Blog by Ing. Sergio Barbarino, Chairman of ALICE, Research Fellow at P&G R&D
Wishful thinking?
In the USA the amount of surface freight transport that is moved over the rail network is estimated to be around 40% of the total. In Europe, despite several programs, strategies and ambitions we are still at less than half of that. Consolation comes from short sea shipping, which is thriving in Europe albeit obvious opportunities exist that don’t in the USA. So what are we doing wrong with the railways?
To start with, the antagonistic attitude toward road transport has not helped. An analysis we did for the Transformers Project (EU FP7) (see chart 1) shows that we would match the USA 40% freight transport by rail only if we would go intermodal for everything shipped at distances over 300 km. This would be 3 times the current EU rail shift goal. Should we do it? Yes of course, having considered also opportunities on inland waterway and short sea shipping. We would still have 60% of transport by road though. So taking a holistic view of the matter one would easily conclude that: Making road transport sustainable is priority #1, Making Rail transport efficient and competitive is priority #2.
Can I have a steak please?
(Vegan readers, please be patient with me) If you go to the butcher and ask for a “steak” would you be surprised if he/she would try to sell you a full “cow”? Well one of the issue with the railways is that they prefer to deal with customers that buy a full block train (a “cow”). However, the average load demand in Europe is way less than a truckload (a “steak”). It can then take more than 100 average loads to fill a train. Difficult? Not really… Maritime shipping lines manage to fill their container vessels with thousands of individual orders… They are great butchers indeed! Is it asking too much from the railways to apply the approach? It is not such a complex business model… They do it already for passengers trains. The recently-started EU project Clusters 2.0 is trying to address this issue via several layers of horizontal collaboration (shippers, logistic service providers, intermodal terminals, railway operators) and smart data sharing to reveal true market needs via the Cargostream initiative.
A better view
The beauty of the Paris Climate Change agreement is that we finally have a globally agreed holistic goal that is helping to put things in perspective and to get to this level of clarity much better than in the past. A Life Cycle Analysis approach reveals that not using the rail network to its full potential is not just a lost opportunity (see chart 2), but it is a net contributor of GHG emissions by itself due to the underlying footprint of inefficiently used infrastructure. The digging of the Brenner Tunnel, for example, will cause emissions that it will take 60 years to offset if the main effect will be to put trucks on shuttle train. This could be reduced to only 20 years if the same freight will cross the Alps on long distance intermodal services, linking for example Trieste to Munich. In Europe, we have plenty of these untapped opportunities. Another example is the Eurotunnel: it could potentially handle 100 Freight trains every night, but after 23 years of service we are still in the single digits. In P&G we have managed, using our flows, to help start an overnight operation (involving 7 different companies). It was sad we had to stop it essentially due to reinforced security requirements after the migrant crisis. We reverted to a good short sea shipping solution, but one must admit that DB Cargo, which continues relentlessly to develop this connection (for example by getting an agreement to open the HS1 at night for freight services, when the Eurostar does not operate), deserves respect and admiration.
Truly integrated transport systems
A huge opportunity we have for all modes of transport is the Physical Internet (PI). In a nutshell standardizing the loads (e.g. containers) and making interconnection across modes so simple that optimizing dynamically the efficiency of the available infrastructure and assets becomes an easy exercise. The opportunity is big because we are below 50% of load units’ efficient utilization in both weight and volume (see chart 3). A critique to the PI is that it may have the adverse effect of making Freight Transport cheaper and create new demand. In ALICE (the EU technology platform for logistic innovation) we have started a good debate on this and whilst it is still a work in progress, it looks promising. First of all, freight transport demand is expected to increase a lot between now and 2050…almost 300%! The only way to make such a projected increase sustainable is to increase load efficiency (this alone would reduce the needed growth in transport supply to only 50%) and aim for ZERO FREIGHT LOGISTIC EMISSIONS. How to achieve this? It is safe to assume that technologically this is feasible, the problem is the cost. We believe that the efficiency gains we could get out of PI could help pay for it. Even more… if 60% of freight logistic is indeed for distances less than 300 Km, better, more convenient and cheaper freight logistic could have a positive sustainable effect on the elimination of unneeded personal mobility (eliminating the need of going shopping by private car for example). From this holistic point of view freight logistic emissions’ impact could not just be targeted to be zero, but even negative. A truck, no matter how it is powered, is hundreds of times more efficient than a private car to transport goods. In this logic, if PI will make freight logistic demand increase at the expense of mobility than the overall effect may be net positive in the path to stop global warming.