Perils of road freight market deregulation: cabotage in the European Union
Journal
International Journal of Logistics Management, The
ISSN
0957-4093
Type
journal article
Date Issued
2020-04-04
Author(s)
Sternberg, Henrik S.
Hofmann, Erik
Overstreet, Robert E.
Abstract
Purpose – The purpose of this paper is to examine the impacts of the ongoing freight market deregulation in the European Union (EU). Specifically, this case study focuses on cabotage penetration rates in Germany, the largest logistics market in Europe. In light of the upcoming trade barriers, we intend to move this topic forward by emphasising its interdisciplinary nature.
Design/methodology/approach – Based on the analysis of Eurostat data, expert interviews and a review of related literature, we elaborate and discuss four propositions related to the factors affecting cabotage penetration, future cabotage levels and the effects on modal split and empty runs.
Findings – We found that cabotage in Germany plays a more important role than officially reported and has increased drastically since 2008. Given our analysis, increased cabotage penetration seems to thwart efforts within the EU to promote a modal shift from road to rail and increased national empty runs are the future outcome of current regulations. In Germany, the cabotage share is likely to reach 16% in the next five years.
Research limitations/implications – This paper highlights the need for incorporating a more contextual understanding in freight carrier selection theory development in general as well as country-specific investigations in particular.
Practical implications – Logistics managers and policymakers looking at future strategies are advised to take the ongoing deregulation trend into consideration. European freight movement using cabotage operators may represent significant cost savings; however, these cost savings come at an environmental and social sustainability price as the modal shift to rail and fill rates suffer.
Originality/value – This paper represents an empirical and unbiased point of view, in contrast to the reports of the European Commission (pro-deregulation) or the reports of the haulage associations and labour unions (anti-deregulation).
Keywords Cabotage, European freight market deregulation, Flagging out, Freight transport sustainability
Design/methodology/approach – Based on the analysis of Eurostat data, expert interviews and a review of related literature, we elaborate and discuss four propositions related to the factors affecting cabotage penetration, future cabotage levels and the effects on modal split and empty runs.
Findings – We found that cabotage in Germany plays a more important role than officially reported and has increased drastically since 2008. Given our analysis, increased cabotage penetration seems to thwart efforts within the EU to promote a modal shift from road to rail and increased national empty runs are the future outcome of current regulations. In Germany, the cabotage share is likely to reach 16% in the next five years.
Research limitations/implications – This paper highlights the need for incorporating a more contextual understanding in freight carrier selection theory development in general as well as country-specific investigations in particular.
Practical implications – Logistics managers and policymakers looking at future strategies are advised to take the ongoing deregulation trend into consideration. European freight movement using cabotage operators may represent significant cost savings; however, these cost savings come at an environmental and social sustainability price as the modal shift to rail and fill rates suffer.
Originality/value – This paper represents an empirical and unbiased point of view, in contrast to the reports of the European Commission (pro-deregulation) or the reports of the haulage associations and labour unions (anti-deregulation).
Keywords Cabotage, European freight market deregulation, Flagging out, Freight transport sustainability
Funding(s)
Language
English
HSG Classification
contribution to scientific community
HSG Profile Area
SoM - Business Innovation
Refereed
Yes
Publisher
Emerald Group Publishing Limited
Volume
31
Number
2
Start page
333
End page
355
Subject(s)
Eprints ID
260311