Combined Freight Transport Operations Engineering Essay

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Transportation is an important field of the European economy as it is estimated that it accounts for almost 7% of GDP (Office of the European Union) which is 871.430,00 millions of euro. Figure 1, below shows the contribution of the main sectors (i.e. agriculture, industry, and services) to total European GDP. More specifically, ¿½Agriculture¿½ includes farming, fishing, and forestry, ¿½Industry¿½ includes mining, manufacturing, energy production, and construction whereas ¿½Services¿½ cover government activities, communications, transportation, finance, and all other private economic activities that do not produce material goods.

Figure 1: GDP- composition by sector in European Union in 2011 (Source: CIA, 2011)

Transport operations can be divided into two main categories. The first one deals with passenger transport where the performance is measured by the number of available seats provided and the number of passengers who can be transported. The second type is freight transportation and a general distinction can be made by the cargo type such as bulk, general, palletized, frozen and containerized. This report will examine freight transport operations.

Nowadays, transportation of goods occurs through the use of different modes of transport such as: road, sea, rail, inland waterways, oil pipelines, and air. The table below shows the European (EU-27) performance by mode for freight transport from 1995 to 2010 by thousand million tonne-kilometers. As it can be seen, freight transport has increased significantly by 25.2% from 1995-2010.

Table 1: EU-27 Performance by Mode

Mode of transport

(% increase)

As a result, truck and ship are the most favorable modes of transportation EU area. Figure 2, shows the use of each mode analytically.

Figure 2: Use of mode for freight transportation in EU-27 (Source: EU Statistical Pocketbook, 2012)

All the aforementioned modes of transport are mainly used for covering the increased demand of good¿½s transport. Table 2 shows the pros and cons of each mode of transport, which are depended on many parameters such as cost, travel distance, duration, environmental impact, integrity of cargo etc. From customers¿½ side, indicators such as economy of scales, transport duration, loss and damage issues, etc. play a pivotal role during mode selection.

Table 2: Pros and Cons of Modes of Transport

Transport mode

To this end, none of the above modes is suitable for all types of goods transportation. The use of more than one mode for freight transport is becoming popular as it provides a significant number of advantages such as low cost, delivery accuracy, and environmental friendly transport operation. The following section describes in detail combined transport characteristics.

1.2 Combined freight transport

Combined transport is defined as the use of at least two different transport modes of transport where the major part of the journey is usually executed by rail, inland waterways and/or maritime services and the initial and final leg is carried out by road transport (ECMT, 1998). Road transport has to be as short as possible and not being extended more than 100-150 km. If the main haulage is by rail, transportation has to be between the point where the goods are loaded/unloaded and the nearest suitable rail loading/unloading station for the initial leg and final leg respectively. If the cargo is moved by ship, the inland waterway port or seaport must not to be further than 150 km from the loading or unloading point (Transport and Tourism Division,2004). Figure 3 depicts the process that a cargo usually follows when combined transport is used.

Figure 3: Combined transport chain (Bektas and Crainic, 2007)

Combined transport can be divided into multimodal and intermodal transport. Intermodal freight transport (Figure 4) can be defined as the combination of at least two modes of transport, without handling the goods themselves in changing modes, as the loading unit and the vehicle uses are transported in an integrated manner. (¿½CCommunication,1998)

Figure 4: Intermodal transport chain

Multimodal transport (Figure 5) involves the movement of cargo from shipper to consignee using two or more different modes under a single rate, with through billing and through liability (Hayuth, 1987). The objective is to transfer the goods in a continuous flow through the entire transport chain, from origin to final destination in the most cost and time effective way (Schijndel and Dinwoodie, 2000).

Figure 5: Multimodal freight transport (Caris, 2009)

In addition, in combined transport operations, a critical issue is also whether the cargo is accompanied or not (Figure 6). There are accompanied transports, in which the whole truck is loaded on the railway wagon (Rolling road ¿½ RoLa) or vessel (Roll-on Roll off ¿½ RoRo) where truck-drivers accompany their trucks while for the case of unaccompanied transports the unit (containers) travels by itself. (Diomis, 2005).

Figure 6: Categories of combined transport

Combined transport includes many combinations of ways of transport. The two most common are land/sea-IWW/land and land/rail/land.

Land ¿½ Sea/Inland waterways (IWW) ¿½ Land

This type of combined transport uses trucks on the first and last leg and vessel for the major part of the trip. There are two different ways of land - sea/inland transport:

Multimodal Transport

Feedering international containers, is a process which appears in the multimodal transport. There are containershipswhich are big enough to be hosted on some sea ports. So these ships unload their cargo on specific seaports, which meet their specifications. After that, a part of this cargo is loaded again on some smaller ships, called ¿½feeders¿½, to distribute it on the other small sea ports. At this operation only ISO container is loaded and the type of the containership is Lift-on/Lift-off (Lo/Lo) (Denisis, 2009).

Intermodal Transport

Road transportation has been increased and trucks have started creating environmental and societal problems, such as road congestion, air pollution, road accident etc. Short Sea Shipping (shipping of cargo for relatively ¿½short¿½ distances or to nearby coastal ports) offers an alternative method for the transportation of the domestic cargo using the waterways. Short sea can exploit the intermodal transportation network and modally shift the cargo for medium and long-haul distances. So every domestic trailer can be inserted to a Roll-on/Roll-off (Ro/Ro) ship. (Denisis, 2009).

Table 3 shows the main differences on the two main categories of land-sea-land transportation.

Table 3: Differences of 2main categories of land-sea-land transportation


Inland waterways have to be used for moving the goods from an inland center to the seaport in the country of origin or from the seaport to an inland center in the country of destination. Although inland waterways transport include many constraints (e.g. bridge clearances, depth of the rivers and canals and the size of locks)it is one of the major modes of freight transport especially in central and south east Europe (e.g. Danube river)

Land ¿½ Rail ¿½ Land

As it was mentioned previously, combined transport may use railway infrastructure for the major part of the journey. The loading unit on the railcar must be carried through tunnels, under bridges and other infrastructure of limited dimensions. In intermodal transport, the type of train is called Ro-La, (RollendeLandstra?e). Figure 7 shows a typical example of road-rail-rod/ship transportation.

Figure 7: Land/Rail/Land or Sea combination (Konings et al., 2008)

1.3 Key players and combined transport operations

Combined freight transport operations currently include mainly two basic stages:

a) Planning, in which all the arrangements concerning freight transportation are made

b) Execution, in which the physical transportation of a load takes place.

In addition, there is also a transactional channel that runs in parallel to those two stages and concerns all necessary documents, agreements and contracts exchanged prior to the execution as well as the documents that accompany the load during execution. These documents provide information to various stakeholders.

In combined transportation, one may distinguish the following key actors (Caris, 2009):

* Demand side-shipper: All companies (e.g. manufacturers, trading companies) that need to transport a shipment (cargo) from one place to another directly or on their behalf contracts.

* Supply side-carrier: The transport providers such as road, sea, train, and air freight carriers as well as transport operators that provide specific type of carriage (e.g. combined transport operator).

* Intermodal operators: They handle the movement of the loading units between ports/terminals. They conduct route selection for shipments through the whole intermodal network.

* Intermediaries-forwarder: Forwarding companies that receive requests for transport and do all the necessary arrangements to ship the load from its origin to its destination.

* Drayage operators: they take care of the planning and scheduling of trucks between the terminal and the shippers and receivers. They usually are called as road transport operator.

* Network operators: they take care of the infrastructure planning and long haul transport between terminals.

* Public authorities: Custom Authority is responsible for customs clearance which is required when freight is transported to (from) the EU from (to) non EU countries. There is also Port Authority for managing all the flow of cargo through the port. It takes cares of supervising the appropriate papers of every vessel and cargo arriving. Infrastructure managers, regional, national, public authorities and international institutions contribute to making the best possible use of infrastructure and provide an environment to encourage intermodal initiatives.

* Port/ Terminal operators: They are involved in cases where loading/unloading units takes place between the main haul and drayage. In some cases they can provide storage services for brief periods when needed.

Figure 8 provides an overview of the main activities for the case in which a customer (shipper) interfaces with a forwarder to arrange intermodal freight transportation.

Figure 8: Overview of intermodal operations (shipper to forwarder)

In this case, Planning operations include the following processes:

* Customer (shipper) request: It documents the customer need for freight transportation from a specific origin to a specific destination. The customer provides standard information such as origin-destination, pickup and delivery time, container type, number of containers, etc. in order to obtain an offer from a forwarder or carrier.

* Shipment file: The forwarder creates a shipment file based on the customer request information and the needs provided by the customer.

* Request to partner(s): The forwarder requests an offer from a number of partners (carriers/ other forwarding agents in its international network) who will participate in the transportation of the load.

* Arrange transfer: When the forwarder collects all offers (for each leg of the trip), then it constructs the trip and calculates the total cost, as well as the total time required.

* Inform customer: The forwarder informs the customer about the cost, the transfer duration, insurance issues, etc. and makes all the final agreements, sends out contracts etc.

* Send shipment details to partner(s): The forwarder sends all the details (e.g. collection area, collection time) concerning the load to its partner(s).

A slightly different flow of the events takes place in the case that a customer (shipper) arranges directly the transportation with carriers without an intermediary (forwarder) (Figure 9). More specifically, the carriers send their offers and arrange the transportation details directly with the shipper.

Figure 9: Overview of intermodal operations (shipper to carrier)

The main difference between the two aforementioned scenarios is that in the second case, the shipper should organize the whole transport by itself. The shipper acts as follows:

* It contacts each carrier separately for each transportation leg.

* It makes sure that there is always enough time for carrier interchange (i.e. unloading/loading procedures) in each Hub.

* It contacts Hub operators and notifies them about its cargo.

* It calculates the total cost of the trip based on the offers received per leg from each carrier.

As far as the execution operations are concerned, they include the following processes for both cases above. At each stage the shipment can be tracked by a unique tracking ID number.

* Shipment collection: The agreed carrier collects the load from the premises of the customer.

* Transportation: This is the part where single or multiple modes are used for fright transportation. In this stage, terminal operators are also engaged if a load must be unloaded from one mode and be loaded to another. During this process, the tracking status gets updated.

* Delivery: This is the final process, which is usually accompanied with a proof of delivery (either by signing a document/CMR/CIM or by using an electronic method).

Finally, the transaction operations include the following processes (for both cases):

* Partner offer: A carrier and/or a forwarder responds to a customer¿½s (shipper) request by sending an offer that includes information such as cost, trip duration, modes of transport, insurance cost, etc. In some cases, this offer is accompanied by a contract that is signed by the shipper if the offer is the one selected.

* Freight agreement: It includes mainly the contract, issues about insurance, etc.

* CMR/CIM/loading details: It includes all documents and manifests that are needed for transporting the load (CMR, CIM, certificates) as well as import/export documents.

* Proof of delivery: This is usually made by signing delivery & load manifests or by sending an electronic copy of the delivery document.

1.4 Network design

There are many different kinds of transport networks. The most common is the point-to-point network as it is used for many years now. Each origin terminal has only one destination terminal without intermediate stops. At the beginning it was worthy and compulsory as there were not any other form of networks. It still works well but only on short distances. However, this network requires large volumes in order to offer a daily service (Macharis, 2004). The demand for industrialization leaded the industries and governments to improve their infrastructures. The need for consolidation of products was important if they wanted to be sustainable. To this end a new type of network design was developed namely the hub-and-spoke network.

Hub-and-spoke model

The usual transport network which is mostly used nowadays is based on the hub-and-spoke model. In this model load units that have different final destinations come from various origin terminals to a hub with an exchange facility. At this hub exchange facility either rail wagons (which are placed on a shunting yard) or load units (at a terminal) are exchanged between trucks and trailers such that load units for one destination terminal are regrouped on one rail or truck. Then both means head for their destination terminal. This form of network is growing also on the airports (cargo terminal section). Figure 10 shows a hub-and-spoke network connecting three origin terminals and three destination terminals.

Figure 10: Hub-and-spoke network (Bektas and Crainic, 2007)

Hub-and-spoke networks also offer many advantages compared to point-to-point networks. In first instance, there are higher frequencies of transport services per transport relation. Thus, even low flows can be served and achieved simultaneously. Hub-and-spoke has great results also in cases where the main mode is primarily the train as it can carry larger quantities. As a consequence, instead of running one train per transport relation directly, all destination terminals can be served more times a day from each origin terminal. The only difference between truck and rail is that on trucks mostly that happens on LTL (Less than Truck Load) instead of FTL (Full Truck Load). Every load is grouped with many others so one truck can pass through all destination terminals and unload the appropriate cargo (Bontekoning, 2006).

2 Literature review

The main issues in combined freight transportation can be classified into six main categories as shown in Figure 1. These categories include actors and key players, operations, regulations and policies, infrastructure, Information and Communication Technology, and environmental issues.

Figure 11: Main categories of combined transport

2.1 Actors and key players

Actors and key players could be categorized by the type of operator and the operational problems. The various tasks along the transportation chain are mostly executed by four operators that could be distinguished in drayage, terminal, network, and intermodal operator (Moccia et al., 2008). The following sections give some further information about each of them.

2.1.1 Drayage Operator

Drayage operators are responsible for carrying the freight between shippers and consignees respectively and within the terminal (Puettmann and Stadtler, 2010; Macharis and Bontekoning, 2004; Caris et al., 2008). Usually they are forwarding companies that receive requests for transport and do all the necessary arrangements to ship the load from its origin to its destination.

Rail terminals, port facilities and shipper/third party facilities comprise the drayage location. In each drayage location there are many independent drayage operators who compete with one another to provide drayage services using their own assets (i.e. personnel, tractors, trailers, chassis and containers, whether borrowed, owned or rented) or often sub-contracting with many independent owner-operators (Nadan, 2003).

The majority of drayage operators are near ports. At the port there is a high volume of containers¿½ arrivals. When a container arrives at the port, the latter can be delivered to its destination by train or truck. Some of those containers are transported by rail to nearby rail yards for long-haul delivery by train. But the majority of the containers is hauled by short-haul truck, called drayage, and is less than 100 kilometers (Robert and Poole, 2007).

A drayage operator picks up an empty trailer or container either at an empty depot, at a terminal or at a consignee. Then the operator provides it to the shipper and the subsequent transportation of a full trailer or container to the terminal. Delivery operation involves the distribution of a full container or trailer from the terminal to a consignee. Then it collects the empty container or trailer and transports it to the terminal, an empty depot, or the shipper. Trucks are able to separate the tractor and trailer which allows two procedures. In the ¿½stay-with¿½ procedure the tractor and the driver stay with the container/trailer during the loading/unloading. In the ¿½drop-and-pick¿½ procedure a full or empty trailer/container is dropped off the shipper/receiver. During loading/unloading duration the tractor and driver are free to carry out other activities.

Each drayage company faces problems such as trip scheduling between shipper, terminals and receiver (Wang and Regan, 2002; Imai et al., 2007). This problem could be enlarged from the terminal requirements, customer¿½s pick-up and delivery times, realistic limits on the length of the working day, and on-road travel times. The majority of the shipments usually are known in advance. Nevertheless, sometimes loads have to be reassigned due to traffic or some terminals¿½ delays.

But the general problem of drayage operations is its cost effectiveness. In spite of the relatively short distance instead of long-haul rail or barge, drayage accounts for 25-40% (Macharis and Bontekoning, 2004) of transportation chain expenses. As a consequence it affects a lot the profitability of the whole transportation service. For solving this problem a drayage operator should decide to cooperate with other drayage companies without affecting though the timeliness of operations.

2.1.2 Terminal Operator

Terminal operator manages the modal shift which take places at the terminal and is responsible for the transshipment operations from barge to barge, road to rail or barge, or rail to rail (Puettmann and Stadtler, 2010; Macharis and Bontekoning, 2004; Caris et al., 2008).

Usually a terminal consists of a road, rail, and barge gate where trucks, trains, or barges respectively enter and leave the terminal. There is a storage area for storing the loads for more than a day and the buffer area (cross-docking), which is for short duration storage. There is also storage and transport equipment and lifting equipment for loading or unloading the trains, trucks, and barges.

Different operations have to be carried out for different types of load units i.e. containers, swap-bodies, trailers or complete trucks. It is also important to mention that the operations are not the same for every mode of transport. In addition, the equipment which is used has to be suitable and cater to the requirements of the load units. Terminals can apply different transshipments techniques, layouts, dimensions, operational strategies etc. An optimal functioning terminal is the basic goal for the terminal operator. That depends on the demand volume and the type of the exchange i.e. road-barge, road-rail, or seldom rail-rail or barge-barge or rail-barge.

Exchange increases the total transport cost and the lead time in chain. Consequently, exchange operations need to be efficient and fast. Terminal operators have to make strategic, tactical, or operational decisions to meet the requirements. At strategic level terminal operator takes care of the design of the terminal (Ferreira and Sigut, 1995; Meyer, 1998; Rizzoli et al., 2002; Ballis and Golias, 2004; Bontekoning, 2006; Vis, 2006; Rijsenbrij and Wieschemann, 2011). At the tactical level terminal operators take decisions about the required capacity levels of equipment and labour (Kemper and Fischer, 2000; Kozan, 2000; Kulick and Sawyer, 2001; Huynh 2005) and the redesign of the operational routines and layout structures (Voges et al., 1994; Mart?nez et al., 2004). Finally terminal operator has to decide at operational level for resource allocation (John Hargreaves, 1990) and scheduling of jobs (Alicke, 2002; Corry and Kozan, 2006;Gambardella et al., 2001).

2.1.3 Network Operator

Network operator takes care of the infrastructure planning (strategic level) and long-haul transportation (Puettmann and Stadtler, 2010). He is responsible for the organization of rail or barge transport (Macharis and Bontekoning, 2004; Caris et al., 2008). At tactical level has to take decisions about schedules of service and pricing services and about daily operations of the services at operational level.

Infrastructure decisions deal with the interconnectivity of the modes in order to achieve combined transport chains (Crainic et al., 1990; Loureiro , 1994; Southworth and Peterson, 2000; Klodzinski and Al-Deek, 2004; Tan et al., 2004;Groothedde et al., 2005; Parola and Sciomachen, 2005) and also the location of terminals (Meinert et al., 1998; Rutten, 1998; Arnold and Thomas, 1999; Groothedde and Tavasszy, 1999; Macharis and Verbeke, 1999; Van Duin and Van Ham, 2001; Arnold et al., 2004; Macharis , 2004; Racunica and Wynter, 2005; Kapros et al., 2005; Limbourg and Jourquin, 2008; Soerensen et al., 2011). In some countries government usually take these decisions and considers for the impact of a capacity increase and the effects of price/cost increases or decreases on the use of the different infrastructure networks. On the other hand, private sector searches for the optimal location of terminals and the government supports the most interesting investments.

At tactical level a network operator, firstly, has to determine what kind of services itwill offer. Ithas to change the approach of long haul transport services from travel on demand to a fix service schedule which has to be planned several months or a year in advance. For achieving this goal the operator has to decide what consolidation network to use i.e. a point-to-point network, a line network, a hub-and-spoke network and a trunk-collection-and-distribution network (Janic et al., 1999; Newman and Yano, 2000a;Newman and Yano, 2000b). A second tactical decision for a network operator is the type of production model, that is, how to operate the trains and the barges. This involves decisions about the frequency of service, train length, capacity planning of equipment and allocation of equipment to routes (Nozick and Morlok , 1997; Choong et al., 2002; Lin and Chen , 2004; Li and Tayur , 2005). In addition, pricing strategy decisions has to be considered at this level. Pricing a combined transport product is a really complicated issue. It requires an accurate cost calculation and insight in the market situation as many actors are related to the various parts of the combined transport chain (Tsai et al., 1994;Yan et al., 1995; Li and Tayur, 2005).

Finally, at the operational level, network operator has to take day-to-day management decisions. Mostly it has to manage the fleet as the load order of the barges and trains (Feo and Gonzalez-Velarde, 1995; Powell and Carvalho, 1998), redistribution of railcars or push barges (Chih and van Dyke, 1987; Chih et al., 1990), and the load units. A typical problem in combined road/rail transport is the assignment of a set of trailers and containers to the available flatcars that can move this equipment. This problem is quite complex as there are different types of flatcars, and many types of trailers and containers.

2.1.4 Intermodal Operator

Intermodal operators are users of the intermodal infrastructure and services, and conduct the optimal route selection of shipments through the whole intermodal network (Puettmann and Stadtler, 2010; Macharis and Bontekoning, 2004; Caris et al., 2008).

Intermodal operators organize the transportation of shipments on behalf of shippers. Intermodal operators buy the services offered by drayage, network, and terminal operators. At the operational level they choose routes and services in existing intermodal networks (Min, 1991; Barnhart and Ratliff, 1993; Boardman et al., 1997; Ziliaskopoulos and Wardell, 2000; Erera et al., 2005). Taking such a decision is more complex than routing problems of road haulage. In road haulage least costly or less time consuming route is more preferable. But in combined transport there is a large variety of combinations of transportation modes. So a modal choice problem has to take into account specific freight volumes and specific time constraints.

2.2 Regulations& Policies

The current policy of the European Commission requires that transport systems should be able to grow without serious negative impact on the environment, as well as on economic and social costs. However, the sustainability of the European transport system faces some barriers such as: incompatibility of infrastructure, growing CO2 emissions from transport, dependence on fossil fuels, changing patterns in mobility, low safety, rising congestions, and charges and prices distortions (REFERENCE).

2.2.1 Incompatible infrastructure

Europe consists of many countries and as a result, the majority of the existing infrastructure has been designed to serve national rather than European economy. This situation created lack of comprehensive standards on infrastructure design, traffic management, power supplies and data exchange. Since now more than 400 billion euros have been spent for developing Trans-European transport networks (TEN-T) (REFERENCE). But still there are main shortages in infrastructure as transalpine tunnels, rail corridors, intermodal nodes for rail and sea or air transport, and IT infrastructure to support intermodal transport. Poor Trans-Europe infrastructure in combination with lack of international cooperation results to the following inefficiencies (Impact Assessment, 2010): Lack of joint traffic forecasts leading to differing investment plans;

* Disconnected or even contradictory timelines;

* Lack of joint investments calculation and joint financial structures;

* Incompatible technical characteristics;

* Inadequate joint management of cross-border infrastructure projects.

For sustainable infrastructure plans there are some actions to be taken. The list below shows some of them.

* Joined investments plans

* Coordinated land planning

* Further development of TEN-T network

* Open standards for information exchange systems

* Open standards for design of infrastructure

2.2.2 Growing Greenhouse Gas emissions

Transport sector has greatly increased its activity for the last couple decades now. The growth rate of GHG emissions in transport is higher than any other sector comparing to 1990. According to the data of European Environment Agency in year 2010, transport is accounted for 19.7% of total GHG emissions in EU-27, as it is shown in Figure 2.This growth of transport activities concerns for its environmental sustainability. The energy efficiency is increasing but the pace of improvements is not sufficient to create sustainable transport in Europe.

Figure 12: GHG emissions by sector (Source: EU statistical pocketbook 2012)

The EU White Paper on Transport, (2011) refers that European commission has set specific goals. The first goal of new transport policy is to keep the transport growing and support mobility while achieving the goal of 60% GHG emissions reduction by 2050 comparing to 1990 level. In order to achieve this goal the European Commission has defined ten goals for a competitive and resource efficient transport system which benchmarks for achieving the 60% GHG emission reduction target (see extensively in White Paper, 2011, pp. 9-11).

In general, actions that should be taken towards the greening of freight transport are as follows: existing technologies have to be replaced by green technologies; usage of electric cars is preferable, phasing out ¿½conventionally-fueled¿½ vehicles from urban areas; reduction of carbon in maritime and aviation transport.

2.2.3 Dependence on fossil fuels

Transport is still 97% dependent on fossil fuels (REFERENCE). Since now Transport has not reduced significantly its GHG intensity by switching to cleaner energy sources. European Union has adopted a binding target of a 10% share of renewable energy sources in transport by 2020 (Directive, 2009) as part of the climate change and energy package.

Shifting to greener vehicles will require the development of alternative fuelling/charging infrastructure. Another important action is focusing on research in cost-effective renewable fuels. The new green technologies for green vehicles are crucial, so there is a need for shorter design-to-market cycles.

2.2.4 Low safety

One of the objects included in the EU White Paper (2001), was to halve casualties in road transport by 2010. This goal has not been achieved although different actions had been taken in many Member States. In aviation sector was implemented a set of common, uniform and mandatory legislation covering all the key safety elements: airport maintenance, airport management, operations of air traffic management systems. The most advanced regulatory frameworks for safety and pollution prevention was established by EU in maritime sector.

Another problem is that European transport corridors are common for freight and passenger transport. This has caused many accidents with a result of over 40000 accident fatalities until 2000 (White Paper, 2001). For reducing the amount of fatalities, EU has to take some measures i.e. separating cargo and passenger corridors. Signaling systems has also to be improved and new vehicles safety systems to be implemented.

2.2.5 Rising congestion

Road transport is the main mode for goods movement. According to the European Commission the share of road transport is 73%, slightly decreased by 3.9% from 2009 (Road Freight Transport Vademecum, 2010). At the same time the share of rail is only 17% with inland waterways and oil pipelines accounting for 5% each (Road Freight Transport Vademecum, 2009).The congestion in urban areas and on the key transit roads works as a barrier for the current capacity of transport networks meeting the growing demand. The reliability of road transport suffers and the time length of journeys is getting longer. Also some airports are very congested. For solving this problem, European Commission published the 2001 White Paper on European Transport Policy. The idea was to reduce that congestion by shifting from road onto rail, waterways or short-sea shipping. In addition, great emphasis is given on the use of intermodal transport.

Moreover, according to the EU statistical pocketbook(2012), road transport is the less environment friendly mode as it causes 71.7% of total GHG emissions. For that reason road transport has to become greener and more efficient too. New vehicle technologies, improve infrastructure, fuel efficiency and ¿½eco-driving¿½ are needed. There is a need of helping solution for lowering the congestion by intelligent mobility and transport demand management. There is still a lack of cooperative systems based on vehicle-to-vehicle and vehicle-to-infrastructure-communications that might in the longer term improve considerably the efficiency of the traffic management and alleviate congestion (Golinska and Hajdul, 2012).

In order to avoid increase in aviation congestion high-speed rail should absorb much medium distance traffic. Another action is to increase the density of rail networks and create efficient and green freight corridors. There is also a need for development of intermodal hubs and intermodal integration of transport services.

2.2.6 Mobility patterns

The progress in moving traffic from road transport to other modes is still very limited. European Commission has tried a lot to convince companies to change their organization of logistics processes and take into account when planning the impact of environment and society, but the results were negative. Entrepreneurs mostly concern about the financial results and if there is not a strong argument of improvement, they are not interested in using alternatives to road transport modes.

Therefore, it is worth to note that the choice of modes of transport directly affects some factors such as price, the susceptibility of the cargo and the characteristics of transport modes. Moreover, sometime is impossible to use rail, inland waterway or intermodal transport.

For solving the above problems, there is a need for integrated logistics systems which should be monitored enabling the co-modality, standardization and interoperability across modes. Furthermore, a platform has to be created for connecting the airports and ports with efficient rail services. Another action is the establishment of the framework for European multimodal transport information, management and payment system attractive frequencies and comfort. Smart intermodal ticketing, with common EU standards is another solution (Golinska and Hajdul, 2012).

2.2.7 Prices and taxes distortions

The differentiation of prices for the use of road in peak and off-peak hours is very seldom. There is also lack of incentives for usage of more silent vehicles, safer and more environment friendly modes of transport. Moreover the congestion charges, which represent the cost of infrastructure scarcity, are not often imposed.

On the other hand, transport system generates revenues for public budget including:

* Energy taxes (1.9% of GDP) coming from fuel taxes on road transport and private cars (Eurostat, 2008);

* Vehicle taxes (0.6% of GDP);

* Tolls and charges for infrastructure use.

Although users pay a significant amount, the price often bears little connection to the real costs of transport in society. The principle ¿½polluter pays¿½ is not always respected. The costs imposed on transport users do not reflect expenses to maintain and develop the infrastructure. Moreover, the pricing system fails to steer the demand for most efficient and sustainable mobility choices.

Thus prices and taxes should be connected with sustainability. Local governments have to self-finance the development and maintenance of infrastructure giving also incentives for local companies for usage of intermodal transport. They also have to follow strictly the principles of ¿½user pays¿½ and ¿½polluter pays¿½ and eliminate the harmful subsidies. In addition there is a need of a regulatory framework and innovative financial instruments for unlocking the potential of private sector in co-financing infrastructure¿½s deployment and maintenances within public-private partnership (PPP) projects.

2.3 Infrastructure

Transport infrastructure is a key element for the economic growth and development and it plays a fundamental role to increase the growth and jobs in Europe. An efficient infrastructure which warrants accessibility could attract centers of production and consumption and thus impacts positively on the regional economy. More efficient infrastructures enable a better mobility for people and goods as well as a better connection between regions.

In addition, planning, design and construction of infrastructures have remained largely unchanged over the last century; therefore attention has to put also on the research of new construction materials processes with the aim to innovate the sector. Research has to be concentrated on procedures and materials that minimize greenhouse gas emissions, on design and planning that respect landscape and geographical diversity whilst contributing to decongestion major transport corridors, and on techniques that will ensure longer life and reduces maintenance interventions.

2.3.1 Road infrastructure

European Union has made great efforts to promote multimodality but road transport has still a growing trend. For this reason there is an immediate necessity to increase road capacity and efficiency. Roads must be able to absorb the ongoing and increasing flow of vehicles and ensure at the same time an adequate level of safety. Such performances must be developed in largest part on existing networks. Therefore not only new construction methods, but also sustainable maintenance of the existing network is paramount.

Maintenance of road infrastructure deserves a special attention for two main reasons. Firstly, many accidents (e.g. rollovers of HV or skidding of vehicles in general) have caused due to the poor condition of road infrastructure. Secondly, maintenance works hinder and interrupt the delivery¿½s free flow thus increasing their costs. For avoiding these two scenarios, more effective and durable maintenance techniques are needed i.e. safe and efficient night-time operations. Moreover, there is a need for more fluent traffic flow to reduce vehicles emissions, as transportation sectors accounts the biggest percentage of CO2 emissions (Laura, V, 2008).

Some of the most important roads are included in the Trans-European road network. It includes more than 65.100 km motorways and 5.000.000 km paved roads (Steer Davies Gleave, 2009), whether existing, new or to be adapted which:

* Play an important role in long-distance traffic

* Bypass the main urban centers on the routed identified by the network

* Provide interconnection with other modes of transport

* Link landlocked and peripheral regions of the Union

Beyond these, this network guarantees users a high, uniform and continuous level of services, comfort and safety (Bergmans, L, 2009).

2.3.2 Sea and river ports

According to (CIA, 2011) in European Union there are 24 oversea ports. The most important one is the Port of Rotterdam which is the largest one and located in the city of Rotterdam. Such seaports can serve at their quayside deep-sea vessels with a loading capacity of more than 8.000 container units (TEU). Smaller regional ports are linked with the oversea ports by Feeder vessels which have capacity up to 1.200 TEU. Inland barges are used to transport containers into the hinterland on rivers and channels and they are also served by cranes.

Ports can be divided into two sections: passengers and cargo. The latter one usually offers terminal facilities. Such terminals consist of two external interfaces. These interfaces are the quayside with loading and unloading of ships, and the landside where the containers are loaded and unloaded on/off trucks and trains. When a container vessel arrives at the port, it is assigned to a berth equipped with cranes to load and unload containers. At the case of RoRo vessels, trucks with their cargo exit from the ramps. Unloaded import containers are transported to yard positions near to place where they will be transshipped next. Containers arriving by railway or road are handling within the truck and train operation area (Steenken et al., 2004).

Figure 13: Container terminal system (Source: Steeken et al., 2004)

At every port terminal there is handling equipment such as cranes, transport means and assisting systems. The quay cranes for loading and unloading ships play a pivotal role. There are two types of quay cranes: single-trolley cranes and dual-trolley cranes. Crane drivers are supported by a semi-automatic steering system. These cranes can serve around 50 boxes per hour, while in operation the performance is around 25 boxes per hour. A second category of cranes is applied to stacks. There are either rail mounted gantry cranes (RMG) which are more stable, or rubber tired gantries (RTG) which are more flexible, and over-head bridge cranes which are mounted on concrete or steer pillars.

At port terminals there is also a variety of vehicles for the horizontal transportation both for the ship-to-shore transportation and the landside operation. The first class of vehicles is these which are not able to lift containers i.e. trucks with trailers, multi- trailers and automatic guided (AGV) (Vis and Harika, 2004, Yang et al., 2004). Transport vehicles of the second class are those which are able to lift containers i.e. Straddle carriers, forklifts, and reach stackers. The first one is the most important because it can also stack containers in the yard.

Last but not least are the assisting systems which help for the organization and optimization of the work flow. Such systems are communication systems and positioning systems. Terminal operators support a very frequent communication with external parties like agents, shipping lines, truck and rail companies, forwarders, governmental authorities like customs, waterway police and others. The communication is based on international standards (EDIFACT) and every change of cargo status is communicated between the respective parties (Steeken et al., 2004).

2.3.3 Rail infrastructure

According to (Steer Davies Gleave, 2009) in TEN-T network there are more than 212.000 km of rail lines, out of which about 110.500 km are electrified and the freight transport trains could reach a length up to 750 m. There are also many road¿½rail container terminals which support this network. Such terminals include:

* Gates, internal road network,

* Loading and driving lanes for the trucks,

* Storage or buffer lanes for IntermodalTransportUnits,

* Transshipment tracks (also called as loading tracks) for the train loading/unloading operations, and

* Rail sidings for train/wagon storage, marshalling and inspection

The equipment which seems to dominate among conventional equipment is reach stackers and rail-borne gantry cranes. On small terminals reach stacker is the major mean for lifting, handling, transporting, and stacking ITUs. This is due to the low cost and flexibility that offers (Ballis and Golias, 2001).

Unlike passenger terminals, rail freight yards do not have to be so centrally located because of the great deal of space for multiple tracks for marshaling. Rail yards, could attract manufacturing activities able to use distribution capabilities of rail, and thus become industrial zones. In addition, rail freight terminals perform four major functions (Rodrigue et al, 2009):

* Bulk: These rail terminals are linked with extractive industries such as agriculture, mining and wood products. Grain elevators are commonly used to store, mix, and load grain into railcars.

* Roll on/ Roll off: Vehicles are rolled in a railcar using a ramp. This operation requires a large amount of parking vehicles.

* Intermodal: The function of loading and unloading unitized freight from railcars needs specific intermodal equipment.

* Shunting: The function of assembling, sorting and breaking of freight trains. Trains can be composed of up to about 100 railcars.

The major problem of freight transport in European Union are the obstacles its faces on cross-border traffic. For instance, the most dramatic evidence of such barriers is different track gauges, electricity supply and the signaling systems. The deployment of ERTMS, the European signaling system, is progressing slowly; so far, only discontinued sections of lines are equipped, and locomotives still need to be additionally equipped with national systems. Furthermore, the length of trains is not harmonized across Europe. Another problem is the lack of efficient and effective intermodal terminals, different service levels across modes, lack of standards, and missing infrastructure links, especially across borders (Impact Assessment, 2010).

2.3.4 Freight Village

In international bibliography, the term ¿½nodal center¿½ or ¿½freight nodal terminal¿½ is encountered with various names: ¿½Freight Villages¿½ (United Kingdom), ¿½Platformes Multimodales/Logistiques¿½ (France), ¿½Logistics Park, Interporto¿½ (Italy), ¿½Gueterverkehrszentren¿½ (Germany) (Tsamboulas and Dimitropoulos, 1999). The first freight villages were created in France around 1960 and later appeared also in Italy and Germany, Netherlands, Belgium, and the United Kingdom (Kapros et. al., 2005). A freight village is the hub of a specific area where all the activities relating to transport, logistics and goods distribution ¿½ both for national and international transit ¿½ are carried out, on a commercial basis, by various operators (Ballis and Mavrotas, 2007, Pal otas, and Bazaras, 2004, Afandizadeh and Moayedfar, 2007).

It is noted that ¿½intermodal¿½ or ¿½multimodal¿½ terminals constitute a principal component of nodal centers for goods where the transshipment of goods from one mode to the other takes place. However, freight villages reflect to a modern way of organizing logistics, transport and goods distribution activities. Usually provides auxiliary facilities such as warehouses, distribution centers, storage areas, offices, truck services, bank, postal, insurance services and in certain cases Customs infrastructures (Europlatforms, 2004). In addition, a freight village located in the vicinity of a large city may provide an efficient solution to urban transport problems including traffic congestion, regional competiveness, and quality of life.

The cost of land acquisition and freight village constructions as well as with distribution systems and operations of storage is high enough. For this reason, such an investment has to take care of all related aspects that include site location selection, site-level layout planning and warehouse design aspects.

2.3.5 Warehouse and cross-docking areas

Cross-docking services are mainly used by many companies in different industries (e.g. retail firms and less-than-truckload (LTL) logistics providers). The idea behind cross-docking is to transfer incoming shipments directly to outgoing vehicles without the process of storage between these two operations. The goal of this service is to consolidate the shipments, to reduce the delivery lead time and costs, etc. The role of cross-docking in industry even seems to increase (Boysen and Fliender, 2010, Apte and Viswanathan, 2000, Saddle Creek Corp., 2011).

Cross-docking can be describes as the process of consolidating freight with the same destination (but coming from several origins), with minimal handling and little or no storage between unloading and loading of the goods (Belle et al., 2012). The focus on cross-docking services is now on the transshipping, not holding cost. On the other hand, warehousing includes four major functions: receiving, storing, picking, dispatching. Storage and picking are the usually the most costly. Storage is expensive due to the inventory handling costs and picking due to labor intensive. Goods can be stored for several days or even weeks, instead of about 24h as many authors say in cross-docking (Bartholdi and Gue, 2004, Li et al., 2004, Vahdani and Zandieh, 2010, Wen et al., 2009). But many organizations use a mixture of warehousing and cross-docking to combine the benefits of both approaches.

A terminal which its main facilities are for cross-docking is called cross-dock. Most cross-docks are long, narrow rectangles (I-shape), but other shapes are also used (L, T, X,¿½) (Bartholdi and Gue, 2004). There is no special infrastructure to stage freight, a ¿½strip door¿½ where the freight is unloaded, and a ¿½stack door¿½ where the freight is loaded on the outbound trucks.

The advantages of a cross-dock (Belle et al., 2012) are the following:

* Cost reduction (warehousing costs, inventory costs, handling costs, labor costs, transportation costs);

* Shorter delivery lead time (from supplier to consignee);

* Improved customer service;

* Faster inventory turnover;

* Reduction of storage space;

* Fewer overstocks;

* Reduced risk for loss and damage;

* Consolidation shipments;

* Improved resource utilization (e.g. full truckloads);

* Better match between shipment quantities and actual demand.

The advantages make cross-docking an interesting logistic strategy that can give companies considerable competitive advantages.

2.4 Environment

Transport contributes significantly to general economic development. However, transport has negative influences on health and the environment, notably through air pollution, road traffic injuries, traffic noise, psychological and social impacts, land use and possibilities for physical activity (WHO, 1999). According to (UNECE/WHO Europe, 2004), policy has also focused on the role of transport on climate change.

2.4.1 Air pollution

The transport sector contributes about 25 per cent of the air pollution load, most of it from vehicles. Air pollution is responsible for many symptoms and diseases. It leads to increased mortality (premature deaths), increased admissions to hospital for respiratory and cardiovascular diseases, increased frequency of respiratory symptoms and use of medication by people with asthma, and reduced lung function (WHO Europe, 1995). It also reduces life expectancy.

Ozone (O3), airborne particulate matter (PM) and lead (Pb) are the transport-related pollutants that pose most concerns, but sulfur dioxide (SO2), nitrogen dioxide (NO2), carbon monoxide (CO), lead scavengers and various carcinogens are also notable.

In EU countries life expectancy is estimated that it is shortened by 8.6 months by air pollution (UNECE/WHO Europe, 2009) and at 2000 about 350,000 lives lost due to exposure to air pollution (WHO Europe, 2005). WHO has set an air-quality guideline level at 20 ¿½g/m3. However, according to (ENHIS, 2007) exposure levels to PM10 (Particulate matters with diameter less than 10 ¿½g) varied from 13 to 14 ¿½g/m3 (Finland, Ireland) to 53 to 56 ¿½g/m3 (Bulgaria, Romania, Serbia). The report of (ENHIS, 2007) also summarized that 89% of people in European region are exposed to more than the WHO¿½s limit and around 14% of population exceeds the EU limit value of 40 ¿½g/m3.

2.4.2 Noise

WHO guidelines limit noise levels for residential areas to 55 dB(A) during the day and to 45 dB(A) during the night (WHO, 1999). Transport is the most important source of community noise across Europe. Approximately 30% of the EU-15 population is exposed to levels of road traffic noise of more than 55 dB(A). In general, the WHO guidelines for noise are often exceeded in South East Europe on road with high traffic loads (UNECE/WHO Europe, 2009). But noise is emanating not only from the movement of transport vehicles but also from the operations of ports, airport and rail yards.

Disruption of communication, impairment of hearing, and bad sleep quality can be consequences of noise. Continuous noise above 30 dB(A) and indoor noise above of 45dB(A) can affect sleep quality, cause fatigue and decreased performance. Prolonged or excessive exposure to noise (e.g. 65-70 dB(A)) can cause permanent medical conditions such as hypertension (Berglund et al., 1999).

European Commission objectives are to ensure a high level of health and environmental protection and simultaneously to safeguard internal market for motor vehicles. To achieve this Commission¿½s proposal foresees a total reduction of 4 dB(A) for light vehicles and 3 dB(A) for heavy vehicles (European Commission, 2011). This step will be introduced from 1 January 2015.

2.4.3 Energy use

Motorized transport depends on fossil fuels, e.g. oil products, which account for more than 98% of the transport sector¿½s energy consumption. Instead of fossil fuels, there are also other prevalent alternatives, such as biogas, hydrogen, electricity, and hybrid vehicles. However, there is also a strong reliance on fossil fuels. As a result, GHG emissions from transport are closely tied to transport demand (BRRT, 2007c, Woodcock et al., 2007).

Since the end of 1990s, energy consumption has been increasing across Europe. Coal is more competitive than the high gas prices. This trend may continue if no additional policies and measures are implemented (BRRT, 2007d). The ratio of increase from 1990-2000 is 2% which is equal to 365 Mtoe (million tons oil equivalent) in 2000 (some 35% of all energy use). As a consequence, the more energy is consumed the more CO2 emissions from transport are produced. In addition, energy consumption per capita for transport is 2 or 4 times higher in Western Europe than in the other European regions (UNECE/WHO Europe, 2009).

According to International Energy Agency, transport sector consumed 42% of the oil in 1973 and this share climbed to 61.5% in 2010. But in recent years oil prices have increased and this crated the need to use more energy efficient modes. The two most energy efficient modes for freight transportation are rail and maritime transport. Inland waterways also provide an energy efficient method for transporting cargoes. For example, a tow boat moving a typical load of 15 barges is equivalent to 225 railcars or 870 truckloads (Rodrigue et al, 2009).

Furthermore, oil reserves are shrinking, costs of petroleum are increasing and the need to reduce emissions of harmful pollutants is now more imperative. For this reason, the solution of alternative fuels in the form of non-crude oil resources is needed. The most prevalent alternatives being consider are:

* Biogas such as ethanol, methanol and biodiesel can be produced from the fermentation of food crops (sugar cane, corn, cereals, etc.) or wood-waste.

* Hydrogen which is produced by electrolysis of water or by extracting it from hydrocarbon

* Electricity which is stored in a pure battery

* Hybrid vehicles consisting of propulsion system using an internal combustion engine supplemented by an electric motor and batteries, which provides opportunities combining the efficiency of electricity with the long driving range of an internal combustion engine.

Price of oil will certainly continue to increase, as there are serious limitations of non-fossil fuels in the transportation sector.

2.4.4 Climate change

Climate change is already affecting human health, by causing new risks and pressures such as food shortages and hunger, alteration of water resources and damage to physical infrastructure (particularly by sea-level rise and extreme weather events such as floods, heat waves etc.).

According to UNECE carbon dioxide (CO2) is not a pollutant but a greenhouse gas which contributes mainly to global warming effects having a predominant share of 55%. (OECD/ITF, 2008) and which is associated to climate change. As it is shown in Figure 12 transport sector¿½s share of GHG emissions is about 30 %. Conventional engines also produce other emissions such as methane (CH4), nitrous oxide (N2O), and ozone (O3) which are also responsible for the greenhouse phenomenon.