A Comparative Study on Port Hinterland Intermodal Container

Transport: Shanghai and Rotterdam

M. Zhang1,

*, B. Wiegmans1, L. A. Tavasszy

2

1. OTB Research Institute, Delft University of Technology, P.O. Box 5030, 2600 GA Delft, The Netherlands;

2. Delft University of Technology, Faculty of Technology, Policy and Management, The Netherlands;

*Email: mo.zhang@tudelft.nl

Keywords: intermodal; hinterland transport; container;

terminal; barge; rail

Abstract

World trade liberalization, developments in information

technologies and enlargement in ocean shipping transport in

the last two decades lead to an increasing demand of

hinterland transport, and caused capacity shortage and

environmental problems, especially in the metropolitan areas

with large ports. Intermodal transport is recognized as an

effective way to reduce congestion and pollution, and is

promoted in the main export/import regions, such as China,

and Europe since the 1990s. Many multi-participant multi-

objective projects have been carrying out aiming to shift the

cargo flow from unimodal trucking to intermodal transport.

These projects mainly focus on infrastructure construction

investment, technology development, and regulatory policy

implementation. This paper presents up to date insights of

intermodal transport development in port of Shanghai, port

of Rotterdam and their hinterlands via a comparative study.

The paper introduces the recently completed or underway

projects carried out in both of the hinterland transport

systems. The projects of each port hinterland system are

summarized to a package of solutions. The paper concludes

with the overall effects of these packages.

1 Introduction

From the beginning of the 21st century, due to fast progress

of containerization and increasing trade between Asia and

Europe, container throughput increased enormously in many

seaports in Europe and China. Road congestion and

environmental issues became unignorable problems in these

port areas. Intermodal transport of freight was introduced as

an effective approach to solve these problems. The concept

of ‘intermodal freight transport’ has been introduced and

discussed since more than two decades ago. A literature

review by Bontekoning et al. argues that there is no common

definition of intermodal transport[1]. Various definitions were

proposed by previous researchers covering different aspects

of the characters of intermodal transport, such as physical

characteristics[34], operational features[11], modal choice[10],

actor relationships[38], etc. The definition we employ in this

paper is the one proposed by European Conference of

Ministers of Transport et al.[8], because it gives clear view of

physical characteristics of intermodal transport. The

definition is as follows: “Intermodal freight transport is the

movement of goods in one and the same loading unit or

vehicle by successive modes of transport without handling of

the goods themselves when changing modes.”—European

Conference of Ministers of Transport et al., 1997.

Intermodal transport has become a more important part of

hinterland transport[20], and many projects focusing on

infrastructure construction, regulatory policy implementation,

and technology development have been carried out by the

governments, infrastructure providers, terminal operators,

carriers, etc. in the last decade, in order to solve the capacity

shortage problems and relieve the environmental problems

via moving the freight from unimodal trucking to intermodal

transport. To obtain insights in the development of

intermodal hinterland transport in China and Europe, this

paper presents a comparison study of the port of Shanghai,

and the port of Rotterdam. The comparison focuses on the

problems faced by the ports, their solutions to the problems,

and the results of implementing the intermodal stimulating

projects. We focus on the scope of solutions to intermodal

projects that were carried out and are underway in the two

port hinterland transport systems since 2000. Many projects

are characterized by multi-participants and multi-objectives

which lead to complicated situations in practice.

The next section discusses the criteria we used in port

selection and introduces the geographic locations of the two

ports, the layout of their hinterland transport network, and

the port production information. Section three discusses the

projects that were carried out and are underway in each port

and its hinterland transport system. The focuses were put on

the motivation of the investors of each project, impacts on

intermodality of each hinterland transport system.

Comparisons of the effects of investments in intermodal

infrastructure construction, regulatory policies, and

technology development are discussed in section four. The

paper is concluded by discussing the combined results of the

two groups of projects implemented in the two port-

hinterland areas.

15

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2 Port of Shanghai and Port of Rotter Dam

In this paper, we compare the hinterland container transport

system of port of Shanghai (SHA) and port of Rotterdam

(ROT) for the following reasons. First, both of the ports are

one of the world’s busiest container ports in the term of

annual container throughput. Second, the two ports have

similar hinterland transport network in geographic

perspective, locating in metropolitan area, and connecting

with inland waterborne corridor. Third, their hinterland

container transport systems consist of three modes: road, rail

and waterway. Forth, freight transport of the two ports are

characterized by intensive intra metropolitan area road

transport flows and a great number of connections with

further hinterlands through all of the three modes. Table 1

illustrates the basic information of the two ports.

Table 1: Comparison of basic information of the three port

hinterland network

SHA ROT

Metropolitan area Shanghai Randstad area

Metropolitan

population

(million)

13 (in 2002) 8.5 (in 2002)

Density of

population

(person/km2)

2104 1224

Container

throughput 2007

(million TEU)

26.2 10.8

Number of

container

handling

10 12

Port capacity for

container

13.5 million TEU

in 2008

13.3 million TEU in

2008

Main waterway

corridor for

freight

Yangtze river

Rhine river

Meuse river

Rotterdam-

Antwerp Canal

Main railway

network for

freight

Pudong city

railway

Shanghai-

Hangzhou railway

Shanghai-

Nanjing railway

BetuweLine

railway

Rotterdam-

Antwerp railway

Main highway

network for

freight

Highway A20

Highway A2 –

East Sea Bridge

Shanghai-

Hangzhou

Highway (A8)

Shanghai-

Nanjing Highway

(A11)

Highway A15

Source: The references for each item are specified

respectively in Sections 2.1 and 2.2.

2.1 Port of Shanghai

Port of Shanghai is the east part of the city of Shanghai, on

the outlet of the Yangtze River to the East China Sea. The

population of the city is 13 million in 2002, with a

population density of 2104 persons/km2[31].

Port of Shanghai is the largest container port in China, and

the second largest in the world. 26 million TEUs were

handled by 10 sea terminals in 2007[27]. The container

terminals of the port can be divided into three groups on the

basis of location: the Wusongkou terminal group,

Waigaoqiao terminal group, and Yangshan terminal group.

The Yangshan terminal group are deep-sea container

terminals, locating on the Yangshan Islands, and are

connected with the mainland by a 43 km bridge. The total

designed container handling capacity of port of Shanghai is

13.05 million TEU by the end of 2008 [27, 30].

The hinterland transport network can be divided to two parts:

intra city transport and far hinterland transport. According to

the statistics of international goods transport, 32% of the

hinterland freight are to/from Shanghai, 60% to/ from the

other two provinces of Yangtze Delta (approximate 500 km

away from port of Shanghai) and another 8% to/from other

part of China[35]. Freight transport within the city of

Shanghai use road system. A2, A20 and A30 are the most

used highways. The far hinterland transport network mainly

consists of 5 corridors: the Yangtze River (2800 km

navigable) corridor, Shanghai-Nanjing railway, Shanghai-

Hangzhou railway, Shanghai-Nanjing Highway (A11), and

Shanghai-Hangzhou Highway (A8).

Rail facilities in the port are limited. There are only two

container terminals have train loading and unloading points.

In other cases, the containers can only access to the rail

facilities via a 30-50 km inner city trucking transit.

Comparing the rail with inland waterway transport, inland

waterway is more commonly used. Containers can be

transshipped at Wusongkou or Waigaoqiao terminals to/from

barges, and go to about 25 inland waterway container

terminals. In 2005, 1.4 million TEU of containers were

transshipped at the port of Shanghai to/from the Yangtze

River [30].

The case of Yangshan terminals is more complicated due to

its special geographic features. Yangshan locates some 30

km off the mainland. There is no rail access to the island,

and the navigating condition around the island is not able to

be reached by inland barge. Currently, containers are

transport between hinterland and the terminal in three ways.

Transshipping by sea-going shuttle ships to Waigaoqiao sea

terminals on the mainland (a distance of 70 km), and then

transshipping to inland barge or train is the most commonly

used intermodal transport model currently. Another way is

trucking the maritime containers to the Luchaogang Rail

Container Central Terminal (a distance of 33 km), and then

going into the Chinese railway network via a 43 km long

Pudong railway corridor. Besides, the containers can be

transported to the middle stream of the Yangtze River

The Fifth Advanced Forum on Transportation of China

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directly from the island by employing river-sea-going ships,

which was put into operation in 2005[12].

Figure 1: Main freight transport network of Port of Shanghai

Source: Constructed by the authors.

2.2 Port of Rotter Dam

The port of Rotterdam is located near the western part of the

city of Rotterdam, the Netherlands, where the Meuse River

and the Rhine River join together and outlet to the North Sea.

Rotterdam is a part of the metropolitan area Randstad. The

population of Randstad is 8.5 million in 2002[37], with

density of 1224 persons/km2[22].

Port of Rotterdam is the largest container port in Europe in

terms of containers handled. A throughput of 10.8 million

TEU was handled in 12 marine terminals in 2007[26]. Based

on the port statistics in 2001, 45% of hinterland freight flow

is to/from the Netherlands, 20% to/from Antwerp

(approximately 100 km from the port of Rotterdam), and

another 35% to/from the other part of Europe[24]. The freight

transported out of the Netherlands is mainly through six

corridors: the highway A15, the Meuse River, the Rhine

River, the Rotterdam–Antwerp Canal, the Rotterdam-

Antwerp railway, and the BetuweLine railway. The

BetuweLine was opened in 2007. It is a 160 km dedicated

freight rail corridor connecting the port of Rotterdam

directly to the German railway network.

Containers can be transshipped to/from barges at the 12 sea

terminals and another newly opened dedicated barge and

feeder terminal in port of Rotterdam. Major transshipment of

marine container to/from trains is handled in two near-dock

rail service centers. The two rail service centers handled

537,000 maritime container movements in 2007.

3 Projects towards intermodality

In this section we discuss the intermodal transport

development of the two hinterland transport systems by

looking into the projects that have impacts on hinterland

intermodal transport and are completed or underway since

2000. The projects can be categorized into three types:

infrastructure construction, regulatory policy implementation,

and technology development.

In this sector we introduce the motivations of various

investors and the impacts of the projects carried out in

hinterland transport system of port of Shanghai and port of

Rotterdam separately. The comparison analyses will be

illustrated in sector 4.

Rotterdam-Antwerp

Railway

Figure 2: Main freight transport network of Port of

Rotterdam (constructed by the authors).

3.1 Port of Shanghai

3.1.1 Infrastructure developmeent

A deep sea terminal on an island: Yangshan

The Yangshan deep-sea Terminal is one of the three main

container terminal groups of the port of Shanghai. It is built

on an island locates 30 km southeast to the mainland part of

Shanghai, and is connected with the mainland via the East

Sea Bridge. Phase I of the terminal is 100% invested by

SIPG (Shanghai International Port Group)[32], which was

incorporated in January 2003 by reorganizing the former

Shanghai Port Authority, is the exclusive operator of all the

public terminals in the Port of Shanghai[33]. With a capacity

of 2.2 million TEU, the Yangshan terminal phase 1 were put

into operation in the end of 2005[30]. More parties are

involved in the investment of the second phase. The original

motivation of the terminal is to enlarge the container

handling capacity of the port of Shanghai and to enable the

ultra large container ships accessing to Shanghai, and thus

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improve the competence of short sea transhipment of the

port of Shanghai. Whereas, due to the navigating condition

of the waters between Yangshan and mainland is not suitable

for barges, the large potential container handling capacity in

Yangshan is a challenge to its hinterland transport.

The first dedicated container rail terminal in China:

Luchaogang RCCT

Luchaogang Railway Container Central Terminal

(Luchaogang RCCT) is the first dedicated container rail

terminal in China, which was co-invested by Ministry of

Railways of China and the city of Shanghai, and put into

operation in 2005 when the Yangshan terminal was opened.

Container handling capacity of the terminal is planned to be

1.72 million TEU in 2010[41]. The terminal is operated by

Shanghai Railway Container Terminal Development Co.,

Ltd, which is a joint venture between Ministry of railways

and City of Shanghai. The project aims to connect the

Yangshan terminals with national railway network to enlarge

the capacity of accommodate the large amount of containers

brought by the newly developed sea terminals.

Pudong Railway connects all the container terminals with national railway network

Pudong Railway (117 km) goes around the city of Shanghai

along the coastal line, connecting the Luchaogang RCCT,

Pudong Airport, Waigaoqiao container terminals, and

Wusongkou container terminals to the national railway

network. The investments were made by Shanghai Railway

Bureau and the City of Shanghai, and operated by a joint

venture of these two parties. Better rail accessibility of the

Waigaoqiao container terminal and better communicating

between Waigaoqiao terminal, Yangshan terminal, as well as

Pudong Airport is the main goal. The railway is designed to

go around the city to avoid on-grade crosses with roads and

traffic congestion. The Phase I of the project (43 km)

connects the Luchaogang RCCT to the national railway

network, and started operation in the end of 2005, as the

same time as the Luchaogang RCCT.

Whereas, the impact of these two newly launched rail

facilities did not have an obvious impact on the modal share

of Yangshan hinterland transport. In 2006, the RCCT

handled only 50,000 TEU, which takes only 0.2% of the

total throughput of Yangshan terminals[41]. The main reason

is that the capacity of national railways is fully used for

passenger and bulk transport.

Inland container barge terminal development

Until 2006, there are 27 terminals of 22 inland ports

providing container handling service along the Yangtze

River. Seven new dedicated container terminals planed to

start operation in the period of 2007-2010. Meanwhile,

another eleven terminals are expected to extend their

container handling capacity. The overall terminal capacity of

the terminals along the trunk line of the Yangtze River will

increase from 4.12 million in 2006 to 10.31 million by 2010

based on the operation reports and construction plans of 22

Yangtze river inland port authorities. SIPG invests or owns

10 inland ports out of the 22 ports. A typical ownership

structure is that 50% of ownership is taking by SIPG and the

other half of ownership being shared by shipping lines and

local port authorities.

3.1.2 Intermodal transport regulations

The three main dimensions of intermodal hinterland

transport policy in China are market opening and reform,

ship standardization, traffic control, and financial support

scheme. The main governmental organizations involved are

Ministry of Communications, Ministry of Commerce,

Ministry of Railways, Yangtze River Administration of

Navigational Affairs, and the relevant provincial and

municipal governments.

Market opening and reform

Reform of the inland transport market in the hinterland of

Shanghai took two steps. First, all the inland ports that were

state operated or co-operated by the state and local

government were required to reform the management

mechanism [16]. Till the first quarter of 2003, the government

functions were required to be separated from enterprise

management in all of the inland ports and relevant service

operators. Second, in 2002, construction and operation of

port infrastructures is opened to foreign investments, without

limitation on share of investment. Foreign entities are also

allowed to engage in transport service investment and

operation with a maximal share of 49% or 50% (according to

different types of businesses)[19]. The liberalization brings

competition and market-driven cooperation to the transport

sector. In addition, opening the market to foreign and private

investors introduces large amount of capital and

technologies into the industry, which compensates the

budget shortage for starting up infrastructure constructions.

Ship type standardization

In addition, the Ministry of Communications put inland ship

standard into act[14]. It requires that all the ships engaged in

inland transport should be respected to serial standards for

different ship types according to the requirements of

navigation channel classification. One of the main objective

of this regulation is to solve the traffic congestion in the

inland waters, especially at the Three Gorges Ship-locks by

increasing the average capacity of inland ships and thus to

better use the capacity of the waterways. The other objective

is environment protection. This regulation accelerates the

process of fleet upgrading. The shipping companies are

encouraged to employ upgraded ship types, which are more

every-saving and with standardized size.

Traffic control

Traffic control is a part of transport regulation in China. The

inland shipping traffic is regulated by the Yangtze River

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Administration of Navigational Affairs. They formulate the

prior orders of inland shipping. For instance, the container

ships have priority to go through the ship-locks. It has

greatly improved the reliability of inland shipping and

reduced the cost caused by waiting time.

The Ministry of Railways is responsible to railway traffic

management. As formulated, the key materials such as coal

and grains are more prior than containers on the railway [17],

which is another reason to railway capacity shortage for

container transport.

Subsidies

In the last decade, besides the governmental investment to

infrastructure construction, main subsidies focused on inland

ship standardization and intermodal service maintenance.

Ministry of Communications, Ministry of Finance, and

relevant local governments give subsidy to scraping the

ships that are not in line with the new standard [15].

Subsidies for intermodal service are in a form of temporary

allowances for a voyage or a period of 3-6 months. An

example is the City of Wuhan provide subsidies to the

shuttle service between Wuhan and Yangshan to maintain

the service route and to achieve the economic scale.

3.1.3 Technology development

River-sea-going ship is an important technological

innovation in hinterland transport market. Together with

establishing river-coast and river-Yangshan direct shipping

routes, the double-transshipment of the river generated

containers can be avoided. It would significantly improve

the efficiency of the Yangtze container shipping services and

reduce the transshipment handling cost. Invested by private

shipping companies, in 2005, the first river-sea-going

container ship was put into operation in Nanjing-Yangshan

service, followed by another direct river-sea route Wuhan-

Yangshan direct river-sea service in 2006 [12].

3.2 Port of Rotterdam

3.2.1 Infrustructure construction development

Multimodal integrated sea terminal: Euromax

A new terminal Euromax was opened in 2008, which was

joint invested by the Port Authority of Rotterdam and

terminal operator ECT[23], and brings 2.3 million TEU of

quay side capacity to the Port of Rotterdam. Euromax is a

multimodal sea terminal, facilitated with an on dock rail

terminal and a dedicated barge and feeder terminal. The

concept of intermodality is integrated to the design of the

terminal. It aims to achieve a modal shift by providing better

accessibility to rail and inland waterway transport. The rail

terminal is situated at one end of the BetuweLine[4]. The

operation of the rail terminal would increase the utilization

of the BetuweLine. The Delta Barge Feeder terminal (DBF)

is the first dedicated feeder and barge terminal in the port of

Rotterdam with an annual capacity of 700,000 barge and

feeder moves[5]. In the other 12 container handling terminals,

barges share the same quay and cranes with sea-going ships,

which causes ineffectiveness to the ships by capacity

planning problems.

Dedicated freight rail corridor: BetuweLine

The state government of the Netherlands invested and

constructed a railway corridor connecting the port of

Rotterdam with the German border, the BetuweLine[40]. The

BetuweLine is a 160 km long double-track dedicated freight

rail corridor that starts from the near-dock Rail Service

Centre Massvlakete, which is a rail terminal launched in

2000 for intermodal container transport. It is built alongside

the only highway giving access to the port of Rotterdam

(A15). The main objective of the government is to relieve

the road congestion on A15, to improve the performance of

hinterland transport by moving more freight to rail, and thus

to enhance the competitive position of the port of Rotterdam

and the Netherlands as the most important gateway in

Europe[18]. The BetuweLine is operated by KeyRail, which is

newly incorporated for this purpose, with participation of

ProRail (the Dutch rail infrastructure provider) and the port

authorities of Amsterdam and Rotterdam.

The BetuweLine is more direct and shorter to the border

comparing with the lines that were used before BetuweLine

was put into operation. As a result, trains shift from the

general network to the BetuweLine. The Rail freight

operators estimate that in 2009, more freight trains will use

this route and the traffic performance on the BetuweLine

will increase[28].

Inland water container terminals and tri-modal inland

terminal

More inland intermodal terminals have been established

along the Rhine River since the last decade. As presented by

Notteboom (2009), the number of terminals increased from

41 in 1998 to 76 by 2002, and this number is still increasing.

Furthermore, there are more inland terminals concentrating

on complementarity between rail and barge transport. For

example, ECT (the largest terminal operator in the port of

Rotterdam) expects to open an inland barge terminal in

Venlo in the second half of 2009. Together with the existing

rail container terminal (since 1982), it will be in tri-modal

operation [4]. As a sea terminal operator, ECT invests on

inland intermodal terminals aiming at gaining better

hinterland control, extending the gates to the Ruhr industrial

area more than extending the inland handling capacity.

3.2.2 Intermodal transport regulations

The regulations that affect hinterland intermodal transport of

port of Rotterdam derive from two sources, namely, the

European Commission and the Netherlands. Within the

Netherlands, the Ministry of Transport, Public Work, and

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Water Management takes the responsibility of intermodal

transport regulating[21], and works closed with the Ministries

of economic affairs, environment, spatial planning and

municipalities[36]. The regulatory framework related to

hinterland transport of port of Rotterdam can be divided into

three categories: market regulating, financing support on

infrastructure, and subsidies.

Railway liberalization and rail traffic management system

standardization

The railway liberalization in European Union started from

1991. Directive 91/440/EEC[2] made a first step in this

direction by establishing rights of access for railway

undertakings operating international combined transport.

Directive 2001/12/EC[9] establishes access rights to the trans-

European rail freight network and, from 2008 at the latest, to

the whole European rail network for international freight

services. It is an important policy that resulted in free entry

to the intermodal traction market and relevant services

market both on domestic and international trade routes.

Whereas the operational system especially the signalling

system for managing the movement of the trains on its

railway network of each country are incompatible. There are

more than 20 different national train control and command

systems in Europe, which are a major technical barrier to

international rail traffic. To improve this situation, European

Commission plans to standardize railway traffic system in

the range of EU. It is the so-called European Rail Traffic

Management System (ERTMS) program, which is also

known as ‘rail harmonization’

Market liberalization and harmonization have resulted in

efficiency and quality improvements in rail freight during

the last decade, with estimated, average decreases in charges

and costs amounting to 25% and 35%, respectively. Besides

freight rates, the liberalization enable the concept of shuttle

service. This leads to a major development in container

intermodal rail freight. With various intermodal rail

operators offering shuttle service, the frequencies and the

number of destinations served have increased significantly.

Public Private Partnership

The Dutch government put many efforts on Public Private

Partnership development. From 1996 to 2003, three

intermodal transport prompting subsidy schemes were

carried out by the Ministry of Transport, Public Work, and

Water Management and the Ministry of Economic Affairs.

These schemes subsided for inland waterway links, inland

waterway connection and public inland terminals[3].

Subsidy scheme

Both of the state government of the Netherlands and the EU

subsidize intermodal transport in the field of infrastructure,

intermodal service, and technology. EU grants for improving

intermodal terminals, starting up international intermodal

services, and handling equipment upgrading. The

Netherlands grants for building intermodal terminal

construction, starting up domestic intermodal services,

maintaining existing domestic intermodal services, IT

system development specifically on purpose of modal

integrating. Benefit of this scheme almost covers all the

commercial players in the intermodal market, such as

terminal operator, intermodal operator, carrier including

pre/pro haulage trucking companies. As a result, the subsidy

scheme helps reducing the terminal handling cost,

intermodal shipping cost, risk of starting up intermodal

service, thus accelerates the intermodal freight flow and

achievement of economic scale.

3.2.3 Technology development

In the hinterland transport system of the port of Rotterdam,

equipment and IT system upgrading has been taking place

continuously in seaport, inland terminals, and transport tools.

A program need to be highlighted is the European Rail

Traffic Management System (ERTMS). It is not only an

important regulatory program, but also serial technology

innovations. In technical perspective, the ERTMS consists of

three parts: the European Train Control System (ETCS),

which provides the signalling techniques to the system; the

Global System for Mobiles on Railway (GSMR), which

establishes communication network within the system; and

the European Traffic Management Layer (ETML), which

intends to optimize rail traffic by managing the timetable

and train running data intelligently[29]. BetuweLine is one of

the pilot projects that employ ERTMS. As planed by the

European Commission, the railways in six freight corridors

will be equipped with ETCS by 2015[7].

4 Comparative analysis

With insights of the projects that were carried out and are

underway in the port of Shanghai and the port of Rotterdam

and their hinterlands respectively, we discuss the similarities

and differences of the projects in the two port hinterland

system from the perspective of infrastructure construction,

regulatory policy, and technology development.

4.1 Comparison of the infrustructure developments

Comparing the two ports in parallel, better accessibility is

the key driver of intermodal infrastructure development.

Accessibility is crucial to the performance of a port, and is

an important competence when competing with others.

Because road is the most preferable transport mean for its

flexibility, reliability and accessibility to destination, it is

foreseeable that road capacity would be fulfilled at first

when the maritime container throughput increase

dramatically. This circumstance occurred in both of the two

ports. In order to ensure the accessibility, the two ports

applied the same approach, modal shift, but in different ways.

The Port of Shanghai focused on waterborne transport and

gateway coverage along with waterway by heavily investing

on inland container terminals. The Port of Rotterdam forms a

complete set of sea terminal facility and hinterland transport

facilities when constructing the new terminal EruoMax.

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Table 2: Comparison on Infrastructure construction development.

Start Project Actors involved Motivation of actors Operator

Shanghai

2005 YSH Terminal SIPG Port accessibility in sea side

Port handling capacity enlargement SIPG[1]

Ministry of

Railways of

China

Road congestion relief

Accessibility

Environment control Dec. 2005

Luchao

gang RCCT

City of Shanghai Regional economy growth

SRCTD[2]

Shanghai Railway

Bureau

Road congestion relief

Port accessibility in inland side

Environment control Nov. 2005 Pudong Railway

City of Shanghai

Regional economy growth

Port accessibility

Passenger transport facility

Shen-Tie[3]

SIPG Cargo source

Hinterland control

Ocean shipping

lines

Hinterland control

Cargo source

Distribution in economic scale 2005–2010 Inland cont. barge

terminal

Local port

authority

Local economic development

City competence

Export acceleration

Accessibility

Inland

terminal

operators

Rotterdam

2007 Betuwe

Route Govern-ments

Competitive position of the port of

Rotterdam and NL

Environment control

Passenger transport of national rail

network

Road congestion relief

KeyRail[4]

Port authority of

Rotterdam

Port accessibility in sea side and inland

side

Port handling capacity enlargement 2008 EruoMax

ECT

Port accessibility in sea side and inland

side

Port handling capacity enlargement

ECT[5]

Under way Venlo

Terminal ECT

Better hinterland control

Extended gates to its deep sea terminals

Strategic objective of the company

ECT

Source: The references for each item are specified respectively in Sections 3.1.1 and 3.2.1

[1] SIPG, Shanghai International Port (Group) Co., Ltd.

incorporated in January 2003 by reorganizing the former

Shanghai Port Authority, is the exclusive operator of all the

public terminals in the Port of Shanghai.

[2] SRCTD, Shanghai Railway Container Terminal

developing Co., ltd. is a joint venture between Ministry of

railways and City of Shanghai.

[3] Shen-Tie, Shanghai Shen-Tie Investment Co., Ltd, is a

joint venture between Shanghai Railway Bureau and City of

Shanghai.

[4] KeyRail, a railway company specifically established for

operation of BetuweLine, with participation by ProRail and

the port authorities of Amsterdam and Rotterdam.

[5] ECT, a division of Hutchison Port Holdings group which

is a port investor, developer and operator.

New rail terminals and new railway links were built in both

of the ports with the same purpose: relief of road congestion.

The new infrastructures were allocated in different

approaches. Pudong railway in Shanghai that connects the

port and notional railway network surrounds the city. The

geographic feature of Shanghai is one of the reasons.

Shanghai locates on the tip of Yangtze Delta, all the

terminals spread along the coast line surrounding the

downtown area. The circling city railway is able to connect

all the container terminals. Another reason for the circling

city design is avoiding intra city trucking transit between

different sea terminals. The BetuweLine is arranged

paralleled with existing highway A15. A15 is the only

highway connecting the port of Rotterdam with hinterland

and was reported to be seriously congested since the 1990s.

The Fifth Advanced Forum on Transportation of China

22

The fact that the BetuweLine lies just alongside the busy

highway is a symbolic indication that this railway was

developed mainly for road congestion relief rather than

extending the hinterland coverage of the port.

Differentiating with rail facilities construction, the

development of inland waterway and inland barge terminals

focus more on strategic business and economic development

of the relevant shipping companies, terminal operators and

inland cities. For the shipping companies, their objectives

are having a better coverage and control of more procedures

in logistic chain. To acquire and consolidate more containers

in order to increase the utilization of the shuttles, and to

achieve economic scale is a main function of the

representatives of the shipping lines in inland barge

terminals. While, for the sea terminal operators, they are

more focus on attracting more cargo to fulfil the capacities

newly built on the gateway seaports. The inland cities aim to

use the inland barge terminals as gateways of export, and

stimulate the regional economy growth by increasing

international trade.

Public-private-partnership is another characteristic of

intermodal infrastructure construction and operation. The

situation in EU and China are similar. In order to introduce

effective competition, investment and operation of

infrastructures are open to private commercial parties. On

the other hand, the transport infrastructures are increasingly

related to public concerns, such as regional/national

economy, road congestion relief, port sustainability, and

environmental issues. Governments recognized that it is

necessary to invest on transport infrastructures to guarantee

their strategies. This results in private-public-partnership.

The infrastructures are constructed and are going to be

operated with co-interests from both of the commercial side

and public side. Therefore, they are expected to be co-

beneficial since the stage of planning. The functions of the

new infrastructures are more likely in balance between

commercial purpose and social benefit.

4.2 Comparison of regulatory policies

The regulation frameworks developed in China and EU are

in a similar trend. Liberalization and standardization,

private-public-partnership, and subsidy are the main

instruments.

Liberalization of EU traction market and relevant services

market, as well as the free entry permission in Chinese

freight transport market for foreign parties has contributed to

a decrease in market prices and/or better cost-effectiveness

via introducing competition to the market. Base on the actual

circumstances we observed in the Netherlands through years,

liberalizations affect the market structures especially in the

sector of rail operating in the scope of intermodal transport.

Standardization applied in both the hinterland of port of

Rotterdam and port of Shanghai. Although the initial

motivations of the rail traffic system standardization in EU

and the ship standardization in China are optimizing the

utilization of EU railway network and the water corridor in

China, due to different nature of markets and different policy

combinations, they lead to different market trends. Because

the rail infrastructure providers and train operators, who are

in the scope of the rail traffic standardization, already have a

certain scale of business and strength, in addition with EU

subsidies on new equipment and equipment upgrading, the

standardization may lead to cooperation among these

operations. Whereas, the ship standardization in China is

more likely to result in mergers and acquisitions. The ship

standardization policy that requires the operators organize

fleets with larger single ship capacity could be beneficial for

the operators as there is opportunity for efficiency gains and

cost savings. However most of the inland shipping

companies are in small or middle scale in the Yangtze region.

They would be not as competitive as large operator, neither

cargo acquisition nor ship building/renting capability.

Table 3: Comparison on intermodal transport regulations.

Activities SHA ROT

Liberalization

Inland

transport

investment

and operation

Rail traction (EU

range)

Rail traffic

Management

system

Standardization Inland ship

Rail traffic

management

system (EU

range)

Private-Public

Partnership

Container

barge terminal

Terminals

BetuweLine

Subsidy

scheme

Intermodal

terminal

development

Intermodal

service

starting up

and

maintaining

Intermodal

infrastructure

construction and

enlargement

Intermodal

service starting

up and

maintaining

IT system

development

Pre/end haulage

trucking

Furthermore, the subsidies in shuttle services may also

especially benefit larger operators, because of the business

scale and existing network, they can take the advantage of

providing lower price and thus achieving economic scale.

Ship standardization along with shuttle service subsidy may

result in integration of market resource by increasing the

average scale of the operators. Taking the free entry policy

into consideration as well, the regulatory policy of inland

waterborne transport in the hinterland of port of Shanghai is

guiding the inland shipping market to a trend of competition

and integration. Collaboration and integration may increase

the overall productivity of intermodal transport services, and

achieve economic scale in the level of an industry, thus to be

more competitive comparing with unimodal road transport.

The Fifth Advanced Forum on Transportation of China

23

Table 4: Summary of problems faced by the hinterland transport systems, solutions, and results.

SHA ROT

Problem Port accessibility

Environmental issues

Port accessibility

Environmental issues

Infrastructure

construction

Yangshan deep-sea terminal

Luchaogang Railway Container Central

Terminal

Pudong Railway connecting all the container

terminals

Inland container barge terminal development

EuroMax multimodal sea terminal

Dedicated freight rail corridor:

BetuweLine

Inland intermodal terminal development

Venlo tri-modal terminal

Policy

Ownership and right of operation deregulation

Inland ship standardization

Priority of traction for containers

Priority of passage of ship-locks for container

barges

Subsidies promoting intermodality

Rail traction liberalization in EU

Railway traffic system standardization in

EU

Private public partnership in

infrastructure construction

Subsidies promoting intermodality

Approach

Technology River-sea going ship European rail traffic management system

Modal share

2002

Barge 17%

Rail 1%

Road 82%

Barge 32%

Rail 9%

Road 59%

Modal share

2007

Barge 36%

Rail <1%

Road 63%

Barge 30%

Rail 11%

Road 59% Results

Results

Port accessibility improved

Enough capacity in inland container shipping

network

Very limit capacity in rail container transport

network

New road congestions caused by new sea

terminal capacity

Share of road and barge transport is stable

Share of rail increased

Road congestion was not relieved

Source: modal share of SHA is calculated based on SIPG statistics; modal share of ROT sources from Port of Rotterdam[25].

Note: modal split mentioned in the table is the number of containers transshiped in the terminal. The ones via warehouse are

not included; data of modal share of barge in the port of Shanghai includes short see shipping and costal shipping.

4.3 Comparison of technology developments

Comparing the examples illustrated above, it is clear to see

that in the port of Shanghai, accessibility is a crucial

problem, new ship development is in urgent to avoid extra

cost for double-transshipment. While in the hinterland of

Rotterdam the focuses were put on the technologies that

enable better infrastructure utilizations.

5 Conclusions

The primary problem that is faced by the container

hinterland transport systems of the port of Shanghai and the

port of Rotterdam is port accessibility from both the sea side

and the hinterland side. Capacity shortages in the ports and

their hinterland transport networks impacts the accessibility

of the ports. Both ports implemented a group of projects as

solutions of improving the intermodal transport system to

solve the problem. The solutions can be categorized to

intermodal infrastructure construction, regulatory policy, and

technology development.

In the case of the port of Shanghai, with the projects, the

problem is relived to a great extent. The Yangshan terminals

solve the capacity shortage of sea side container handling

demand. With half of the inland river ports launched new

terminals for container handling, there is enough container

The Fifth Advanced Forum on Transportation of China

24

handling capacity in the network of inland barge terminals.

The bottleneck of inland waterway transport is the Three

Gorges ship-lock [39]. Although regulation on passage

priority provides more capacity for container transport, it

caused delays for other types of cargos. Ship standardization

is a more promising solution to the capacity shortages in the

waterways, because greater average ship scale enables better

utilization of the inland waterway capacity. In addition,

standardized ship size improves the passage efficiency at the

ship-lock. At this moment, construction of rail facilities near

the port is not effective, because the capacity for container

transport in the national rail network is very limited. Another

issue that needs to be noticed is that the newly launched sea

port container terminals cause increased congestion on

motorways as a result of the providing more handling

capacity of the sea side.

Road congestion in Rotterdam is more serious than in the

port of Shanghai. Because road capacity is difficult to

upgrade in the Rotterdam metropolitan area, stimulating

modal shift is necessary in order to guarantee the

accessibility of the port of Rotterdam. Improving the

accessibility of rail and barge is the strategy being employed.

The new EuroMax terminal brings extra sea side handling

capacity, and also provides intermodal hinterland facilities

directly at the sea side. In addition, the BetuweLine has been

built to absorb the predicted growth of rail container.

Together with the inland terminals developed with the

concept of inland gateway port, it improves the reliability

and efficiency of the intermodal hinterland transport. The

modal share shifted 2% from barge to rail when comparing

2002 and 2007. Although it is not significantly related to rail

liberalization and harmonization, the cost index of rail

freight transport decreased nearly 35% from 1995 to 2002 [13]. The different projects helped to improve the accessibility

of the port of Rotterdam, but still further improvements are

needed as especially road transport access of the port of

Rotterdam is limited, difficult to extend, and vulnerable for

accidents.

Another issue we would like to mention in the end of the

paper is that the environment protection is raised up as a

motivation in most of the projects we analyzed in this paper,

whereas we are hardly able to get any data or information on

pro-evaluation of the projects from the environmental

perspective. It indicates a potential requirement of further

research.

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