The transport sector currently accounts for almost a quarter of Europe’s greenhouse gas emissions. Road transport accounts for almost three quarters of this figure, and trucks account for around a quarter of road transport emissions. Intermodal solutions should therefore play a key role in the greening of enterprises in the transport and logistics sector.
Remember that by 2050, EU member states must create an efficient structure to ensure sustainable cargo transport by connecting railways, ports, roads, airports and terminals using ecological means of transport. Neli Karapetjan-Baranauskienė, director of the intermodal services department at the international logistics company Vlantana, talked about how logistics operators deal with it and whether small enterprises will benefit from it.
Artur Lysionok, Trans.INFO: Why does Brussels care so much about intermodal transport?
Neli Karapetjan-Baranauskienė, director of intermodal services, Vlantana: The COVID-19 pandemic has shown how important a role transport plays in the economy. Therefore, in order to increase the EU’s resilience to any crises, the goal in Brussels is to develop intermodal transport and ensure the flow of goods regardless of the human factor or other problems. Let’s take this situation as an example. Before the pandemic, vehicles from Turkey to Italy were sent by ro-ro ship, and drivers were transported by plane. COVID-19 completely paralyzed this process because it was impossible to send drivers by plane. This contributed to the rapid finding of alternative solutions. Now there is no longer even a need to transport drivers by plane, because the terminal on the Italian side has been expanded in such a way that semi-trailers or containers are loaded from the ship directly to the railway line, which then travels further across Europe.
Sustainable development is also one of the main advantages of this type of transport. Railways and ships can transport more trailers at one time. This means that we eliminate a large number of trucks driving long distances, thus contributing to more sustainable transport. This is especially so, since most railway networks are electrified and shipowners are also encouraged to use more environmentally friendly fuels. We already work with partners who use two types of fuel in ships: diesel and electricity or diesel and gas.
On 1st January 2024, the ETS (Emission Trading System) will come into force – an emissions tax that all shipowners will have to pay based on the greening of their operations. For this reason, operators have long been wondering how to increase the efficiency of their operations and avoid empty shipments. If one ship is traveling with three trailers, it is certainly not an environmentally preferred mode of transport.
Another advantage is that the development of intermodal transport will reduce the burden on road infrastructure and avoid serious congestion, as well as facilitate the organisation of the flow of goods at the international level.
Lithuania is proud of its position in European transport. How is this country coping with implementing EU plans?
As far as intermodal transport is concerned, I can confidently say that Lithuania is in a strategically good place. Its geographical location has had a significant impact on the fact that intermodal solutions have been used in Lithuania for a long time and on a large scale. Of course, there are still areas for improvement, but Lithuania already has a lot to offer the intermodal community. We have good seaport infrastructure that ensures efficient intermodal freight traffic. Klaipeda has ships that offer intermodal transport services to most customers. The port of Klaipėda is one of the largest and deepest ports on the Baltic Sea and is constantly modernised.
The national railway network is constantly being developed and modernised, and the infrastructure itself is being adapted to both domestic and international transport. Railways are constantly developing new routes. Lithuania’s inland waterways are also in the spotlight. It is already possible to transport goods by barge from Klaipėda to Kaunas. The government plans to invest approximately EUR 76 million in the moderation of inland infrastructure and the purchase of electric barges. This project is expected to remove 48,000 trucks from the roads per year.
In short, Lithuania already has all the conditions for a successful transition to the new mode of transport. Our country is not only a stop for all logistics points, but is also very strong internally because it can concentrate all connections (ferry, plane, train and car) on its territory. Our company’s foreign partners are amazed at how much the transport structure has changed in Lithuania. There are many transport companies on the market, all of them focusing on modernization and development. There is great interest in intermodal transport among Lithuanian carriers, and companies are already taking their first steps in this area. Compared with other countries, Lithuania has excellent specialists in every transport segment.
Will this help companies increase efficiency in the supply chain?
Shipowners are currently modernising equipment, looking for electrical solutions and integrating systems. Railways are ordering new rolling stock and electric locomotives. It is important to realise that in both of these logistics sectors, all processes are run more slowly. You have to wait four years for a new ship, and two or three years for a locomotive. Managing road transport is easier. Of course, the execution of orders for tractor units is delayed, but you do not have to wait several years for them. The most important thing is that the industry is moving in the right direction. We must understand that this is not a sprint, but a marathon – we are moving towards the goal in small steps. In 2030, we will be able to evaluate our efforts, look at the results, and decide whether we need to adjust the roadmap to achieve all the goals set for 2050.
The number of trailers shipped in Europe via intermodal corridors is not large. Why?
The most important factors in the supply chain are cost, transport time and regularity and quality of services. It is difficult to accommodate large amounts of cargo because transportation requires uninterrupted connections. It’s easier to plan operations when ferries run daily rather than twice a week.
When it comes to the transport of trailers and containers by rail in the EU in general, it is worth noting that most railway lines in the EU are designed for intermodal trailers. Eighty percent of trailers on the market are non-intermodal. They cause more problems. To reload them and load them onto railway tracks, they require access to a special platform. Currently, only four large rail operators in Europe are developing non-intermodal trailer operations.
Why are there so few of them?
One of the main goals of every intermodal terminal is to ensure trans-shipment as quickly and efficiently as possible. Because most terminals are only suitable for intermodal trailers, which, as I mentioned earlier, only account for 20%, we need solutions for the remaining 80%. Their handling increases the costs incurred by operators. In the long run, one of the best solutions is to introduce the LOHR system in terminals. However, this is expensive and few terminals have space for it. Most of them do not even see the point in changes and expect all carriers to adapt and invest in intermodal trailers. For comparison, these trailers cost EUR 4,000 more and also weigh more. This means that if you want to transport cargo on certain roads without exceeding the permissible weight, you need to load half a ton less.
A serious revolution is needed in this area, but trade unions themselves are holding back change. In Lithuania, railway management must inform employees about certain changes, for example the liquidation of a role, eighteen months in advance. In this country, trade unions prevent certain modernisation and system integration because they protect jobs. Such regulations exist in every country, so common regulations are needed to help develop intermodal transport.
Compared to trucks, trains and ships are slower. Road transport is the most flexible and easiest way to organise cargo transport because it allows you to travel from door to door. It is the fastest way to deliver many types of goods. Carriers and their customers who choose combined transportation are aware that transit times may be longer in some cases. Unfortunately, over the last few years, the quality of services of most railway operators has been reduced by road renovations (roads cross the tracks, often running along routes that are construction sites – editor’s note) and strikes, which have partially or completely paralyzed traffic in some directions. Such disruptions do not help the railways attract more freight. However, in the long term, intermodal solutions are the future of transport.
Can intermodal transport benefit small businesses? After all, small and medium-sised enterprises dominate the market.
Although intermodal transportation offers a number of benefits, it also requires effective coordination, planning and partnerships with other transportation service providers. Before deciding to participate in intermodal transportation, small carriers should carefully evaluate their capabilities, available equipment, market conditions and operational capabilities. It may be that today it will be profitable for them to transport some loads in intermodal operations, but tomorrow market changes (cargo shortages, fuel, train or ferry costs) may make intermodal transport no longer profitable.
Every innovation is a challenge, but also an opportunity. Entrepreneurs need to take stock of their business; what they have, what their strengths are, where they see a niche, and then look for options that are right for them. I recommend cooperation with large operators. I often advise small companies that want to offer intermodal services. None of them have started offering this type of service yet. Why not? To be effective, you need reach. One or two trailers are not enough, you need a well-developed cargo circulation. After leaving a semi-trailer at the terminal, the tractor unit must immediately pick up the next one and deliver it to the unloading point. In this case, smooth repetition of operations ensures adequate operational efficiency. But when trains are late or cancelled, small businesses struggle to stay profitable. Trailer storage fees at terminals should also be taken into account. Most of these facilities offer one free day of parking and then charges begin.
Will intermodal transport displace small companies?
By taking into account the infrastructure and the time it takes to improve it, I think small businesses are safe. Intermodal transport benefits all citizens. In the long term, its development will result in a large number of trucks and trailers disappearing from the roads, which will reduce air pollution and contribute to overall road safety. It can also benefit producers. A properly developed intermodal transport system will make it easier for them to reach more markets.
When it comes to intermodal transportation, the sweet spot for small and medium-sized businesses is last mile and urban deliveries, as well as vehicle rentals to large logistics operators. Another option is freight exchanges. In Europe, there are also intermodal transport exchanges designed specifically for small and medium-sized enterprises.
Let’s talk about costs. How does intermodal transport reduce transport costs?
The efficiency of intermodal transportation and reduction in transportation costs can be measured by many factors, depending on cargo type, route distance, transportation modes, fuel prices and market conditions. In each case, the amount of cost reduction is different. The price ratio for certain routes (road, rail or sea) may change from time to time.
However, it is not the price that determines the choice of intermodal transport by shippers or carriers. Travel time, regularity of the timetable and the quality and reliability of the service itself are also very important factors. The more fiddling there is, the more room there is for potential disruptions and misunderstandings. Let’s assume, for example, that the train from Duisburg to Travemünde was late and the trailers missed the ferry. The next one is only two days away. Downtime begins and all the „fun” that comes with it, not to mention the constant road renovations that disrupt the smooth flow of some trains.
What has Vlantana already done in terms of expanding its business towards intermodal transport?
In 2010, we were one of the first Baltic countries to invest in semi-trailers and started offering rail transport services. We have previously successfully used short-haul ships. We have an extensive network of partners (both rail and ferry operators) and customers who choose Vlantana’s services precisely because of its extensive intermodal network. Some partners are pleased that Vlantana has become their first customer from Lithuania and has encouraged other carriers to become interested in rail. Intermodal currently accounts for 35% of our freight transport. We plan to increase the share of intermodal transport in our range of services by 5% annually. Intermodal transport helped us save 10,278.56 metric tons of CO2 in 2022.
We want to help build the infrastructure necessary to transfer as many trailers as possible from road to rail transport. We are concentrating on connecting all the parties involved – railway and ferry operators, terminal representatives, and companies offering transhipment services. One of our main goals is to connect as many ferry and rail terminals as possible and make them available to non-rail trailers.
What intermodal routes are thriving in Lithuania?
Railway operators, in cooperation with ferry operators, already offer connections from Klaipėda. All trailers arriving from Denmark, Germany or Sweden can be loaded at the Klaipėda terminal directly onto the railway and then transported to Vilnius. This is a perfect example of cooperation. For Vlantana, our network of intermodal lines covers Europe, Scandinavia and the UK.