An Economic Feasibility Study of Short Sea Shipping Including the Estimation of Externalities with Fuzzy Logic.

Abstract

The continuing growth of freight transportation has placed significant stress on U.S. and European transportation networks. The dominance of trucking as the main mode of domestic general cargo transportation has caused environmental and societal problems, such as traffic congestion, air pollution, highway accidents, noise, and increased energy consumption. Using inland and coastal waterways, short sea shipping (SSS) can alleviate these problems. SSS can provide efficient door-to-door transportation as part of an intermodal system, where ships perform the long-haul and trucks the short haul cargo collection and distribution. This dissertation examines the economic feasibility of SSS. The environmental and societal advantages of SSS over competing modes are translated into lower external costs. External costs or externalities are the hidden costs not reflected in transportation prices. This non-inclusion is considered a market failure by economists. Estimating their monetary value is a challenging task. There is an inherent subjectivity, imprecision, and vagueness in current external cost valuation methods. This dissertation addresses this vagueness and imprecision of externalities using fuzzy logic. Fuzzy logic treats subjectivity with mathematical rigor. Several factors that determine the impact level of transportation externalities are modeled as fuzzy input variables. The outputs are the damage costs of major air pollutants and the external costs of traffic congestion. A fuzzy inference system can provide site-specific monetary estimation for these externalities under defined conditions, instead of average values. The results show that SSS has great potential for further improving its environmental performance by lowering ship emissions at ports, where most of its external costs occur, by implementing procedures, such as “cold ironing.” The dissertation assesses the feasibility and competitiveness of SSS, in comparison to the all-truck mode, in two realistic cases of prospective short sea operations along the U.S. East Coast. SSS is highly competitive, due to its significant energy efficiencies. Furthermore, its environmental performance, in terms of monetary impact of emissions is superior, due to location. Combining the internal costs with the external cost estimates, the two case studies demonstrate the fair pricing principle in freight transportation, where prices are based on the full social cost of a transportation mode.