Friday, 29 January 2010 10:42

Forth Estuary Barge Report

Research Into Barge Operations in the Forth Estuary

November 2009

Introduction

One of the objectives of the Scottish Inititiative within the Dryport project is to investigate the potential of barge operations in the Forth Estuary. TRI held meetings with SEStran and Forth Ports throughout 2009 to discuss the potential of setting up a water freight service along the coast of Fife on the north side of the estuary, into and out of Scotland’s principal international port at Grangemouth, on the south side of the estuary. If this service could prove feasible, not only would it remove road miles and hence reduce externalities such as congestion and pollution, but specifically it would remove traffic from the already heavily congested Forth Road Bridge. An expanded service operating along the coast and calling at a number of ports could make a significant contribution to the connectivity of intermodal freight operations in the region, which is one of the aims of the Scottish Intermodal Gateway Network (SIGN). The project was designed to investigate the feasibility under current conditions with different levels of demand from the Fife area, as well as considering the possibility of government funding during the start-up phase.

The Current Situation

Freight demand in Fife is expected to rise by between 4% and 6% over thirteen years which will put a considerable strain on pinch points in the network, notably the Forth Road Bridge. Traffic on the Forth Road Bridge has reached capacity at around 24m crossings per year and very little growth is possible; increased usage will simply worsen the already significant congestion problems. In addition, during construction for the proposed replacement bridge, access on the approach will be further congested, making it more attractive to road hauliers to avoid the area entirely or face dramatic increases in labour costs due to longer journey times. Moreover, in its current state the Forth Road Bridge will cease taking HGVs in around 2014-16, although if current improvements are successful, this deadline will be extended for two years.

Setting Up the Service

A map of the Edinburgh and Fife areas, including the proposed ports, is shown below.

Methil is an under-utilised port with spare capacity and is also located in a deprived area, which makes it a good candidate for regeneration that can help to bring economic activity to the area.

In terms of demand, a number of different scenarios were modelled, based initially on export levels from Fife of 6,000, 12,000 and 18,000 FEU. It was assumed that containers would return, either empty or with packaging, etc. therefore calculations were made based on 12,000, 24,000 and 36,000 one-way container movements. In order to begin with a safe amount of cargo that could be sourced from the area, the calculations were initially based on an output of 6,000 FEU, but it was felt that export demand of 12,000 FEU would not prove difficult to achieve within a couple of years if the service could compete economically with road.
Lorry Miles, Tonne Kms & Environmental Benefits


The annual lorry miles removed by a representative usage of the service would be approximately 469,950 (=751,920km), based on the removal of 6,000 return journeys (one FEU per truck). This compares favourably with previous recipients of infrastructure funding in Scotland, and would rate significantly higher if the demand increases in future. In terms of tonne kms, even being conservative and using average load figures of 14t per TEU and based on a full container one way and returning empty, the current scheme would remove 12.29m tonne kms annually from the road network. If the container fill is maximised in both directions then the savings could be greater. Therefore it is clear that significant volumes could potentially be shifted to water.

Emissions & Externalities

Emissions saved by the water service have been calculated using average figures across EU states for grammes of CO2, NOx, PM10 and SO2 per tonne km of freight[1]. These results, presented in the following graphs, show that significant reductions are achieved for Carbon Dioxide and Nitrous Oxide, alongside moderate savings in Sulphur Dioxide and a small increase in Particulate Matter.

Measuring negative externalities [2] saved on the current route has been done using DfT figures which give a value in pence per lorry mile for different categories. The annual value of externalities saved by the removal of 6,000 containers, based on the net road journey, is shown in the chart below.

The above figure shows the value of external costs to society saved by the annual reduction of 469,950 lorry miles, adding up to £417,786 per year. These figures are only estimates as we do not yet have final details on the actual ship to be used and more details on operational hours, speeds, etc. However it can tentatively be concluded that even with the initial estimated demand of 6,000 FEU containers per year, significant environmental savings can be attained, and these benefits can be expected to increase dramatically if the service is successful and more output is committed.

Costs – Infrastructure & Operating

Scottish FFG funding is available to contribute towards infrastructure requirements, based on the number of lorry miles removed per year. It is expected that RoRo infrastructure at Methil could be funded in this manner, whereas funding for full cranes, etc. for LoLo would not be achievable.

Operating costs remain the problem for this service, due to the short distances involved. One way road haulage costs approximately £90 per container, and an estimate of £30-40 per container has been used for the haulage from the shipper to the port at Methil. Therefore the water leg of the service, including handling, must cost no more £60 to break even. This requirement rules out the LoLo option quite quickly, while even RoRo struggles to meet this price without subsidy. Operational subsidies are available from the Scottish government during the start-up period but the service must be shown to be feasible within three years.

It is well known that the primary obstacle to the economic feasibility of intermodal freight transport by comparison with road is the additional handling cost. This cost needs to be offset by savings elsewhere in the transport chain, usually by achieving economies of scale over the longer distance on the rail or sea leg, therefore road haulage is generally used over short distances. The findings of the study broadly confirmed this position, particularly with regard to container ships, bearing in mind that road haulage is still required to bring cargo to the port at Methil. However it was found that reducing handling fees through the introduction of a RoRo ferry could bring the service to within about £30-40 of feasibility (per one-way container movement), under conditions of high demand (12,000+ FEU annually) with relatively high efficiency regarding for example ship utilisation rates. This shortfall is further reduced if rising congestion were to increase labour costs for road haulage, such as when the Forth Road Bridge is closed to lorries in 2016. Other government interventions such as road pricing or bridge tolls could also help narrow the gap.

Conclusions and Outlook

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[]1 More accurate emissions figures can be obtained by measuring the amount of fuel burned for each journey, based on speed and distance, then multiplied by emissions factors per litre, however in the absence of such detailed information, average figures per tonne km have been used.

[2] Negative externalities are external costs, i.e. negative effects produced by road transport that are not paid for by the user but instead the cost is borne by society.