Research in Transportation Business & Management 19 (2013) 27–33

Contents lists available at ScienceDirect

Research in Transportation Business & Management

Competition between ro–ro and lo–lo services in short sea shipping

market: The case of Mediterranean countries
Francesco Russo a, Giuseppe Musolino a,⁎, Vincenzo Assumma b
a
Dipartimento di ingegneria dell'Informazione, delle Infrastrutture e dell'Energia Sostenibile — DIIES, Università Mediterranea di Reggio Calabria, Reggio Calabria, Italy
b
Società degli Interporti Siciliani, VIII Strada n. 29, 95121 Catania, Italy

a r t i c l e i n f o a b s t r a c t

Article history: A relevant portion of the scientific literature focuses on the competition of short sea shipping (SSS) with
Received 14 September 2015 land transport in presence of international programmes that provide financial support to SSS services
Received in revised form 8 February 2016 (e.g. Motorway-of-the-Sea).
Accepted 2 March 2016
The paper analyses the competition inside the maritime SSS market, comparing roll on–roll off (ro–ro) vs. lift on–
Available online 31 March 2016
lift off (lo–lo) services. The market has two structural pillars: (a) the analysed services connect Italy and a set of
Keywords:
countries belonging to the south-eastern range of the Mediterranean basin, then without any financial support to
Ro–ro and container services the services; (b) there are no available land transport services for all the considered relationships.
Short sea shipping The two above pillars allow to quantify the reciprocal advantage of the two maritime services, by purifying the
Discrete choice models market from the bias generated by the presence of available land transport services and of any kind of financial
Mediterranean area support to SSS services.
An aggregate discrete choice model, simulating the split between ro–ro and lo–lo services of freight flow
exchanged by sea between countries facing the Mediterranean basin, has been specified and calibrated. The im-
portant element that emerges, in general terms, is the segmentation of the market in relation to the distances
existing between each couple of countries.
© 2016 Elsevier Ltd. All rights reserved.

1. Introduction
The paper presents a comparative analysis between roll on–roll off
(ro–ro) and lift on–lift off (lo–lo) services belonging to the short-sea
shipping (SSS) market.
The SSS market has not a unique definition in literature. EU adopted
in 1999 a definition with precise geographical boundaries: “the move-
ment of cargo and passengers by sea between ports situated in geographical
Europe or between those ports and ports situated in non-European coun-
tries having a coastline on the enclosed seas bordering Europe. Short Sea
Shipping includes domestic and international maritime transport, including
feeder services, along the coast and to and from the islands, rivers and lakes.
The concept of Short Sea Shipping also extends to maritime transport be-
tween the Member States of the Union and Norway and Iceland and
other States on the Baltic Sea, the Black Sea and the Mediterranean” (EU
Commission, 1999). In 2005 US Maritime Administration defined SSS
as: “a commercial waterborne transportation that does not transit an
ocean. It is an alternative form of commercial transportation that utilises
⁎ Corresponding author.
E-mail addresses: francesco.russo@unirc.it (F. Russo), giuseppe.musolino@unirc.it
(G. Musolino), v.assumma@interporti.sicilia.it (V. Assumma).
inland and coastal waterways to move commercial freight from major
domestic ports to its destination” (see Douet & Cappuccilli, 2011).
Both the definitions exclude oceanic services and consider domestic
and international maritime ones. The EU definition includes maritime
services operating in (closed) sea basins, and even if the first definition
considers only the relationship between states with a coastline, the final
inclusion of Norway and Iceland, extend the SSS to all states in a not oce-
anic market.
The paper, according to the above definitions, analyses the compet-
itive advantage of using ro–ro or lo–lo services in a closed sea basin, as it
is the Mediterranean Sea.
An aggregate discrete choice model simulating the split between
ro–ro and lo–lo services of freight flow exchanged by sea between
countries facing the Mediterranean basin, has been specified and
calibrated.
The paper presents the advancement of activities in the behalf
of a research line whose general objective is the evaluation of geo-
graphic factors affecting the maritime services in (closed) sea ba-
sins. In a recent paper, Russo and Musolino (2013) demonstrated
that transhipment services are more developed in regions of the
world with closed sea basins (e.g. Mediterranean Sea basin), in
which the port system is hierarchically composed of one (or
more) hub port(s) and more feeder ports (e.g., hub-and-spoke
structure).

http://dx.doi.org/10.1016/j.rtbm.2016.03.002
2210-5395/© 2016 Elsevier Ltd. All rights reserved.
28 F. Russo et al. / Research in Transportation Business & Management 19 (2013) 27–33

The paper is articulated as follows. Section 2 provides an overview Table 2

about the SSS market structure, illustrating the demand and supply Domestic cabotage and international shipping of northern Mediterranean countries. Year
2012.
sides. Section 3 presents a review of existing studies on SSS. Section 4
describes two theoretical approaches in dealing the analysis of compe- Country
Domestic International Total
tition between ro–ro and container (lo–lo) services: deterministic sup- Ton ∗ 106 % Ton ∗ 106 % Ton ∗ 106
ply and probabilistic demand. Section 5 focuses on the specification and
Spain 36.0 9.2 356.5 90.8 392.5
calibration of a maritime service model with two alternatives: lo–lo and Italy 83.2 21.6 302.6 78.4 385.8
ro–ro. The specification of the expected value of perceived utilities and France 17.3 6.4 252.0 93.6 269.3
attributes associated to each available alternative and the results of a Greece 25.8 22.8 87.4 77.2 113.2
calibration process are presented. Finally, the Conclusions are reported Slovenia 0.0 0.0 16.9 100.0 16.9
Croatia 1.1 7.5 13.5 92.5 14.6
in the last section. Cyprus 0.0 0.0 6.1 100.0 6.1
Malta 0.0 0.0 3.3 100.0 3.3
2. SSS market in the Mediterranean area Northern Med 163.4 8.4 1038.3 91.6 1201.7

On the demand side, SSS refers to the maritime transport of goods on
domestic and international routes, not crossing oceans (for instance
within the EU); by contrast, deep sea shipping (DSS) operates on higher
distances, involving trans-oceanic routes.
Table 1 provides the split between SSS and DSS traffic concerning
northern Mediterranean countries. The SSS share represents nearly
63.3% of unitised maritime traffic.
A further element on SSS can be introduced by comparing do-
mestic cabotage and international shipping of northern Mediterra-
nean countries (Table 2). The domestic cabotage accounts for
about 163 million tons, representing the 8.4% of maritime traffic of
northern Mediterranean countries. By excluding the above 8.4%
from the 63.3%, the remaining 54.9% is therefore attributable to
international SSS traffic.
The international SSS traffic defined above embraces different types
of load: liquid bulk, dry bulk, and container (lo–lo), ro–ro. Fig. 1 reports
the amount of total traffic (SSS + DSS) per type of load in the Mediter-
ranean in the year 2012. The sum of container and ro–ro traffic is
366 millions tons (34.4% of market share).
By multiplying the above amount for the percentage of 63.3% of SSS
(from Table 1) and, by subtracting the percentage of 8.4% of national
cabotage (from Table 2), it is obtained – in a rough way – an amount
of 213 million tons of SSS traffic using lo–lo and ro–ro services travelling
inside the Mediterranean.
By considering the supply side, the SSS market “can embrace dif-
ferent ships, from conventional to innovative ones such as fast ships,
with a variety of cargo handling techniques (horizontal, vertical or a
mixture of both), ports, networks and information systems” (Paixão
Casaca & Marlow, 2002). According to Paixão Casaca and Marlow
(2002), three categories of ships have been identified:
• bulk carriers and tankers, engaged in the pure and conventional dry
and liquid bulk trades such as mineral oil products, chemicals, lique-
fied petroleum gas (LPG), coal, iron ore and grain.
• container feeder vessels, which carry high value cargoes and provide a
link for deep-sea container vessels employed in the transoceanic routes;
(source: http://ec.europa.eu/eurostat).
• ferries, capable of carrying both passengers and/or a whole range of
cargoes that include palletised cargo, accompanied and unaccompanied
trailers, semi-trailers, pallets, swap-bodies, railway waggons, cassettes,
project cargo and machinery.
The dry component of the first category has seen a progressive de-
crease in the SSS market share in favour of the other two categories
(container feeder vessels and ferries), due to the introduction of
unitised cargos.
3. Existing studies on SSS
Studies on short sea shipping (SSS) may be classified according to
two main classes.
The first class concerns the analysis of financial programmes, such as
the European Motorway-of-the-Sea (MoS), in order to make SSS com-
petitive vs. road haulage. Among the numerous studies, the following
papers are recalled. Paixao Casaca and Marlow (2001) presented a re-
view of European shipping policies conceived to achieve the goal of eco-
nomic and sustainable growth of the EU member-states. The outcome of
the above policies was the shift of freight from road haulage to unused
transport capacity existing by sea. In Paixão Casaca and Marlow
(2002), the analysis of SSS strengths and weaknesses showed the com-
plexity of the logistics network necessary to implement SSS. The authors
concluded that, although several strengths exist (geographical, finan-
cial, knowledge/skills-based/human resources, energy, environmental,
underused capacity, ancillary activities), SSS still was not a reliable
transport alternative within multi-modal transport chains. Baird
(2010) described how the MoS programme was capable to re-affirm
the centrality of maritime transport in relation to land transport
modes. However, some examples of implemented MoS emphasised

Table 1
Split between SSS and DSS traffic of northern Mediterranean countries. Year 2012.

SSS DSS Total

Country
6 6
Ton ∗ 10 % Ton ∗ 10 % Ton ∗ 106

Spain 191.4 47.6 211.1 52.4 402.5

Italy 285.5 74.0 100.3 26.0 385.8
France 170.9 65.0 91.9 34.9 262.8
Greece 90.3 79.7 22.9 20.3 113.2
Slovenia 8.8 52.3 8.0 47.6 16.8
Croatia 12.1 82.6 2.5 17.4 14.7
Cyprus 5.7 56.4 4.4 43.6 10.1
Malta 3.0 52.4 2.7 47.6 5.8
Northern Med 767.7 63.3 444.0 36.7 1211.7
Fig. 1. Traffic in the Mediterranean per type of cargo. Year 2012.
(source: http://ec.europa.eu/eurostat). (source: http://ec.europa.eu/eurostat).
 F. Russo et al. / Research in Transportation Business & Management 19 (2013) 27–33
the challenges faced that concern, among the others, administrative and
legal issues. Douet and Cappuccilli (2011) presented a description of the
financial tools provided by EU for the implementation of SSS and
analysed some case studies to show the limited modal shift of MoS
from road haulage.
The second class concerns the analysis of competiveness of SSS, com-
paring the performance of different multi-modal door-to-door trans-
portation chains. Two types of studies may be identified inside the
second class: qualitative and quantitative.
Qualitative studies aimed to identify the structural characteristic of
the SSS services and its potentialities and weaknesses. Paixao Casaca
and Marlow (2005) identified service attributes of SSS within multi-
modal transport chains and examined the SSS trends in Europe. The em-
pirical analysis allowed to evaluate the SSS vs. its competitors. Medda
and Trujillo (2010) showed the potentialities of SSS to reduce traffic
congestion and enhance economic development. Due to higher fuel
economy and lower emissions of pollutants offered by maritime trans-
port, SSS was considered by the authors the most sustainable and eco-
nomically competitive transport mode.
Quantitative studies were finalised to specify cost and time struc-
tures of different existing mode-services connecting a couple of coun-
tries. Garcìa and Feo (2009) carried out a stated preference survey in
order to specify and calibrate a disaggregate modal choice model be-
tween door-to-door road transport and MoS in south-eastern Europe.
In a further paper (Feo, Espino, & Garcìa, 2011), the authors estimated
the value of time, value of reliability and value of frequency attributes
related to the existing transport alternatives. López-Navarro, Moliner,
Rodríguez, and Sánchez (2011) examined the profile of a set of interna-
tional road transport firms using SSS between Spain and Italy. The aim
was to gain certain elements inherent their relationship with ship-
ping firms, according to the two modalities of SSS transport opera-
tions: accompanied vs. unaccompanied. Morales-Fusco, Saurí, and
Lago (2012) analysed different strategies taken by the cargo carrier
in presence of MoS: door-to-door road haulage, combined road–sea
transportation with accompanied cargo or with unaccompanied
cargo. The authors identified critical points affecting the competi-
tiveness of SSS and proposed policies to support its development
and success. Suárez-Alemán, Campos, and Jiménez (2015) studied
the competitiveness of some SSS corridors by comparing the gener-
alised costs of different alternatives to move cargo between Spain
and other European countries. The authors developed an economet-
ric model to identify the main drivers of maritime prices along
several SSS routes and to quantify the impacts of EU maritime
programmes and policies.
The existing literature considers the following elements that alter
the SSS market.
• Several studies focus on SSS services connecting ports belonging to
the same country, or to countries belonging to the same geo-
political area (e.g. European countries), but they do not consider SSS
services connecting ports belonging to countries of different conti-
nents (e.g. European and African countries).
• A number of studies analyses the effects of the introduction at EU
levels of the Motorway of the Sea financial programme, but they do
not consider SSS market without any kind of financial support.
• Existing studies evaluate the competition of SSS vs. land transport
mode, but they do not consider the competition between maritime
SSS services.
The research contribution of this paper concerns the analysis of the
competition between ro–ro and lo–lo services inside the SSS market.
The reciprocal advantage of the two above maritime services is quanti-
fied, by purifying the market from the bias generated by the presence of
available land transport services and of any kind of financial support to
SSS services.
29
4. Competition between ro–ro and lo–lo services:
theoretical framework
According to the lacks of the existing literature on SSS studies, this
section introduces a theoretical framework to support the analysis of
the competition between ro–ro and lo–lo services inside the SSS market.
The competition between ro–ro and lo–lo services according to
distances covered is due to the following reasons.
(1) Containers are the least expensive mode of transporting goods
(per unit of distance), lo–lo operations are slower at the termi-
nals.
(2) Containers incur in higher handling costs (and time) and lower
transport costs (per unit of distance) compared to trailers accom-
panied by their respective drivers and unaccompanied trailers.
(3) In the long distance, container cost is lower because ro–ro entails
the cost of the running gear, or at least, of the trailer.
The above elements determine a lack of competitiveness of ro–ro
services over longer distances than lo–lo ones. The identification of
the range of distances in which one service is more competitive than
the other is the object of the analysis presented in the following sec-
tions. The problem may be treated according to two approaches: deter-
ministic supply and probabilistic demand.
4.1. Deterministic supply approach
The deterministic supply approach allows to estimate the geograph-
ical condition (maritime link to be covered) of competitiveness of ro–ro
service vs. lo–lo by treating the (generalised) cost of handling and trans-
port operations associated to each service as a deterministic variable
(see as example Musso, Paixão Casaca, & Lynce, 2010).
Fig. 2 shows a trip between an origin O and a destination D. Two al-
ternative maritime services (lo–lo and ro–ro) are available in the mari-
time link between port A and port B. Road transport is available as
access service to port A (link OA) and as egress service from port B
(link BD).
The two linear functions depicted show the generalised transport
costs associated with the use of each available maritime service: lo–lo
and ro–ro. The lo–lo function presents a higher generalised cost at the
terminal (connected to lo–lo operations) and a less steep segment be-
tween port A and port B. The ro–ro function presents a lower general-
ised cost at the terminal and a less steep segment between port A and
Fig. 2. Lo–lo vs. ro–ro generalised costs. Deterministic supply approach.
30 F. Russo et al. / Research in Transportation Business & Management 19 (2013) 27–33
port B (connected to the transport of trailers accompanied by their
respective drivers and/or of unaccompanied trailers).
Ro–ro is then advantageous when distance between A and B, dist
(AB), is short enough to compensate lower terminal costs than the
ones of lo–lo.
Let's define:
Ch,ro–ro generalised handling cost of ro–ro service [Euro].
Ch,lo–lo generalised handling cost of lo–lo service [Euro].
ct,ro–ro generalised transport cost per unit of distance of ro–ro service
[Euro/mph].
ct,lo–lo generalised transport cost per unit of distance of lo–lo service
[Euro/mph].
The following conditions hold:
Ch;ro–ro b Ch;lo–lo
ct;ro–ro Nct;lo–lo:
By considering the distance between O and D, the total cost of lo–lo
service is:
Clo–lo ¼ 2 Ch;lo–lo þ ct;lo–lo dist ðABÞ
and the total cost of ro–ro service is:
Cro–ro ¼ 2 Ch;ro–ro þ ct;ro–ro dist ðABÞ:
According to the above elements of costs associated to each service,
the length of the link AB below which the ro–ro service is competitive is
obtained by solving the following inequality:
Clo–lo NCro–ro :
By substituting Eqs. (3) and (4) into (5), the value of dist (AB) may
be obtained:



dist ðABÞ b 2 Ch;lo–lo −Ch;ro–ro = ct;ro–ro −ct;lo–lo
Eq. (6) defines the geographic (according to distance covered) and
economic (handling operations at the terminal) conditions of competi-
tiveness of ro–ro service vs. lo–lo ones.
A research concerning the market prices for transporting one con-
tainer with lo–lo and ro–ro services in the Mediterranean basin
(Russo, 2005) led to the following estimated average deterministic
values of ct,lo–lo = 0.21 Euro/miles and ct,ro–ro = 0.25 Euro/miles. More
recent estimations of generalised transport costs are not available. How-
ever, it is reasonable to accept that the above values did not go through
relevant increases in the last decade due to the stability of Euro currency
and to the economic global crisis of 2008 that produced a stagnation of
prices.
The above values confirm that the lo–lo function of Fig. 2 presents a
less steep segment than the ro–ro function. However, the estimated
values do not take into account a variety of elements concerning the
characteristics of lo–lo services (e.g. they are generally a continuation
of the deep sea services, resulting from the establishment of hub and
spoke systems) and ro–ro services (e.g. the frequency of the ro–ro ser-
vices connecting two ports increases their quality).
4.2. Probabilistic demand approach
The probabilistic demand approach allows to determine the geo-
graphical condition of competitiveness of ro–ro service vs. lo–lo ones
by estimating the probability of choosing one service by a decision-
maker (e.g. shipping line, carrier,…), according to the principles of ran-
dom utility theory (Domencich & McFadden, 1975; Cascetta, 2009).
By considering the hypotheses of random utility theory, let's assume
that a decision-maker i associates a perceived utility, Uim, to the choice
of service m (the two services constitutes the choice set). Uim is a ran-
dom variable with:
h i
E Ui m ¼ Σk βk xi m;k
h i  2
var Ui m ¼ σ i m
where:
E[Uim] expected value of perceived utility Uim;
var[Uim] variance of perceived utility Uim;
xim,k measurable attribute k of service m for decision-maker i;
βk parameter associated to attribute k to be calibrated.
ð1Þ
According to the above assumptions, it is not possible to predict with
ð2Þ certainty the service that the decision-maker will choose. It can be
expressed the probability of choosing the service m conditional on
his/her choice set, as the probability that perceived utility of decision-
maker associated to service m is greater than that of the other available
services.
ð3Þ Therefore, the probability that the decision maker i chooses ro–ro
service may be expressed as the probability that the perceived utility
associated to ro–ro service, Uiro–ro, is greater than the perceived utility
associated to lo–lo service, Uilo–lo:
ð4Þ
h i
pi ro–ro ¼ prob Ui ro–ro NUi lo–lo : ð7Þ
Eq. (7) sets a competitive condition of ro–ro service vs. lo–lo one, in
terms of choices undertaken by the decision maker. By defining the
ð5Þ probabilities of choosing an available maritime service as function of
the distance AB (see Fig. 2), the following condition may be obtained:
Dist ðABÞ : pi ro–ro Npi lo–lo : ð8Þ
ð6Þ Eq. (8) sets the geographic conditions of competitiveness of ro–ro
service vs. lo–lo one, defined upon the choices undertaken by the deci-
sion maker.
5. Model
This section focuses on the specification and calibration of a mari-
time service model with two alternatives: lo–lo and ro–ro.
The specification of the expected value of perceived utilities and
attributes associated to each available alternative and the results of a
calibration process are presented.
5.1. Model specification
The proposed service model estimates the percentage of freight
(unitised cargo) travelling by means of each available maritime service.
The model has an aggregate nature as it simulates aggregate choices of
transport operators, such as shipping lines and/or carriers, whose indi-
vidual characteristics are not considered.
According to the elements presented in Section 4.2 and assuming
that the random variable Um is distributed according to a Gumble vari-
able, the proposed model is a binomial logit:
pm ¼ expðE½Um Þ=Σm expðE½Um0 Þ: ð9Þ
The randomness of perceived utility, Um, incorporates uncertainty of
the analysis, which is due to several factors such as measurement errors
of the attributes, omitted attributes, errors in the evaluation of attri-
butes by the decision-maker (Cascetta, 2009).
 F. Russo et al. / Research in Transportation Business & Management 19 (2013) 27–33 31

The maritime services composing the choice set are container

handled with lo–lo technique or with ro–ro and then, in this last case,
travelling on a trailer.
Monetary cost and travel time are considered as generic attributes of
level of service for each alternative. Specific attributes of the alternative
are introduced in order to take into account the not-specified character-
istics of each service.
Several expected values of perceived utility have been specified (and
calibrated) during the research. In this paper, the following specification
has been considered:

E½Ulo–lo  ¼ βc clo–lo þ βt tlo–lo þ βHUB HUB ð10aÞ

E½Uro–ro  ¼ βc cro–ro þ βt tro–ro þ βSERV SERV ð10bÞ

where:
• clo–lo(ro–ro), monetary cost of transporting freight from a country of
origin to a country of destination by means of lo–lo (ro–ro) service;
• tlo–lo(ro–ro), travel time of transporting freight from adestination and to
a country of destination by means of the lo–lo (ro–ro) service;
• HUB, specific attribute of lo–lo service which is equal to 1 if one coun-
try has a container transhipment port that offers direct services
towards East Coast of USA and the Far East with at least one million
of TEUs handled per year, 0 otherwise;
• SERV, specific attribute of the ro–ro service which is equal to 1 if there
is a high-frequency service (at least twenty-five connections per
week) between the pair of countries, 0 otherwise. Fig. 3. Values of estimated probabilities vs. distance between country of origin on the
relationship southern Mediterranean–Italy.

5.2. Model calibration Europe. The un-expressed potential due to existing infrastructure and
bureaucratic constraints may reasonably affect positively the volumes
The study area consists of the following countries belonging to the transported (Italian Ministry of Infrastructures and Transport, 2015).
Mediterranean basin: It is worth to add that, by considering only one country of the
• Italy among countries belonging to the northern Mediterranean northern Mediterranean range, the average differences of costs
range; (e.g. port anchorage and fuel taxes) existing among ports of north-
• Morocco, Malta, Tunisia, Libya, Algeria, Egypt, Cyprus, Israel, Lebanon, ern Mediterranean countries, are not considered in the analysis.
Syria and Turkey belonging to the southern and eastern Mediterra- The parameters of the maritime service model are calibrated by con-
nean range, shortly indicated with southern. sidering the freight flows by type of cargo between Italy (as unique
country of the northern Mediterranean) and a set of southern Mediter-
ranean countries.
The growing economies of the southern and eastern Mediterranean The attributes of the model focus of the structural characteristics of
countries offer in terms of trade, logistics and transport, great opportu- each of the two maritime services operating between each couple of
nities to Italy. Despite the social and political tensions generated by so- countries. Therefore, the aggregation of data regarding observed freight
called “Arab uprisings”, the economies of Algeria, Egypt, Libya, Morocco flows, on the demand side, and estimated travel times, monetary costs
and Tunisia continue to present opportunities to invest for Italian and specific service attributes, on the supply side, is at country level.
manufacturing and service companies. Traffic development of SSS by No disaggregate observations at port-terminal level are used to calibrate
means of ro–ro and lo–lo services and the use of the Italian ports is the model. A brief description about data used for the model calibration
closely related to this opportunity. The expected growth in demand at is reported in the following.
2020 is due to the positive trend in Italian–Mediterranean trade (espe- Data regarding freight flows exchanged by sea between Italy and the
cially exports) and to the expected growth rates in Turkey and Eastern above set of countries, transported by lo–lo and ro–ro services, were ob-
tained from EUROSTAT (year 2010) (http://ec.europa.eu/eurostat). Data
Table 3 regarding time and monetary costs for travel are estimated by means of
Calibrated parameters of service model. models present in literature (Russo & Assumma, 2005) and updated in
Attribute Alternative(⁎) Unit South → Italy Italy → South
the context of this work. The distances are calculated between the larg-
est centres of production/attraction of each country by means of the
t G h −0.8911 −0.5466
“Encarta Multimedia World Atlas”, through existing shipping routes
t-Student −4.6 −4.3
c G € −0.0045 −0.0051 (an average value between the centres is calculated for countries with
t-Student −8.7 −14 two or more centres of production/attraction). Data regarding the pres-
HUB LL 0/1 1.322 1.864 ence of container hub transhipment port (attribute HUB in Eq. (10a))
t-Student 5.0 8.0
and high-frequency of ro–ro services (attribute SERV in Eq. (10b)) are
SERV RR 0/1 2.255 3.332
t-Student 6.7 14.8 calculated on the base of aggregate evaluation at country level. For the
Initial likelihood −862.28 −1028.63 calculation of HUB attribute, the countries of the southern Mediterra-
Final likelihood −723.29 −654.27 nean range having ports with direct services towards East Coast of
Rho2 0.16 0.36 USA and the Far East were Malta and Egypt. While, for the calculation
⁎ G, generic attribute; LL, lo–lo attribute; RR, ro–ro attribute. of SERV attribute, the following ports having ro–ro services with Italian
32 F. Russo et al. / Research in Transportation Business & Management 19 (2013) 27–33
Fig. 4. Values of estimated probabilities vs. distance between country of origin on the
relationship Italy–southern Mediterranean.
ports have been considered: Tangier (Morocco), La Valletta (Malta),
Tunis (Tunisia), Tripoli (Libya), Alessandria (Egypt), Tartous (Syria),
Cesme, Hydarpasa, Mersin, Pendik and Tekirdag (Turkey). The countries
having high-frequency ro–ro services with Italy were Malta and Turkey.
The results of the calibration of the service model, specified by
means of Eqs. (9) and of (10a)–(10b), are reported in Table 3.
The following elements emerge. The sign of the attributes connected
to travel times and monetary costs are negative for both the relation-
ships, as expected. For what concern the specific variables HUB and
SERV, they have positive signs for both directions; in other words, the
utility associated to the alternative increases when they are equal to one.
The variable HUB reflects the advantage of the presence of a hub port,
which can ensure direct connections with the two main worldwide geo-
graphical areas: East Coast of USA and the Far East. This condition
Fig. 5. a, b: Estimated probabilities vs. observed percentages of use of ro–ro and lo–lo services.
generates a higher number of feeder lines that can be used to deliver con-
tainers towards destinations located inside the Mediterranean Sea. The
variable SERV represents higher utility associated to the presence high
frequency roll on–roll off services.
The values of probabilities estimated by means of maritime service
model, for each of the two alternatives on the relationships southern
Mediterranean–Italy and vice versa are plotted against the distance be-
tween eachdestination and/destination and Italy in Figs. 3 and 4. The
figures show that values of probabilities of using the two services are
similar for distances lower to 1000 miles, this phenomenon is more ac-
centuated for the relationship southern Mediterranean–Italy rather
than vice versa. For distances greater than 1000 miles, the probability
of using lo–lo services tends to increase as the distance between Italy
and country of destination increases, while the values of probabilities
of using ro–ro services tend to decrease with the distance. These trends
are in line with the characteristics of the two services: the container ser-
vice tends to be more convenient than the ro–ro one as distances in-
crease (see Section 3). This because, as the distance increases, the
higher cost of tare associated to roll on–roll off implies a higher cost
per net unit of transported freight. On the contrary, over short distances,
the difference of the above cost is lower and the advantages of having
simpler loading and unloading operations associated to the ro–ro (with-
out any quay cranes) holds.
A specific consideration is due for Turkey, which presents a high
amount of freight exchanged by means of ro–ro services. Italy and
Turkey in the last years gained a strong commercial relationships due
to three main reasons: (1) the geo-political conditions of Turkey, as
NATO partner and candidate to enter into EU; (2) the robust growth
of its economy, which raised an increment of + 9.0% in 2010 with the
60% of production exported; and (3) the strong partnership with Italy.
It is worth noting that the port of Trieste is the main important gate of
Turkish exported goods towards the markets of central and northern
Europe. The maritime ro–ro services, connecting the area of Istanbul,
Cesme and Mersin with the port of Trieste since 1987, had a perfor-
mance of 213,334 trucks and 5.6 million tons of freight in 2010.
Fig. 5a and b shows the comparison between the estimated values of
probability by means of service model vs. the observed percentages of
using ro–ro (Fig. 5a) and lo–lo (Fig. 5b) services. They confirm the
good quality of the calibrated parameters.
A t-Student statistic has been calculated in order to test if the two pa-
rameters associated to travel time, βt,lo–lo and βt,ro–ro, are equal (H0:
βt,lo–lo = βt,ro–ro). As the two values of the statistics for the two relation-
ships (Italy–South and South–Italy) lie both inside the interval [−2; 2],
the null hypothesis H0 holds and the parameters are equal. These results
 F. Russo et al. / Research in Transportation Business & Management 19 (2013) 27–33
of the t-Student statistic have led the authors to exclude the specifica-
tion of expected value of perceived utility considering travel time as
specific attribute of the alternative.
6. Conclusions
The paper analyses the competitive advantage of using ro–ro and lo–
lo services for freight exchanged by sea between Italy and a set of coun-
tries belonging to the south-eastern range of the Mediterranean basin.
An aggregate discrete choice model simulating the split between ro–
ro and lo–lo services has been specified and calibrated. The results of the
estimations are in line with the characteristics of the two services. It
emerges, in general terms, a lack of competitiveness of ro–ro services
over longer distances than lo–lo ones. In particular, for the relationship
South–Italy a threshold of 900/1000 miles could be identified (see
Fig. 3), above which the estimated probabilities of choosing a lo–lo ser-
vice are much higher than the ones of choosing a ro–ro service. The
probabilities of choosing the two services are comparable in the range
of distances below the identified threshold. For the relationship Italy–
South the threshold drops to about 700 miles (see Fig. 4) and, however,
the probabilities of choosing lo–lo services are always higher than the
ones of choosing the ro–ro ones. The specific variables HUB and SERV
play a significant role in the model. The variable HUB reflects the fact
that the presence of a hub port, having direct connections with East
Coast of USA and the Far East, generates a higher number of feeder
lines potentially able to deliver unitised cargos inside the Mediterra-
nean Sea. The variable SERV reflects the increment of utility associated
to high-frequency ro–ro services connecting the pair of countries.
As reported before, the “Turkey case” for both the relationships rep-
resents an outlier respect to the above general considerations, for which
it will be necessary a specific analysis of economic relationships be-
tween the two countries.
The proposed analysis could support the decisions of maritime
transport operators (e.g. shipping lines, carriers,…), who operate with
unitised cargos. It could be also suitable to support the analysis of mar-
ket penetration of the analysed maritime services in other sea basins,
such as the Baltic one in Europe. At the end, it could contribute to pro-
vide quantitative support to transport planning activities in progress
at EU-Mediterranean level. It is worth to recall some EU transport
plans and programmes involving ports and maritime services operating
in the Mediterranean basin, such as the ones defining the Trans-
European Networks-Transport (TEN-T), the Regional Transport Action
Plan (RTAP) for the Mediterranean Region in the period 2014–2020;
the Transport Mediterranean Network-Transport (TMN-T).
33
Further work will concern the definition of new specifications of the
service model by considering attributes concerning specific geo-politic
contexts and economic relationships able to capture some specific
patterns existing between couples of countries (e.g. Italy and Turkey).
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