Impact of external cost internalization on short sea shipping – The case of the Portugal-Northern Europe trade
Heitor Abreu, Tiago A. Santos, Valdir Mendes Cardoso
Abstract
This paper presents research on the impact of transportation external costs internalization in the competitiveness of short sea shipping. Numerical methods for calculating emissions and external costs, that consider the full range of technical and operational vehicle characteristics are presented. The impacts of existing and future emission control areas, emissions abatement technologies, types of fuel, ship speed, cargo capacity and utilization factors in the required freight rate are evaluated. Internal and external costs are used to evaluate alternative intermodal chains for a set of pairs origin/destination extending to a range of regions in Northern Europe. Short sea shipping is competitive for a large set of destinations and its scope of competitiveness does not change significantly between different scenarios. Competitiveness regarding external costs shows more variation but, due to the small relative magnitude of these costs, internalization shows a moderate potential for promoting modal shift towards short sea shipping.