Increasing capacity utilization of shuttle trains in intermodal transport by investing in transshipment technologies for non-cranable semi-trailers

For shuttle trains with a fixed transport capacity which are the dominant operating form in intermodal transport, increasing capacity utilization is of crucial importance due to the low marginal costs of transporting an additional loading unit. Hence, offering rail-based transport services for non-cranable semi-trailers can result in additional earnings for railway companies. However, these earnings have to compensate for the investment costs of the technology. Based on a dynamic investment calculation, this paper presents a simulation model to evaluate the economic profitability of transshipment technologies for non-cranable semi-trailers from the railway company’s perspective. The results depend on the capacity utilization risk faced by the railway company. In particular, if the railway company does not sell all the train capacity to freight forwarders or intermodal operators on a long-term basis, investing in technology for the transshipment of non-cranable semi-trailers can be economically profitable.

Freight volume is predicted to increase in the years to come and the majority of this growth is expected to even increase the road freight transport volume. According to forecasts the total road freight transport volume in the European Union will grow to 2442 billion ton kilometers (tkm) in 2030 which is an increase of 43% compared to 2005 (Rich and Hansen 2009).

These trends put a high pressure on the road infrastructure and are considered to be environmentally disadvantageous due to the high external costs of truck transportation. Therefore, one of the goals of the EU transport policy is to shift 30% of road freight over 300 km to other modes of transport like rail or waterborne transport by 2030 (European Commission 2011). Hence, intermodal transport is of increasing importance. According to the definition of the European Commission intermodal transport is “the movement of goods in one and the same loading unit or road vehicle, which uses successively two or more modes of transport without handling the goods themselves in changing modes” (UN/ECE 2001). Intermodal transport chains can be separated into at least three legs: pre-carriage, main-carriage and on-carriage (Stedieseifi et al. 2014). While local pick-up and delivery operations in pre- and on-carriage are often performed by truck, transport modes characterized by economies of scale are used for the main-carriage (Bektas and Crainic 2007; Bontekoning, Macharis, and Trip 2004). Since the focus of this paper is on rail-based intermodal transport chains, intermodal transport refers to the combination of road (pre- and on-carriage) and rail (main-carriage) using the loading units containers, swap bodies and semi-trailers. While containers and swap bodies are the dominant loading unit in intermodal road-rail transport, semi-trailers are commonly used in road transport.

In Germany, about 70% of the road freight transport volume (310 billion tkm) in 2014 was performed with semi-trailers (German Federal Motor Transport Authority 2015). Therefore, they are of focal importance for a shift from unimodal road transport to intermodal transport. Semi-trailers can be further separated in non-cranable and cranable semi-trailers which are equipped with grappler pockets and can be lifted by conventional transshipment equipment (reach stackers and portal cranes) in terminals. However, the majority of semi-trailers in Europe (over 85%) are non-cranable. Based on this shortcoming, several transshipment technologies for the horizontal or vertical transshipment of non-cranable semi-trailers have been developed.

However, depending on the technology, investments in terminal infrastructure and/or additional transshipment equipment are necessary. From the perspective of the railway company undertaking investments in the transshipment technology, the economic profitability of these investments must be ensured. The additional demand generated from attracting new customers by offering transportation services for non-cranable semi-trailers can increase the capacity utilization of shuttle trains which are the dominant operating form for railway transport in intermodal transport (Woxenius 2007, Macharis and Bontekoning 2004). Shuttle trains consist of a fixed number of wagons and run according to a predefined schedule. Since the costs for rail transport are mainly fixed costs (Woxenius, Persson, and Davidsson 2013), increasing the capacity utilization directly results in additional profit. This profit must be compared with the investment costs and possible additional costs (e.g. for handling and/or maintenance).

The perspective of the railway company which has to decide about the investment in transshipment technology has not been considered in research so far. This paper addresses this research gap and investigates this investment decision subject to various risk scenarios for the capacity utilization faced by the railway company. The three investigated scenarios differ according to the percentage of capacity sold on a long-term basis to the customers of the railway company which are intermodal operators and freight forwarders.

Therefore, the research question is the following: Under which risk scenarios for the capacity utilization is the investment in transshipment technology for non-cranable semi-trailers economically profitable from the perspective of the railway company? To account for the temporal distribution of the cash flows, the economic profitability is evaluated based on a dynamic investment calculation. The net present value (NPV) method is used to discount estimated future cash flows for different investment periods. However, the cash flows can be considered as uncertain and differ according to the risk scenario for the capacity utilization, the availability of necessary transshipment equipment at the terminals and the demand for intermodal transport services for non-cranable semi-trailers, and other operational influences.

Therefore, a simulation approach is used to model the operation of shuttle trains capable of loading non-cranable semi-trailers to estimate the cash flows for the dynamic investment calculation. The developed model follows the agent-based modeling approach that allows one to model complex systems consisting of autonomous entities called agents, which have their individual behavior and interact with other agents (Macal and North 2010). Agent-based modelling allows one to precisely model the various entities (e.g. train, orders, transshipment equipment) which are part of the transport process in a detailed manner. The model was developed in cooperation with a leading railway company and validated with industry experts. In this paper, it is used to conduct a case study for a specific origin-destination (O/D) pair.

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