A decision analysis framework for intermodal transport: Comparing fuel price increases and the internalisation of external costs Cathy Macharis * , Ellen Van Hoeck, Ethem Pekin, Tom van Lier Vrije Universiteit Brussel, Department MOSI-Transport & Logistics, Pleinlaan 2, 1050 Brussels, Belgium article info Article history: Received 17 June 2009 Received in revised form 23 March 2010 Accepted 24 April 2010 Keywords: Intermodal transport Fuel price External costs Location analysis GIS network model abstract This paper presents the impact of fuel price increases on the market area of intermodal transport terminals. Aim of this research is to determine whether an increase in fuel prices is sufficient enough to raise the market area of intermodal transport to the same degree that would be accomplished by stimulating intermodal transport through policy instru- ments. Therefore, several fuel price scenarios are analysed in order to verify the impact of different fuel price evolutions on the market area of unimodal road transport compared to intermodal transport in Belgium. The LAMBIT-model (Location Analysis for Belgian Intermodal Terminals), which is a GIS-based model (Macharis and Pekin, 2008), is used to analyse the different fuel price increases and enables a visualisation of the impact on the market area. The LAMBIT model incorporates the different network layers for each transport mode by setting up a GIS network that includes four different layers: the road network, the rail network, the inland waterways network and the final haulage network. The geographic locations of the intermodal terminals and the port of Antwerp are added as nodes in the network and the Belgian municipality centres are defined and connected to the different network layers. Based on the different fuel price scenarios representing respectively a fuel price increase with 10% (low price case), 50% (business as usual case) and 90% (high price case), the results of the LAMBIT model show that the market areas rise in favour of intermodal barge/road and intermodal rail/road. Depending on the scenario, the degree of modal shift however differs. Additionally, in order to compare policy mea- sures with the effect of a fuel price increase, the internalisation of the external costs is ana- lysed with the LAMBIT model. For some years, the European Commission is supporting the idea that transportation costs should reflect the true impacts on environment and society, and is relentlessly pushing towards the so called ‘internalisation of external costs’ as a pol- icy instrument in order to establish fair and efficient pricing of different transport modes. This requires monetarizing the external effects of transport and adding them to the already internalized costs in order to give the correct price signals. Results of this comparative analysis performed with the LAMBIT model are also presented in this paper. Ó 2010 Elsevier Ltd. All rights reserved. 1. Introduction In general there is an unequal growth in the different modes of transport within the EU. Compared to other European countries the modal share of road transport is higher in Belgium than in the Netherlands, Austria and Germany but lower than the EU-27. The increasing importance of door-to-door and just-in-time services has led to a strong sustained growth 0965-8564/$ - see front matter Ó 2010 Elsevier Ltd. All rights reserved. doi:10.1016/j.tra.2010.04.006 * Corresponding author. Tel.: +32 2 629 22 86; fax: +32 2 629 21 86. E-mail address: Cathy.Macharis@vub.ac.be (C. Macharis). Transportation Research Part A 44 (2010) 550–561 Contents lists available at ScienceDirect Transportation Research Part A journal homepage: www.elsevier.com/locate/tra