https://orcid.org/0000-0001-6347-8827
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ABSTRACT
Despite high ambitions, policies for a modal shift in Europe have largely been unsuccessful. Part of the explanation relates to the inelasticity of freight transport demand. Understanding the demand elasticity of freight transport is important to design and appraise policies for external cost reductions in the transport sector. There have been many studies focused on estimating the elasticity of demand for short-sea shipping, a mode which policy makers have often aimed to strengthen to facilitate a modal shift from road freight. The objective of this review is to build upon the available literature by presenting and comparing estimated elasticities and to demonstrate the state of evidence through the application of two methodological approaches. Our review shows that there is a surprising degree of variation in elasticity estimates, part of which can likely be explained by differing methodological approaches. Applying a deterministic cost-minimising freight transport model and a stochastic multinomial logit approach based on responses from the Swedish Cargo Flow Survey, we demonstrate the inelasticity of Swedish maritime freight flows and provide suggestions for future research and policy discussions. For future studies of maritime transport demand elasticities to arrive at reliable and policy-relevant results, we highlight the need for combined and pluralistic methodological approaches and an increased use of real-world data.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 Between the years 1995-2018, the combined modal share of maritime (excluding inland waterways) and rail tonne-kilometres in intra-EU-27 freight transport decreased from 43.6 to 41.8 percent (European Commission, Citation2020). During the same period, the modal share of road transport increased from 47 to 51 percent.
2 At the European level, the Pilot Action for Combined Transport, the Marco Polo programs and The Motorways of the Sea can be mentioned as examples. Policies in the UK include the Waterborne Freight Grant Scheme and the Modal Shift Revenue Support.
3 This inclusion criteria means that some articles, while relevant to the study of modal shift and short-sea shipping's competitiveness, were excluded due to not presenting comparable estimates of demand elasticity. For a more comprehensive review of modal shift studies in general, the reader is referred to (Raza et al., Citation2020).
4 Most of the reviewed papers calculate point elasticities, though not all papers provide information sufficient to determine the type of elasticity presented. Few papers, Arencibia et al. (Citation2015), being an example, explicitly state that they calculate arc elasticities.
5 It would be desirable to construct longer time series of modal shares in Swedish freight transport. However, the statistics suffer from comparability issues over time as methods for calculating freight tonne-kilometres have been altered several times. The timespan of 2011–2016 is used for illustrative purposes since it is internally consistent in terms of measurement.
6 The model includes 16 shipment sizes classes and 14 transport chains. Another alternative modelling approach would have been to use a nested logit model, specifying separate nests for road transport and multimodal transport. However, previous comparison of the MNL approach with a nested logit specification has shown that the difference in results is relatively small (Lindgren et al., Citation2019).
7 The number of chain and shipment sizes dummies included in the estimation for every commodity group was based on the accuracy with which the coefficients were estimated and whether the chain/shipment size was observed in the estimation sample. Coefficients for chain and shipment sizes never chosen among shipments in a commodity group fall out of the model. Only cost coefficients with the expected negative sign is included in the model specification.
8 Sweden, for instance, recently expanded its version of the European “Ecobonus” scheme, which allows an outright grant to be paid to transport companies who can provide new or improved maritime services shifting freight from road.