The need for a thriving intermodal transport sector in Europe is evident, and the overwhelming consensus among governments and industry is that more goods should be transported by rail. Despite this, there are many hurdles to be overcome in order for intermodal to reach its full potential.
To learn more about the state of play in intermodal logistics, including the positive developments in infrastructure and technology, as well as what’s holding the sector back, we spoke to Nicolas Chambon, Director of Modalis.
How varied does an intermodal company’s fleet need to be?
We began our discussion on the subject of fleet diversification. Just how important is it for intermodal service providers to have a variety of different assets at their disposal nowadays?
According to Chambon, in the case of Modalis, having disparate options in the fleet is a means of trying to stand out.
“Bernard Meï, the founder of the company when it was formed in 2002, kept telling us that the diversification of our fleet is a competitive advantage and a way of mitigating risks. Modalis does not focus on one type of cargo. We see diversification as a strength because markets fluctuate and investment follow cycles. So far, Modalis covers general cargo, dry bulk, liquid bulk, gas, and liquefied gas and likes tailor-made projects.”
Chambon also revealed that Modalis will announce 500 equipment focused on cryogenic transport for air gas at International Transport & Logistics trade show in Paris mid-March, noting that the company “want to be ready when that curve starts rising up again”.
This won’t be easy though, as Chambon admits it is technically difficult to maintain such a diversified portfolio of equipment.
“The requirements when it comes to regulations, technical maintenance, repair and so on are very demanding. You can’t compare the repair of an intermodal wagon with that of a tank container or an LNG container. The difficulty is in having proper technical knowledge, technicians and staff of how to maintain the fleet as the years go by,” Modalis’ General Director told Trans.INFO.
In order to have the resources to do this, the company is keen to attract talent and investment on a continuously basis
“Attracting the right person and expertise is critical to maintain credibility over the years. When we invest in rail freight wagons, we do it for 30 years, we must invest in maintenance management accordingly.” said Chambon.
Issues with rail freight
Despite the European Union and governments throughout Europe championing rail freight, the modal shift isn’t going as smoothly as some would have hoped.
State owned rail freight firms in France, Belgium and Germany are in need of more public funding, while infrastructure is lacking in many key regions. Service irregularities and enforced route changes or closures haven’t helped Europe’s rail freight industry either.
In Chambon’s opinion, France is one country where more could be done.
“France is not one of the best pupils in the class when it comes to rail freight. I think approximately 11% of freight is on rail, with the rest being road. That may not be good, but on the other hand, it gives us a lot of opportunities because there’s a lot that can be done.”
As for what could be done at a European level, Chambon believes “too many rules have been added over the years, increasing complexity” and that “competition is not fair”. He thus wishes to see measures implemented to address these issues.
Elaborating on some of the barriers the sector is facing, Chambon added:
“Running a train from one country to another remains a challenge, the network is not uniform nor integrated yet. In Germany trains have an average length of 600m, in France 750m trains are allowed, in Spain 450m is often the norm due to network constraints. No to mention the rail gauge headache, the train paths and congestion issues, nor the weights and dimensions on-going discussions.”
Moreover, Chambon stresses that Investments are also required at a European level.
“We’re trying to catch up on the lack of investments in infrastructure, rolling stock and intermodal wagons. It is to be noted that there have been improvements to the rules for approving rolling stock and equipment across the European Union’s rail network. That said, a lot of areas of improvement remain”
In the opinion of the intermodal director, if the need to cut emissions by embracing intermodal is urgent, specific measures and investments need to be made quickly, otherwise “the words climate emergency made by the authorities will just look like marketing”.
Chambon also cited rolling stock and infrastructures as examples here:
“Let’s take the example of the average age of rolling stock in Europe or the lack of CT terminals in Southern Europe. Hundreds of millions shall be invested with no delays if we want to meet the European climate, energy and transport policy objectives. Without any massive assistance, it could take 30 years to catch up. This could come in the form of European subsidies, or tax incentives.”
Acquisition of CCFC
Continuing the investment theme, Modalis announced in October that it had acquired Italian company CCFC, which specialises in the construction of semi-trailers, intermodal transport units, container chassis and special ISO containers, as well as custom modular constructions.
Asked what the acquisition would bring to Modalis, Chambon told Trans.INFO:
“Our core business is centred on equipment. So we need to invest in fleet renewal on a continuous basis and innovate continually. The reason for the investment in CCFC is dual. First, it was a former provider of our equipment and the quality of their equipment is among the highest in Europe. Letting this company go bankrupt would have meant that its knowledge and technical expertise would be lost too.”
Chambon added:
“Second, it will help us to innovate more. There are plenty of projects in Modalis’ pipe, thanks to this acquisition, we can accelerate our innovation projects. In short, the investment will secure our sourcing and generate faster innovation.”
Modalis’ “fastest” intermodal wagon
Another recent Modalis announcement concerns what the company has labelled as “Europe’s fastest intermodal wagon.” The wagon is designed for transporting containers, swap bodies, and refrigerated swap bodies, and is approved to travel at a speed of 140 km per hour and possibly 160km/h with no additional equipment.
Chambon told Trans.INFO that the wagon was the result of several years of studies and development.
“It took us many years to bring this very modern intermodal wagon to market. Modalis must optimize its portfolio of intermodal equipment on a continuously basis to defend its market position.”
Modalis’ General Director added that numerous other projects are in progress, including a swap body open-top with automatic hard covers designed for easier transportation of heavy items. “We are still improving the prototype, it’s going well,” said Chambon, who added:
“We are also engaged on a container equipped with a horizontal movement drawer system for emptying bulk or waste that will be an alternative to moving floors equipment. Another project is our 45ft lightweight curtain-sided swap body, that’s been around 3 years in the making now. We work around the same idea: maximizing the cargo load and the quality. The prototype will be on show at the JEC World International composite exhibition in Paris early March.”
In order to help foster these projects, Modalis invested in an engineering consulting firm, bringing a group of 30 engineers into the fold in the process. Chambon believes strategic investments like these make sense given Modalis’ size compared to the industry’s big guns:
“It’s vital for us to differentiate from the huge players backed by private equity funds or pension funds who have millions to invest. We cannot fight on tariffs against these huge players. So our positioning has to be different from the others, and innovation is really the way we can differentiate ourselves.”
Government investment in intermodal projects
A common wish among the stakeholders in the intermodal industry is to see more public investment in infrastructure. So how does Chambon see the situation in France?
On a positive note, the Modalis Director said there was “strong will” from President Macron to invest in the port of Marseille-Fos. “The idea is to connect the port of Lyon and the Port of Marseille-Fos using the model of Haropa Ports, and of course, we do support this vision,” Chambon told Trans.INFO.
Chambon said that this Rhône-Saône corridor project shall bring opportunities for Modalis, notably around combined transport terminals and connected infrastructures that need renovating.
“Invest in combined transport terminals would make us more visible, and our strategy is to be part of the south-north corridor from the Mediterranean Sea to northern Europe.” said Chambon.
It goes without saying that these projects will take a long time to come to fruition. Chambon stressed that Modalis is working on a combined transport terminal in the port of Marseille-Fos that’s been in progress for 3 or 4 years and still has 2 or 3 years to go.
Part of the problem is financing, particularly for companies of Modalis size:
“These long-term projects are a challenge for a medium-sized company to deal with; the return on investment is very long and financials need to be carefully monitored. Naturally, we would like it to go faster,” Chambon told Trans.INFO.
Could more public sector funding help here? Chambon thinks so, though he also notes that other measures like simplifying regulations can help delivering infrastructures:
“There was spotlight on this timing problem as many industrial projects were canceled because of unacceptable delays and administrative complexity. Government shall be more audacious and show ways to cut delays and simplify procedures, so that we can be ready before 2030.”
Interestingly, Modalis’ General Director praised the authorities in Poland for seemingly offering more support compared to the likes of France when it comes getting intermodal projects off the ground:
“For comparison, one of our partners in Poland recently launched a brand new combined transport terminal. When I heard how it was monitored and supported by the authorities, I thought our partner was lucky because we have not been treated the same way. It makes no sense to compete one country against the other when it comes to intermodal as we are working towards the same goals, we must play as a European team. In my opinion, something is missing here on a European level, and it probably needs more consultation and so on to help private actors like us invest,” Chambon told Trans.INFO.
Avoiding mistakes
Given the amount of different containers that can be used in rail freight and intermodal transport, are there common mistakes that shippers can make?
When asked, Chambon did not specify any technical mistake regarding fleet use, but rather claimed that some companies make the more general mistake of turning to consultation too late during their decision-making process.
“One of the things I often notice is that we may be consulted at a very late stage in the decision making process,” said Chambon. “Often the logistics is badly considered in the feed and feasibility study of an industrial project. Also, it happens, purchasers can be sure of what they need but their specifications could be more optimized. Modalis has an advisor role to play here.”
Why Modalis’ is following developments concerning carbon capture technology
Finally looking forward, what other innovations could come to intermodal in the future? In Modalis’ case, the company is interestingly looking at what is going on with carbon capture technology.
Chambon told Trans.INFO that the company is taking this step to take advantage of future demand for the transport of captured carbon.
“One significant area we want to develop and invest in concerns carbon capture utilisation and storage. A majority of large industries will need to severely tackle their emissions, and for those who want to capture the CO2 and get rid of it, recycle it, or sell it, there will be logistics and equipment. At present we are designing an offer to provide the right equipment and intermodal logistics service as a combo.” Chambon told Trans.INFO.
In order to do this, Chambon said that Modalis was working with its partners, including an engineering consulting firm and a company experienced in gas transportation.
Why are Modalis convinced there will be demand here? Chambon told Trans.INFO:
“France confirmed and declared that they definitely want to go for carbon capture. They’ve weighed up the pros and cons, and they consider CCUS as one of the technologies required to meet climate objectives. It needs a huge amount of investment, which can be a barrier to entry. Nevertheless, we know the return on investment is there, and we pursue a long-term perspective. Modalis is a family business, our attitude towards investment, risk and time is singular.”
Innovations such these are key according to Modalis’ General Director, who argues that technological progress helps to encourage more parties to embrace the modal shift:
“Our mission is to convince more logistics and transport companies to go intermodal. Road does remain more flexible and agile than rail for a single unit. When it gets to 50 units, things start to change though, and when it comes to hundreds of thousands of units per year, rail definitely has a competitive advantage. So we need to convince companies to rethink their logistics and the flows that go with them. Innovation is a good way to open the discussion,” concludes Chambon.
