Impact of external cost internalization on short sea shipping - The case of the Portugal-Northern Europe trade

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.

Automated summary

This paper examines the impact of transportation external costs internalization on the competitiveness of short sea shipping. It introduces numerical methods for calculating emissions and external costs, considering various vehicle characteristics. The study evaluates the effects of emission control areas, abatement technologies, fuel types, ship speed, cargo capacity, and utilization factors on freight rates. The findings indicate that short sea shipping is competitive for a wide range of destinations, and internalizing external costs has the potential to promote modal shift towards this mode of transportation.