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Unaccompanied transport as a strategy for international road hauliers in Ro-

Ro short sea shipping

Article  in  Maritime Economics & Logistics · September 2013

DOI: 10.1057/mel.2013.10

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This is an accepted manuscript of an article published in Maritime Economics &
Logistics, Vol. 15, Issue 3, pp. 374-394, September 2013, available online:
http://www.palgrave-journals.com/mel/journal/v15/n3/abs/mel201310a.html

UACCOMPAIED TRASPORT AS A STRATEGY FOR ITERATIOAL

ROAD HAULIERS I RO-RO SHORT SEA SHIPPIG

Miguel Ángel López-Navarro

Department of Business Administration and Marketing, Universitat Jaume I,

E-mail: mlopez@emp.uji.es
ABSTRACT:

As a consequence of the problems of sustainability caused by the growth of road

transport, short sea shipping (SSS) has attracted much attention from the European

Union in recent years. Road hauliers, as clients of shipping companies, constitute a key

player in the development of SSS. For these firms, the use of this transport mode

implies a change to their traditional all-road transport operations. Consequently, if these

firms want to maintain stable operations in the SSS context, they need to face the

challenge of modifying their profile and adopt an appropriate organisational structure.

The aim of this paper is twofold: firstly, to analyse, in the context of roll on-roll off (Ro-

Ro) short sea shipping, the two possible operating strategies for road transport firms:

accompanied vs. unaccompanied transport, in an attempt to determine their

characteristics and the factors that condition their use; and secondly, to analyse the

challenges facing international hauliers by changing the process from the all-road

transport option to the use of unaccompanied transport in SSS operations, and how

these challenges are addressed. A study is made of five international road hauliers that

have adapted to become intermodal transport operators. Our findings reveal five key

areas for change: organisation of haulage and fleet restructuring, restructuring of driving

staff, changes in the operating model and development of coordination capabilities,

improving the commercial capacity at destination, and establishing an adequate

infrastructure to organise haulage in the destination country. Proper management of the

adjustment process largely determines the success of road hauliers in the use of

unaccompanied SSS.

Keywords: Short sea shipping; motorways of the sea; road hauliers; intermodality;

unaccompanied transport mode; process of change.

2
Introduction

In recent years, there has been growing concern in the context of the European Union on

issues related to freight transport, primarily in terms of pollution and congestion in the

road network. In this context, and with the purpose of increasing transport efficiency

and sustainability, short sea shipping (SSS) has been promoted as an alternative to

unimodal road transport. The European Commission considers SSS to be a safe and

sustainable alternative for transporting goods and unit loads that would reduce

congestion on the European transport network. In order to facilitate its development,

SSS must be promoted as a part of multimodal transport chains (Paixão and Marlow,

2002; Beskovnik, 2006; Kapros and Panou, 2007; Perakis and Denisis, 2008; Medda

and Trujillo, 2010). The relevance of intermodality and the need for integration between

different modes to make transport more sustainable and efficient is clearly reflected in

the new European Transport White Paper, which sets out guidelines on this matter until

2050 (CEC, 2011).

However, despite the efforts of the European Commission and public

administrations at national and local levels, substantial problems are emerging in the

development of SSS and the results are not as expected (Paixão and Marlow, 2009; Medda

and Trujillo, 2010; Cappuccilli and Douet, 2011; Feo et al., 2011; Baindur and Viegas,

2011, 2012). Several reasons for this have been put forward, such as, for example, the

poor image of SSS, the complexity of documentation and administrative procedures, or the

inefficiency of ports and port-hinterland connections. But no studies have identified and

explored questions dealing specifically with the adjustments road hauliers need to make

in order to operate efficiently in the SSS context, bearing in mind that these firms are a

key player in the development of SSS. International road hauliers constitute a major set

of potential clients for shipping companies in the roll on-roll off (Ro-Ro) SSS segment.

3
According to several authors, these firms are notoriously reticent to use shipping lines

to transport their semi-trailers because of the substantial modifications to their business

model this change entails (Gouvernal et al., 2010; López Navarro et al., 2011a).

Normally, the organisation of international road hauliers is structured around all-road

transport, and introducing the SSS option involves significant modifications to the way

they organise their transport operations. However, in an economic and institutional context

favourable to intermodality, road hauliers should renew their efforts to become integrated

into multimodal transport chains. This implies that they must modify their profile and

implement an appropriate organisational structure to obtain maximum profitability.

The aim of this paper is twofold. First, we analyse the two operating modes, or

strategies, that road hauliers can use in their operations in the context of Ro-Ro SSS:

accompanied vs. unaccompanied transport, in an attempt to determine, on the basis of

the existing literature, their characteristics and the factors that condition their use.

Second, we attempt to identify the key factors that enable firms to successfully adapt to

SSS and, specifically, make use of unaccompanied transport. We focus our second

objective on the unaccompanied transport mode because this requires a greater

adjustment effort, while representing greater economic benefits for firms that use it

(Torbianelli, 2000; De Solere, 2007; Desiderio et al., 2008; Danielis et al., 2010; López

Navarro et al., 2011b). This should further our understanding of the conditions under

which international road hauliers must operate, as well as the obstacles that may impede

their greater use of SSS. For this second objective, we analyse five international road

hauliers that have adapted their operations to use SSS and, specifically, the

unaccompanied transport mode, and we explore the process by which they implemented

this transport mode and the challenges they faced. Our research is therefore limited to the

4
segment of SSS where semi-trailers are transported in Ro-Ro ships, considered as a direct

alternative to all-road transport.

The study is structured as follows: the next section describes Ro-Ro SSS and the

differences between accompanied and unaccompanied transport. Then we analyse the

challenges that road hauliers using a unimodal road transport model need to overcome

to make an efficient use of SSS in the unaccompanied transport mode. The main

conclusions are presented in the final section.

Ro-Ro short sea shipping and the question of accompanied vs. unaccompanied

transport

SSS has aroused a great deal of interest in recent years and constitutes a research field

with great potential for the future. However, SSS is not uniform, and in order to better

understand its nature, different types of traffic should be identified, since they may

represent different markets (Gouvernal et al., 2010). Specifically, Perakis and Denisis

(2008) identify two major types of cargo units for the transport of general cargo: freight

containers and truck-trailers or semi-trailers, and SSS can provide transportation options

for both. A thorough analysis of the differences in operating with semi-trailers and

containers can be found in Woxenius and Bergqvist (2011). Containers are the least

expensive mode of carrying goods, but they are also the slowest due to the

characteristics inherent in their loading/unloading operations (Paixão and Marlow,

2002). Consequently Ro-Ro allows for shorter delivery times than container options.

Moreover, Ro-Ro operations are the main focus of the Motorways of the Sea (MoS)

(Paixão and Marlow, 2007; Cappuccilli and Douet, 2011; Baindur and Veigas, 2012),

an ambitious programme in which the EU has currently embarked. Specifically, the

5
MoS will be the maritime dimension of the ‘core network’ of European corridors (CEC,

2011).

Road hauliers, as clients of shipping companies, can choose between two

operating modes or strategies in the use of Ro-Ro SSS and MoS: (1) accompanied

transport (semi-trailers are shipped together with their tractor units and drivers travel on

the vessel as passengers); (2) unaccompanied transport (only semi-trailers are boarded

onto the vessels, which are loaded and unloaded at the port with special vehicles; semi-

trailers are then coupled with the tractor units located at either end, and moved onto

their final destination as complete units). Despite the importance of this decision, few

studies have addressed the issue; some exceptions are Torbianelli (2000), De Solere

(2007), Desiderio et al. (2008), López Navarro et al. (2011b) or Danielis et al. (2010),

although the latter deals with rolling motorways. According to these studies, the

unaccompanied transport option constitutes, in principle, the most favourable in

economic terms –loading the whole truck takes up more space on board and involves

higher costs resulting from inactive tractor units and drivers. In fact, support for

unaccompanied transport was put forward as an incentive for SSS within the framework

of the 2009 annual meeting of stakeholders and experts on Short Sea Shipping and

Motorways of the Sea. Furthermore, by not shipping tractors, space would be freed up

to board more semi-trailers, and it would also help to reduce emissions per tonne

transported. Consequently the use of unaccompanied transport is a more sustainable

option. However, unaccompanied transport involves greater organisational restrictions.

A different number of actors may be involved in each of the two modalities

considered, which affects coordination needs and, therefore, the complexity of the

operating model (Figure 1 shows the various options). Accompanied transport implies

that the haulier is responsible for pre- and post-haulage. In this case, two agents are

6
involved in the intermodal transport chain: the road haulier and the shipping company.

In contrast, in the case of unaccompanied transport, two options are available for

haulage activity: (1) it may be undertaken by the road haulier if it has an owned tractor

unit fleet; (2) it may be sub-contracted to independent hauliers (usually drivers with just

one vehicle –owner-operators), or cooperation agreements may be signed with varying

degrees of commitment with other road hauliers, thus completing the door-to-door

transport. The level of complexity and the needs of coordination will therefore vary in

the case of unaccompanied transport depending on the alternative strategy chosen. If the

road haulier internalises both pre- and post haulage, only two actors are still involved:

the road haulier and the shipping company. However, if haulage is subcontracted or

agreements are reached with other road transport firms, new operators are added to the

intermodal transport chain (firms C and D in Figure 1), and operations will have to be

coordinated with these additional actors. This decision (internalisation vs.

externalisation of pre- and post-haulage) constitutes a relevant problem of economic

organisation of intermodal transport (Panayides, 2002). According to Transaction Cost

Theory (Williamson, 1975; 1985) there are two basic structures that govern

transactions: the market and the hierarchy (internal governance). In the case of

unaccompanied transport, the internationalisation of pre- and post-haulage by the road

haulier will facilitate the control and coordination of the intermodal transport. In

contrast, with the externalisation of haulage activities more parties are involved, and

therefore control is reduced and greater coordination needs appear within the transport

chain. In addition to transaction cost view, Agency Theory has also been used in the

research on trucking industry to explain the choice between owner-operators and

company drivers (Nickerson and Silverman, 2003).

7
 ________________________

Figure 1
________________________

Despite its economic advantages, the unaccompanied transport option is not

necessarily the best option for all companies. In the analysis of the reasons that motivate

road hauliers to use accompanied or unaccompanied transport, the most decisive factor

is firm size, and by extension, the volume, frequency and regularity of traffic, as well as

the firm’s experience in using SSS (Torbianelli, 2000; Desiderio, 2008; Danielis et al.,

2010; López-Navarro et al., 2011b). Accompanied transport allows hauliers to gradually

move into SSS with hardly any modifications to their operations. Firms usually start by

operating with accompanied transport, which is more flexible, and once familiar with

the operations in the field of SSS, if their traffic volume is sufficiently large, they can

seek higher profits by making greater use of unaccompanied transport.

Cargo characteristics can also condition the decision to use accompanied or

unaccompanied transport. The literature reports a lower use of intermodal transport, the

more valuable the cargo is (Harper and Evers, 1993; Feo et al., 2011). Unimodal road

transport offers greater flexibility and also gives the road haulier more control over

operations, control that declines with intermodal transport, since the cargo units are

transported by a different operator for a part of the journey. Within the context of

intermodal transport using Ro-Ro SSS, the accompanied transport mode allows greater

control. Furthermore, the risk of damaged cargo is higher in unaccompanied transport as

a consequence of semi-trailers’ handling in the port by the stevedoring services.

Therefore, if the freight transported is more valuable, the accompanied transport option

may be preferable.

8
 Finally, the organisation of transport flows by the road haulier, in order to

guarantee that semi-trailers do not return empty, may favour accompanied transport.

Imbalances in the flows of available cargo between the hinterlands of ports connected

by a SSS line may require different transport modes to be used on the outbound and

return journeys. This is the case, for instance, of a firm that uses SSS to transport goods

from country A to Country B, but then it searches for return cargoes in country C, so

that the return journey is made entirely by road. In such a situation, the road haulier

must use the accompanied transport mode on the outbound journey using SSS because it

needs the tractor unit for the return journey.

In light of above, various reasons determine the road haulier’s decision to use

accompanied or unaccompanied transport. However, taking into account the greater

economic benefits that unaccompanied mode brings, in the next section we focus on the

challenges and adjustments that the adoption of this modality involves.

Challenges for international road hauliers in the use of unaccompanied transport:

a case analysis

The lack of research into the challenges facing road hauliers to modify their profile and

adopt an appropriate organisational structure for maximum profitability in the use of

unaccompanied transport, has led us to seek information directly from firms that have

undergone this process. In fact, qualitative research is particularly appropriate in areas

where little prior knowledge is available. Panayides (2002, p. 411) points out the

applicability and benefits of qualitative approach to research in an intermodal transport

context, “because the originality of the topic and the dearth of scientific studies in this

context suggest that any current research study should be exploratory in nature”.

9
 The selection of firms was made on the basis of the authors’ experience in

previous research into this transport mode, and with cooperation from Grimaldi

Logística España (a shipping company that operates several SSS lines between Italy and

Spain). Although a wide range of road hauliers use SSS, relatively few companies have

adapted their structure in order to become true intermodal transport operators using

unaccompanied Ro-Ro SSS. The five firms selected were located in the Valencian

Community (Spain) and they were highly focalised in international transport with Italy.

At present, Italy is the best connected country with Spain regarding SSS, with different

lines running from the ports of Barcelona and Valencia to various Italian ports (Genoa,

Rome and Livorno from Barcelona, and Salerno and Livorno from Valencia).

Data were collected through in-depth personal interviews with the general

managers of these five firms. Reliability requirements were satisfied by following the

same protocol, in this case a script, in each interview. The main characteristics of the

firms analysed in this study are summarised in Table 1. The names of the companies

have been modified for reasons of confidentiality. Three of the organisations can be

classified as ‘pure’ SSS firms, as they operate exclusively using this transport mode; the

remaining two are ‘mixed’ firms, combining Ro-Ro SSS with road transport in their

traffic operations. However, even though a firm is classified as ‘pure’ SSS, it may use

road transport in certain circumstances, such as lack of space on the SSS line at a given

moment, unfavourable conditions at sea preventing vessels from sailing, etc. Regarding

the use of SSS, all firms analysed use the unaccompanied transport mode. In the opinion

of the five general managers interviewed, the essential characteristic of Ro-Ro SSS is

that it should only involve semi-trailers, and that it would make no sense to ship

complete trucks and drivers since unjustifiable costs would be incurred. Table 2 shows

the estimated prices the shipping company charges on the lines used by the companies

10
interviewed for both accompanied and unaccompanied transport (the Barcelona-Genoa

line is operated by Grandi Navi Veloci and the other lines that appear in the table are

operated by Grimaldi). This information is taken from the ‘transport chains simulator’, a

tool developed by Shortsea Promotion Centre Spain. These figures do not include the

opportunity costs associated with the immobilisation of the tractor unit and the driver in

the case of accompanied transport (these costs are particularly relevant when the

journey by sea exceeds the driver’s mandatory rest periods).

________________________

Table 1
________________________

________________________

Table 2
________________________

The information gathered in the interviews enabled us to identify five main

challenges that condition the process of adjustment from traditional all-road transport

operations to unaccompanied transport using SSS: (1) organisation of haulage and fleet

restructuring; (2) restructuring of the driving staff; (3) changes in the operating model

and development of coordination capabilities; (4) improving commercial capacity at

destination; (5) establishing an adequate infrastructure to organise haulage in the

destination country. The following section discusses how companies deal with these

adjustments while at the same time contextualising the results in the literature on the

trucking industry and intermodality.

11
Organisation of haulage and fleet restructuring

In conventional all-road transport operations, firms generally require a similar number

of tractor units and semi-trailers. However, use of unaccompanied transport in SSS

operations implies that tractor units are only used to move the semi-trailers before and

after the sea leg, thus requiring adjustments to the ratio between tractor units and semi-

trailers. Consequently, the first issue that an international road haulier must consider

when adopting an organisational structure for unaccompanied SSS is to restructure its

fleet. The magnitude of the adjustment process will vary, depending on the option

chosen to organise haulage activity.

The road haulier can organise the haulage activity internally (as in the case of

firm 4), or externally by subcontracting (firm 1). However, the firm may combine the

two options, and also use cooperation agreements with other road transport firms, in

pursuit of advantages deriving from controlling its own resources and the organisational

flexibility offered by subcontracting (this is the case of firms 2, 3 and 5). The distinction

must be made between haulage activities in each port, however. In the home country,

where the company usually has its logistics base, the most common option is for firms

to have their own tractor units and drivers (this is the case of firms 2, 3, 4 and 5); only

firm 1 subcontracts full haulage activity at origin. This preference for internalisation can

be explained by the importance of coordination in haulage activity. Whereas

international all-road transport requires virtually no coordination between journeys,

haulage activity in the unaccompanied transport option demands timely coordination of

truck movements (including the possibility of several trips for each tractor unit in the

same day) with vessel arrivals and departures. In the absence of externalities across

hauls, subcontracting may be preferred for traditional agency reasons –assets ownership

provides an incentive to an owner-operator to expend more effort and resources in

12
vehicle maintenance and careful driving than would a company driver; however, when

the outcome of one haul imposes externalities on the other hauls, and consequently they

must be properly coordinated, hauliers tend to rely on company drivers (Nickerson and

Silverman, 2003). Thus, for timely coordination of truck movements, hierarchy

(internalisation) is likely to provide better solutions for synchronisation and designation

problems than subcontracting (Arruñada et al., 2004).

Moreover, three of the five companies analysed use cooperation agreements with

local companies to perform the haulage activity at destination. Cooperation agreements

are hybrid forms between the hierarchy and the market and, for the reasons set forth

above, may be preferred to outsourcing if the company does not have its own resources

at destination. In this case, the coordination of the haulage activity at destination is

carried out internally by the local partner, which also avoids the externalities outlined

above. Consequently there are theoretical arguments that justify the road haulier’s

preference for internalisation of haulage activity at origin (or the use of a local partner at

destination), compared to the outsourcing alternative. However, there are other reasons

for cooperation agreements with local companies, since they are also used, as we will

see below, for commercial purposes (to capture cargoes at destination and avoid empty

returns).

In the case of outsourcing all haulage activity by subcontracting to independent

hauliers, the firm’s fleet would consist entirely of semi-trailers, and it would have to sell

all its tractor units (this is the case of firm 1). At the same time, and regardless of the

modality chosen to organise the haulage, the company has to assess whether more semi-

trailers are necessary, since their rotation in the maritime operation is slightly lower than

in the all-road alternative, as a consequence of the limited number of vessel departures.

With full outsourcing, the firm would depend on third parties for the pre- and post-

13
haulage operations, which some managers may consider problematic. However, there is

a large pool of independent owner-operators and, a priori, problems in contracting this

service do not generally arise.

In the case of managing haulage operations internally (this is the case of firm 4),

the firm must own both semi-trailers and tractor units (for pre- and post-haulage), and it

must therefore determine the optimal ratio between the two. This ratio will vary

according to the haulage distances the firm has to cover, depending on where its clients

are located (at both ends of the sea leg). In principle, a reasonable ratio for optimum

fleet efficiency, according to the general managers interviewed, would be around three

semi-trailers per tractor unit; higher ratios would imply greater profits from

unaccompanied Ro-Ro SSS operations. A firm choosing this option would have to sell

some of its tractor units in order to reach the appropriate ratio between tractor units and

semi-trailers. In terms of pre- and post-haulage, this firm model would function in a

similar way to a domestic road transport firm. On the other hand, it should be noted that

firms 3 and 5 combine international semi-trailer transport using SSS with their port-

based container transport activity. These two firms have, at origin, their own fleet of

tractor units which they use for both businesses, thus further their optimisation.

If the company decides to manage its haulage activity internally, modifications

may be undertaken without having to sell a part of its tractor units. This option provides

for the gradual increase in the number of semi-trailers until the desired “semitrailer-

tractor unit” ratio is reached –in general, this would entail a slow transition during

which the company gradually abandons its all-road operations to become integrated

within the unaccompanied SSS framework. However, this alternative will only be

feasible if the company has sufficient commercial capacity to capture new clients,

which will enable the new semi-trailers to be used to the full.

14
Restructuring of the driving staff

As a direct consequence of fleet restructuring, the general managers interviewed also

mentioned the need to restructure the driving staff. This issue has two different

implications. Firstly, as the firm reduces the number of tractor units, it must also

proportionally reduce its number of drivers, which can lead to workplace disputes.

Firms that decide to subcontract all haulage activity, and therefore sell all their tractor

units, must also terminate their drivers’ contracts; redundancy may, however, motivate

some drivers to become self-employed hauliers and reach agreements with the firm to

undertake haulage operations (this is the case of firm 1). Secondly, where road haulage

is undertaken internally (or where outsourcing is only partial), the remaining drivers

will work exclusively on national routes and not on international ones as before. This

change has certain advantages in terms of quality of family life (time the drivers spend

at home is an indicator of their welfare and contributes decisively to reducing work-

family conflict (Williams et al., 2011)), and regarding conditions of work. International

truck drivers’ work in particular is characterised by long working hours, work at

different times of day, and other conditions that impact not only their working

conditions but also their out of work living conditions. In this regard, in a study on the

health and working conditions in Spanish road transport (Instituto de Salud Carlos III,

2007), drivers on international routes reported higher levels of physical demands in the

work and higher mental strain than national route drivers. International drivers also

stated that their work interfered significantly more not only in family life, but also in

their social life and leisure activities.

But the change also has disadvantages for drivers, as national transport drivers’

salaries are lower than those of international ones and, consequently, some of them may

not agree to the new conditions. The general managers of the firms interviewed

15
recognised that this situation requires a process of negotiations to review contracts, as

well as an effort to avoid workplace disputes.

From a company perspective, in this adjustment process, it must be taken into

account that the drivers’ wages constitute the major cost factor in road transport

operations (Stephenson and Fox, 1996; COMPETE, 2006). Consequently, the reduction

in the necessary number of drivers constitutes a huge saving in costs for the company.

On the other hand, the use of unaccompanied SSS transport gives companies more

control over drivers compared to the all-road alternative. On long international routes it

is more difficult to monitor truck use than on shorter routes –drivers have more

discretion on long routes (Fernández et al., 2000). Haulage activity in the

unaccompanied transport option assumes a lower level of driver discretion because

he/she has to work according to a strict schedule that enables the proper coordination of

hauls.

Changes in the operating model and development of coordination capabilities

The transition from an international road haulier using all-road transport to an

intermodal transport operator using unaccompanied Ro-Ro SSS necessarily requires

changes in the operating model. Its activity essentially now consists of capturing clients

with cargoes at both ends of the SSS leg, contracting reserve capacity on the vessel and

coordinating the turnaround cycle in each port through efficient management of pre- and

post-haulage operations.

An all-road international haulier will not, in principle, be familiar with port

operations and will have to learn how to work in this context. Moreover, the complexity

of the documentation and administrative procedures involved in SSS are regarded as an

obstacle to SSS development (Medda and Trujillo, 2011; Jugovic et al., 2011). In fact,

16
the general manager of firm 3 highlighted the notable advantages for the firm of

participating in the road container haulage business, which enabled the firm to gain

experience and a broad knowledge of port operations. On the other hand, the firm’s

capabilities to properly coordinate the haulage activity must also be considered.

Appropriate planning of loading operations with shippers and synchronisation of

haulage operations with the vessel departures and arrivals will allow a more efficient

use of company equipment. In all-road transport, and also in the SSS accompanied

transport mode, the “semitrailer-tractor unit-driver” package always moves together;

thus, the driver is able to inform the company in cases of delay or problems in the

maritime leg. In unaccompanied transport the different agents participating in the

process must be afforded sufficient levels of information in order to coordinate

adequately the intermodal transport chain (in four of the five cases analysed, in addition

to the road haulier and the shipping company, other actors are also involved–

subcontracted hauliers or partners at destination). It should also be noted that road

hauliers or road-based forwarders dominate/coordinate the organization of transport

chains involving semi-trailers (Woxenius and Bergqvist, 2011). For the road haulier,

this coordinating role implies the need for suitable interaction and information exchange

with shippers, shipping company, subcontracted hauliers, partners at destination and

even cargo receivers. This can require the use of new ICT (information and

communication technology) applications. As stated in the literature, these tools provide

new possibilities to support the complex task of intermodal chain coordination and

control (Bontekoning et al., 2004; Macharis et al., 2011; Marchet et al., 2011).

According to the above, the new work environment therefore requires the

company to acquire or improve its competences in regard to port operations and

procedures and especially its capabilities for planning and coordinating its cargo units in

17
haulage operations, and ultimately organise the coordination of the intermodal transport

chain as a whole.

Improving the commercial capacity at destination

A firm using unaccompanied Ro-Ro SSS must have significant commercial

capacity to secure cargoes at both ends of the SSS route(s) on which it operates. It is

worth noting again that international road hauliers that adapt to become multimodal

operators using unaccompanied Ro-Ro SSS are generally large road hauliers, and as

such are likely to have a well-developed commercial capacity, particularly in their

domestic market. Notwithstanding, this capacity must be intensified, especially in the

destination market, since the profitability of a firm using unaccompanied transport on a

specific SSS line is highly dependent on the volume of semi-trailers it can transport

within the hinterland of the ports of origin and destination connected by this link. A

greater distance from the place where the freight is loaded to the port of origin (or from

the port of destination to the place of unloading) reduces the profitability of the

intermodal alternative as compared to all-road transport. SSS efficiency and

competitiveness lie essentially in the lower costs that can be achieved in the sea leg as a

consequence of scale economies, and haulage distances need to be minimised. Indeed,

the distance between the port and the point of cargo origin/destination is an important

factor in the choice between road and intermodal maritime transport (see, for example,

Feo et al., 2011). Of the five companies interviewed, two of them (1 and 4) have their

own commercial infrastructure in the country of destination; the other three have

engaged in cooperation agreements with local road hauliers which are used to search

return cargoes at the other end of the SSS line.

18
 Commercial collaboration agreements at destination therefore play an important

role in securing cargoes to ensure that the semi-trailers return full. As highlighted in a

study by the Ministerio de Fomento de España (2006) –the Spanish Ministry

responsible for transport- regarding the development of SSS, domestic road hauliers still

maintain a dominant position over the transport of goods produced for export in their

own country and, in contrast, their participation in the transport of goods produced

abroad is limited by the privileged position of foreign road hauliers. The consolidation

of these positions of power over the goods in the country itself leads to a tangible

presence of empty returns in the international freight market. This is the usual situation

in the road transport sector. However, when cooperation agreements are signed between

road hauliers from different countries, it is in the interest of all the firms to find the best

way of occupying as many of their semi-trailers as possible. Therefore, this operation

helps reduce empty returns, and leads to a parallel reduction in unit costs. Consequently,

the use of unaccompanied SSS requires firms to redouble their efforts in establishing

cooperation agreements with local firms at the other end of the SSS line. In this regard,

it is possible that new capabilities must be developed to manage such relationships, as

the literature indicates (Kale and Singh, 2007; Schreiner et al., 2009).

Establishing an adequate infrastructure to organise haulage in the destination country

The organisation and coordination of the turnaround cycle in each port require the firm

to have an adequate infrastructure at both ends of the SSS line. In principle, any

international road haulier will already have a logistics base in its country of origin to

organise pre-haulage. But successful adoption of the unaccompanied SSS alternative

will also require adequate installations to be established in the destination country to

organise post-haulage. In this regard the company has two possibilities:

19
 a) A wholly owned subsidiary (this is the case of firms 1 and 4). This

infrastructure needs to be created both when the road haulier internalises the post-

haulage activity and when the firm relies exclusively on subcontracted independent

hauliers for post-haulage. Port operations are highly complex and involve many

variables that condition the service to clients; consequently the task of coordinating

independent hauliers may prove too complicated if undertaken from the country of

origin. Furthermore, when the firm undertakes post-haulage internally –with its own

drivers and tractor units-, a more sophisticated infrastructure at destination should be

created.

b) Cooperation relationships with local road hauliers in the destination country,

which may take one of two forms: 1) creation of a joint venture –by its very nature this

option involves creating a shared subsidiary at destination for post-haulage, but also for

commercial activities (this is the case of firm 3); 2) cooperation agreements with local

transport firms –this option does not require the establishment of an infrastructure at

destination, because the local partner coordinates post-haulage activity (this is the case

of firms 2 and 5). The general managers of these firms emphasised the advantages of

having partners in the destination country, given the operational differences in each

country or geographical region, and recommended on seeking partners that would

ensure good operating dynamics. It might be expected that firms would be more willing

to work with partners on haulage than on commercial activities, particularly if their

partners are competitors that might attempt to poach their own clients. However, firms

use cooperation with local road hauliers with a dual purpose: organising post-haulage

activity and, as discussed in the previous section facilitating the capture of cargoes to

minimise empty returns.

20
 Table 3 summarises the main challenges of the adjustment process dealt with in

this section.

________________________
Table 3
________________________

Conclusions

The use of SSS by road hauliers implies changes to their traditional business

model, the all-road transport, although the magnitude of the change and challenges to be

faced differ depending on the operating mode or strategy the firm chooses for using

SSS: accompanied vs. unaccompanied transport. In this paper we have discussed the

peculiarities of each of these options, and we have described the conditions that

motivate the use of unaccompanied transport: the size of the road transport firm, which

translates into a higher volume, frequency and regularity of traffic; experience in the use

of SSS; the value of the cargoes; and the absence of trade imbalances at both ends of the

SSS line. On the other hand, unaccompanied transport may involve a greater number of

actors. If haulage is subcontracted or cooperation agreements are reached with other

road hauliers, new operators are added to the intermodal transport chain, and operations

will have to be coordinated with these additional actors. Unaccompanied transport

involves a greater need for adjustments, which reduces the firm’s flexibility –changes

are not easily reversed once they have been effected. However, the economic

advantages offered are substantially higher.

A firm can combine the two options, accompanied and unaccompanied transport

(and even unimodal road transport), in order to optimise its transport strategy and make

an efficient use of its physical and human resources. However, in the context of Ro-Ro

21
SSS, we assume that if the firm is sufficiently large and has frequent and regular traffic

flows between the two ends of the SSS line, it will be more likely to use the

unaccompanied transport mode in order to reduce operating costs. In this regard, we

have also analysed the areas on which an international road transport firm needs to

focus if it wants to adapt successfully to Ro-Ro SSS operations using unaccompanied

transport.

An initial area of change is fleet restructuring. The extent of this change will

depend on the option chosen to organise the haulage activity. Full haulage

externalisation (outsourcing) involves the sale of all tractor units, and internalisation –

the preferred option because it facilitates coordination– involves the sale of a part

thereof, up to the desired ratio between semi-trailers and tractor units. This ratio

depends largely on haulage distances. Driving staff must also be restructured as a result

of changes to the fleet. The requirement of a lower number of tractor units, as well as

drivers, allows the company to make significant savings in capital investment and

operating costs, freeing up resources that can be invested in other areas to improve its

competitiveness.

Moreover, changes must be made to the operating model, associated with port

operations and management of haulage activity. The firm must learn to manage new

documentation and administrative procedures, and must also develop capabilities to

coordinate the turnaround cycle in each port through efficient pre- and post-haulage

management, as well as to coordinate the intermodal transport chain as a whole. On the

other hand, the intensification of commercial capability at destination is a relevant issue

to capture return cargoes in the port hinterland and minimize haulage distances. This

may lead to formalising cooperation agreements with local firms at the other end of the

SSS line, and new skills should be developed in this respect. Consequently, the process

22
of change towards the use of unaccompanied transport involves the need for the

company to improve or develop certain capabilities, a circumstance that for many

companies may involve a higher challenge than restructuring its fleet and its staff of

drivers.

Finally, an adequate infrastructure to organise haulage must be set up in the

destination country. This may take the form of an own subsidiary to properly manage

the firm’s own fleet or an outsourced fleet, or may result from the signing of

cooperation agreements with local hauliers (in this case the local firm takes

responsibility for managing the haulage at destination). Cooperation agreements with

local companies are therefore a relevant factor in unaccompanied transport, both in

terms of the organisation of the haulage activity and in the commercial capacity to

secure return cargoes. Thus, companies should overcome their resistance to such

agreements and contemplate them favourably in their change process.

It should be noted that the five cases analysed in this study are firms highly

focalised in international transport between Spain and Italy. This circumstance has

allowed them to develop an organisation centred on unaccompanied Ro-Ro SSS that

affects a large part of the firm’s activity. Clearly, international road hauliers operating in

a wide geographical context will not be able to apply the guidelines put forward in this

paper throughout their entire organisation. However, they may adopt them partially in

geographical areas connected by SSS lines with which they have regular flows and

sufficient cargoes to make unaccompanied transport a viable and efficient option.

As a final thought, it is important to note that SSS is less flexible than all-road

transport. Such flexibility –the road haulier’s ability to respond to shippers’ changing

needs– is one of the road haulier’s main strengths (Randall et al., 2010). With the

unimodal road transport solution, a truck can always wait in the shipper’s facilities in

23
cases of delay; likewise, it can leave for its international destination immediately after

loading. This is not possible with the intermodal solution, because the firm has to

accommodate vessel departure schedules. With the intermodal transport alternative,

particularly through the use of unaccompanied transport, road hauliers can improve the

profitability of their operations, but they lose flexibility vis-à-vis their clients and they

need to make changes to their structure and operations. Additionally, the generally

monopolistic structure existing in the exploitation of SSS lines must be taken into

account. All of this makes the process of change and, consequently, the transfer of cargo

from road to sea, less straightforward. Establishing a new SSS line represents a high

investment and a risk for the shipping company. But beyond the economic analysis in

terms of potential cargo flows, or the possibility of offering a competitive price,

shipping companies need to pay more attention to their customers –the road hauliers–,

in an attempt to understand their processes of changing to operate in the new scenario.

As Bontekoning et al. (2004) note in their proposals for further research in the field of

intermodality, the issue of (re)distribution strategies for (investment) costs and benefits

among actors is an important consideration.

24
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27
 Figure 1: Control and coordination needs in accompanied/unaccompanied transport

Accompanied transport

Pre- Maritime Post-

Origin Destination
haulage transport haulage

Loading the Loading the Unloading the Unloading the cargo

cargo at origin complete truck complete truck at destination
into the vessel from the vessel

Road haulier (Firm A)

Shipper Client
-the vessel is used as a bridge-

(- ) Control

(+) Coordination

needs

Unaccompanied transport

Pre- Maritime Post-

Origin Destination
haulage transport haulage

Loading the Loading the semi-trailer Unloading the semi-trailer Unloading the cargo
cargo at origin into the vessel (using from the vessel (using at destination
stevedoring services) stevedoring services)

(1) Shipper Road haulier Shipping company Road haulier Client

at origin (Firm B) at destination
(Firm A) (Firm A’)

(2) Shipper Road haulier Shipping company Road haulier at Client

at origin (Firm B) destination
(Firm A ) (Firm A outsources post-
haulage in Firm C)

(3) Shipper Road haulier at origin Shipping company Road haulier at Client
(Firm A outsources (Firm B) destination
pre-haulage in Firm D) (Firm A outsources post-
haulage in Firm C)

Firm A is a road haulier that receives transportation request for cargoes that have to be carried from a
shipper in region 1 to a client –receiver– in region 2.

28
 Table 1: Characteristics of the firms

Firm1 Firm 2 Firm 3 Firm 4 Firm 5

Countries
they Italy and Italy and
Italy Italy Italy
operate Greece (minor) Greece (minor)
using SSS

Valencia- Valencia-
Livorno Livorno
Valencia-
Valencia- Valencia- Livorno Valencia-
Livorno Salerno Salerno
Lines of Barcelona-
Barcelona-
SSS used Genoa
Valencia- Barcelona- Genoa Barcelona-
Salerno Genoa Genoa

Barcelona- Barcelona-
Rome Rome

Operating Unaccompanied Unaccompanied Unaccompanied Unaccompanied Unaccompanied

mode transport transport transport transport transport

Shipments
80 135 90 60 75
per week

Haulage at Own resources

origin (pre- Subcontracted and Own resources Own resources Own resources
haulage) subcontracted

Haulage at
Cooperation
destination Cooperation Cooperation
Subcontracted agreements and Own resources
(post- agreements agreements
subcontracted
haulage)

Commercial
activity at Own resources Own resources Own resources Own resources Own resources
origin

Commercial
Cooperation Cooperation Cooperation
activity at Own resources Own resources
agreements agreements agreements
destination

29
 Table 2: Estimated prices charged by shipping firm in accompanied and

unaccompanied transport (prices in €)

Accompanied Unaccompanied Difference (in

transport transport percentage)
Barcelona-Genoa 767 590 -30%
Barcelona-Rome 1032 882 -17%
Valencia-Livorno 1050 850 -23.5%
Valencia-Salerno 1913 1863 -2.7%
Source: Shortsea Promotion Centre Spain
(http://simulador.shortsea.es/simulador.aspx; accessed on 29/01/2013)

30
View publication stats

Table 3: Main challenges in the process of change from all-road transport to unaccompanied Ro-Ro short sea shipping
Dimension Observations
Organisation of Outsourced haulage The firm’s fleet is entirely made up of semi-trailers (it must sell its tractor
The optimal number of semi-trailers per tractor unit will
haulage and fleet units and use the services of independent hauliers, generally drivers with depend on pre- and post-haulage distances
restructuring just one vehicle –owner-operators) Savings in capital investments for tractor units
Internal haulage In addition to semi-trailers, the firm also have tractor units for haulage (itInternal haulage option is preferred because it favours
must sell some of its tractor units because fewer of them will be needed in coordination
unaccompanied SSS than in international all-road transport) Cooperation agreements with local hauliers are usual in
haulage activity at destination
Road haulier has to assess whether more semi-trailers are necessary, since their rotation in the maritime operation may be slightly lower than in the all-road alternative
Restructuring of The firm must reduce its driving staff –wholly or partially, depending on the option chosen to organise Possible occurrence of workplace disputes in case of
the driving staff haulage activity- and modify the contract conditions of those than remain in it (only national routes) redundancies
Salary savings for the company
Less driver discretion (more control by the company)
Changes in The road haulier must adapt its operating model when using maritime transport –the services of the shipping company. It must become familiar with new documentation
operating model and administrative procedures, and also with port operations
and development The road haulier must coordinate the turnaround cycle in each port through efficient management of haulage operations, including new players when haulage is outsourced
of coordination or when cooperation agreements with local hauliers are established (capabilities to efficiently coordinate its equipment / capabilities to coordinate the intermodal transport
capabilities chain as a whole)
Improving The firm must intensify its commercial activity, especially at destination, to achieve return cargoes within the port’s hinterland and Cooperation agreements with
commercial minimise empty returns (commercial capabilities) local hauliers are a relevant
capacity at To increase its commercial capacity the firm can establish cooperation agreements with local firms at the other end of the SSS line, and factor in unaccompanied
destination new skills should be developed in this field (capabilities to manage cooperation relationships) transport. They allow the
adequate coordination of
Establishing an Own subsidiary Although the firm does not have tractor units at destination (outsourced haulage), it must have an adequate
post-haulage through use of
adequate infrastructure that allows it to coordinate haulage operations efficiently
partner’ equipment, as well
infrastructure to When the firm has tractor units and drivers at destination a more sophisticated infrastructure is needed to as improving the commercial
organise haulage manage its own resources capability to secure return
in the destination
cargoes
country Cooperation agreements Joint ventures with local hauliers. The joint venture coordinates the haulage operations
Cooperation agreements with local hauliers (whose tractor units are used). The local partner coordinates the
haulage operations