As logistics has come to influence business strategies, shippers emphasise the flexibility and frequency that is offered by road haulage. If other modes of transport (such as rail and sea) are to compete with road haulage, they must offer flexible and frequent services as well. Flexibility may be obtained by offering multimodal transport services involving pick up and delivery by truck at each end of the long (or main) haul. In order to determine the frequency required for a multimodal freight transport service to be competitive to road haulage, a simple theoretical economic mode choice model in which shippers may choose between the two modes of transport was used. A major finding is that in order to provide a service that is sufficiently frequent, a multimodal freight transport service must attract a volume of cargo that exceeds a certain 'critical mass'. As shippers are expected to substitute modes of transport gradually rather than instantly, such a service will experience a kind of infancy during which the volume of cargo will fall below this 'critical mass'. Due to insufficient volume of cargo during this infancy, the operator will incur a loss. Such a loss may act as a barrier to entry, preventing it from being established despite being sustainable in the long run. If multimodal freight transport is welcomed in order to relieve roads from congestion, this may call for public start-up financing. This supports the recommendations from the PACT programme which is to be prolonged in the Marco Polo programme being recently initiated by the European Commission. For the covering abstract see ITRD E124693.
Abstract