Transportation Policy and the Effects on Modal Choice in the EU

This study addresses the question of how trans-national regulations could stimulate environmentally friendly transportation. Effects of capacity limitations, costs and transit time requirements on the attractiveness of different containerized transportation modes are modeled for a representative freight corridor in the European Union. Multiple legislative scenarios are developed for 2010, taking into account various characteristics of road, rail and inland waterway transportation, including costs to society and environmental costs. Analysis of the scenarios reveals that under the current legislation environmentally friendly transportation modes are already very attractive, but lack sufficient capacity to deal with demand. Further legislative interventions, such as increased taxation, would only lead to increased transportation costs, and render containerized transportation less effective and more costly to society. For a more favorable modal split, it appears that important investments are to be made in dedicated cargo rail and inland waterways.