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Evaluating the external costs of trailer transport: a comparison of sea and road

Maritime Economics & Logistics volume 21, pages 61–78 (2019)Cite this article

Abstract

The objective of this study is to deduce the comparative level of external costs per transported trailer within a context where an existing freight transport chain is replaced by one that includes greater use of shipping. Using both Sweden’s national guidelines for cost–benefit analysis (ASEK) and the European guidelines (Ricardo), the external costs of two alternative options are evaluated. The external costs for a road and shipping option are estimated to be lower than for the direct shipping option under Swedish guidelines, but higher under the European guidelines. However, the results favour the road and shipping option in preference to the direct shipping option under both Swedish and European guidelines when internalizing taxes and fees are accounted for. This is the case even where the shipping mode is compliant with the most stringent environmental regulations. The paper concludes that the evaluation system employed can have a fundamental impact on the outcome of a CBA and that the Swedish guidelines (ASEK) could by improved by incorporating specific values for air pollution from ships (particularly NOx emissions) and a system for regularly updating emission factors.

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Notes

  1. Styhre (2009) provides some insights into the sort of considerations and strategies influencing the supply of short sea shipping services.

  2. Directive 91/542/EWG defined Euro 1 and Euro 2, which were compulsory from 10/1993 and 10/1996, respectively. Euro 3 became compulsory from 10/2001 and Euro 4 from 10/2006, regulated by 1999/96/EWG updated by 2001/27/EWG. Three years later, Euro 5 was required, described in Directive 2006/81/EWG and modified in 2008/74/EWG. Euro 6 became compulsory in 01/2014. New Euro classes are usually on the market one or more years before they become compulsory (Dieselnet 2017).

  3. In undertaking this analysis, it is not entirely certain that all diesel fuel consumed by trucks on the Stockholm-Trelleborg route is taxed in Sweden. The reason is that foreign trucks carry a large part of the freight moved to and from Sweden and fuel taxes differ across Europe. Luxembourg, for example, has one of the lowest diesel taxes in Europe; standing at about 40% lower than that in Sweden. There is, therefore, reason to believe that the degree of internalization presented is slightly overestimated. As an extreme case, if only diesel purchased in Luxembourg is used, the internalization rate decreases from 75 to 44% under ASEK values.

  4. The EU Directive 8/77/EWG regulates the emissions of carbon oxide (CO), hydrocarbon (HC), nitrogen oxide (NOx), particulate matter (PM) and smoke. From Euro 1 to Euro 6, CO emissions have been reduced by 67%, HC emissions by 88%, NOx emissions by 95% and PM emissions by 97% (Dieselnet 2017).

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Acknowledgements

The authors are grateful to Sweden’s East Coast Ports Coalition for funding this study. For valuable comments received on an earlier version of the paper, thanks are due to Katarina Händel (Swedish Maritime Administration), Gunnel Bångman (Swedish Transport Administration), Henrik Swahn (HSAB) and Mattias Haraldsson (VTI – The Swedish National Road and Transport Research Institute). The authors would also like to thank Rune Karlsson at the VTI (for the use of Figs. 1 and 2), as well as the Editor-in-Chief of the journal, Prof. Hercules Haralambides, and anonymous reviewers, for providing valuable feedback on an earlier version of the paper. The conclusions and recommendations expressed in the paper remain the authors alone and do not necessarily reflect the opinions of the VTI as an authority.

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Authors and Affiliations

  1. Swedish National Road and Transport Research Institute (VTI), Stockholm, Sweden

    Inge Vierth

  2. Etraveli AB, Uppsala, Sweden

    Victor Sowa

  3. School of Business, Economics and Law, University of Gothenburg, PO Box 610, 405 30, Gothenburg, Sweden

    Kevin Cullinane

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  1. Inge Vierth
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  2. Victor Sowa
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Correspondence to Kevin Cullinane.

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Vierth, I., Sowa, V. & Cullinane, K. Evaluating the external costs of trailer transport: a comparison of sea and road. Marit Econ Logist 21, 61–78 (2019). https://doi.org/10.1057/s41278-018-0099-7

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Keywords

  • Freight transport
  • Environment
  • CBA
  • Emissions
  • ro–ro
  • Ropax