Intermodal Freight Transport Competition on China-Europe Route: Environmental and Welfare Implications

45 Pages Posted: 20 Aug 2022

See all articles by Anming Zhang

Anming Zhang

University of British Columbia (UBC) - Sauder School of Business

Yilin Zhang

affiliation not provided to SSRN

Kun Wang

University of International Business and Economics

Shiyuan Zheng

affiliation not provided to SSRN

Hangjun Yang

University of International Business and Economics

Junjie Hong

University of International Business and Economics (UIBE) - School of International Trade and Economics

Abstract

China Railway Express (CR Express) has been fast developed, offering an alternative to transportation of the containerized cargo between China and Europe. This paper examines the environmental (CO­2 emissions) and social welfare implications of intermodal competition between the emerging CR Express and incumbent maritime shipping. An analytical model is developed, which shows that the implications depend in general on the relative emission intensities of the two transport modes on a per-trip basis. The entry of CR Express and and the resultant intermodal competition, while likely improving welfare, will increase emissions unless CR Express is sufficiently emission efficient. Such impacts on emissions and welfare are enhanced when there are more CR Express operators, or when there are fewer shipping carriers. The competition among Chinese local governments in supporting their own CR Express services also strengthens the impacts. The analytical model is further calibrated with real market and operational data on the route between China’s Yangtze River Delta and Central Europe. Our numerical simulations show that the intermodal competition leads to more emissions unless CR Express can achieve approximately 90% reduction in emission intensity, and that overall welfare is nonetheless improved. Policy and managerial implications are discussed.

Keywords: Intermodal competition, CR Express, maritime shipping, China-Europe route, emission, welfare

Suggested Citation

Zhang, Anming and Zhang, Yilin and Wang, Kun and Zheng, Shiyuan and Yang, Hangjun and Hong, Junjie, Intermodal Freight Transport Competition on China-Europe Route: Environmental and Welfare Implications. Available at SSRN: https://ssrn.com/abstract=4195272 or http://dx.doi.org/10.2139/ssrn.4195272

Anming Zhang (Contact Author)

University of British Columbia (UBC) - Sauder School of Business ( email )

2053 Main Mall
Vancouver, BC V6T 1Z2
Canada

Yilin Zhang

affiliation not provided to SSRN ( email )

No Address Available

Kun Wang

University of International Business and Economics ( email )

10 Huixindongjie, Chaoyang District
Beijing, 100029
China

Shiyuan Zheng

affiliation not provided to SSRN ( email )

No Address Available

Hangjun Yang

University of International Business and Economics ( email )

10 Huixindongjie, Chaoyang District
Beijing, 100029
China

Junjie Hong

University of International Business and Economics (UIBE) - School of International Trade and Economics ( email )

10 East Huixin Street
Chaouang District
Beijing, 100029
China

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