Working papers in Transport Economics,
CTS - Centre for Transport Studies Stockholm (KTH and VTI)

Abstract: In CTS Working Paper 2011:14 it is shown that the balance between road, rail and sea transports for long distance freight transports in, to and from Sweden in 2015/16 would shift in favour of road transports. The result follows the prediction that the sea transport costs increase slightly less than rail transport costs if the government gives all modes an equal liability for external costs and applies the same funding model for all modes. The current report analyses based on a literature review and interviews with shippers how the changed transport costs would influence mode choice. It is shown that the companies are price sensitive, independently of the mode of transport. The transport costs (per tonkm) for sea and rail are low when economies of scale are realised. But there is a trade-off between low transport costs and high frequencies. Transport chains that make use of economies of scale for sea and rail transports often contrast to “small scale chains” that go via the nearest port. The role of the forwarders is crucial when it comes to transport solutions that affect several shippers as consolidation of goods volumes or usage of unbalanced flows. Preferences to change to other modes differ between different sectors and between inbound and outbound transports etc. The overall picture is that shippers and forwarders’ preference to use sea transports instead of land transports is limited. The existence of economies of scale in different parts of the transport system and the shippers’ demand of many departures can be seen as hinder for small scale sea transports through the many ports on the Swedish coastline.

Keywords: Internalization; Freight transport; Intermodal competition

JEL-codes: R40

34 pages, October 2, 2012

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CTS2012-20.pdf  

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