Intermodal transportation: The next wave?

03 Aug 2010 - By Dr. Yvo Saanen - Industry Blog

All major ports in Europe are heavily dependent on hinterland transportation, and when we observe what is happening, we should be worried.

Worried about the structure of our hinterland transportation system.

- It’s fragmented.

- It’s outdated.

- It’s undersized.

The majority of good is being transported by truck. Not by trucks carrying containers - it’s almost surprising to see how few containers are moved beyond the logistics centres that are located near the port areas in a range of, say, 10-50km around the marine terminals - but by continental cargo units.

The ongoing increase of truck volumes - ignoring here the recent drop in volumes; in 2-3 years we have forgotten about this - is overwhelming the highway system, as well as the secondary system of national roads. A perfect example is the insufficient capacity of parking areas along the German highways. By 10pm on Fridays, the entrances to rest areas are already getting congested with trucks queuing to find a space to stay over - not infrequently leading to dangerous situations. However, it can also be seen in the high occupation of the right lanes in many countries, becoming an almost continuous line of moving trucks. Similar chaos can be observed around peak times in marine areas such as the terminals in Hamburg, where truck traffic simply blocks entire access to the terminals and beyond.

For some 25 years, European countries have been trying to foster intermodal transportation, and they have succeeded in keeping the share of non-truck traffic at par, which is an accomplishment in itself given the immense rise of traffic. However, they have not been able to grow the relative share of intermodal traffic by a substantial percentage, despite the increasing network of (partially state funded) bi- and tri-modal intermodal hubs. In The Netherlands, but also in many other countries, many places have their own intermodal facility. Volume-wise, most of them can hardly be called a success. Profit-wise - even without considering that part of the investment is government funded -  they are even less of a success.

Interestingly enough, the tariffs for handling containers through facilities like these are (very) low compared to marine terminal tariffs. How come? Competition from truck transportation. Although continental transportation per TEU is quite expensive (compared to marine transportation, being cheap because of economies of scale), the intermodal alternative is more expensive in most cases. This because the trucking community consists of extremely hard-working, badly paid people. So despite the advantage of scale of trains (80 TEU versus 2 TEU for a truck, or up to 400 TEU for a barge), the overall cost of the chain are barely competitive to truck transportation. The simplicity of putting the load on a truck and drive to the final destination versus the complexity of organizing a multi-modal chain is too attractive.

What if we still want to increase the relative share of intermodal traffic for the aforementioned reasons? Although there are many initiatives in relieving the burden to organize - partially successful - I believe that the price mechanism (being unpopular, for sure) is the only way long term. At the same time, the infrastructure of the intermodal network should be streamlined. Consolidation, increase of scale, increase of fluidity through these hubs, and more advanced technology. The time is there for the next generation intermodal facility!