The Impact of the Internalization of External Costs in the Competitiveness of Short Sea Shipping

Abstract

This paper applies a methodology for computing external costs in an intermodal transport network that includes short sea shipping to explore the impact of external costs in its competitiveness. The network, which includes roads, freight railways, maritime and inland waterway connections, considers the specific characteristics of different transport alternatives and vehicle types, providing a fair comparison of the various modes. A case study focused on freight transportation between Northern Portugal and 75 destinations (NUTS2 regions) in north-western Europe is presented. The potential of different intermodal routes that include short sea shipping is assessed, including not only internal costs and times but also external costs per mode and unit of cargo. The impact of the different cost approaches in each country of transit is shown along with the progress that has been made in the integration of external costs, using the most recent EU estimates on marginal costs coverage ratios per country for freight transport modes. The results support the modal shift from road to sea in this corridor, providing means for modal comparison and for the development of short sea shipping’s image as a sustainable mode of transportation.

Estimation of Air Emissions Externalities Due to Shipping: Analytical Methodological Framework

“…External costs are not simple to calculate and they can be distinguished into seven categories: accident, noise, congestion, habitat damage, air pollution, climate change and well-to-tank emissions. In most cases, these costs are not taken into account by the group of people who cause them [7] and, for example, shipping companies argue that external costs should not be considered at all for their sector due to the social nature of their activities. This is certainly not very realistic, and even though maritime transportation promotes economic growth and removes isolation between islands or different geographic areas in general, it also contributes to the above-mentioned seven impact categories.…”

Cost Effectiveness Analysis in Short Sea Shipping: Evidence from Northeast Asian Routes

“…Martínez-López et al [25] introduced a calculation method to estimate a specific environmental charge in ports to incentivize Cold Ironing (process to supply onshore electric power to vessels) use in Short Sea Shipping, and examined the impact of a charge on SSS vessel operators' economic performance under different scenarios. Ramalho and Satos [26] proposed a computing mechanism for external costs in an intermodal transport network including SSS to explore the impact of external costs in the competitiveness of SSS.…”

Methodology for Predicting Maritime Traffic Ship Emissions Using Automatic Identification System Data

“…Firstly, they may contribute to assess the contribution of shipping to current emission inventories, thus informing and guiding policy as regards investments (shore power supply) or speed limitations. The accurate assessment of emissions may also support a policy of future implementation of fees to cover the so-called external costs of transportation, which are those costs (GHG emissions, air pollution, noise, accidents, congestion, well-to-tank, habitat damage) imposed on society and not duly paid by the beneficiaries of transport activities [21].…”