Demand study of freight transportation via railway of four commodity groups: A case study on Costa Rica's Pacific Coast Route

Abstract

Having railway mobility as an option among transportation modes is of prime importance for the freight logistics of a country and the overall performance of its commerce sector. This work presents a case study in Costa Rica, where freight transportation via railway was formerly available during the last century but has not been in full service since 1995. Specifically, this paper assesses the link connecting the capital city of San Jose to the port of Caldera on the Pacific Ocean coast, henceforth referred to as the “Pacific Coast Route”. Although government institutions and industries alike have stressed the importance of its reactivation in recent years, few efforts have been made to specifically study this route with a level of detail that enables them to understand the composition of freight markets.

This study presents a novel demand estimation differentiated by four types of commodities developed to calculate the potential amount of goods that could flow through this corridor, measured in monetary terms and as volumes. Trends in the expected share were analyzed to identify variables that may improve the attractiveness of the railway service and the participation of clients along the route from the country's main economic activities which includes the following: agriculture & livestock, manufacturing, minerals, and forestry.

The four-step transportation model was chosen for its suitability towards this case study; where available data sets were limited, the information was aggregated into yearly values, and the network was defined with few transportation zones. Activity-based models were not feasible in this case due to the lack of information on complete routes and volume flows. The model evaluated a first scenario given the present design of the route and a second scenario involving improvements in the alignment and the addition of a new segment.

Regarding the opportunities of moving goods according to their type, in terms of volume, minerals (48 %) and agricultural (31 %) have the largest shares of participation in this region, followed by manufacturing (20 %) and forestry products (1 %). However, the manufacturing sector stands out in financial terms, accounting for 71 % of the total value of goods mobilized in the study area.

It was found that the demand is most sensible for changes in the service fare, while the benefits of shorter travel times and a larger attraction area in scenario 2 were not significant. A service fee of $USD 2.35/ton in average is recommended to reach a 30 % modal shift towards the railway (following the European Commission's goals to reduce CO₂ emissions from freight transportation in 2030).

Finally, recommendations for public policies are provided to the entities in the country in the sectors of Agriculture, Health, Energy and Environment, Transportation, and Public Services. The suggestions aim to develop the new railway project with a holistic perspective, considering the inclusion of less profitable economic activities of the surrounding communities that require connectivity, compliance with environmental commitments, and design for resilience while aiming for a financially feasible business model.