Policy decisions and modal choice: An example from the European Union

This study addresses the question of how trans-national regulations could stimulate environmentally
friendly and socially responsible transportation. Three scenarios are developed for 2010,
taking into account various costs related to road, rail, and inland waterway transportation,
including costs to society and environmental costs. The attractiveness of different containerized
transport modes is calculated for a representative freight corridor in the European Union. The
modal split is adjusted for the capacity limitations of the different modes. Analysis of the results
reveals that dedicated cargo rail and inland waterways, the two more socially responsible
transportation modes, are already relatively attractive to shippers, but lack sufficient capacity
to deal with forecasted demand. Further legislative interventions, such as increased taxation,
would therefore only increase the financial burden to shippers and society. Important investments
appear necessary for the further development of dedicated cargo rail and inland waterways.