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.