This study has illustrated that it is possible to evaluate the potential acceptance
of a service not yet in the market through the use of discrete choice analysis.
Furthermore, this study has illustrated the value of using WTP models in assessing the mode switching that may take place in the market if regulatory
policy with respect to carbon pricing of transport options is imposed in future.
Worldwide, those interested in the promotion of short sea shipping have, on
philosophical grounds, argued that carbon pricing will induce switching
without actually investigating whether this is likely to happen with existing
purchasers of transport services, or if there are other factors that are at play, and
the buyer is willing to pay more in the changed conditions. To use a simple
example, the findings above, if put into a decision support system, indicate that
a 1 per cent increase in the mean truck freight rate, due to either carbon pricing
or congestion charging that are not imposed on the other modes, will result
in only a 0.13 per cent decline in truck’s share of the headhaul market and
a 0.12 per cent decline in the back-haul market when considered at the sample
mean. In the case of the headhaul market, rail acquires two-thirds of the change
in share (with coastal shipping gaining one-third) but in the back-haul market
they both benefit equally. Most important, the volume of traffic switching from
truck, given the high preference for service frequency, is quite miniscule and
implies that demand in this mode is not easily switched. This indicates that
while this research provides the approach needed to evaluate proposed surcharges
policy that planners might consider to induce modal switching, they
may not get the effect they are seeking. The model we have developed here can
be used for scenario assessment of proposed public policy tools like carbon
pricing, but in the face of cargo interests committed to a particular choice, they
may only provide guidance on the scale of change needed.