Executive summary
Modal shift in freight transport from road to Inland Waterways (IWWs) is a strategic objective prioritised by both the European Union (EU) and many of its Member States. Notwithstanding, IWWs remain underutilised in most Member States. Even in the small number of countries in which inland waterway transport (IWT) has a high market share and is well established, inland waterway freight transport volumes decreased in the period 2010-2020. From the macro perspective, the IWT sector as a whole has difficulties to maintain its modal share and thus support the EU’s ambitions to shift freight to more sustainable modes of transport. Such challenges are partly due to the intense competition that the inland waterway transport (IWT) faces from road and rail transport modes but are also related to reducing transport demand from traditional industries in Europe resulting in a decline of bulk cargo transports.
Notwithstanding, there is a clear potential to increase the use of IWWs to their full potential and facilitate modal shift to IWT, although specific opportunities vary depending on the region and local context. This will require inter alia putting in place the right framework conditions. These could enable the sustainable use of IWT, as well as a better understanding and anticipation to the decision-making process behind the modal choice. Furthermore, the IWT sector needs to anticipate to the requirements of shippers and to provide one-stop-shop solutions for intermodal and multimodal chains. This means that also pre- and end haulage by road, transhipment and storage in ports need to be taken into the scope of the service offered by the logistic service supplier. The transport by barge therefore needs to be integrated in a seamless way and could also serve as ‘floating storage’.
Having a better understanding of the rationale and principles of modal shift, the decision-making process behind a modal choice, the barriers and facilitators to modal shift is crucial. Equally important is stakeholder engagement and collaboration among key actors in the transport and logistics chain. Collaborations between parties in the chain may develop, synchromodal solutions. This means the choice of mode (rail, shortsea, road haulage or inland navigation) being dynamic and depending on the actual lead time and transport route possibilities. Synchromodal solutions take into account dynamics of capacity supply, utilisation, terminal waiting times, congestion on roads, costs etc.
In the context of modal shift from road transport, the shift could be towards either intermodal or multimodal transport, depending on the specific circumstances and logistics of the transport chain. The term “intermodal” is often used more commonly in the context freight transport using containers as load unit, particularly for longer distance and more complex transport chains. The term “multimodal” is often used in the context of freight transport, particularly for local and regional transport systems that use multiple modes of transport and where bulk transport is concerned or different types of load units are used for each mode in the chain.
Although the transport industry is nowadays much more complex than in previous centuries due to advances in technology, globalisation and greater volume of goods being transported across longer distances, as well as changes in consumer behaviour, the mechanism underlying modal shift essentially remains the same: when a transport mode becomes more advantageous than another (in terms of costs, convenience, quality, speed or reliability) over the same route or in the same market, a modal shift is likely to occur. However, the factors that influence modal choice can be complex and may vary depending on the specific context, such as the type of goods being transported, the distance of the route, and the availability of infrastructure and services. As such, it is important to consider these factors when promoting sustainable transport choices and encouraging modal shift towards more sustainable modes of transport. Notwithstanding, modal choice is a very complex decision process, determined by a wide range of factors coming from different disciplines, such as economy, sociology, geography and psychology. It is often the result of a complex process that can take place consciously or unconsciously and which includes both objective and subjective determinants.
Focus and purpose of the report
Against this background, the report aims at providing a foundation of knowledge on modal shift (MS) in freight transport and framework conditions enabling the potential for modal shift from road to IWWs. The major objective of the work carried out under Task 1.4 is to identify facilitators and barriers — economic and financial — preventing the potential for freight modal shift to IWT. To this end, it investigates from a micro-perspective approach key factors underpinning modal choice and modal shift with the aim of identifying support actions and measures which could assist the IWT sector in its quest for achieving a higher share of modal shift at EU level. To this end, the decision-making process and the key actors and factors underpinning the freight modal shift to IWW is analysed. Next to best practices, support actions and measures are outlined, coupled with a set of recommendations which could assist the IWT sector to achieving a higher share of modal shift at EU level.
The report briefly presents the micro approach conceptual framework (chapter 2) — a theoretical framework used to understand the decision-making processes of individual actors in the transport sector, such as shippers and carriers. The framework is based on the idea that transport decisions are made at the individual level and that these decisions are influenced by a range of factors, including the characteristics of the shipment, the transport mode, and the market environment.
Mode choice plays a critical role in the success of modal shift from road to inland waterway. To encourage mode shift to inland waterway transport, stakeholders in the transport industry can implement a range of measures, including improving the infrastructure for inland waterway transport, providing financial incentives for shippers and carriers, and promoting the environmental benefits of inland waterway transport. By addressing the key factors that influence mode choice, stakeholders can create an environment that encourages modal shift and contributes to the overall success of the initiative. Accordingly, modal choice is discussed in chapter 3. When making mode choice decisions, shippers consider a wide range of factors, including cost, speed, reliability, accessibility, and environmental sustainability. To encourage mode shift to inland waterway transport, stakeholders in the transport industry can implement a range of measures, including improving the infrastructure for inland waterway transport, providing financial incentives for shippers and carriers, and promoting the environmental benefits of inland waterway transport. By addressing the key factors that influence mode choice, stakeholders can create an environment that encourages modal shift and contributes to the overall success of the initiative.
Modal shift concept and phases distinguished: 1. inertia, 2. modal shift, and 3. maturity. These are described in chapter 4 and prepares the ground for further analysing the factors influencing the modal shift at micro and macro-level. These phases can vary depending on the specific market context. By understanding the different phases of modal shift, stakeholders can develop strategies that take into account the unique challenges and opportunities of their specific context. Economic and financial barriers to modal shift are defined and examples are provided in chapter 6. Furthermore, the impact of such barriers is discussed in relation to the three phases of modal shift.
Best practices and possible solutions for overcoming the economic and financial barrier are discussed in chapter 7. In this context an analysis of economic and financial barriers that are most salient in the inertia phase, the modal shift phase, in the maturity phase and related solutions that can be used to overcome these barriers, such as public education campaigns, targeted incentives for early adopters, and regulatory reforms are outlined.
Key actors and their role in the modal shift decision making process and in setting the right framework condition for modal shift are presented in chapter 8. The ninth chapter specifically presents a deep-dive into main findings of the Multimodaal Vlaanderen (MMV) study case focusing on modal shift cases in Flanders, Belgium. In this programme, from end of 2017 till mid 2021 about 1095 companies were contacted of which 333 agreed to start up a modal shift business case. The success rate of these business cases was however disappointing: only 52 were successful in achieving modal shift to rail and IWT. The important outcome is that the vast majority of the successful cases/companies turned to IWT. They provided data for 39 cases, representing 12% of the business cases they handled in this period. By request MMV made a selection of representative cases (both successful and unsuccessful) which created the opportunity to look at the financial/economic barriers which come into play and which could positively or negatively influence modal shift. Accordingly, some of the main barriers to modal shift were identified as follows: unfavorable contractual arrangements, principles of supply chain management that work against modal shift, complexity of a multimodal chain, malfunctioning of maritime supply chains, which ultimately lead to an unfavorable total cost of ownership (TCO) compared to road transport.
The final chapter of this report discusses the key findings and outlines a set of possible support actions and measures to eliminate economic and financial barriers to modal shift in IWT. Accordingly, public policies and support measures by policy makers at national and regional level are outlined can be developed along the three phases of modal shift to encourage and facilitate the shift towards IWT. Against this background, the setting up of a promotion centre for modal shift to inland waterway providing services and carrying out activities targeted for all phases can be a useful strategy to encourage and facilitate greater use of inland waterway transportation.
Notwithstanding, there is a clear potential to increase the use of IWWs to their full potential and facilitate modal shift to IWT, although specific opportunities vary depending on the region and local context. This will require inter alia putting in place the right framework conditions. These could enable the sustainable use of IWT, as well as a better understanding and anticipation to the decision-making process behind the modal choice. Furthermore, the IWT sector needs to anticipate to the requirements of shippers and to provide one-stop-shop solutions for intermodal and multimodal chains. This means that also pre- and end haulage by road, transhipment and storage in ports need to be taken into the scope of the service offered by the logistic service supplier. The transport by barge therefore needs to be integrated in a seamless way and could also serve as ‘floating storage’.
Having a better understanding of the rationale and principles of modal shift, the decision-making process behind a modal choice, the barriers and facilitators to modal shift is crucial. Equally important is stakeholder engagement and collaboration among key actors in the transport and logistics chain. Collaborations between parties in the chain may develop, synchromodal solutions. This means the choice of mode (rail, shortsea, road haulage or inland navigation) being dynamic and depending on the actual lead time and transport route possibilities. Synchromodal solutions take into account dynamics of capacity supply, utilisation, terminal waiting times, congestion on roads, costs etc.
In the context of modal shift from road transport, the shift could be towards either intermodal or multimodal transport, depending on the specific circumstances and logistics of the transport chain. The term “intermodal” is often used more commonly in the context freight transport using containers as load unit, particularly for longer distance and more complex transport chains. The term “multimodal” is often used in the context of freight transport, particularly for local and regional transport systems that use multiple modes of transport and where bulk transport is concerned or different types of load units are used for each mode in the chain.
Although the transport industry is nowadays much more complex than in previous centuries due to advances in technology, globalisation and greater volume of goods being transported across longer distances, as well as changes in consumer behaviour, the mechanism underlying modal shift essentially remains the same: when a transport mode becomes more advantageous than another (in terms of costs, convenience, quality, speed or reliability) over the same route or in the same market, a modal shift is likely to occur. However, the factors that influence modal choice can be complex and may vary depending on the specific context, such as the type of goods being transported, the distance of the route, and the availability of infrastructure and services. As such, it is important to consider these factors when promoting sustainable transport choices and encouraging modal shift towards more sustainable modes of transport. Notwithstanding, modal choice is a very complex decision process, determined by a wide range of factors coming from different disciplines, such as economy, sociology, geography and psychology. It is often the result of a complex process that can take place consciously or unconsciously and which includes both objective and subjective determinants.
Focus and purpose of the report
Against this background, the report aims at providing a foundation of knowledge on modal shift (MS) in freight transport and framework conditions enabling the potential for modal shift from road to IWWs. The major objective of the work carried out under Task 1.4 is to identify facilitators and barriers — economic and financial — preventing the potential for freight modal shift to IWT. To this end, it investigates from a micro-perspective approach key factors underpinning modal choice and modal shift with the aim of identifying support actions and measures which could assist the IWT sector in its quest for achieving a higher share of modal shift at EU level. To this end, the decision-making process and the key actors and factors underpinning the freight modal shift to IWW is analysed. Next to best practices, support actions and measures are outlined, coupled with a set of recommendations which could assist the IWT sector to achieving a higher share of modal shift at EU level.
The report briefly presents the micro approach conceptual framework (chapter 2) — a theoretical framework used to understand the decision-making processes of individual actors in the transport sector, such as shippers and carriers. The framework is based on the idea that transport decisions are made at the individual level and that these decisions are influenced by a range of factors, including the characteristics of the shipment, the transport mode, and the market environment.
Mode choice plays a critical role in the success of modal shift from road to inland waterway. To encourage mode shift to inland waterway transport, stakeholders in the transport industry can implement a range of measures, including improving the infrastructure for inland waterway transport, providing financial incentives for shippers and carriers, and promoting the environmental benefits of inland waterway transport. By addressing the key factors that influence mode choice, stakeholders can create an environment that encourages modal shift and contributes to the overall success of the initiative. Accordingly, modal choice is discussed in chapter 3. When making mode choice decisions, shippers consider a wide range of factors, including cost, speed, reliability, accessibility, and environmental sustainability. To encourage mode shift to inland waterway transport, stakeholders in the transport industry can implement a range of measures, including improving the infrastructure for inland waterway transport, providing financial incentives for shippers and carriers, and promoting the environmental benefits of inland waterway transport. By addressing the key factors that influence mode choice, stakeholders can create an environment that encourages modal shift and contributes to the overall success of the initiative.
Modal shift concept and phases distinguished: 1. inertia, 2. modal shift, and 3. maturity. These are described in chapter 4 and prepares the ground for further analysing the factors influencing the modal shift at micro and macro-level. These phases can vary depending on the specific market context. By understanding the different phases of modal shift, stakeholders can develop strategies that take into account the unique challenges and opportunities of their specific context. Economic and financial barriers to modal shift are defined and examples are provided in chapter 6. Furthermore, the impact of such barriers is discussed in relation to the three phases of modal shift.
Best practices and possible solutions for overcoming the economic and financial barrier are discussed in chapter 7. In this context an analysis of economic and financial barriers that are most salient in the inertia phase, the modal shift phase, in the maturity phase and related solutions that can be used to overcome these barriers, such as public education campaigns, targeted incentives for early adopters, and regulatory reforms are outlined.
Key actors and their role in the modal shift decision making process and in setting the right framework condition for modal shift are presented in chapter 8. The ninth chapter specifically presents a deep-dive into main findings of the Multimodaal Vlaanderen (MMV) study case focusing on modal shift cases in Flanders, Belgium. In this programme, from end of 2017 till mid 2021 about 1095 companies were contacted of which 333 agreed to start up a modal shift business case. The success rate of these business cases was however disappointing: only 52 were successful in achieving modal shift to rail and IWT. The important outcome is that the vast majority of the successful cases/companies turned to IWT. They provided data for 39 cases, representing 12% of the business cases they handled in this period. By request MMV made a selection of representative cases (both successful and unsuccessful) which created the opportunity to look at the financial/economic barriers which come into play and which could positively or negatively influence modal shift. Accordingly, some of the main barriers to modal shift were identified as follows: unfavorable contractual arrangements, principles of supply chain management that work against modal shift, complexity of a multimodal chain, malfunctioning of maritime supply chains, which ultimately lead to an unfavorable total cost of ownership (TCO) compared to road transport.
The final chapter of this report discusses the key findings and outlines a set of possible support actions and measures to eliminate economic and financial barriers to modal shift in IWT. Accordingly, public policies and support measures by policy makers at national and regional level are outlined can be developed along the three phases of modal shift to encourage and facilitate the shift towards IWT. Against this background, the setting up of a promotion centre for modal shift to inland waterway providing services and carrying out activities targeted for all phases can be a useful strategy to encourage and facilitate greater use of inland waterway transportation.