Scandinavia, cutting across central Europe, and destined for southeast-ern Europe. Seamless movement of freight through internationalboundaries is hindered by political, technological, administrative,social, and legal barriers. The attractiveness of intermodal freight ser-vices therefore hinges on resolution of these barriers. A network simu-lation platform was developed to evaluate various policy scenariosaimed at mitigating these hindrances (1, 2). These policy scenariosinclude implementation of European interoperability directives andbarrier-removing or barrier-reducing improvements in physical, oper-ational, or managerial aspects and business practices of the rail systemaimed toward achieving European Commission (EC) policy objectives.

The EC’s interest in rail-based intermodal competitiveness istwofold. During the past two decades, shipper preference for road-based transport has steadily increased, thereby increasing environ-mental pollution and congestion (3). At the same time, state-ownedrailway infrastructure has languished, and international rail movementhas been hindered by technologically inconsistent networks and a hostof other barriers (4). In addition, rail as a mode of transport offers thelowest negative socioenvironmental external costs (defined as the col-lective adverse impact of transport not borne by the operator, e.g., pol-lution) among all land-based modes. It is a political objective of the ECto pursue greener alternatives for transport. However, higher-qualityintermodal rail service is precluded by (a) barriers to seamless opera-tion across international boundaries and (b) significant impedimentsto new private railway operators entering what has historically been astate-owned monopoly. Policy-sensitive business assessment toolsare needed that can quantify benefits under various operational andpolicy scenarios and formulate viable business models that operatorscan implement.

A number of alternative scenarios were carefully formulated inregard to proposed supply of services and potential policy actions con-cerning the industry. These scenarios were then analyzed using thenetwork modeling methodology developed and calibrated for pur-poses of this study. Comparison of the scenarios supports evaluationof various supply strategies from the operator’s perspective. New ser-vice design options, developed in consultation with rail operatorsfrom the region and founded on market-based research, are evaluatedby quantifying potential rail competitiveness in attracting freightdemand resulting from operational considerations that pertain to theproposed services. The key question this paper seeks to answer isunder what operational and policy conditions can pan-European inter-modal rail freight services be competitive? Results show, among otherfindings, that a combination of favorable rail policies and intermodaloperations offering a high level of service is a prerequisite for success.

The main contribution of this paper is in the quantification of poten-tial gains in the market share of international intermodal rail-based

Market Potential for International Rail-Based Intermodal Services in EuropeFrom Sea to Shining Sea

Rahul Nair, Elise D. Miller-Hooks, Hani S. Mahmassani, Vishnu CharanArcot, April Kuo, Kuilin Zhang, Aaron Kozuki, and Johanna Ludvigsen

21

This paper examines the market potential for international rail-basedintermodal services along the REORIENT Corridor, which spans 11 countries from the Baltic (Scandinavia) to the Mediterranean (Greece)through the accession countries of the European Union. The mainapproach followed in this assessment is to conduct scenario analyses usinga state-of-the-art intermodal freight network modeling capability, whichallows the evaluation of various service supply strategies under varyingoperational and policy scenarios. New service design options, developedthrough a combination of market-based research and expert opinion, areevaluated in regard to the potential addressable market demand and thelikelihood of successfully competing for that demand. The analyses pro-vide realistic assessments of the potential competitiveness of rail inattracting freight demand resulting from (a) operational considerationsthat pertain to the proposed services and (b) implementation of inter-operability directives and barrier-removing or barrier-reducing improve-ments in physical, operational, or managerial aspects and businesspractices of the rail system that are aimed toward achieving EuropeanCommission policy objectives. In addition, the analysis points to charac-teristics of the demand, which is most likely to shift toward rail, in regardto commodity types and geographic location. The key question the paperseeks to answer is under what operational and policy conditions can pan-European intermodal rail freight services be competitive? Results showthat prerequisites for success are a combination of favorable rail policiesand the intermodal operations’ high level of service.

This paper examines the market potential for international rail-basedintermodal freight services along the REORIENT Corridor, whichspans 11 countries from the Baltic (Scandinavia) to the Mediterranean(Greece) through the accession countries of the European Union (EU).Accession countries are newly admitted members of the EU andinclude Bulgaria, Czech Republic, Hungary, Poland, Romania, andSlovakia. Typically, these countries are characterized by spare railcapacity offering an alternative to the congested rail networks of west-ern Europe. The focus of the analysis is on high-valued freight move-ment along this trans-European north–south corridor, originating in

R. Nair, E. D. Miller-Hooks, V. C. Arcot, A. Kuo, K. Zhang, and A. Kozuki, 1173Glenn Martin Hall, Department of Civil and Environmental Engineering, Universityof Maryland, College Park, MD 20742. H. S. Mahmassani, Transportation Center,Northwestern University, 600 Foster Street, Evanston, IL 60208. J. Ludvigsen,Institute of Transport Economics, Gaustadalléen 21, N-0349 Oslo, Norway. Cor-responding author: E. D. Miller-Hooks, elisemh@umd.edu.

Transportation Research Record: Journal of the Transportation Research Board,No. 2066, Transportation Research Board of the National Academies, Washington,D.C., 2008, pp. 21–30.DOI: 10.3141/2066-03

freight services in Europe in the face of political (accession of manyeastern European countries to the EU), business (opening of rail mar-kets to private participation), technological (EC interoperability direc-tives and standardization), and administrative (a common transportpolicy with seamless integration of national rail networks) changes.

BACKGROUND

From 1995 to 2005 the share of goods transported inland by road hasincreased from 72.2% to 76.9% across the European Union’s 27 coun-tries, according to the EC. This growth in road traffic is a direct resultof the distorted attention roadways have received in the recent past.Railway infrastructure, which typically is state owned, has not beenexpanded or adequately upgraded (although within the REORIENTnetwork, the Czech Republic is an exception). Technical standardsbetween national networks vary greatly, resulting in a patchwork ofrail networks that are not interoperable. As the EU expands eastwardto include the accession countries of eastern Europe, problems ofinfrastructure and interoperability are only exacerbated. The histori-cal lack of a common transport policy has resulted in considerable bar-riers to international rail transport. In addition, rail policy occupiescenter stage in national politics, thereby posing considerable inertiaagainst change. Until the recent liberalization of the railways, in manycountries the same public entity operated, maintained, and owned therail system. Despite the fact that EC directives have legally and func-tionally separated rail operations from infrastructure ownership andmanagement, the government-owned national railways still maintaina symbiotic relationship with infrastructure providers. New entrantsto rail business face considerable hurdles in regard to access to infra-structure and operations at border crossings. The structure of goodstraded in intra-European markets has changed considerably duringthe past decade with substantial decreases in low-value bulk goodsand increases in high-value manufactured and processed freight thatare better served by flexible and reliable truck-only services. There-fore, the nascent rail-based intermodal industry has captured a mar-ket segment served by truck transport by attracting high-value,time-sensitive goods.

European shippers demand that goods be transported safely, reli-ably, and at a minimum cost. Ludvigsen (5) shows empirically that forthe Nordic regions of Europe, criteria that shippers use for route andmode choice are mainly “operational excellence” (referring collec-tively to efficiency, reliability, expediency, and service), service avail-ability, and risk to cargo. A more in-depth analysis of shippers’ qualityrequirements was conducted in the REORIENT project (6) with theaim of identifying quality factors that determine a shipper’s transportchoices. In addition to the factors described above, the ability to dealwith service failures was found to be a critical determinant of a ship-per’s decision. The gap between expected and delivered quality of ser-vice was found to be broader for rail than for truck, although rail offerslower freight rates for transit of some goods categories. Shippers ofhigh-value goods, mainly from logistics and manufacturing indus-tries, do not distinguish between service qualities required from inter-modal and truck service. Thus, any intermodal service providerhoping to capture high-value goods must compete directly with roadfreight movements and the high-quality service provided.

SERVICE DESCRIPTION

Any rail-based intermodal service provider needs to be cognizant oftwo aspects of freight demand: potential commodities that can be ser-viced and the nature of international shipments. In the REORIENT

22 Transportation Research Record 2066

network, rail and truck compete directly in select high-value marketsegments (manufactured goods, chemicals, and foodstuffs). Modalshift from road to rail, as desired by the EC, or the increased flow ofservices, as desired by rail-based intermodal operators, should focuson these markets to (re)gain shares from truck transport. These com-modities by their nature require a high level of service. In addition,typically international shipments moved between 1,000 and 1,500 km,as determined by a shipper’s survey conducted in the REORIENTstudy (6). A service design should offer competitive “operationalexcellence” within this distance band. The rail segment of the pro-posed intermodal service is, therefore, a shuttle service that is charac-terized by point-to-point routes, fixed number of load-carrying units(LCUs), and limited or no classification–marshaling. The routesconnect major European hubs and are described in more detail next.

Service design options were developed based on expert knowledgefrom the region. Four such expert-generated routes are proposed, asshown in Figure 1.

Service T1 is a block train with full carloads (FCLs) connect-ing Halsberg, Sweden, to Budapest, Hungary, through the ports ofTrelleborg, Sweden, and Swinoujscie, Poland, via Vienna, Austria–Bratislava, Slovakia. It is dedicated to the movement of Finnish paperrolls to mills and printing houses in central Europe along with otherbulk freight. This train competes directly with rail transit via Germanyand covers a distance of 1,182 km at an estimated moving time of13.5 h (moving time does not include delays and stops for processingof shipments).

The T2 service is a shuttle train with semitrailers on flatcars (SFC)run between Trelleborg and Swinoujscie and Bratislava–Vienna. Itmoves high-value, high-margin, time-sensitive cargo customized tothe needs of third- or fourth-party logistic (3PL or 4PL) providers.The route covers 934 km with an estimated moving time of 11 h.

T3 is a mixed train with unitized LCUs (containers, semitrailers,swap bodies) on flatcars connecting Gdansk–Gdynia in Poland toThessaloniki in Greece through Bratislava–Vienna, Budapest, andBelgrade, Serbia. It carries high-value, high-margin, time-sensitivefreight customized to the needs of 3PL and 4PL providers andlarge-scale wholesalers. T2 and T3 services directly compete withtrucks over Germany and Poland. The route covers 2,203 km withan estimated moving time of 27 h.

T4 is a mixed train with unitized LCUs and FCLs connecting theBratislava and Budapest hubs with Constanta seaport in Romania viaBucharest and was designed to carry high-value freight customizedto the needs of 3PL and 4PL providers, global manufacturers, anddistribution wholesalers. This service will compete with long-haulcontainer block trains between Rotterdam in the Netherlands andConstanta, and Rotterdam and Thessaloniki, connecting westernEurope with Turkey. The route covers 1,268 km in an estimatedmoving time of 15 h.

Two operational characteristics, namely scheduling constraints andaccess, have a bearing on the attractiveness of the services. Europeanrail networks serve mainly passenger services, and rail freight move-ments yield priority to them. Freight movements during the day areeither considerably slower or prohibited. Relaxation of schedulingconstraints is considered as a way to increase competitiveness.

The point-to-point service concept calls for limited egress andingress stops along the service. However, a balance between the mar-kets served and the level of service needs to be established. With toofew access points, the rail service can serve only a geographically lim-ited market. Too many access points, however, lead to a drop in thelevel of service as a result of frequent stops. The proposed services aretested for different levels of access. These services are simulated onthe network modeling platform, which is described next.

FRAMEWORK FOR EVALUATING SERVICE POTENTIAL

The representation of freight moved by rail and associated modesfrom origin to destination requires a model of the underlying networkstructure and processes. On the supply side, the physical infrastruc-ture of roads and rail links serves as a network on which services oper-ate. This network connects zones in which freight originates andterminates (representing the demand side). Demand for freight move-ment across Europe is maintained in the European Transport PolicyInformation System (ETIS) database for Base Year 2000 and Fore-cast Year 2020 (7). Freight flows for 2006 are determined by incor-porating growth rates found in the PolCorridor study (8). The networkmodeling platform represents supply and demand in the REORIENTCorridor and captures their dynamic interaction through a simulation-assignment framework. The platform simulates freight at the disag-gregate level of the shipment. A joint mode, path, and service choiceis modeled for each shipment. A generalized cost function is used todetermine the choice between truck-only paths and rail-based inter-modal paths. Each path has associated attributes that are consideredexplicitly by the shipper: travel time and transport price. The com-modity to be shipped and its value, time-sensitivity, and level of haz-ard also are used to evaluate the utility of a particular path. The choiceof a particular mode reflects the shipper’s preference for a mode–pathcombination that is best suited for the commodity to be shipped. Addi-tional details concerning the network modeling platform are describedin Arcot et al. (9).

Model parameters are modified to reflect the effects of opera-tional or policy changes. The impact of these changes on the systemis studied. Of primary interest is the market potential for new services.In addition, in line with EC objectives and legislation, market share

Nair, Miller-Hooks, Mahmassani, Arcot, Kuo, Zhang, Kozuki, and Ludvigsen 23

captured by rail-based solutions as opposed to truck-only movementscan be studied. Key questions relating to the potential for services areformulated.

From the operational perspective, for what levels of access do ser-vices capture additional demand? Which markets (geographic andcommodity categories) do the proposed services attract? What aregood scheduling practices? How will the implementation of ECinteroperability directives, barrier reduction at borders, and invest-ment in transport infrastructure affect service performance? Whateffect will an increase in infrastructure access charges have on thecompetitiveness of the rail service? To answer these questions, sce-narios were designed. Each scenario represents a realization of modelparameters. Comparison of simulation results on performance mea-sures quantifies effects of the specific parameter altered. Key perfor-mance measures were studied at the overall network level (modesplit, link flows, and node delays) and at the service level (freightattracted in tons, service usage in ton km, service “catchment” areas).

SCENARIO DESIGN

Operational scenarios pertaining to the proposed services weredefined in three dimensions: service design, scheduling, and access.Service design refers to the proposed services T1 through T4 (seeFigure 1) and which of the services were tested. Three levels ofscheduling policy were tested: (a) Level 1: night only, (b) Level 2:any time with restrictions, and (c) Level 3: any time with priority.Similarly, two levels of access were tested.

Policy scenarios affect model parameters by reducing travel times(infrastructure improvements) or by reducing border delays (barrierreduction of borders). These improvements can be specific to parts

T1

T2

T3

T4

Access Points to Service

FIGURE 1 Services proposed through expert opinion showing Level 2 access points.

of the network (specific rail links or border stations) or can affectthe entire network (for example, effects of better data exchange).Improvements were modeled as bundles specific to either barrierreduction at borders or infrastructure improvements. In addition,the effects of infrastructure improvements were tested. Theseimprovement bundles are described in Table 1.

Assumptions were made based on expert opinion for measuresthat were difficult to quantify (for example, no empirical studiesshow the effects of better data exchange on border processing times).The scenarios were defined such that, all else being equal, a changein performance measures between two scenarios is the result of asingle operational or policy change.

The current situation is called the base case, for which no new ser-vices are introduced. All other scenarios can be viewed in referenceto the base case or compared with each other to answer questionsof interest. For example, to study the effect of infrastructure usagecharges ceteris paribus, two identical scenarios were simulated andcompared—one with base case infrastructure usage charges and theother with a higher charge. The differences in performance measurescan be attributed solely to infrastructure usage charges. All scenarioswere designed for Base Year 2006, and a select number of scenarioswere run for Forecast Year 2020. Two modes were considered: truck-only and rail-based intermodal. Approximately 57 million tons offreight, representing 3.2 million shipments, is simulated for a periodof 1 week. More details of the experimental design and methodologycan be found in Arcot et al. (9). Results of the numerical experimentsare reported next.

ANALYSIS RESULTS

Results of the simulation experiments demonstrate the potential fornew international rail freight service in the REORIENT Corridor. Insummary, results favor introduction of the proposed services althoughthe extent of demand captured is conditional on improvementsthat would make rail-based intermodal services more competitive ascompared with truck.

The base case mode shares without the proposed services for 2006,shown in Figure 2, illustrate the overall intermodal market share dis-aggregated by commodity types [shipments are classified according to

24 Transportation Research Record 2066

the NST/R (Nomenclature Uniforme des Marchandises pour les Sta-tistiques de Transport—Standard Goods Classification for TransportStatistics) chapters classification, which has 10 broad commodityclasses and a separate class for crude oil]. High-value goods, namelymachinery, manufactured articles, and chemicals, show a higher pref-erence for intermodal services, as expected. The overall shares also areas expected and compare with official statistics from the EC (3).

Operational Scenarios

The introduction of the four new services with limited access points(Level 1) in existing conditions results in major gains for the T3 ser-vice. Scheduling is assumed as nighttime only, and no improvementsin either infrastructure or at the borders have been implemented. Intotal, all four services carry 68.59 million ton km of largely high-value goods, chemicals, machinery, and manufactured articles (seeFigure 3).

To quantify the impact of entry into additional market segments, asecond scenario involving the four proposed services is considered.This scenario involves changes in only the level of access to Level 2,including points of loading and unloading at Sofia in Bulgaria,Bucharest and Arad in Romania, and Poznan in Poland, as shown inFigure 1. The level of access affects all services. Poznan is an additionalpoint of access for T1 and T2, Sofia is an intermediate loading pointfor T3, and Bucharest and Arad are additional points of access for T4.Results, as given in Figure 4, indicate strong market gains for all rail-based services except T3, suggesting that the addition of Sofia as anaccess point does not tap additional markets. That is in part the resultof there being less trade to and from Bulgaria, as suggested by the ETIStrade database (6), the source for demand estimates in this study.

The next operational scenario pertains to increasing the level ofservice of the proposed services. High-margin, high-value goodscan be attracted by providing competitive delivery times achievedby relaxing scheduling constraints. At the first level of scheduling,international freight is assumed to move only at night. This assump-tion captures the very high penalties for movement of freight duringdaytime hours. On European rail networks that serve primarily pas-senger trains, this assumption is considered justifiable because pas-senger trains have strict priority. At the second level, this constraint

TABLE 1 Infrastructure Improvements, Scenario Dimensions

Dimension Value Implication

Scheduling

Access

Border barrierreduction

Infrastructure improvements bundle

Infrastructure charges

Level 1Level 2Level 1Level 2CurrentIntermediateBest

Current

Improved

CurrentHighest

Nighttime operations only.Additional daytime operations with strict priority for passenger trains.Loading points: all harbors on the REORIENT network, Vienna, Bratislava, Budapest, and Belgrade.In addition to Level 1 loading points, stops at Sofia, Bucharesti, Poznan, and Arad are included.Existing situation at borders replicated (delays typically between 3 and 4 h).Use of multivoltage locomotives and mitigation of some operational barriers (delays typically between 1 and 2 h).In addition to the intermediate improvements, use of European Rail Traffic Management System (ERTMS) or similar

along the T3 corridor, Information and Communication Technologies (ICT) facilities for better data exchange (delaysbetween 15 and 45 min, with 15% increase in speed along the T3 corridor).

Existing speed, congestion at important terminals (e.g., Budapest), and nonelectrified tracks in some segments of thecorridor.

Improvements in operating speeds, mainly in Poland (by 20%); improved terminal operations resulting in higher ser-vice rates; and all tracks along corridor electrified resulting in reduction of delays at locations where a change fromelectric locomotives to diesel was required.

Existing charges.Introduction of uniform charges along the entire corridor, assumed to be equivalent to the current highest charges (as

found in Slovakia, Romania, and Hungary).

is relaxed, and movements during the day are permitted, although atlower speeds than at night (passenger schedules across the networkwere not available, and speeds during the day for freight trains wereassumed to be half of those of night runs). No improvements ininfrastructure or reduction of barriers at borders are modeled. Level 2access is assumed for both scenarios.

Nair, Miller-Hooks, Mahmassani, Arcot, Kuo, Zhang, Kozuki, and Ludvigsen 25

Results of the comparison are shown in Figure 5. A 14.9%increase in flows (measured in ton km) along the newly proposedservices is predicted as a consequence of relaxing scheduling con-straints. Further improvement is possible through more sophisti-cated operation of the rail network to allow more efficient priorityallocation to different services.

0%

5%

10%

15%

20%

25%

30%

Agriculturalproducts andlive animals

Foodstuffs andanimal fodder

Solid mineralfuels

Petroleumproducts

Ores and metalwaste

Metal products Crude andmanufactured

minerals,building

materials

Fertilizers Chemicals Machinery,manufactured

articles

Crude oil

Intermodal10,288,888

18%

Truck-only47,327,745

82%

Weekly Flow in Tons (57,616,633) Road only IM47,327,745(82.14%)

10,288,888 (17.85%)

Inte

rmod

al S

hare

(ton

%)

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

Agriculturalproducts andlive animals

Foodstuffsand animal

fodder

Solid mineralfuels

Petroleumproducts

Ores and metalwaste

Metalproducts

Crude andmanufactured

minerals,building

materials

Fertilizers Chemicals Machinery,manufactured

articles

Crude oil

T4 (mixed)T3 (unitized)T2 (unitized)T1 (bulk)

Wee

kly

Flow

in to

n-km

FIGURE 2 Base case flows and intermodal market share by commodity.

FIGURE 3 Weekly flow predicted on new services by commodity classes in ton-km.

Policy Scenarios

One critical deterrent to seamless intermodal freight transport arisesat the borders between nations, where administrative, technological,legal, and business barriers exist. To predict the potential impactof implementing improvements [such as sending train manifestsahead of each train’s arrival, employing multivoltage locomotives,applying interoperability standards to allow locomotive drivers tooperate in tow to three countries, deploying information and com-munication technologies (ICT) for better communication, and per-mitting carriers to operate in foreign countries] that would aid in mitigating existing barriers, experiments were run to assess theimpact of decreased border crossing times. The improvements underthe barrier improvement bundle include improved signaling systemsalong the T3 line (the route from Gdansk to Thessaloniki). T3 is oneof six major corridors that will receive funding for improvements ofsignal systems mandated by the European Rail Traffic ManagementSystem (ERTMS).

In these runs, it was assumed that the new services are offered with“greater access,” as defined in Table 1, but no other improvements

26 Transportation Research Record 2066

were assumed. “Conservative” estimates of border crossing times ofbetween 3 and 4 h were used. These times were based on empiricalknowledge gathered in the field. With streamlined border operations,improved technologies, and international agreements allowing per-sonnel from one country to run trains on another country’s network,these border crossing times can be reduced to as little as 15 to 45 min,the assumption of the sophisticated case. For example, at the CzechRepublic–Austrian border, delays were estimated to be nearly 3 h inthe conservative scenario and 15 min in the sophisticated scenario.

Results of the experiments, as depicted in Figure 6, show thatimprovements in border crossing times result in a significant gain (onthe order of 20.5%) in new service usage in the sophisticated case incomparison with the conservative case. The entirety of the increasethat is observed was carried by the T3 line. The improvement in theT3 line is expected because this line involves numerous borders, manyof which cause considerable train delays, and is the object of signal-ing system improvements as a result of the considerable investmentmandated by ERTMS along the corridor.

Technological barriers related to the physical infrastructure wereidentified across the REORIENT Corridor. Bottlenecks caused by,

Flow in ton-km (×106)ServiceLevel 1 Level 2

T1 1.23 22.26 T2 3.03 11.41 T3 60.91 60.90 T4 3.42 17.15

T1 T2

T3

T4

T1

T2

T3

T4

0

20

40

60

80

100

120

140

160

180

200

Level 1 Level 2

×106

Ton-

km

Flow in ton-km(×106 )Service

Level 1 Level 2T1 21.40 21.76T2 10.78 12.87T3 86.88 97.55T4 15.59 22.51

T1

T2

T3

T4

T1

T2

T3

T4

0

20

40

60

80

100

120

140

160

180

200

Level 1 Level 2

×106

Ton-

km

FIGURE 4 Effect of increased access on service attractiveness, weekly flow in ton-km; gains for all services except T3.

FIGURE 5 Increased new services usage that results from allowing daytime operations.

for example, poor infrastructure, and changes in voltage were alsonoted. Experiments were run to assess the potential impact of infra-structure improvements pertaining to technological and administra-tive barriers to improve general operations and to alleviate identifiedbottlenecks. A bundle of infrastructure improvements is proposed,including a 20% increase in rail maximum speeds in Poland thatwould result from improvements in the track, electrification of trackalong all newly proposed services, and terminal processing timeimprovements.

To assess the impact of this bundle of infrastructure improvements,results from experiments before and after these improvements wereimplemented were studied. In both scenarios, “greater access” andimproved (sophisticated) border crossing operations were assumed.Terminal processing times were modeled such that between 20 and25 min per container (approximately 10 h per train at the end termi-nal, assuming 30 cars per train) was required in the sophisticated case.As a consequence of improved equipment and operating practices atthe terminals, the terminal operating time was reduced to between 5and 10 min per container, or approximately 2 to 3 h per train at an endterminal.

To assess the impact of this infrastructure bundle, rail-based inter-modal mode share is considered at the network level. Overall, it is esti-mated that weekly flows on the rail-based intermodal system willincrease by 9.5% from 10 million tons to 10.95 million tons. Themode share of the rail-based intermodal system as a result of the infra-structure improvements is expected to increase by 1.6 percentagepoints (from 17.4% to 19%).

Findings from the assessment of proposed new services and oper-ational improvements ascertained in the experiments show thatwhen new services are introduced with a sufficient number of serviceaccess points (“greater access”), technological and administrativebarriers are correspondingly mitigated, time-of-day scheduling con-straints are relaxed, modern technologies are introduced (resulting ingreater safety and faster terminal processing times), improvementsto infrastructure are made, and a significant impact can be noted onthe market share of rail-based intermodal services in the REORIENTCorridor and on the proposed services. To quantify the effects of allthese improvements jointly, the current situation is contrasted withthe best-case scenario.

The magnitude of the gain in freight flows (in ton km) result-ing from this best-case scenario, with infrastructure, technological,

Nair, Miller-Hooks, Mahmassani, Arcot, Kuo, Zhang, Kozuki, and Ludvigsen 27

administrative, operational, and scheduling improvements, is esti-mated to be 182% along newly proposed services in the REORIENTCorridor study area (Figure 7). Results also estimate a 12.2% increasein rail-based intermodal flows (in tons) over the entire REORIENTnetwork. The mode share of the overall rail-based intermodal systemincreases by 2.08 percentage points (from 16.97% to 19.05%) if allimprovements are made.

The intermodal share can be disaggregated by commodity classes(see Figure 8), and high-value goods categories show solid gains(chemicals, machinery, and manufactured articles). Intermodal sharesof low-value commodities, which are insensitive to level of service(ores, metal waste, building materials, crude oil, agricultural products,fertilizers, etc.), remain stable. Petroleum products show an unusualjump in intermodal share.

In addition, the attractiveness of the proposed services leads to anincrease in the catchment area of the services. The catchment arearefers to the zones from which shipments using the proposed serviceoriginate. In the best case, the proposed services cover a region withsignificantly wider geographical radius and, thus, are able to attractmore demand from zones farther away from the corridor (Figure 9).

The cost of the infrastructure improvements requires investment,and the cost of development is likely to be passed on by public agen-cies (e.g., the national infrastructure managers) to railway operatorsby increasing infrastructure usage charges, which then are passedon to consumers as increased shipping prices. The introduction ofany charge is expected to reduce intermodal market share, and itis desirable to quantify this adverse effect.

Currently, infrastructure charges vary by country. Lacking crediblesources for charging levels, a simple strategy is tested. Charges for allcountries are set to equal the highest charges currently prevalent(those in Slovakia, Romania, and Hungary). This higher user fee isexpected to pay for installation of more advanced signaling systems,improved container-handling equipment, information technologyrequired at the borders for streamlined handling of train manifests andother documents, and adherence to enhanced infrastructure operationsstandards. Two scenarios, with and without infrastructure chargeincreases, are compared. All else being equal, intermodal marketshare reduces by 18.2% (measured in tons) from 10.9 million tons to8.95 tons. Despite this reduction, the increase in infrastructure chargesleads to a 64% increase in revenues to pay for the infrastructureimprovements. Note that an increase in infrastructure usage charges

Flow in ton-km(×106 )ServiceConservative Sophisticated

T1 22.26 21.40T2 11.41 10.78T3 60.90 86.88T4 17.15 15.59

T1

T2

T3

T4

T1

T2

T3

T4

0

20

40

60

80

100

120

140

160

180

200

Conservative Sophisticated

×106

Ton-

kmFIGURE 6 Improved border crossing times lead to greater attractiveness of intermodal rail.

without improvements in the level of service would lead to a loss ofrevenue.

Additional analysis was carried out to assess whether or not con-currently deploying all four proposed services (T1 through T4) resultsin a greater share of demand for intermodal rail than the sum ofdemand for each service deployed separately. Demand captured inexperiments involving all four services is compared with the sum ofdemand expected to be captured in comparable runs, each with onlyone service offered. The outcome of this analysis is depicted in Fig-ure 10. As shown in the figure, services attract more demand whenoffered together; that is, the sum is greater than the parts.

T4 gains the most when the other services operate with it, becauseT1, T2, and T3 serve as feeder services to T4. This result implies con-siderable synergistic effects of concurrently offered services and hasimportant consequences for business models that may be adopted byrail intermodal operators.

28 Transportation Research Record 2066

CONCLUSIONS

The viability of international intermodal services through theREORIENT Corridor is quantified using a network modeling plat-form. Four service designs were proposed and evaluated. Scenarioswere designed to evaluate the effect on service performance of oper-ational parameters of scheduling and access. In addition, policy sen-sitivity to intermodal attractiveness and service performance weretested. Policies were bundled as either barrier reduction at bordersor infrastructure improvements. Additional loading and unloadingpoints along the service corridor increase service usage, although onlyif there is a substantial market to be served by the addition. Relaxationof scheduling constraints boosts service attractiveness, as expected.The service performance was found to be highly sensitive to physicalimprovements in the system and to key policy changes that wouldallow relatively seamless freight movement. In the best case, in which

Flow in ton-km(×106)Service

Current BestT1 1.23 28.84T2 3.03 13.60T3 60.91 134.17T4 3.49 16.52

T1 T2

T3

T4

T1

T2

T3

T4

0

20

40

60

80

100

120

140

160

180

200

Current Best

×106

Ton-

km

0%

5%

10%

15%

20%

25%

30%

35%

Agriculturalproducts andlive animals

Foodstuffsand animal

fodder

Solid mineralfuels

Petroleumproducts

Ores andmetal waste

Metalproducts

Crude andmanufactured

minerals,building

materials

Fertilizers Chemicals Machinery,manufactured

articles

Crude oil

CurrentBest

Inte

rmod

al s

hare

(ton

%)

FIGURE 7 Large gains in weekly freight flow (in ton-km) along proposed services.

FIGURE 8 Rail-based intermodal market share by commodity (ton %).

all envisioned improvements were tested, there is an estimated 182%increase in flow of the four services. Overall, these changes increasethe attractiveness of the intermodal system, and market shares increaseby more than two percentage points, corresponding to 1.2 millionadditional tons per week across the REORIENT network. Thus, suc-cessful intermodal operations on the REORIENT network involvetwo facets. Services operating at a high level of service attract consid-erable freight. When high level of service is coupled with key policyand infrastructure upgrades, the services reach their full potential.

Nair, Miller-Hooks, Mahmassani, Arcot, Kuo, Zhang, Kozuki, and Ludvigsen 29

ACKNOWLEDGMENTS

This work was funded by the European Commission, DG TREN,under the REORIENT project, a Concerted Action in the SixthFramework Programme that addresses Strategic Objective 3.3.1,Research to Support the European Transport Policy, ResearchDomain 3.1, Implementation of Change in the European RailwayArea. This support is gratefully acknowledged. The authors have ben-efited from the collective contribution of the REORIENT consortium

(a) (b)

Less than 500 tons

500 - 1000 tons

1000 - 2000 tons

2000 - 5000 tons

Greater than 5000 tons

Less than 500 tons

500 - 1000 tons

1000 - 2000 tons

2000 - 5000 tons

Greater than 5000 tons

Weekly Flow Weekly Flow

Flow in ton-km(×106)ServiceComplementary Individually

T1 28.16 28.68T2 12.99 17.02T3 66.62 63.37T4 17.78 3.55

T1

T2

T3

T4

T1

T2

T3

T4

0

20

40

60

80

100

120

140

160

180

200

All Services in Tandem Individually

×106

Ton-

kmFIGURE 7 Large gains in weekly freight flow (in ton-km) along proposed services.

FIGURE 8 Rail-based intermodal market share by commodity (ton %).

partners, especially Demis, BV (Netherlands) for data collection andthe Institute for Transport Economics (TOI, Oslo, Norway) for var-ious aspects of the work, especially the contributions of WarrenWalker of Demis and Arild Vold of TOI.

REFERENCES

1. Mahmassani, H. S., K. Zhang, J. Dong, C.-C. Lu, V. C. Arcot, and E.Miller-Hooks. Dynamic Network Simulation-Assignment Platform forMultiproduct Intermodal Freight Transportation Analysis. In Transporta-tion Research Record: Journal of the Transportation Research Board,No. 2032, Transportation Research Board of the National Academies,Washington, D.C., 2007, pp. 9–16.

2. Zhang, K., R. Nair, H. S. Mahmassani, E. Miller-Hooks, A. Kuo, V. C.Arcot, J. Dong, C.-C. Lu, and A. Kozuki. Application and Validation ofDynamic Freight Simulation–Assignment Model to Large-Scale Inter-modal Rail Network: Pan-European Case. In Transportation ResearchRecord: Journal of the Transportation Research Board, No. 2066, Trans-portation Research Board of the National Academies, Washington, D.C.,2008, pp. 9–20.

3. EUROSTAT. Road Share of Inland Freight Transport. 2007. ec.europa.eu/eurostat.

4. REORIENT Consortium. Progress Toward Rail Interoperability in Coun-tries Along the REORIENT Corridor: An Analysis of Status. Deliverable2.1. 2007. www.reorient.org.uk/.

30 Transportation Research Record 2066

5. Ludvigsen, J. Freight Supply and Demand Conditions in the NordicCountries—Recent Evidence. Transportation Journal, Vol. 39, No. 2,1999, pp. 31–54.

6. REORIENT Consortium. Demand and Supply Structures for Intermodal(rail-based) and Single Modal (all truck) Freight Supply Solutions.Deliverable 6.1. 2007. www.reorient.org.uk/.

7. NEA Transport Research and Training BV. D5 Annex Report WP 3: ETIS-Database Methodology Development and Database User Manual—FreightTransport Demand V2.0. Core Database Development for the EuropeanTransport Policy Information System (ETIS). www.iccr-international.org/etis/library/reports.html.

8. Ludvigsen, J. The LOGCHAIN PolCorridor Project. The Institute forTransport Economics. 2006. www.eureka.be/inaction/AcShowProject.do?id=2727.

9. Arcot, V. C., A. Caprara, C. D’Ambrosio, J. Dong, A. Kozuki, A. Kuo,C.-C. Lu, H. Mahmassani, E. Malaguti, S. Martello, E. Miller-Hooks,R. Nair, P. Toth, and K. Zhang. Modelling Corridor Freight Transport forDemonstration of Seamless International Rail Freight Services. Techni-cal report. University of Maryland, College Park, 2007.

This work was funded by the European Commission, DG TREN, under the REORIENTproject; however, no endorsement of the findings is implied.

The Freight Transportation Planning and Logistics Committee sponsored publicationof this paper.