Intermodal Connectivity: The Future of Irish Freight Transportation

The freight transport sector in Ireland is a dynamic and evolving component of the national economy. It is characterised by a diverse set of transportation modes, ongoing infrastructure developments, and a response to global trade dynamics, making it a critical player in facilitating the movement of goods and sustaining economic growth.

The derived demand for logistics has been anticipated with the increase in economic activities in the region as well as within the island of Ireland for all modes of transport such as sea freight, air freight and land freight.

The utilisation of rail freight in Ireland is currently limited, yet the sector holds substantial untapped potential. Intermodal connectivity plays a pivotal role in the freight industry in Ireland, offering a range of benefits that contribute to the efficiency, sustainability, and competitiveness of the transportation network. It not only enhances the efficiency and cost-effectiveness of transportation but also contributes to environmental sustainability, global trade facilitation, and the overall resilience of the freight network. Therefore, emphasizing and investing in intermodal solutions will be key to ensuring a robust and competitive freight industry in Ireland.

Increasing demand for freight transportation in Ireland

The International Transport Forum (ITF) anticipates a substantial increase in global freight demand, projecting that demand for freight transport across all modes will more than double in the next three decades. Along with Brexit transition period, Ireland underwent a significant transformation in its conventional supply chains. The introduction of new customs obligations triggered a notable increase in the demand for services operating on direct routes between Irish ports and mainland Europe. This will lead to a significant increase in freight movements and policies and infrastructure have to be established to facilitate the increasing demand.

In 2019, Ireland had approximately 30 direct sailings to and from European ports, but currently there are over 60 direct sailings to the continent, and the capacity expansion trend persists. As an example, the Roll-on Roll-off (RoRo) traffic experienced a significant surge, marking a 94% increase compared to the figures from 2020. This increased demand was primarily influenced by a decrease in the utilisation of the UK Land bridge. Presently, direct EU traffic constitutes one-third of the total RoRo volume, which is a substantial rise from the 17% observed in recent years as per Irish Maritime Development Office (IMDO). Therefore, connectivity is expected to play a major role in the upcoming decade in terms of logistics operations in Ireland.

Rail Freight Connectivity

The current rail freight network in Ireland is primarily geared towards serving a limited number of customers involved in transporting specific goods, such as Zinc and Lead from Tara Mines and pulpwood from Westport to Waterford. Despite this focus, recent developments highlight the actual potential of rail freight.

A new container train service between Ballina and Waterford Port, which commenced operations in July 2021 and the gradual and consistent escalation of its demand, highlights this potential. According to estimates of XPO Logistics, this service could eliminate 5,000 truck movements from the roads annually, leading to reduced congestion and emissions savings as well as delivering significant economic savings as well.

Significance of Integrated Transport Planning and Intermodal Transport

Intermodal transport involves the movement of goods through successive modes of transportation without physically handling the goods during mode transitions. There are significant opportunities for countries which promote intermodal transport and steer away from road-based modes. This shift is motivated by the fact that the overall negative impacts associated with road transport, including air pollution, climate change, noise, and congestion, are, on average, at least twice those of rail or inland waterway transport per tonne-kilometer.

Rail transport is often characterised by lower costs and fuel intensity when compared to road transport. This makes it an attractive option for certain freight movements, especially over longer distances or for large volumes of goods. The efficiency of rail transport can contribute to cost savings and reduced environmental impact, particularly in terms of fuel consumption and associated emission.

Mostly, countries encounter various barriers when promoting intermodal transport and also when trying to achieve the modal shift. These barriers often stem from their pre-existing infrastructure networks and geographical characteristics. The challenges in reshaping transportation habits and infrastructure are influenced by the unique features of each country's existing systems and physical landscape.

Ireland faces challenges in promoting intermodal transport due to the absence of a substantial inland waterway network, making significant modal shift difficult. Also, the distances between Irish ports are insufficient to make coastal shipping a practical alternative to road freight. Consequently, the primary focus for promoting intermodal transport in Ireland circulates around increasing the use of rail freight. Also, there are possibilities to enhance the efficiency of transferring freight between rail and sea transport. Currently, the rail network is limited to Load-on/Load-off (LoLo) cargo movements. However, in some European railways such as Georgian Railway, have attempted to test the capability to accommodate Roll-On/Roll-Off (RoRo) cargo movements as well.

Policy Thinking to Achieve Modal Shift

a. Rail freight rate

For rail freight to be competitive, it must offer pricing that is comparable to road freight while ensuring seamless connectivity between major freight producers and customers. Rail freight rate is comprised of several components, including the transport charge, loading/unloading charge, storage charge, and various operational fees, resulting in a pricing mechanism that is both rigid and intricate. In the context of China, despite the application of a floating freight rate with discounts ranging from approximately 30% to 50% on many rail routes, the sea–rail intermodal freight rate still lacks competitiveness compared to road transport (truck) offering a door-to-door service.

Based on price elasticity based study conducted in the context of Turkey, concerning transportation costs, the demand for intermodal rail exhibits greater elasticity compared to the demand for road transport.? A 1% rise in the cost of road transport correlates with a 0.70% reduction in its market share, concurrently leading to a 5.97% increase in the market share of intermodal rail. Conversely, a 1% reduction in the cost of intermodal rail results in a 0.47% decline in the market share of road transport, coupled with a 4.01% increase in the market share of intermodal rail. After the transportation costs, transit time emerges as the second most crucial factor influencing modal shift. According to that, 1% decrease in the transit time of intermodal rail corresponds to a 1.45% increase in its demand, concurrently leading to a 0.17% decrease in demand for road transport. Transit time is inherently connected to train frequency, as the reduction in transit time can only be achieved by increasing the frequency of train departures. Third factor considered in this study was the number of delayed shipments. It further indicates that a 1% decrease in the percentage of delayed shipments in intermodal rail transport leads to a 0.68% increase in its mode share, concurrently causing a 0.08% reduction in the mode share of road transport. This highlights the significance of minimising delays in intermodal rail transport as one of the most influential factors in maintaining a high level of demand, following transportation cost and transit time considerations.

A similar price elasticity based research study conducted within Irish context, would be helpful for the Irish authorities when taking evidence based policy decisions in order to get the correct trade-off between price, transit time and cost.

b.???? Freight Consolidation Centres (FCCs)

Freight Consolidation Centres foster collaboration among various logistics service providers, aiming to enhance efficiency by facilitating the shared use of assets and infrastructure. The primary goal of FCC is to streamline the process of goods shipments and deliveries through coordinated efforts.

Based on a case study related to Gothenburg city, Sweden, the key risk factor in managing FCCs is the potential drop in demands for Freight Consolidation Centres (FCCs) from the logistics operators due to complex economic factors, industry specific trends, sudden changes in policies and regulations and Global and regional influences. Also, a successful FCC business model should encompass several key elements. These elements include the capability to scale up the operations and consistently evolve the system, the proficiency to identify pivotal roles and establish supporting organizational structures, and the ability to innovate new services. The success of the Gothenburg case study highlights that it is not merely individual services but the comprehensive business model that plays a pivotal role in the effectiveness and sustainability of FCC operations.

c.???? Digitalisation to facilitate Intermodal connectivity

Digital interventions such as Port Community Systems, play a crucial role in achieving this goal. An example of such a digital system is the Port Terminal Management System currently under development at Rosslare Port. Once implemented, this system will feature improved freight and passenger check-in through Smart Gate technology, real-time cloud-based reporting, and an enhanced traffic management system. The implementation program began in June 2022, and the full system implementation is expected to be completed over the next 36 months.

Another case study is the newly operational container terminal in Ringaskiddy, which commenced its activities in April 2021. This terminal is equipped with a digital booking system that enables hauliers to schedule a time slot for the delivery and collection of containers. This system is designed to enhance the efficiency and speed of container movements in and out of the terminal.

Contemporary information technologies, including electronic data interchange, global positioning systems, geographic information systems, and decision support systems, have found widespread use in the field of transportation. Despite this adoption, challenges persist in terms of the accessibility of these information systems across various transport sectors, leading to the prevalence of isolated data points and data bases. Experts identify this situation as "isolated information islands.". Information systems are implemented to enhance transport efficiency and service, often integrated into port logistics platforms. As information technology advances, transport companies update their systems accordingly. However, persistent information barriers hinder seamless integration, especially as businesses expand in scale and scope. For instance, cargo-tracking information remains fragmented across different transport stages because the port, rail, truck, and shipping sectors maintain separate platforms without effective information exchange. These circumstances contribute to an abnormal market scenario where, regardless of distance or cost, most shippers favour road transport.

Conclusion

Intermodal transportation involves the seamless movement of goods using multiple modes of transportation, such as road, rail, sea, and air. Ireland, being an island nation with a relatively small land area, relies heavily on efficient and well-integrated transportation networks to facilitate the movement of goods both domestically and internationally.

The rail freight potential in Ireland is a key aspect of the country's transportation and logistics infrastructure. While Ireland has a well-developed road network, enhancing and formulating evidence-based policies on rail freight can offer several advantages.

In the transportation industry, understanding the price elasticity of freight services can help authorities strike the right balance between price, transit time, and cost. Conducting research on price elasticity in the context of freight transportation would provide valuable insights for Irish authorities in making evidence-based policy decisions.

Freight consolidation centres and inland rial freight terminals play a vital role in streamlining supply chain activities, improving efficiency, and reducing transportation costs. Understanding the key elements of those infrastructure, their business models, and their strategic positioning is indeed crucial for optimising logistics operations, as well as to mitigate negative externalities on environment as well as on society.

The goal of digitalisation in the context of intermodal freight transportation, is to create a seamless and efficient flow of information across various modes of transportation, therefore, ensuring the compatibility of different modes is a critical consideration when digitising multimodal transport systems.