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

Freight transport modes:

Competition, cooperation or areas of advantage?

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

1
Basic facts: modal split, differences and evolution 4

2
Rationale for modal split 6

3
Characteristics of different modes 9

4
Actual and potential competition 12

5
From modal split to modal shift? 15

6
Long range perspectives 16

Sources and references 19

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

F R E I G H T T R A N S P O R T M O D E S: CO M P E T I T I O N , CO O P E R AT I O N O R A R E A S O F A DVA N TA G E ?
MAN
not as frequent as theory assumes. In SCANIA Jenny Johansson
many (or even most) situations, only Toyota Motor Europe Vincent Legagneur
one mode is available. On the other
VOLVO Ulf Ehrning
hand, integration of several modes
CCFA Jean-Baptiste Baroni
into intermodal solutions is rare, and
VDA Michael Niedenthal
accounts for only a small percentage
BUSINESS EUROPE August Mesker
of total inland transport. As for
ACEA Fuensanta Martínez-Sans
intercontinental transport, this is, by
necessity, multimodal (successively ACEA Stefan Larsson

using maritime or air transport and ACEA Céline Domecq

final haulage), but is seldom integrated EUCAR Simon Godwin
into combined intermodal chains. EUCAR Alessandro Coda

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

In referring to the following figures, note chart, members of the European Union have been
that, depending on available data, some refer to classified according to the share of freight transport
inland transport only, while others cover all modes. (measured in tonnekm or tkm) carried by road.
For intercontinental transport (and more generally, Whereas some countries rely entirely (or mostly)
every time inland itineraries are interrupted by on road for their inland transport (Cyprus, Malta,
the sea), maritime and air transport are the only Greece, Ireland, Spain, Portugal), others use inland
available technologies. At the same time, though, waterways intensively (accounting for nearly one-
one should also keep in mind the degree to which third of freight traffic in the Netherlands), while still
local traffic is handled by coastal shipping in certain others rely more on rail (particularly among Member
F R E I G H T T R A N S P O R T M O D E S: CO M P E T I T I O N , CO O P E R AT I O N O R A R E A S O F A DVA N TA G E ?

parts of the world (Europe, Japan, China, etc.). States in Eastern Europe, such as Lithuania and
Poland, but also Sweden and Austria; Switzerland,
Modal split data show a great variety at an which is not an EU Member State, shows a similar
international level (considering national statistics, modal split to that of Austria).
which can cover even stronger differences between
regions inside the same State). In the following

F i g u r e 1 . M o d a l s p l i t - E U 2 0 0 7 ( i n l a n d t r a n s p o r t, t km ) Pipeline | IWW | Rail | Road Total

source EU Energy and transport in figures, statistical pocketbook, 2009

80%

60%

40%

20%

0%

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

4 1
Figure 2. Modal split
i n t e r co n t i n e n ta l co m pa r i s o n s ( a l l m o d es , t km )

source EU Energy and transport in figures, statistical pocketbook, 2009

(for China, inland waterways includes coastal shipping; for the US,
road transport does not include local traffic)

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

40%

20%
F i g u r e 3 . M o d a l s p l i t i n J a pa n 1 9 55 -2 0 0 5 ( % , t km )

Truck | Railway | Coastal Shipping

0%

EU27 USA JAPAN CHINA RUSSIA

80%

Intercontinental comparisons show even greater 60%

differences, even between developed regions,
such as the United Sates, the EU and Japan. 40%

Such differences have yet to be explained, but,

considering they affect otherwise comparable 20%

countries (concerning the type and level of

0%
development), they infer that the freight transport
mode strongly depends on the context in which 1960 1965 1970 1975 1980 1985 1990 1995 2000

it takes place, including geography, as well as a

Figure 4. Modal split in Europe
strong path dependency process (history matters),
1 9 7 0 -2 0 0 4 ( E C M T, 4 4 membe r s , % , t km )

F R E I G H T T R A N S P O R T M O D E S: CO M P E T I T I O N , CO O P E R AT I O N O R A R E A S O F A DVA N TA G E ?
and not on a universal, uniform mechanism.
Rail | Road | IWW | Pipeline

Over the long run, there is a shift taking place in

60%
most countries, including Japan, from rail and
50%
inland waterway to road. If we consider the entire
European continent, including the 44 member 40%

States of the European Conference of Ministers of 30%

Transport (now the International Transport Forum), 20%

then, contrary to what is occurring in the Western
10%
part of the continent, rail remains the primary mode
0%
of transport, and this remains true even at the pan-
European scale, when both parts of the continent 1970 1975 1980 1985 1990 1995 2000 2005 2010

are combined. Nevertheless, there is a clear trend, source

– Yoshi Imanishi, Freight Transport Policy and Measures in Japan,

over the last 30 years, in terms of a shift from rail Public Planning & Policy Studies, 2004
to road. – Trends in the Transport Sector, 1970-2005, ECMT, 2007

1 5
 2 Rationale for modal split

Most firms seek to minimize production The divide between road and rail solutions takes
costs and the freight transport sector is no place according to a threshold distance, D0,
exception. This effort to reduce costs explains, to whereby, road is cheaper for short distances, rail
a large extent, the choice between modes. We shall for long distances. The value of this threshold
look at the choice between road and rail (though, is debatable, although the average of 500km
comparisons between other modes are possible, or even 800km is often quoted (surprisingly,
following the same methodology). The main idea considering the average length of rail haulage in
is that transport cost varies (admittedly, in a Europe is only 240km; source: Statistics in Focus,
linear way) according to the distance of haulage n° 17, Eurostat, 2007).
(mileage), but not proportionally. It also comprises
a fixed cost, independent of distance, covering such When one considers the average cost (per
F R E I G H T T R A N S P O R T M O D E S: CO M P E T I T I O N , CO O P E R AT I O N O R A R E A S O F A DVA N TA G E ?

operations as packaging, loading and unloading, kilometre), it depends of course on the distance,
preparation of the vehicle, invoicing, organisation and the comparison between the average costs of
and transaction costs, etc. For railways, this road and rail. It is a misconception to contend that
fixed cost is particularly important when taking shippers accept a higher cost from road carriers,
into account collecting the individual wagons to compared with rail carriers, because the quality of
form a train, or the pre- and post-road haulage service of road haulage is better. Since the bulk of
between transhipment yard and final destination in freight traffic by road travels only a short distance
multimodal solutions, given that many origin and/ (in terms of tonnes, 56% of freight carried by road
or destination sites are not directly linked to the in Europe covers a distance shorter than 50km),
rail network with their own siding. In contrast, at the choice of road is the result, first and foremost,
least for FTL (full truck load) consignments, road of the difference in transport cost, reflected in
does not require any time-consuming and costly its price; the fact that the average price for road
transhipment. is about four times higher than for rail results
from the fact that they correspond to different
transport distances: on the following graph, each
F i g u r e 5 . T r a n s p o r t co s t acco r d i n g
t o d i s ta n ce ( y = a x + b ) mode appears as cheaper than its competitor, in
its own area of advantage (comprising the bulk of
Road cost | Rail cost
its market).
8000

7000

6000

5000

4000

3000

2000

1000 Fixed cost

COST/KM

0 distance
DO
200 400 600 800 1000

6 1

20%
 F i g u r e 6 . T r a n s p o r t av e r age co s t ( p e r k i l o me t r e )
acco r d i n g t o d i s ta n ce ( y/ x = a + b / x )

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

80

70

60

50

40

30 Road

20

10 Rail
COST/KM

0 distance
DO
200 400 600 800 1000
F i g u r e 7. S h i p me n t we i g h t a n d t r a n s p o r t d i s ta n ce

700

600
Considering this sketch, one would expect that
500
100% of freight is consigned to road, up to the
threshold distance D0, and 100% to rail, beyond 400

this limit. This is obviously not the case, however, 300

since road, indeed, has a near-monopoly on short 200

distances, as well as remaining dominant for long
100
distances. The first reason for this discrepancy is
0
that the value of parameters is not the same for
KM

every product or every transport operation and Less

than
50
to
100
to
500
to
750
to
1 000
to
10 000
to
50 000 100 000
to Ibs or
50 Ibs 99 Ibs 499 Ibs 749 Ibs 999 Ibs 9 999 Ibs 49 999 Ibs 99 999 Ibs more
that, on a macro level, the divide between road
and rail according to distance is a gradual logistics

F R E I G H T T R A N S P O R T M O D E S: CO M P E T I T I O N , CO O P E R AT I O N O R A R E A S O F A DVA N TA G E ?
curb and not a “staircase step”, suddenly jumping
F i g u r e 8 . S h i p me n t we i g h t a n d va l u e d e n s i t y ( $ / t )
from 0 to 100. In addition, this sketch does not
take into account other determinant factors,
60
which result in different values for parameters
50
and different behaviours from the shippers. The
size of the consignment is an important factor: a 40

small load requires light transport means, even 30

for long distance haulage – lorry or airplane – and 20

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

1 7
 In some cases, quality of service can be a key Another non-negligible element is that inland
concern, which justifies a costlier solution, such as waterways, rail, short sea shipping (and
road, or even air, rather than rail, for long distances, combinations of these various modes with final road
for reasons of speed, safety, flexibility, etc. haulage) must all be able to consolidate important
quantities of goods in order to reach sufficient
More generally, a growing proportion of shippers levels of productivity to compete with road prices.
tend to seek to optimise their comprehensive Economic geography matters, and explains why
logistics costs, and not just to minimize their road is also used for long distances, when the
transport cost. Optimisation means that the amount of goods transported is not sufficient to
best solution is not necessarily the cheapest; it justify the use of other, heavier means.
corresponds to the requirements of the customers
F R E I G H T T R A N S P O R T M O D E S: CO M P E T I T I O N , CO O P E R AT I O N O R A R E A S O F A DVA N TA G E ?

(consignees) and to their willingness to pay for it. Finally, in many cases, road is selected for long
Optimising logistics, rather than just transport, distance freight transport just because it is the
means that a total cost, comprising transport, only solution available to shippers: there is no
inventory and information systems, is taken into alternative supplier on the market. In this case,
account, particularly in the context of today’s “just competition between modes, even if feasible,
in time” management practices. This means that simply does not exist in actuality.
a more expensive transport solution can result in
a lower inventory volume and therefore an overall
cheaper logistics solution.

F i g u r e 9. T r a d i t i o n a l ( “ p u s h ”, s u p p ly d r i v e n ) a n d co n t em p o r a r y
( “ p ul l”, dema nd dri v en ) f low ma n agement, s t ruc t ure of logis t ics comprehensi v e cos t

source Highway Administration, Office of Freight Management. http://ops.fhwa.dot.gov/freight

Demand Driven

Supply Driven

Inventory
Transport System
Information System

20% 40% 60% 80% 100%

8 1
 3 Characteristics of different modes

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

F R E I G H T T R A N S P O R T M O D E S: CO M P E T I T I O N , CO O P E R AT I O N O R A R E A S O F A DVA N TA G E ?
F i g u r e 11 . Va l u e d e n s i t y b y m o d e
F i g u r e 10 . Av e r age m i l es p e r s h i p me n t b y m o d e ( 10 0 0 $ / t, l o ga r i t h m i c sca l e )

2 000
10

1 500

1 000

0,1
500

0 0,01

Truck Air Truck Rail Parcel Air Parcel Truck Truck Rail
and (incl truck and and U.S.P.S. For-hire Private (incl truck U.S.P.S. and For-hire and Private and
Water and air) rail Water or courier Rail Water truck truck and air) or courier rail truck Water truck Pipeline Rail Water Water

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

1 9
 F i g u r e 1 2 . Ra i l a n d r o a d co m p a r i s o n : F i g u r e 1 3 . Ra i l a n d r o a d co m pa r i s o n :
r e d u c t i o n o f r a i l ma r g i n a l co s t r e d u c t i o n o f r a i l f i x e d co s t

Road cost | Rail cost Road cost | Rail cost

8000 8000

7000 7000

6000 6000

5000 5000

4000 4000

3000 3000

2000 2000

1000 1000
COST/KM

COST/KM
0 0
F R E I G H T T R A N S P O R T M O D E S: CO M P E T I T I O N , CO O P E R AT I O N O R A R E A S O F A DVA N TA G E ?

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

In the following diagram (figure 14, page 11), we The table is quite intuitive, mixing differentiation
have represented the core fields of these two in the size of letters and colour blending. For inland
transport modes according to two key criteria: the transport, road is the dominant – if not exclusive
distance of transport and the size of shipment. – mode today in Europe for short and medium
Both parameters, as seen earlier, are linked to the distances, as well as for small and medium-sized
nature of the commodity and its density of value. shipments. Rail is only used for large quantities
Considering distance of transport, a distinction and over long distances (with some exceptions
must be made between inland transport (on short, to this rule, such as successful medium distance
medium and long distances) and intercontinental rail shuttles), but is no longer dominant, even in
transport. When considering the size of shipment, this segment. On continental long distances, air
a technical and economic segmentation comes into transport is used only for courier traffic, “air”
play between: small consignments, at a scale much general cargo being carried by road (possibly with
smaller than the capacity of a vehicle and therefore an air waybill!). For intercontinental transport,
requiring a complex process of consolidation so as maritime transport is by far dominant in terms of
to preserve transport productivity (courier, parcels, tonnes carried (at the same time, with only 0.3%
up to LTL); medium shipments (corresponding to of total tonnage, air transport carries about 25% of
the capacity of a lorry or of a container: FTL, FCL) worldwide trade in terms of value).
and large consignments, often exceeding several
hundred tonnes and carried in bulk. For sake of This table provides a generic framework, which
clarity, other modes have been omitted from the could be applied to various contexts when
table, to wit: inland waterway, pipeline, short sea adequately qualified: average distances are longer
shipping, and various multimodal and intermodal for all modes in the US than in Europe, which
combinations. partly explains the difference already mentioned

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

F i g u r e 14 . T r a n s p o r t m o d es : ma i n f i e l d s o f o p e r at i o n ,
acco r d i n g t o d i s ta n ce a n d s i z e o f s h i p me n t road | rail | air | sea

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

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

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

size of shipment
distance inland short inland medium continental long intercontinental

F R E I G H T T R A N S P O R T M O D E S: CO M P E T I T I O N , CO O P E R AT I O N O R A R E A S O F A DVA N TA G E ?
The differences between modes are so distinct that
it leads to the inescapable conclusion that there is
very little overlap between the realms on which
different modes are operated. Freight transport is
divided into different segments, with a single mode
of transport tending to be best placed to serve each
segment.

1 11
 4 Actual and potential competition its poor quality, shortage of capacity, or due to
long route mileage (road is more likely to go “as
Actual competition takes place only on the crow flies” than rail and river, since it accepts
the fringes of the respective areas of advantage tougher slopes). To make sense, virtual competition
of different modes, and the change in modal split requires being at least feasible, i.e., that physical
will result from a shifting and broadening of these conditions exist to make it possible, if not actual.
fringes.
The key role of infrastructure
Competition: Transport is an industry where an important
within modes or between modes part of productive capital, infrastructure, is mainly
Competition in the freight transport market provided by public authorities. The building of a
is therefore mainly within modes (among firms network (in recent history, motorways/highways)
implementing the same technology of transport) requires about two human generations and large
F R E I G H T T R A N S P O R T M O D E S: CO M P E T I T I O N , CO O P E R AT I O N O R A R E A S O F A DVA N TA G E ?

and much less between modes (firms offering amounts of financing, the profitability of which is
different technological solutions for the same flow hardly assured (as the Channel tunnel, entirely
of goods). financed by private funds, has shown). The
availability of infrastructure is, therefore, a matter
In Europe, competition within railway transport both for institutional and public economics, as
exists only where the “unbundling” of infrastructure well as for evolutionary economics, considering
and services will likely allow network access for the path dependency of infrastructure building,
several carriers (historical as well as new entrants), operation and efficiency. Today’s practice of
thus facilitating intra-modal competition. In other inland waterways in the Netherlands is the result
parts of the world, rail transport remains vertically of centuries of constant efforts to control rivers.
integrated, with each carrier controlling its own
infrastructure. In the US, two overlapping pan- On a local basis, many modern production and
American networks compete, covering the same distribution sites are only accessible by road
territory with more or less parallel tracks. (whereas, in the 19 th century and first half of the
20th century, they were systematically located
When there is no actual competition between along a canal and/or equipped with a railway
modes (in fact, when road is the only available siding). The choice of a freight transport mode is
mode), one might expect a degree of virtual now pre-determined by real estate developers, and
competition to arise, for example, a new supplier, the modal split is biased long before shippers have
relying on another mode, could compete with road to make any decision.
haulage (thus putting the present single-mode
situation into question). This situation certainly In other words, actual competition between modes
exists and justifies attempts, here and there, to explains only a part of the modal split, given
develop alternative solutions to all-road haulage. that this competition requires an adequate, pre-
existing context, which is not the case in every
Still, in many cases, an alternative supplier is just country or along every route, particularly as far as
not feasible, due to the lack of infrastructure, or infrastructure is concerned. Switzerland provides

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

F i g u r e 15 . M a i n r a i l- r o a d i n t e r m o d a l t r a n s p o r t i n E u r o p e

source UIRR

Unaccompanied international traffic in 2001 (without alpine traffic) Unaccompanied international traffic in 2001 (alpine traffic)

F R E I G H T T R A N S P O R T M O D E S: CO M P E T I T I O N , CO O P E R AT I O N O R A R E A S O F A DVA N TA G E ?

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

1 13
 or even declining, representing roughly 5% of total The contrast with existing complex solutions
freight in Europe, 25% of railway transport (tkm), is sharp, all the more so as the following chart
5% of waterway transport and 10% of maritime provides only a simplified vision of a traditional
transport. It remains a niche market, mainly at intermodal arrangement, as it comprises only
the international level and, in Western Europe, one border, two modes of transport (road, rail),
concentrated in a few corridors, particularly across and ignores technical discontinuities in terms of
the Alps. energy, signalling, gauge, etc., resulting in a poor
“interoperability” outcome. Additional factors
The reasons for this situation are complex. One are also ignored, such as wagon, container and
factor is the inefficient performance of traditional locomotive renting companies, freight-forwarders
operators, who are hampered by a fragmentation of and 3PL, real estate owners, local and State
intermodal organisation among many autonomous authorities, infrastructure regulators, etc.
actors. This encourages newcomers to set up
F R E I G H T T R A N S P O R T M O D E S: CO M P E T I T I O N , CO O P E R AT I O N O R A R E A S O F A DVA N TA G E ?

simple, integrated arrangements, often dedicated The common characteristics of these new
to one type of traffic, or even one single shipper, arrangements are, beyond their simplicity, that they
consisting of a shuttle service between two fixed promote internal coordination rather than external
points. They abandon the notion of network and market driven cooperation; planning rather than
create bespoke intermodal transport chains, transaction; integration rather than vertical
organised under a single agent’s control (a shipping competition. Here, again, the basic explanation
company like Maersk for ERS, chemical industry for of freight organisation through competition and
Rail4Chem, steel industry for CFL Cargo, etc.). market mechanisms is challenged.

F i g u r e 16 . T r a d i t i o n a l i n t e r m o d a l a r r a n geme n t o f ac t o r s

source RECORDIT, 2001.

shipper

intermodal transport operator

transshipment
yard operator road carrier

border

origin destination
(shipper) (consignee)

railway company A railway company B

rail infrastructure rail infrastructure

operator A operator B

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

F i g u r e 17: Ra i l n e t w o r k i n F r a n ce a r o u n d 1 9 2 0 F i g u r e 18 : Ra i l n e t w o r k i n F r a n ce 2 0 0 8

F R E I G H T T R A N S P O R T M O D E S: CO M P E T I T I O N , CO O P E R AT I O N O R A R E A S O F A DVA N TA G E ?

1 15
 Taking into account new concerns, such as energy 6 Long range perspectives
consumption and climate change due to the
greenhouse effect, governments can be expected The conclusions of a recent long-range study
to match their words with actions, and develop carried out on freight transport in France (which
alternative solutions to road. However, they should also took into account European integration as well
not just support any type of project willy-nilly - as globalisation), entitled Fret 2030 (Freight 2030),
rather, they should spend their scarce resources can be extended to most European countries. The
in an efficient way by focusing on projects likely study proffers different scenarios, based on the
to succeed, i.e., to capture a significant share extent to which two main assumptions, concerning
of freight. Supporting abstract competition the rhythm of European economic growth and the
mechanisms is not enough, as demonstrated by the way transport is “coupled” to it, are impacted by
European railway reform effort to open the market the degree to which a sustainable development
to intra-modal competition, launched in 1991, strategy is applied to freight transport policy. This
F R E I G H T T R A N S P O R T M O D E S: CO M P E T I T I O N , CO O P E R AT I O N O R A R E A S O F A DVA N TA G E ?

which has yet to result in any broadening of rail’s results in four schematic perspectives.
modal share. Real competition must also be made
possible, by setting up adequate infrastructure In the following table, S1 corresponds to a high rate
and up-to-date operational technology, along long of growth of transport with little public regulation,
corridors serving substantial traffic markets. S2 to high growth but strong public intervention
so as to promote “sustainability”, S3 to a low rate
Some 50 years ago, a comparable situation of growth of freight volume and little public policy,
existed for passenger transport, when traditional and S4 to low growth of transport and strong
railways had reached their peak development and public policy. Figures are only given for likely
new modes (private car and plane) represented orders of magnitude and do not represent extreme
the future. The invention of the high speed train, possibilities, such as an energy shortage due to an
based on a large capacity dedicated line, enabled international military crisis, a pandemic, a global
a real breakthrough, which provided rail a new economic crisis or collapse in international trade
area of advantage and put it back into the market (such events may not be all that improbable and
of passenger transport in the following decades. Is would merit further study). They merely provide
such a change in store for freight? limits for a possible, non-chaotic evolution.

Transport volumes are expected to continue

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

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

F R E I G H T T R A N S P O R T M O D E S: CO M P E T I T I O N , CO O P E R AT I O N O R A R E A S O F A DVA N TA G E ?
F r e i g h t t r a n s p o r t i n F r a n ce – l o n g - r a n ge p e r s p ec t i v es ( t km )

Billion tkm 2002 2030 S1 2030 S2 2030 S3 2030 S4

Road 257 412 340 296 272
Rail 50 50 80 76 87
IWW 6.9 7 20 15 20
Total 314 469 440 387 379
with SSS* 427 419
*SSS = short sea shipping

F r e i g h t t r a n s p o r t i n F r a n ce – l o n g - r a n ge p e r s p ec t i v es ( m o d a l s p l i t, % )

% 2002 2030 S1 2030 S2 2030 S3 2030 S4

Road 82 88 77 76 72
Rail 16 11 18 20 23
IWW 2 1 5 4 5
Total 100 100 100 100 100
source Fret 2030, 2008

1 17
 The presentation of the choice between infrastructure, serving important sources or
different modes of freight transport as being destinations of heavy traffic. In such cases,
settled according to neoclassical mechanisms they should not be considered as hostile to road
of competition is, as a whole, unrealistic. transport; shrewd road carriers will understand
Segmentation is the rule; actual competition (i.e., that such measures will alleviate traffic on
where alternative supply modes exist in the same congested trunk roads, while leaving them with
market) is the exception. Modes of transport are the value added terminal operations. According to
broadly specialised in specific and separate area all plausible scenarios, road transport will go on
of advantage, and they are more complementary increasing in the coming decades.
than rival. Intermodal combinations only play a
limited role, due to their complexity and fragility, Going forward, efforts to reduce greenhouse gases
as well as the non-cooperative attitude of their will have to use all available tools, simultaneously:
actors, unless one of them integrates the complete technology and standardisation, organisation and
F R E I G H T T R A N S P O R T M O D E S: CO M P E T I T I O N , CO O P E R AT I O N O R A R E A S O F A DVA N TA G E ?

chain under his control. management, regulation and taxation, etc. In any
case, the modal shift will only provide a limited
Till now, policies to change the modal split have, in part of the solution, and the main prospects for
Western Europe, mostly failed. This does not mean progress will remain within road transport itself.
that attempts to increase the use of alternatives The European road industry, including vehicle
to all-road long distance haulage have no chance makers as well as carriers and logistics service
to succeed. However, they require demanding providers, should take up this challenge and turn it
conditions, which are seldom fulfilled, and must into a crucial competitive advantage in the global
only be supported where they are meaningful: market of the future.
that is, on a few corridors, equipped with adequate

18 1
 Sources and references:

EU Energy and transport in figures, statistical

pocketbook, Brussels, European Commission, 2009.
http://ec.europa.eu/energy/publications/statistics/
doc/2009_energy_transport_figures.pdf

Trends in the Transport Sector, 1970-2005, Paris,

ECMT, 2007.

CLECAT Statement in the Area of Policy Making in the

Field of the European Logistics Sector, CLECAT, 2006.
http://www.clecat.org/dmdocuments/
PP017OSECR061130StatLogistics.pdf

Yoshi Imanishi, Freight Transport Policy and Measures

in Japan, Public Planning & Policy Studies, 2004.

2002 Commodity Flow Survey, United States,

Washington, Bureau of Transportation Statistics, 2004.

RECORDIT project (REal Cost Reduction of Door-to-

door Intermodal Transport), WP8 Intermodal transport
in Europe: Cost reductions possibilities and options,
European Commission (DG TREN):

F R E I G H T T R A N S P O R T M O D E S: CO M P E T I T I O N , CO O P E R AT I O N O R A R E A S O F A DVA N TA G E ?
http://www.recordit.org, 2001.

Bulletin Transport / Europe: 24 issues available, in

English and French, from: www.cnt.fr

Savy Michel, Le transport de marchandises, Paris,

Éditions Eyrolles, 2006.

Savy Michel (dir.), Questions clefs pour le transport en

Europe, Paris, La Documentation française, 2009.

1 19
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