The impact of transport policies on railroad intermodal freight competitiveness – The case of Belgium

This paper discusses the impact of three freight transport policies aiming to promote railroad intermodal transport in Europe, and examines the case of Belgium as a testing ground. These policies consist in subsidizing intermodal transport operations (such as in Belgium, to stimulate rail transport), internalizing external costs (as recommended by the European Union in order to foster cleaner modes), and adopting a system perspective when optimizing the location of inland intermodal terminals. The study proposes an innovative mixed integer intermodal freight location-allocation model based on hub-location theory and deals with non-linear transport costs in order to replicate economies of distance. Our analysis suggests that subsidizing has a significant impact on the volumes transported by intermodal transport, and, to a lesser extent, that optimizing terminal location increases the competitiveness of intermodal transport. On the other hand, according to our assumptions, internalizing external costs can negatively impact the promotion of intermodality. This finding indicates that innovative last-mile transports are needed in order to reduce the external impacts of drayage operations.