Perils of road freight market deregulation: cabotage in the European Union
The International Journal of Logistics Management
ISSN: 0957-4093
Article publication date: 3 April 2020
Issue publication date: 14 July 2020
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
Acknowledgements
An early version of this research was presented at the 23rd International Symposium on Logistics (ISL 2018) in Bali, Indonesia.This paper forms part of a special section “ISL 2018 23rd Symposium on Logistics”, guest edited by Shams Rahman and Nyoman Pujawan.
Citation
Sternberg, H.S., Hofmann, E. and Overstreet, R.E. (2020), "Perils of road freight market deregulation: cabotage in the European Union", The International Journal of Logistics Management, Vol. 31 No. 2, pp. 333-355. https://doi.org/10.1108/IJLM-12-2018-0321
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited