the Belgian waterway terminals

Source: Own setup - data based on the statistics of PBV and Lloyd

2.3.6.3. Rail transport market

The modal share of rail transport in the European freight transport is 17 percent. Intermodal
transport constitutes 25 percent of railway transport expressed in ton-kilometres (CNT,
2005). The northern seaports of Hamburg, Bremen, Rotterdam and Antwerp are linked to

26
the hinterland regions in Southern Germany, the Alpine countries and Northern Italy. The
domestic market of intermodal rail transport exist mainly in France, Germany and Italy.

Figure 2-15 presents the concentration of rail transport on a European map based on UIRR
companies. More than half of the total intermodal rail transport takes place over the Alpine
corridors between Italy and Germany. In line with the European rail traffic management
system 1 and the corridor approach of the EC, which focuses on strategic international axes,
other routes via the Alps to Benelux and France are also seen.

Figure 2-15: Transport flows generated by railway

Source: UIRR, 2005

The available data on intermodal rail transport is shown in Figure 2-16 and Figure 2-17. In
Figure 2-16, the International Union of Railways (UIC) indicates an increasing trend for the
European intermodal rail traffic. UIRR firms also report a similar trend (see Figure 2-17). In
2008, the total UIRR traffic reached the level of 6.0 million TEU. Two-thirds of this traffic is
international and one third is national transport.

1
The 6 ERTMS corridors: A (Rotterdam-Genoa), B (Stockholm-Naples), C (Antwerp-Basle-Lyon), D (Valencia-Lyon-
Ljubljana-Budapest), E (Dresden-Prague-Budapest), F (Duisburg-Berlin-Warsaw).

27
75

70
Million tkm

65

60

55

50
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Figure 2-16: European intermodal rail traffic: Total UIC traffic

Source: UIC, 2009

7

6

5
Million TEU

4

3

2

1

0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

international national

Figure 2-17: Combined transport traffic: Total UIRR traffic

Source: Own setup - data based on the statistics of UIRR, 2009

With the aim of creating an integrated European rail freight market, the EU legislation lead
to the complete opening of the rail freight market to competition by 2007. Today, over 700
licences are issued in the Member States and a significant increase on the railway transport
can be observed in the Member States which already opened their markets. Furthermore,
European enlargement also created a market for new intermodal services, so that
intermodal rail transport is expected to grow even further.

Focusing on Belgium, a trend of increase, from 1997 to 2001 is followed by a decline until
2004 (see Figure 2-18). In 2004, national intermodal rail transport services has been set up

28
with the Narcon, the National Rail Container Network, connecting the Port of Antwerp with
several inland terminals. During the last five years, Narcon realised 731,239 TEU.

350

300

250
Thousand TEU

200

150

100

50

0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Rail all Narcon

Figure 2-18: Evolution of the number of TEUs on the Belgian rail terminals

Source: Own setup - data based on the statistics of IFB and TRW

2.4. Intermodal terminals

Intermodal terminals, enabling a transhipment from one mode to another, play a pivotal role
in the intermodal transport chain. Using the container handling equipment and ICT,
intermodal terminals aim to achieve efficient operations both in the seaports and inland
terminals. Intermodal terminals serve as a place where ILUs are collected, exchanged,
stored and/or distributed. The handling operations may include the same transport mode or
two different transport modes.

Wiegmans et al. (1998), describe and analyse the freight terminal market with the help of
Porter’s model of five competitive forces. Two groups of industry competitors exist in the
terminal market. The first group consists of terminal owners who are not providing the
terminal services by themselves. In general, a terminal ownership includes publicly owned
terminals, privately owned terminals and a PPPs. The second group of industry competitors
consists of the terminal operators who provide terminal services. These terminal operators
provide central terminal services such as loading and unloading, transhipment, storage and
cargo groupage. In addition to these central services, a terminal can offer freight handling,
monitoring, intelligent transportation systems and physical transport of freight.

Muller lists three important characteristics of a good terminal: location, access and
infrastructure (Muller, 1999).

29
- Location. Traditionally, terminals were located in function of geography and
population, but when terminals are located near larger cities, they incur higher costs
such as real estate and congestion costs. It is the main focus of this dissertation to
develop an assessment framework for the analysis of the impacts of intermodal
transport policies on the terminal landscape.

- Access. In order to provide integrated intermodal services, an intermodal terminal has
to offer easy access and facilities for at least two modes of transport.

- Infrastructure. Intermodal terminals are used to handle, stack and tranship ILU to
and from other transport modes. Gantry cranes are used to conduct ship-to-shore
handling. Portal cranes and mobile equipment such as reach-stackers and fork-lifts are
commonly used in intermodal terminals. Tractors and roller systems are used to move
semi-trailers and swap bodies in Ro-Ro terminals. There is a continuous need to
improve infrastructure due to the growth in containerisation. Larger container cranes
and container storage areas are required. Furthermore, deeper berths are necessary to
serve larger ships.

Many characteristic measurements are used to describe the types of intermodal terminals
(Wiegmans et al. 1998). Terminals can be categorised according to their capacity, the
availability of transport modes, the terminal operating time, the terminal size, the loading
units and the number of cranes.

The characteristics of freight flows can also be used to define four types of intermodal
terminals:

- Bulk terminal. These are terminals located in the ports where large volumes (bulk)
and global freight connections take place. Large freight flows are transported further
into smaller flows from the bulk terminal by inland waterway, railway or shortsea
shipping. A point-to-point bundling model is applicable in bulk terminals.

- Transfer terminal. These terminals that are exclusively aimed at transhipping
continental freight. Large freight flows pass through the terminal but there is no
drayage taking place. Direct transhipment is established between trains and or inland
waterway vessels. A hub-and-spoke network bundling model is preferred in a transfer
terminal.

- Distribution terminal. Value added services are performed in a distribution terminal.
The continental freight at the terminal is consolidated into shipments for individual
customers. Placed as a buffer in the supply chain, warehousing and cross-docking

30
services are done in the distribution centres, where further transportation can be done
by domestic containers or pallets. Road transport plays a prominent role in these
terminals. A line network bundling model and intelligent transport systems are applied
in a distribution terminal.

- Hinterland terminal. These terminals serve the hinterland by means of the trunk line
bundling model with a collection and distribution network. Large transport flows are
further splitted up into smaller shipments and distributed locally.

Figure 2-19 shows the two major types of intermodal terminals based on their location
(Rodrigue et al., 2006):

- Port terminals. Maritime containerisation lead to intermodal terminals with higher
volumes. Terminals located on the seaports handle containers for a hinterland
distribution. The growth of long distance maritime container shipping has also lead to
offshore hub terminals.

- Inland terminals. This type of terminals is most interesting to research given the
scope of this dissertation. The inland waterway terminals gained impetus as a result of
the containerisation of inland navigation. Inland rail terminals also offer connections
from the seaports. Inland terminals can provide added logistical services or serve as a
freight village for the industry that is located in proximity.
Port Terminals

Container sea terminal Offshore hub
Inland terminals

Rail-road, inland waterway or trimodal terminal
Figure 2-19: Types of intermodal terminals

Source: adopted from Rodrigue et al., 2006

31
Intermodal transport has a European dimension with frequent international transport flows
within the European territory. The enlargement and the globalisation of economy will lead to
a further development of international flows. In 2005, the European study ISIC (Integrated
Services in the Intermodal Chain) provided valuable information for the Commission to
successfully prepare and implement the actions that have been described in the Freight
Integrator Action Plan. One of the main objectives of this study is to develop a system for
improving the quality of intermodal terminals. The quality of services at the terminals will
improve the efficiency of the operations, which leads to higher quality and lower costs of the
whole intermodal transport chain. Based on the quality indicators, a quality label and
benchmark system for terminal operations is aimed for. Furthermore a standardisation of
the terminal practices, including equipment and systems, is proposed.

The ISIC study counted a total number of 725 terminals on the European intermodal
network. The study defines an intermodal terminal as “a place equipped for the
transhipment and storage of intermodal transport units” (ISIC, 2005). 65 percent of the
intermodal terminals are rail and 15 percent are inland waterway. Container terminals in the
seaports represent a share of 20 percent.

Figure 2-20 graphically shows the location of the terminals for intermodal transport at a
European level. Bimodal terminals are represented as triangles, and trimodal terminals as
circles. Rail terminals (red triangles and pink circles) form a very dense network particularly
in the Benelux, Germany and Northern Italy. Terminals using inland navigation (green
triangles and pink circles) are concentrated in the Rhine-Scheldt delta (Benelux and West
Germany). Compared to rail terminals, inland waterway terminals are available in only a
limited number of European countries.

32
Figure 2-20: Overview of intermodal terminals in Europe 2003

Source: NEA, 2006

In Belgium, the intermodal terminal landscape for intermodal terminals followed a different
evolution for rail and inland waterway (barge) terminals. Table 2-4 summarises the
intermodal terminals in Belgium. In total, there are 19 terminals in Belgium of which there
are 12 rail terminals: 6 rail/road terminals and 6 trimodal terminals also offering rail
services. The terminal landscape has been quite stable over the years. The two intermodal
rail operators TRW and IFB dominate the intermodal rail market in Belgium by operating
national and international services from the terminals. In the past, some terminals were
closed and changes within the port of Antwerp had been observed. Today, a collection
distribution system is set up via the main hub in Antwerp, which connects the port quays
and serves the inland terminals. The main hub also provides shuttles to the port of
Zeebrugge. For international routes, specialised direct trains are scheduled.

Inland waterway terminals tell a completely different story. There are 13 barge terminals: 7
barge/road terminals and 6 trimodal terminals. Over the last decade, several private actors

33
took initiatives to operate new inland container terminals in Belgium. The inland waterway
terminal landscape in Belgium became very dense due to the introduction of a number of
terminals since the mid 1990s.

Table 2-4: Intermodal terminals in Belgium

Year Name Municipality Type
1979 Terminal Container Athus Athus Rail/Road
1991 Avelgem Container Terminal Avelgem Barge/Road
1994 Dry Port Muizen Muizen Rail/Road
1995 Euroterminal Genk Genk Rail/Road
1996 Water Container Transport Meerhout Trimodal
1997 Dry Port Mouscron / Lille International Moeskroen Rail/Road
1999 Haven Genk Genk Trimodal
2000 Trimodale Container Terminal Willebroek Trimodal
2001 Compagnie Française de Navigation Rhénane Brussels Trimodal
2001 Cargovil Container Terminal Grimbergen Barge/Road
2001 Gosselin Container Terminal Deurne Barge/Road
2002 Liège Logistics Intermodal Bierset Rail/Road
2002 Intermodal Platform Gent Gent Barge/Road
2002 Terminal E.C.E. Renory Trimodal
2003 Terminal BATOP Herent Barge/Road
2004 Delcaterminal Kortrijk Rail/Road
2004 River Terminal Wielsbeke Wielsbeke Barge/Road
2005 Transport Gheys Mol Barge/Road
2007 Charleroi Logistics Center Charleroi Trimodal

Source: Own setup

Although most of the terminals offer daily services to the ports of Antwerp and Rotterdam,
some of them have a small scale such as BATOP, which is located between Herent and
Antwerp. BATOP serves only one customer, the malting company Cargill. Gheys in Mol is
also a small scale terminal focusing on providing logistics services to the chemical sector in
the region.

Figure 2-21 indicates a concentration of terminals near the Flemish waterways. At the
moment, new terminals are planned for Wallonia. In 2007, the terminal in Charleroi opened,
however it is not offering regular container services yet. In Chapter 5, special attention is
paid to the Belgian intermodal terminal landscape, including perspectives for the future.

34
Figure 2-21: Intermodal terminal landscape in Belgium

Source: Own setup

2.5. Benefits and costs of intermodal transport

Intermodal transport has a pivotal role in proving that both economy and environment can
grow in harmony thanks to an integrated transport system. Aiming to establish a delicate
balance between economy, environment and society, intermodal transport has a potential to
offer substantial benefits for its users and for the society at large.

The intermodal stakeholders are defined as shippers of freight, intermodal transport
operators, intermediaries in logistics and public authorities as well. Table 2-5 contains the
benefits of intermodal transport for the different stakeholders. All actors involved in
transportation are expected to benefit from intermodal transport systems.

35
Table 2-5: Benefits of intermodal transport for stakeholders

Stakeholders Expected benefits
Shipping companies Development of a new product and entering in new markets
(earnings & employment).
Existing shippers Lower transport costs, more transport
opportunities/alternatives, greater reliability and safety.
Potential shippers Better access to market, opening of new markets, more
transport opportunities/alternatives, lower logistics costs.
Railways Potential growth of market and segments where competition
with road transport can be succeeded.
Road companies Improved economics, greater flexibility for drivers
operations (within constraints of prevailing driving and
resting regulations).
Forwarding industry Greater range of transport opportunities/alternatives, lower
costs (earning & employment).
Intermodal operators Improved economics, more transport alternatives, lower
costs (earnings & employment).
Authorities, Additional business opportunities/alternatives, enabling
policy makers and limitation/control of traffic congestion and dangers, emission
the society at large of hazardous materials and energy use. Increased
competition, offering cost-effectiveness (and accelerated
introduction of market principles).

Source: Palšatis and Bazaras, 2004

Based on the table, benefits of intermodal transport can be grouped as:

- Creates cost and operating efficiencies

- Improves global accessibility

- Provides increased options and new services for a niche market

- Utilises the inherent advantages of transport modes

- Minimises the impact of transport modes’ disadvantages

Benefits and costs of intermodal transport are discussed in relation to the following three
themes; economic, quality and environmental aspects. This section presents economic and
quality aspects of intermodal transport and section 2.6 discusses its environmental aspects.

36
2.5.1. Economic aspects of intermodal transport

Panayides (2002) aims to review the developments in intermodal transport and considers
various approaches for the economic organisation of intermodal transportation. The
economic aspects contribute to the economic viability and competitiveness of intermodal
transport. Considering the intense competition in the European shipping and logistics sector,
governments intervene to regulate and prevent anticompetitive forces and regimes.
Furthermore, there is a need for economic efficiency and for satisfaction of growing
consumer demands (Panayides, 2002).

Cost is one of the most important criteria in defining the competitiveness of a service. In the
transport sector, including intermodal transport, providers aim to offer services that
contribute to reducing the total logistics costs. In order to apprehend the benefits of
intermodal transport, it is necessary to study the critical cost items. This will allow to
perceive the intermodal transport cost structure and the break-even concept. Intermodal
transport plays a vital role in improving the cost efficiency.

2.5.1.1. Intermodal cost structure

As several types of transport are included in an intermodal transport chain, a variety of
transport activities are involved in the intermodal transport costs. There is a need for
greater efficiency in order to extend the economies of scale in container flows from the
seaports. As a result, intermodal transport systems are established to carry large volumes of
cargo over a long distance. In recent years, ocean carriers developed a significant interest in
inland transportation by offering total door-to-door logistics services to their clients
(Panayides, 2002). Supply chain management has also contributed to a growing demand of
value added services from the carriers. Consequently, intermodal transport chains can
include various shipments, transhipments and warehousing activities, besides the
transportation from an origin to a destination. In theory, the costs of the different services in
the transport chain constitute the intermodal transport costs, which is composed by the
following elements:

- Main haulage. Rail, inland navigation or shortsea shipping.

- Pre - and post - haulage. Road transport between the terminals and the customers.

- Intermodal Terminal. Handling and transhipment between the main haul vehicle and
the truck.

- Intermodal loading unit. The transfer of a container.

37
- Infrastructure. Services and charges related to using the infrastructure.

- Other. Costs associated to all activities of chain management.

Figure 2-22 presents an intermodal cost function. For a door-to-door intermodal transport
chain, the function allows to calculate total intermodal transport costs between an origin and
a destination. Pre – and post – haulage requires interchanges from road transport to another
transport mode in an intermodal terminal. From the figure, it is possible to derive the
importance of transhipments in an intermodal transport chain.

Costs (€)

Post-haulage
(road)

Transhipment

Main-haulage
(rail/barge/shortsea shipping)
Transhipment

Pre-haulage
(road) Distance (km)

Origin Destination

Figure 2-22: Intermodal cost function

Source: Own setup

The intermodal cost function shows both fixed and variable costs. For each cost element, the
distance related costs are defined as the variable costs. All haulages in an intermodal
transport chain consume energy, the main component of the variable costs increases with
the distance covered. The intermodal transport costs also depend on time. Costs with a fixed
nature, like capital costs, labour costs and insurance costs are time related. The total
intermodal transport cost is obtained by adding all of the fixed and the variable costs.

2.5.1.2. Intermodal transport costs

Costs of different services in the transport chain constitute the intermodal transport costs. In
this section, the cost centres of intermodal transport are presented.

38
2.5.1.2.1. Main haulage

The type of an intermodal transport system defines the operational costs of the main
haulage. In this dissertation, the main focus is on inland waterway and rail transport. The
operational costs of inland navigation depends on the type of the container barge. The fixed
costs of the main haulage are linked to the size of the vessel. Although larger vessels benefit
more from the scale economies, they have higher capital costs and labour costs. If a vessel
has a higher frequency of usage, it will be possible to lower the fixed costs. Depending on
the route and the characteristics of the waterways, operators can prefer smaller vessels to
minimise their operational costs. The variable costs of inland navigation are energy costs
and the maintenance and depreciation of the vessel. Finally, inland navigation is exposed to
costs, especially in the seaport container terminals, where high port times and delays
happen.

For railway transport, identification of the cost elements is not straightforward. The
complexity of various actors in an intermodal chain (see Figure 2-10) leads to a cost
structure, where locomotives and wagons, drivers and other personnel are being shared.
Nevertheless it is possible to calculate the total costs of intermodal rail transport. For each
stage of a journey, the type of a locomotive, the number of wagons and drivers and the rail
operations are aggregated to calculate the fixed costs. The distance travelled determines the
variable costs. The European study, RECORDIT constructs a bottom-up approach for the
calculation of intermodal freight transport costs (RECORDIT, 2002). Cost items are clustered
in 8 cost categories (depreciation, personnel, consumption, maintenance, insurance, tolls
and charges, third party and other costs). Figure 2-23 presents the internal costs by mode
of transport for the Genova-Manchester corridor. The average intermodal cost per kilometre
is lower than the uni-modal road transport. A comparison of transport modes learns that
inland waterway transport is the cheapest mode of transport. Pre – and post – haulage are
high due to transhipments.

39
2,5

2

1,5
€/km

1

0,5

0
rail sss iww pre&post inland&port other average unimodal
haulage services intermodal road

Figure 2-23: Internal costs by mode of transport

Source: Own setup from RECORDIT, 2002

2.5.1.2.2. Pre – and post – haulage

As seen in Figure 2-22, a door-to-door intermodal transport chain is dependent on road
transport for the collection and distribution of the ILUs. The costs of pre – and post –
haulage (drayage) are mainly time related. Compared to a unimodal road transport, drayage
operations show higher fixed costs because of the time constraint. Although covering shorter
distances, implying lower total variable costs, the total costs of drayage increase especially
in congested regions, where delays and waiting times occur. An efficient drayage is
sustained when the trucks move frequently between the intermodal terminal and the
customers without any waiting times for the handlings. Morlok and Spasovic (1994)
developed an approach for improving service quality and reducing costs for drayage in rail-
truck intermodal transport, which requires a reorganisation of the operations. The
centralised drayage operations through subsidiaries or partnerships can reduce drayage
costs, and as a result, increase the intermodal market range.

2.5.1.2.3. Intermodal terminal

Intermodal terminals and terminal operations are situated in the core of an intermodal
transport chain. Intermodal terminals require high investment costs, composed of the cost
of property, construction of quays and infrastructure, the cost of linking the terminal to the
network, and the cost of the equipment. A variety of financial instruments exists to construct
intermodal terminals, ranging from government funding to PPSs. Private sector investments
can grant a full ownership of the terminal or can be formed through a partnership with the
public sector.

40
On an operational level, transhipments of the ILU occur in the intermodal terminals (Vrenken
et al., 2005). The accompanying costs depend on the characteristics of the terminal, namely
its size and the type of transhipment infrastructure. Capital intensive terminals with vertical
transhipment structures, such as gantry cranes, provide fast handling for its customers.
Operating 24 hours a day, these terminals have higher capacities and sophisticated
management systems. These larger terminals tend to have higher costs per ILU.

Smaller, low scale terminals are also found in the terminal landscape. These terminals aim
to offer low-cost services by using mainly mobile equipment such as reach-stackers or fork-
lifts. Operating with fewer staff and limited opening hours, these terminals have lower costs.
In Belgium, both types of intermodal terminals are found. Although most terminals are open
to public, only few achieve higher annual TEU transhipments. Some terminals serve only one
customer or specialise on specific sectors (see section 2.4).

Scientific literature has been devoted to intermodal terminals. Meersmans and Dekker
(2001) give an overview of the use of operations research in the design and operation of
container terminals such in order to tackle various problems such as container stowage,
berth and crane allocation, container loading and stacking. Simulations and analytical
models are derived from the scientific theory but the real problems are extremely complex
and there is a need to modify existing approaches in order to answer the very costly
decisions (Meersmans and Dekker, 2001).

2.5.1.2.4. The intermodal loading unit

Described in Section 2.2.1, the ILU (container, swap body or semi-trailer) is transferred from
one transport mode of the intermodal chain to the other. The ILU costs are fixed by nature
and depend on the type and size. An ILU can be acquired or rented, which accumulates as
the capital costs. Other cost items include maintenance, repair and insurance. Furthermore,
an ILU can have specific features such as temperature control and extended security, which
will also have an impact on the costs.

2.5.1.2.5. Infrastructure

Infrastructure managers provide services to the intermodal operators for using the
infrastructure. In order to compensate the costs of maintenance and management of the
infrastructure, infrastructure charges are imposed. Although a European implementation for
common charging principles is aimed for the Member States, currently apply different
infrastructure charges.

41
Road hauliers have to pay road tolls or user charges (Euro Vignette). Depending on the
country, these costs can be variable, e.g. a toll, or a fixed sum e.g. the Euro Vignette. The
vehicle characteristics define the extent of the charges. For railway transport, also different
charges are imposed. Each rail infrastructure manager covers its own network area.
Concerning inland navigation, canal charges have to be paid in Belgium and France. Finally,
there are also port dues. These are applied in the seaports and inland ports and depending
on the vessel sizes and the cargo type (see chapter 3).

In addition to charges, intermodal operators also incur costs that initiate from infrastructure
related services. Infrastructure providers or third parties provide services in the ports or
railway yards.

2.5.1.2.6. Other

The establishment of an exhaustive management is imperative for a decent functioning
intermodal transport chain. Chain management fulfils tasks such as administration,
marketing and insurance. In order to monitor and supervise the actors involved in an
intermodal chain through an integrated chain management, mainly labour costs and ICT
costs are incurred. However, depending on the complexity of the chain, the range of the
costs may differ.

2.5.1.3. Break-even or not?

Once the total intermodal cost is calculated, it is possible to make comparisons with
unimodal road transport. An important modal choice criterion are the transport costs, which
correlate with the distance travelled. This relationship enables us to understand which
transport alternative is preferred in a given situation based on the concept of break-even
analysis. The total costs of unimodal road transport and intermodal transport from the port
of Antwerp are shown in Figure 2-24. In this analysis the costs of transhipment and post
haulage of intermodal barge transport are included. For the post haulage a distance of 20
kilometres is foreseen from the intermodal terminal. The graph shows that unimodal road
transport performs better compared to intermodal transport for short distances. Once a
certain distance is reached, the costs of road and intermodal transport are equal. This is
called the break-even point. The figure also shows that unimodal road transport has a lower
fixed cost. This is explained by the costs of transhipment and drayage that are incurred in an
intermodal transport chain. Above the break-even point, intermodal transport costs are
lower than those of unimodal road transport.

42
450
400
350
Break-even point
300
Costs (€)

250
200
150
100
50
0
0 50 100 150 200
Distance (km)

Unimodal road Intermodal barge (with 20km post haulage)

Figure 2-24: Break-even point

Source: Macharis, 2004

The break-even distance reacts to the changes in the cost components of road and
intermodal transport. The lines will move downward if the fixed costs decrease. For example,
a decrease in the dues for intermodal transport would shift the yellow line downwards and
reduce the break-even distance. The slope of the lines react to the changes in the variable
costs. For example, an increase in fuel price would affect the variable cost of both unimodal
road and intermodal transport. It will make the green line steeper, shifting the break-even
point to the left. Intermodal transport becomes more competitive but this is tempered to
some degree as the cost of pre - and post - haulage also rises.

Studies have been commissioned to analyse the break-even distances for each transport
mode. In 1994, the Dutch Ministry of Transport calculated break-even distances of 100-250
kilometres for inland navigation and 200-400 kilometres for railways (Van Duin and Van
Ham, 2003). In Belgium, inland waterway transport is cheaper than unimodal road transport
for distances above 90 kilometres (Macharis, 2000). At a European scale, intermodal
services over 600 kilometres usually are proven to be viable, while services over distances of
100 kilometres can rarely compete with unimodal road transport (Vrenken et al., 2005).
Although more customers demand value added services in line with just-in-time-oriented
logistics, the competition between transport modes is still focused on price. Consequently,
intermodal transport must become cheaper compared to unimodal road transport. From a
co-modal perspective, whether it breaks-even or not, intermodal transport offers a
prominent opportunity to enable an efficient combination of transport modes and hence

43
contribute to achieving a sustainable and less costly alternative than unimodal road
transport. The focus of attention should be on improving the efficiency of the intermodal
transport chain, and more in particular, on the performance of the transhipments and on
drayage.

Scale advantage in the main haulage of an intermodal transport chain leads to a better
performance than unimodal road transport. For example, the capacity of a shortsea vessel is
equal to at least 200 trucks. For inland navigation vessels, the capacity is 30 trucks or more
and trains can carry up to 60 trucks. Scale economies show a decrease in the cost of ILU
transported. It has to be noted that this decrease is not endless. The capacity restrictions
will increase the costs per unit above a certain point. Diseconomies also occur in
transhipments, which take place in the intermodal terminals.

2.5.1.4. Cost efficiency in intermodal transport

The benefits of intermodal transport become apparent when the critical cost items are
thoroughly understood. Discussions on the cost structure and the break-even concept
underlines many aspects that could influence the efficiency of intermodal transport.
Efficiency gains are translated into reductions of intermodal costs, implying an increase in its
competitiveness (Vrenken et al., 2005).

Scale economies gained by the main haulage leg of an intermodal transport chain can
further be increased by an introduction of larger vessels or longer train wagons. In order to
achieve flexibility, the concept of routing can be introduced. Modern ICT allows to track and
trace ILU, allowing for successful implementations of freight consolidation to be achieved.

Attention should be directed towards the drayage operations. Pre – and post – haulage
needs to be seamlessly integrated to the main haulage. The focus of attention is on the
intermodal terminals, where reductions in waiting times can be obtained. Introducing truck
trip planning and chain management, optimisation of truck movements will improve the cost
competitiveness of intermodal transport. Furthermore, an intermodal network can be
designed by the introduction of new terminals or freight villages to minimise the road
distances to the final destination.

Reliable terminal operations will contribute to prevent costs that take place in transhipping
an ILU from the main haulage to the drayage. In order to achieve reliable operations and
optimise the terminal processes, ICT applications will be needed. Special attention for empty
containers is also required.

44
The type of the ILU also has a direct effect on the intermodal transport costs. Based on the
customer requirements, a larger container can be preferred. ICT also plays an important role
in tracking and tracing the ILU. Investments in ICT will result in as cost efficiency gains in
the management of an intermodal transport chain.

2.5.2. Quality aspects of intermodal transport

Different stakeholders tend to value quality aspects of the transport services in different
ways. Infrastructure network managers, for instance, are oriented to the physical
components of the transport system, in terms of effective and efficient functioning of
infrastructure and vehicle fleets. Drivers on the other hand focus on trip times, trip reliability
and costs. Also, these aspects are valued differently depending on the transport mode.
Acknowledging that the quality of a transport service can only be judged in relation to the
requirement of a specific customer or case, it is necessary to describe the need for quality in
intermodal transport. By doing so, it will be possible to emphasise the benefits of intermodal
transport in its potential to increase the quality issues in a transport system.

2.5.2.1. A need for quality

In 1973, Fritz Voigt defined transport from the point of view of economic and operational
efficiency. In such a context, transport modes can be assessed in respect of their
performance in combining high mass transport capacity with low operating costs,
predictability and traffic safety, speed, network development potential and frequency of
service. In order to understand the quality aspects of intermodal transport, the following
critical success factors are to be considered: (Wijnolst et al., 1994)

- Transport time

- Transport costs

- Frequency and flexibility

- Reliability

- Capacity

- Customer satisfaction

- Environmental impact

- Political acceptability

45
Studies on measuring the importance of critical success factors will vary according to each
stakeholder. Nevertheless time, flexibility and reliability are the three common drivers that
have direct impacts on improving the quality of a transport system.

Modern production processes depend heavily on logistics. Including transportation, logistics
services have to meet the supply chain requirements of the manufacturers, distributors and
customers. Quality standards of time, flexibility and reliability are commonly expected in
supply chains. Intermodal transport is a service which is offered to transport users and
society at large. As a consequence, it also has to provide quality services.

2.5.2.2. Transport time

Intermodal transport can provide either door-to-door transport or terminal-to-terminal
transport. Transport time is the duration of the movement of freight from an origin to a
destination. There is an inevitable correlation between the transport time and the speed.
Different transport modes have different speeds. Road transport performs better compared
to other modes especially in short distances. On the other hand, the European regulations
on driving hours limit its speed on longer distances, where rail and shortsea perform better.
Inland navigation is slower compared to the other modes.

In door-to-door intermodal transport chains, the time needed for transhipments,
administration and drayage are also included. From this perspective, proximity to the
customers provides a way to deliver services in shorter times. The concept of freight
villages, linking the industrial sites with intermodal terminals, is an outcome of the tendency
to achieve this goal.

2.5.2.3. Reliability

Congestion on the European road network directs a growing concern towards the reliability
of transport services. Congestion is a result of the limitations on the infrastructure capacity.
Although commonly observed in road transport, intermodal transport is also exposed to the
problem of congestion. For example an intermodal terminal can face a capacity related
congestion, which will cause delays in transhipments or drayage operations. Inland
navigation services can be interrupted due to canal lock crossings. The longer the transport
chain, the more risks there are for a disruption. This can have a massive impact, especially
on an intermodal chain, which is basically composed of consecutive transport operations.
Finally, involvement of many players in the transport process also constitutes risks for other
performance problems.

46
Although prone to a variety of risks, intermodal transport has time buffers by which delays
in the intermodal chain can easily be offset. Shortsea and inland waterway traffic usually
have higher reliability rates. The expected delays, that take place in the container seaports
can be taken into account when planning intermodal transport schedules. Railways on the
other hand face bigger problems. Involvement of different rail operators and lack of
interoperability between the European countries negatively affect the reliability of railway
services.

2.5.2.4. Frequency and flexibility

The global economy causes fluctuations in demand, which requires the logistics sector to
respond accordingly. Flexibility is the tool to overcome demand fluctuations. Flexibility can
be achieved through capacity arrangements, higher frequency of services, and the possibility
of routing.

Logistics involve a range of related activities including storage, inventory management,
materials handling and order processing. Supply chain management is an extension of
logistics management, which aims to optimise the flow of materials and supplies from the
organisation to the customer (Henstra et al., 2007). From a shippers perspective, transport
performance instead of transport mode matters. Intermodal transport plays an important
role in linking transport with the supply chain. Intermodal terminals, acting as a buffer zone
between the origin and destination, also contribute to achieve flexibility. When necessary,
intermodal terminals can act as a depot to store ILU, offering a value added service to the
clients. Considering just-in-time-oriented logistics, this constitutes an important cost factor.
Henstra et al. (2007) underline the increasing need for consolidation and collaboration in
supply chains. Setting up a strategic network design can lead to transparency improvements
along the supply chain, reduce uncertainty in demand and supply, create flexibility and
parallel sourcing possibilities.

2.6. Environmental aspects of intermodal transport

Transport activities and environmental considerations are widely discussed in political and
scientific fields. It is accepted that transport causes various environmental problems ranging
from global warming to accidents and local noise. Indeed each transport mode has individual
impacts on the environment based on their energy supply systems, their emissions and their
infrastructures. Vehicles emit various pollutants and transport infrastructures lead to
damages of the ecological system.

47
Many of the environmental impacts of transport systems are externalised, implying that the
benefits of mobility are realised by a few while the costs are carried by the whole society
(Rodrigue et al., 2006). In this section, the environmental aspects of intermodal transport
are explained. First the link between transport and environment is highlighted. After defining
the environmental dimension of transport activities, different types of impacts per transport
mode are discussed. Thirdly, the concept of external costs is introduced and examples of
external cost calculations are given.

2.6.1. Environmental dimensions of transport

There is an inevitable link between transport and the environment. This paradoxical
relationship implies that transport is a major contributor to some of the local and global
environmental problems. Increasing trends in transportation activities, both in urban areas
and internationally, have resulted in problems of congestion, which is related to
motorisation. Acknowledging the long-run projections, which indicate a further growth in
transport demand (OECD, 2006), the environmental dimension of transport will continue to
remain a vital theme in transport research.

Sustainable development and sustainable mobility are relatively new concepts. Awareness of
global environmental issues since the 1990’s underlines the multidimensional relationship
between transport and the environment. The two elements defining the environmental
dimensions of transport are the physical environment and the transport infrastructures.
Factors such as geographical location, topology, geological structure, climate, hydrology, soil
and natural life are the main factors considered in forming the physical environment. The
activities, the outputs and the results of transport systems establish the environmental
dimension of transport, although indicating the linkages between these dimensions is a
complicated task. First of all, transport activities do not always cause exclusively direct
impacts, but also indirect and cumulative impacts may be generated (Tsunokawa & Hoban,
1997). Second, transport activities occur at different geographical levels, ranging from local
to global, implying that the environmental dimension for each level varies. Nevertheless
transportation activities, which are a dominant factor in the emission of most pollutants, are
becoming increasingly linked to environmental problems.

The environmental impacts of transport can be explained within intermodal transport
systems. First, major transportation activities are identified. Transport activities can either
take place on an operational or infrastructural level. Vehicle operations, equipment
maintenance and facilities operations can have negative impacts on the environment.

48
Furthermore, transportation infrastructure construction and expansion also cause impacts.
Figure 2-25 depicts the major transport activities with environmental impacts.

Figure 2-25: Transport activities with environmental impacts

Source: Rondinelli and Berry, 2000

In many countries policy makers introduce measures to tackle the environmental impacts of
transport (see chapter 3). In Europe, various transport policies aim to induce a shift of
freight transport from unimodal road transport to transport modes that are environmentally
more efficient. In 2007, the Commission announced a European freight transport action
plan. One of the concepts introduced is that of “green transport corridors”. Green transport
corridors include shortsea shipping, rail, inland waterway and road transport combinations to
enable environmentally friendly transport solutions for the European industry. The EC also
proposes to revise the Directive on the charging of road transport for the use of
infrastructure (Eurovignette). With the renewed system, Member States will also be able to
take environmental costs into account. These measures are planned to come into action
before 2011.

2.6.2. Types of environmental impacts

The most important impacts of transport on the environment are related to climate change,
air quality, soil quality, water quality and land take. Table 2-6 shows the link between
environmental impacts and the transport sector.

49
Table 2-6: Environmental impacts linked to the transport sector

Environmental impacts Contribution from the transport sector
Climate change CO2, N2O (+NOx, water vapour, SO2)
Ozone depletion Ozone depleting substances
Acidification SOx, NOx
Eutrophication NOx, NH3
Ground level ozone NOx, VOC (volatile organic compounds)
Air pollution in urban areas causing NO2, PM, PAH, benzene, etc.
health impacts like increased breathing
resistance, cancer, acute fatalities
Noise Noise levels
Impacts on the landscape Land take, fragmentation, barriers,
accessibility problems
Risks and waste Pollution of soil and water

Source: European Environmental Agency, 2000

- Climate change. One of the direct outcomes of transport activities is the production
of pollutants. These gases include the emission of lead (Pb), carbon monoxide (CO),
carbon dioxide (CO2), methane (CH4), nitrogen oxides (NOx), nitrous oxide (N2O),
chlorofluorocarbons (CFCs), perfluorocarbons (PFCs), silicon tetraflouride (SF6),
benzene and volatile components (BTX), heavy metals (zinc, chrome, copper and
cadmium) and particulate matters (ash, dust). Climate change arises from the
emissions of pollutants, which change the concentration of greenhouse gases in the
atmosphere. Greenhouse gases enable to maintain a stable temperature and climate
on Earth and increases in their concentration causes changes in air temperature, sea-
level rise and melting of glaciers. Some of the emissions also contribute in damaging
the stratospheric ozone layer, exposing the Earth’s surface to ultraviolet radiation.
Carbon dioxide emissions, which are produced as a result of transport activities,
represent the most important type of greenhouse gas. The road transport sector
represents 74 percent of the global transport related CO2 emissions, while aviation,
maritime and railways account for 12 percent, 10 percent and 4 percent respectively.

- Air quality. The combustion of fossil fuels, the primary energy source for trucks,
ships, locomotives and aircrafts, releases pollutants in the form of gas and particulate
matter emissions. Sulphur dioxide (SO2), carbon monoxide CO, CO2, NOx,
hydrocarbons (HC) particulate matter (PM), Pb, heavy metals, and volatile organic

50
compounds (VOC) affect air quality, which is translated in a direct threat to human
health. Air pollutants are associated with cancer, cardiovascular, respiratory and
neurological diseases. CO lowers the availability of oxygen carried in the human blood,
leading to negative impacts on the heart, the blood circulation and the nervous
system. The emissions of SO2 NOx contribute to acidification, which causes acid rains.
Indirect effects of these emissions are occur in the agricultural sector (Delucchi, 2003).
HC together with NOx creates smog. Pb and PM have a negative impact on the
neurological development of children and also cause cardiovascular problems among
adults.

- Noise. A straightforward negative impact of transport activities is noise, which is
defined as irregular and chaotic sounds. Excessive noise levels damage human health
by seriously hampering hearing and by contributing to high blood pressure (stress) and
cardiovascular diseases. Although the movement of vehicles generates noise, driver
behaviour (horn usage sudden break or start) can worsen the situation. Furthermore,
transport operations at the seaport, airports, rail yards and terminals and construction
and maintenance of transport infrastructure are considered as other noise sources.

- Water quality. Water quality is also affected as a result of transport activities. Rivers,
lakes and oceans are exposed to fuel, chemical and other particulates that are
discarded from trucks, trains, aircrafts or from seaports and airports. The increasing
trends in maritime transport since the 1970s constitute a challenge for water quality.
Dredging activities, aimed at maintaining sufficient water depth for ships in the
seaports, have a negative impact on the environment. Furthermore, waste and oil
spills from ships also cause environmental pollution in waterways. In addition to
maritime transport, pollution of waterways is also caused in places that are adjacent to
transport infrastructure.

- Soil quality. On the one hand, soil is used to construct transport infrastructure. On
the other hand soil is necessary for agriculture. This situation results in a significant
trade-off. When a transport infrastructure is established in a region, not only the soil
covered by that infrastructure becomes wasted, but adjacent soil is also affected.
Transport activities usually result in soil erosion and soil contamination. Erosion
happens in seaports and on highways, where important fertile and productive soils are
lost. Toxic materials released as a result of transport activities lead to soil
contamination.

51
- Land use. When a transport infrastructure is built, the land is not only directly
affected, but also indirectly by developments induced by the transport sector. Urban
landscape and life are exposed to changes as a result of transport activities. Increased
land use for transport infrastructure leads to changes in biodiversity. Quality of life
depends on the land use. In the EU, 93 percent of the total land area used for
transport belongs to roads, while rail and airports occupy 4 percent and 1 percent
respectively (OECD, 2001). Considering the other types of environmental impacts of
transport, this situation clearly constitutes a threat to the quality of life.

2.6.3. Environmental performance of transport modes

Figure 2-26 presents an overview of the major potential environmental impacts resulting
from transportation activities. An extensive list of potential harmful environmental impacts is
linked to aviation but as aviation falls outside the scope of this dissertation it will not be
discussed. Environmentally harmful operations such as ship waste disposal, bilge pumping,
tank cleaning, ballasting, power generation and fueling can take place in waterborne
transport. Emissions of SO2, NOx, PM and hazardous pollutants are emitted to the air during
ship operations. Cargo handling and vessel maintenance in seaports and inland ports
generate air, water and soil pollutants. Disposal of oils, grease and petroleum hydrocarbons
require effective processing, because inefficiency can result in the degradation of surface
water (Rondinelli and Berry, 2000). Finally, the construction and extension of port facilities
can lead to ground water contamination and air pollution.

Rail transport activities also cause environmental impacts. Railway usage causes air pollution
from vapours. Leakages can occur while transporting hazardous materials. Wagon and
locomotive maintenance and refurbishing can pollute water and soil as a result of products
used such as degreasers, paints, and solvents.

Trucking operations generate HC, CO, NOx, PM and sulphur compounds, which cause air
pollution. Trucking operations usually occur in the form of hauling, but operations also take
place at the terminals, where freight loading and unloading happen. At the terminals,
parking, docking, equipment maintenance and vehicle cleaning activities are also provided.
Environmental impacts include emissions of CFCs and VOCs, which are generated through
motor oil, brake and transmission fluids, solvents and lubricants that are used at the truck
terminals.

52
Figure 2-26: Potential environmental impacts of transportation activities

Source: Rondinelli and Berry, 2000

Figure 2-27 and Figure 2-28 compare the greenhouse gas emissions for each transport
mode. Both inland navigation and railway transport have lower rates compared to unimodal
road transport when considering the carbon monoxide emissions. Emissions for nitrogen
oxide provide an overview of the evolution of engine technology being used in transport
units. Due to innovations and stricter regulations, road transport considerably decreased its
emissions rate over the last decade. Nevertheless, railway transport performs better in
terms of the NOx emissions.

53
[g/tkm]
0,6

0,5

0,4

0,3

0,2

0,1

0,0
1995 2008

Road Rail Maritime Inland

Figure 2-27: CO emissions

Source: EEA, 2009

[g/pkm or tkm]

1,8

1,6

1,4

1,2

1,0

0,8

0,6

0,4

0,2

0,0
1995 2008

Road Rail Maritime Inland

Figure 2-28: NOx emissions

Source: EEA, 2009

54
Greenhouse gas emissions from transport activities increased in European countries by more
than 32 percent between 1990 and 2004. Figure 2-29 depicts the emissions by transport
mode.

Figure 2-29: Greenhouse gas emissions of transport modes

Source: EEA, 2007

In 2005, road transport accounted for 44 percent of total freight transport in Europe. In line
with this increasing trend, registration of trucks in the EU has risen by 49 percent since the
last decade (EC, 2007). Although technological innovations in the road transport sector
allowed for the introduction of vehicles with lower CO2 emissions, the lack of behavioural
changes prevented the achievement of the necessary greenhouse gas emissions. This
situation can be explained by the growth of light duty vehicles, which improved less
compared to larger trucks in terms of emissions.

CO2 emissions from international aviation and navigation are growing faster than emissions
from other transport modes. Between 1990 and 2004, the emission growth in international
aviation reached 86 percent and their combined growth amounted to 56 percent. Aviation
also causes NOx and PM, which contribute to the formation of contrails and cirrus clouds.

Maritime transport accounted for 13 percent of greenhouse gas emissions in 2007. The
amount of emissions is directly related to the consumption of fuel oil. Although shipping is a
relatively energy efficient mode of transport, the projections of higher growth rates for the
demand require an increased attention to energy improvements in this sector as well.

55
Comparisons of environmental performance between transport modes make a change in
modal choice towards environmentally friendly transport modes possible. Intermodal
transport enables the efficient use of different modes on their own and in combination to
achieve a high level of both mobility and of environmental protection. As a result, for each
destination, the best mode of transport can be chosen. This advantage and ability of
intermodal transport is also valid for the environmental impact. As intermodal transport
benefits from scale economies, environmental costs per transported unit are also low
compared to unimodal road transport.

2.6.4. External costs of transport

An external cost, also known as an externality, arises when the social or economic activities
of one group of persons have an impact on another group and when that impact is not fully
accounted, or compensated for by the first group (ExternE, 2003). Transport imposes
significant costs on societies (estimated at about 8 percent of the EU GDP) (EEA, 2009. In
order to define external costs of transport properly it is important to distinguish between:

- Social costs. all costs related to the usage of transport infrastructure such as wear
and tear costs, capital costs, congestion costs, accident costs and environmental costs.

- Private (internal costs). all costs that are directly borne by the transport user, such
as costs related to vehicle usage (wear and tear and energy cost), personal time costs,
transport fares and transport taxes and charges.

External costs refer to the difference between social costs and private costs. From this
general description, it can be derived that the focus in external costs is on the environmental
impacts of transport. External costs are then calculated when the environmental impacts
(Table 2-6) linked to the transport activities are monetarised.

External costs are generally being estimated in terms of shadow prices, which reflect the
costs to prevent or minimise the damages due to the negative environmental impacts of
transport activities. The estimates can be direct or indirect, bottom-up or top-down, and
related to political, scientific or individual targets or norms (Kreutzberger et al., 2006).

2.6.5. External costs calculation

Several studies have been conducted at a European level to estimate external costs in the
transport sector for the purpose of assigning more environmental responsibility to the
transport service provider. A literature review from the European framework programmes
concludes that there are three types of approaches: pricing information based on marginal

56
costs, on cost benefit analysis and on total costs. Studies of UNITE (2003) and GRACE
(2008) use pricing information based on marginal costs to provide cost figures for different
transport modes, mainly based on case studies. The total and average external costs at the
European level for each European country are included in the INFRAS/IWW (2000 and 2004)
study and it can be concluded that there is growing consensus on the main methodological
issues (CE Delft, 2008). In parallel to the European studies, national governments have
commissioned several studies to estimate the costs for different transport modes.

Academicians also investigate the environmental aspects of intermodal transport. Beuthe et
al. (2002), conducted a detailed analysis of the external effects of interurban freight
transport to estimate the main social costs they impose on the population. In a review of the
external effects of intermodal transport versus road transport, Kreutzberger, Macharis and
Woxenius (2006) concluded that intermodal transport is, in most cases, more friendly to the
environment than unimodal road transport and that it can help to reduce congestion. In
assessing the success of intermodal transport, attention has to be paid to the drayage
operations of an intermodal transport chain. Congestion and local environmental effects can
lead to local problems if an intermodal terminal is located near large cities. Therefore, it is
necessary to take a look at the location of intermodal terminals and plan drayage operations
efficiently. For Belgium intermodal terminals are mostly located in industrial zones outside
the city centres.

One study on the effect of marginal social cost pricing internalises the costs for each
transport mode (Figure 2-30). Even after all the marginal social costs are allocated, both
inland navigation and railway keep performing better than unimodal road transport.
Compared to railway, inland navigation clearly gains a cost advantage.

Figure 2-30: The effect of marginal social cost pricing in €ct/tkm

Source: Delft, 2004

57
Figure 2-31 compares the external costs due to freight transport. Costs for heavy goods
vehicles are very high, mainly due to accident and air pollution costs. On the other hand the
containership, which scores low in accidents and noise, has high air pollution costs mainly
due to the high NOx emissions. Similar data are also observed in inland waterway (barge)
but on a smaller scale. Finally, the freight trains encompass a comparably low cost due to
lower air pollutants. It can be concluded that by using intermodal transport, authorities,
policy makers, and the society at large will benefit as a result of less emission, lower energy
use and a decrease in congestion.

Figure 2-31: External costs of freight transport

Source: European Commission, 2003

Another example of the comparison of external costs of transport modes is taken from a
European project and is based on the ExternE methodology. It makes use of a detailed
“impact-pathway analysis”, which quantifies impacts of air pollution on human health and on
the environment. Figure 2-32 presents a summary of the marginal external costs for freight
transport. As mentioned above, the figure also indicates a better performance of larger
trucks compared to smaller ones.

58
Figure 2-32: Marginal external costs of different vehicles for freight transport

Source: Int Panis et al., 2000

The European project RECORDIT calculates the external costs of unimodal road transport
and intermodal chains on selected freight corridors. The entire range of external costs are
taken into account: air pollution, noise, accidents, congestion, global warming, and up- and
downstream processes. For the routes between Genova, Basel, Rotterdam and Manchester,
where road, rail and shortsea shipping take place, the study concludes that intermodal
transport accounts for 38 percent of the external costs of unimodal road transport. Figure
2-33 presents the external costs for unimodal road transport and for an intermodal chain.
For road transport, accident costs (29.5 percent) have the highest share, followed by air
pollution (20.9 percent), global warming (19.5 percent) and up- and downstream processes
(14.5 percent). Noise and congestion account for 5 percent each.

Figure 2-33: External costs on the intermodal corridor Genova-Manchester

Source: RECORDIT, 2002

59
A North-South route was analysed between Patras via Brindisi and Munich to Gothenburg.
The results indicate intermodal transport’s external costs to be 52 percent of the external
costs of unimodal road transport. For the route Barcelona-Warsaw, only road and rail
transport are included. Analysis of this East-West route shows that intermodal transport
generates about 38 percent of the external costs of unimodal road transport. Over 50
percent of the external costs are attributed to the higher accident risks for this route.

External cost calculations are also published in scientific journals. Janic (2007) developed a
model for calculating comparable internal and external costs of intermodal and road freight
transport networks. Using the inputs from the European freight transport system, the
model’s objective is to investigate the effects of European transport policy measures aimed
at internalising the external costs of transport.

The model is applied to a simplified European intermodal rail-truck and unimodal road
freight transport network. Figure 2-34 presents the results of the model. For both transport
alternatives, the sum of internal and external costs decreases more than proportionally as
the door-to-door distances increase. However the rate of decrease in intermodal transport is
higher compared to unimodal road transport. The increase in distances also causes an
increase in the share of the rail/terminal related external costs and a decrease in the road-
related external costs. Road related external costs are almost double of the rail-terminal
related external costs because of the two drayage operations that are included at both ends
of the intermodal network.

Figure 2-34: Average external, internal and full costs of unimodal road and intermodal transport

Source: Janic, 2007

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2.7. SWOT

A SWOT (strengths, weaknesses, opportunities and threats) analysis is performed to
investigate the market opportunities for intermodal transport. The results of the SWOT
analysis are summarised in Figure 2-35. As mentioned in this chapter, intermodal transport
benefits from the scale advantages of containerisation. Its environmental performance
compared to road transport is an important advantage considering the current transport
policies. For the moment, external costs are not yet completely internalised and intermodal
transport can benefit, especially concerning the routes along the Trans European network,
when this kind of policy measures are introduced. Intermodal transport can find
opportunities with the changing perception of companies that introduce the concept of
“green transport”. Intermodal transport promotion centres will play a strategic role to
improve the bad image of intermodal transport, which remains as a critical weakness.
Special attention is needed to overcome other weaknesses such as lack of integration into
intermodal transport networks, lower speed in international transport and complex
administrative burdens. The main threat that intermodal transport has to face is the
flexibility of road transport.

Figure 2-35: SWOT analysis for intermodal transport market

Source: Own setup

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2.8. Conclusion

Due to globalisation and booming international trade, more and more cargo is containerised
and transported by sea. Transporting this cargo to the hinterland can be done by other
transport modes than road. In this introductory chapter of the dissertation, the notion of
intermodal transport is studied. Based on the relationship between containerisation and
intermodalism, the chapter introduced the concepts that will be used throughout the
dissertation. Examination of the freight transport statistics indicated an uneven growth on
individual transport modes. Further investigation of the intermodal transport market can
conclude increasing trends for the container handlings in seaports and intermodal terminals,
especially in Belgium. The two important concepts introduced in this chapter are the
intermodal cost structure and the break-even distance. These concepts will be used later on
in the model. Finally, benefits and costs of intermodal transport are discussed.

As concluded in the SWOT analysis, vast market opportunities exist for intermodal transport.
The increasing level of containerisation and the changing attitude towards green transport
systems can lead to positive perspectives for intermodal transport, if it is promoted
efficiently to the sector and society at large. The challenges for intermodal transport are to
maintain the further integration into the transport networks and compete with the flexibility
of road transport. The notion of intermodal transport developed in this chapter will allow to
comprehend chapter 3, which is about transportation policies that are aimed at promoting a
further growth of intermodal transport.

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3. Intermodal transport policies

3.1. Introduction
Introduction (1)
In this chapter an overview of the European policy
Intermodal transport
in general (2) measures that support the further development of

Intermodal transport intermodal transport is presented. As indicated in chapter 1,
policies (3) intermodal transport is promoted through policies being
analysis for Belgium (5)

addressed at all political levels. Focusing on intermodal
analysis for Turkey (6)
GIS-based intermodal

transport policies, this chapter aims to establish a link
transport model (4)

between the concepts that are explained in the previous
Scenario-based
Scenario-based

chapter and the policy evaluation model.

Playing a vital role in the economic development of the
society, freight transport produces significant benefits. At
the same time transport also causes many negative
externalities. This situation can be used to interpret the
Conclusions (7) delicate role transport policies play in maximising the
benefits and minimising the negative effects of transport.

The European transport policies establish a strategy to stimulate a better use of the existing
transport resources and to take better advantage of the different transport modes. Given the
uneven growth in freight transport (see section 2.3.6), this strategy positions intermodal
transport to realise a balance between transport modes.

Section 3.2 introduces the European transport policies, starting from the historical
development of the Common Transport Policy (CTP). The focal point is the 2001 White Paper
“Time to decide” and its mid-term review. In section 3.3 an intermodal policy framework is
presented. This framework will be incorporated in the model. Intermodal infrastructure at a
European level is explained by means of the concept of the Trans-European transport
networks in section 3.4, and research and development activities in Europe are introduced in
section 3.5. Policymakers often make use of subsidies in the intermodal transport sector.
Section 3.6 discusses the Marco Polo programme and the national subsidy schemes.
Charging and pricing policies are handled in section 3.7, while section 3.8 highlights the

63
liberalisation of the European transport markets. Section 3.9 presents other policies that
favour intermodal transport. Finally, in section 3.10 the conclusions are drawn.

3.2. European transport policy

Transport is a key element in generating economic progress through trade and labour forces
mobility. Ensuring the distribution of goods throughout the single market from manufacturer
or producer to end-user, transport contributes to the welfare of the EU and its citizens. For
Europe, transport also represents an important sector of the economy, which is accounting
for almost 10 percent of the EU’s gross domestic product (GDP), and employing 10 million
Europeans. There has been a continuous growth in traffic in Europe, reflecting increased
mobility levels, rising income levels, increased social and leisure time, and the abolishment
of national barriers within Europe. In contrast to the positive effects of transport, the
increase in mobility of persons and goods leads to a concern at a European level, where the
European transport policy plays a pivotal role in achieving sustainable mobility in Europe.

An integrated transport policy at the European level dates back to the Community’s founding
Treaty of Rome (1957), where the CTP was defined as one of the Community’s priority
tasks. However, the progress towards the realisation of a CTP was slow. November 1993
marks a turning point in the evolution of the CTP, when the Treaty of Maastricht came into
force. Coupled with the establishment of the European Economic Area, it provided a new
basis for the Community to contribute to the establishment and development of transport
infrastructure (Notteboom, 2000). From six members in the 1950s to 27 in 2007, the EU
promotes an integrated CTP to regulate competitiveness, cohesion and environment. In this
section, the evolution of the European transport policy will be discussed.

3.2.1. “Slow progress” - phase 1 from 1957 to 1992

The development of the CTP followed a slow pace until 1986, when the Single European Act
required the removal of physical barriers between the European countries. During this
period, the interventions of the European Court of Justice (ECJ) enabled the interpretation of
the transport provisions of the Treaty of Rome to extend their scope. In 1985, a decision of
the ECJ officially recognised the lack of a European transport policy and that this failure was
due to the inefficiency of the European Council of Ministers (CEC, 1985). Therefore, the
Commission proposed a medium term plan on transport infrastructure consecutively in 1986
and 1988. The Council was reluctant towards the presented proposals especially regarding
the availability of financial sources. Finally, the proposal was accepted in 2000 with a limited
budget. As indicated above, the Maastricht Treaty contributed to the formulation of rules on

64
international transport and improvements in transport safety. Apart from the limited EU
budget, contributions were made by the European Regional Development Fund (ERDF) and
the European Investment Bank (EIB) to finance transport projects.

3.2.2. “The objectives of the CTP” - phase 2 from 1992 to 1995

The Maastricht Treaty emphasised a balanced development of economic activities in Europe
in order to achieve a sustainable growth respecting the environment. The concept of
sustainable development was translated into the formulation of a CTP through sustainable
mobility. In 1992, the aim of the CTP was clearly stated in the White Paper published by the
EC. The new framework aimed at achieving the following goals:

- An integrated transport system, where different modes are combined in an
environmentally friendly manner, meaning that intermodal transport is considered as
an alternative to unimodal road transport.

- An integrated transport network at a European level through the Trans-European
transport network (TEN-T), that should contribute to social and economic cohesion
among enlarged Europe.

The European transport policy focused on the integration of the transport system and not on
the improvement of the transport infrastructure in general. The problem of funding also
remained a crucial question in this period. Although various problems remained unsolved
with regard to transport infrastructure, the CTP introduced a global programme, based on
sustainable mobility. During this period, the CTP acted as an initiator for the Member States
to introduce policies, so that the final responsibility for implementation was left at the level
of the individual Member States.

3.2.3. “A more coherent CTP” - phase 3 from 1995 to 2000

In 1995, the Commission took the initiative to issue the transport policy action plan 1995-
2000, providing the timetable for implementation of the actions announced in the 1992
White Paper on Transport (COM(1995) 302). Narrowing the focus of the transport policy to
three fundamental areas, this action programme stressed the importance of the social
cohesion objectives, the environment and the accession countries:

- Improving quality by means of integrated European transport systems

- Improving the functioning of the single market in order to achieve efficient and
competitive transport systems

65
- Improving the external effectiveness by the elimination of missing links with third
countries.

Priority on improving the quality of the European transport systems is interpreted in a broad
sense to further integrate system development, safety and the protection of the
environment. The document states that better integration of transport modes is essential to
have environmentally friendly modes offering better capacity usage within modal
interconnections. Intermodality plays a crucial role in this system development, where it is
incorporated under the research and technological development framework programme.

The action plan focuses on the transport market by liberalising market access. Rules on the
competition and state aid in transport services are defined in order to supervise the
implementation of the Single Market. Special attention is paid to maritime and railway
transport, where a fundamental strategic assessment is required to achieve competitiveness.
The action plan took steps to a further synchronisation of the charging regimes applicable to
the different modes, with specific emphasis on intermodal transport. Policy initiatives also
aimed at ensuring fair and efficient pricing within and between transport modes in order to
achieve an optimal modal balance.

A new dimension originates from the enlargement of the EU. The scope of the CTP is
extended by policy initiatives that include not only the accession countries but also third
countries. Agreements have been negotiated with the accession countries to minimise
disruptions during the integration process.

The action plan is prescribed target applied for the period between 1995 and 2000. In this
period various policy papers, succeeding the priority areas for the CTP, were formulated
ranging from the 1995 Green Paper on passenger transport to the 1996 White Paper on a
strategy for revitalising the railways. The 1997 Communication on intermodal transport
(Intermodality and intermodal freight transport in the EU) had the objective to develop a
framework for an optimal integration of different transport modes (COM(1997) 243). After it
first defined intermodal transport, a number of obstacles preventing the extensive use of
intermodal transport were identified. Based on these obstacles, four key strategies were
formulated:

- A European strategy on infrastructure: TEN-T

- The Single transport market: harmonisation of regulation and competition rules

- Identification and elimination of obstacles to intermodality and the associated friction
costs

66
- Implementing the Information Society in the transport sector

The 1997 Communication on intermodal transport enables the Commission to take the
necessary steps towards intermodality.

3.2.4. “Time to decide” - phase 4 from 2000 to 2006

The Commission adopted the “White Paper European Transport policy for 2010: Time to
decide” on 12 September 2001 (COM(2001) 307). Defining transport as the essential driver
of industry, trade, way of life and further European integration, the White Paper places it at
the heart of the European society. The four key objectives of the paper are to shift the
balance between transport modes, eliminate bottlenecks, gear transport policy to users and
manage the globalisation of transport.

Although the White Paper itself has no legislative or executive force, the Commission
proposes an integrated package of 60 policy measures. The following guidelines underpin
the policy proposals of the Commission:

- Revitalising the railways

- Improving quality in the road transport sector

- Promoting transport by sea and inland waterway

- Finding a balance between growth in air transport and environment

- Turning intermodality into reality

- Building a Trans-European transport network

- Improving road safety

- Adapting a policy on effective charging for transport

- Recognising the rights and obligations of users

- Developing a high quality urban transport

- Putting research and technology at the service of clean efficient transport

- Managing the effect of globalisation

In the first objective of the White Paper – “Shifting the Balance Between Modes of
Transport” – the Commission highlights the growing imbalance between the transport modes
in the EU. The dominance of road transport and the higher growth rate of air transport
negatively affects the environment. On the other hand, this situation constitutes a potential
for rail and inland navigation. The Commission suggests a better regulated competition

67
between transport modes. Therefore, it suggests intermodality to link-up modes. To realise
this objective, it proposes to revitalise the railways by opening the market, including the rail
freight market; by connecting ports to railway, inland waterway and shortsea shipping
(MoS); by improving quality in the road sector; and by helping to start up intermodal
transport services (Marco Polo, EILUs, Freight Integrators etc).

In the second objective of the White Paper – “Eliminating Bottlenecks” – the Commission
addresses the bottlenecks on main international routes in Europe. In order to maintain the
cohesion and the internal market of the EU, the Commission plans to propose a revision of
the TEN-T guidelines. A two-stage revision includes eliminating bottlenecks on priority routes
and encouraging the MoS. The limited budgets of the transport infrastructure projects are
also overcome by the pooling of funds.

The White Paper also aims to gear transport policy to users by “Putting Users at the Heart of
the Transport Policy”. Although passenger transport can be found at the core of this
objective, a reform of the legislation on efficient charging and fuel taxation is suggested by
the Commission.

Finally, the White Paper acknowledges the European enlargement by “Managing the
Globalisation of Transport” in order to extend the transport policy to the accession and third
countries. In the next sections an overview will be given of the EILU and freight integrators.
Broader policy measures of TEN-T, MoS and the Marco Polo programme will be discussed in
the succeeding sections.

3.2.4.1. European Intermodal Loading Units

Section 2.2.2 introduced the ILUs, which are exposed to various problems. Many different
types of ILUs cause a complexity of handling in intermodal terminals and require different
handling and bearing surfaces. This problem has a Community dimension: no common
maintenance procedures and identification systems existed in Europe. Furthermore, ISO
containers are sub-optimal for use on European roads and swap bodies are not stackable.
Therefore, the Commission proposed a framework for the standardisation and harmonisation
of ILUs in 2003 (COM(2003) 155) which was amended in 2004. The standardisation will
allow the European transport industry to make efficiency gains, estimated to lead to logistic
costs savings of up to 2 percent. Depending on the commodities and the corridors under
consideration, this reduction can reach up to 10 percent. Proposing a smooth transition,
existing ILUs can be used until the end of their working life (on average in 5 years for
weaker swap bodies and 10-15 years for stronger containers) under the premises of periodic
inspections (COM(2003) 155). EILUs will be compatible with road, railway, shortsea shipping

68
and inland navigation and they will be stackable. Optimised for Euro pallets, the EILUs can
be top lifted. On-going legislative progress for the standardisation of ILU continues with
research studies on technical and economic aspects of standardisation of loading units.

3.2.4.2. Freight Integrator Action Plan

Recalling the complexity of intermodal transport systems (Section 2.3.4), the Commission
wanted to support the organisation of intermodal freight transport. Introduced by the White
Paper, “freight integrators” play the role of transport flow organisers. Freight integrators are
transport service providers who arrange full load, door-to-door transportation by selecting
and combining, without prejudice the most sustainable and efficient mode(s) of
transportation (Freight Integrators, 2003). Freight integrators combine the strengths of each
transport mode to offer the best services in a single transport scheme. This way, they offer
efficient, cost effective and green services, while integrating the interests of shippers,
operators and society.

A study was performed to provide recommendations for the development of the Freight
Integrator Action Plan. The study established guidelines for the identification of freight
indicators to evaluate the development of companies to becoming freight integrators. The
study also showed the problems they are confronted with and how they can be supported by
the Commission. The following recommendations were made:

- Promote Intermodal Transport to shippers and freight forwarders;

- Support training for Freight Integrators;

- Harmonise intermodal regimes, equipment and liability;

- Support the quality of Freight Integrators through certification and benchmarking.

The Action Plan, which is under preparation considers ideas such as information exchange;
common transport documents; training and education; quality standards; promotion and
terminals for the period 2005 and 2009.

3.2.5. “Keep moving” - phase 5 from 2006 to 2008

The 2001 White Paper proposed policies to overcome challenges of the modal imbalance,
congestion on European roads and in cities and the impact on the environment. Various
policy measures were formulated between 2001 and 2006. Over the past five years, a
change in the context of mobility in Europe is being observed. The enlargement resulted in a
EU consisting of 25 countries and places mobility on a continental scale. On the one hand, a
reliable transport system is a key factor in meeting the global competitiveness. On the other

69
hand, a growing concern is directed towards the environmental aspects of transport:
greenhouse gas emissions, global warming and increasing oil prices. This situation requires a
broader, more flexible transport policy toolbox (COM(2006) 314). In other words, it was
time for a mid-term review of the 2001 White Paper.

Extensive consultations between the Member States and other actors of the European
transport system, have resulted in an overview of the current situation and of the
expectations for the future. Based on this input, the Commission formulated proposals to
shape the future transport policy of the EU. Maintaining the overall objectives of transport
policy, namely a competitive, secure, safe and environmentally friendly mobility, the toolbox
is designed to establish a broad dialogue between all stakeholders at national, regional and
local levels of government as well as by citizens and the industry itself. Therefore, a
renewed agenda is proposed to encourage shifts to more environmentally friendly modes,
especially on long distances and congested corridors. Optimisation of all transport modes,
which must be more environmentally friendly, safe and energy efficient, is needed.

The 2006 White Paper mid-term review proposes the following main actions:

- Sustainable Mobility. Promoting rail freight corridors and inland navigation;
developing a Common European Maritime Space White Paper; and formulate a
European ports policy.

- Protection. Developing an urban transport Green Paper; launching a major
programme for green transport; and promoting training for transport professionals.

- Innovation. Defining an action plan for logistics; launching a major programme to
bring intelligent transport systems to the market; implementation of ERTMS; and
launching of the 7th Framework Programme.

- International dimension. Developing a strategy for integrating the EU’s
neighbouring countries into the internal market.

In line with the mid-term review of the 2001 transport White Paper, the Commission
launched a series of policy initiatives:

- Boosting the efficiency, integration and sustainability of freight transport in Europe
(COM(2007) 606);

- A Freight Transport Logistics Action Plan (COM(2007) 607);

- Towards a rail network giving priority to freight (COM 2007) 608);

- A Commission Communication on a European Ports policy (COM(2007) 616);

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- Consultation on the MoS (SEC(2007) 1367);

- Consultation on a maritime transport space without barriers reinforcing the internal
market for intra-European maritime transport (SEC(2007) 1351).

The current package of policy measures contributes to the promotion of intermodal transport
in various ways. The Freight Logistics Action Plan aims to simplify administrative processes,
reviews loading standards and sustainable quality and efficiency. The Communication on a
freight-oriented network focuses on ensuring lower transit times and increasing the
reliability in the rail transport to improve its competitiveness. The European ports also
receive attention through the Communication on a European Ports Policy, which is aimed at
enhancing their performances. The progress already made in developing the MoS network
will be continued and shortsea shipping will be encouraged through facilitation and
simplification of administrative and documentary procedures.

Subsequently, the Commission introduced the Greening Transport Package in July 2008
(COM(2008) 433), aimed at moving transport further towards sustainability. The package
includes actions to improve pricing and charging of transport modes.

3.3. Intermodal transport policy

As explained, the evolution of the European transport policies has resulted in a strategy to
stimulate a better use of the existing transport resources and to take better advantage of
the different transport modes. This strategy can only be achieved when there is a balance
between transport modes. Hence intermodal transport plays a pivotal role in obtaining
balanced transport flows in Europe. In this section, an overview of the European policy
measures supporting the further development of intermodal transport is presented.

Intermodal transport is being promoted through policies addressing all political levels. The
policy maker’s role in intermodal transport policies is to assure an environment for a smooth
functioning market, to maintain a complete and interoperable multimodal transport network
and to promote its optimised use in order to minimise environmental externalities. The
intermodal transport policy in Europe resembles a soft modal shift instrument. Directed to
potential customers, who mainly use unimodal road transport, the policy aims to create
awareness of the capabilities and advantages of intermodal transport.

Figure 3-1 presents a range of intermodal policy measures. Various combinations of policy
instruments or packages can be made along the intermodal transport chain. This requires a
close co-operation among the stakeholders in order to create synergies. EU’s intermodal
policy is designed to provide an integrated framework in order to develop a structured

71
approach to intermodal freight transport. Figure 3-1 summarises the key elements of the
European intermodal transport policy. Infrastructure development is recognised by the EU as
an essential factor to initiate intermodal transport. Targeted TEN-T investments aim to
establish an intermodal network. Furthermore, intermodal transfer points (terminals) are
designed and projects are initiated with the intent to overcome missing links. A second vital
element of the intermodal policy in the EU is the setting of rules and standards. Legislative
progress on ILUs and intermodal liability are contributing to the establishment of a uniform
intermodal transport system. In addition, the intermodal market is regulated through
liberalisation and competition rules. Innovation and technology is indispensable for the
integration of intermodal transport in supply chains. Framework Programmes enable to
conduct research on intermodal transport in order to serve this integration and to steer the
Commission in the formulation of efficient policies. Finally, operational aspects of intermodal
transport are being addressed through common charging and pricing. Internalisation of
external costs within the framework of green transport gets growing attention.

Figure 3-1: Intermodal policy framework

Source: Own setup

Although no directive is specifically devoted to intermodal transport, the Commission is a
defender and promoter of intermodality (Burkhard and Nemoto, 2005). The policy objective
behind the Commission’s action to promote intermodal freight transport can be found in the
Communication on “Intermodality and Intermodal Freight Transport in the EU” (1997). As a
vital policy document recognising that a business as usual approach is not a sustainable one,
the communication offered a systems approach to look at the mode independent utilisation
of spare capacity for all modes advocated to the intermodal system. This approach
encourages co-operation and integrity between transport modes and competition between
transport operators. The 2001 transport White Paper and its mid-term review in 2006 also
propose measures assigning vital roles to intermodal transport in order to reset the market

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shares of the transport modes back at their 1998 levels by 2010. Table 3-1 provides a list of
policy and regulatory frameworks of the European intermodal transport policy, which were
already briefly introduced in Section 3.2.

Table 3-1: Policy and regulatory framework of the European intermodal transport policy

Year/Reference Title
1992/COM(92)494 White Paper on the Future of the Common Transport Policy
1992/92/106/EEC Council Directive on the establishment of common rules for
certain types of combined transport of goods
1992/93/45/EEC Commission Decision concerning the granting of financial support
for pilot schemes to promote combined transport
1997/COM(1997)243 Communication on intermodality and intermodal freight transport
in the EU
1995/COM(1995)691 Green Paper on Fair and efficient pricing
1996/COM(1996)421 White Paper A strategy for revitalising the Community’s railways
1996/1692/96 Community Guidelines for the development of the Trans-
European Transport Network
1997/COM(1997)242 Communication on Rail Freight Freeways
1997/COM(1997)678 Green Paper on Port infrastructure
1998/COM(1998)466 White Paper on fair payment of infrastructure use
1998/2196/98 Council Regulation concerning the granting of community
financial assistance for actions to promote combined transport
2001/COM(2001)370 White Paper: European transport policy for 2010
2003/COM(2004)56 Commission proposal for a Directive on ILUs
2006/COM(2006)314 Communication on the mid-term review of the EC’s 2001
Transport White Paper
2007/COM(2007)607 Communication on the freight transport logistics action plan
2008/COM(2008)433 Communication on the greening transport

Source: Own setup

3.4. Trans-European transport networks

The concept of the TEN-T is in line with the completion of the single market. The opening of
borders for the free movement of goods and persons since the Single European Act (1986)
has not made the communications between countries any easier. Various obstacles prevent
the achievement of a complete free movement and of a balance between different regions of
the Community. In order to guarantee free movement of goods and persons and to maintain

73
economic and social cohesion, a harmonisation of transport policies through improving the
Member States’ infrastructure was required.

3.4.1. A need for infrastructure

The completion of the single market brought certain obstacles along on the free movement
of goods and people due to incomplete or congested European transport infrastructure
networks. The need for the creation of the TEN-T is stated in the Treaty of Maastricht. Major
infrastructure projects are developed to integrate national land, sea and air transport
infrastructure networks throughout the EU. Bottlenecks and missing links are identified to be
removed. Furthermore, new transport links are foreseen between the EU and its neighbours
in the European Free Trade Association as well as in Central and Eastern Europe. The main
objective of the TEN-T is to create a sustainable infrastructure at a Community level, which
is capable of delivering high-quality transport services. In order to achieve this objective, all
of the transport modes will be integrated into a single trans-European transport network.

3.4.2. Creation of a trans-European transport network

Copenhagen European Council (1993) provided a legal base for the concept of the Trans-
European networks (TENs). This development was followed by the identification of 14 major
priority projects in Essen European Council (1994). In 1996, the Council and the European
Parliament adopted guidelines for the development of TEN-T. As a result, the existing plans
were brought together under a single framework. In the same year, the Commission, with
its annual report on the TENs, evaluated the progress made in the priority projects but also
added the need for a revision of the financial instruments of the projects; as public funding
was not enough to finance these costly projects. The need for this revision was also included
in the 1997 report. With Agenda 2000, the enlargement process was brought to the agenda
and in 2001, the TEN-T guidelines were extended to port infrastructure (seaports, inland
ports and intermodal terminals). The report of the High Level group, which was chaired by
Karel Van Miert, lead to the extension of the list in 2004 to take the accession of 12 new
Member States in the EU into account. TEN-T comprises 30 priority projects that should be
completed by 2020.

The long legislative history is only the beginning of the process, and the centre of attention
is how to implement the projects into reality. The TEN-T projects require a vast amount of
funding. In 2008, the overall cost of the TEN-T project is estimated at € 900 billion (from
1996 to 2020).

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The Community has focused its financial efforts to the contribution of the implementation of
the TEN-T. The financial instruments of the Community include the TEN-T budget, Cohesion
and Structural Funds, and the European Investment Bank loans. For the period 1993-2006,
the Community financing of the TEN-T was 29 percent; its share is expected to decrease to
27 percent for the period 2007-2013. The Cohesion fund has two vital objectives: transport
and environment. At present, all new Member States as well as Portugal, Spain and Greece
qualify for support from the Cohesion Fund. It has to be noted that the European Investment
Bank offers services both to private and public entities.

The EU contribution is needed to achieve the TEN-T. However, serving the common
European interest through the TEN-T initiative, does not imply a major support from the
Community. Therefore the private sector is encouraged to invest as well in order to
complement public financing. The Member States direct a budget from the taxpayers, public
borrowing and, to a certain extent, by charging users to finance the TEN-T projects.
Charging for infrastructure use constitutes a financial structure not only to attract investors
but also to establish public private partnerships (PPP).

PPP have been used mainly for constructing tunnels, bridges, motorways or airports. Once a
delicate risk sharing agreement is established, PPP provide an attractive structure for the
private entities. Although the public entities usually take higher political risks, there should
also be a compromise in revenue risks.

Various actors, including authorities at member State level, regional and local level,
transport mode related undertakings, construction companies, interest groups, financial
institutions and European citizens are involved in the implementation of TEN-T. This
situation requires a need for coordination. When the Priority projects and the cross-border
projects are considered, the amount of actors involved is multiplied by a factor of two or
more, depending on the countries involved. To improve coordination of the TEN-T, the
Commission has introduced the concept of European Coordinators.

3.4.2.1. The development of axes and nodes

Figure 3-2 presents the TEN-T priority axes and projects. 60 percent of the priority projects
are railway projects. Although the majority of projects are high-speed rail projects, rail
freight projects and intermodal rail road projects also exist. Only two of the projects are
directed to inland navigation and one to MoS.

Some of the TEN-T projects have already been completed or will be completed soon. The
Oresund fixed link (2000), the Malpensa airport (2001) and the Betuwe railway line (2007)

75
are successfully completed. The high-speed railway axis Paris-Brussels/Brussels-Cologne-
Amsterdam-London is expected to be completed in 2013. Many priority projects consist of
individual sections, which are realised through a step-by-step approach. However, the
timetable points out delays for the priority projects. In May 2008, a report on the
implementation of the TEN-T priority projects was published. According to the findings of the
report, it will be difficult to meet the 2020 deadline for some of the most complex projects,
such as the Alpine crossing, along with a number of other bottlenecks on the priority
projects.

Figure 3-2: TEN-T priority axes and projects
Source: TENTEA, 2009

There are several causes explaining the delay of the TEN-T implementation. First of all, there
is a lack of financing; second, coordination problems cause an inefficient project planning;
and finally, regulatory constraints cause an additional obstacle (EC, 2008).

By 2020, TEN-T will cover 89,500 kilometres of roads and 94,000 kilometres of railways. The
inland navigation network will account for 11,250 kilometres and the intermodal landscape
will be composed of 294 seaports and 210 inland ports.

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The implementation of the TEN-T means the construction of new roads to abolish the
missing links. 4,800 kilometres will be built by 2020. Most of these new links will be located
in the periphery (Ireland, Portugal, Greece and the Baltic countries). In addition existing
roads will be upgraded for example to realign and widen the roads. This upgrade is foreseen
to be executed on 3,500 kilometres of the existing road network.

The Commission puts railway transport in the core of the TEN-T. In addition to developing
high-speed links, the TEN-T also focuses on developing intermodal lines for freight transport.
Attention is devoted to the central European countries to maximise the capacity of the
existing lines and to eliminate bottlenecks. Interoperability is also a challenge, especially to
connect peripheral countries. Under the TEN-T 12,500 kilometres of rail will be constructed
and 12,300 kilometres will be upgraded.

Although facing topological limitations, inland navigation represents a cost-effective and
environmentally friendly transport mode. In Western Europe, inland waterways is found in
the Benelux, France and Germany. The TEN-T aims to integrate the national waterway
networks through modernising of existing canals and rivers.

The TEN-T plays a crucial role in developing axes but in addition the TEN-T network is also
composed of nodes, which are linked to the axes. Seaports, inland ports and intermodal
terminals represent such nodes being included in the TEN-T projects. Ports are the gates of
the EU. Higher trade flows take place in ports in the Hamburg-Le Havre range and increasing
trends are observed for the Mediterranean ports. European ports should be capable of
serving their hinterland through a variety of transport modes. The increase in container
transhipments requires successful intermodal transport services as well. TEN-T projects aim
at improving the efficiency of traffic flows through ports by:

- Infrastructural improvements in maritime access

- Port infrastructure

- Inland transport infrastructure

- Hinterland access arrangements

Intermodal terminals are vital for the hinterland connectivity of seaports. Therefore policies
are formulated to integrate these nodal points in the TEN-T. Finally, the airport network is
also considered. First, airport of common interest are identified. Then, policies are directed
to improve the environmental compatibility and to increase the capacities of the airports.

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3.4.2.2. The development of information and management systems

Two pillars establish the TEN-T, the physical network (axes and nodes) and the virtual
network (information and management systems). ICT is a key to controlling transport
systems. Key indicators which can be handled through intelligent transport systems include
among others safety, environmental effects and congestion.

In the area of road transport, a European traffic management system is built, aiming to
achieve interoperability of the existing systems. The users of transport also benefit from
information systems, such as the RDS-TMC system (Traffic Message Channel).

Infrastructure management in railway transport is a pre-condition to sustain interoperability,
which is a vital bottleneck. The TEN-T allows the technical harmonisation of infrastructure
and the introduction of a system at European level, such as the implementation of ERTMS
(European Rail Traffic Management System).

Finally, the Commission also supports ICT applications in inland navigation and shortsea
shipping. For all transport modes, monitoring cargo movements by means of tracking and
tracing systems are possible via satellite systems. A European initiative to create a global
satellite navigation system, Galileo is an ongoing project of the TEN-T. The uniqueness of
Galileo is its specific design for civilian use worldwide and its freely available open services.

3.4.2.3. Revision of Trans-European transport networks

In Section 3.4.2 an overview of the TEN-T timeline was provided in order to demonstrate its
evolution over the last decade. The revision of the TEN-T is an inevitable consequence of the
European enlargement process and its reaction towards the globalisation. An important
aspect of revising the TEN-T is the inclusion of the MoS.

The MoS initiative was introduced in the 2001 White Paper, which recommended a
rebalancing of transport modes. Intermodality is seen as promoting a modal shift away from
road transport. The MoS is capable of providing integrated intermodal services, based on
shortsea shipping.

The Policy goal is to develop a network of MoS between different European ports, each
linked to railway and inland waterways. MoS will provide a competitive alternative to the
congested road network. Through TEN-T, MoS axes are identified and projects for intermodal
transport applications are developed on these axes. Both physical and virtual infrastructure
are taken into consideration.

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3.5. Research and technological development

The European intermodal transport policy and research and technological development
(RTD) activities have usually been addressed together (Janic and Bontekoning, 2002). There
are close interactions between research and policies. In most cases, the Commission and
other European institutions prefer to include research in their policy making procedures.
Research projects provide inputs for intermodal policies. Ex-post and (or “or”) ex-ante
analyses are conducted in order to assess various policy measures. Furthermore, under
numerous research programmes, research projects are funded by the EU to support the
development of intermodal technologies and operations. As a final step, the implementation
of RTD is done through case studies and pilot applications.

The EU and the Member States support RTD projects on a co-funding basis. Availability of
funds attract not only research institutes but also private companies, that are often too
small to be able to generate the necessary critical mass of resource for RTD (Vrenken et al.,
2005). Shared investments enable close cooperation between the public and the private
sector, which allows the implementation of research results. The EU also encourages RTD at
European level, where various Member States are participating. In this section, an overview
of the intermodal freight transport research agenda in Europe will be presented. Intermodal
RTD activities are initiated through three main spectrums such as the Framework
Programmes, the COST-Transport Actions, the PACT and the Marco Polo Programme

3.5.1. The Framework Programmes

The EU supports the development of intermodal freight transport through its multi-annual
framework programmes (FP) for RTD. Table 3-2 summarises a selection of the FP projects
on intermodal freight transport. The first group of projects are conducted within the 4th FP.
Both operational and decision-making related aspects are included in the objectives of the 5
selected projects. In 1998, “Sustainable Mobility and Intermodality” was introduced as a key
action under the 5th FP, which lead to extensive RTD in intermodal transport. The examples
in the table point out that research has been conducted in order to establish efficient door-
to-door intermodal transport chains. As a result, existing knowledge is disseminated and
case studies are widely developed. The 6th FP extended the scope of the research areas by
introducing cross-cutting research activities and the European Research Area (ERA).
Thematic areas are complemented by cross-cutting research activities and the ERA aims to
stimulate the coherent development of the European RTD policy by supporting programme
co-ordination and joint actions conducted at national and regional level as well as among
European organisations.

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Table 3-2: Selected FP projects on intermodal freight transport

Period Project Research
CESAR Improvement of intermodal transport performance and quality by an
appropriate information system.
IMPREND Improvement of pre- and end- haulage at terminals, achieved by defining
and testing a number of formulae on how to do that.
1994-1998

IQ Analysis of the quality aspects influencing intermodal transport at both
intermodal terminals and networks with the aim to improve interoperability,
4th FP

interconnectivity and accessibility of intermodal terminals.
PRECISE-IT Optimisation of intermodal operations, particularly addressing those
operational problems that can be put in relation to the position of ITUs
and/or vehicles at the terminals
TERMINET Identification of promising innovative directions for bundling network new
generation terminals and terminal nodes for combined and intermodal
transport in Europe.
EUTP Dissemination of the existing knowledge related to the intermodal freight
transfer points in the EU at both national (member states) and international
(EU) levels with the purpose to provide a better co-ordination of R&D
activities.
IP Improvement of the integration of ports into intermodal transport chains,
which is expected to be achieved by harmonising administrative procedures
and by offering a set of information and communication (ICT) tools and
services, which would facilitate exchanging of data between the partners
1998-2002

involved in transport chains.
5th FP

BESTUFS Dissemination of the best European practice, success criteria, and
bottlenecks in moving the goods in urban areas. The project is expected to
contribute to integration of the urban collection and delivery services into
‘door-to-door’ transport and logistics chains.
RAILSERV Revitalisation of rail transport through investigation and development of
measures that will enhance rail’s competitiveness in the European freight
transport market.
RECORDIT Improving the competitiveness of intermodal freight transport in Europe
through the reduction of cost and price barriers, which currently hinder its
development, while respecting the principle of sustainable mobility.
BRAVO This important intermodal demonstration project will lay foundations for
achieving a significant and sustainable increase in intermodal volume on the
Brenner corridor.
CREAM Analyse the operational and logistic prerequisites for developing, setting up
and demonstrating seamless rail freight and intermodal rail/road and
rail/short sea/road services on the Trans-European mega-corridor between
the Benelux countries and Turkey,
CREATING Stimulating waterborne transport in an economical way, by giving new
2002-2006

impulses to inland navigation. Whereas the hinterland transport of maritime
cargo such as maritime containers already takes place via inland waterways
6th FP

to a large extent, continental cargo is almost completely transported by
road.
FREIGHTWISE Support the co-operation of transport management, traffic and infrastructure
management and administration sectors in order to develop and
demonstrate suitable intermodal transport solutions in a range of business
cases.
PROMIT Contribute to a faster improvement and implementation of intermodal freight
transport technologies and procedures, and to help Promoting Innovative
Intermodal Freight Transport and modal shift by creating awareness on
innovations, best practices and intermodal transport opportunities for
potential users as well as politicians and research community.
Source: 4th and 5th FP Janic and Bontekoning, 2002 and 6th FP own setup

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For the period 2007-2013, the 7th FP is designed to continue to stimulate the RTD activities
in Europe. Compared to the previous framework programme, the FP7 is associated with a
substantial increase of its total budget of over € 50 billion. Its building blocks include
cooperation, ideas, people, capacities and nuclear research. Intermodal transport is defined
as one of the key thematic areas under the “cooperation” programme. Furthermore, the
objective of the specific programme “ideas” includes “frontier research”, which leads to
producing new knowledge leading to future applications and markets. The “people”
programme on the other hand guarantees a researcher mobility at European level. Finally,
the “capabilities” programme aims to strengthen the research capacities of the EU.

3.5.2. The COST-Transport Action

COST – (European Cooperation in the field of Scientific and Technical Research) – is defined
as an intergovernmental network, which supports cooperation among scientists and
researchers across Europe. Intermodal transport receives attention by the COST actions. In
Table 3-3 an overview of the completed and ongoing COST actions, related to intermodal
transport, are given.

Table 3-3: The COST-Transport Actions

Action Title
310 Analysis of freight transport logistics in Europe and creating the recommendations for
development of an integrated Trans-European freight transport system.
306, Research, demonstration and assessment of the impacts of EDI (Electronic Data
320, 330 Interchange) and tele-informatics links on the efficiency of transport and logistics
operations.
315 Assessment of economic, environmental and safety effects of introducing containers of
increased dimensions.
328 Improvement of the methodologies for assessment the socio-economic performance of
the Trans-European transport networks with emphasis on generating better added
value from their interconnectivity and interoperability. In particular, the role of
transport operators and providers of transport infrastructure has been analysed
339 Produce guidelines for governments, standardisation organisations, transportation
associations and container manufacturers to assist in the developments of rules to
cover the implementation of small containers that are usable Europe wide.
340 Creation of a European intermodal freight transport network by defining a framework of
references and conceptual guidelines of the current European policy in order to remove
existing barriers to intermodality
350 Establishing a concept integrating at regional scale all the environmental aspects of
traffic and land-transport infrastructure in relation to the decision-making process.
355 Analysis of the conditions under which the process of growing unsustainable transport
demand could be reversed, by changing travellers‚ shippers‚ and carriers’ behaviours.
356 Designing harmonised methods to build better environmental indicators by using
existing European indices, and to develop methods to be applied to the decision-making
process of the transport sector in the different European countries, in order to
contribute to a systemic approach to environmental and transportation issues.
Source: Janic and Bontekoning, 2002

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3.5.3. The PACT Programme

In 1992, the Commission launched a mechanism for granting financial assistance for pilot
actions for combined transport (The PACT Programme). The first programme ran for a period
of five years from 1992 to 1996 and a funding of ECU (European Currency Unit) 20 million
was made available for that period to finance 99 projects. The program mainly provided
start-up assistance for innovative projects which are likely to increase the use of
international intermodal transport by improving its competitiveness. The industry was highly
involved in the PACT Programme, enabling to demonstrate the applications of intermodal
transport.

For the period 1997-2001, the second PACT programme financed another 92 projects that
develop innovative modal shift concepts. The EU invested approximately ECU 35 million in
the PACT Programme for this period.

Since 2001, the Marco Polo Programme has replaced the PACT Programme. Both the scope
of the actions and the budget of the programme expanded with the launch of the Marco Polo
Programme and Marco Polo II (see below).

3.6. Financial support for “modal shift”

In the transport sector, government subsidies are designed to provide incentives to attract
certain transport activities. Policymakers often formulate subsidies inspired by economic
concerns. The intermodal transport sector also receives transport subsidies. This section
introduces subsidies by elaborating on its definition, objectives and classifications. The main
focus was on the subsidy schemes that are formulated by the Member States for financial
support for modal shift. Finally, the Marco Polo programme will be explained as an example
of a community-wide instrument.

3.6.1. Subsidies

The definition of subsidies is not only important for academic concerns but especially for the
decisions of the policymakers. The dictionary definition of a subsidy is that it is a form of
financial assistance paid to a business or economic sector. OECD (Organisation for Economic
Co-operation and Development) narrows this broad definition down to “a result of a
government action that confers an advantage on consumer or producers, in order to
supplement their income or lower their costs”. Rothengatter (EEA, 2007) translates the
definition of subsidies to the transport sector: “payments by public institutions to individuals
or companies, for which the state or other institutions receive no goods or service in return”.

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Based on this definition, several policy measures could be considered as subsidies such as
tax exemptions, accelerated depreciation allowances, selective exemptions from government
standards, limited liabilities and provision of transport infrastructure.

Transport subsidies aimed at fostering economic growth or regional development; reducing
congestion and transportation costs; introducing new technologies into the market or
improving safety are examples of subsidies intended to reach economic objectives. Some
transport subsidies are inspired by environmental objectives. The external effects of
transport modes can be balanced by the introduction of subsidies to reduce greenhouse gas
emissions, reduce air pollution; reduce noise and introduce cleaner technologies. Finally, the
nature and the place of transport in our daily lives require the formulation of subsidies with
social objectives. Subsidies might also be aimed at low-income groups and developing
socially disadvantaged regions.

Several methods can be used to classify subsidies. Steeblik (2002) addresses the question of
how to classify subsidies. Subsidies can be grouped according to their recipients, purpose,
instruments and benefits. Logically, subsidies are also grouped according to their grantor,
budget impacts, drawbacks and economic functions.

In this dissertation, subsidies being granted to intermodal terminals and transport operators
by the public bodies of Member States for economic and environmental purposes are
considered. The focus of attention is on the pathway of benefit; direct and indirect effects of
subsidies are analysed and the drawbacks of the subsidies are addressed.

Usually the policymakers need methods of measurement to assess the effects of subsidies
after their introduction. Literature on subsidy measurement conclude that the effect of
subsidies can be assessed by means of a comparison of total costs and total revenues
(Steenblik, 2002). Intermodal transport policies usually aim to achieve a modal shift from
unimodal road transport to more environmental friendly modes. Therefore the amount of
containers that are shifted from road to railway is frequently used as a method to measure
the effects of subsidies (Macharis and Van Ham, 2005).

3.6.2. National initiatives

Investments in the transport sector are capital intensive and have their revenues on the
long term, which limit the investors’ willingness to invest. Therefore a well functioning
financial mechanism is a precondition to realise intermodal transport systems. Representing
an important policy instrument, Member States formulate a variety of subsidy schemes,
which have significant impacts on both the level of freight transport and on the modal

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choices made by transport users. The concept of PPP is widely used in performing transport
projects. Within community competition rules the EC is very open for issuing positive
decisions concerning state aid cases of national initiatives on promoting intermodal
transport.

The transport policy in Europe is more driven by public policy concerns instead of business
dynamics. As the intensity of public policy concerns varies between different Member States
and regions in Europe the development of continent wide solutions is very difficult to
implement. European intermodal transport policies and national intermodal policies of the
Member States should complement each other. Below the national and regional subsidy
schemes of 5 European countries are discussed. Each scheme is authorised by the EU
competition authorities. By using the case numbers, each subsidy scheme can be consulted
at: http://ec.europa.eu/comm/competition/state_aid/register/

3.6.2.1. Austria

In Austria, there are certain intermodal transport operations being considered to be of public
interest. Therefore, fiscal incentives are provided to encourage these intermodal transport
operations. The current subsidy scheme (N140/04) is the extension for the period 2003-
2008 of the previous scheme (N121/99) covering the period 1999-2002. Given the objective
of achieving a 3 percent modal shift from road, the scheme provides grants for:

- Equipment for combined/intermodal transport;

- Innovative technologies and systems to improve the combined transport system;

- Feasibility studies for specific implementing measures;

- External training costs for introductory training to specific computer systems or
technologies.

Another subsidy scheme (N644/01) that subsidised loans to encourage the transfer of road
transport operations to railway or inland waterway for the period 2001-2006, is also being
extended for the period 2007-2011 (N76/07).

3.6.2.2. Belgium

Belgium has an extensive transport network to distribute containers arriving at the port of
Antwerp and Zeebrugge. In the last decade, the Flemish government introduced various
subsidy schemes for container barge waterways transport. The Walloon government followed
this trend as well.

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Focusing on intermodal rail transport, the Flemish aid (N 566/02) for combined transport
consisted of an annual budget of € 3 million for the acquisition of combined transport
equipment, transhipment equipment and aid for information system. The subsidy scheme,
which expired at the end of 2003, covered the investment costs of the railway operators
offering:

- New combined transport operations, i.e. a new route, new types of traffic or a new
contract;

- Expansion of existing combined transport operations;

- Maintaining the capacity of existing combined transport operations.

A subsidy (N 249/04) is specifically designed for national intermodal rail transport. The
Belgian government grants an annual budget of € 30 million to the intermodal operators,
offering transport services within Belgium of at least 51 kilometres. The subsidy is composed
of a fixed part (€ 20) and a variable part (maximum € 0.40 per kilometre). The objective of
the aid scheme, which was extended until the end of 2008 (N 656/07), was to help
maintaining the existing rail traffic levels of 300,000 ITU and to increase rail traffic by 20
percent over a period of three years. In 2009, the subsidy is extended for the period 2009-
2012. The updated subsidy is composed of a higher fixed part (€ 40) and a lower variable
part (maximum € 0.20 per kilometre). Over the coming period, the fixed part of the subsidy
will gradually be decreased to € 22 and the variable part to € 0.14 (N 571/08).

In order to promote inland navigation, the Flemish government developed a policy measure
that stimulates the construction of new quay walls coupled with a reduction of canal-dues.
The PPP programme allows the co-financing of the construction of quay walls for 80 percent
by the Flemish government and 20 percent by the private sector. The quays remain property
of the Flemish government and the private investor guarantees that a fixed tonnage of
freight will be transported by inland waterways in the ten years to come. The programme,
which established the support of the EC until 2010 (N 550/01 and N 344/04), realised a 66.5
percent growth in the inland waterway transport over the previous five years (Promotie
binnenvaart, 2006). In May 2007, the EC authorised another Flemish measure to grant a
subsidy of € 17.5 per each container transhipped to a Flemish inland container terminal from
or to an inland waterway vessel (N 682/06).

Similar initiatives are also developed in Wallonia and Brussels. In March 2005, the EC
authorised a Walloon measure to grant a subsidy scheme to promote intermodal transport in
the Walloon region (N 247/04). According to the government decision of December 2004,
the Walloon government, started to subsidise investments in the terminals such as the

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transhipment infrastructure, with the objective of developing regular container services in
Wallonia. The government decision also aims to modernise the fleet. In addition to the
investment aid, a subsidy of € 12 is foreseen for the containers that are transhipped to a
Walloon inland container terminal from or to an inland waterway vessel (OPVN, 2006). In
2008, this subsidy is extended for the period 2008-2013. An identical subsidy scheme is also
valid for the Brussels region for the period 2007-2009 (N 720/06).

3.6.2.3. France

In France, a state aid (N 623/02) is granted for the operation of scheduled combined freight
transport services as an alternative to the unimodal road transport. An annual budget of €
40 million is foreseen for the period 2003-2007. The aid aims to cover extra costs of
intermodal transhipments that are taking place in the terminals.

An experimental rail (rolling) motorway service was launched in 2003 between Bourgneuf-
Aiton (France) and Orbassano (Italy) thanks to the authorisation of a state aid (N 155/03).
By providing a rail service to cross the Alps, the project aims to contribute to a modal shift
towards rail transport. The French government continues its support in this field with the
following initiatives:

- The “route roulante 2006” project (rolling road) for which the first trials were planned
on the route between Perpignan and Bettencourt.

- The “Eco fret Atlantique” project on the route between Vitoria, Hendaye and Lille.

3.6.2.4. Germany

In 2001, the German combined transport operator Kombiverkehr and the Italian transport
company RTC formed a joint venture to offer a new service between Munich and Verona
through the Brenner corridor, which is the principal axis of the German intermodal transport.
An Ad-hoc start-up aid (NN 134/05) was granted to this service, aimed at shifting traffic
from road to railway by introducing a new transport technology. This innovative idea was
planned by a high performance capacity locomotive.

The German government also supported the construction of combined transport terminals
through a subsidy scheme (N 406/02). Focusing on the high construction and property
purchase costs for building the intermodal terminals, the subsidy scheme provided a budget
of € 110.5 million to facilitate the construction of terminals for 2002-2005. This subsidy
scheme (N 397/05) was prolonged for 2006-2008

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On the operational level, an aid scheme (N 238/04) for the funding of new combined
transport traffic was introduced for a three years duration. With a budget of € 45 million, the
start-up aid covered a maximum of 30 percent of the operating costs of the new transport
services.

3.6.2.5. Italy

In Italy, two-thirds of the total traffic takes place on the Trans-Alpine route. Most of the
thirteen state aid cases presented by Italy are related to investment and start-up aid for
equipment and infrastructure. There are also some cases covering environmental premiums.

A recent aid scheme (N 575/06) provided a budget of € 9 million for 2007-2009 to
modernise regional infrastructure and services in order to improve the efficiency of
intermodal freight transport services. The subsidy scheme supports investments of railway
undertakings in intermodal transport infrastructure, information systems and transhipment
equipment.

To conclude, it can be pointed out that the transport policy in Europe is more being driven
by public policy concerns instead of by business dynamics. Since public policy concerns vary
in intensity between different Member States and regions in Europe, the development of
continent wide solutions is very difficult to implement. The European intermodal transport
policy and the national intermodal policies of the Member States should complement each
other.

3.6.3. Marco Polo

As a successor of the PACT programme, the Marco Polo programme was set up in 2003 in
order to shift international road freight transport to shortsea shipping, inland waterway and
rail. The current programme (Marco Polo II) runs from 2007 to 2013, with a total budget of
€ 400 million. Between 2003 and 2006, 55 projects have been financed. The subsidies
reduce the high financial risks of market players during the start-up phase of new
intermodal transport services. Furthermore, incentives are given to develop innovative
solutions for using intermodal transport. In 2007, the scope of the programme was extended
by including MoS and traffic avoidance measures. The Marco Polo programme plays a vital
role in European integration as it builds bridges through symbolically attractive projects that
can be implemented (Vanderhaegen, 2009). Concrete actions are foreseen in the
Mediterranean Sea and further projects are developed for the Black Sea and the Caspian
Sea. It should be noted that the programme can also fund international projects involving
third countries if there is a Community interest.

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The current policy at the European level focuses on developing an updated methodology to
calculate the environmental benefits of Marco Polo projects and to better link the hinterland
aspects of the MoS. Additionally, regulations of the programme are being revised, which will
decrease the administrative burden of project proposals and which is expected to enter into
force by 2010. The EC comments that the subsidies in the framework of Marco Polo will
remain a tool to achieve modal shift, as the suboptimal allocation of transport flows on
different modes continue until an agreement on internalisation of external costs is achieved
(Vanderhaegen, 2009).

3.7. Charging and pricing policies

3.7.1. Charging principles

Next to prescribing European policies on transport, a more direct approach involving
imposing cost measures on transport users is also used to enhance economic efficiency.
Transport users pay only a percentage of the actual costs for the society of their usage.
Economists indicate that the external costs of transport should be borne by the users. When
this cost is ignored, the market fails, underlining the necessity of corrective policy measures
(Rouwendal and Verhoef, 2006).

Charging principles are designed to compensate for the costs of infrastructure maintenance
and management. Economic theory suggest that charging policies based on marginal costs
lead to a better usage of the available transport capacity than charging policies based on
average costs or cost recovery rules (Ecorys, 2005). The marginal cost is calculated when an
additional vehicle or vessel uses the transport infrastructure. They reflect costs such as
infrastructure damage, congestion and pollution, implying that they vary according to
vehicle or vessel type, engine emissions and peak times.

Another charging principle depends on the external costs of transport. It is widely accepted
that transport activities lead to environmental impacts, accidents and congestion. Unlike the
benefits of transport, these costs are generally not borne by the transport users. The
internalisation of external costs of transport acts as a policy measure to integrate external
costs into the decision making process of transport users. The current policies have lead to
innovations in the road transport sector in an attempt to minimise their external effects. The
result of internalisation provides opportunities for intermodal transport solutions, although
their competitiveness is challenged by the improvements in the road transport sector.

Despite the fact that a European implementation for common charging principles is aimed
for. To date, Member States apply different infrastructure charges. In 2008, the Commission

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proposed a common European framework for charging and pricing. The goal is to develop a
model that will serve as a basis for infrastructure charging calculations accompanied by the
internalisation of external costs for all modes of transport.

3.7.2. Charging on transport modes

Road hauliers have to pay road tolls or user charges (Eurovignette). Depending on the
country, these costs can be variable e.g. a toll, or a fixed sum, e.g. the Eurovignette. The
Eurovignette system consists of a time-based fee in the form of a vignette, which is mutually
recognised and valid in all participating countries (Belgium, Denmark, Luxembourg, the
Netherlands and Sweden). User charges are scaled according to vehicle emission classes and
range from € 750 to € 1,550. Tolls, on the other hand, are used to collect distance-based
charges in other European countries (France, Spain, Italy, Austria and Germany). Tolls are
scaled according to vehicle emission classes, type of roads and time periods.

Railway infrastructure usage is taken into account by the rail infra charges, which enable the
infrastructure managers to compensate for their infrastructure maintenance and
management costs. Different principles determine the shape of the rail infrastructure
charges in Europe. Social marginal costs and full costs are considered as pricing principles.
Furthermore, factors such as train weights, type of engines and time periods are also taken
into consideration to refine the charges, which are fixed or variable. The charges for rail
freight transport differ among European countries. For a freight train of 1,000 gross tonne
kilometres, the charge per train-kilometres varies between € 0.6 and € 2.5 in Austria. For
example in Brenner corridor the total charge will amount up to € 3.5. In the Czech Republic,
a typical charge would be more or less € 3.4 and in Switzerland they can mount up to € 6.
In contrast, the charges per train-kilometres are only € 0.67 in the Netherlands (OECD,
2005).

Concerning inland navigation, pricing policy aims to finance infrastructure expenditures and
to reach environmental objectives. Unlike for other transport modes, infrastructure costs are
for a large part independent of the use when considering inland waterways. Maintenance
costs, especially dredging represent an important part of the costs. The charges can take 3
forms: fuel charges, waterway charges and harbour and lock dues. The different functions of
waterways constitute an obstacle to the development of charging principles. There are also
agreements on free access to waterways such as the Mannheim Convention on the Rhine
river. To conclude, most waterways in Europe are free of charge and the systems of charges
are not coherent. In Belgium, the “Scheepvaartrechten” system amounts to € 0.00025 per

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ton-km. In France, there is a toll system that depends on vessel type, goods transported
and route.

3.7.3. Fuel taxes

Common rules on annual taxes for heavy goods vehicles over 12 tonnes are defined by the
Directive 99/62/EC, which was modified by the Directive 2006/38/EC. The Directive provides
minimum rates for fuel taxes according to the number and the configuration of axles and
with the maximum permissible gross laden weight:

(in €/1 000 litres) Leaded petrol Unleaded petrol Diesel fuel

Minimum rate 421 359 302

The rates themselves still differ from one Member State to the other.

3.7.4. Cross modal financing for railways

One of the goals of charging is to increase the ability of transport sectors to finance
themselves. There is a link between charging for the infrastructure on one hand and
investments in infrastructure on the other hand. Revenues from one mode can be reinvested
in another mode to facilitate infrastructure financing. This innovative infrastructure funding
model is called cross-modal financing.

Successful examples of cross-modal financing are seen in the Transalpine corridor. The
Swiss, Italian and Austrian governments allocated funds being fed by two thirds of the
revenues of the km-based road tax, the fuel tax, the VAT and credits from the capital
market.

3.8. A change of seasons in the markets

National support for modal shift and charging and pricing policies are highly correlated with
the liberalisation of the European transport market. Until the 1980s strict public control was
steering the European transport market, which has changed during the European integration
process through competition and liberalisation policies. Today, in all Member States and on
all transport markets the policy has been to abandon public interference in transport
operations and to encourage international competition (Vrenken et al., 2005). Liberalisation
of the transport sector acts in parallel to the competition policy in order to maintain a
transport system with harmonised rules and to avoid distortions in competition. The national
initiatives of the Member States, which aim at promoting intermodal transport represent a

90
risk of market distortion, so that they became subjected to EU approval. In this section, a
brief overview of the redevelopment of regulations governing the liberalisation of the
transport market and of competition will be highlighted.

3.8.1. Road transport

Although the road transport industry is already liberalised as a result of opening up national
markets since the early 1990s, the European policy still has to deal with economic and
environmental impacts of increased road traffic. These impacts have led to road-use toll
systems, vehicle emission standards and other policies such as operational restrictions.
Furthermore, the competition policy is directed towards harmonising regulations on access
to the market, driving and rest hours and dangerous goods traffic.

3.8.2. Inland navigation

The inland navigation transport market has been liberalised in January 2000 through the
abolition of fixed tariffs and of the principle of mandatory barge rotas in the dry bulk goods
segment. Complete liberalisation was achieved earlier than this date in some countries
including Belgium and the Netherlands. The restructuring of the sector was accompanied by
a number of important regulations on social aid (Blauwens et al., 2006).

Additionally, the conditions for issuing technical certificates for inland waterway vessels in all
Member States were harmonised (Directive 2006/87) and a Community framework
(Directive 2005/44) was developed for deploying and utilising harmonised river information
services to support the development of inland waterway transport while to strengthening its
safety, efficiency and environment-friendliness, and facilitating interfaces with other modes
of transport.

3.8.3. Railways

The European transport policy considers the development of rail freight as a major
challenge. Although it declined significantly from the 1970s until recent years, the railway is
still a mean of transport with major potentials. In the process of creating an integrated
European rail freight market, the EU legislation induced the complete opening of the rail
freight market to competition by 2007. Today, over 700 licences are issued in Member
States and a significant increase of railway transport is observed in the Member States that
already opened their markets.

One has to acknowledge the pivotal role, the new railway undertakings play especially when
it comes to becoming more competitive and to better adapting to the customer

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requirements. Next to serving new markets, the railway undertakings also offer new
services, such as container transport. Rail systems that are organised along national lines,
still face a key obstacle for the further integration of rail markets, namely a lack of
interoperability. Therefore the Commission launches a series of initiatives aimed at
accelerating the revitalisation of the rail freight transport through operational and technical
standardisation. Another problem is the competitiveness of the railway undertakings in
attracting and maintaining their customers.

The first step towards rail liberalisation was the separation of infrastructure from transport
operations. Once public responsibility for infrastructure was separated from transport
operations, access rules were developed, defining the technical standards for the equipment.

Eisenkopf questions whether open access guarantees competition automatically. Entry
barriers exist not only with regard to economic factors like financial strength or economies of
scale, but also in the form of continuing reluctance of some European states and railways to
open up their national infrastructure or to hamper market access (Eisenkopf et al., 2006).
Open access has to be enhanced by additional regulatory and structural reforms to reach
competitiveness in the railway sector.

3.8.4. Shortsea shipping

The major developments in shortsea shipping market liberalisation focus on opening up
national markets and on cabotage transportation. Apart from forcing freight rates down,
liberalisation has not had a major impact on the structure of shortsea shipping in Europe,
where the major ocean carriers have great influence (ECMT, 2001).

Liberalisation at the seaports follows a legislative procedure since 2001. Current policies on
port reformation aim to develop a regulatory framework at Community level in order to
establish a more systematic liberalisation of the port services market (in the ports). The aim
of this framework would be to establish a level playing field between and within Community
ports while ensuring compliance with port and maritime safety standards.

3.9. Other policies that favour intermodal transport

3.9.1. Operational measures

Policies of promoting intermodal transport are widely applied in Europe at various levels.
Some national governments introduce policies on weight restrictions and weekend bans.
From an operational point of view, intermodal transport will benefit from releasing traffic
restrictions at the weekends and at holidays, enabling drayage operations. Furthermore,

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exemptions from the weight restrictions (i.e. 44 tonnes instead of 40) in intermodal chains
contribute to improve competitiveness of intermodal transport.

3.9.2. Intermodal transport promotion

Both the Member States and the EC widely apply the policy of promoting intermodal
transport. Various policy measures and projects are intended to create an awareness of the
capabilities and advantages of intermodal transport among potential customers. The main
objectives of intermodal transport promotion are to create an awareness among all parties
of the possibilities for cooperation between transport modes and to establish virtual portals
for all intermodal modes.

The European project TRALOTRA – TRAining tools in LOgistics an TRAnsport – is a vivid
example of intermodal transport promotion. This two-years project is set up in order to
increase the awareness of the benefits intermodal transport can have to business and to the
society as whole. The system advantages of intermodal transport are far from fully
exploited. There is much room for intensifying intermodal business by intelligent rearranging
of logistic solutions and by efficiency improvements. Intermodal transport is the key to the
successful development of a feasible, sustainable transportation system. The project aims at
defining and implementing online training courses made up of different modules. The final
goal of the TRALOTRA project is to create training curricula for a wide range of training
target groups (post-diploma students, junior managers, personnel of Public Authorities)
available by means of an e-platform.

Some countries establish consultancy services to provide support for shippers or logistics
service providers to identify opportunities for modal shift. Targeted promotion of intermodal
transport takes place both at the company level and at industrial sites. Based on modal shift
analysis, implementation steps procedures are envisaged. Dissemination of best practices
are also widely used.

3.10. Conclusion

This chapter elaborated on the European transport policy on intermodal transport. Following
a brief explanation of the historical development of European transport policies, an
intermodal policy framework was presented. Various policy measures are connected to this
framework, which serves as an input for the evaluation model. The following policy
measures were discussed:

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- Intermodal infrastructure at European level was explained with the concept of the
Trans European transport networks,

- Research and development activities in Europe,

- Subsidies on intermodal transport sector,

- Charging and pricing policies,

- Other policies that favour intermodal transport.

This overview shows that various combinations of policy instruments or packages can be
implemented along the intermodal transport chain. This requires a close co-operation
between the stakeholders in order to create synergies. The EU’s intermodal policy sets the
guidelines for a structured approach to intermodal freight transport. Different transport
policies are launched in the Member States to stimulate the use of intermodal transport but
no integrated formal ex-ante and ex-post evaluation of these transport policies is being
executed. Therefore, intermodal policies will be further analysed with the GIS-based
evaluation model.

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4. GIS-based intermodal transport model

4.1. Introduction
Introduction (1)
This chapter establishes the scientific framework of this
Intermodal transport
in general (2) research. As a very young field in transportation research, a

Intermodal transport significant number of models have been and will be
policies (3) developed (Bontekoning et al., 2004). In order to facilitate a
analysis for Belgium (5)

comprehensive understanding of intermodal transport
analysis for Turkey (6)
GIS-based intermodal

research problems and theories, a literature review on
transport model (4)

modelling in intermodal freight transport is presented. The
Scenario-based
Scenario-based

main aim of this chapter is to lay the foundation for the GIS-
based Location Analysis Model for Belgian Intermodal
Terminals (LAMBIT) and to sketch its role in solving research
problems in this field.

Demonstrating the current state-of-the-art in the theory and
Conclusions (7) practice of intermodal transport modelling, section 4.2
presents a literature review of the academic papers in this field. In Section 4.3, the LAMBIT
methodology is introduced. The added value of this research is concerned with the further
developments of the LAMBIT methodology that is presented Section 4.4. In section 4.5 the
implementation of the model is shown. Finally conclusions are drawn in section 4.6.

4.2. Modelling methodology

Modelling is one of the important tools used to solve complex decision-making problems.
Throughout history and in many civilisations, physical models have been used for designing
equipment and infrastructure. An example is the geographic maps that have, for
generations, been used to model reality by efficiently communicating spatial information.
Maps, defined by Harley (1987) as memory banks for spatial data and as mnemonics in
societies, may be regarded as the first transport models. Indeed, maps constitute a common
language spoken by men of different races and tongues to express the relationship of a
society with its environment. As a concise and precise language, mathematics is also used to
model our beliefs about how the world functions.

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Intuitively we all use mind maps often to generate, visualise, structure, and classify ideas,
and as an aid in study, organisation, problem solving, decision making, and writing. The aim
of the human brain is to transform concepts into simple and abstract forms in order to
achieve a tangible decision-making process. One can understand a present situation based
on the available data and key relationships and then analyse future situations.

From the perspective of transport research, numerous actors are included into decision
making processes, which are leading to certain problems. The aims and goals of these actors
for a given problem can be conflicting. As a result, the decision problems along the points of
view of all actors should be structured. Each actor wants to identify the key factors that
influence the outcome of any action (Hensher and Button, 2000; Macharis, 2004). To this
end, decision makers frequently undertake transport modelling approaches so that the users
can determine precise outcomes from their analysis based on computing technology and a
range of software and mathematical algorithms.

Ongoing economic globalisation and production systems have turned freight transport into a
major public policy and business domain (Ben-Akiva et al., 2008). As it has developed into
one of the driving forces of economic growth, freight transport also created substantial
negative externalities. Considering the current transport trends, the social costs of freight
transport may exceed the benefits. This situation explains the recent evolution in European
transport policy, such as the urgent need for internalising external costs of transport. While
the EU transport policy has created awareness, its implementation has not been a
straightforward proposition. Intermodal transport has a pivotal role in adjusting the
transport policy to level external effects of transport, thus achieving a balance in transport
modes. The challenge of a shift towards co-modal transport policies represents one of the
problems that require transport modelling to conduct ex-post and ex-ante assessment. This
section is concerned with the methods which allow an analysis of the problems in intermodal
freight transport decision-making. In order to demonstrate the current state-of-the-art in
the theory and practice of intermodal transport modelling, first, a literature review of the
academic papers in this field is performed. Then new models and approaches in intermodal
freight transport are discussed.

4.2.1. Literature review

In this section a literature review on modelling in intermodal freight transport is conducted.
As a relatively young field in transportation research, a significant number of papers on this
topic have appeared in recent years. In their review, Macharis and Bontekoning (2004) give
a review of operational research models that are used in intermodal freight transport

96
research and define the modelling problems which need to be addressed. In a recent update
of this review, Caris, Macharis and Janssens (2008) further focus on the planning issues in

intermodal freight transport research. Within the scope of this dissertation, recent papers in
modelling were integrated to the review.

The problem-oriented nature of the intermodal transport literature requires a need to
address the theories, methods and techniques applied to investigate the problems.
Specifically, intermodal transport chains are applied to various planning problems with
respect to drayage operations, rail haul operations, terminal location decisions,
transhipment, infrastructure planning, intermodal route selection and intermodal pricing.
Operations research techniques that have been applied to these problems include linear
programming, integer programming, non-linear programming, network analysis (sometimes
GIS-based) and simulation (Bontekoning et al., 2004). Applied social science methods and
techniques in this field are centred around mode choice, standardisation, multiple actor
chain co-ordination, and transport planning and policy. Just as in any other transportation
research field, the intermodal transport research also uses techniques such as case studies,
surveys, interviews, observations, expert panels and analytical approaches. Theoretical
approaches to research questions of intermodal transport problems are location theory,
market area theory, marketing channels theory, system analysis and cost-utility analysis.

In an attempt to categorise the types of decision makers in intermodal transport research,
Macharis and Bontekoning (2004) distinguish intermodal operators based on the four main
activities in intermodal freight transport. First, drayage operators are included in the
planning and scheduling of trucks between the terminal and the shippers and receivers.
Second, terminal operators organise transhipment operations from one mode to another.
Third, network operators are involved in the infrastructure planning and organisation of the
long haul of the intermodal transport chain. Finally, intermodal operators are defined as
users of the intermodal infrastructure and services and manage the route selection for the
cargo throughout the whole intermodal network.

Decision makers face planning problems with different time horizons. Long term, strategic
problems require large capital investments over long time horizons. Typical decisions in the
strategic level are related to the design of the physical intermodal infrastructure network
such as the location of terminals, the network configurations and the layout of a terminal,
which involves the highest level of decision makers. Medium term, tactical problems are
concerned with improving the performance of the intermodal transport systems through
better allocation of existing resources over a medium term horizon. Short term, operational

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problems are related to the day-to-day or even real-time management of the intermodal
transport chain.

Macharis and Bontekoning (2004) combine these two categories to establish a classification
matrix with twelve categories of intermodal operation problems, as depicted in Table 4-1.
This classification provides a structured overview of the types of planning problems in
intermodal transport based on the reviewed academic papers. The classification, which
integrates both single and multiple decision levels and makers, is not exhaustive as some
decision problems can be faced by several decision makers and can be relevant for the same
decision maker at different time horizons. However, the decision problems placed in the
classification matrix of Table 4-1 are most prominent.

Table 4-1: Overview of publications

Decision Time horizon
maker Strategic Tactical Operational

Drayage Co-operation Allocation of shippers Vehicle routing
operator between drayage and receiver locations Wang and Regan
companies to a terminal (2002)
Spasovic (1990) Taylor et al. (2002) Imai et al. (2007)
Walker (1992)
Morlok and Spasovic Pricing strategies Redistribution of
(1994) Spasovic and Morlok trailer chassis and
Morlok et al. (1995) (1993) load units
Gambardella et al. Justice (1996)
(2002)
Macharis (2004)

Terminal Terminal design Capacity levels of Resource allocation
operator Ferreira and Sigut equipment and labour Alessandri et al.
(1995) Kemper and Fischer (2009)
Meyer (1998) (2000)
Van Duin and Van Ham Kozan (2000) Scheduling of jobs
(1998) Kulick and Sawyer Bostel and Dejax
Gambardella et al. (2001) (1998)
(2002) Huynh (2005) Gambardella et al.
Rizzoli et al. (2002) (2001)
Vis and de Koster Redesign of Alicke (2002)
(2003) operational routines Vis and de Koster
Ballis and Golias (2004) and layout structures (2003)
Evers and De Feijter Voges et al. (1994) Corry and Kozan
(2004) Vis and de Koster (2006)
Macharis (2004) (2003)
Bontekoning (2006) Marín Martínez et al.
Vis (2006) (2004)

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Network Infrastructure Configuration Load order of trains
operator network consolidation Feo and González-
configuration network Velarde (1995)
Crainic et al. (1990) Howard (1983) Powell and Carvalho
Jensen (1990) O’Kelly (1987) (1998)
Fonger (1993) Slack (1990)
Loureiro (1994) Klincewicz (1991) Redistribution of
Clarke et al. (1996) O’Kelly et al. (1995) railcars, barges and
Van Duin and Van Ham Jourquin (1995) load units
(1998) Jourquin and Beuthe Chih and van Dyke
Woxenius (1998) (1996) (1987)
Jourquin et al. (1999) Klincewicz (1996) Chih et al. (1990)
Southworth and Skorin-Kapov et al. Bostel and Dejax
Peterson (2000) (1996) (1998)
Eatough et al. (2000) Guldman and Shen
Gambardella et al. (1997)
(2002) Ernst and
Evers and De Feijter Krishnamoorthy (1998)
(2004) O’Kelly and Bryan
Klodzinski and Al-Deek (1998)
(2004) Janic et al. (1999)
Tan et al. (2004) Slack (1999)
Groothedde et al. Jourquin et al. (1999)
(2005) Hamacher et al. (2000)
Parola and Sciomachen Nickel et al. (2000)
(2005) Sohn and Park (2000)
Kreutzberger, Macharis Newman and Yano
and Woxenius (2006) (2000a)
Tsamboulas et al. Newman and Yano
(2007) (2000b)
Rahimi et al. (2008)
Macharis, Pekin and van Production model
Lier (2009) Anderson and Walton
(1998)
Location of terminals Nozick and Morlok
Meinert et al. (1998) (1997)
Rutten (1998) Choong et al. (2002)
Arnold and Thomas Lin and Chen (2004)
(1999) Li and Tayur (2005)
Groothedde and
Tavasszy (1999) Pricing strategy
Macharis and Verbeke Tsai et al. (1994)
(1999) Yan et al. (1995)
McCalla et al. (2001) Li and Tayur (2005)
Arnold et al. (2004)
Macharis (2004)
Racunica and Wynter
(2005)
Kapros et al. (2005)
Sirikijpanichkul and
Ferreira (2005)
Limbourg and Jourquin
(2009)

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Intermodal Gambardella et al. n.a. Routing and
operator (2002) repositioning
Macharis (2004) Min (1991)
Hanaoka and Barnhart and Ratliff
Kunadhamraks (2009) (1993)
Boardman et al.
(1997)
Ziliaskopoulos and
Wardell (2000)
Erera et al. (2005)
Chang (2008)
Grasman (2006)
Androutsopoulos and
Zografos (2009)
Caramia and Guerriero
(2009)
Source: Own interpretation and update based on

Macharis and Bontekoning, 2004 and Caris, Macharis and Janssens, 2008

Table 4-1 can be used to review the papers in intermodal freight transport. The intermodal
transport framework (see chapter 3) is used to examine the current knowledge base in
intermodal freight transport literature and on this basis the following research categories are
selected: drayage, intermodal haul and terminals and intermodal transport policies.

4.2.1.1. Drayage

Representing a critical leg of an intermodal transport chain, drayage operations take place
by truck between an intermodal terminal and shippers or receivers. In an integrated
intermodal transport chain, drayage operations account for a large fraction of transport
costs, despite the relatively short distances of the kilometres between the intermodal
terminals. High drayage costs negatively affect the total intermodal transport cost. In
countries like Belgium, where short distance transport is frequently used, this situation can
limit the markets in which intermodal transport competes with unimodal road transport and
therefore models have been constructed to minimise the total cost of drayage operations.
Spasovic (1990), Morlok and Spasovic (1994) and Morlok et al. (1995) focus on reducing
drayage costs through central planning of all pick-up and delivery trips of several drayage
companies. Their model is a large-scale integer linear program with time windows and
service constraints. The outcomes of this dynamic model show that substantial cost savings
could be realised with a centrally planned drayage operation. Walker (1992) approaches the
same problem through a computerised network with the simulation of a Monte-Carlo
assignment.

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4.2.1.2. Intermodal haul and terminals

There is a considerable literature devoted to intermodal haul and terminals. Ranging from
strategic infrastructural planning to tactical network configuration and operational loading
unit redistribution, various models are used to find solutions to the problems of intermodal
freight transport.

As an intermodal transport chain shows, loading units are transhipped at least twice
between truck and train or inland waterway vessel. Through the establishment of an
integrated chain between the intermodal main haul and the drayage, transhipments take
place in intermodal terminals. Transhipment techniques and terminal designs attract
researchers to develop methods to assess the performance of the intermodal transport
chain. Ferreira and Sigut (1995) compare a conventional road-rail terminal and the
RoadRailer concept, a technology that uses trailers with the capability of being hauled on
road as well as on rail. Their model is based on a discrete event simulation for both terminal
concepts. Woxenius (1998) evaluates the development of small-scale intermodal freight
transportation in a systems context. ILUs can easily be exchanged between the wagons and
inland waterway vessels which transforms terminals as hubs. Meyer (1998) focuses on the
design problem of a rail-rail terminal in a hub-spoke system through a computer simulation
model designed to determine required capacity for terminal infrastructure and efficient
management of train arrival times. Researchers also assess performance indicators used to
tackle tactical problems in intermodal freight terminal operations. Voges et al. (1994) take
the operating procedures for an existing terminal as a case and use their computer-based
simulation model to measure the waiting times of trucks. Bostel and Dejax (1998) aim to
optimise the loading allocation of containers in terminals. Bontekoning (2006) constructs a
simulation model to compare various hub exchange facilities in an intermodal rail network.
The model provides perspectives for innovative intermodal terminal concepts which can
replace shunting yards. Vis (2006) focuses on the type of equipment used for containers.
Simulation model aims to measure and compare the time required to perform handling
operations of manned straddle carriers with automated stacking cranes. Alessandri et al.
(2009) address the efficiency of container terminals via an approach based on the
optimisation of logistics operations. Proposing a discrete-time dynamic model of the various
flows of containers that are intermodally routed from arriving carriers to carriers ready for
departure, the decisions on the allocation of the available handling resources inside a
container terminal are formulated.

The majority of the studies are related to the problems associated with the development of
the intermodal network, which include decisions at a strategic level, such as infrastructural

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investments in links (railway or waterway) and nodes (ports and terminals). Among others,
research questions include which intermodal transport links to use, which current terminals
to use and where to locate new terminals, and which origin and destination regions to serve.
Researchers also question the scale of terminals. Slack (1990) argues that hubs can be used
to direct concentrated traffic along a few corridors between a few terminals. However nine
years later he proposes establishing satellite facilities in order to solve the problem of
congestion in terminals (Slack, 1999). Other researchers argue that a denser network,
composed of many intermodal terminals may be preferred. Howard (1983) argues that a
dense intermodal terminal network with smaller terminals may be preferred as larger
terminals do not lead to economies of scale.

The second research question concerning the intermodal terminals is their locations. It is
one of the most vital characteristics of a good terminal as indicated in section 2.4. The
location of a terminal has impacts (financial, economic, social and environmental) on
different stakeholders, such as policy makers, investors, terminal operators, freight
operators, industry and the community. Indeed, intermodal freight terminals have direct and
indirect impacts on land use and business development (McCalla et al., 2001). The challenge
for researchers is to develop models to evaluate these impacts through various evaluation
models. In the context of this dissertation, location related models will be discussed.

A location evaluation model can be based on multi-modal transport networks and origin-
destination matrices with transportation flows. Traffic flows are derived from the origin-
destination matrices, which are assigned to the network by cost functions. The costs are
defined as transportation price, time, congestion or other performance indicators for each
transport mode. Using the models, the possible routes and transport modes where a freight
flow will pass can be determined. This model makes it possible to identify optimal locations.
An optimal location depends on which objectives to optimise. Examples of these objectives
are: minimising transportation costs on the links, maximising terminal profitability,
maximising modal shift from road to intermodal transport, minimising total transport costs,
minimising drayage distance and costs (Macharis and Bontekoning, 2004).

The general problem in location evaluation models derives from searching for an optimal
location. Indeed optimisation techniques are widely used in these models when the optimum
location for an intermodal terminal is required. Sirikijpanichkul and Ferreira (2005)
categorise the models based on the optimisation techniques used, namely classical and
heuristic. Classical models such as mathematical programming, branch and bound
algorithms, branch and cut methods, and set partitioning formulations can provide the exact
solutions, thanks to the numerous assumptions, which make their computation costs higher

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and limit their application. Heuristic models such as neural networks, fuzzy control systems,
expert systems, genetic algorithms, tabu searches, local beam searches and simulated
annealing searches have the flexibility of formulating complex models and are cost efficient,
but they do not guarantee exact solutions to optimal location decisions.

In the literature, the application of classical techniques is seen in the research of O’Kelly
(1987) and Klincewicz (1991), with quadratic integer programming; O’Kelly et al. (1995),
Klincewicz (1996), Skorin-Kapov et al. (1996), Ernst and Krishnamoorthy (1998), Arnold
and Thomas (1999), Nickel et al. (2000), Sohn and Park (2000) and Hamacher et al. (2000)
with linear programming; Guldman and Shen (1997), O’Kelly and Bryan (1998) and
Racunica and Wynter (2005) with non-linear programming.

Ernst and Krishnamoorthy (1998), Hamacher et al. (2000), O’Kelly et al. (1995) and Skorin-
Kapov et al. (1996) apply a discount factor in order to incorporate a cost reduction effect
according to the consolidation process. O’Kelly and Bryan (1998) assess the number of
profitable terminals in terms of opening costs and travel time savings. Racunica and Wynter
(2005) focus on the optimal location of intermodal hubs in a hub-and-spoke network. Their
non-linear, mixed-integer model takes cost functions in order to derive cost reductions at
the selected hub. The model is applied to a case study of the Alpine freight network.
Although this model is the latest classical model developed to date, it still has limitations.
First of all, capacity constraints on the terminals are not included in the model. Secondly,
rather than a dynamic model with time as a parameter, the cost functions are used to define
frequency effects. Finally, external costs of transport are not considered.

Location models can also be distinguished by the attitude taken towards the choice of
location. The three categories of location models are continuous, network, and discrete
models (see Figure 4-1). In a continuous model a terminal may be located anywhere in the
space. Network and discrete models, on the other hand, consider potential locations within
the transport network. The network model considers all the potential locations within the
transport network whereas the discrete model requires pre-selected locations
(Sirikijpanichkul and Ferreira, 2005).

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Figure 4-1: Location models

Source: Own setup adapted from Sirikijpanichkul and Ferreira, 2005

Heuristic models are widely used in terms of multi-objective evaluations of terminal location
decision problems. Before such a heuristic model is set up, its boundaries (limitations)
should be defined. Summarised in Table 4-2, the researcher can answer three questions to
derive the dimensions for each component of the model.

Table 4-2: Boundaries of the model set up

Question Component Dimension
Where? Spatial Geographic boundaries
Who? Stakeholders Actors
What? Impacts Range of effects
Source: adapted from Sirikijpanichkul and Ferreira, 2005

A series of network models is found in the literature. Rutten (1998) focuses on rail/road
intermodal transport by investigating the interrelationship in intermodal networks in the
Netherlands. Within the European project TERMINET, his model analyses the possible
locations for intermodal terminals and evaluates the effects of these new terminals on the
existing terminal landscape. Arnold and Thomas (1999) developed a linear programming
model for finding optimal locations for the Belgian rail/road terminals. Their model functions
through minimisation of total transport costs. Five years later, Arnold et al. (2004) applied
their model to the location of rail/road terminals in the Iberian Peninsula. A simulated
annealing technique of Groothedde and Tavasszy (1999), on the other hand, minimises
generalised and external costs in order to find the optimal locations of rail/road terminals.
New terminals are added to the network randomly and the total generalised, then the
external costs for transport for each network configuration are calculated and compared in
order to find the optimal locations. Van Duin and Van Ham (1998) aimed at identifying
optimal locations considering the actors of an intermodal chain such as shippers, terminal
operators, agents and carriers. A model for each level was formulated. First, optimal
locations in the Netherlands were identified through a linear programming model. Once
optimal locations were found, a financial analysis was performed to assess those of interest.

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Finally, a discrete event simulation model was run in order to simulate the operational
working of a selected terminal. Simulation techniques are also used in investigating the
location of a new rail terminal in the work of Meinert et al. (1998). In order to evaluate the
impact of the terminal location on drayage length and time, a discrete-event simulation was
designed.

The strategic and tactical planning problems of an intermodal network operator were
investigated with NODUS software, designed by Jourquin (1995). NODUS is a GIS-based
software for analysing multi-modal, multi-means and intermodal freight transport. Instead of
a simple geographic network, a virtual network is constructed in NODUS to analyse the
complete intermodal chain operations in a systematic way. Using a shortest path algorithm,
the generalised costs along the virtual network are minimised. The simulations of the
software can provide performance measures such as total cost, total distance, duration and
capacity utilisation of nodes and links (Jourquin and Beuthe, 1996). NODUS can also identify
optimal terminal locations on the European network (Limbourg and Jourquin, 2009)

Macharis (2004), with the LAMBIT, developed a GIS model in order to identify the market
areas of the existing and possible new intermodal terminals. However, the study only
focuses on the location of an inland waterway terminal. The model of Macharis on the
location analysis of Belgian intermodal barge terminals served as a starting point for this
research.

In addition, a multi-criteria analysis may be used to decide the best location for an
intermodal terminal out of alternatives. Macharis (2000) developed a method to evaluate
potential sites for new inland waterway terminals in Belgium by performing a Multi-Actor,
Multi-Criteria analysis. This decision support system considers the point of view of each of
the actors who are involved, namely in this case the terminal users, the terminal operators,
the investors and the community as a whole. Kapros et al. (2005) proposes a multi-criteria
analysis to evaluate intermodal terminal projects. Differentiating the interests of business
and public sector, their model takes an additive aggregation function to rank location
alternatives based on the criteria, which are weighted using the Rembrandt method, a
variation of the Analytic Hierarchy Process. Their model is used within the European project
EUNET/SASI. Hanaoka and Kunadhamraks (2009) presents a framework to evaluate the
logistics performance of intermodal freight transportation based on a fuzzy set approach. the
actual modal shares in the model outcomes can lead to the development of the existing
infrastructure (rail, ports, and freight terminals) and operational performance of the system.

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4.2.1.3. Intermodal transport policies

Intermodal transport policies, as explained in chapter 3, are mainly concerned with long
term infrastructure planning (strategic level), pricing of services through subsidies (tactical
level) and daily operations of the services (operational level). In the previous sub-sections,
the literature on intermodal freight transport modelling through the use of an intermodal
transport chain is discussed. In this subsection, special attention is given to modelling in
intermodal transport policies in order to summarise the literature review.

Policy evaluation models for these kinds of problems require the involvement of various
stakeholders, such as the government, the intermodal operators and the private sector.
Note that there is a difference in the type of stakeholders between the European and North
American literature, especially for infrastructure related problems in intermodal rail
transport. In Europe, governments take prominent roles in defining and implementing
infrastructure related policies, whereas in the United States, the intermodal operators take
the initiative. Concerning the inland navigation, mostly private initiatives are seen in Europe.
Concerning the interconnectivity of the modes and pricing policies, both European and North
American governments are actively involved in formulating decisions.

Nozick and Morlok (1997) discuss the regional options and policies for enhancing intermodal
transport. The study investigates public involvement in intermodal policy issues. A challenge
for transport decision makers is how to integrate intermodal freight transport into regional
plans and programmes. An example can be found in Eatough et al. (2000) with their six-
step freight transportation planning process to improve the intermodal freight transportation
system. Studying the freight transport system, problems are identified. Then problems are
tackled through developing and evaluating improvement alternatives. Another research
problem arises from the intermodal infrastructure investments of the government bodies.
Anderson and Walton (1998) developed a methodology for rating and prioritising intermodal
freight terminal projects. Proposing an intermodal freight planning procedure, their method
performs a terminal capacity analysis. In order to investigate the proposed prioritisation
strategies, a system is designed to rank facilities for a given network, utilising operational
and physical attributes.

A discussion in intermodal policy is the formulation of policy measures on reducing the
external impacts of transport modes. Studies are designed to show the impact of policy
measures on congestion, pollution and road safety. Clarke et al. (1996) conclude that
intermodal rail-road services reduce fatal highway accidents in the United States. Work of
Fonger (1993) shows that road transport performs better than intermodal transport when

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social costs are considered. However, Jensen (1990) opposes their argument with his
calculation of private and external costs for intermodal transport in Sweden. As mentioned in
section 2.6.5, Kreutzberger, Macharis and Woxenius (2006) concluded that intermodal
transport is, in most cases, more friendly to the environment than unimodal road transport.
Macharis, Pekin and van Lier (2009) further demonstrate the possibility to internalise the
external costs.

With respect to infrastructural and spatial planning, policy makers require models to
evaluate the effect of a certain measure. Example of factors to be included in the decision
support models concern indicators such as accessibility, freight flows, intermodal market
areas and performance. As discussed in the literature review, various evaluation models
have been developed in the past. The crucial point in intermodal modelling is the capability
of dealing with intermodal flows instead of one mode. Network models such as Crainic et al.
(1990), Loureiro (1994), Jourquin et al. (1999) and Southworth and Peterson (2000),
Klodzinski and Al-Deek (2004), Tan et al. (2004), Groothedde et al. (2005), Parola and
Sciomachen (2005) and Rahimi et al. (2008) show the progress in extending unimodal
network models by adding transhipment nodes to achieve an intermodal network model.

In Europe, all levels of governments have supported an intermodal freight transportation
policy for several years (see chapter 3). Certainly in Belgium, where federal and regional
governments are active in intermodal transport policy formulation, this situation requires a
need for integrated formal ex-ante and ex-post evaluation of these transport policies.
Therefore, the project “A decision support system for intermodal transport policy (DSSITP)”
was executed for further developing models to create an overall evaluation framework for
intermodal transport policies in Belgium. Three core models constitute the DSSITP
framework, namely a multimodal freight model of NODUS, a discrete event simulation model
of the inland waterway network and its terminals and the LAMBIT model, which is the
methodology of this dissertation. The DSSITP framework based on the combination of the
three models creates a decision support system that allows simulating policy measures and
foreseeing possible problems in the freight infrastructure network. The effectiveness and
sustainability of policy measures in terms of modal shift, external costs and capacity
restrictions can be analysed (Macharis et al., 2008).

Although various policy and planning documents exist, models in evaluating the policies on a
European scale are yet very limited. Tsamboulas et al. (2007) have developed a
methodology to assess the potential of policy measures to produce a modal shift in favour of
intermodal transport. Their methodology has three parts: a toolbox, which assesses the
potential for modal shift, a sensitivity analysis and the policy action plan. The methodology,

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developed within the SPIN Research Project of the EC, is aimed at the policy makers at the
governmental level as well as at the private sector through the application of cases on a
European level.

To conclude, the transport sector can benefit from the capabilities of models in order to
evaluate the impacts from the implementation of transport policies and projects. Hence,
intelligent communication platforms between end users and transport models are required to
maximise efficiency in decision making processes. With the progress of computer systems, it
is the challenge for researchers to further develop software tools to deliver outcomes of the
transport model in a user friendly manner. An example is the rapid development of GIS
technology, which opens new horizons for the modelling of intermodal freight networks. In
the next section an overview of new trends in intermodal freight transport modelling is
given, with a specific focus on spatial modelling with GIS.

4.2.2. Towards new models and approaches for intermodal freight transport

The socio-economic and geopolitical restructuring in Europe over the last decade has
resulted in a new position on transport, which also provokes many challenging policy and
research questions. Both academicians and practitioners are interested in analysing these
transport problems which are included under the broad umbrella of ‘transport sustainability’.
One of the vital areas that is frequently referred to in the domain of transport sustainability
is concerned with the intermodal freight transport. There has been an increasing awareness
of intermodal transport in European transport policy, namely through the Framework
Programmes. Nijkamp (1995) explains the driving forces behind the importance of
intermodal transport with the so-called ‘Inter-Transport Matrix’ 2 . In a transport economic
context, transport sustainability has addressed the analytical/planning needed to investigate
the dynamic interrelationships between the interoperability, interconnectivity and
intermodality factors at all levels of transport and organisations (Hensher et al, 2004). While
representing intriguing research questions, Inter-Transport Matrix may also play a key role
in developing strategies for reducing the external costs of actual European freight transport.
In particular, the academic community aims to approach this relationship by modelling
efforts that are able to cope with future transport problems.

2
In this matrix interoperability refers mainly to operational and technical uniformity which allows actors and
operators to use and link various layers or components of a transport network. Interconnectivity is in particular
concerned with horizontal coordination of and access to networks of a different geographical coverage. Finally,
intermodality addresses the issue of a sequential use of different transport modes in the chain of transport. The
Inter-Transport Matrix essentially depicts the integrating capabilities of various actors in the context of various ways
of generating an added value in combined/coordinated network infrastructures (see Nijkamp, 1995, p 164).

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Intermodal transport models have a close connection with guiding policy decisions. Indeed
the literature review provided in the previous section shows that the evaluation of policies is
one of the major objectives of a freight transport model. In most cases, outputs of a model
do not directly translate into a decision themselves as it usually requires the interpretation
of a politician or another decision maker. This seems to suggest that models have a delicate
role in conveying inputs and outputs to the decision process, where the modeller has to
represent the complexity of reality as fully as possible within the constraints of a model
(Vickerman, 2008). As a consequence, both the policy maker and the modeller have specific
tasks. First, the policy measures have to be effectively represented in the models. Second,
the outcomes of the models in evaluating policies have to be communicated clearly.
Vickerman (2008) defines the key to good policy modelling as getting the right balance
between simplicity and reality. Only when all parties are able to understand the policy
measures including their alternatives and to model their likely effects, then it will be possible
to have transport models evolve from simply informing policy decisions to become more a
part of the policy making process. In the changing environment of transport research,
modelling will also evolve gradually. Accordingly, GIS technology is one of the tools that is
more and more associated with intermodal transport modelling in performing various
research tasks.

Since the early 1990s, interest in information systems for storing, managing, processing,
analysing and displaying geographic data has boomed (Geertman et al., 2004). The last
decade has also witnessed some new areas of application for this geographic data, especially
in sectors such as defence, forestry, telecommunication and transport.

The GIS allows the processing and updating of spatial data storage in transport modelling,
along with displaying results on visually attractive maps. GIS integrates hardware, software,
and data for collecting, managing, analysing, and displaying particular forms of geographic
information about the Earth (Fletcher, 2000). There are many efforts to collect and maintain
spatial data, that can also be seen as a part of the national infrastructure (Clarke, 2000).
Transportation systems and related geographic regions form particular types of
geographically referenced information, meaning that GIS refers to the principles and
applications of applying geographic information technologies to transportation problems
(Miller and Shaw, 2001). In general, topics related to GIS-based modelling can be grouped
into three categories (Rodrigue et al, 2006):

- Data representations. How can various components of transport systems be
represented in a GIS?

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- Analysis and modelling. How can transport methodologies be used in a GIS?

- Applications. What types of applications are particularly suitable for GIS?

GIS are needed in many policy supporting studies in order to store, manage and process
digital spatial data (Rajabifard et al., 2003). Intermodal transport also benefits from the GIS
which improves the realistic representation of the multi-modal transport network (Peng,
1997) and which can be used to create applications and solutions. In this section, an
overview of GIS-based modelling is given in order to explain the methodology used in this
dissertation.

4.2.2.1. All we need is data

The starting point of GIS models is the existence of data, a core research topic of GIS. In a
GIS, data is connected through a geographic component so that a combination of datasets is
possible to conduct the analyses (Geudens et al., 2010). This requires data to be correctly
represented digitally. Mainly connected to accessibility and interoperability between the
datasets and information systems, a lot of problems exist with the creation, maintenance
and application of GIS (Bouckaert et al., 2006). The challenge, in this context is, to
overcome problems associated with various types of reference systems, different software
and databases. Therefore, integration of the individual systems is required to solve these
problems. The concept of the Spatial Data Infrastructure (SDI) aims to provide consistent
datasets to users so that they can achieve their goals, although the data were collected and
managed by different authorities (Groot, 2000).

GIS relies on spatial and descriptive data, stored as geographic information files. The spatial
data contains information such as the location and geographic features. The geographic
features are subdivided into other forms such as nodes (points), arcs (lines) and polygons
(areas). Descriptive data are the attribute information of points, lines or polygons stored in
attribute tables of the geographic information files. The descriptive data are composed of
various items and records. Once the data are represented, a unique characteristic of GIS
enables integrating spatial and descriptive (non-spatial) data in order to support both
display and analysis needs.

One of the main objectives in GIS modelling is to fully represent transportation related data.
In this way, existing GIS data serve as a vital input. However, the application needs and
characteristics of transportation data, require developing custom models to modify or
integrate GIS data. Considering network analysis, the main type of data are digital network,
defined as a set of nodes interconnected with links and origin-destination (O-D) matrices for

110
goods flow data. Depending on the purpose of transport research applications, types of GIS
data can further be extended.

4.2.2.2. Analysis and modelling

The second fundamental factor in GIS modelling concerns the use of methodology. Various
analysis methods and models serve the needs of GIS applications. Table 4-3 introduces the
types of GIS analysis and modelling.

Table 4-3: GIS analysis and modelling

Type Examples
Shortest paths and Least cost path analysis, travelling salesman problems, vehicle
routing routing problem
Minimum cost flow problem, maximum flow problem, network
Network flows
flow equilibrium models
p-median problem, set covering problem, maximal covering
Facility location
problem, p-centres problem
Spatial analysis Gravity model
Travel demand The four-step trip generation, trip distribution, modal split, and
analysis traffic assignment models
Land-
Lowry model, mathematical programming, multisector models,
use/transportation
urban economic models
modelling
Source: Miller and Shaw, 2001

The methodology uses a shortest path algorithm to compute the least cost path between the
origin node and the destination node. Therefore, only this type of GIS modelling is discussed
in this section. In order to understand the operation of shortest path algorithms, two
properties of a shortest path must be stated. The first property is that a shortest path from a
given origin to a given destination is composed of shortest paths between all intermediate
locations on that path. For example, a shortest path from node i to node j that contains an
intermediate node k must consist of: (i) a shortest path from node i to node k and (ii) a
shortest path from node k to node j (Nemhauser and Wolsey, 1988). Once the intermediate
shortest paths are known from the origin, then assembling the overall shortest path is
possible. The second property is that a shortest path algorithm must have foresight or “look-
ahead” to find a minimum cost route. Since the objective is to minimise the cost of the
entire path, higher short-term costs may be incurred in an intermediate path to achieve
lower costs overall (Miller and Shaw, 2001). The original shortest path algorithm can be
found in the work of Bellman (1958), Ford (1956) and Dijkstra (1959). A generic shortest
path algorithm for a network G=(N,A) and a nonnegative arc weight wij for each (i,j) ∈ A s
was defined by Gallo and Pallottino (1988):

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Step 1. Initialise a directed tree rooted at node r, T(r). For each v ∈ N, let l(v) be the length
of the path from r to v using subnetwork T(r) and let p(v) be the parent node of v in T(r).

Step 2. Find an arc (i,j) ∈ A such that l(i) + wij<l(j), set l(j)=l(i)+ wij and update T(r) by
setting p(j)=i.

Step 3. Repeat step 2 until l(i)+ wij ≥ l(j) for every (i,j) ∈ A.

Step 1 initialises a directed tree to provide an initial estimate of the shortest path tree from
the origin. Then the shortest path tree is updated when the algorithm scans the network in
Step 2. This underlines the shortest path property of “look-ahead”. Step 3 of the algorithm
establishes the shortest paths from origin to all network nodes. When this is done it is no
longer possible to update the shortest path estimates and the shortest path tree is rooted.
Nowadays, commercial GIS software is capable of finding the shortest path.

4.2.2.3. Applications

GIS applications are used by transportation analysts and decision makers and cover much of
the broad scope of transportation issues, such as infrastructure planning, design and
management, traffic analysis, transportation safety analysis, environmental impacts
assessment, and configuring and managing complex logistics systems. Integration of GIS
and communication technologies enable applications such as intelligent transportation
systems and vehicle routing and scheduling. Furthermore, GIS enters logistics applications
under the umbrella of site selection and service area analysis and supply chain
management. The literature review presented in this chapter also indicates a GIS-based
analysis in transport modelling, specifically in intermodal freight transport research.

One of the main advantages that GIS provides is that it represents a platform for managing
information among various components in the decision making process in transport. In
Figure 4-2, information flows in a planning process are enhanced through GIS technology.
Without a GIS model, the planning process is linear, and the revision of data and information
has higher costs, meaning that there is a disconnection between stakeholders and the
processes. Encouraging a more flexible structure, GIS enables a continuous manipulation
and revision of plans at any point in the process. Inputs from stakeholders and the public
are easily integrated. GIS also provides an advantage for analysis and presentation of the
results.

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Project data

Land-use and
Selection of decision
Socioeconomic
criteria
data

Selection of Transportation
alternatives network data

GIS enterprise
database

Modeling and
Presentation of results
analysis

Comparison of
alternatives and Impact analysis
decision support

Final presentation

Figure 4-2: Information flows in the GIS-enhanced transportation planning process

Source: Nielsen, 1995

4.3. The LAMBIT methodology

As can be concluded from the literature review of modelling methodology, freight transport
models can vary greatly in size and technology depending on the purposes of the models.
Due to the inevitable link between transportation modelling and geographical constraints,
many transport models are encapsulated in a GIS-like map interface with connections to
databases for input and output data (Flodén, 2007). D’este (2001) pointed out the three
main approaches to freight transport modelling behind the geographic systems: simulation,
optimisation and network modelling. It has to be noted that transport modellers can
formulate combinations of these approaches. Indeed the literature review shows various
examples of models based on the three approaches.

In this dissertation, a GIS-based intermodal transport policy evaluation model is further
developed. The research is initiated from the model of Macharis (2000), called LAMBIT,
which proposes a methodology to evaluate new barge terminal projects in Belgium. This
section presents the LAMBIT methodology. The aim is to clarify the starting point of this
research, which will be elaborated in the following two sections.

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Figure 4-3 presents the overview of the methodology of Macharis, which was constructed on
two phases. The preliminary phase determined the traffic potential of the intermodal barge
terminal projects. Here, the proposals commissioned by the private and/or public sector
were taken into consideration. Focusing on sustainable new terminals, the methodology
investigated the traffic potential in the market areas of the terminals based on a network
model. Furthermore, the methodology studied the impact of the new terminals on the
market areas of the existing terminals. In parallel to the traffic potential analysis, the
terminals were also screened according to set of standards (size of the terminal, geographic
location of the terminal, ability to get permissions, etc.). Finally possible locations were
identified.

The second phase executed a more comprehensive evaluation of the terminal locations.
Several criteria were selected to represent the aims of the parties who are involved, namely
the users of the terminal, the operators, investors and the community as a whole. A multi
criteria model based on the PROMETHEE-method (Brans, 1982; Brans and Mareschal, 1994;
Macharis et al., 1998) was executed for each group of parties. The main advantage of
performing a multi criteria analysis is to gain insights into the strengths and weaknesses of
several alternatives (intermodal terminal projects) according to several criteria thus a
ranking of the alternatives is achieved. In order to get a global ranking of the terminal
projects, the results of the multi-criteria model were brought together that was followed by
a sensitivity-analysis.

The LAMBIT methodology aimed to examine the potentials of new barge terminals. By end
1999, only 6 barge terminals (Avelgem, Gent, Meerhout, Puurs, Renory and Willebroek)
were operational in Belgium and new terminals were under construction. Therefore, Macharis
(2000) introduced 6 new terminals (Grimbergen, Brussels, Genk, La Louvière, Roeselare and
Wielsbeke) to the model. Two of these barge terminals were planned relatively close to each
other (Roeselare and Wielsbeke), which lead the Flemish government to commission an
evaluation of them. The LAMBIT methodology was applied as a decision support tool for the
government to decide whether it should support one of these two terminals. The
methodology also served other parties by investigating whether these terminals would be
viable and whether they would benefit the community at large if they were built. Therefore,
two reference terminals (Avelgem and Meerhout) were included in the analysis in order to
have benchmarks.

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Screening

Projects

screening on standards Traffic potential

possible
locations

MCDA
Criteria
Criteria Criteria
Users
Operators-investors Community

-weights -weights -weights
-preferences -preferences -preferences

Promethee I Promethee I Promethee I
Promethee II Promethee II Promethee II
G aia Gaia Gaia

Global

Global PROMETHEE-GAIA analysis

Sensitivity-analysis

Figure 4-3: Overview of the LAMBIT methodology

Source: Macharis, 2000

4.4. Futher development of the LAMBIT methodology

The ultimate goal of this dissertation is to deliver a policy assessment framework in order to
reveal impacts of the policies to stimulate the growth of intermodal transport. To this end,
research is devoted to enhancing the preliminary phase of the LAMBIT methodology.
Proposing a macro-level approach, this dissertation aims to further advance the
methodological foundations of intermodal transport policy evaluation approaches. The
literature review on intermodal transport policies (chapter 3) establishes the primary
research objects. Table 4-4 shows the methodological advancement of the LAMBIT model.

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The research has concentrated on three main segments of the LAMBIT methodology:
network, scenario analysis and geographic scope. Originated as a location analysis model for
the inland waterways network (Macharis, 2000), the model is extended to include the
railway network (Pekin and Macharis, 2007; Macharis and Pekin, 2008; Macharis et al.,
2008) thus a more comprehensive analysis of intermodal transport is possible. This is an
important development of the model, as national intermodal freight transport is promoted in
Belgium since 2004 so it is necessary to analyse barge and rail transport together.

Table 4-4: Methodological advancement of the LAMBIT model

Categories Methodology

Network Multimodal (road, barge, rail)
Scenario analysis Intermodal policy framework
- New terminals in Wallonia
- Subsidy schemes
- Fuel price changes
- External costs
Geographic scope Belgium and Turkey

Source: Own setup

Previous applications of the LAMBIT model were mainly limited to new intermodal terminal
projects in Flanders. The literature on intermodal transport policies concluded an evident
need for the intermodal policy framework that is capable of evaluating various policy
measures, initiated from all levels of governments (European, national and local). While
construction of new terminals remains being included in infrastructure related development
projects in Belgium, a broadening of the scenario analysis with the LAMBIT model is realised
with an aim of further evaluating other policy measures. Here, a special attention is paid to
subsidy schemes of federal and regional governments. Furthermore, internalisation of
external costs and fuel price changes were analysed in depth.

Following the rapid development of the intermodal terminal landscape in Belgium (see
section 2.4) over the last decade, a reference scenario with the current intermodal terminals
is developed. During this period, new barge terminal projects were initiated especially
located along the Walloon waterways. Additionally, rail terminals were also established in the
Walloon region. Considering the subsidy schemes for barge and rail transport with different
rates for each region, the model has taken a broader view to evaluate intermodal policies.
Finally, the LAMBIT methodology was applied to Turkey, which allows to see if the
methodology can easily be used in other geographical settings.

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Within this research, an architecture of the LAMBIT methodology is developed. As depicted
in Figure 4-4, three major components can be identified. The first component in the model is
its inputs, with all sorts of data to be included in the analysis. The second component is the
core model, a GIS-based intermodal transport model, which performs analysis of policy
measures. The GIS provides output, which constitutes the third component of the model. In
addition to the three major components, the modelling process includes an additional tool
which serves to integrate data inputs to the model. The preceding two components will be
explained in the model set up. In the latter component, outputs will be shown in the
implementation of the model and will further be demonstrated in chapter 5 with a scenario-
based analysis for Belgium. Here, attention will be given to the inputs, outputs and
assumptions of the model.

Figure 4-4: Architecture of the LAMBIT model

Source: Own setup based on Fischer and Nijkamp, 1993

4.4.1. Model set up

LAMBIT is based on three main inputs: transportation networks, transport prices and
container flows from the municipalities to and from the port of Antwerp. In this section the
set up of the model is described.

4.4.1.1. Transportation networks

LAMBIT is a GIS-based model, consisting of different GIS network layers (for each transport
mode), the location of the intermodal terminals and the seaports (as nodes in the network).

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The model has been built through connecting the geographic locations of the intermodal
terminals (transhipment points) and the municipality centres (end destinations) to the
network layers by their corresponding nodes. During the set up process, possible locations
for future terminals can also be included into the model, according to their coordinates on
the network.

The GIS network has two tasks. First of all, it represents the real transportation network
including the terminals. The second and vital task of the network is to calculate the transport
prices in various scenarios. Figure 4-5 depicts the four layers of the network.

Figure 4-5: Network layers and nodes

Source: Own setup

The networks for Belgium were built by merging the following digital databases:

- Road layers and municipalities are obtained from the MultiNet database of Tele Atlas.

- Rail and inland waterways layers are extracted from the ESRI (Environmental Systems
Research Institute) dataset for Europe.

The reliability of the results of the LAMBIT analysis is dependent on the reliability of the data
used in the model. The underlying data are the market prices and the container volumes

118
from the Belgian municipalities which are incorporated into the network layers and nodes.
These underlying data will be explained in the next two sub-sections.

4.4.1.2. Transportation prices

In chapter 2, the intermodal cost structure and the break-even distance were introduced.
The LAMBIT methodology is based on these two concepts. Considering the total transport
prices and the distance travelled, unimodal road transport is cheaper over short distances
but once the breakeven distance is achieved, intermodal transport offers a competitive
alternative.

In the model fixed price and variable price functions, based on the existing market prices are
used. The assumption is that costs are included in these prices. The calculated transport
prices for each transport mode then are associated with the network layers. The variable
prices are uploaded to the network layers and the fixed prices are attached to the nodes,
which also indicate the origin and destination for each route.

The total price of intermodal transport is composed of the transhipment/handling price in the
seaport to a barge or a wagon, the price of the intermodal main haul (barge or rail), the
transhipment/handling price in the inland terminal to a truck and the cost of final haulage by
truck. The total intermodal transport price is obtained by adding all of these price
components.

The following formula explains the calculation of intermodal transport price (see section
2.5.1.1):

PIT=PHS+PMH+PHT+PPH

In which:

- PIT: Price of intermodal transport per TEU (in €)

- PHS: Price of handling in seaport per TEU (in €)

- PMH: Price of main haulage by barge or rail transport per TEU (in €)

- PHT: Price of terminal handling in intermodal terminal per TEU (in €)

- PPH: Price of pre/post haulage by road transport per TEU (in €)

A field survey was conducted to obtain data for the model. In order to have reliable
transport prices, many transport companies were contacted and average market prices for
2008 were calculated. For the inland waterways and unimodal road transport, average prices
were calculated from the current market prices. On the other hand, the rail prices are based

119
on the market prices of the rail operators and they differ for each inland terminal as they
adapt their prices to the local prices of transport companies.

Figure 4-6 shows the market price functions introduced in the LAMBIT model. The figure
helps to compare fixed and variable prices for each transport mode. Barge transport appears
to be competitive with its lower fixed and variable prices. In order to use barge transport in
an intermodal transport chain also the transhipment and pre - and post - haulage should be
taken into account. Therefore, transhipment and post haulage (of 20 kilometres) from the
intermodal terminal have to be considered as well. This will make the fixed prices of
intermodal transport higher compared to unimodal road transport. The figure also presents
the distinction between unimodal road and post haulage. Although both depend on road
transport, the variable prices of post haulage is higher compared to unimodal road transport.

450
400
350
300
Prices (€)

250
200
150
100
50
0
0 20 40 60 80 100 120 140 160 180 200
Distance (km)

Unimodal road Post haulage Barge Intermodal

Figure 4-6: Market price functions for Belgium

Source: Own setup

4.4.1.3. Container flows

The final input for the LAMBIT analysis is the container flows from the port of Antwerp. In
this research, the statistics of road transport from the National Institute of Statistics (NIS)
and from the port Authority of Antwerp surveys were used. The annual NIS data was
collected through a survey conducted among companies who are involved in the logistics
sector. The aggregated data, dating 2007, was based on freight transport from one district
to another. Within the scope of this research, only containers from/to port of Antwerp

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from/to each Belgian municipality have been extracted and attached to the municipalities’
database.

The port Authority of Antwerp also initiates surveys for the container flows from the port.
The data provides an annual estimate of container counts for trucks, wagons and barges.
The figures represent 2007. They were collected during a census in November-December
2007: during 3 days, from 6 to 22h, students of the Karel de Grote Highschool in Antwerp
asked every truck driver who arrived at one of the main container terminals (MSC Home,
Noordzee, Antwerp Gateway and Deurganck Terminal) what was the place of
origin/destination of the containers, and the type and number of containers. These figures
were then extrapolated on the basis of the total number of truck movements during 2007 at
all the container terminals in Antwerp, in order to calculate the number of TEUs.

4.4.2. Assumptions

The LAMBIT model, composed of a digitalised network, current market prices and container
flows has limitations. Certain assumptions are made in the model. Apart from the transport
prices, other modal choice criteria are also important, such as reliability, speed, frequency,
safety and customer satisfaction. These other modal choice variables are not yet
incorporated in the model. Furthermore, transport prices (costs) are only one part of the
total logistics costs. Warehousing costs and inventory carrying, administration and order
processing costs also affect the total logistics costs.

Within this research, the LAMBIT model also includes the rail network and thus, a
multimodal network is achieved. Considering the container flows, the model has been
enhanced by the updated data from the port of Antwerp, but container flows from other
seaports such as the port of Zeebrugge and Rotterdam can also be included in the model.
The model has broadened its scope to assess a range of intermodal policy measures and
scenarios in Belgium, but in the future the methodology can easily be extended towards the
European scale. The LAMBIT application on a Turkish case shows this possibility (see chapter
6).

4.5. Operation of the model

The LAMBIT methodology explores the relative attractiveness of three transportation modes
(unimodal road, rail and inland waterway transport) through a price (cost) minimisation
model. In the model, the total sum of transport prices is minimised. Using a shortest path
algorithm in ArcInfo, various scenarios are conducted in order to find the shortest path and
the attached transport prices from the seaport to each Belgian municipality via intermodal

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terminals and via road-only. For each destination, the total transport prices for unimodal
road, inland waterway/road and rail/road transport are compared and the cheapest option is
selected. The market area of each inland terminal are then highlighted in the map of the
model. These visualisations make it possible to see how large the market area of each
intermodal terminal is. As a further step, the container flows data are used to show the
amount of containers that are currently transported by road to the municipalities within the
market area, which gives an indication of the existing potential volume that can still be
shifted. This is particularly useful when a location of a new terminal needs to be analysed.

LAMBIT is capable of making ex-ante and ex-post analyses. The reference scenario with all
the existing terminals and current market prices serves as benchmark. Then different policy
measures such as price scenarios (subsidies, external costs, fuel prices) and the location of
new terminals are introduced.

The model, reproduces the transportation system through the traffic assignment, which is
the process of allocating all trips in one or more trip matrices to their routes in the network.
Considering the available assignment methods, the model uses the All-Or-Nothing (AoN)
assignment that is based on the shortest path computations. AoN is the simplest route
choice and assignment method. This method weighs route choices the same way. Also it
assumes that there are no congestion effects or capacity constraints for the network.
Therefore, the routes from any origin to any destination are realised through a single,
minimum cost path between them. This method can be criticised as unrealistic due to the
fact that only one path between every origin destination pair is chosen even if there is
another path with another travel cost (Mathew, 2009). As a result, the main limitation of
AoN is encountered when there is congestion or existence of multiple paths to carry freight.
While more sophisticated techniques such as incremental assignment, capacity restraint
assignment, user equilibrium assignment, stochastic user equilibrium assignment, etc. can
be implemented to achieve better results, the solutions obtained by an AoN assignment may
be reasonable in various cases, especially in highlighting the desired transport options.

From the perspective of this research, the results of the AoN assignment are used in defining
the market areas of intermodal terminals. Considering the limitations of the AoN, the model
has to be further refined. In order to show possible more advanced visualisations of the
market area, a price ratio analysis has been performed. For each municipality, the ratio of
intermodal transport market price and unimodal road transport market price is calculated.
Ratio analysis is used to visualise the market area of each terminal with gradual shades. The
outcomes of the price ratio analysis will be presented in section 5.4.

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4.5.1. The LAMBIT framework

Figure 4-7 presents the LAMBIT model as a policy assessment framework. The framework
intends to take multiple indicators into account when assessing policy measures. Unimodal
and intermodal transport alternatives are included in the framework in order to measure the
impact of policy measures. The inputs and outputs of the assessment framework are also
stated in Figure 4-7. The LAMBIT model, which is scaled on the Belgian intermodal transport
network, analyses the market areas of intermodal terminals. In order to do so, the policy
measures are brought in to the model by altering some parameters such as the price
functions and the network. The model analyses policies based on the following indicators:
total prices for all transport modes, the market areas of intermodal terminals, and modal
shift and potential volume of new intermodal terminals.

transport prices
MEASURES

total price
POLICY

modal shift
LAMBIT
market area
potential volume

container flows

Figure 4-7: The LAMBIT framework

Source: Own setup

4.5.2. Analysis of scenarios

The policy assessment framework is applied to analyse the introduction of policy measures
to stimulate intermodal freight transport. Based on the findings of the literature on
intermodal transport policies (see chapter 3), two major categories of scenarios, including
potential measures, are identified in Table 4-5. The LAMBIT model aims to assess these
scenarios.

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Table 4-5: LAMBIT scenarios

Categories Scenarios / Policy measures
PRICES Subsidy
Internalisation of external costs
Taxes and pricing
Fuel prices
INFRASTRUCTURE New terminals
Intermodal network

Source: Own setup

4.5.2.1. Prices

One of the major factors that determine the attractiveness of containerised transportation is
concerned with transportation prices. Typically, intermodal pricing constitute one of the most
common policy measures in promoting intermodal transport. Indeed, modal shift policies of
the Member States (see section 3.6) aim to establish subsidy schemes to promote the
growth of intermodal transport. This is also the case in Belgium, where both federal and
regional governments have introduced such measures. The LAMBIT model may serve as a
policy assessment framework to make ex-ante and ex-post assessment of pricing related
measures. Subsidies can be included in the market price functions of the LAMBIT model in
order to visualise the changes in the market areas of intermodal terminals. These scenarios
will be analysed in chapter 5. The model will further conduct an ex-ante analysis for the
internalisation of external costs (see section 5.3.2), a topic that is currently on the agenda
of the EC. Transportation prices are mainly determined by fuel prices, the efficiency of the
transportation mode, and taxes (Ribbink et al., 2005). The attitude of European policy
makers is that transportation prices should reflect the true costs to environment and society.
Therefore, the LAMBIT model will be used to internalise external costs for each transport
mode to show real total costs of transportation. Also fuel prices are highly connected to the
competition between intermodal and unimodal transport. Fuel price increases have an
impact on the variable prices of transport modes. With updated price functions, the LAMBIT
model will illustrate the impact of fuel price increases. While taking the complete multimodal
network into account, the model may act as a tool to prescribe policy measure combinations
for further growth of intermodal transport.

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4.5.2.2. Infrastructure

Infrastructure related policy measures centre around the construction of new intermodal
terminals. The LAMBIT model is able to analyse the introduction of new terminals in order to
show their market areas. Furthermore, market potentials for new terminals can be
demonstrated based on the container statistics that are transported by road. The LAMBIT
model visualises not only the market areas of new terminals but also their effects on the
current terminal landscape. An analysis of freight flow distribution can be used to verify the
location of terminal initiatives and further seek other new possibilities. The network of the
model can also be altered to assess new intermodal services. In relation to the rail transport,
the Narcon network implemented in 2004 (see section 2.3.6.3) can be evaluated together
with the barge transport to highlight the competition between them.

4.6. Conclusions

In this chapter the GIS-based intermodal transport model which has been developed is
described. While establishing the scientific framework of this research, this chapter
presented modelling as a tool to solve complex decision-making problems. For this purpose,
a literature review on modelling in intermodal transport is shown. Linking models with policy
assessment, the literature review is followed by new approaches in this field.

The LAMBIT model develops a framework to make ex-ante and ex-post analyses of policy
measures to stimulate the intermodal transport market. Originating as a location analysis
model for the inland waterway network, the methodology of the model has been extended to
include the railway network. Considering the previous applications of the model that is
concentrated on new terminal projects, the methodology broadened its scope of scenario
analysis through an evaluation of intermodal policy measures. The LAMBIT methodology
explores the relative attractiveness of three transportation modes (unimodal road, rail and
inland waterway transport) through a price comparison model, connected to a GIS-based
view. The LAMBIT model, which is scaled on the Belgian intermodal transport network,
analyses the market areas of intermodal terminals. The model analyses policies based on
the following indicators: total prices for all transport modes, market areas of intermodal
terminals, and modal shift and potential volume of new intermodal terminals.

125
The typical characteristics of LAMBIT include a set up of a reference scenario for the terminal
landscape. Then different policy measures, such as new terminal locations, subsidies and
internalisation of external costs, are simulated by the model. Finally with the aim of further
improving the outcomes of the model, a price ratio analysis developed. In the next chapter
the LAMBIT model is applied to analyse the introduction of policy measures to stimulate
intermodal freight transport.

126
5. Scenario-based analysis for Belgium

5.1. Introduction
Introduction (1)
In order to stimulate intermodal transport, several policy
Intermodal transport
in general (2) options are possible. A policy option can involve alternatives

Intermodal transport to be considered for adoption and it is the aim of evaluation
policies (3) models to help selecting the best. This type of evaluation is
analysis for Belgium (5)

preferred especially before the policy option is put into
analysis for Turkey (6)
GIS-based intermodal

practice, therefore it is named an ex-ante evaluation.
transport model (4)

Although assumptions of a model are the underlying factor
Scenario-based
Scenario-based

for interpreting the outcome of the policy options, ex-ante
evaluation can provide insights on future problems that may
be encountered when the preferred option is implemented.
After a policy option is implemented, ex-post evaluation can
be performed to interpret the impact of policies. Both ex-

Conclusions (7) ante and ex-post evaluations are served by many types of
evaluation models (see chapter 4).

This chapter aims to show the possibilities of a GIS-based location analysis model that is
defined in chapter 4, for analysing different policy measures for the stimulation of
intermodal transport. The model is set up for Belgium, where the regional governments and
the federal government pursue various policies to promote the growth of intermodal
transport. Therefore, the model is used to perform post-evaluation to assess the impact of
the different policy measures and their combination.

The model is set up for Belgium, but the methodology can easily be used for other regions
and preferably even on a European scale. The case of Belgium is interesting as it has
different policies in the different regions for barge transport and has a federal policy for rail
transport. This situation calls for a comprehensive model that shows the effects of the
combination of policies. The cases show that the different policy measures oriented towards
the rail/road and inland waterway/road combinations should be incorporated in a coherent,
integrated vision, in order not to create a modal shift between the different intermodal
transport options. The same is true on a European level, where the different
regions/countries are introducing different funding schemes to support the intermodal

127
transport market (see section 3.6.2). The methodology is also applied to a new country:
Turkey, which will be discussed in the next chapter.

In section 5.2, the reference scenario is presented. Then scenario-based analysis is
performed in section 5.3. Section 5.4 provides a further refinement of the model. Finally,
the chapter concludes and derives policy recommendations in section 5.5.

5.2. Reference scenario

Figure 5-1 presents the existing intermodal inland terminals with their market areas. In this
reference scenario, nine barge (inland waterway) terminals and four rail terminals are
included (see Table 2-4 for an overview of the terminals). The reference scenario is based on
the terminals which are offering daily services to the port of Antwerp. Therefore 6 terminals
(the barge terminals in Herent, Mol and Deurne; and the rail terminals in Bierset, Genk and
Muizen) are not included in the reference scenario. As indicated in section 2.4, the terminals
in Herent and Mol are small scale terminals serving only one customer or a single industry.
Located right next to the Albertkanaal, the terminal in Deurne offers scheduled services only
to the port of Rotterdam. The rail terminals in Bierset, Genk and Muizen are at the moment
of study not included in Narcon (National Rail Container Network) and as such are not
offering daily services to the port of Antwerp.

Current market prices are used to show the market areas of the current terminals. No
subsidies for rail and inland waterway transport are taken into account in the reference
scenario. The municipalities are highlighted, when intermodal transport has a more
attractive transport price compared to unimodal road transport based on the current market
prices. The terminals which are located far from the port of Antwerp, benefit more from the
lower variable costs of intermodal transport compared to unimodal road transport and they
have larger market areas. This is explained by the intermodal cost structure (see section
2.5.1.1). The longer the distance travelled, the greater the extent to which the lower
variable costs of intermodal transport can compensate for the extra transhipment costs at
the terminals. In this analysis a post haulage of 20 kilometres is added to the price of
intermodal barge transport. Figure 5-2 shows that above a certain critical distance,
intermodal barge transport prices are lower than those of road transport. The point where
the lines intersects is the break-even point: at this distance the prices of unimodal transport
and intermodal barge transport are the same. With current market prices, intermodal
transport (barge) can break-even with road transport after 99 kilometres. Break-even
distance for the rail transport is 173 kilometres. The break-even analysis will be performed
in other price scenarios such as subsidies, internalisation of external costs and fuel prices.

128
Figure 5-1: The reference scenario

Source: Own setup

400
350
300
Prices (€)

250
200
150
100
50
0
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150
Distance (km)

Unimodal road Intermodal barge (with 20km post haulage)

Figure 5-2: Break-even analysis: Reference scenario

Source: Own setup

129
The barge terminals in Renory, Brussels and Genk have a larger market area. Located in a
relative proximity to the port of Antwerp, the terminal in Gent can not compete with the
unimodal road transport prices. Considering the rail terminals, only the terminals in
Charleroi and Athus have a market area in terms of the number of municipalities.

5.3. Scenario-based analysis

The LAMBIT methodology that is described in the previous chapter was applied to the
scenario-based analysis in this section. The following structure is applied: first existing
subsidy schemes are analysed, second internalisation of external costs is performed, third
fuel price scenarios are considered and finally future terminal landscape is evaluated.

5.3.1. Subsidy scenario 3

As introduced in section 3.6.2, the Member States formulate subsidy schemes in order to
promote the growth of intermodal transport. This subsection describes different subsidy
scenarios, which then can be analysed by the LAMBIT model.

5.3.1.1. Subsidy scenario development

An option that can be used to stimulate intermodal transport is to decrease the costs linked
to the transport operations at the terminals. In parallel to the European efforts to internalise
the external costs of road transport, the Member States design subsidies to provide
incentives to attract intermodal transport. In Belgium, subsidies are granted for each
container handled by an intermodal terminal. This kind of measure for inland waterway
transport is applied in Belgium in both Walloon, Brussels and Flemish regions but at different
tariffs for each (see section 3.6.2.2 for an overview of the subsidies). Rail transport falls
under the responsibility of the federal government. Also for rail transport a subsidy scheme
was introduced in 2004. Figure 5-3 presents the regional and federal subsidy schemes in
Belgium.

3
This part of the dissertation was published in the paper: Assessing policy measures for the stimulation of
intermodal transport: a GIS-based policy analysis. Transport Geography, Volume 17, Issue 6, November 2009,
Pages 500-508.

130
Figure 5-3: Regional and federal subsidy schemes

Source: Own setup

Federal subsidy on rail transport, which has recently been extended for four more years,
foresees an annual budget of € 25 million for the intermodal rail operations within Belgium.
Budgets of regional subsidies on inland navigation are modest compared to the rail subsidy.
In Flanders, an annual budget of € 3.75 million is foreseen for a period of three years from
2007 - 2009. In 2008, the subsidy in Wallonia has been extended for five more years, which
represents an annual budget of € 3.5 million for the development of intermodal transport in
this region. Finally, the subsidy in Brussels accounts for an annual budget of € 150.000 for
the period 2007 - 2009.

LAMBIT can be used to assess the impact of federal and regional subsidy schemes. In this
sub-section, two main scenarios are developed: one with subsidised inland waterway
transport and a second one with a subsidised railway transport (Table 5-1).

Table 5-1: Overview of the subsidy scenarios

Scenario Subsidy amount Year Region
€ 17.5 for each full container 2007-2011 Flanders
Inland
€ 12 for each 20 feet container 2007-2009 Brussels
navigation
€ 12 for each 20 feet container 2004-2013 Wallonia
€ 20 + € 0.40/km for each container 2005-2008 Federal
€ 40 + € 0.20/km for each container 2009 Federal
Railway € 34 + € 0.18/km for each container 2010 Federal
€ 28 + € 0.16/km for each container 2011 Federal
€ 22 + € 0.14/km for each container 2012 Federal
Source: Own setup data based on the European Commission state aid cases (2009)

131
5.3.1.2. Subsidy scenario results

5.3.1.2.1. Inland navigation subsidy scenario

In the different regions, the current subsidy schemes for inland navigation were included in
the model. In Figure 5-4 and Table 5-2 the results of this scenario is shown. Compared to
the reference scenario, this subsidy scenario shows that intermodal transport grows
substantially thanks to the inland waterway subsidies. Considering the inland waterway
terminals, the terminal in Genk is exposed to a common market area with the terminal in
Meerhout. As a result it can hardly increase its market area. The subsidy enables the
terminal in Gent to compete with unimodal road transport. An interesting finding from this
scenario is that it visualises the impact of the regional differences in the degree of subsidies
for inland navigation. This can be illustrated with the two neighbouring terminals, namely
the terminals in Grimbergen and Brussels. The terminal in Grimbergen will enjoy the subsidy
scheme of the Flemish government (€17.5), which is more than the subsidy scheme for the
terminal in Brussels (€12). As a result the terminal in Grimbergen takes market area from
the terminal in Brussels 4 . Overall, the inland navigation subsidy decreases the market area
of unimodal road transport by 121 municipalities. This is explained by the change in the
break-even distance of barge transport. The break-even distance is 57-69 kilometres
depending on the degree of regional subsidies. In Figure 5-5 intermodal barge transport with
the subsidy of €17.5 is shown. A decrease in the fixed component of the barge transport will
shift the line downwards. This will move the break-even point to the left as illustrated in
Figure 5-5. As a result, intermodal barge transport can gain more market area. Changes in
the market areas of terminals (in terms of the number of municipalities served) with respect
to their reference scenario are provided in Table 5-2.

4
This however will not be true in reality as the terminal in Grimbergen has not applied for the subsidy scheme and
will close its activities. When the terminal in Grimbergen is excluded from the model, all of its market area will be
taken by the terminals in Willebroek and Brussels. The terminal in Brussels will take more area than the terminal in
Willebroek. This is due to the post-haulage advantage Brussels has.

132
Figure 5-4: Subsidy scenario for the inland waterway transport

Source: Own setup

400
350
300
Prices (€)

250
200
150
100
50
0
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150
Distance (km)

Unimodal road Intermodal (subsidy €17.5) Intermodal (no subsidy)
(with 20 km post haulage) (with 20 km post haulage)

Figure 5-5: Break-even analysis: Subsidy scenario

Source: Own setup

133
Table 5-2: Market areas of terminals in terms of the number of municipalities for the barge subsidy

Terminal Intermodal Reference Barge
Type terminals scenario subsidy
Meerhout 24 41
Gent 0 14
Wielsbeke 19 39

5
Willebroek 3 18

TERMINALS
BARGE
Avelgem 8 14
Renory 60 64
Genk 30 37
Grimbergen 6 36
Brussels 39 47
Athus 2 2
TERMINALS

Charleroi 9 9
RAIL

Kortrijk 0 0
Moeskoren 0 0
Total barge terminals 189 310
Total rail terminals 11 11
Total road transport 389 268
Total 589 589

Source: Own setup

5.3.1.2.2. Rail subsidy scenario

In Figure 5-6, the rail subsidy scheme of 2008 is introduced for the rail terminals. In this
scenario, no subsidies for inland navigation is taken into account. An immediate impact of
the rail subsidy is seen in Charleroi, where the terminal increases its market area by
attracting various municipalities due to cheaper transport prices of rail transport.
Furthermore the rail terminals in Kortrijk and Moeskroen also gain market area, but this at
the expense of the barge terminals in Avelgem and Wielsbeke. It has to be noted that the
local prices of transport companies define the rail prices, that differ for each terminal
irrespective of the distance from the port of Antwerp. This situation explains the smaller
market area for the terminal in Athus compared to the terminal in Charleroi. The rail
terminals increase their market area by 157 municipalities thanks to the rail subsidy.

5
Barge subsidies: Meerhout, Gent, Wielsbeke, Willebroek, Avelgem, Genk, Grimbergen €17.5; Renory,
Brussels €12

134
Respectively, there has been a decrease in the market areas of the barge terminals by 27
municipalities. Overall, it can be concluded that the rail subsidy decreases the market area
of unimodal road transport by 130 municipalities. Changes in the market areas of terminals
(in terms of the number of municipalities served) with respect to their reference scenario are
provided in Table 5-3.

Figure 5-6: Subsidy scenario on rail transport 2008

Source: Own setup

In 2009, the federal subsidy on rail transport is extended for the period 2009-2012. Over
the coming period, the fixed part of the subsidy will gradually be decreased to € 22 and the
variable part to € 0.14. In Figure 5-7, the subsidy scenarios for this period are presented.
The reduction in the degree of rail subsidy enables the terminals in Wielsbeke and Avelgem
to take back some market area from the rail terminals in Kortrijk and Moeskroen by 2010.
Overall, the market area of the unimodal road transport gradually increases again (see Table
5-3).

135
Figure 5-7: Subsidy scenario on rail transport 2009-2012

Source: Own setup

The results of the rail subsidy scenarios are summarised in Figure 5-8. The rail subsidy
scheme of 2008 represents a maximisation for the market areas of the intermodal terminals.
In parallel to the reduction of the rail subsidy from 2009 to 2012, the market areas also
head towards their reference scenario.

136
Table 5-3: Market areas of terminals in terms of the number of municipalities for the different rail subsidy scenarios

Terminal Intermodal Reference Rail Rail Rail Rail Rail
Type terminals scenario 2008 2009 2010 2011 2012
Meerhout 24 24 24 24 24 24
Gent 0 0 0 0 0 0
Wielsbeke 19 0 1 4 8 11
Willebroek 3 3 3 3 3 3
TERMINALS
BARGE

Avelgem 8 0 1 3 4 4
Renory 60 60 60 60 60 60
Genk 30 30 30 30 30 30
Grimbergen 6 6 6 6 6 6
Brussels 39 39 39 39 39 39
Athus 2 19 14 13 12 10
6
TERMINALS

Charleroi 9 91 80 68 59 46
RAIL

Kortrijk 0 51 39 29 21 14
Moeskoren 0 7 9 8 8 8
Total barge terminals 189 162 164 169 174 177
Total rail terminals 11 168 142 118 100 78
Total road transport 389 259 283 302 315 334
Total 589 589 589 589 589 589

Source: Own setup

6
Rail subsidies: 2008: Athus €125, Charleroi €67, Kortrijk €77, Moeskroen €75; 2009: Athus €93, Charleroi €64,
Kortrijk €69, Moeskroen €68; 2010: Athus €81, Charleroi €55, Kortrijk €60, Moeskroen €59; 2011: Athus €70,
Charleroi €47, Kortrijk €51, Moeskroen €50; 2012: Athus €59, Charleroi €39, Kortrijk €42, Moeskroen €41

137
450

in terms of the number of municipalities
400

350

300
Market area

250

200

150

100

50

0
Reference 2008 2009 2010 2011 2012
scenario

Total barge Total rail Total road

Figure 5-8: The effect of rail subsidies on modal market area

Source: Own setup

5.3.1.2.3. Inland navigation and rail subsidy scenario

As shown above, both the federal rail and regional inland navigation subsidies have a clear
impact in favour of intermodal transport compared to the reference scenario. On the one
hand, a further growth in the market share for intermodal transport is achieved when the
regional subsidy schemes directed to inland waterway transport. On the other hand, the rail
subsidy scenario shows that the market areas of rail terminals would not be able to survive
without government subsidy. However a drawback from this uncoordinated policy measures
on different governmental levels is that a modal shift is induced from barge to rail due to the
stimulation of intermodal rail transport in regions where barge transport is possible. The
global aim should be a modal shift from road to the more environmental intermodal options.
In this section, all subsidy schemes will be brought together.

Figure 5-9 depicts the subsidy scenario for 2008. The subsidies have a clear impact on both
the rail and inland waterway terminals. Compared to the reference scenario, barge terminals
increase their market areas by 72 municipalities. This is lower compared to the inland
navigation-only subsidy. For the period 2009-2012, this negative impact of the rail subsidies
on the market areas of the barge terminals (see Figure 5-10). Considering the rail terminals,
they increase their market areas by 142 municipalities. Overall, the market area of the
unimodal road transport decreases by 214 municipalities (see Table 5-4).

138
Figure 5-9: Subsidy scenario on inland waterway and rail transport 2008

Source: Own setup

The future rail subsidy scheme can also be incorporated to the analysis. Figure 5-10 shows
that the changes in the intermodal terminal landscape with subsidised rail and barge
terminals. An interpretation of the subsidy scenarios can be presented with the Figure 5-11,
which shows an enormous growth in the market areas of the intermodal terminals compared
to the reference scenario. It can be argued that if the rail terminals deliver more efficient
services and thus remain competitive with road transport despite the reduction of rail
subsidies, this growth in intermodal transport can even be maintained in the future.
Nevertheless, the critical distance will continue to constitute a decisive factor in the market
areas of the rail market terminals.

139
Figure 5-10: Subsidy scenario on inland waterway and rail transport 2009-2012

Source: Own setup

140
Table 5-4: Market areas of terminals in terms of the number of municipalities for the different subsidy scenarios

Terminal Intermodal Reference Subsidy Subsidy Subsidy Subsidy Subsidy
Type terminals scenario 2008 2009 2010 2011 2012
Meerhout 24 41 41 41 41 41
Gent 0 14 14 14 14 14
Wielsbeke 19 10 16 23 26 30
4

Willebroek 3 18 18 18 18 18
TERMINALS
BARGE

Avelgem 8 5 7 7 12 13
Renory 60 64 64 64 64 64
Genk 30 37 37 37 37 37
Grimbergen 6 33 34 35 35 36
Brussels 39 39 40 40 42 43
Athus 2 19 14 13 12 10
5
TERMINALS

Charleroi 9 87 76 68 57 46
RAIL

Kortrijk 0 40 27 19 13 8
Moeskroen 0 7 8 7 3 2
Total barge terminals 189 261 271 279 289 296
Total rail terminals 11 153 125 107 85 66
Total road transport 389 175 193 203 215 227
Total 589 589 589 589 589 589

Source: Own setup

450
in terms of the number of municipalities

400

350

300
Market area

250

200

150

100

50

0
Reference 2008 2009 2010 2011 2012
scenario

Total barge Total rail Total road

Figure 5-11: The effect of rail and barge subsidies on modal market area

Source: Own setup

141
The subsidy scenarios, developed in this section, clearly demonstrates the possibilities of the
LAMBIT framework. Impacts of the formulation of subsidies can be assessed with this
framework.

5.3.2. Internalisation of external costs scenario 7

5.3.2.1. Internalisation of external costs scenario development

From a social point of view it is important to calculate the amount of potential external cost
savings from barge transport and rail transport compared to road transport, these
calculations are also relevant from a transport policy perspective. There has been a growing
political interest in the external costs, which is translated to the main objective of
internalisation of external costs. From the perspective of the transport sector, non-
internalisation of external costs gives the wrong market signals and thus leads to significant
inefficiencies such as congestion and environmental problems. In order to develop more
sustainable transport solutions, an internalisation of external costs towards fair and efficient
prices between transport means is considered essential. By internalising these external
effects they are made part of the decision making process of transport users, leading to a
more efficient use of transport infrastructure. Chapter 3 provided the developments in this
domain e.g. the introduction of market-based instruments for internalisation of external
costs in EU directives and the Eurovignette Directive on road charges. Stated in several
strategy papers, the EC proposes a stepwise strategy for the internalisation of external costs
in all transport modes, which contemplates, among other measures, the inclusion of aviation
in the EU emission trading scheme from 2012 and the introduction of internalisation charges
for heavy goods vehicles.

Since the external costs of road transport depend highly on the location, time and vehicle
type, there are significant country-related differences for most external cost categories.
Therefore, use was made of the external cost figures for road transport from De Ceuster
(2004), for four main reasons:

- the study calculates values on a Belgian level (more specifically the Flemish part of
Belgium).

- the study takes into account the five most important short term marginal external cost
categories: air pollution, climate change, accidents, noise and congestion. 8 In addition,

7
This part of the dissertation was published in the paper: “A decision analysis framework for intermodal transport:
evaluating different policy measures to stimulate the market”. In Moshe Givoni and David Banister (Eds.),
Integrated Transport: From Policy to Practice (in publication)

142
the short term Marginal External Cost (MEC) of damage to the road, caused by
additional trucks on the road, is taken into account (MEC road in Figure 5-12).

- the study differentiates between different vehicle types, giving figures for diesel trucks.

- the study takes into account the effects of taxation of road transport (including excises
and VAT on fuel, traffic taxes, taxes on insurance premiums and on maintenance of
vehicles, Eurovignette, vehicle purchase taxes and registration taxes) in order to
determine which part of the external costs is already internalised. 9

Especially this last point is very useful, since it allows to take only the part of non-
internalised external costs into account. Figure 5-12 shows values for the marginal external
costs and taxes for a heavy duty diesel truck for Flanders over the period 1991-2002. In
2002 total marginal external costs amounted to 0.52€/km. Note the high and increasing
proportion of congestion costs over the years, accounting for 74 percent of total short term
marginal external costs in 2002, whereas the other external cost categories remained stable
or gradually decreased. As can also be seen from this figure (the shaded area), the existing
taxation system on heavy diesel trucks compensated for 26 percent of short term marginal
external costs in 2002, leaving 74 percent of external costs non-internalised. This equals the
proportion of congestion costs, so it could be said that this taxation system internalises all
the external cost categories, except the largest category, namely congestion. Since
congestion is very time and location dependent, this implies that a full internalisation of
external costs requires the introduction of some form of differentiated congestion charging.

In a recent publication of the Belgian Federal Planning Office, Hertveldt et al. (2009)
calculated the proportion of congestion costs in the total of congestion and direct
environmental external costs for Belgium for 2005 and 2030. The results showed that in
2008 during peak traffic the proportion of congestion is well above 80 percent and still more
than 50 percent during off-peak (above 95 percent in peak and about 80 percent off-peak in
2030), but since important external cost categories such as accidents and noise are not
considered in Hertveldt et al. (2009), comparison with the results from De Ceuster (2004) is
not straightforward. However, the study seems to confirm the trends visible in Figure 5-12:
an increase in marginal congestion costs and a decrease in the other marginal external cost

8
In De Ceuster (2004), the short-term component of up- and downstream processes which consists mainly of pre-
combustion processes (= external costs due to energy production) is not taken into account as a short run marginal
external transport cost.
9
Abstraction is made of the fact that, ideally, transport users that cause higher external costs, should be taxed
higher in order to give the correct price signal to transport users. Therefore, taxes should vary according to place
(urban, non-urban), time (peak, off-peak) and vehicle characteristics (EURO-norm). This differentiation however is
achieved only very partially at present.

143
categories (due to advances in the field of car technology, traffic safety, legislation, etc)
between 2002 and 2009. It is expected that this trend will continue in the future.

Figure 5-12: Marginal external costs (MEC) versus taxes – heavy truck diesel, Flanders, 1991-2002, 2002 prices

Source: translated from Transport & Mobility Leuven, 2004; MEC climate and MEC air are derived from Vito, 2003

For rail and barge, figures are provided by De Vlieger et al. (2004) in Table 5-5. Here
comparison is made between key figures for the different marginal external costs of
transport for three transport modes, provided by three different studies (from VITO, EC and
Planco). The differences between the three studies show that there is no such thing as
standard key figures for this type of costs. This is explained by the fact that, as mentioned
before, marginal external costs of transport activities depend strongly on parameters such
as fuel type, location, driving conditions and vehicle characteristics. Especially for road
transport, parameters such as network type and driving conditions can vary strongly.
However, as can be seen in Table 5-5, marginal external costs for trucks are consistently
and significantly higher than for the other two modes. For air pollution and climate change,
marginal external costs of barge and train are comparable, for the other categories barge
has lower marginal external costs than train (for infrastructure the data is inconclusive). In
this analysis the figures from the Belgian VITO study for barge and rail will be used, since
these best reflect local conditions. Truck figures in this table are just for comparison and will

144
not be used in this analysis since the above figures from De Ceuster (2004) are partly based
on VITO data for environmental aspects and better account for congestion costs in the
Belgian situation.

Table 5-5: Marginal average external costs per transport mode from various sources

€/100 km Truck Barge Train
Externalities Vito EC Planco Vito EC Planco Vito EC Planco
Accidents 22.8 5.4 37.8 0.01 0.0 0.3 1.6 1.5 2.3
Noise 4.4 2.1 7.4 <0.1 0.0 0.0 2.8 3.5 12.7
0.0-
6.8 7.9 29.1 4.8 3.0 4.2 3.8 3.5
Air 8.2
0.4-
2.3 0.8 0.0 0.6 ne 0.0 0.5 0.0
Climate 1.26
Congestion 5.4 5.5 1.2 ne 0.0 ne 0.2 0.0
Infrastructure 1.9 2.5 0.0 0.7 1.0 0.0 0.2 2.9 0.0
Space
1.3 - 0.0 - 0.4
availability
Soil- and
water- - 8.6 - 0.0 - 0.0
pollution
Total 43.5 24.1 85.4 6.1 5.0 4.5 7.1 12.3 19.0
Difference
- - - 37.4 19.1 80.8 36.4 11.8 66.3
with truck

Source: translated from De Vlieger et al., 2004

In order to simulate the internalisation of external costs, first the price functions of the
LAMBIT model were adapted. As mentioned, taxes on road transport do not cover all of the
external costs of this mode. However, not taking them into account would bias the analysis.
Therefore the current road taxes are subtracted from the total external costs for road. It
should be mentioned that no taxes are applied to the inland waterways and rail transport.
Next step was to calculate external costs per TEU. Table 5-6 shows the marginal external
costs for each transport mode that are used in the LAMBIT model. These costs include all
costs related to usage of transport infrastructure such as accident costs, noise, air pollution,
climate change and congestion (See section 2.6.4).

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Table 5-6: The marginal external costs in €/TEU

Year Road Rail Barge
2002 0.39 0.07 0.06

Source: Own calculations data based on De Ceuster (2004) and De Vlieger et al. (2004)

5.3.2.2. Internalisation of external costs scenario results

Figure 5-13 shows the internalisation of external costs for all modes of transport. The costs
of transport by different modes are internalised based on current market prices and no
subsidies for rail and inland waterway transport are taken into account. The scenario leads
to an increase in the market areas of intermodal terminals but the impact differs for rail and
barge terminals individually. This is explained by the differences in the external costs and
critical distances for each transport mode, which show that barge transport has a clear
advantage compared to rail and road transport.

The major change occurs in the market areas of barge terminals. While the terminal in
Genk, Willebroek and Grimbergen face a moderate growth in their market areas, the
terminals in Brussels, Renory and Wielsbeke experience a considerable growth. Considering
the rail terminals, the terminals in Athus and Charleroi increase their market areas. Both
types of terminals now reach municipalities which were formerly in the market area of the
unimodal road transport. Nevertheless, an internalisation of external costs do not lead to
any market area for the rail terminals in Kortrijk and Moeskroen. These two terminals can
only compete with the barge terminals in Wielsbeke and Avelgem when the rail subsidy is
introduced (see Table 5-7).

Internalisation of external costs maximises the market areas of the barge terminals
compared to both the previous subsidy scenarios. The scenario performed in this section
shows that an internalisation of external costs would also stimulate intermodal transport in a
substantial way and with a better balance between the two types of intermodal transport.
This situation can be considered as the ideal situation as the decrease in the market area of
unimodal road transport is also less than the case when inland waterway and rail transport
are subsidised. Although both subsidies and the internalisation of external costs aim to
achieve modal shift, subsidies are addressed only to a particular transport sector (rail and/or
barge). An internalisation of external costs addresses all transport modes including the road
transport. In this way, a motivation can be fostered for each transport sector to initiate
innovations to have more sustainable transport alternatives. Compared to the reference
scenario, the break-even distance will decrease with 33 kilometres when the external costs
are internalised to a new break-even point at 66 kilometres (see Figure 5-14). Market area

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of each transport mode (in terms of the number of municipalities) are provided in Figure
5-15.

Figure 5-13: Internalisation of external costs: all modes of transport

Source: Own setup

450
400
350
300
Prices (€)

250
200
150
100
50
0
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150
Distance (km)

Unimodal road Intermodal (with 20km post haulage)

Figure 5-14: Break-even analysis: Internalisation of external costs

Source: Own setup

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Table 5-7: Market areas of terminals in terms of the number of municipalities for the internalisation of external
costs and the different subsidy scenarios

Reference Barge Rail Internalisation
Terminal Intermodal 10 11
scenario subsidy subsidy of external
Type terminals
costs
Meerhout 24 41 24 35
Gent 0 14 0 10
Wielsbeke 19 39 0 42
Willebroek 3 18 3 10
TERMINALS
BARGE

Avelgem 8 14 0 18
Renory 60 64 60 86
Genk 30 37 30 33
Grimbergen 6 36 6 14
Brussels 39 47 39 74
Athus 2 2 19 11
TERMINALS

Charleroi 9 9 91 38
RAIL

Kortrijk 0 0 51 0
Moeskoren 0 0 7 0
Total barge terminals 189 310 162 322
Total rail terminals 11 11 168 49
Total road transport 389 268 259 218
Total 589 589 589 589

Source: Own setup

10
Rail subsidy: Athus €120; Charleroi €70; Kortrijk €71; Moeskroen €73
11
Barge subsidy: Meerthout, Gent, Wielsbeke, Willebroek, avelgem, Genk, Grimbergen €17.5; Renory, Brussels €12

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450

in terms of the number of municipalities
400

350

Market area 300

250

200

150

100

50

0
Reference scenario Barge subsidy Rail subsidy External costs

Total barge Total rail Total road

Figure 5-15: The effect of internalisation of external costs on modal market area

Source: Own setup

In Figure 5-16, the two simulations for the internalisation of external costs for barge/road
and rail/road combinations are presented. For the barge-only simulation, intermodal
terminals significantly increase their market areas. The degree of increase is evident for
terminals in Wielsbeke, Brussels and Renory. In the rail-only simulation, the terminals in
Kortrijk and Moeskroen can gain a market area. Figure 5-16 can be used to assess the
common market area problem between the rail and barge terminals. This is especially
evident in the west of Belgium, where the barge terminals in Wielsbeke and Avelgem
compete with the rail terminals in Kortrijk and Moeskroen. A common market area is also
found between the terminal in Brussels and Charleroi.

Figure 5-16: Internalisation of external costs barge and rail transport

Source: Own setup

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5.3.3. Fuel price scenarios 12

One could argue that an internalisation of external costs is not necessary in the future as
fuel prices will increase and by itself create a less competitive situation for road transport.
Establishing the price of petrol is no simple matter as it depends on various factors. In
addition to excise duties, the diesel price is connected to the price of crude oil, an energy
contribution and the value added tax (VAT). A change in crude oil prices on the world
market affects the diesel price by only 30 to 40 percent and generally the price of crude oil
is very volatile compared to diesel fuel prices.

In 2008, oil and diesel fuel prices reached historical records but due to the weak dollar the
impact on the diesel price was partially dampened. The current financial crisis had a
significant lowering effect on the diesel fuel and oil prices since the recession caused
demand for energy to shrink and price to plunged as well, but this effect is considered
temporal. The EIA (Energy Information Administration) developed forecasts to predict future
oil prices. In their Annual Energy Outlook 2009 three scenarios are described, namely a
business-as-usual case, a low price case and a high price case. The forecast expressed in
$/barrel was converted to the diesel price in Belgium. The calculations show the effect of an
increase of the crude oil price on the diesel fuel price. Table 5-8 summarises the scenarios
that will be simulated in the LAMBIT model.

Table 5-8: Effect of crude oil price increases on diesel fuel prices

Scenario 1 Scenario 2 Scenario 3
low price business as high price
case usual case case
Crude oil price ($/barrel) 50$ 130$ 200$
Increase vs current price ↑ 30% ↑ 160% ↑ 300%
Increase in diesel price ↑ 10% ↑ 50% ↑ 90%
Source: Van Hoeck, Macharis, Van Lier and Pekin, 2009

Fuel price increases have an impact on the variable component of the transport price
functions. In the scenarios only the price functions of the road and inland waterway
transport were adapted as most of the rail tractions in Belgium are conducted by electric
locomotives and furthermore it is difficult to determine the exact proportion of diesel
tractions.

Figure 5-17 demonstrates the impact of fuel price increases on the terminal catchment area.
Compared to the reference scenario with the current market prices, fuel prices are gradually
increased. A 10 percent increase in fuel prices shows a minor decrease in the market areas

12
This part of the dissertation was published in the paper: “Effect Van Een Stijging Van De Brandstofprijs Op De
Modal Split Van Het Goederenvervoer In België”, Vervoerslogistieke werkdagen: Bijdragen Deel 2, pp. 569-580.

150
of barge terminals. The terminals in Genk and Renory lose respectively 3 and 5
municipalities to unimodal road transport, due to the effect of the fuel price increase on the
road haulage leg of intermodal transport (see section 2.5.1.1). In contrast, the terminals in
Brussels and Meerhout increase their market areas by 1 municipality each. Considering the
rail terminals, minor growth in the market areas of the terminals in Charlori is observed.
Table 5-9 summarises the market areas (in terms of number of municipalities).

When the fuel price is increased by 50 percent, unimodal road transport begins to lose
market area and almost all of the barge terminals increase their market areas. Only the
terminal in Genk maintains its market area. The terminals in Wielsbeke and Meerhout
increase their market areas by at least 5 municipalities. Furthermore, the 50 percent fuel
price increase leads to a significant growth in the market area of the rail terminal in
Charleroi (see Table 5-9).

Finally, a 90 percent increase of fuel price also leads to larger market areas for the barge
terminals. Unimodal road transport loses 33 municipalities to the barge terminals. The
expansion of the market area for inland waterway transport is visually observed especially
for the terminals in Wielsbeke and Brussels, where the terminals increase their market areas
by 7 municipalities each. The market areas of the rail terminals also alter with the 90
percent increase of fuel prices. In addition to the growth in the market areas of Charleroi
and Athus, the rail terminals in Moeskroen is also able to attract some market area. Fuel
price increase leads to a gradual increase in the market areas of both rail and barge
terminals but at a different rate.

The results of this scenario can also be analysed with the break-even analysis. As fuel prices
are related to the variable part of the transportation prices, a change in fuel price will have
an effect on the slope of the lines. In this case variable prices will be higher when fuel price
are increasing, which will make the market price line steeper. Figure 5-18 shows the new
break-even distance when the fuel price increases with 90 percent. The new break-even
point is at 88 kilometres, accounting for a decrease of 11 kilometres compared to the
reference scenario.

Overall, the fuel price scenarios indicate a decreasing trend in the market area of unimodal
road transport however it remains as the dominant transport alternative (see Table 5-9).
Figure 5-19 can be used to summarise the effect of fuel prices on each transport mode. It is
evident that intermodal transport can increase its market area especially in a high-price
scenario.

151
Figure 5-17: Fuel price scenarios

Source: Own setup

400
350
300
Prices (€)

250
200
150
100
50
0
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150
Distanc e (km)

Unimodal road Intermodal (with 20km post haulage)

Figure 5-18: Break-even analysis: Fuel prices

Source: Own setup

152
Table 5-9: Market areas of terminals in terms of the number of municipalities for the different fuel price scenarios

Terminal Intermodal Reference 10% 50% 90%
Type terminals scenario increase increase increase
Meerhout 24 25 29 29
Gent 0 0 0 0
Wielsbeke 19 19 25 28
Willebroek 3 3 4 4
TERMINALS
BARGE

Avelgem 8 8 12 12
Renory 60 55 62 66
Genk 30 27 29 30
Grimbergen 6 6 11 8
Brussels 39 40 40 46
Athus 2 2 3 5
TERMINALS

Charleroi 9 10 13 27
RAIL

Kortrijk 0 0 0 0
Moeskoren 0 0 0 1
Total barge terminals 189 183 212 223
Total rail terminals 11 12 16 33
Total road transport 389 394 361 333
Total 589 589 589 589

Source: Own setup

450
in terms of the number of municipalities

400

350

300
Market area

250

200

150

100

50

0
Reference scenario 10% increase 50% increase 90% increase

Total barge Total rail Total road

Figure 5-19: The effect of fuel price increase on modal market area

Source: Own setup

153
5.3.4. Future terminal scenario

Location and spatial relations play a significant role in the development of transport
terminals (Rodrigue et al., 2009). The two geographic concepts that can be used to
determine the location characteristics of an intermodal terminal are absolute and relative
locations. First is absolute location, or the issue of site. The performance of an intermodal
terminal depends on where it is located. The second component is relative location, or
location relative to other terminals in the intermodal network. While absolute location is a
way of describing the position of the terminal on the surface of the earth, relative location
determines its position on the intermodal network e.g. accessibility of the terminal to
transport modes, proximity of the terminal to industrial sites. Together, absolute and
relative locations are the underlying factor for explaining competition between terminals.
Location of a terminal is determined according to the transport mode and by the types of
activities carried on (Rodrigue et al., 2009).

Location of the intermodal terminals refers to the hinterland of the seaports, the land areas
from which the port acquires freight flows. In this setting, containers enable seaports with
the flexibility to penetrate larger markets, so that many ports compete over the same
market area. This concept is also valid for the intermodal terminals, especially considering a
very dense network, as is the case in Belgium. The intermodal terminal landscape in Belgium
has changed with the introduction of a number of new terminals over the last decade (see
section 2.4 in chapter 2). New initiatives are often emerging to add new terminal to the
landscape. An overview of the new terminals is given in Table 5-10. The majority of the new
potential locations for intermodal terminals are in the Walloon region. For rail terminals, the
Narcon (National Rail Container Network), connecting the Port of Antwerp with the inland
terminals in Athus, Charleroi, Kortrijk and Moeskroen network has recently added a new
terminal to its network in Genk. Close to Athus and at the cross-section of 2 major
motorways, an industrial estate (region) is established in Neufchâteau. The new terminal
(Ardenne) will be linked up to the Brussels-Luxembourg rail line.

154
Table 5-10: Overview of the new terminal scenarios

Year Terminal Municipality Type
2010 Garocentre La Louvière Trimodal
2010 Vaulx Tournai Barge/Road
2010 Pecq Pecq Barge/Road
2011 Sambreville Sambreville Trimodal
2012 Liège Trilogiport Oupeye Trimodal
2012 Ardenne Logistics Neufchâteau Rail/Road
Narcon extension Euroterminal Genk Rail/Road
No services yet Ghlin Ghlin Trimodal
No services yet Charleroi Charleroi Trimodal
Planning phase Roeselare Roeselare Barge/Road
Planning phase Aalst Aalst Barge/Road

Source: Own setup

For barge terminals, the initiatives often come from the private sector supported by the
public sector, through PPPs. Sometimes municipalities also take the lead. As concluded in
section 3.6.2.2, various initiatives in intermodal transport promotion are applied in Wallonia,
following the developments in Flanders. Table 5-10 also indicates that inland navigation is a
priority in the Walloon region. According to the office of promotion of the inland waterways
in the Walloon region (OPVN), several inland terminals (trimodal and barge/road) will be
created in the near future. It is evident that the terminals need to be competitive with the
road transport and attract customers. The Walloon Region will provide the means: adjusting
the size of canals and raising bridges so that bigger barges can be accepted. The new
subsidy scheme for the period 2008-2013 will play a strategic role in achieving a further
development in the Walloon inland waterways. While the construction of some of the
terminals are underway, some terminals are already operational but currently no scheduled
services are implemented e.g. Ghlin and Charleroi. New barge terminals are also discussed
in Flanders, mainly in Roeselare and Aalst. In order to evaluate the potential of these new
locations, LAMBIT can be used to analyse the market area and potential of the terminals.
Furthermore its effect on the existing terminals is also considered.

In Figure 5-20, the nine potential new barge terminals (La Louvière, Vaulx, Pecq,
Sambreville, Liège, Ghlin, Charleroi, Roeselare and Aalst) and two rail terminal (Genk and
Ardenne) are introduced. As can be expected, compared to the reference scenario, the
future terminal landscape indicates a growth for the market areas of barge terminals. The
potentially new terminal in Liège will have to share its market area with the terminals in

155
Renory and Genk. This is also valid for the terminals in Roeselare and in Wielsbeke. In this
scenario no subsidies are introduced which leads to a competitive disadvantage for the rail
terminals. Not only the new rail terminals in Genk and Ardenne are not able to take any
market area, but the rail terminal in Charleroi is also exposed to a shift in its market area to
the barge terminal. Overall, barge terminals in the southern axis of the waterways can take
market area from the unimodal road transport. The new barge terminal in Pecq is not able to
take any market area. The terminal in Pecq is only 12 kilometres away from Avelgem.

Figure 5-20: Future terminal scenario without subsidies

Source: Own setup

The amount of municipalities gives already an indication of the potential of the terminals.
However, this analysis should be completed with an idea on the amount of containers that
are transported to this region in order to indicate the market potentials of intermodal
terminals. Taking the NIS data into account, the addition of these new terminals results in a
29.1 percent potential increase in intermodal transport meaning a modal shift of 694,880
tons. Table 5-11 presents the market potentials for the new terminals. On the one hand, the
new terminals in Ghlin and Charleroi will have a considerable market area in terms of the
amount of municipalities. When the current container traffic is taken into account, the final
potential for the terminal in Charleroi per municipality appears quite low. On the other hand,
the terminals in Aalst and Sambreville indicate a higher tonnage per municipality despite

156
their smaller area. This is related to the industrial and economic activity in the particular
region.

Table 5-11: Market potentials of terminals

Terminal Intermodal The number of Volume
Type terminals municipalities in ton
La Louvière 21 211,461
Vaulx 2 1,947
Pecq 0 0
Sambreville 4 91,021
TERMINALS
BARGE

Liège 38 201,018
Ghlin 13 110,642
Charleroi 18 120,102
Roeselare 13 265,146
Aalst 1 92,567

RAIL Genk 0 0
TERMINALS Ardenne 0 0

Source: Own setup data based on NIS (2007)

It is necessary to approach the future terminal scenario with the future subsidy schemes.
Therefore different subsidy schemes for the rail terminals are applied for the period 2010-
2012. The regional subsidies for the barge terminals are also taken into consideration with
the assumption of possible prolongation for the same period. Figure 5-21 visualises the
perspectives for the future intermodal terminal landscape with a comparison to the reference
scenario. The new terminals are added according to their expected completion dates that
were listed in Table 5-10. As described in section 5.2, the reference scenario includes the
current terminals and no subsidies are considered. The future scenarios for the period 2010-
2012 indicates a very dense market area for the intermodal terminals. The new terminals,
located mostly in the Walloon inland waterways, lead to an increase for barge transport by
taking market area from road transport and rail transport. It has to be noted that the
market areas of the rail terminals gradually decrease due to the application of different rail
subsidies. This is especially valid for the terminal of Charleroi, where its market area will be
taken by road transport when the federal government scheme for rail transport will
decrease. Taking 2010 as analysis period, potential volume of the new terminals and their
impact on the existing terminals can be analysed. Compared to subsidy scenario (see Figure
5-9), the new terminals result in three main geographic implications. The first observation is

157
centred around the new rail terminal in Genk, where it shares a common market area with
the terminals in Meerhout and Genk. The new terminal takes two thirds of its market area
from the barge terminal in Genk. The second change takes place in the terminal in Kortrijk.
Northern parts of the market area of this terminal are overtaken by the new terminal in
Roeselare. Finally, the terminal in La Louvière settles in the market area of the rail terminal
in Charleroi. Changes in the market areas of new terminals (in terms of the number of
municipalities served) and their potential (in terms of volume) are provided in Table 5-12.

Figure 5-21: Future terminal scenario with subsidies

Source: Own setup

158
Table 5-12 Market potentials of terminals for the period 2010-2012

2010 2011 2012
Scenario Scenario scenario
Terminal Intermodal Market Volume Market Volume Market Volume
Type terminals area in ton area in ton area in ton
La Louvière 12 192,150 15 193,878 18 220,804
Vaulx 0 0 2 1,947 2 1,947
Pecq 0 0 0 0 0 0
Sambreville 0 0 0 0
TERMINALS
BARGE

Liège 38 201,018
Ghlin 16 113,067 16 113,067 16 113,067
Charleroi 0 0 0 0 0 0
Roeselare 17 214,386 20 297,232 22 303,187
Aalst 24 145,613 24 145,613 24 145,613

RAIL Genk 9 126,632 0 0 0 0
TERMINALS Ardenne 13 13,792

Source: Own setup data based on NIS (2007)

The future terminal (subsidised) scenario for 2012 can be compared with the subsidy
scenario for 2012. Taking the NIS data into account, the impact of new terminals results in a
8.7 percent potential increase in intermodal transport meaning a modal shift of 379,001
tons. So to conclude, extending the current terminal landscape will have a modest impact on
the intermodal market share. The landscape is already very dense and the new potential
locations can cannabalise some of the market area of the existing ones. Therefore, it is
necessary to examine the effect of new intermodal terminals on the existing ones. The
future terminal scenarios performed in this section clearly indicates that there is competition
between barge terminals due to the common market area. This analysis of potential new
locations for terminals shows how important it is to have a broader view on the location of
terminals and to take into account new initiatives (also over the border of regions and
countries). To this end, the LAMBIT framework demonstrates an ex-ante analysis of future
terminal scenarios.

In the final stage of future terminal analysis, the container flows from the port of Antwerp
(2007) can be used to validate the potentials of new terminals. Figure 5-22 shows the
container flows from the port of Antwerp, based on the container counts survey of the port

159
Authority of Antwerp (see section 4.3.1.3). The container flows density indicate that the new
terminals in Genk, Liège, Charleroi, Ghlin, Aalst and Sambreville are located in the network,
where there are higher freight flows from the port of Antwerp.

Figure 5-22: Container flows analysis from the Port of Antwerp

Source: Own setup data based on Port of Antwerp (2007)

5.4. Further refinement of the model

As indicated in chapter 4, the LAMBIT model uses an AoN assignment method in indicating
the market area of the intermodal terminals. This is done by comparing the market prices of
unimodal road transport with intermodal transport for each Belgian municipality. The
simplicity of AoN assignment method results in two alternatives for each municipality:
cheaper by unimodal road transport or by intermodal (barge or rail) transport.

The limitation of AoN assignment can be overcome by introducing a ratio analysis. First step
is to calculate price ratios for each municipality: dividing intermodal transport market price
by unimodal road transport market price. Working with ratios can make it possible to
visualise the market area of each terminal with gradual shades. Figure 5-23 depicts the

160
market area for each terminal based on the price ratio. Here, subsidy scenario on inland
waterway and rail transport for 2010 is taken as an example to perform the ratio analysis. A
ratio higher than 1 means that unimodal road transport is the most interesting transport
mode in that municipality. A ratio lower than one, means that intermodal transport is more
attractive. But instead of the all-or-nothing approach, we give here an indication in how far
intermodal transport is more attractive Towards the centre of each terminal, intermodal
transport becomes relatively cheaper with a lower ratio compared to unimodal road
transport. In other words, the further you go away from the terminal the price ratio
increases.

Figure 5-23: Ratio analysis

Source: Own setup

On the one hand, the ratio analysis shows that only 6 percent of the municipalities are
highly competitive with the unimodal road transport due to their lower ratio (less than 0.85).
This is the case especially for the terminal in Charleroi. On the other hand, 27 percent of the
municipalities are included in the ratio range 0.96-1.00. These are the municipalities found
on the periphery of the market area of each terminal. The remaining two ratios with the

161
range 0.86-0.90 and 0.91-0.95 are dominant. The ratio analysis introduces a more realistic
market area for the intermodal transport. This analysis also demonstrates the impact of post
haulage within the intermodal transport chain.

The ratio analysis can easily be applied to other scenarios. Implementation of the analysis
can enhance the reliability of the results of the LAMBIT model. Depending on the
sophistication of the implemented methods, other assumptions of the model can be tackled.
These perspectives for future research are discussed in chapter 7.

5.5. Conclusions and policy recommendations

In order to stimulate intermodal transport, several subsidy schemes have been introduced
with the objective to lower the price of intermodal transport and to avoid the cost of the
extra handling at the terminal. In this chapter, the LAMBIT framework was used to analyse
the impact of these subsidy schemes. The case of Belgium was used, as a federal rail
subsidy scheme is foreseen for road/rail transport and several barge subsidy schemes are
introduced on a regional level for the road/barge combination. The scenarios described in
this chapter show that the subsidies are indeed increasing the market area of intermodal
transport, but that also a shift from barge to rail is induced in areas where both types of
terminals are available. The same is true on a European level, where the different
regions/countries are introducing different funding schemes to support the intermodal
transport market. Here, attention should also be made for possible negative side effects. The
model justifies the opportunities of subsidies both for rail and inland waterway transport
however they should be made more complementary. The scenario-based analyses for
subsidies demonstrate that the market areas of rail terminals would not be able to survive
without government subsidy. When the regional subsidy schemes are directed to inland
waterway transport, a growth in the market share for intermodal transport is achieved.

In a second round of scenarios, the possibility to internalise the external costs was
examined. The external costs were internalised into the market prices for all transport
modes, keeping in mind which taxes were already paid by these transportation modes. The
outcomes of the model show that an internalisation of external costs would also stimulate
intermodal transport in a substantial way and with a better balance between the two types
of intermodal transport.

The model also demonstrated the impact of fuel price increases in the terminal landscape.
An increase in fuel prices leads to larger market areas for the barge and the rail terminals.
Finally, the future terminal scenarios gave perspectives on the intermodal terminal

162
landscape in Belgium. It can be concluded that the terminal landscape is already very dense
in Belgium and that potential new locations should be examined carefully in order not to
cannabalise the market area of the existing ones and also keeping the volume into account
for their potentials. Additionally, the analysis of potential new locations for terminals
underlines how important it is to have a broader view on the location of terminals and to
take into account new initiatives.

The GIS-based model, called LAMBIT makes it possible to make ex-ante and ex-post
analysis of policy measures to stimulate the intermodal transport market. Based on the
current market prices for each transport mode, the model compares intermodal transport
with unimodal road transport. This chapter presented the LAMBIT framework for analysing
the impact of intermodal policy measures through a scenario-based analysis for Belgium.

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6. Scenario-based analysis for Turkey

Introduction (1) 6.1. Introduction

Intermodal transport In this chapter, the LAMBIT framework is extended to
in general (2) Turkey with the aim of emphasising the importance of
Intermodal transport intermodal policy and assessing intermodal transport
policies (3) potential in Turkey. This final application chapter of the
analysis for Belgium (5)

analysis for Turkey (6)

dissertation shows that the LAMBIT methodology can be
GIS-based intermodal

applied to new countries, prescribing future research
transport model (4)

perspectives for developing the applications on a European
Scenario-based
Scenario-based

scale.

92.5 percent of the hinterland freight transportation from
the Turkish seaports is realised by road. This situation
underlines the need to promote intermodal transport in
Turkey in order to lower the external effects of
Conclusions (7)
transportation, resulting from the uneven modal split.

Turkey has a great potential for intermodal transport due to its geographic location and the
degree of containerisation but in terms of intermodal facilities (ports, terminals, railroads
and cargo handling equipment) it lacks the necessary equipment to facilitate intermodal
traffic. Therefore revitalisation of railways and seaports are on the political agenda for the
Turkish government. Consequently, major ports are privatised and infrastructure policies in
the rail sector are foreseen, including the construction of intermodal terminals. Although the
Turkish State Railways (TCDD) initiated the construction of freight villages, private initiatives
are also started to offer intermodal rail services between the seaports and inland terminals.
The decision about the location of these new intermodal terminals is of primary concern for
the private investor and for the government as it involves large amounts of capital to be
invested and has the vital importance in the long run as been explained in the previous
chapter. From this perspective, there is a need for decision support systems to analyse the
location of intermodal terminals.

Section 6.2 questions the need for intermodal transport in Turkey by analysing
containerisation and investigating the location of Turkey in intermodal transport networks.
In section 6.3 the current state of intermodal transport is briefly presented with specific

164
focus on intermodal transport policies. Section 6.4 develops scenarios to assess intermodal
transport policies for Turkey. Finally section 6.5 draws conclusions from the results of
scenarios for this chapter.

6.2. Need for intermodal transport in Turkey

Road transport is the dominant mode in Turkey reaching over 90 percent. Turkey has
64,000 kilometres of road network excluding village roads (Table 6-1). During the previous
decades, the priority in investments has been given to road construction. The average
annual growth of motorway development was over 10 percent until the 1990s.

Table 6-1: Road network in Turkey

Road Type Total Length

Motorways 2,010 km

State roads 31,311 km

Provincial roads 30,712 km

Total 64.033 km

Source: General Directorate of Highways, 2009

Compared to the European Member States, the Turkish road network has a lower density.
Nevertheless, the lack of infrastructure and lower quality in rail and shortsea shipping places
road transport as an attractive solution for the customers. This situation contributes to the
unbalanced development in modal split. The road freight transportation sector has been
growing steadily, especially over the last decade, as a result of the tax incentives given by
the state to road transporters and the rise in exports (Akgul, 2006). Overall, demand
(measured in tonne-kilometres) has grown at an annual rate of nearly 8 percent since 1950
(World Bank, 2009).

The road sector is not only an important transport mode on itself but also an important
service sector that is related to all other sectors and transportation modes, especially the
intermodal transport chain. Respectfully, the current transport policy in Turkey underline the
supplementary role of road sector to railway and shortsea shipping transport. Therefore the
policy should be directed towards achieving an integrated intermodal network by improving
the road transport infrastructure. Ongoing projects of dual-carriage ways and highways on
the East-West and North-South axes will have a positive contribution to national freight

165
transportation in Turkey (TUSIAD, 2007). Additionally, projects should be stimulated to
finalise urban ring roads and connections should be established between the intermodal
terminals and the industrial zones without entering the congested city traffic.

In contrast to the development in road transport, Turkey has a great potential in terms of
maritime transportation owing to its privileged geographical position at the crossroads of
Europe, Central Asia and Middle East. Mainly connected to international and transit
transport, this geographical location places Turkey in the focal point of the transportation
network, extending to the Atlantic Ocean via Gibraltar, Arab peninsula and the Indian Ocean
via Suez Canal, and Eurasia and East Asia via the Turkish straits (the Bosporus and the
Dardanelles).

Turkish seaports play an important role in North-South and East-West container traffic,
where higher containerisation density is observed in the Eastern Mediterranean Sea. Despite
the fact that Turkish container ports are connected to various ports of the world, these
connections are mostly conducted with feeder vessels, because large scale container vessels
are exposed to certain obstacles to call at these seaports. Nevertheless, a growth in
container transportation already exists in Turkey and most of the international trade has
been done by maritime transport. This situation underlines the need for the intermodal
transport policy. It is the aim of this section to elaborate this statement by highlighting the
impact of containerisation on the modal split and assessing the transport network within
Turkey.

6.2.1. Containerisation

Over the past decade, the containerisation process in Turkey has gained momentum mainly
parallel to the growth of the Turkish economy. Today the containerisation in the Turkish
seaports reflects an increasing trend in the activity of the logistics chain. Surrounded by the
sea on three sides, with its 8,333 kilometres of coastline, Turkey has strategic ports in a
very rapidly developing region between Eastern Europe, Russia and the Middle East (Figure
6-1).

166
Figure 6-1: Map of Turkey and its neighbours

Source: Own setup

The majority of the container transportation to/from Turkey depends on the feeder services
mainly from Gioia Tauro, Damietta and Port Said. Main container routes within Turkey can
be stated as follows: (1) Northern Europe: Containerised cargo is carried by the vessels
operating on the North Europe-the Mediterranean-Asia route, transhipped at Port Said and
transferred to Mersin, Izmir and Istanbul by feeder services. (2) North America:
Containerised cargo is carried by ships operating on the North America-Mediterranean-Asia
route, transhipped at Gioia Tauro and transferred to Mersin, Izmir and Istanbul by feeder
services. (3) Mediterranean Region: Containerised cargo is carried by vessels operating on
the West Mediterranean-Asia route, transhipped at Damietta and transferred to Mersin,
Izmir and Istanbul by feeder services. (4) Asia Route: Containerised cargo is carried by
vessels connecting Europe and Asia on the West Mediterranean-Asia route (Deveci, 2003).
Figure 6-2 presents the container handlings at the Turkish ports. Container transportation
has been developing in Turkey gradually over the last decade despite a slight decrease in
2001, when the country encountered its worst economic crisis. In 2008, container handlings
exceeded 5 million TEU. During this period an average annual growth rate of 34 percent is
observed.

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6

5

4
Million TEU

3

2

1

0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Figure 6-2: Container handlings at the Turkish ports

Source: Undersecretariat for Maritime Affairs, 2009

Although major share of international trade in Turkey is being realised by maritime
transport, 92.5 percent of the freight transportation inside the country is done by road. In
1950 railway transport was the dominant mode of transport in Turkey with a share of 55
percent. Over the years the road transport has gradually increased its share from 17 percent
to over 90 percent. While the state policies on road transport led to this unbalanced modal
split, the economic development of the country resulted in a higher transportation demand
that was mostly supplied by road transportation. Total freight transportation in Turkey has
increased by 163,846 million ton-kilometres during the last three decades (Figure 6-3). To
conclude, intermodal transport can be promoted through rail/road and shortsea shipping
services in Turkey in order to lower down these external costs while preserving the economic
growth.

168
100%
+3,584 million tkm
80%
Modal split freight transport

60% +159,962 million tkm
(basis=tkm)

40%

20%
+0.300 million tkm

0%
1970 1980 1990 1995 2000 2001 2002 2003 2004 2005 2006
Rail 17.8% 0.1% 8.9% 0.2% 4.4% 4.8% 3.5% 3.2% 3.0% 3.2% 4.3%
Road 60.9% 88.1% 81.1% 92.7% 90.1% 90.6% 92.1% 91.5% 91.2% 91.4% 92.9%
Maritime 21.3% 11.8% 9.9% 7.1% 5.5% 4.5% 4.4% 5.2% 5.7% 5.2% 2.8%

Figure 6-3: Modal split in Turkey

Source: TUIK, 2008

6.2.2. Location of Turkey in intermodal transport networks

Containerisation and the need for intermodal transport in Turkey can be discussed by
investigating the location of Turkey in the international intermodal transport networks. This
requires a discussion of corridor and network, the two important concepts in this field. Both
of them arose from the development of the European transport infrastructure. On the one
hand, the TEN-Ts were designed to meet the twin objectives of integration and cohesion of
the EU. On the other hand, the EU also considers enhancing transport infrastructure beyond
its borders. With the enlargement of EU, two main challenges entered into the European
decision making agenda: first, a revision of the TEN-T policy for the new Member States and
secondly, the adjustment of infrastructure development of the new neighbours of that
enlarged Europe. In this setting, the corridor approach provides to be a good solution to
solve specific problems and develop intermodal transport because of its capability of acting
as a catalyst between partners in order to have better cooperation. With the EU integration,
the corridor approach has been further elaborated through more formal arrangements as
well as agreements between national and international bodies (Reynaud, 2003). These
concepts will be introduced in this section in order to locate Turkey in the intermodal
transport networks.

- TEN-T extension

Strategic location of Turkey as a natural bridge between Eastern Europe and new emerging
markets of Caucasus and Central Asia is preceded by involvement in various international

169
agreements concerning the development of the intermodal transport network from Europe to
the Middle East and Central Asia. As a candidate country to the EU, Turkey has already
established transport connections with the European countries and there is a growing
interest in extending the TEN-T further into Turkey.

Turkey represents a unique case for the EU namely through its involvement in the Customs
Union with the EU since 1996 and its relatively developed transport network especially in the
Western part (Kartal, 2007). Furthermore, international transport in Turkey is done mainly
with maritime transport, making transport connections between Turkey and its main trading
partner, the EU. Therefore, the EU interest in extending the TEN-T into Turkey concentrates
on the connections to the neighbours of Turkey in Caucasia and Middle East and beyond
such as Central Asia and North Africa. As a result, the EU tries to pursue its own interest
through the corridor approach by prioritising connections which Turkey offers. A critical
assessment of this approach shows that the internal needs of the country to develop a
national transport network come as of secondary importance. However, Turkey did not
accept this methodology and proposed a one-step and one-network approach (Kartal, 2007).
For this purpose, the TINA study is initiated to develop a multi-modal transport network
(Core Network) within Turkey and to extend the TEN-T into Turkey. The project, which
consists of defining and assessing a multimodal transport network in Turkey, was finalised in
May 2007. The Core Network for Turkey comprises 10,912 kilometres of railway lines
(including 3,508 kilometres of high-speed lines), 11,984 kilometres of roads, 20 airports and
39 seaports. As Figure 6-4 visualises, 44 percent of the future investments will be directed
towards Turkish railways network, which is in poor condition. Compared to the road network,
the rail network also has more capacity constraints. This situation clearly indicates an
essential need to modernise the rail network and restructure the TCDD to meet changing
market needs.

170
Figure 6-4: Core network for Turkey

Source: TINA Final report, 2007

On a broader level the Pan-European transport Corridors (i.e. Corridor IV) and areas
(Black Sea PETrA), TRACECA transport corridor and the European agreement on important
international combined transport lines serve as inputs to extend the TEN-T into Turkey.
These different actions will be explained in this section. The Pan-European transport
corridors (PETrC) and area (PETrA) were defined at the three Pan-European transport
conferences (1991 in Prague, 1994 in Crete and 1997 in Helsinki) with the aim of
interconnecting the transportation networks and enabling a sustainable development of the
European transportation sector. The PETrC are distinct from the TEN-T, which include all
major established routes in the EU but after the European enlargement in 2004 and 2007,
there are proposals to combine the two systems, since most of the involved countries now
are the members of the EU.

Turkey is adhered to the memorandum of understanding for the 4th and 8th corridors.
Intermodal corridor 4 connects Germany to Turkey via Czech Republic, Slovakia, Hungary,
Romania, Bulgaria and Greece. As this corridor is aimed at extending to the Central Asian
countries, simplification of border crossing regulations and interoperability are needed. This
situation absolutely requires Turkey to restructure its transport network. In this process, two
prominent projects appear in the foreground: Kars (Turkey) – Tbilisi (Georgia) railway line
and the Marmaray project. The latter rail crossing of the Bosporus will link Berlin (Germany)

171
– Istanbul (Turkey) railway network to the Central Asian countries (Uzbekistan and
Kazakhstan) via Iran through block-container trains (Işık, 2004). The 8th corridor aims to
connect the Black Sea with the Adriatic, mainly focusing on the infrastructure needs of the
Balkan countries. This corridor is connected to the 4th corridor in Bulgaria. Dependent on the
geographic position, Turkey is located in the Black Sea and Mediterranean Pan-European
transport areas.

The TINA study prioritised the projects proposed for the Core Network in Turkey, using a
Multi-Criteria Analysis methodology. The priority projects are shown in Figure 6-5. Among 32
priority projects, six railway projects support the development of transport via seaports,
therefore, an important element of integrated intermodal transport in Turkey. The projects
cover seaports in the Mediterranean (including Aegean and Marmara) and the Black Sea
regions. Additionally, six intermodal terminals are planned. Furthermore, in addition to the
seaports in Mersin and Samsun, five seaports are planned to integrate Turkey in the MoS.

Figure 6-5: Priority projects: Railways, seaports, terminals

Source: TINA Final report, 2007

- TRACECA – Transport Corridor Asia - Caucasus - Europe

Launched in 1993, TRACECA project aims to develop a transport corridor on the West-East
axis from Europe, across the Black Sea, through the Caucasus and Caspian Sea to Central
Asia. The corridor, consisting of railway, maritime and road networks establishes a link

172
between TEN-T and PETrA. Turkey is involved in the projects of improvement of Maritime
Links between TRACECA Corridors and TEN-T Corridor, MoS for the Black Sea and the
Caspian Sea Logistic Centres Network for all TRACECA Countries. Figure 6-6 shows the
corridor of TRACECA, which passes through Northern Turkey connecting Balkans to
Caucasia.

Figure 6-6: TRACECA network

Source: TRACECA, 2009

- AGTC - European Agreement on Important International Combined Transport
Lines and Related Installations

In order to make international combined transport in Europe more efficient and attractive to
customers, AGTC aims to establish a legal framework which lays down a co-ordinated plan
for the development of combined transport services and the infrastructure necessary for
their operation based on internationally agreed performance parameters and standards
(UNECE, 2006). According to the agreement, the seaports and container terminals in
Haydarpaşa, Mersin, Bandırma, Iskenderun, Samsun and Derince (see section 6.3.1 for an
overview of the seaports) are listed as terminals of importance for international intermodal
transport in Turkey. The role of Turkey in the intermodal network gained more importance in
the East-West and North-South connections.

173
6.3. Current state of intermodal transport in Turkey

Intermodal transport in Turkey is in the emerging phase. This section describes the current
state of intermodal transport by providing an overview on policies and traffic. Based on the
literature review, the development of intermodal transport in Turkey is evaluated and
perspectives on the future are given.

6.3.1. Shortsea shipping

In chapter 2, shortsea shipping as a part of the integrated intermodal transport chain was
introduced. Shortsea shipping can be redefined as a joint product of the TEN-T, the Marco
Polo programmes and the shortsea shipping applications, which all fell under the White
Paper guidelines. Also in Turkey, attention is given to shortsea shipping as stated in the
Turkish maritime transport policy (Turkish Maritime, 2009).

6.3.1.1. Shortsea shipping transport policy

Undersecretariat for Maritime Affairs steers the shortsea shipping policy in Turkey. The main
aim is to integrate shortsea shipping seamlessly into the logistics chain and to offer door-to-
door intermodal transport solutions to customers. Therefore, the complexity of documentary
and administrative procedures have to be simplified and the efficiency of the Turkish ports
needs to be enhanced. Furthermore, the port hinterland connections are preconditions for
maritime based intermodal transport. Currently, specific intermodal shortsea shipping
transport measures are not yet on the political agenda in Turkey but there are developments
in its promotion. The aim of this section is to present these developments.

- Shortsea Promotion Centre

In 2005, the “Shortsea Promotion Centre” has been established by the Union of Chambers
and Commodity Exchanges of Turkey. In parallel with the extension of TEN-T into accession
countries, a number of proposals were brought on the agenda concerning the extension of
the shortsea shipping routes to Turkey e.g. Turkish seaports of Izmir, Mersin, Istanbul and
Samsun were introduced as nodes to be included in the MoS network. Among the projects
offered, those of the port of Mersin and the port of Samsun have been accepted (Turkish
Maritime, 2009).

- Ro-Ro transport

Turkey is included in the international network of shortsea shipping routes. The war in
Yugoslavia in the 1990s resulted in the need for alternative transit routes between Turkey
and Western Europe. Due to the lack of infrastructure and high transit fees charged by

174
Balkan countries, Turkish transport companies decided to establish Ro-Ro lines (see section
2.3.3.1) to ensure secure and low-cost transportation. Currently, Ro-Ro transportation is
widely used in transport from Rize, Trabzon, Samsun and Zonguldak to Ukraine, Russia and
Georgia in the Black Sea region, from Izmir, Cesme, Dikili and Canakkale in the Aegen
region to Greece and Italy from Mersin in the Mediterranean Region to Northern Cyprus, as
well as domestic transportation in the Sea of Marmara.

- Cabotage transport

A bottleneck for shortsea shipping in Turkey is the regulation around cabotage for coastal
shipping. The Cabotage Act, dated 1926, sets the rules governing the trade between Turkish
ports. In accordance with the Cabotage Act, all maritime transport between the seaports of
Turkey are granted to Turkish citizens. Foreign ships may only transport passengers and
cargo from abroad to Turkish ports, and take on passengers and cargo from Turkish ports to
carry them to foreign ports. This means that trading with the coastal shipping is reserved for
Turkish-flag vessels. However, cabotage shipping is continuously losing its economic place
within Turkish shipping largely because of the inefficiencies of the monopoly held by the
state-owned cargo carrier (Yercan, 1998). The Turkish ship owners prefer to flag out 13 their
vessels in order to benefit from low taxation and crew costs offered in other countries.
Approximately more than half of the national merchant fleet in Turkey are flagged out.
Flagged out vessels and the complex custom regulations constitute a major obstacle for the
cabotage shipping. In order to promote cabotage transport, canal dues are reduced and tax
exemptions are granted for fuel oil that is used in the vessels (TUSIAD, 2007).

In March 2008 a regulation came into force to amend customs legislation in order to open
the way for shortsea shipping. Allowing the cabotage items to be stored, unloaded and
quarantined in customs areas, movement of freight between the Turkish ports is made
easier. In September 2008, Turkey’s first container cabotage transport from Mersin to
Istanbul was realised.

- Privatisation of the Turkish seaports

There are three categories of ports regarding their ownership and operations in Turkey: (1)
Public ports: State owned and operated ports, which belong to TCDD and Turkish Maritime
Administration (TDI), (2) Public/Private Ports: State owned but operated by private
enterprises after their privatisation by the transfer of operations rights strategy (which are

13
"Flagging out" is the process of removing a vessel from a national registry. Generally flagging out refers to the
practice of switching the vessel's registration to another country to fly operate it under a "flag of convenience".

175
mostly owned by TCDD and TDI), and (3) Private Ports: owned and operated by private
enterprises (Gunaydin, 2006).

The total number of listed seaports in Turkey is 160: 25 ports are state owned and 27 are
owned by municipalities. Since 1990s various small scale private ports were established. In
2008, 108 ports are owned by private enterprises. TDI and TCDD operate 6 ports each and
one seaport (Mersin) is operated by a private international company. All of the TCDD ports
has an access to the railways and container transport services are available.

Mersin port is the main port for the East Mediterranean Region and a gateway for both the
South Eastern Turkish cities and the Middle East countries. Its railroad connections and easy
access to the international motorway network makes it an ideal transit port for trade in the
region. Haydarpasa is the only port in Istanbul with a rail connection. Haydarpasa port is
situated on the Anatolian side of the Bosphorus in Istanbul and it serves a hinterland which
is the most industrialised area of Turkey. Izmir port, located at the east end of the Izmir
Bay, is Turkey’s third largest port. A comparison of these three most important seaports of
Turkey can be made: Haydarpasa port is mainly utilised for import cargo, while Izmir port
and Mersin port are mainly utilised for export purposes. Yet, the container throughput is
negligible at the Black Seaports. In this region, the port of Samsun is the major port serving
export/import cargoes and transit traffic to Iran and also Ro-Ro lines between Turkey and
Ukraine/Russia. The port has a ship to shore bridge system that serves the railway.

The present condition of the state owned ports involve several disadvantages like obsolete
technology, inefficient management, insufficient depth of the ports, missing links of the
parts in accessing the rail and road networks (Gunaydin, 2006). These conditions that
require huge investments face state budget restrictions, as a result of lack of financial
resources. All these factors result in an unfavourable environment for intermodal
transportation from the seaports.

Since late 1990s, 13 TDI seaports have been privatised by conveying the right of
exploitation to private enterprises for thirty years. Privatisation goal for these seaports has
been to mobilise the private sector involvement for new transport investments, to increase
the operational and managerial efficiency of the ports and to enhance the competitiveness
market for maritime transport. Among the privatised ports, the ports of Trabzon, Antalya
and Tekirdag are the largest with cargo handling capacity over 3 million tonnes per year.
Although the post privatisation analysis of the TDI ports indicate an increase in the volume
of business, there has not been a significant change in cargo handling of the ports
(Gunaydin, 2006).

176
In 2004, the TCDD ports in Izmir, Mersin, Iskenderun, Derince, Bandirma and Samsun Ports
have been included in the privatisation programme of the Privatisation High Council. It has
to be noted that Haydarpasa port is not included in the portfolio since it will be part of a
tourism complex project.

The main reason for privatising the TCDD ports is highly correlated to the growth in
container transportation in Turkish ports. Infrastructure and superstructure investments are
necessary in order to meet the demand of container traffic at these ports, which has an
annual growth rate of 20 percent.

A similar approach of transferring operational rights to the private sector is preferred as in
the case of TDI port privatisation, so that the ownership of the ports and the land will
remain a public property. Operational right for the private enterprise is slightly longer, a
period of forty-nine years for Izmir port and thirty-six years for the other ports. Additionally,
TCDD has the responsibility for the post-privatisation performance monitoring of the port
operations.

At present only the privatisation of Mersin port has been completed. In May 2007, PSA-
Akfen company obtained the contract for 755 million USD. The same company also bid 80
million USD for the port of Iskenderun, which is located in proximity to the port of Mersin
but the tender contract was revoked requiring another tender to be planned within the
coming years. The privatisation process in Izmir goes through legal obstacles as in the case
of Iskenderun port. In May 2007 Global Hutchison gave the highest bid in the tender for
operating the Izmir port for forty-nine years. Till now the handover process has been
finished and it is currently awaiting the last signature of the Privatisation High Council for
the ratification. Today, tenders for the ports of Bandirma, Samsun and Derince are also in
their finalisation processes.

6.3.1.2. Shortsea shipping traffic

Turkey aims to become the centre for transit cargo in the region through privatised modern
seaports. In 2008, 315 million tonnes of cargo were realised at Turkish ports. As shown in
Figure 6-7, shares of cabotage and transit traffic are relatively lower compared to import
and export tonnages.

177
350

300

250
Million ton

200

150

100

50

0
2004 2005 2006 2007 2008

Transit Export Import Cabotage Total

Figure 6-7: Cargo handling figures at Turkish ports

Source: Undersecretariat for Maritime Affairs, 2009

Container and Ro-Ro traffic plays a key role for the flow of traffic especially within Europe. A
significant volume of the sustained increase in maritime container volume is handled
through the TCDD ports of Izmir, Mersin and Haydarpasa and the private ports such as the
port of Ambarli (Figure 6-8). As a result of the privatisation, only 24 percent of the maritime
containers were handled at the TCDD ports in 2008.

6

5

4
Million TEU

3

2

1

0
Private ports TCDD ports Total

2005 2006 2007 2008

Figure 6-8: Container handling figures at Turkish ports

Source: TURKLIM, 2009

Although cabotage transportation is very limited along the Turkish coastline, an increasing
trend has been achieved since 2005. The effect of government subsidy on port dues and
exemptions of taxes are reflected in this growth rate (Figure 6-9).

178
140

120

100
Thousand TEU

80

60

40

20

0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Figure 6-9: Cabotage container handling at Turkish ports

Source: Undersecretariat for Maritime Affairs, 2009

Ro-Ro transport has also increased to a significant level in recent years. At present 9 Ro-Ro
lines are operating between Turkey and the seaports in the Mediterranean and Black Sea. In
2008, 330,100 vehicles have been transported by Ro-Ro transport. This represents an
increase of 65 percent compared to 2002. An analysis of the Ro-Ro lines shows that 66
percent of the transported vehicles are realised between Italy (port of Trieste) and the ports
of Ambarli, Pendik and Cesme.

6.3.2. Railway transport

Economic growth in Turkey has created a great potential for railway transport. In Figure
6-10 rapid growth of Turkish gross domestic product and foreign trade are shown. Rail
freight traffic has not kept pace with this growth, which both GDP and trade almost tripled
since 2001.

179
Turkish Economic Growth

2000

GDP

1500 Trade
Rail
1983=100

1000

500

0
91

93

97

99

3
83

85

87

89

95

01

05

07
0
19
19

19

19

19

19

19

19

19

20

20

20

20
Figure 6-10: Turkish economic growth and rail transport

Source: Lawrence, 2009

Over the period unbalanced development in the modal split is observed. Rail transport share
steadily declined from 55 percent to less than 5 percent, while road has grown many times
faster than rail. In a large country like Turkey, this situation can be translated into large
sums of economic losses especially due to environmental impact of road transport. It can
therefore be concluded that an efficient railway can easily contribute to economic growth by
providing low cost, long distance transport and connectivity among regions (Lawrence,
2009).

The length of the main lines of railway in Turkey is currently 10,991 kilometres; 2,294
kilometres of which are considered sub-lines, such as station lines, and connections to
factories. 22 percent (1,920 kilometres) of the main network and 354 kilometres of
secondary railroads are electrified, while 3,098 kilometres are signalised (TCDD, 2009).

After almost sixty years of negligence, the Turkish government policy in the early 2000s
prioritised rail investment through the development of the network. Ninth Development Plan
for Turkey sets a goal of increasing railway freight traffic by 12 percent per year, and
increasing rail’s modal share. Since 2003, the budget for the TCDD was increased. In 2007,
TCDD is ranked as the first place for government investment in state-owned companies. The
company received 807 million Turkish lira, a four-fold increase since 2002, for its
investments in 2007.

180
6.3.2.1. Railway transport policy

The current rail policy challenges consist of establishing commercial structure, intermodal
linkages and partnerships. The most important objectives of the policy are to introduce high
speed trains, reconstruct life-expired infrastructure, establish intermodal freight villages and
open up the network to enable the private sector to operate rail services in line with the
policy adopted in the EU (TCDD, 2009). In this section an overview of rail freight transport
policy is given.

- Block trains

Since 2003 TCDD initiated to operate block container trains for both domestic and
international routes. A block train, also called a unit train, is a railroad train in which all the
wagons are shipped from the same origin to the same destination. The idea is to offer door-
to-door transport in a minimised transport time. From the operational point of view, block
trains do not require any assembling and disassembling at rail yards near the origin and the
destination. However, it should be noted that block trains, which usually carry only one
commodity, are economical only for high-volume customers. Therefore, bundling
applications serve to provide economically feasible services for more customers.

TCDD is a member of ICF, which enables to perform the organisation of the block container
transport in European destinations from Turkey. Halkali terminal in Istanbul is connected to
Wels (Austria) through a Ro-La service (see section 2.3.3.3). Block train routes are also
established in the Middle East through Iran. Furthermore, Eurasia block container train links
Turkey with the countries in South Eurasia countries although this route encounters
interoperability problem resulting in longer transport duration. Co-funded by the EC under
the 6th Framework Programme, the CREAM project has been set up to deliver customer-
driven rail-freight services on a European mega-corridor, establishing a connection between
Western/Central Europe and the Balkan states towards Greece/Turkey. The CREAM project is
targeting to solve structural barriers that are impeding a further growth of intermodal rail
transport such as the lack of terminal capacity, low riding conditions on the rail network and
not co-ordinated border crossing activities. Overall this project, with the involvement of
many railway partners including TCDD represents a platform to realise the respective
improvements for extending the TEN-T corridor Rotterdam/Antwerp to Turkey and Greece
(Cream Project, Newsletter February 2008).

The door-to-door intermodal transport applications also combine shortsea shipping with rail
transport. The bilateral agreement between Romania and Turkey has resulted in conducting
maritime-rail intermodal services between Derince (Istanbul) and Constanta.

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Domestic block container trains aim to allocate trains and wagons efficiently by decreasing
the wagon rotation time, which also decreases the transportation duration. As a result there
is an increase in freight traffic and customer satisfaction. At present 4,000 domestic and
1,000 international block trains are operated monthly.

Apart from the state owned rail company TCDD, private initiatives have also emerged in
offering intermodal transport services. OMSAN Logistic founded a joint company OMFESA
with the Spanish counterpart Transfesa to offer block train services for swap body
transportations between Kosekoy (Istanbul) and Cologne (Germany). The successful project,
which started in 2002, has reached 10 trains transporting 300 swap bodies per week for
each destination. One of the major services run by this company is the Orient-Freight-
Express, transporting car parts and components. Overall the company has increased the
activity by 2.5 percent since 2004 (European Rail & Intermodal, 2008). In 2008, another
private initiative was formed with EKOL Logistics block train concept to begin an
experimental intermodal chain between Turkey and Mannheim (Germany). The block train
route includes a Ro-Ro leg from Istanbul to Trieste (Italy), a rail leg from Trieste to
Mannheim and a final haul by road transport.

- Industrial junction lines

TCDD aims to form agreements with the private sector in order to increase quality standards
and modal share of the rail transport. In order to facilitate sustainable transport systems for
the industry, TCDD started to construct junction lines for the factories and industrial zones.
PPP serves as an important tool to realise these linkages. Until now 317 junction lines have
been established and 100 kilometres annually are planned as more than half of the freight
traffic is conducted over these lines.

- Freight villages

A freight village is mainly an intermodal terminal, which is the principal component of the
intermodal transport chain, constituting the node where the transhipment of goods from one
mode to the other takes place (Tsamboulas, 2003). In addition to the transhipment of
goods, other activities relating to transport, logistics and the distribution of goods are carried
out by various operators in freight villages. Main objectives for establishing freight villages
are to create a more efficient and cost-effective freight distribution system, increase rail
mode share and improve traffic operations on the road network. This situation will lead to
improvements in environmental quality.

Depending on the modes used and the type of freight handled, freight villages provide
intermodal integration at a local or interregional level (Tsamboulas and Kapros, 2003). In

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the sea regions, maritime terminals provide an interface between container vessel (deep-sea
or shortsea) and inland modes (road and rail). In the inland regions, freight villages are
interrelated to intermodal transport chain structure with a specific organisational focus on
the types of markets served and the transport modes used. In both of the regions, shippers
(customers) asses whether intermodal transport chains through freight villages produce
cost-savings, enhance reliability, decrease transit times and improve quality (Konings,
1994).

A freight village provides its services to various transport and logistics companies located
within its site, as well as to other external users. The common transport infrastructure,
equipment and services are open to companies, which are not required to risk any
investments if they had to establish their individual ones. The economies of scale achieved
by freight village users, from sharing the same facilities and equipment and from the
synergy generated by the concentration of transport activities in one and the same place,
decrease the overall transport cost while offering a higher quality of transport services (TER,
2002). This situation underlines the need for efficient administration of a freight village in
facilitating comprehensive transport services to its users.

For many years, freight villages have been developed in the European countries.
Europlatform, the European association of freight villages indicate over 60 freight villages in
8 countries (Italy, Spain, Germany, Denmark, Portugal, Luxembourg, Greece and France).
Šakalys and Palšaitis (2006) review the development of intermodal transport in new Member
States. Their analysis focuses on the situation of the intermodal transfer nodes. Political
support for the development of intermodal transport in these countries is reflected in their
national transport policies, which include infrastructural investments on transport
infrastructure and the establishment of freight villages (Šakalys and Palšaitis, 2006). They
conclude that intermodal terminals and freight villages need to be integrated into TEN-T
network and Pan-European corridors.

From the perspective of this research, the construction of intermodal terminals can be
defined as a vital policy measure for the promotion of intermodal transport in Turkey. It is
evident that the Turkish transport network lacks intermodal nodes at present. Hence, the
TCDD plans to construct 11 freight villages in Turkey to enhance the intermodal transport
network. In addition to TCDD’s activities in the direction of establishing freight villages in
Turkey, private and other public involvement have also emerged. The freight village in Çorlu
and Manisa are the two examples where local governments and industry take the lead.
Figure 6-11 shows the freight villages in Turkey. In 2007, the first freight village in Samsun
Gelemen was symbolically opened. TCDD aims at finalising the construction of all freight

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villages by 2013. The studies on potentials for freight villages indicate a growth of 56
percent for freight transport in railways and 7.6 million ton increases in railway
transportation (Kurt et al., 2008).

Figure 6-11: Freight villages in Turkey

Source: Own setup

6.3.2.2. Railway transport traffic

Current railway network in Turkey covers only 54 percent of the Turkish city centres. In
other words, only 72 percent of the population has access to railway transport network
based on the demographic data (Ministry of Transport, 2009). Especially seaports in
Trabzon, Antalya and Tekirdag do not have any railway connection, which makes road
transport the only option for freight transport to reach the hinterland. Construction of a
railway line for the seaport in Tekirdag is in progress. Additionally, Sanliurfa and Bursa, two
important industrial cities also do not have any access to railway network. All of these cities
except for Tekirdag have a population over 1 million.

Despite a highly limited railway network, the outcomes of policies are already reflected in
rail freight traffic. Figure 6-12 and Figure 6-13 present the evolution of freight traffic in
railway transport over the last decade. After the economic crisis in 2001, total rail freight

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traffic in tonnes has an increasing trend. Compared to 1999, tonnages increased over 30
percent. When the transport distances are considered, this situation shows rather a stable
trend by an increase of 9 percent in ton-kilometres. Focusing on the container
transportation, Figure 6-14 shows a considerable growth both for tonnage and ton-
kilometres. Furthermore, its share in total railway transport gained momentum from 3
percent in 2003 first to 11 percent in 2005 and over 32 percent in 2008. Hence this proves
how successful the block train operations are for the future development of intermodal
transport in Turkey. However, the container transport by railway represents only 5 percent
of total container traffic which was handled at the TCDD ports (TUSIAD, 2007). The main
reasons behind this fact are lack of wagons and low frequency of service for container
transportation. Finally, Figure 6-15 illustrates the fraction between tonnage and ton-
kilometres for the container transportation between 2003 and 2008. Average kilometre per
shipment is decreasing.

25000

20000
Thousand ton

15000

10000

5000

0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

National International

Figure 6-12: Freight traffic in tonnes

Source: TCDD, 2009

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12000

10000

8000
Million tkm

6000

4000

2000

0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

National International

Figure 6-13: Freight traffic in ton-kilometres

Source: TCDD, 2009

7000 2500

6000
2000
5000
Thousand ton

Million tkm
4000 1500

3000 1000
2000
500
1000

0 0
2003 2004 2005 2006 2007 2008

tonnage tkm

Figure 6-14: Container transport in tonnes and in ton-kilometres

Source: TCDD, 2009

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2500

2000
2008
Tkm (Million tkm)

1500
2007
2006
1000
2005
500
2004
2003
0
0 1000 2000 3000 4000 5000 6000 7000
Tonnage (Thousand ton)

Figure 6-15: Container transport in tonnes and ton-kilometres

Source: TCDD, 2009

6.4. LAMBIT methodology applied to Turkey

In this section, the LAMBIT methodology is applied to the Turkish case. The model is based
on three main inputs: transportation networks, transport prices and container flows from the
municipalities/cities to and from the ports of Mersin and Izmir, the two prominent gateways
of Turkey. First step was to build the transportation network for Turkey by using Başarsoft
digital databases (Figure 6-16). Navigable inland waterways are very limited in Turkey and
there is no freight transportation in Turkish rivers due to unsuitable physical conditions of
rivers. As a result, only road and rail network layers were included in the model.

In the second step of the model set up, the transportation prices were calculated based on
the field survey conducted on April 2008. For the unimodal road transport and final haulage,
average prices are calculated from the current market prices. On the other hand, the rail
prices, including handling at the inland terminals were provided by the private companies
which offer intermodal railway services from the port of Mersin. Finally, transhipment costs
at the port of Mersin were obtained from the Mersin International Port Authority.

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Figure 6-16: Network for Turkey

Source: Own setup

Figure 6-17 shows the market price functions that are introduced to the LAMBIT model. The
figure points to the lower variable prices per transported containers by rail compared to
unimodal road transport. It also shows the difference between unimodal road transport and
post haulage from the terminal by road. The steeper line for the post haulage section
illustrates the higher variable prices than those of unimodal road transport. This originates
from the quite short distances around the intermodal terminal for compared to unimodal
road transport. The figure can be used to underline the higher fixed prices of the intermodal
transport due to handlings and post haulage. As a consequence, intermodal transport
remains expensive until the break-even distance is covered.

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800
700
Prices (€) 600
500
400
300
200
100
0
0 50 100 150 200 250 300 350 400 450 500
Distance (km)

Unimodal road Post haulage Rail Intermodal

Figure 6-17: Market price functions for Turkey

Source: Own setup

In the final step, container flows from the seaports to the municipalities were linked to the
network. The report on combined transport (SUDOPAK, 2006) provides insights into the
potential traffic for the hinterland of seaports, which could be used for this purpose. The
report was delivered within the framework of cabotage transportation field study, which was
commissioned by the Undersecretariat for Maritime Affairs in order to investigate the
potentials for coastal shipping in Turkey.

The model is operated through various scenarios in order to calculate the transport prices for
each transportation mode (unimodal road and rail transport). Here, the idea is to minimise
the total sum of transport prices. For this purpose the shortest path algorithm in Arc Info is
used. As a result transport prices from the ports of Mersin and Izmir to each Turkish
municipality via intermodal rail terminals and via road-only are calculated and for each
destination the cheapest option is selected. The outcomes of the model are presented with
the maps for the market area of each inland terminal. The analyis of intermodal transport in
Turkey is further enhanced with other parameters such as the container flows data in order
to indicate potentials for intermodal transport.

6.4.1. Current situation

In order to depict the current terminal landscape in Turkey, a scenario is simulated with the
three existing rail terminals in Konya, Kayseri and Gaziantep which serve as satellites for the
port of Mersin. Arkas operates block trains from the port of Mersin to Gaziantep since
February 2005. The second terminal was established in Konya in May 2006. In 2007 the

189
terminal was opened in Kayseri. These terminals are included in the Arkas Anatolia Project,
which was launched in 2003 with the goal of offering integrated intermodal services that
include extensive container storage areas, a large number of loading/unloading vehicles and
equipment to industrial regions in Anatolia. Through this project Arkas Holding aims to
connect the inland cities to the port cities by rail. With this aim, the number of rail cars in
the project was increased to 501 and land purchases were completed to build logistics
centres in the industrial regions of Anatolia. The Arkas Anatolia Project complements the
freight village programme of the TCDD. It represents a private leg of developing intermodal
transport in Turkey. Port of Mersin plays a vital role in these initial stages of the project. 45
percent of the total container rail transport of Arkas in 2008 was realised in the port of
Mersin, of which 20 percent took place in Kayseri and Gaziantep.

Figure 6-18 shows a considerable market area for the inland terminals of Konya, Kayseri and
Gaziantep. With current market prices, intermodal transport can break-even with road
transport after 262 kilometres. Considering the size of Turkey, this distance can be
interpreted as great potential for intermodal rail transport services.

Figure 6-18: Current situation

Source: Own setup

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The market areas of the terminals in terms of the number of municipalities are summarised
in Table 6-2. It has to be noted that although block trains are operated between the port of
Mersin and these inland terminals, at the moment no scheduled services are being offered.
Customers and the railway company make service agreements to initiate the operations. In
other words, intermodal rail shuttles are only taking place when wagons reach its full
capacity. For urgent deliveries road transport is preferred. Current railway regulations in
Turkey position private companies to depend on state railways, resulting in inflexibility.
However, the involvement of the private sector, coupling with the higher infrastructural
investments in the railway network and liberalisation policy will positively influence the
future development of intermodal transport in Turkey (UTIKAD, 2008).

Table 6-2: Market areas of terminals: Current situation

Intermodal The number of
terminals municipalities
Konya 11
Kayseri 10
Gaziantep 2
Total rail transport 23
Total road transport 899
Total 922

Source: Own setup

The market area of each inland terminal can be studied along with the freight flows to these
regions. The report on combined transport indicates that 10 percent of the cargo for the port
of Mersin is transported to Kayseri. Gaziantep and Konya also receive 3 percent share from
these transportation flows (SUDOPAK, 2006). The terminal in Gaziantep is considered as a
gateway to the South Eastern Anatolia Project (GAP), which is a multi-sector and integrated
regional development effort approached in the context of sustainable development. The
basic development scenario of the GAP Master Plan, which aims at transforming the region
into an agriculture-based export centre, represents the future potential for the
containerisation and intermodal terminal in Gaziantep. This terminal can extend its position
to serve as a logistics hub for organising national and international flows of containers to
other inland destinations in Turkey via railway and international destinations via the port of
Mersin.

When the goods categories are taken into consideration, it can be concluded that the
terminals in Kayseri and Gaziantep show a similar trend. Chemical products, cotton and iron

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are transported to the latter two terminals. On the other hand, agricultural products are
transported to Konya, which is Turkey’s grain warehouse. It is also necessary to focus on the
goods that can be containerised. The origin-destination data shows that there are potentials
for textile, plastic, chemical and agricultural products to be containerised and transported by
rail from the port of Mersin to the three inland destinations (SUDOPAK, 2006).

Although intermodal transport proved to have potential from the port of Mersin, some
threats arise when the potential cargo for incoming and outgoing traffic is analysed. The
origin-destination data indicates that 68 percent of the potential cargo is an incoming flow
from the hinterland and only 32 percent is outgoing flow. This situation, which is related to
the utilisation of Mersin port for export purposes, requires collaboration along the transport
chain for rail-bound container hinterland traffic. In this respect, bundling concepts and hub-
spoke systems can be setup in order to increase efficiency in the port and eliminate empty
container problems. Kreutzberger proposes a generic approach to the intermodal goods
transport networks based on bundling (Kreutzberger, 2008).

6.4.2. Future scenario

In parallel to the plans of the TCDD on constructing freight villages, a future terminal
scenario is developed by introducing a selection of intermodal terminals. In this analysis the
terminals that are located in proximity of the hinterland of the seaports of Izmir and Mersin
are considered: the terminals in Denizli, Eskişehir, Uşak and Balıkesir are connected with the
port of Izmir and the terminal in Erzurum with the port of Mersin. The terminals located in
proximity of the seaports e.g. Corlu, Istanbul, Samsun and Mersin are not taken into
consideration, as they do not qualify as a hinterland terminal. As explained in section
6.3.1.1, the port of Samsun is active in Ro-Ro transport, therefore the freight village is not
playing a role in container transport.

Figure 6-19 indicates large market area in terms of the number of municipalities for the two
terminals in Eskişehir and Erzurum. The terminal in Denizli has a small area and the
terminals in Uşak and Balıkesir can not compete with road transport. Benefiting from the
lower variable costs of intermodal rail transport, the terminal in Erzurum indicates a large
market area. This terminal is located along the Kars-Tbilisi-Baku railway, which is a regional
rail link project that directly connects Turkey, Georgia and Azerbaijan. The market areas of
terminals in terms of the number of municipalities are summarised in Table 6-3.

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Figure 6-19: Future scenario

Source: Own setup

Table 6-3: Market areas of terminals: Future scenario

Origin Intermodal The number of
seaport terminals municipalities
Port of Konya 11
Mersin Kayseri 10
Gaziantep 2
Erzurum 127
Port of Uşak 0
Izmir Balıkesir 0
Eskişehir 25
Denizli 2
Total rail transport 177
Total road transport 745
Total 922

Source: Own setup

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The potentials for the terminals are rather limited as the port of Izmir has extensive
container flows to/from cities (Manisa and Torbalı) that are in close proximity (less than 50
kilometres). Nevertheless, Denizli represents 8 percent of the potential cargo for the port of
Izmir, while Uşak and Balıkesir also receives 2 percent share. The origin-destination data
shows that there are potentials for textile, plastic, chemical and ceramics products to be
transported by rail from the port of Izmir to the three inland destinations (SUDOPAK, 2006).

Potential modal shift from road to railway through intermodal terminals can be analysed by
looking at the number of trucks that are currently using the Turkish road network to reach
the municipalities that are located in the market areas of the terminals. Surveys of the
General Directorate of highways are matched with the market area of each terminal. In
2004, 46,455 trucks were counted in the municipalities around Denizli. Eskişehir, occupying
a larger area, has 99,931 trucks. The market area of the terminal in Erzurum sums up to
180,278 trucks.

To conclude, it is necessary to refer back to the break-even distance of 262 kilometres (see
section 6.4.1), which is reflected especially in the future scenario from the port of Izmir,
where the terminals hardly compete with unimodal road transport. Only the terminal in
Eskişehir, which is beyond the hinterland of the port, can take a large market area. This
situation highlights the need for government subsidies to support intermodal transport,
which will be discussed in the next section.

6.4.3. Subsidy scenario

To encourage, support and orient investments in intermodal transport, subsidies can be
formulated with financing sources in Turkey. A decree concerning state encouragements to
investments (2002/4367) serves as a guideline to introduce subsidy schemes for intermodal
transport. By taking into consideration the EU legislation on state aid to land transport, the
following types of investments must be encouraged within the scope of promoting
intermodal rail transport (Secretariat General for EU Affairs, 2008):

- Intermodal terminal constructions;

- Purchasing of transhipment equipment;

- Introduction of information systems;

- Pilot intermodal services;

- Railroad transport equipment including locomotives and wagons;

- Introduction of innovative concepts;

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- Research and development and feasibility studies.

Turkish legislation formulates the instruments of financing the subsidies through exemptions
from customs duties and value added tax and also external financing. It should be noted
that Turkey, as a candidate for EU membership has not completed its alignment with the
Community state aid legislation yet. Legislative progress is required to guarantee the
transparency of current and future subsidy measures. For this purpose, a fully autonomous
state aid supervisory authority can be established.

Both the construction of freight villages and intermodal rail services qualify for subsidies. In
this dissertation, a subsidy scenario is developed in order to support the freight village
development in Turkey. Focusing on the higher fixed costs of intermodal transport, in Figure
6-20 a hypothetical subsidy scheme is developed for an amount of € 20 for transporting a
container by railway via intermodal terminal.

Figure 6-20: Subsidy scenario

Source: Own setup

Table 6-4 indicates the growth of intermodal transport in terms of the market areas of the
rail terminals compared to the current situation. As the subsidy scenario has future
perspective, it is necessary to compare it to the future scenario because of its impact on the

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terminal landscape. Subsidies result in a 20 percent increase in the market areas of the
intermodal terminals. The degree of increase is higher in the terminals of Gaziantep and
Denizli but lower in Erzurum. The potential terminal in Erzurum already extends to a very
large market area.

Table 6-4: Market areas of terminals: Subsidy scenario

Origin Intermodal The number of
seaport terminals municipalities
Port of Konya 15
Mersin Kayseri 18
Gaziantep 7
Erzurum 134
Port of Uşak 1
Izmir Balıkesir 0
Eskişehir 32
Denizli 6
Total rail transport 213
Total road transport 709
Total 922

Source: Own setup

The subsidy, reducing the total price of intermodal rail transport, results in a market area for
the terminal in Uşak as well but the terminal in Balıkesir still can not provide cheaper prices
then unimodal road transport. Considering the current goods flows in the region, the
terminal in Uşak represents 3 percent of the potential cargo for the port of Izmir and good
types of leather and ceramics are qualified to be transported by rail (SUDOPAK, 2006).
When the number of trucks in its area are counted, the terminal in Uşak indicates a shift to a
potential of 19,011 trucks from road to rail. Finally the subsidy results in a lower break-even
distance for intermodal transport, namely 243 kilometres.

6.5. Conclusions

This chapter presents the application of the LAMBIT methodology to Turkey. Turkey, a
candidate country to EU is chosen as a case study because of its potential for intermodal
transport. First the need for intermodal transport in Turkey is introduced. The geographic
position of the country, its intermodal transport networks and the degree of containerisation
in its seaports are emphasised. Considering the uneven modal split in Turkey, there is a

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need to promote intermodal transport. Despite the increasing trend in maritime flows to the
Turkish seaports, the current state of intermodal transport in terms of rail/road and shortsea
shipping is very limited. This is related to the lack of facilities and equipment to facilitate
intermodal transport. On the other hand, several initiatives are taken in the railway and
shortsea shipping sector. The application of the LAMBIT framework to Turkey allows to
assess intermodal transport potential in Turkey.

The model compares transport alternatives based on the current market prices for each
transport mode. The model is used to perform a case study in order to analyse the present
and future situation of intermodal transport in Turkey. Scenarios that are developed to
assess intermodal transport policies in Turkey include new terminal initiatives (freight
villages concept of the TCDD) and subsidies. After depicting the current terminal landscape,
the model analyses the future scenario with new terminal locations. Intermodal transport
proved to have potentials in Turkey but considering the current market prices for railway
transport and the origin-destinations data for the seaports with short distance container
transhipments, pointed to opportunities to further develop intermodal rail transport services
in Turkey that can be obtained through the formulation of subsidies. For this purpose, the
model has performed an ex-ante analysis of a hypothetical government subsidy. This
chapter shows that the LAMBIT methodology can be applied to new countries, prescribing
future research perspectives for developing applications on an European scale.

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7. Conclusions

Introduction (1) 7.1. Introduction

Intermodal transport This final chapter presents the main research conclusions,
in general (2) policy recommendations and perspectives for future
Intermodal transport research. In this chapter it is evident to return to the
policies (3) principal research objectives and the questions of the
analysis for Belgium (5)

dissertation formulated in chapter 1. The main research
analysis for Turkey (6)
GIS-based intermodal

question was formulated as “What are the impacts of the
transport model (4)

policies to stimulate the growth of intermodal transport?”.
Scenario-based
Scenario-based

This research question was approached by developing a
GIS-based intermodal transport policy evaluation model.
Focusing on a maritime based intermodal transport chain
which includes rail and inland waterway transport systems,
the market areas of the intermodal terminals were
Conclusions (7) analysed. Cases performed in chapter 5 and chapter 6
studied the impact of various policy measures such as the implementation of subsidy
schemes, price measures and new intermodal terminals.

The outline of this chapter is as follows. Section 7.2 discusses the main research findings
and conclusions. In section 7.3 policy recommendations are given. Finally, in section 7.4
perspectives for future research are formulated.

7.2. Main research findings and conclusions

As a main contributor to the economic growth, Europe witnessed a significant growth in
freight transport over the past thirty years. While transport is capable of offering significant
benefits, it also causes many negative externalities. This situation emphasises the need for
sustainable transport policies, which are designed to maximise the benefits and minimise the
negative effects of transport. Evolution of the European transport policies has culminated to
a strategy to stimulate a better use of the existing transport resources and to take better
advantage of the different transport modes. This strategy can only be achieved when there
is a balance between transport modes. Hence intermodal transport plays a pivotal role to
obtain balanced transport flows in Europe.

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In order to explain the increased policy attention for intermodal transport, first its benefits
and costs were studied in chapter 2. Highlighting the intermodal transport cost structure and
the break-even concept, cost centres of intermodal transport were identified. Then
environmental performance of intermodal transport was questioned. Comparison of the
greenhouse gas emissions for each transport mode concluded that both inland navigation
and railway transport have lower external costs compared to unimodal road transport.
Discussing the literature on external costs calculations, input was provided for the LAMBIT
model that performed an analysis for Belgian intermodal terminal landscape when external
costs are internalised. Finally, the SWOT analysis summarised that intermodal transport can
benefit from its environmental performance considering the current policy evolution towards
the concept of “green transport”. The SWOT analysis also indicated that a special attention is
needed to overcome other weaknesses such as lack of integration into intermodal transport
networks, lower speed in international transport and complex administrative burdens. The
main threat that intermodal transport has to face is the flexibility of road transport, which is
difficult to copy to the other models.

In chapter 3, an intermodal policy framework was developed to summarise the key elements
of the European intermodal transport policy. Intermodal transport is promoted through
policies being addressed at all political levels. The intermodal transport policy in Europe is
based on a co-modal approach: the efficient use of different modes on their own and in
combination to achieve a high level of both mobility and environmental protection.
Addressed to potential customers, who mainly use unimodal road transport, policy aims to
create awareness of the capabilities and advantages of intermodal transport. With regard to
intermodal policy measures, it can be concluded that infrastructure investments aim to
establish an intermodal network. Furthermore, intermodal transfer points (terminals) are
designed and projects are initiated with the intent to overcome missing links. The overview
provided in chapter 3 shows that various combinations of policy instruments or packages can
be implemented along the intermodal transport chain. This requires a close co-operation
between the stakeholders in order to create synergies. The EU’s intermodal policy sets the
guidelines for a structured approach to intermodal freight transport. Different transport
policies are launched in the Member States to stimulate the use of intermodal transport but
no integrated formal ex-ante and ex-post evaluation of these transport policies is being
executed. For that reason, intermodal policies were further analysed with LAMBIT.

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While establishing the scientific framework of this dissertation, chapter 4 presented
modelling as a tool to solve complex decision-making problems. As a relatively young field in
transportation research, a literature review on modelling in intermodal transport was given.
Out of this literature review, it can be concluded that intermodal transport models have a
close connection with delivering policy recommendations for the decision makers at the
strategic level. In parallel to the scope of this dissertation, the literature review also
indicated that the evaluation of policies is one of the major objectives of freight transport
models.

The LAMBIT model makes it possible to make ex-ante and ex-post analyses of policy
measures to stimulate the intermodal transport market. Originating as a location analysis
model for the inland waterway network, the added value of this research is presented in
chapter 4 with the further developments of the LAMBIT methodology. Methodological
advancement of the model includes the extension of the railway network and the
development of a policy evaluation framework. The methodology explores the relative
attractiveness of three transportation modes (unimodal road, rail and inland waterway
transport) through a price comparison model, connected to a GIS-based view. The LAMBIT
model, which is scaled on the Belgian intermodal transport network, analyses the market
areas of intermodal terminals and how these are changing due to price policies or the
location of new terminals (chapter 5). The methodology was applied to a new country:
Turkey (chapter 6). The model analyses policies based on the following indicators: total
prices for all transport modes, market areas of intermodal terminals, and modal shift and
potential volume of new intermodal terminals.

7.3. Policy recommendations

In this dissertation, a number of cases were analysed with the GIS-based model. Looking at
the hinterland transport from the seaports, the outcomes of the model can deliver policy
recommendations for the decision makers. A special attention is given for three main policy
topics.

Subsidies, evaluated in chapter 5, are indeed increasing the market area of intermodal
transport, but also create a shift from barge to rail is induced in areas where both types of
terminals are available. The same is valid on a European level, where the different
regions/countries are introducing different subsidy schemes. For a policy maker, it is
necessary to prevent possible negative side effects of these subsidy schemes. The outcomes
of the model indicate that subsidies both for rail and inland waterway transport are

200
necessary in Belgium but should be coordinated more. This is also the case for Turkey,
where rail transport should be supported (chapter 6).

Another policy area is included in the possibility to internalise the external costs. In parallel
to the European directives, the model internalised the external costs into the market prices
for all transport modes, keeping in mind which taxes were already paid by these
transportation modes. With regard to the overall price measures, the model showed that an
internalisation of external costs would also stimulate intermodal transport in a substantial
way and with a better balance between the two types of intermodal transport.

A final policy topic is the future terminal cases that gave perspectives on the intermodal
terminal landscape in Belgium (chapter 5) and in Turkey (chapter 6). The policy implications
from the model are that the terminal landscape is already very dense in Belgium and that
potential new locations should be examined carefully in order not to cannabalise the market
areas of the existing ones and keeping the volumes into account for their potentials.
Additionally, the analysis of potential new locations for terminals underlines how important it
is to have a broader view on the location of terminals and to take into account new
initiatives. Finally, new terminal analysis in Turkey proved to have positive implications on
the intermodal transport that is still in its emerging phase.

7.4. Perspectives for further research

A first perspective for further research concerns the scale of the model. Given the
international aspects of the intermodal transport and the elimination of borders in the EU,
the methodology can further be extended towards the European scale. This is especially
interesting to assess policy measures such as introducing different funding schemes to
support the intermodal transport market. The cases presented in this dissertation concluded
that policy measures should be incorporated in a coherent, integrated vision, in order not to
create a modal shift between the different intermodal transport options. The model can
deliver important policy analyses on a European level, where the different regions/countries
are introducing different funding schemes.

In aiming to enhance the growth of intermodal transport, many different policy measures
play a supporting role of which only a few are addressed in this dissertation. The policy
measures are analysed based on a number of indicators such as total prices for all transport
modes, the market areas of intermodal terminals and potential volume of new intermodal
terminals. A second perspective for further research is thus to extend the scope of the
assessment framework by introducing other policy measures and developing additional

201
indicators, namely other modal choice variables. Research can be directed towards
intermodal transport in integrated logistic chains. Quality oriented performance indicators
should serve to evaluate policies.

For methodological reason, a third and vital perspective for further research focuses on the
assumptions of the model. Apart from the transport prices, other modal choice criteria are
also important, such as reliability, speed, frequency, safety and customer satisfaction. These
other modal choice variables can also be incorporated in the model. Furthermore, research
can be directed towards calculating the total logistics costs. For this purpose, warehousing
costs and inventory carrying, administration and order processing costs should also be
incorporated to the price functions of the model.

202
203
204
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