Market Insights

Europe must put the modal shift back on the agenda

Column door Paul van de Vorle

There is a strong call to reduce transport costs within the supply chain, as well as to cut CO₂ emissions and, where possible, to ensure business continuity. The current energy crisis is bringing these objectives together even more rapidly: long-distance road transport routes have become more vulnerable to rising diesel prices, limited fuel availability and geopolitical unrest.

For purchasers of logistics services, this is not simply another discussion about fuel surcharges. It is a reason to determine which long-distance routes are most vulnerable to fluctuations in the price of diesel, and where intermodal transport is a viable alternative. The key question is no longer what transport costs today, but which transport model will offer the lowest costs and risks in the coming months.

Diesel-dependent road transport

The Strait of Hormuz is one of the world’s most important energy corridors. The International Energy Agency (IEA) describes the current disruption to oil supplies as the greatest ever. At the same time, threats to shipping in the Red Sea and around the Bab el-Mandeb Strait are undermining an important alternative route. The result is therefore less available crude oil and increasing risks to shipping. This combination is particularly relevant for Europe, where road transport remains heavily dependent on diesel and where increased competition for available middle distillates can quickly lead to higher transport costs.

The modal shift has gone in the wrong direction

In recent years, market pressures and overcapacity in road transport have led to parts of the European bulk market shifting from intermodal solutions to long-distance road transport. When lorries were readily available and rates were under pressure, this often seemed an attractive choice in the short term. Fuel security and the reliability of transport played hardly any role in this decision.

The cost comparison has now changed. Intermodal rail transport does not render road transport redundant: lorries remain essential for the first and last mile. However, it does replace the most diesel-intensive part of the journey with a more energy-efficient mode of transport. For suitable routes, this can reduce dependence on fuel prices. Furthermore, our intermodal rail solutions can reduce CO₂ emissions by up to 40 per cent compared with fully road-based transport.

The right mode of transport for every shipment

However, a more resilient supply chain is not achieved simply by opting for rail for every single shipment. It is about choosing the right mode of transport for every shipment, and reassessing long-distance road transport where intermodal alternatives are available. Regular volumes, suitable terminals and predictable scheduling can transform the modal shift from a sustainability ambition into a commercially viable operational model.

The supply chains of tomorrow

Making that choice starts with four questions: Is the route long enough to achieve an efficiency benefit through rail transport? Are the volumes regular and predictable? Are suitable terminals available near the departure and destination points? Does the overall transport analysis yield benefits in terms of costs, exposure to fuel prices, continuity or CO₂ performance? If several of these questions are answered in the affirmative, the route warrants consideration.

The message should be clear: do not wait for the next fuel surcharge to reassess long-distance road transport. Van den Bosch can help identify these routes and draw up a transparent