Europe wants to build more intermodal traffic to lessen the region’s truck dependency. But there are many obstacles to reducing road haulage and increasing traffic by rail and short sea.

Intermodal terminal at Port of Barcelona, Spain
Intermodal terminal at Port of Barcelona, Spain

This year, the Spanish government earmarked about $1 billion (€850 million) to improve rail access to ports, including Barcelona, Valencia and Ferrol. They’re all part of a major push to boost intermodal traffic.
Spain isn’t alone in its efforts. Slovakia, Italy, Poland and France all have projects underway that are designed to heighten use of intermodal rail for moving freight, as do many other countries in the EU. Add to those efforts to bolster intermodal hubs for short-sea shipping and inland waterways.

“There are a number of projects around Europe,” said Richard Morton, managing director of Jura Associates, a UK ports, maritime and logistics consultancy.

The reason for this push: intermodal is seen as one important way to counter the growing preeminence of road-based freight.

Trucking now dominates freight movements in Europe. According to a European Parliament study released in May, less than 12% of European Union freight was transported by rail, as of 2014, the latest year data was available. Road haulage, by contrast, topped 50%.

This dependence on trucks raises serious environmental concerns, including CO2 emissions. It has prompted distress as well about growing road congestion, especially in urban areas.

Yet, while rail has been losing ground to road, intermodal rail freight has registered impressive gains. According to Libor Lochman, executive director of Community of European Railway and Infrastructure Companies, intermodal rail traffic grew by 43% from 2005 until 2015. This came despite the fact that rail freight declined over the same period.

Rail Freight Conundrum

Lochman said rail operators should focus on intermodal shipments as a means to grow. “Intermodal rail freight, in particular combined transport, is the fasted growing rail freight segment in Europe,” he wrote in an email.

The EU is pushing for better intermodal facilities. “This is a key precondition to secure long-term success for rail freight in general,” wrote Lochman.

Being the EU, this comes in part through regulations and in part through financing. The primary policy is called Trans-European Transport Network, known as TEN-T. The financing vehicle associated with TEN-T is termed “Connecting Europe Facility, or CEF. TEN-T is an ambitious multi-hundred-billion-Euros infrastructure initiative designed to better link the 28 countries of the EU. The program itself is more than two decades old, but was updated in 2004.

Perpignan Saint Charles Conteneur Terminal in France
Perpignan Saint Charles Conteneur Terminal in France

Associated with this is a 2010 directive called the European Rail Freight Corridors. That regulation is aimed at “increasing the cohesion, harmonization and coordination of rail and intermodal infrastructure along the major European freight corridors,” said Lochman. For example, the EU is contributing almost €12 million to a €56 million project in Valencia that upgrades rail infrastructure, allowing better access to the Port of Valencia. Part of this project, like many others in Spain, involves laying a third rail to conform to UIC gauge, from the broader Iberian gauge, which now requires axel changes at Spain’s borders, seriously lengthening travel time. This project will enable as well accommodation of freight trains up to 750 meters, adding several tons’ worth of freight.

“European policy is very much about making sure the infrastructure is there so the choices are available,” said Morton.

However, the European Parliament study is critical of the EU, pointing out that rail-related funding has been used primarily to boost passenger services and that the EU continues to underwrite road projects. In addition, the study said, with the exception of TEN-T funding, “no priority has been given to providing last-mile facilities or to adapting the network to longer trains.”

The European Parliament study cited rail links to the two large French ports of Marseille and Le Havre, which have “significantly lower speeds than road haulage.”

Overall, the percentage of freight moved by rail in the EU pales in comparison to the US. The two have similar sized rail networks, in terms of length. And European intermodal rail moves about 60% of the number of units in the US. However, the US moves more than six times as much freight tonnage by rail as does the EU, according to another European Parliament study, this one from last year.

One of the many limitations: European rail can’t double-stack containers. Administrative barriers also hobble rail freight. For example, rail requires a separate locomotive and driver for each country a train traverses, while trucks and drivers can transit the entire EU without restriction.

In the EU, rail-related freight faces an uphill battle on a much bigger front: commercial considerations. Time and cost still combine to heavily favor road over rail and governments can force shippers to use rail or short sea.

“There’s only so much [the EU] can do,” said Morton. “It comes down to business.”

Supply chain considerations weigh heavily. That’s especially true with just-in-time manufacturing, or the movement of perishable cargo, which is particularly important for a country like Spain. Freight, for example, can move from Spain to the UK by truck within 24 hours.

Morton’s firm served as project manager for an effort designed to boost intermodal traffic to the Iberian Peninsula and the UK. Completed two years back, the project heightened links between Bilbao, Spain and Tilbury, on the Thames River, 25 miles downstream from London. This project came under the auspices of an EU initiative called Motorways of the Sea, which seeks to buoy short sea shipping. It’s part of the TEN-T umbrella.

Pancorbo Solution

On the Spanish side, the Port of Bilbao constructed an inland railway logistics terminal, about 70 miles from the port. Called Pancorbo, this so-called inland port established shuttle trains that carry goods to ships in Bilbao, lessening road congestion in the city and near the port. It also built electrified shunting tracks for 650-meters trains and loading and unloading tracks capable of handling the even larger, 750-meters trains. Development of the Pancorbo terminal is ongoing.

The results are promising. Bilbao’s port-rail traffic last year grew by more than 20%, according to the Port of Bilbao, while overall cargo at the port grew by 8% during the first quarter of this year.

On the British side, Tilbury buttressed dock infrastructure to better load and unload cargo. It also has launched ambitious plans to heighten its own intermodal rail operations, part of a £1 billion port renovation and expansion program now underway.

“Intermodal rail freight continues to be a big success story, and the Port of Tilbury’s development and future plans are a growing part of that,” said Peter Ward, the port’s commercial director, in a June conference.

In Europe, Spain appears especially active these days on creating or improving on intermodal facilities, perhaps playing catch-up with some of the other major European economies and perhaps reflecting its rail-related limitations, including a different track gauge than the rest of the EU. Most Spanish ports have projects on the books designed to promote intermodal capabilities. The largest is at the Port of Barcelona, which is in the midst of a €150 million rail access and improvement effort. Most notably, the port is constructing a new rail connection linking the southern end of the port, and a new intermodal terminal. Already, the port of Barcelona is upping its rail-related services. Last December, for example, the port launched a new refrigerated rail service to Zaragoza.

However, Barcelona also shows how difficult the battle is. Last year, rail accounted for only 13% of total port-related traffic. That’s up sharply from 3.2% in 2006, but still represents a minor portion of freight movements. The EU, in funding the port’s rail access project, predicted that rail could reach a 30% share with the new facilities, as well as improve Barcelona traffic.

“Nearly all the ports in Europe are looking at how to have a better ratio of intermodal traffic,” said Morton. But he warns that conversion from road to rail won’t be easy.

“It’s very much a work in progress and improvements won’t come overnight,” said Morton. “They’ll have to make it even more efficient than road.”