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Instructions

We have read and reviewed Chapters 1 and 2. Chapter 1 discussed the expansion of the European intermodal rail-road freight transport (EIT) under the European Union. Chapter 2 explores the development of intermodal transportation in the United States.

Instructions: In 2-3 pages maximum, discuss the impact (negative and positive) that regulation/deregulation has had on the growth and/or continued growth of intermodal transportation in both countries. Ensure you site specific examples in your paper. You are encouraged to use the internet and other sources to support your discussion.

Submission Instructions: Please attach the assignment in Word Format. Format your paper consistent with APA guidelines.

The future of intermodal freight
transport: an overview
Rob Konings, Hugo Priemus and Peter Nijkamp

1.1 INTRODUCTION

Generally speaking, freight is transported from door to door: sometimes it
is taken from the place where the raw materials are found (mines, f

example) to the processing plants, and sometimes from these plants to fac-
tories where the various raw materials and components are combined into
industrial end products, which are then transported to the wholesalers, dis-
tribution centres and eventually to the final consumer in the shape of

company, an organization or a household.

It is often impossible to arrange just one modality for freight transport,
making two or even three modalities necessary: intermodal freight trans-
port. The market share of intermodal freight transport is relatively low and
is not showing a spectacular increase. The share of road transport is very
high in most countries. This may contribute to the flexibility of freight
transport, but emissions (soot) and road congestion (where passenger and
freight traffic use the same roads) are causing a growing problem. A larger
share for inland shipping, short-sea shipping and rail transport would be
an advantage, particularly where there are intense flows of goods. Many
countries will need to modernize their rail transport rigorously and ensure
the proper coordination of passenger and goods transport on the railway
network. Dedicated freight rail links could be the solution in some cases.

Air transport and maritime transport are two fairly well-defined market
segments in the international goods transport sector. Both supply chains
must be properly connected to inland freight transport: inland waterways,
roads and rail for maritime freight transport, and roads for air transport.

A breakthrough in intermodal freight transport is being hampered by
numerous factors. There are problems with operations due to a lack of
interconnectivity and interoperability. There are still wasted technologica

opportunities and perspectives for design and modelling. And, last but not
least, there is a lack of interorganizational and international coordination,
as a result of which the reliability, the speed and the costs of intermodal

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freight transport are suboptimal. This raises challenges for improving the
implementation and public policies.

1.2 CONTENTS OF THE BOOK

In this book the challenges for successful development of intermodal freight
transport are discussed. This theme is elaborated along three topics, which
can be considered as main determinants for the performance of intermodal
transport and its potential role as an alternative mode for road transport.
The first chapters of the book are devoted to an overview of the present role
of intermodal freight transport operations and elaborate on the structure of
intermodal freight transport systems. They also outline future development
paths to improve the performance of intermodal transport. The next chap-
ters then go on to focus on some innovative approaches regarding the design
of terminals and the modelling of intermodal networks.

Design and modelling tools are presented that can be used to analyse
and support the performance of intermodal transport. The book clos

with an analysis of the requirements to get promising intermodal innova-
tions implemented and the policies needed to improve the competitiveness
of intermodal transport. In particular the role of governments comes into
play here. The book is structured according to these main lines and consists
of three parts, each dealing with one of these topics. This structure can also
be recognized in the subtitle of the book.

Part I: Intermodal Transport Operations

The current operations of intermodal freight transport are not the same
in different parts of the world. State-of-the-art overviews are presented for
the European Union, the United States and Japan. In addition, issues of
hinterland network developments, bundling of freight flows and

terminal

handling quality are dealt with.

The first contribution in this part of the book, Chapter 2, presented by
Johan Woxenius and Fredrik Bärthel, gives an overview of the structure
and operations in the intermodal road–rail transport sector in the
European Union. Their presentation is based on a system approach in
which, successively, the system elements of actors, activities and resources
are used as a framework to describe and analyse the structure of the inter-
modal transport sector. The argumentation is empirically supported by
previous market studies of the authors covering in-depth interviews with
key players involved in intermodal transport. The chapter starts with a
description of the actors of the demand and supply side of intermodal

2 The future of intermodal freight transport

Konings, R., Priemus, H., & Nijkamp, P. (2008). The future of intermodal freight transport : Operations, design and policy.
ProQuest Ebook Central http://ebookcentral.proquest.com
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road–rail transport. The role and activities of these actors are explained
and typical differences in their role and position in a variety of European
countries are discussed. The types of resources needed to offer intermodal
road–rail transport services are elaborated. The way in which these
resources are used are part of the operational principles of designing net-
works, that is, the production models for intermodal transport services (for
example direct or shuttle train operations or hub-and-spoke operations). A
major observation from this overview is that intermodal road–rail trans-
port is a rather complex system, partly due to the involvement of many
actors and different kinds of resources. Deregulation of the sector has
changed the structure to the benefit of the sector and more changes can be
expected according to Woxenius and Bärthel. However, many barriers for
further growth of intermodal road–rail transport must still be overcome,
for example, low infrastructural interoperability, missing infrastructural
links and missing access to attractive time slots, lack of standardization of
load units, lack of information systems and inefficient administrative pro-
cedures. The authors conclude that the future of road–rail transport will
also strongly depend on developments affecting the competitiveness of
road transport.

In Chapter 3 Latta Chatterjee and T.R. Lakshmanan discuss the origin,
the development and prospects of intermodal transport in the United
States. In their contribution the driving forces for intermodal transport are
explicitly addressed. The authors argue that the interplay of broader forces
of economic evaluation, technological changes, institutional and organiza-
tional developments, as well as specific and changing conditions of the
transport system in the United States, have shaped the interest in inter-
modal transport. Globally organized production and a shift from supply-
oriented (mass) manufacturing to high value-added custom-oriented
manufacturing have changed logistic supply chains significantly. With its
potential for integrating multiple modes, intermodal transport seems to
offer a flexible response to the supply chain requirements in the global pro-
duction and distribution system. Of course containerization has revolu-
tionized intermodal transport, but other technological innovations in
transport and communication have greatly enabled improved performances
of intermodal transport as well. Deregulation of the US transport sector
has also stimulated intermodal transport. These impacts are underpinned
by an interpretative statistical overview of developments in freight trans-
port, showing recent trends in intermodal transport in the United States.
The chapter proceeds with an analysis of emerging developments in US
intermodal transport in the context of observed and emerging technologi-
cal, institutional and organizational factors. In addition, policy and strat-
egic issues related to the future of intermodal transport are explored,

The future of intermodal freight transport

attempting to identify the enabling role of the public sector. Chatterjee and
Lakshmanan conclude that extending the role of intermodal transport
would be desirable if the physical, organizational and information infra-
structure structures across a network were integrated in an optimal way in
order to reduce transaction costs and maximize operational efficiencies.
This would translate into lower costs and an increase in the competitiveness
of US firms in the global marketplace.

In Chapter 4 Eiichi Taniguchi and Toshinori Nemoto give an insight into
the position of intermodal freight transport in Japan. Its role in the total
transport system is very modest and examples of intermodal transport ser-
vices are still rather rare. Indeed the potential benefits of intermodal trans-
port are acknowledged, but according to the authors the exchange of
modes in terminals is a relatively expensive operation, making intermodal
transport only attractive for long distances. Moreover, as opposed to the
rail network, the road network in Japan has been significantly improved
and trucking companies have improved their transport services. As a result,
road transport has become very cost-efficient and competitive with rail
transport. The successful examples of intermodal transport discussed by
Taniguchi and Nemoto reflect rather exceptional conditions. Improvement
of the intermodal transport infrastructure, including in particular improve-
ment of access routes to railway stations and seaports, are considered as the
most crucial measures to stimulate intermodal transport.

In Chapter 5 Theo Notteboom zooms in on a very interesting and
important market segment of intermodal transport, that is, hinterland
transport of seaports. Transport of containers between the seaport and a
place in the hinterland is in fact the most developed market for intermodal
transport, and also definitely today the most dynamic market. Since market
players in the maritime industry have identified inland logistics as one of
the most promising areas still left in which to cut costs, to add value and
to increase profitability, interest in landside operations has increased
significantly. In their search for efficient inland services, shipping lines,
transport operators, port authorities and shippers have come up with
different network solutions leading to new dynamics in transport system
development. The bundling of freight flows in a limited number of trans-
port nodes proves to be one of the main driving forces in this development.
Notteboom elaborates the role of freight bundling in designing intermodal
services and uses these conceptual notions to discuss the hinterland
network developments in intermodal rail and barge transport for the
Hamburg–Le Havre port range.

In Chapter 6 Bart Wiegmans, Peter Nijkamp and Piet Rietveld deal with
the terminals in the intermodal transport chain. They address the quality
of services of container terminals as a competitive asset. Low container

4 The future of intermodal freight transport

handling prices are a major competitive factor, but offering additional and
high-quality services has gained importance in this very competitive busi-
ness of container handling. Quantitative information on quality features of
terminals is rather rare and therefore the authors suggest an approach to
measure container terminal service quality and to determine critical per-
formance conditions. The chapter starts with a definition of terminal
service quality and presents the SERVQUAL model as a framework to
analyse the terminal service quality. This SERVQUAL model comes from
marketing theory and has been adapted to give an operational view on the
judgement of service quality of container terminals by terminal operators.
The service quality analysis is applied to maritime (deep-sea shipping) ter-
minals and continental (barge and rail) terminals. Reliability is a critical
performance condition for all types of terminals, but differences between
the terminals exist. The authors conclude that the terminal quality mea-
surement should be incorporated with methods to measure the perfor-
mance in the total transport chain.

Part II: Design and Modelling

When in general situations are suboptimal, technology often is mobilized
to solve current problems and create better solutions. This implies chal-
lenges for design and modelling. This second part presents an overview.

The contribution of Joan Rijsenbrij, Chapter 7, discusses the future
strategies of container terminals in seaports to accommodate growing
transport volumes. This discussion raises the question of what kind of
investments in handling facilities and inland infrastructure are desirable in
ports. Rijsenbrij elaborates this intriguing issue by postulating that the
future scale of vessels and inland transport vehicles plays a major role. In
reviewing the impact of scale developments he observes that vessel size
development has had significant influence on the design of handling facil-
ities, such as the cranes and the internal transport systems, but it has also
affected the infrastructure of the ports, for example the port entrance.
Rijsenbrij argues that further scale developments are likely, but these devel-
opments will also demand more dramatic changes in the terminal handling
systems, both at the waterside and the landside. The profitability of these
new investments however seems rather uncertain, provided that terminal
clients demand both lower costs and higher service levels. Following the
scale developments of vessels by large investments in terminals in order to
remain attractive for shipping lines may result in underutilization and
financial losses. On the other hand, if the scale developments are not antici-
pated the service level may be endangered, resulting in a loss of customers
and financial losses as well. Rijsenbrij believes that the answer to this

The future of intermodal freight transport

dilemma could be found in establishing more cooperative structures
between the major participants in the door-to-door chain, where increas-
ing the vessel size is no longer a completely unilateral decision of the ship-
ping line.

In Chapter 8 Klaus-Peter Franke presents a technical solution for a new
logistic concept of hinterland transport, where intermodal transport
innovations in the seaport are combined with new developments in the hin-
terland. A key element of this concept is to use land in container ports more
efficiently, because with increasing throughputs at terminals and vessels
becoming bigger and bigger, storage in container ports is becoming more
and more land-consuming, and has driven many container ports to their
spatial limits. The main idea of this concept being launched in the United
States is to split container ports into an Efficient Marine Terminal part
ashore and an Intermodal Interface Centre inland, both connected by a
dedicated railway line. In this chapter Franke shows how this idea, named
the Agile Port System, could be elaborated from a technical perspective to
improve the performance of this logistic system, in both the Efficient
Marine Terminal and the Intermodal Interface Centre. As for the Efficient
Marine Terminal, a technology is proposed that enables containers to be
transhipped between vessel and freight trains without the need to start
moving the quay cranes along the vessel for positioning purposes. The big
advantage of this concept is that yard transfer vehicles are not required,
saving substantial machinery and labour costs. With respect to the
Intermodal Interface Centre, a container handling technology is presented
that allows for the transhipment of containers between trains instead of
shunting wagons. As a result dwell-time of wagons can be significantly
reduced, the handling speed can be remarkably increased and the amount
of land required is much lower compared to shunting yards. With the con-
tainer handling equipment proposed in these systems being of proven tech-
nology, the author concludes that it offers a great opportunity to realize a
challenging logistical solution for high-throughput marine terminals in
crowded locations.

In Chapter 9 Ekki Kreutzberger elaborates a conceptual approach to
identify promising intermodal rail and barge network operations. He
observes that particularly in the 1990s there has been a strong emphasis on
technical innovations to improve the performance of intermodal transport.
Many ideas, such as new types of terminals, trains, barges and storage and
transport systems, have been proposed, but most of them were not imple-
mented. However, despite the slow pace of implementation, Kreutzberger
argues and demonstrates that a more efficient load unit exchange can create
important advantages for link operations in the network in such a way that
it can improve the cost and quality of door-to-door intermodal operations.

6 The future of intermodal freight transport

The possible synergy between exchange and network operations is
addressed and from this perspective the author emphasizes the need for a
reorientation in the choice of bundling concepts by train and barge oper-
ators. This issue of bundling of freight is elaborated through the relation
between network volumes, transport frequencies, scale of transport and
network layout. A typology of bundling concepts and a mathematical for-
mulation of the bundling effects are presented, and for rail transport also
results of performance and cost calculations. One of the results is that,
given one daily service on each transport relation, hub-and-spoke concepts
have the lowest main modality costs for networks with medium-sized flows,
line concepts and for networks for small flows. The network design logic
presented in this chapter has a somewhat different approach than existing
network design research. As a result the author ends with some recom-
mendations focusing on methodological issues. A main suggestion is to
strengthen the quantitative consistency between the entities of network
volumes, transport frequencies and the scale of transport units in network
design models and to let this relation be influenced by the choice of
bundling concepts.

In Chapter 10 Arne Jensen develops a conceptual and methodological
framework for the design and evaluation of intermodal freight transport
systems. This theoretical-oriented framework can be considered as a
generic toolbox, which can be used in a practical way. It assumes that any
transport system has to compete for customers and therefore competitive-
ness plays a crucial role in this system design approach. The author intro-
duces two notions to operationalize the competitiveness or viability of a
new intermodal transport system. These are the concepts of significant,
sustainable competitive advantage (SSCA) and market entry ability
(MEA). The SSCA concept assumes that shippers evaluate transport per-
formance in a multidimensional way and that cost, transport quality and
market orientation are important performance dimensions. The MEA
concept refers to ways to avoid or overcome entry and survival problems.
Jensen demonstrates how these concepts can be applied in the system
design process to specify the features of a new intermodal transport system
that has promising market perspectives. This design approach seems not
only applicable for new transport systems, but can also be used to modify
existing systems. An original feature of this approach is that it actually inte-
grates a methodology of transport system design and transport system
evaluation. This means that if this framework is used properly, costly mis-
takes can be avoided in the design phase of transport system development.

In Chapter 11 Florian Schwarz sheds light on the issue of modelling
intermodal freight transport. In the field of transport modelling inter-
modal freight network modelling is a relatively new research area, but due

The future of intermodal freight transport

to a wide range of problems addressed by these models different modelling
approaches exist. Schwarz argues that the choice of a model should be care-
fully based on the objective of the model and the actors’ point of view,
because many different actors are involved in intermodal transport: from
policy decision makers, who set the legal framework for freight transport,
to different actors organizing and operating intermodal transport chains,
to shippers, that produce the demand for transport. Also the planning
horizon of the model determines possible modelling approaches. In add-
ition, the author emphasizes the role which different network structures can
play in modelling. The chapter provides an overview of contemporary
modelling approaches for intermodal freight networks, discussing the
models that make use of geographic information systems in more detail.
The rest of the chapter is used to present a new approach for modelling of
intermodal transport networks for seaport hinterland container traffic,
focusing on trimodal transport networks, combining barge, rail and road
transport within the same transport chain. This modelling approach is
based on using both geographic information about the available transport
infrastructure for road, rail and inland navigation, and detailed informa-
tion about necessary processes within intermodal transport chains.

Part III: Implementation and Policy

Many technological designs and models created on paper are never imple-
mented. Apparently there are barriers for increasing the scope of inter-
modal freight transport. This third part deals with interconnectivity and
interoperability as critical success factors, development strategies, infor-
mation technology and policy challenges for innovations in intermodal
innovations.

In Chapter 12 Bryan Stone reviews a number of important barriers to
efficient intermodal transport. He emphasizes in particular two issues,
which are inherent to the structure of an intermodal transport system and
therefore can be considered as critical success factors, namely interconnec-
tivity and interoperability. His chapter starts with a brief historical
overview of the development process of transport and the critical condi-
tions that enabled this new transport mode to take off in those early days.
Of course maritime containerization has paved the way to intermodal
transport as we know it today, but the container was, according to Stone,
just one element of the new vision to integrate modes. Maclean, founder of
Sealand in 1955, created interconnectivity and imposed interoperable
equipment, although it was still in his own closed system. The author moves
on to highlight the different types and causes of interconnectivity and inter-
operability problems, thereby also comparing the situations in Europe and

8 The future of intermodal freight transport

the United States. As the liner shipping industry moved rapidly to inter-
modal operations in a short space of time, interoperability within the
chosen system was achieved rapidly. As far as the integration of the land-
based transport systems is concerned, their interconnectivity and interop-
erability have been and still are more problematic, particularly with regard
to the railways in Europe. Stone believes that EU legislation should solve
these problems, as unsolved interconnectivity and interoperability issues
create additional burdens to efficient intermodal freight operations and
restrict the competitiveness of intermodal transport with road transport.

Intermodal transport is a typical multi-actor business, in which many
organizations with different interests, cultures and core activities are
involved. Coordination of the processes of these organizations and their
relationships is a key element for the performance of intermodal transport.
In Chapter 13 Mariëlle den Hengst addresses this important issue of
interorganizational coordination and discusses the opportunities of infor-
mation technology to change and support interorganizational coordina-
tion. Information and communication technology enables organizations to
decrease costs and increase capabilities, and thus to change their interor-
ganizational coordination. The author starts with a theoretical framework
on interorganizational coordination. Within this framework the direction
in which interorganizational coordination will change due to the impact of
information and communication technology (ICT) is indicated. The frame-
work is used to design an ICT-based system to support interorganizational
coordination. The model base basically consists of an algorithm to find a
transport solution that matches a transport request, incorporating several
criteria to indicate the degree to which the transport solution meets the
requirements of the transport request. In addition, the algorithm and the
information structure have been translated into a prototype to demonstrate
the possibilities of ICT support to strategic coordination processes. Both
the framework and the prototype have been applied to the container trans-
port industry for evaluation.

In Chapter 14 Dimitrios Tsamboulas investigates ways and possible
strategies to develop intermodal transport in Europe further and to
increase its modal share. Tsamboulas summarizes the unsatisfactory
current status of intermodal transport quality and limited use as a result of
poor infrastructural inheritance, poor levels of interoperability, fragmen-
tation of operational control, separation of operational control from
responsibility and institutional arrangements that are unclear and contin-
uously changing, due to their transitional nature. However, the intermodal
transport environment as well as the policy framework within which
European intermodal transport operates are gradually changing, and
create opportunities for new products and markets in intermodal transport.

The future of intermodal freight transport

Five promising areas are being identified and discussed: the role of railways
as traction providers, short-distance intermodal services, intermodal ser-
vices for small shipments, integration of air transport into intermodal
transport chains and new trends in short-sea shipping services. In addition,
Tsamboulas addresses a number of general topics and related actions for
intermodal transport development. Based on this overview of issues he for-
mulates priority actions and a policy action plan. His conclusion is that the
development of intermodal transport in Europe needs the combination of
the top-down approach, for example European Commission policies and
legislation, and the bottom-up approach, which is the identification of the
needs of the intermodal transport market actors. Collaboration between all
actors, including private and public bodies, is an important condition and
point of departure for this development strategy.

In the final contribution to this book, Chapter 15, José Holguin-Veras,
Robert Paaswell and Anthony Perl explore the role of government in fos-
tering intermodal transport innovation and research. The authors highlight
the factors that enable or constrain intermodal innovations in the American
freight transportation sector. The institutional setting, the industry struc-
ture, and government–freight industry dynamics in transportation policy
can influence these innovations. Once the workings of these factors have
been highlighted, key challenges to intermodal innovation are identified and
a set of possible approaches to overcoming them is considered. The conclu-
sion assesses how these forces play out in other socio-economic environ-
ments. A major finding is that multiple implementation paths to innovation
are possible. These policy recommendations to stimulate and implement
intermodal innovations are not only applicable to the United States, but
seem to have a much wider interest.

10 The future of intermodal freight transport

PART I

Intermodal transport operations

2. Intermodal road–rail transport in
the European Union
Johan Woxenius and Fredrik Bärthel

2.1 INTRODUCTION

An intermodal freight transport system is characterized by the subsequent
use of different traffic modes for moving goods stowed into an intermodal
loading unit (ILU) from the consignor to the consignee. It involves a wide
variety of activities, actors and resources, which implies a certain degree of
technological as well as organizational complexity. Other features are the
derived demand, dependency on surrounding activity systems and in
Europe a typical lack of formal systems management as well as of objec-
tives shared by all actors.

European intermodal road–rail freight transport (EIT) is regarded by
many as the universal solution to a wide range of problems related to
road freight transport as well as to the financial problems of national
railway freight operations. The European Commission estimates that
external effects from road transport in the EU cost €250 billion annually,
of which half relates to congestion. As an example, Van Schijndel and
Dinwoodie (2000) claim that 10 per cent of lorry operating time in the
Netherlands is spent in congested conditions. Supporting words have
been abundant and a truly wide range of political instruments have been
used for promoting EIT but they have still not created a truly level playing
field for competition with road transport. On the contrary, political
promises that were not delivered have caused disillusion within the indus-
try although initiatives like the Marco Polo Programme, the German road
toll (the LKW Maut) and the French subsidy to forwarders using EIT are
promising.

The high expectations of increased EIT flows, in particular from polit-
ical actors, have not been fulfilled although the industry has shown sub-
stantial growth over a number of years. According to the European
Commission (2002), EIT almost doubled from 33 to 64 billion metric
tonnes-km between 1990 and 2000, accounting for 2.2 per cent of the total
transport performance in the EU in the latter year. The transport markets

that have been successfully penetrated are mostly related to Alpine
crossings and transport between the main seaports and their hinterlands
(Eurostat 2002).

There are many reasons for the unsatisfactory development (Bukold
1993 and 1996; Henstra and Woxenius 1999; Zapp 1999):

● time and cost handicap due to the transshipments;
● inferior frequency;
● lack of standardization of swap bodies;
● rigidity of government-owned railways;
● fear of internal competition with wagon-load transport within

railways;
● inadequate long-term stable access to rail capacity at strategic times;

and
● lack of realization of political promises.

In previous theoretical work (Woxenius 1994), the systems approach
(Churchman 1979) and the actor approach (Gadde and Håkansson 1992)
have been used to develop a three-element approach. The elements consist
of actors, activities and resources, and they have been found useful as start-
ing points for analyses of industrial structures with different purposes. This
chapter deals with the whole transport chain although the focus is stronger
on the core of EIT – terminal handling and rail haulage – and from the
moment the ILU is filled to the moment it is emptied. The focus is also on
the ‘conventional’ EIT industry with unaccompanied haulage of goods
loaded in containers, swap bodies and semi-trailers offered to an open
market. This limitation implies that ILUs are seen as part of the goods and
not explicitly as a system resource. The focus is also restricted to transport
chains including rail transport. Inland or short-sea shipping in combina-
tion with road transport are intermodal transport chains which are not
being discussed.

The empirical foundation for the description and analysis of the market
is a study carried out in 1994 (Woxenius 1994) and an update and revision
in 2002 (Woxenius and Bärthel 2002). The study in 1994 was based upon 20
structured interviews with officials of EIT companies, forwarders, terminal
companies and shippers as well as upon scientific literature, public statistics,
annual reports and brochures. The update was based upon information
from journals, Internet sites and interviews with industry representatives
along with continuous coverage of the industry while addressing related
research questions.

14 Intermodal transport operations

2.2 THE MARKET AND THE ACTORS

The EIT system may be described by its core activities: pre- and post-
haulage by road (PPH), transshipment, rail haulage, coordination activities
and, where applicable, sea transport. In addition, infrastructure and sup-
porting activities such as lease of equipment, inspection, cleaning, mending
and empty stacking of ILUs are needed for the system to work. Stuffing of
goods in ILUs is performed by the shipper or by the forwarder if the goods
are consolidated in its general cargo terminal and not included in the
system model.

Although EIT by definition involves at least two traffic modes, the focus
here is on the core of EIT, as shown in Figure 2.1, including rail haulage
and transshipments. This is what distinguishes EIT from all-road transport
and the road–sea combination. Most intermodal research implicitly takes
this perspective, although studies on PPH by road have been published for
instance by Morlok and Spasovic (1994), Niérat (1997) and Taylor et al.
(2002).

The Demand Side of the Core of the EIT Market

The role of the shippers in the EIT system is largely determined by the size
of their shipments. Shippers sending full ILUs (15–35 tonnes depending on
type of ILU and country) obviously take an interest in the system, while
customers sending general cargo typically do not know or care how their
consignments are forwarded. Apart from stuffing and stripping and sup-
plying the ILUs, the activities occasionally performed by shippers include
transshipment at private sidings and PPH. Some large shippers arrange
their own logistics, maintaining a forwarding role, and exceptionally, like
IKEA, they coordinate the core of EIT.

The role of the forwarders, sometimes referred to as logistics service
providers, is to act as an intermediary in the transaction of transport ser-
vices between shippers and operators supplying physical transport and
transshipment services. The definition of the market used here implies that

Intermodal road–rail transport in the European Union 15

Figure 2.1 A system model focusing on activities in the intermodal chain

pre-haulage

post-haulage
rail haulage

transshipment transshipment

sea transport

coordination of intermodal transport

coordination of the core of intermodal transport

forwarders, mediating the specific demands from a multitude of shippers,
can be called ‘proxy customers’ (Ohnell and Woxenius 2003) and are thus
part of the demand side.

Traditionally forwarders perform activities such as physical and admin-
istrative consolidation of small consignments, documentation, warehous-
ing and supplying ILUs. Ties to the hauliers have traditionally been very
strong for the land transport segment, but increasingly they are traffic mode
neutral. Many forwarders also operate lorries themselves and are thus
both forwarders and hauliers. Exceptionally, like Hangartner (owned by
German Railways, DB, since 2002), they operate intermodal terminals and
coordinate the core of EIT.

Forwarders have a dominant position in the transport system, but their
scale is often overestimated since they are wholesalers and they show large
turnover figures, but figures of value added, number of employees or the
balance sheet are not equivalent to, for instance, those of the railway com-
panies. This is especially true for the much-hyped but still rather insignificant
fourth-party logistics service providers or ‘non-asset-based operators’, such
as Exel, GeoLogistics and Celexor, which take on a coordinating role only
and subcontract all physical activities.

In EIT, forwarders act on different markets defined by size of consign-
ments, geography or type of ILU. The traditional forwarders such as
Schenker, DHL (mainly the former Danzas part) and Kühne and Nagel,
have a history of close connections to road hauliers and use EIT as part of
some regular services, as reserve capacity or on customers’ request. These
large forwarders attempt to offer all types of transport between all geo-
graphical areas. The wide range of transport on offer implies that the trad-
itional forwarder covers the full-truckload, part-load and general cargo as
well as parcel segments. Mergers and acquisitions to form players with
larger geographical and service scope have created a new picture in which
the German state maintains a very dominant position in Northern Europe.

Semi-trailer operators such as Euroute and GT Spedition usually own
semi-trailers and buy the haulage services from small hauliers, short-sea
shipping lines or intermodal operators. They have terminals for grouping
shipments, however, on a smaller scale than the traditional forwarders since
they primarily move part-loads and full loads. Geographically, they often
specialize in transport between two countries and cooperate bilaterally with
a similarly focused forwarder.

The business orientation of the swap body operators is to transport full
loads directly between major industrial areas. The road haul costs of swap
bodies is higher than for semi-trailers and they are less suitable for roll-
on/roll-off shipping, which means that this segment is most tightly con-
nected to EIT.

16 Intermodal transport operations

Container shipping lines and their shipping agencies have shown a par-
ticular interest in extending their control to port operations and hinterland
transport. Consequently, Maersk-Sealand and P&O Nedlloyd are partners
in intermodal train operators specializing in shuttles to and from the big
ports.

It should be noted, though, that there are vast differences in the for-
warding role between the national markets. In Germany, France and
Sweden large traditional forwarders dominate, while Dutch forwarders, to
a larger extent, have vehicles of their own, combining the forwarding and
haulier roles. Italy and Spain have almost as many hauliers as lorries and
lack a strong forwarding industry although the trend is to cooperate in
different forms of alliances.

Beside information and communication technology (ICT) systems for
controlling the flows, resources controlled by forwarders are mainly general
cargo terminals and ILUs.

The size of hauliers varies widely between European countries. In
Germany, Italy, Spain and Sweden the hauliers are of small or moderate
size, while the French and Dutch road transport market is dominated by
somewhat larger hauliers. In domestic transport, hauliers are often con-
tracted for a long-distance haul and decide whether to subcontract an inter-
modal operator. In international EIT, hauliers have a role of supplying the
forwarder with one local road haulage, while another haulier is contracted
for the other haul. Hauliers can hence be placed both on the demand and
the supply side of the market.

The resources of the hauliers vary according to their size. Some hauliers
have specialized in hauling one type of ILU, while other larger companies
possess vehicles for all types of transport. Other activities performed are
supplying ILUs and, occasionally, operating terminals. With horizontal
transshipment systems like the Swiss–Austrian Mobiler and the French
Modalohr, the hauliers will become more important for the transshipment
activity.

The Supply Side of the Core of the EIT Market

The supply side of the EIT market is traditionally divided between com-
panies based upon rail and road transport respectively. Considering regu-
lated monopolies and the historic scope of concessions, the borderlines
between market segments have been drawn according to types of ILU and
geographical markets (Bukold 1996). Due to transport policy deregulation
in the EU, this practice is now diminishing (Aastrup 2002).

The classic role of the rail operators has been to sell rail haulage
between intermodal transshipment terminals. They also operate terminals

Intermodal road–rail transport in the European Union 17

and supply rail wagons. In addition, the railway companies have owner
interests in virtually all of the other actor categories needed for producing
EIT services.

The intermodal operators are obviously of particular interest to this study.
When the maritime or ISO container was introduced in the 1960s, the
national railway companies founded container transport companies in order
to offer complementary land transport. Intercontainer, later Intercontainer-
Interfrigo (ICF), was founded for international transport and companies like
Transfracht in Germany, Compagnie Nouvelle de Cadres (CNC) in France
(founded in 1948 for moving smaller containers) and Italcontainer in Italy
were founded for domestic transport. In Scandinavia, faced with less rigid
transport regulations, the railways offer transport of all types of ILUs. The
railways and the Norwegian intermodal operator CargoNet retail to ship-
pers, while CargoNet’s Swedish subsidiary Rail Combi wholesales the core
of EIT.

ICF and the national container companies have their base in the trans-
port of maritime containers to and from seaports, but they also offer trans-
port of containers, swap bodies and to some extent semi-trailers between
European inland terminals. Deregulation implies that the intermodal oper-
ators in the railway family are less restricted by national borders, and ICF
now operates domestic trains, while container companies compete for
border-crossing flows.

Forwarders and hauliers established their own national companies such
as CEMAT (in 1953) in Italy, Trailstar (in 1964) in the Netherlands, TRW
(in 1965) in Belgium, Novatrans (in 1966) in France, HUPAC (in 1967) in
Switzerland and Kombiverkehr (in 1969) in Germany (Wenger 2001). The
original purpose of these organizations was to organize the transport ser-
vices for which the road-based transport companies had concessions. Now
in the post-regulation days, they still coordinate the core of EIT, but due to
the fact that most hauliers are small companies, their role as a strong coun-
terpart to the railways in negotiations is more important. This goal is,
however, rarely stated since the national railways usually hold at least a
minority share of the companies. In the case of German Kombiverkehr,
DB now owns 50 per cent of the company. Since 1970, the companies coor-
dinate their international operations through the International Union of
combined Road–Rail companies (UIRR). Earlier, the UIRR companies
worked as pure intermediaries, but increasingly they carry the commercial
risk of filling trains.

Many, not least the European Commission, entertain hopes that new
intermodal operators will emerge onto the scene. However, high initial
investments, large economies of scale, lack of clearly established market
shares and the industry’s currently low profitability keep new entrants out

18 Intermodal transport operations

of the picture. Also the lack of long-term transport policies and the strong
market position of the national railways discourage private investments.
One exception has been that American companies have tried unsuccess-
fully to practise their domestic intermodal experiences in Europe. There
are also some genuine new actors such as IKEA Rail, NeCoSS and Hafen
und Güterverkehr Köln. The general trend, though, is that the already
active European actors find new markets or extend their scope of services.
The present actors have also formed alliances, such as Polzug, Metrans,
Hansa Hungarian Container Express, TARES and European Rail Shuttle
in order to get access to critical resources, knowledge or clearly established
shipper contacts in line with the suggestions of Gifford and Stalebrink
(2002).

In general, the new intermodal operators are found in the northern part
of Europe and in particular in the large market for hinterland transport of
maritime containers related to the ports of Hamburg, Bremerhaven,
Rotterdam and Antwerp. The ports themselves have also demonstrated
their interest in hinterland transport by rail. In the case of Germany, for
instance, the port operator HHLA has bought 50 per cent of Transfracht
from DB. These initiatives all aim at ‘cherry-picking’ EIT: they do not
capture new market shares from road transport, but rather from existing
intermodal services.

Most terminals are operated by actors that also maintain other roles,
but increasingly by dedicated terminal operators. One category is con-
tainer port operators such as PSA of Singapore, Hutchison of Hong
Kong and American CSX World Terminals that build global networks.
Another category is shipping lines that operate port terminals supporting
their own shipping operations, but also as businesses in their own right in
subsidiaries such as APM Terminals (Maersk), P&O Ports and Evergreen
Ports. In line with the so-called dry-port concept, these port operators
might expand to inland terminals on a large scale. Yet another category
is local companies operating a single terminal, often with local authori-
ties, rail or intermodal operators, hauliers and dominant shippers as
co-owners.

So far most of the rolling stock has been supplied by the rail or inter-
modal operators, but there is a clear tendency towards avoiding large
investments by using leasing companies offering engines and wagons. A
clearer actor role concerning rail traction is also distinguishable with many
small rail companies, often with a short-line origin. The actor analysis is
presented in the actor version of Figure 2.2.

In more detail, the actors and their activities are better presented in a
table. As an example, the Swedish intermodal operators are presented in
Table 2.1.

Intermodal road–rail transport in the European Union 19

20 Intermodal transport operations

Figure 2.2 A system model focusing on actors in the intermodal chain

haulier haulier

rail operator and leasing company

terminal operator terminal operator

shipping line

intermodal operator

forwarder or shipping agency

shipper

Table 2.1 The Swedish intermodal operators and their activities

Operator
Activity

PPH D D D SD/SI SD D SI
Transshipment D D D SD/SI D/I SD/SI SD I
Terminal D D D/I

services
Rail haulage D D D SD/SI SD/SI D SI D
Market to D D D D/I D I
shippers

Coordinate D D I D/I I
EIT

Coord. EIT D D D D/I D/I D/I D I
core

Supply ILUs D I
Supply rail

wagons D D D I D/I SD/SI D I D/I
Supply rail

engines D D D SD/SI SD/SI D SI D/I
Launched, year 2002 1998 2000 1996 1993 1992 1990 1998 2001
Closed, year 2001 2000 2003 200

Note: D: domestic, I: international, italics: exceptional cases, S: by subcontractor.

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Konings, R., Priemus, H., & Nijkamp, P. (2008). The future of intermodal freight transport : Operations, design and policy.
ProQuest Ebook Central http://ebookcentral.proquest.com
Created from apus on 2021-02-08 16:01:49.
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The Marketplace

The way EIT providers approach the shippers varies depending on whether
the service is domestic or international and also on the history and strategies
of the intermodal operators. ICF, CNC and CargoNet offer their services
to shippers or intermediaries, while the UIRR companies, Transfracht,
Italcontainer, Rail Combi and most of the new entrants strictly limit their
services to forwarders, shipping agencies and hauliers. On demand, the
former operators offer PPH, while the latter ones leave this to their cus-
tomers. The railways often maintain a forwarding role and offer door-to-
door EIT.

On the way to the shippers the services are bundled in different ways. The
principles for this bundling are shown in Figure 2.3, where dotted lines indi-
cate occasional supplier relations.

2.3 THE PRODUCTION SYSTEM

The physical components of the European EIT system definitely qualify
as mature technology. Lorries are either semi-trailer tractors, flatbed
container lorries or swap body lorries equipped with air suspension.
Rail engines are of standard freight design, occasionally capable of multi-
current power supply, while rail wagons are either pocket wagons for
semi-trailers or flatbed wagons for containers and swap bodies. In addition,
rail wagons for special applications, mainly horizontal transshipment, have
been developed, but except for turntable wagons (for example ACTS),
bimodal boggies for trailers (for example Wabash’s RoadRailer as imple-
mented by BTZ) and wagons for roll-on/roll-off (RoRo) loading (for
example Modalohr), very few are in use. In case of sea transport a ship is
obviously needed.

Intermodal road–rail transport in the European Union 21

Figure 2.3 A system model focusing on actors with typical supplier
relations in the intermodal chain

haulier
haulier

rail operator and leasing company
terminal operator terminal operator
or
shipping line
intermodal operator
forwarder or shipping agency
shipper
Konings, R., Priemus, H., & Nijkamp, P. (2008). The future of intermodal freight transport : Operations, design and policy.
ProQuest Ebook Central http://ebookcentral.proquest.com
Created from apus on 2021-02-08 16:01:49.
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The vast majority of terminals base their operations on gantry cranes
and reach stackers. Many suggestions for new intermodal transshipment
technologies have been presented (for overviews and evaluations, see Ballis
and Golias 2002; Bontekoning and Kreutzberger 1999; Woxenius 1997),
but very few have been commercially implemented. Most new technologies
aim at either small-scale and low-cost operations or large-scale, automated
and fast applications. For the mid-range terminals, say 50 000–200 000
transshipments a year, conventional technologies are sufficient for the
current use with transshipments during some hours in the morning and in
the late afternoon.

Beside transshipment technologies, ICT systems attract most attention.
Railways were among the really early users of computers, but mainly
of mainframes controlling their own production and administration.
Electronic data interchange connections with customers are of rather
recent date. Efficient ICT systems are vital to forwarders controlling huge
numbers of small consignments for many shippers, but less crucial to
hauliers, rail and intermodal operators which can move a single container
or some 80 boxes in a shuttle train for a limited number of customers. The
resource analysis is presented in Figure 2.4.

In addition to these physical resources, operations clearly depend on a
large number of skilled employees, organizational know-how, brands,
developed procedures and legal agreements as well as permissions and train
slots from authorities. Road and rail infrastructure is needed to accomplish
EIT, but as this is supplied by government in exchange for user charges and
shared with passenger and other freight operations, it is not treated as a
resource.

About 100 of the 2000 European intermodal terminals correspond to
90 per cent of the total freight volumes (Nelldal et al. 2000) and the chal-
lenge is to offer services to smaller terminals. This underlines the impor-
tance of fast train-forming, marshalling and handling techniques to
facilitate market coverage and a high average speed (for example Siegmann
and Tänzler 1996). In order to combine economies of scale and frequency
in the rail haul and a dense terminal network, the EIT industry uses a

22 Intermodal transport operations

Figure 2.4 A system model focusing on resources in the intermodal chain

lorry lorry

rail engine and wagons

terminal terminal

ship

ICT system

ICT system
Konings, R., Priemus, H., & Nijkamp, P. (2008). The future of intermodal freight transport : Operations, design and policy.
ProQuest Ebook Central http://ebookcentral.proquest.com
Created from apus on 2021-02-08 16:01:49.
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number of operational principles when they design their networks. The
design principles are schematically illustrated in Figure 2.5.

The deregulation of the European rail network has entailed a separation
of the production systems for passenger and freight, in order to specialize
and to avoid cross-subsidy. In the rail freight industry, the co-production of
wagon-load and intermodal services has continuously decreased, due to the
mono-functional rail terminals, the focus on full trains and diverging
service requirements. The flexibility, earlier maintained through a combi-
nation of different wagon-load and intermodal services as well as a wide
market coverage, are lost.

An operational design consisting of a hierarchic network (D1) forms the
foundation in the conventional wagon-load network. The train sets are
operated along routes with repeated shunting or marshalling operations.
The trains stay at the terminals only briefly, requiring rapid handling
or marshalling. The operator can choose among many different routes
between the origin and destination terminal. The maximum degree of
freedom is possible if the routes are dynamically allocated in real time as a
function of actual demand.

Economies of scale are clearly present in rail transportation and since
approximately 1990, EIT companies have abandoned their networks and
focused on transport quality (primarily transport time and reliability),
economies of scale and a high utilization rate for each train. Thereby the
production philosophy has changed dramatically from conventional hier-
archic networks towards a focus on shuttle trains or block trains between
economic centres and ports.

The direct connection design (D2), aims at large flows transported
directly between origin and destination terminals over relatively long

Intermodal road–rail transport in the European Union 23

Figure 2.5 Network designs for EIT: (D1) hierarchic network, (D2)
direct connection, (D3) shuttle train, (D4) hub-and-spoke
network and (D5) transport corridor

distances. Direct connections require some 100 000 annual tonnes for daily
departures, which limits this design to a small fraction of the total trans-
port demand. The handling capacity requirements depend on how long the
trains stay at the terminal and the conventional night-leap traffic reduces
these requirements to a non-critical parameter.

The shuttle train design (D3) is a special application of D2 distinguished
by the operation of fixed-formation train sets, operating specific origin–
destination connections. This creates a base for reliable and cheap opera-
tions, since neither cost- and time-consuming shunting of wagons, nor
sophisticated information systems, are needed. The timetable is not depen-
dent on other transports and can easily be tailor-made for the customers,
that is, there is a high degree of flexibility regarding time planning. EIT shut-
tles are used for: (1) transports of containers on high-volume connections
between ports and their hinterland, for example the network operated by
Transfracht and new entrants; (2) as infrastructure replacement, for
example for rolling highway transit operations through the Alps and under
the English Channel; and (3) as fixed-capacity trains in the railway net-
works, for example by CargoNet in Norway.

In the hub-and-spoke (H&S) design (D4) a centrally situated terminal is
selected as hub and all transports pass through this terminal, where
wagons are marshalled or ILUs transshipped between the trains. The
advantage is good market coverage despite insufficient volumes for direct
trains between the different origin and destination terminals. Rational
marshalling or handling at the hub is crucial as it compensates for longer
transport distances.

One application is CNC’s network in France, in which Paris assumes the
function as hub. The hub function, however, is not absolute since large
parts of CNC’s flows relate to the region of Paris. The transport network
operated by ICF is based on two H&S networks, the Quality Net and the
X-net, operated by block trains. The Quality Net is operated with 60 trains
six days a week and connects 12 countries via a hub in Metz. The recently
developed Cargo Express system in Switzerland, serving the market for
high-value products over medium distances in co-production with wagon-
loads, is operated as a H&S system with fast day- and night-leaps through
the Dänicken hub.

In the transport corridor design (D5), trains, sometimes called liner
trains, make frequent stops along a corridor line and thus cover the inter-
mediate markets and so enable PPH on shorter distances. Along the corri-
dors, fixed train sets operate at a high frequency according to a tight and
precise timetable. Transfer time must be kept at a minimum so as not to
prolong the total transport time too much. Storage at the terminals is
needed since road and rail operations must be detached. These trains are

24 Intermodal transport operations

for dual transport markets – dispersed flows over long distances and dense
flows over short distances – and by combining these markets, the service
can attract enough flows for good resource utilization. Interconnected liner
trains permit large areas to be covered at relatively low costs. The organ-
ization of such services, however, is difficult and needs to be tailored to the
business. Corridor services could perhaps be considered as supplementary
to the network of direct links, serving the less busy corridors. Empirically,
the Swedish Light-combi concept shows that long distances, 650 km, can
be covered during the night-leap including four intermediate stops (Bärthel
and Woxenius 2003).

2.4 THE SIZE AND CHARACTER OF THE FREIGHT
FLOWS

The transport performance in Europe increased from 1.4 trillion metric
tonnes in 1970 to 3.1 trillion metric tonnes in 2000, that is, by 119 per cent,
or 2.6 per cent per year (European Commission 2002). Fifty per cent of this
transport work regards distances between 150 and 500 km and 20 per cent
distances over 500 km. The market share of unimodal road transport, mea-
sured in metric tonnes, increased from 35 per cent in 1970 to 44 per cent in
2000 and also intra-European sea transport increased its market shares as
shown in Figure 2.6. The transport performance of domestic sea transport,
pipeline and rail transport and inland shipping was rather stable, implying
significantly reduced market shares. In the case of rail transport, it decreased
from 20 to 6 per cent.

The EIT flows have grown substantially and doubled in volume between
1990 and 2000 (European Commission 2002). Figure 2.7 shows the devel-
opment between 1990 and 2002 for the largest operators in Europe. Notable
are the large increase for the UIRR companies, the decreasing volumes for
ICF and the large market share for the Swedish operator Rail Combi.
Earlier estimates of the intermodal freight flows are often based on aggre-
gated statistics of the UIRR companies and ICF. This was adequate until
the beginning of the 1990s, but due to services by new intermodal opera-
tors and the railways themselves, for example the large flows of automobile
parts to and from Spain, statistics must be dealt with in more detail.

Besides the price–quality ratio of competing transport modes, the com-
petitiveness of EIT depends on geographical and demographical condi-
tions. Conventional EIT, characterized by transshipment of unit loads by
use of gantry cranes and reach stackers, full train night-leaps directly
between terminals and services offered to shippers through intermediaries,
is generally competitive at distances above 500 km (Van Klink and Van den

Intermodal road–rail transport in the European Union 25

26 Intermodal transport operations

Note: Data from Italcontainer are not available.

Source: Intermodal transport operators.

Figure 2.7 Transported volumes (in TEU) of the major European
intermodal transport operators, 1990–2002

0
1
2
3
4
5

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

M
ill

io
n

T
E

ERS
Rail Combi
Renfe/Transfesa
Freightliner
CNC
Transfracht
ICF
UIRR

Source: Eurostat (2002).

Figure 2.6 Transport growth in the EU between 1970 and 2000 by
transport mode (in billion metric tonnes)

200

400

600

800

1000

1200

1400

1600

1970 1975 1980 1985 1990 1995 2000

B
ill

io
n

m
et

ri
c

to
n

n
es

Road

Intra EU sea

Railway

Inland waterways

Pipeline

Domestic sea

Berg 1998). For container shuttles to and from ports, the distance is slightly
shorter (Rutten 1998). The average distance for the largest EIT operator,
ICF, was 784 km in 1991 and increased to 952 km in 2002. For domestic
transport, the largest operator, Kombiverkehr, reported a break-even dis-
tance of 350 km in 1998. The average transport distance for the UIRR com-
panies was 550 km domestically and 760 km internationally.

Germany holds a dominant position with almost half of Europe’s
domestic EIT, and even more so if EIT by inland waterways is included. In
France domestic EIT operations are also substantial. Many countries, for
example Belgium, the Netherlands and Denmark, are not large enough for
competitive domestic EIT. Peripheral countries, like Italy, Spain, the UK
and the Scandinavian countries, have rather substantial domestic networks
with border crossings defined as gateways to other networks.

A few relations across the Alps dominate border-crossing EIT. Partly due
to Swiss and Austrian regulation and tax policies, EIT has a large market
share for the flows between Italy–Benelux and Italy–Germany, for example
50 per cent between Italy and Belgium. Other examples of large market
shares for EIT are between Sweden and Italy with 60 per cent, Belgium and
Spain with 30 per cent and Sweden and Belgium with 30 per cent (IQ 1998).
A truly unexplored market is the triangle of France–Germany–Benelux,
where the unimodal road flows are 100 times larger than the EIT flows
(ibid.). The major EIT flows are presented in Figure 2.8.

It might be questioned whether this is a real network or some independ-
ent direct connections. Figure 2.8 also reveals the previous trend regarding
the east–west corridors connecting the accession countries in Eastern
Europe with the economic centres and ports in Western EU.

The general trend regarding types of ILUs transported by the UIRR
reveals an increasing share of rolling highway and swap bodies at the
expense of semi-trailers. Between 1995 and 2000 the number of swap bodies
transported by the UIRR increased by 27 per cent to 1 367 000, compared
to a decrease in semi-trailers of 32 per cent to 152 000 units. The use of
semi-trailers is more common in France and Germany. In Germany, the
shorter class C (7.15–7.82 m length) almost universally prevails, but else-
where there is a clear trend towards an increasing share for Class A swap
bodies of semi-trailer length.

2.5 SYNTHESIS AND OUTLOOK

Comparing the studies of 1994 and 2002, it is obvious that due to deregu-
lation, changes have taken place in the EIT industry. Some ‘cherry-pickers’
have entered, some of them have left, while others maintain and develop

Intermodal road–rail transport in the European Union 27

their position in the market. Above all, however, the large players have
changed strategies, entered new markets or formed alliances which give
much faster and more dramatic changes as well as a more scattered picture
than in the monopoly days. In general, the new intermodal operators are
found in the northern part of Europe and in particular in the large market
for hinterland transport of maritime containers related to the large ports.
The comparison reveals that the national railways have widened their
scope, that less intermodal operators sell directly to shippers and that the
forwarders’ mediating role is strengthened.

Capital for intermodal equipment is found to be a major barrier for EIT
operators (Golias and Yannis 1998). For a long time, rail wagons have been
leased, but companies offering traction services, often with a short-line
origin and leasing of locomotives, play a new and vital role in lowering the
entry barriers for new entrants.

Moreover, a political discussion on whether terminals should be part
of the infrastructure or of transport operations is initiated. This distinction

28 Intermodal transport operations

Source: Statistics from the operators and Eurostat (2002).

Figure 2.8 Major European intermodal transport flows in 1999 (flows
exceeding 40 000 TEU/year), domestic flows (figures) and
international bilateral flows (lines)

1350

900
(est.)

1000
(est.)

190

460

910

CH: 40

400

50 000 TEU

100 000 TEU

200 000 TEU

400 000 TEU

is crucial under the current EU regulatory framework, in which infra-
structure is a government concern while operations should be open for com-
petition. It might well end in a situation where the fixed terminal installations
are supplied by public infrastructure providers at a marginal social cost,
while the terminal operation is up for tender and commercially charged.

The statement that ICT is most essential to forwarders is in line with con-
temporary research by Patterson et al. (2003), who conclude that new ICT
systems are more likely to be adopted by large and also by decentralized
companies, rather than by small ones and hierarchies. It is then logical that
the adaptation of ICT in the transportation sector is led by the large for-
warders and neither by the small hailers nor by the hierarchic railways.
Golob and Regan (2003) find that road transport companies operating
large fleets are more likely to adapt ICT like EDI than, interestingly, those
engaged in EIT.

Still, ICT systems are not unimportant to railways and hauliers.
Applications making their own production and administrative processes
more efficient, exchanging orders and billing information with the coordi-
nating actors and supplying them with tracking and tracing data, are
useful. Lack of tracking and tracing systems has often been argued to be
the main competitive disadvantage for EIT, but just adding that capability
will not solve all reliability issues. Tracking and tracing systems can only
mitigate the consequences of reliability problems, not remove them.

The merger of Figures 2.1, 2.2 and 2.4 focusing on activities, actors and
resources respectively results in the system model in Figure 2.9.

Concerning train operations, there is obviously no point in plying termi-
nals when the train is already full with ILUs bound for a single terminal,
but the question that arises is: how large are the flows needed for the shuttle

Intermodal road–rail transport in the European Union 29

Figure 2.9 Results of a system analysis of the intermodal transport system
applying the network approach

pre-haulage
haulier
lorry

transshipment
terminal operator

terminal
or

sea transport
shipping line

ship

coordination of the core of intermodal transport
intermodal operator

ICT system

coordination of intermodal transport
forwarder or shipping agency

ICT system

rail haulage
rail operator and leasing company

rail engine and wagons
transshipment
terminal operator
terminal

post-haulage
haulier
lorry

Legend: activities, actors, resources

train services and how are market coverage and train frequency affected?
As a dedicated freight rail network emerges (European Commission 2001),
‘night-leaps only’ will be abandoned by sensible operators that do not allow
trains to stand idle at terminals during the daytime. ICT improvements will
facilitate flexible timetables for freight trains.

Attempts at lowering marginal costs by increasing train sizes are limited
by the infrastructure, and increases must be matched against departure fre-
quency and transshipment productivity gains (Ballis and Golias 2002). It is
vital for the competitiveness of EIT that services with different character-
istics can be co-produced (Trip and Bontekoning 2002) and the integration
of different and flexible network designs can facilitate the utilization of
economies of scale. For example, Liu et al. (2003) prove that hybrids of
operating principles can save at least 10 per cent of the travel distance in
consolidation networks, an issue also addressed by Houtman (2002).

Shippers usually argue that poor price and quality performance prevents
them from using EIT (Ljungemyr 1995; Ludvigsen 1999), and that a sub-
stantial cost and/or quality leap, primarily regarding frequency and relia-
bility, is necessary to improve the competitiveness of EIT (Konings and
Kreutzberger 2001). The cost components obviously differ between the
countries and companies, but the high proportion of fixed costs compared
to unimodal lorry transport implies a break-even distance of 400–500 km.
The PPH often constitutes 40 per cent of the total cost and the transship-
ment some additional 20 per cent (Persson 2003; Bergstrand 2001). The
competitive disadvantages are particularly distinguished in border-crossing
relations due to technical and organizational interoperability problems
between the national rail systems. Substantial improvements have been
achieved through the change towards shuttle and block train designs, but
the most effective improvements have been obtained through an improved
interorganizational cooperation between the European rail authorities
(Vleugel et al. 2001; Hansson 2003).

From a supply-side perspective the main barriers for further growth of
EIT are related to infrastructure, such as a lack of spatial coverage and ter-
minals, insufficient infrastructural interoperability, some missing links and
bad access to attractive slots. The lack of standardization of ILUs, infor-
mation systems and administrative procedures are also hampering, as well
as the remaining lack of competition for rail traction, despite EU efforts
(Henstra and Woxenius 1999). The problems related to ILUs are acknowl-
edged by the European Commission (2003) when proposing the European
Intermodal Loading Unit, the EILU, combining the benefits of the ISO
container with those of the swap body.

Demand for environment-friendly transport will affect the demand posi-
tively, but EIT cannot solely rely on its ‘environmental friendliness’ (IFEU

30 Intermodal transport operations

and SGKV 2002). Once lorry engines can be made more energy-efficient
and the discharge of emissions lessens, their currently superior operational
efficiency might actually also make them superior from an environmental
perspective. Moreover, on a local level, neighbours to intermodal terminals
protest against the increased local traffic and related disturbances (Slack
1999). This implies that some present terminals have to operate during
restricted hours and others have to be relocalized. New terminals will be
built outside city centres or be designed for less noise emissions.

Nevertheless, the key to a prosperous EIT sector actually lies in the com-
peting unimodal road transport sector. Governments clearly state that
investments in roads to cope with increasing vehicle flows will not be real-
ized, and road hauliers threatened by congestion will turn to the tracks to
fulfil their promises for fast and reliable service.

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Intermodal road–rail transport in the European Union 33

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