SHORT SEA
SHIPPING IN
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OECD, 2001. Software 1987-1996, Acrobat is a trademark of ADOBE. All rights reserved. OECD grants you the right to use one copy of this Program for your personal use only. Unauthorised reproduction,
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2, rue André-Pascal,
75775 Paris Cedex 16, France. SHORT SEA
SHIPPING IN
EUROPE
EUROPEAN CONFERENCE OF
MINISTERS OF TRANSPORT
EUROPEAN CONFERENCE OF MINISTERS OF TRANSPORT ECMT
The European Conference of Ministers of Transport ECMT is an inter-governmental organisation
established by a Protocol signed in Brussels on 17 October 1953. It is a forum in which Ministers
responsible for transport, and more specifically the inland transport sector, can co-operate on policy. Within this forum, Ministers can openly discuss current problems and agree upon joint approaches aimed
at improving the utilisation and at ensuring the rational development of European transport systems
of international importance. At present, the ECMTs role primarily consists of
helping to create an integrated transport system throughout the enlarged Europe that is economically
and technically efficient, meets the highest possible safety and environmental standards and
takes full account of the social dimension
helping also to build a bridge between the European Union and the rest of the continent at a
political level. The Council of the Conference comprises the Ministers of Transport of 40 full Member countries
Albania, Austria, Azerbaijan, Belarus, Belgium, Bosnia-Herzegovina, Bulgaria, Croatia, the Czech Republic,
Denmark, Estonia, Finland, France, FYR Macedonia, Georgia, Germany, Greece, Hungary, Iceland, Ireland,
Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Moldova, Netherlands, Norway, Poland,
Portugal, Romania, the Russian Federation, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland,
Turkey, Ukraine and the United Kingdom. There are six Associate member countries Australia, Canada,
Japan, New Zealand, Republic of Korea and the United States and two Observer countries Armenia
and Morocco. A Committee of Deputies, composed of senior civil servants representing Ministers, prepares
proposals for consideration by the Council of Ministers. The Committee is assisted by working groups,
each of which has a specific mandate. The issues currently being studied on which policy decisions by Ministers will be required
include the development and implementation of a pan-European transport policy the integration of
Central and Eastern European Countries into the European transport market specific issues relating to
transport by rail, road and waterway combined transport transport and the environment the social costs
of transport trends in international transport and infrastructure needs transport for people with mobility
handicaps road safety traffic management road traffic information and new communications technologies. Statistical analyses of trends in traffic and investment are published regularly by the ECMT and
provide a clear indication of the situation, on a trimestrial or annual basis, in the transport sector in
different European countries. As part of its research activities, the ECMT holds regular Symposia, Seminars and Round Tables on
transport economics issues. Their conclusions are considered by the competent organs of the Conference
under the authority of the Committee of Deputies and serve as a basis for formulating proposals for
policy decisions to be submitted to Ministers. The ECMTs Documentation Service has extensive information available concerning the transport
sector. This information is accessible on the ECMT Internet site. For administrative purposes the ECMTs Secretariat is attached to the Organisation for Economic
Co-operation and Development OECD. Publié en français sous le titre
LE TRANSPORT MARITIME A COURTE DISTANCE EN EUROPE
Further information about the ECMT is available on Internet at the following address
httpwww.oecd.orgcem
ECMT 2001 ECMT Publications are distributed by OECD Publications Service,
2, rue André Pascal, 75775 PARIS CEDEX 16, France. FOREWORD
The following two reports were presented to the national delegates of the ECMT Combined
Transport Group to introduce economical and policy problems brought about by the development of
short sea shipping.
Work undertaken in 1997 was based on these reports and led to a report and
recommendations adopted by the ECMT Council of Ministers in May 2000. The first report was drawn up by M. Stratos Papadimitriou, responsible for urban transport in
Athens and also the co-ordinator of concerted action in short sea shipping for the Commission of the
European Union in 1996. The second report was drawn up by Professor Dr. Manfred Zachcial, Institute of Transport ISL,
Bremen. These two reports are the framework of the work of the Conference and are reproduced for
information.
Closing Remarks and Future Prospects .............................................................................. 16
SHORT SEA SHIPPING AND INTERMODAL TRANSPORT
Report by Professor Dr. Manfred ZACHCIAL
1. Introduction......................................................................................................................... 23
2. Basic Requirements on Improved Services of Short Sea Shipping ..................................... 24
3. Identification of Shift-Related Potentials ............................................................................ 25
4. Assessment of Road to Sea Split Function .......................................................................... 30
5. Data Base and Route Assignment Model ............................................................................ 32
6. Overview on Short Sea Shipping Projects in Europe .......................................................... 33
SHORT SEA SHIPPING AN ALTERNATIVE TO EUROPEAN INLAND TRANSPORT
OR A COMPLEMENTARY MODE
Report adopted by the ECMT Ministers of Transport at the Council of Ministers,
Prague, 30-31 May 2000
Executive Summary .................................................................................................................... 39
Introduction.................................................................................................................................
41
1. 2. 3. The main characteristics of short sea shipping in Europe ................................................ 41
Advantages of short sea shipping..................................................................................... 43
Obstacles to the development of short sea shipping......................................................... 44
5
PART I Policy initiatives in recent years............................................................................. 47
1. Policy initiatives for the development of short sea shipping............................................ 47
2. Short sea shipping and overall transport policy ............................................................... 50
PART II Main characteristics of the transport system in Europe
and its implications for future government policy..................................................
63
ANNEX II DEFINITIONS ........................................................................................................ 65
RECOMMENDATIONS ADOPTED BY THE ECMT MINISTERS OF TRANSPORT
DURING THE COUNCIL OF MINISTERS, PRAGUE, 30-31 MAY 2000............................. 67
GLOSSARY ............................................................................................................................... 75
6
SHORT SEA SHIPPING IN EUROPE
EXPERIENCE AND PROSPECTS
by Dr. Stratos Papadimitriou
7
1. INTRODUCTION
Transport and transport infrastructure were identified almost at the very early beginning of the
European Common Market as a key field for a competitive economy. ECMT has now been in
existence for almost 50 years, performing pioneering work, and the essential link to the OECD
ensured the efficiency and the excellent co-operation with other international bodies. During the past
ten years several major changes occurred in Europe in the political as well as the commercial fields. The commitment to a common peaceful and prosperous future for the European continent expressed in
the form of the single market of the European Union, the economic and political collapse of the former
socialist republics and the pressing need for improved competitiveness in the most competitive global
market ever, forced and still is forcing the adoption of policies in key fields. In December 1992, the White Paper on the Transport field was published and the Common
Transport Policy was adopted. Among other important policy decisions declared in that document,
there is one concerning the special transport mode of short sea shipping shifting cargoes from land
modes to the sea is not only an environmental and economic necessity but also a policy choice. In due
course short sea shipping should relieve the congested road networks and improve the competitiveness
of the European economy. For the purposes of this paper, short sea shipping is understood to cover maritime transport
services which do not involve an ocean crossing. It also includes maritime transport along the coasts
and between the mainland coasts and islands of the European Union, covering purely national
transport cabotage and cross border services, as well as sea-river transportation by coastal vessels to
and from ports in the hinterland. 2. CURRENT STATUS
In the White Paper for the development and promotion of a Common Transport Policy CTP,
three strong conclusions emerged
1. The demand for both freight and passenger transport services is increasing. 2. There is an imbalance between modes which is increasing annually. 3. There is a worrying stagnation in transport infrastructure investments. Simple statistics indicate the transport problem in Europe the total volume of goods imports
transported between the European Union countries amounted to 685 x 106 tonnes in 19921. The
proportion carried by each mode of transport was as follows
9
Table 1. Road
Rail
Sea
Inland waterways
43
7
29
21
Land
Waterborne
50
50
Focusing on the road transport percentage, this figure represents 295 439 000 tonnes, and given
that the European market is growing, the flows not only between the Member States, but also between
other regions, such as the countries of East Europe and the regions of North Africa, will explode to
figures that the existing infrastructure can not serve, bottlenecks and congestion will be the everyday
problem along with the energy consumption and the environmental burdening. Thus will result in a
dramatic loss of competitiveness of the European economy, demand for more investment in
infrastructure and aggravation of the quality of living of the European citizens. All of the above have
been well documented in the Commissions Paper dealing with the internalization of the external
costs. In a more quantitative approach it has been estimated that between 1995 to 2010, freight traffic in
the Community is forecasted to increase by 37 per cent. All these trends have resulted in the
congestion of the land networks with dangerous environmental impacts therefore CTP has adopted
the promotion of short sea shipping and the shifting of transport flows from land to sea in a non-
mandatory and non-artificial way. The CTP aims also, in addition to all inherent advantages of short
sea shipping as transport service, to achieve further growth and development of peripheral and isolated
regions achieving cohesion through short sea shipping and indirectly contributing significantly to the
development of European shipbuilding and supporting industries. It has been said that cohesion should
not be viewed in its social or economic meaning alone, but also as an efficient connection achieving
mobility Psaraftis, 1995. Therefore, in Europe and specially in the European Union, short sea shipping is a policy choice. Short sea shipping is considered important for the European cohesion because it
promotes European trade competitiveness
maintains vital transport links
decreases unit cost of transport
facilitates Eastern European integration
relieves congestion from land based networks. Exploring the feasibility of this policy however, it became clear that several obstacles were
hindering the whole effort. Due to improper infrastructure, including documentary and procedural
requirements, and connecting links to the hinterland, a large number of ports fail to attract investors
and shippers to use short sea shipping. Almost all southern ports charge high fees, transit times tend to
be longer, and finally there is insufficient integration with other modes, so the just-in-time JIT
requirements are not easily met. The market has an old-fashioned image of short sea shipping services
and it is not aware of short sea shipping capabilities. The overall geographical and operational setting in which short sea shipping functions in Europe
is the following. Europe is a large peninsula penetrated by inland waterways. It has a favourable
geographical configuration which makes it particularly well suited for waterborne transport. In
Europe, road and rail networks are much denser as a reflection of the population distribution pattern. 10
Flexibility and frequency of service receive more attention from shippers and consignees than do
the economies of long-distance haul. In Europe the 20ft container is the dominant one.
Railroads must
strive harder to gain a competitive advantage over trucks on the relatively short distances that
characterise the average journey within the continent. Originally the majority of containers were
transported by road and thus, because the initial arrangement was underlined by U.S. carriers, the
principle was that every container should have a chassis, leading to investments only few could afford. This trend reversed completely and now almost 80 per cent of containers that move over long
distances travel by rail. Double-stack railcars are not currently in use in Europe because of the low
bridges height. This can be explained by the railway system in general, its size and capacity, which
solves the quantitative problems of container transport to and from the hinterland. As an example, the
break-even point between rail and road haulage is about 170 to 250 km from the sea terminal
Schiffer, 1996. This result also emphasizes the fact that a port inaccessible to a major railway axis or
system is seriously handicapped in the competition of intermodal traffic. By optimizing container
movements and increasing the use and the number of inland depots, trucking companies are tending to
concentrate their activities on short-haul movements and door-to-door services. In accordance with the above, the strategic objective of short sea shipping in Europe is the
diversion of freight streams from across the mainland of Europe to around the continent, requiring an
alliance between terminal corporations, short sea shipping, and land mode organisations and shuttle
companies. In other words cargoes should be shifted from land to sea modes. This cargo potential can
be determined on the basis of detailed cost estimates and quality assessment of the quality factors. From the logistics point of view, time and cost are the most crucial factors. Selecting some example
routes, two shifting criteria can be applied and reflect the potential of shifting2
Routes
General Cargo from Hamburg to
- Venice
- Piraeus
Sawn timber from Sweden to
Containers from Bremerhaven to
- Rouen
- Bilbao
- Marseilles
- Cadiz
Table 2. Price ratio
road ship 1
Time ratio
road ship 2
1 2
1.27
2.55
3.00
3.71
1.58
3.24
7.26
4.51
3.31
2.51
4.59
1.30
0.17
0.57
0.91
1.48
0.34
2.49
Such considerations and calculations are highly relevant to the general problem of shifting
cargoes from overland to the transport. Most European ports are innovative and have broken away from the traditional jobs of just
handling and storing cargo, and now offer service packages. The ports are entering into joint ventures
with companies moving in special markets such as the fruit trade, offering intermodal links and the
monitoring of cargoes for the shipper and forwarding agent in a compatible EDI way.
Regarding the existing short sea shipping fleet and the services which it can offer in the transport
chain, the following table3 gives a broad picture
11
Table 3. Number
GT
EU
Rest of Europe
Rest of the World
Deep Sea
Short Sea
Deep Sea
Short Sea
Deep Sea
Short Sea
42.7
57.3
37.3
62.7
31.5
68.5
92.1
7.9
88.6
11.4
90.4
9.6
DWT
93.3
6.7
90.8
9.2
91.1
8.9
Average
age
Years
14
20
13
21
13
18
Average GT
25 958
1 654
24 598
1 882
27 155
1 319
In these statistics, short sea shipping vessels are considered to be those of less than 6 000 GT. However, it is recognized that in practice larger ships are also active in short sea shipping and that
smaller vessels are also engaged in some deep sea routes. In any case, the use of different criteria can
alter the apparent make-up of the fleet. The data of the above table indicate that the share of short sea
shipping vessels of the total cargo carrying fleet is broadly similar worldwide. Some small differences
can be seen in the average size and the age of the vessels. From the same sources is also known that
multi-purpose vessels constitute almost between 57 per cent to 72 per cent of the short sea shipping
total fleet reflecting the need for flexibility. New types of ships are most unlikely to be needed in the European short sea shipping routes, as
far as the general principles and concepts are concerned, but important details of existing vessel types
need more investigation and consideration. More likely, flexible load-onload-off LOLO dry cargo
vessels and other small cargo vessels offering the ability to work under LTL conditions bypass the
season-related obstacles. On the other hand, Europe needs more fast vessels. In Europe many fast
ferries are constructed and operated by European-based companies. This focused interest originates
from the ever-increasing value of time and the concentrated funds needed for such investments. The
European policy of Marine Corridors is offering a very strong initiative for investments, especially in
wealthy countries, where time costs more and money is available for investment. It is not accidental
that although short sea shipping can and should flourish in the southern regions, and specially in the
vital routes for the social cohesion of the Mediterranean, the majority of short sea shipping
applications are in the Baltic Sea, the North Sea and the English Channel. The European short sea shipping industry possesses more strategic advantages than other regions
because of favourable geography, networking limited land areas, and extensive coastlines and a
traditional and successful operating culture among different nations Europe comprising so many
different nations in contrast to North America with only three. In Europe, market mechanisms are
highly developed, there is an after-market for ageing vessels, and the technology is impressive. short
sea shipping in Europe faces challenges but it has proven to be innovative and viable with vigorous
competition in most of its sectors, so European short sea shipping can provide a base of expertise and
capacity for participation in new markets. Europe did not follow the American model of national merchant marine development. The
primary difference between the cabotage laws in Europe and those in the United States stems from the
building provision. The direct restrictions originating from the Jones Act prohibit the viable entrance
of small vessel in the coastal chains. U.S.-built vessels are relatively more expensive and the cost of
the U.S. flag is burden. In an indirect way this Act promotes a sheltered market and cabotage
conditions.
This U.S. model proves also that separate national regulation is a major obstacle to
competitiveness and that regulatory structures should support a concordance with world standards and
12
trends. The unavoidable high costs of small vessels led also to the implementation of tug-barge
systems in coastal trades. It should also be underlined that due to the Jones Act, U.S. economy has not
integrated ship ownership, ship operation, ship repair and marine technology development. The
integration of these activities is a vital element of successful long-term market evolution. Europes
ability to be a source for its own short sea tonnage requirements is an important foundation, and
exports of ships and domestic opportunities will continue to provide high paying employment. The
U.S. experience has shown, that the loss of any element of this capability ultimately erodes the
competitiveness of the entire marine-related industry. The Commissions decision to support short sea shipping is expressed through funding effective
RD in new maritime transport technologies, aimed at enhancing the competitiveness of European
shipping, the development of short sea shipping in parallel with an increase of port efficiency and the
improvements in reliability and safety. More important the CTP expects the shipping sector to adopt
proper cargo units for optimal intermodal utilization, automated mooring and loading procedures to
reduce turnaround time, and the design and construction of suitable sea vessels compatible with the
information technology based logistic systems and port-terminals. CTP urges implementation of the
following measures in the total design of transport chain
Use of VTMIS. Optimal use of human resources. Re-engineering in maritime transport. Promotion of inland waterway transport systems. 3. PERFORMED RESEARCH DEVELOPMENT
Although the European market is not so promising, like other markets, such as the region of
south-east Asia, the policy choice and the strong and traditional supporting industry of almost all
shipping fields are designating European research on the field of short sea shipping as the most
advanced worldwide, despite the fact that in many special fields research is more advanced in
institutions and institutes of other regions, such as in Australia. Taking into account the inadequacy of the existing infrastructure and fleet as well as the not so
well developed interface between land and sea, the European Commission-sponsored RD4 in all
maritime transport activities, and focusing on short sea shipping, as a policy object, short sea shipping
has to play a major role in the future of European transport under the summary title-theme Integration
of Fast Waterborne Transport Systems in the Logistical Chain. There has been an explosive growth in short sea shipping related research during the last six
years. In this period there have been about 80 papers presented at the three European Research Round
Table on Short Sea Shipping conferences to date 1992, 1994, and 1996. In addition, the three FAST
international conferences on fast waterborne transport 1991, 1993, and 1995 presented close to
300 papers, of which about 70 directly focus on short sea shipping. In view of such a boom of research activity, it became imperative to critically survey such work,
and also make a taxonomy of it, so that all this work is sorted out, and the baseline for further research
13
becomes clear. Failure to do this would inevitably result in duplication of effort, gaps in research, lack
of vision on what is needed, and other negative ramifications. A special request for research on waterborne transport produced a noticeable collection of
information from papers, research projects and programs, books, articles, etc. Psaraftis, 1996. The
purpose of that study on short sea shipping was to carry out a critical survey and taxonomy of such
work. The survey has involved a European-wide solicitation of input on related work, mainly in the
context of the Concerted Action on short sea shipping, but also from other sources. The material is
available on the Internet and is supported by a search engine, assisting the researcher to get the most
out of the data5. The data from all sources are gathered in a final matrix. Table 4. Ships
Cargo
Ports
Networks
Telematics
Total
Engineering
EconomicsLogistics
BusinessManagement
Regulatory Policy
EnvironmentalSafety
Total
221
82
88
32
23
446
23
41
29
6
7
32
61
66
28
16
23
54
48
40
10
106
203
175
304
255
249
112
61
5
17
18
6
5
51
After solicitation for input, computerised retrieval, and presentation to the sponsor and to the
academic community in June 1996, this material is also presented here focused on the statistical
results. All inputs followed a special taxonomy broken down by discipline and subject. Analysing the
above information to two pie charts Figures 1 and 2 we can understand where research is focused in
Europe.
Figure 1. Telematics
5
Cargo
11
Networks
18
Ports
21
Ships
45
Source Concerted action on short sea shipping, DG VII, Commission of the European Communities. 14
Figure 2. Environment
Safety
6
Regulatory policy
11
Business
Management
25
Engineering
32
Economics
Logistics
26
Source Concerted action on short sea shipping, DG VII, Commission of the European Communities. It is obvious that ships as a subject are the primary target of European research and they are
examined intensively from the engineering, managerial and economics points of view. Although
intermodality and short sea shipping chains demand the efficient interface among modes -- that port
terminals be integral parts of the shipping system -- researchers are primarily interested in ships and as
far as ports are concerned, only in their managerial and logistic problems. Terminals hold pivotal
positions, but do not attract the interest of researchers. From Table 1, it is obvious that 72.4 per cent of all engineering-related entries are of pure
engineering interest. Consequently, 49.6 per cent of all ship-related entries are products of engineering
research, 38.1 per cent of economic and managerial origin and only 12.3 per cent of regulatory or
policy matters, including safety and environmental issues.
It is remarkable that most entries on these
public decision issues such as policy, regulation and safety are conducted in several countries and
funded by national budgets. Another interesting result is that only 48 out of 441 entries are reported as
telematics. A translation of this can be that there is not yet a real interest in such matters. Observing the trends of data from the conferences as a mirror of the research and the interest of
researchers, it should be noted that in the first conference on short sea shipping papers of all kinds
were presented. The strongest field of interest was policy and network regulatory matters. In the
ESSS 92 Conference, 5 out of 6, including all FAST conferences, telematics-related paper appeared,
where in no other conference one was presented. As expected also in the ESSS 94 Conference,
regulatory and policy matters dominated, but this time the interest was broken into two ships and
networks shared almost the same percentage of 35 per cent. This conference represents the
56.3 per cent of environment and safety-related papers. At the ESSS 96 Conference the focus was on
logistics and management. Also for the first time many papers on cargoes were presented. 15
4. CLOSING REMARKS AND FUTURE PROSPECTS
The sea-leg is often the largest part in a logistical chain as far as the travelled distance is
concerned, but not in the cost logistic. Trying to improve each part, the total performance is only
marginally optimized. That is the reason for an holistic view of every transport chain. There is a need to view the many different aspects of the term integration such as integration
in the transport chains, in market evolution, in regional markets, and in world-wide compatible cost
and distribution systems. Transport integration implies that all modes share the common objective of
optimum service in the holistic approach to the production process. Intermodality should be achieved
in order to exploit better any single mode and to minimize cost and time wastage in terminal or cargo
shifting nodes. Transport integration affects the market also by another more direct way. The alliances
between organisations and companies shape joint lobbies that influence authorities to adopt rules and
to invest in specific infrastructure. These alliances promote standardisation and information
management, creating also the appropriate wealth for investments in new technology. Integration in
markets means that ship ownership, operation, building and repair shall be well founded in the market. From the same point of view port authorities, shippers and supporting industry shall also be well
founded in the market. This integration provides high-paying employment and industrial development. Regional integration is synonymous with the term statewide co-operation. Todays transports and
especially short sea shipping need high volumes in order to achieve acceptable break-even points, and
usually the frequency and the volumes needed are offered by more than only one state. In addition to
the dismantling of borders, regional integration leads to larger, more homogenous and integrated
markets, improving commercial terms and allowing further evolution and market expansion. The
expansion of a regional economy under free trade tends also to reduce the complexity of trade
patterns, helping to proceed to the next step of a larger regional market and a world-wide integrated
transport market. For the achievement of this goal, the existence of common ground in cost and time
logistics and a compatible way of cargo shifting is vital.
This will not only produce a base line for all
transactions but will generate trades between regions that are isolated today due to different regulatory
and logistic approaches. Ports and terminals should change attitude -- from a traditional passive role to that of an active
concern for the total production chain. Ports and terminals should integrate successfully and accept
co-operation with other transport nodes and companies involved in the chain. In conclusion, short sea shipping can provide new and wide traditional fields of research and
occupation. Maritime business have always been considered to be the product of a thinking involving
three separate and interactive environments First is the technical one consisting of the design,
construction and interaction with classification societies and specialized international or national
organisations. Second is the managerial environment, where shipowners, operators and supporting
staff try to supply the vessel with money, documentation, people and cargo, and third is the
operational environment, where people operate the vessel -- in other words, handle someone elses
capital -- the crew, pilots, shore staff, etc. So it is meaningless to focus all interest only on technical
matters when so many other factors affect the proper operation. The application of new technology
and the reduced number of crew demand more skilled and well trained personnel onboard and these
serious problems deserve a scientific approach. Almost all these fields of research and interests are approached by many scientists and
researchers as the market and the policy makers are identifying the problems and the inadequacies.
At
this point a hidden truth is revealed there is not only one approach to these matters and solutions
16
should be tailor-made for all interested parts. Consequently, a very small list of possible activities and
interests can be as follows
New designs and improvement of existing ones. Cargo handling equipment. Cargo unitization. EDI and information technology. Energy saving and conservation systems. Unmanned systems and unattended machinery. Crew training and proper number and type of manning. Planning and design of intermodal terminals. Design of special automation. Advanced transport logistics.
Regulatory proposals and market investigations. Concluding, ECMT has and can promote short sea shipping by
convincing all individual countries in Europe of the potential of short sea shipping. The
existing routes indicate that all European regions can and should be included
promoting the close co-operation of all involved parties. ECMT as an international body
should assist in the creation of fair competition between all modes
encouraging the research on port and terminal technology and logistic management, since their
improvement eliminate unnecessary delays, costs and hindrances which hamper the normal
transport commodities
putting even more emphasis on the marketing aspects of short sea shipping
wide-spreading the knowledge regarding the possibilities of short sea shipping. Short sea shipping can be used as vehicle and driving force for creating more jobs in the transport
sector and for achieving a more competitive commercial power by optimizing parts of the cost chains. As Europe faces the ghost of unemployment throughout the Member States, especially in young and
productive ages, short sea shipping can be an expensive investment but a promising sector,
expanding and growing in such a way as to create more employment too in the hands of policy makers
of the unified Europe. ECMT should call upon other countries and the European Union along with the European
Commission to include short sea shipping in their overall transport policy. Only this inclusion can
guarantee a better use of the sealane, promote a sea-based transport chain and foster the integration of
short sea shipping into an integrated European transport network. 17
NOTES
Source EUROSTAT. Source European Short Sea Shipping by Professor Manfred Zachcial, 1994. Source Policy Research Corporation N.V. Data supplied by Lloyds Register. Short sea shipping-CA, Concerted Action on Short Sea Shipping, Contract No. WA-00-CA.95186 of the
Commission of the European Communities, Directorate General for TransportDG VII. The National
Technical University of Athens is the contractor and co-ordinator of the whole project. 1.
2. 3. 4. 5. The URL is httpwww.maritime.deslab.naval.ntua.grcassssearch.htm. 18
REFERENCES
1. 2. 3. SCHINAS, O. New Frontiers Through Short Sea Shipping. Paper presented in the Annual
Meeting of the Society of Naval Architects and Marine Engineers in Ottawa, Canada,
October 1997. PSARAFTIS, H. N., and SCHINAS, O. D., Research in Short Sea Shipping The State of
the Art, 3rd European Research Round Table Conference on Short Sea Shipping, Bergen,
June 1996. SCHIFFER, E., Competition Between European ports and the Effect on Intermodal
Development, Transportation Research Circular, No. 459, July 1996.
4. PSARAFTIS, H.N. Short Sea Shipping Key to European Cohesion, December 1995. 5. BLONK, W., Prospects and Challenges of Short Sea Shipping, Closing speech in the
2nd European Research Round Table Conference on Short Sea Shipping, Athens, 1994. 6. CRILLEY, J., DEAN, C. J., Short Sea Shipping and the world cargo-carrying fleet -- a
statistical summary, 1st European Research Round Table Conference on Short Sea Shipping,
Delft, November 1992. 7
Communication from the Commission to the European Parliament, the Council, the Economic
and Social Committee and the Committee of the Regions, The Development of Short Sea
Shipping in Europe Prospects and Challenges, COM95 317 final, Brussels, July 1995. 8. Commission of the European Communities, Towards Fair and Efficient Pricing in Transport,
COM95 691 final, Brussels, December 1995. 9.
ZACHCIAL, M., European Short Sea Shipping, 1994. 19
SHORT SEA SHIPPING AND INTERMODAL TRANSPORT
by Professor Dr. Manfred ZACHCIAL
21
1. INTRODUCTION
The paper presented deals with the assessment of shift potentials from unimodal to multimodal
transport and especially from road to sea. In this context it should be made clear that European short
sea shipping nearly always includes a percentage to a varying degree of hinterland transport which is
in many cases road haulage, in others rail or inland waterways transport. There is no doubt that an automatic shift from road to sea is not possible. What is needed is a
favourable offer of the suppliers of short sea shipping to their present and potential clients, namely
shippers and forwarders. The EU-Commission as well as a number of European transport and research
ministries are going to promote respective actions and programmes to improve the competitive
position of short sea shipping. Short sea shipping has a market share of about 32 within intra-community trades. For the
contribution to solve existing and future transport problems the competitive position of short sea
shipping compared to road transport has to be strengthened and competitive disadvantages have to be
reduced.1
Empirical research shows a volume of 15 million tonnes2 presently being carried on the German
highway network which could be shifted to short sea shipping. Comparable volumes have been
identified for other European countries e.g. Netherlands 3 of total road haulage of the country. It
is important to realise that these potentials cannot be shifted only via German seaports, but also via
Dutch and Belgian ports.
Moreover, this quantity also contains present land traffic flows -- for
example between Scandinavia and South Europe which might be shifted to sea transport without using
ports either in German or Benelux countries. A statistical analysis of European cargo flows showed that during the period 1990-1995 freight
flows by sea within European trades have increased by about 4 p.a. feeder traffic excluded. It has
been a smooth and steady growth, without sudden increases as is sometimes expected from promoters
of short sea shipping.
23
2. BASIC REQUIREMENTS ON IMPROVED SERVICES OF SHORT SEA SHIPPING
2.1 Technical and infrastructural aspects
With respect to technical aspects and handling procedures port performances have to be improved
as stated by researchers and organisationsinstitutions involved in this field of activities. Obviously
short sea shipping is competitive if time spent in ports can be significantly reduced. A round the
clock service for loading and unloading activities should be provided, whenever possible. A great
number of all ports do not dispose of up-to-date handling equipment. Respective movements would
allow shorter turn-around times in ports and hence reduce travel time and transport cost. If short sea shipping is to be strengthened it is an absolutely necessary precondition to improve
hinterland connections of sea ports. This is especially essential for promoting European short sea
shipping in the sense of a modern transport mode. The promotion programme of the EU Commission for strengthening ports and shipping is
directed to communication centres in seaports. At present, the structure of most ports allows only slow
handling because of deficient infrastructure or even lack of hinterland connections by rail, road and
inland waterways. The negative image has been increased by high port duties and overcapacities of the
ports infra- and supra-structure. Customs operations and administrative procedures are often too
complicated and time consuming. 2.2 Commercial Aspects
It must be a decisive aim that combined landsea transport be carried out through mutual
co-operation and agreements so as to
maintain control over the complete chain from dispatching to receiving
guarantee delivery times
minimise delays in ports
offer maximum service frequency. An important precondition for the functioning of the intermodal transport chains and entities
involved is the use of telecommunication. There are various systems in operation which are focussed
on different centres of application areas. Measures must be directed towards the improvement of overall logistics and also towards the
development of acquisition by means of transparency and marketing instruments. The strengthening of
ports and shipping against sole land transport across Europe will require full-scale integration of data
and information of hinterland services, port performances and maritime services including ship and
freight characteristics freight ratestariffs, frequency, speed, punctuality, load capacity and special
features. 2.3 Political Aspects
The future development of European shipping depends also on the general set-up regarding
transport policy. The following important aspects should be discussed
24
charging of road-related and external traffic cost to users as a prerequisite for undistorted
intermodal competition in favour of environment-friendly modes of transport
ending discriminative treatment of inner-community shipping in favour of overland traffic by
suppressing complicated customs procedures
harmonization of rules for land and sea carriage of hazardous goods harmonization of
different rulings in different ports and introduction of comparable liability and insurance
conditions
incorporation of short sea shipping into transport infrastructure planning and integration of sea
ports as multi-modal interfaces into the trans-European networks. The system components are basically valid for the overall European network. They are naturally
to be referred to the maritime network in coastal areas enterprises, ports, hinterland connections,
flows of goods and shipping movements. For seaports to take a stronger part of traffic volumes to relieve roadrailway traffic in the future,
a more intensive and comprehensive use of information systems will be essential which clearly should
exceed the present conceptional frame of telecommunication. 3. IDENTIFICATION OF SHIFT-RELATED POTENTIALS
3.1 Statistical basis
into 52 commodity groups
For the identification of shift potentials only the relevant routing of direct road haulage without
sea transport has been analysed in detail. Information about modal split and route choice have been
broken
related data. The
NSTR-2-digits
commodity-specific affinities have been used to understand the modal split into road haulage and
combined landsea transport through German as well as DutchBelgian ports. The respective affinities
have been sub-divided into weak, neutral and strong ones.
From these affinities possible shift
potentials were estimated. Again the shift potentials had to be distinguished in an independent and
dependent potential. On the basis of the branch classification of Statistisches Bundesamt shift
potentials in each NSTR-2 group were classed for relevant industry branches in the specific traffic cell
source or destination area. traffic zone
for
3.2 Market Transparency
Along with the statistical analysis of origindestination data, ISL designed a questionnaire to
analyse the behaviour of shippers and forwarders. This questionnaire contained the following major
aspects
25
Objective criteria of choice of mode. Assessment of the image of European short sea shipping and of shippersforwarders
knowledge on service supply shipping
Information on the true attitude of shippersforwarders.
For getting a statistically reliable sample, a random approach has been applied. This means that
the traffic zones according to the German transport planning system have been further disaggregated
down to a system of small administrative units. This was necessary to identify individual companies
within the traffic zones and cells mentioned. A top-down approach has been applied showing goods-specific origin destination relationships,
opening information on industrial sections and individual companies. The working steps have been as
follows
Determination of relevant partner countries based upon foreign trade volumes and existing
modal split situations road haulage potentials
Analysis of foreign trade flows that are relevant for considerations regarding From Road to
Sea basis individual Federal States in Germany and regions in Spain and Portugal,
disaggregated into traffic zones
Further detailed analysis of foreign trade traffic with the Iberian Peninsula regarding transport
prices and transport times in both road and sea transport
Based upon the findings of PortugalSpain traffic further potentials have been analysed
between individual Federal States in Germany and partner countries in ScandinaviaFinland,
the Netherlands, Belgium, France, Italy, Greece, Turkey and the Mediterranean
Assessment of the chances of realisation of potentials identified considering the affinities of
commodities and modes based upon surveysinterviews of relevant companies. 3.3 Assessment of marketing and transparency requirements
Important for shifting potentials is the fact that about 90 of the responsibility for the modal
split determination and about 75 of the transport chain organisation are managed by the dispatching
or receiving companies. The decisive contact persons for short sea shipping are therefore to be found
in the shippers logistics departments.
As well as identifying company-related shift potentials, it is essential to increase market
transparency on the supply side. A survey on a sample of 700 shippers has shown that shippers
knowledge about short sea shipping can be split into an affective and a cognitive side. The cognitive
base means that shippers act on practical and impartial knowledge about short sea shipping services,
while an affective base means that shippers decide on emotional and subjective knowledge which is
influenced by prejudices e.g. short sea shipping is slow, unreliable, etc.. In this connection it has to be mentioned that shippers decisions about modal split are influenced
by so-called measurable and non-measurable criteria. Measurable criteria are factors of competition
which are comparable e.g. money items, time. Non-measurable criteria are not directly comparable
between road and sea transport, but they are influenced by subjective judgement concerning reliability,
punctuality, etc.
It is important to perceive that non-measurable criteria also have a strong influence on
shippers decisions regarding modal split. 26
3.4 Results
3.4.1
General
Obviously, there seems to be a lack in market transparency which has to be eliminated within the
logistic departments of shipping companies. This assumption results from interviews made by ISL
with several companies with respect to their knowledge and experience regarding the alternative short
sea shipping. The result shows that shippers have specifically affective and cognitive opinions or
attitudes facing short sea shipping. The cognitive attitude bases on the degree of shippers knowledge regarding offers of transport
services in short sea shipping, whereas the affective attitude often depends on emotional judgements. The cognitive knowledge is characterised as an imperfect information or as a deficit thereof. This
means that the level of information of a company normally does not comprise the whole set of existing
information which is known to be the necessary base for a decision to be taken. In this situation the
measurable criteria are influenced with respect to an objective assessment of competitiveness within
transport modes. Contrary to this, the affective knowledge is determined only by subjective confidence and
emotion. Both aspects, confidence and emotion, determine widely
the mode choice of
shippersforwarders. Their non-measurable criteria, e.g. reliability, relations of confidence, punctuality
or security of goods are important and specific arguments for the decision regarding modal split and
organisation of transport chains. These differences existing between the cognitively and affectively characterised knowledge level
of shippers and the services in European short sea shipping being available are significant for the fact
that in the past a larger shifting of potentials has not yet been realised. The survey mentioned yielded
several additional results which can be transferred from German conditions to those of other European
countries. 3.4.2
Specific
Concerning the frequency of exports and imports 63 of the companies in the sample explained
that several times per day transports depart from the companys ground 20 have daily shipments,
8 have 2-6 times per week, another 8 weekly shipments and only 1 declared to have 1 to
2 shipments per month. A similar distribution - even more equal - can be observed regarding imports. 46 of the companies interviewed answered that several times per day goods would be delivered
23 received daily consignments, 9 between 2 and 6 times per week, 19 weekly and 3
between 1 and 2 times per month. With respect to the orientation of fixed schedules of departures and arrivals of exports, a high
percentage of 81 answered that they are bound to fixed times. Regarding departure times 39 are
oriented during the morning, 16 around noon, 14 in the evening and 5 late noon and night as
well. Concerning times of arrival, fixed time schedules are related to the morning 26 , early noon
24 , evening 12 , late noon 6 , night time 32 .
Out of a subtotal not being fixed to
specific time 19 , a third of interviewed companies mentioned a rhythm of 24 or 48 hours as
necessary. A very important topic of discussion is the requirement for Just-In-Time JIT delivery. The
requirements were structured as follows
27
The question of just-in-time was extended by asking for particular preferences of the companies. This
requirement was structured as follows mentioning of preferences within a ranking without a scaling
given active structure the passively structured question to be measured by a scaling of 5 degrees for
15 criteria. The results of the latter requirement are shown in Figure 1.
Figure 1. Weighted results of criteria modal split
Valuation
600
500
400
300
200
100
0
Reliability
Punctuality
Cost
Valuation
600
500
400
300
200
100
0
Time
Safety of goods
Safety of liability
Supply-overall-view
Relationship of personal trust
Frequency of transshipments
Blanket coverage organisation
Information flow
Frequency of departure
Environmental impact
Customer advisory service
Customers request
Flexibility
Customers location
Door-to-door service
Transport volume
2448 hours service
Kind of goods
Source ISL Survey, 1996. The survey showed that with regard to the transparency of information obviously substantial
improvements will be necessary. Only the time schedules of liner shipping have a good image 53
good. However, even in this case companies requested better or substantially better services. 28
Table 1. Evaluation of Market Transparency in Short Sea Shipping
Percentages
Grading components
Time schedules and line services
Conditions
Transport time
Prices
Technical details, e.g.
transport units
Non-scheduled transport
Guidelines, regulations, e.g. customs
Free capacities
Movement data of consignments
Average
Good
53
33
41
33
32
12
16
29
11
29
Fair
25
38
26
42
45
41
30
39
36
36
Poor
22
27
32
24
20
39
30
27
49
31
Unknown
No answer
--
2
1
1
3
8
14
5
4
4
Total
100
100
100
100
100
100
100
100
100
100
In addition to this, the survey tried to gain a better insight into the affective component. The
problems indicated by the survey participants may be explained by both missing knowledge andor
lack of trust in the maritime transport compared to land transport. The most important problem seems
to be the duration of the transport process by sea nearly 37 of all answers concerning the question
of primary problems. For nearly 92 of the companies interviewed the time of transport is generally
a problem of first, second or third ranking. All other factors are clearly located below this very serious
problem. Nearly 30 of the interviewed companies indicate a problem concerning a low transparency
of the supply services, followed by frequency of departures, unknown cost structure, risk of delay, etc. To get an idea under which circumstances cargo might be shifted from road to sea, scenarios have
been defined. They contain stated preferences concerning benefits of cargo shifting due to cost
savings. The latter has been split into several classes, namely 5-10 , 10-20 , 20-30 and more
than 30 . An extension of transport time due to shifting cargo from road to sea is accepted by 23 of the
companies only then if cost savings of more than 30 can be realised. 52 are not willing to change
their mode choice even if more than 30 cost savings would be achieved. The remaining 25 would
consider a shift from road to sea if transport cost would be reduced by less than 30 . The structure of
answers is similar concerning other qualitative topics such as lower departure frequency etc. To touch another question, one third of the companies interviewed stated an interest in additional
information about European shipping. Compared to previous statements it should be taken into
account that 40 of the companies do not envisage any cargo to be shifted from road to sea and also
do not wish to have any more analyses, while 16 do not envisage any shifting presently, but are of
the opinion that future studies on this problem are necessary. This means that 56 of the companies
interviewed do not have any information about additional possible maritime transports for replacing
road haulage. However, only one third would like additional information about short sea shipping. There should be a reduction of 16 points out of this third which leaves altogether 17 companies
who are definitely interested in discussing possible shifting potentials. 29
4. ASSESSMENT OF ROAD TO SEA SPLIT FUNCTION
Until now, the system-immanent disadvantages of intermodal transport including maritime
transport compared to direct trucking have not been quantified in monetary terms. There are only
certain tentative estimations available assuming advantages of transport cost of 15-30 in favour of
sea transport to be necessary to shift a certain amount of cargo from road to sea. 4.1 Modelling Approach
Since a number of determinants of mode choice is not possible to be quantified and expressed in
monetary terms, ISL has applied a modal split model which estimates system-immanent disadvantage
of intermodal transport compared to pure road haulage. In concrete words, the freight flows between
Lisbon and the centres of the German countries have been used for modelling purposes. It has been assumed to have C1 and C2 as the known parts of transport cost better of generalised
cost for each mode and origindestination pair. Provided there are valid information about the
portions choosing each mode sea and road haulage for each pair within the research areas. The
following modal split model has been defined
The ratio of the proportions or transport shares of both modes yields
P1
1 - P1
1
exp cid1cid2cid1 C2 - C1cid3
exp cid1 C2 - C1
The various components of the formula mean the following
Pij market shares of OD pairs
dispersion parameter
modal disadvantage penalty
Linearisation of using logarithms results in the following formula which is used later for linear
regression
ln
1 - P1
P1
C2 - C1
30
Figure 2. Theoretical modal split function
P1 Share of sea transport
1.0
0.5
Cost difference in favour
of land transport
Cost difference in favour
of sea transport
C1 C2
C2 C1
C1 cost of mode sea. C2 cost of mode road. Source ISL Survey, 1996. The values of and as the regressions unknown parameters have been calibrated by regression
analysis with acting as dependent is variable and C2-C1 as the independent one. The product
equals the regressions constant and the slope of the function. equals
cid2 . The theoretical modal split function implies that both modes will have 50 market share of the
difference between total cost including all relevant qualitative factors is zero. 4.2 Results
By applying the modelling approach on empirical data for GermanyPortugal trades3, the
following linear regression function resulted
y ln
P1
1 - P1
0.0095 C2 - C1 - 7.4826
5.402 -5.689
31
Figure 3. Linearised regression line at trucking costs of 1,85 DMkm
t
r
o
p
s
n
a
r
t
a
e
s
f
o
e
r
a
h
S
-200
-100
4
3
2
1
0
-1
-2
-3
-4
-5
0
100
200
300
400
500
600
700
C2-C1
Source Mr Holger Kramer, Institute of Shipping Economics and Logistics ISL, Bremen. The function is very satisfactory from statistics point of view with a rate of determination of
R2 - 81 and the values for the t-statistics number in brackets below the regression coefficients.
This
holds for the fact that the regression has been calculated based upon cross section data not time
series. The numerical result can be interpreted as follows The regression line crosses x-axis at about
DM 267,--. This means that with regard to this transport relation Lisbon-Germany cities sea transport
achieves 50 of the market if the pure transport price including port handling is by DM 267,
- cheaper than trucking as average. If the price differential is zero or even negative, the share of
intermodal landsea transport is zero or close to it. This means also that the market share of intermodal transport could be increased if on a certain
route the price difference could be increased for example by lower handling cost or lower freight rates
by using economies of scale or the qualitative disadvantage of shipping including time cost, capital
binding cost and others would be reduced. Our Institute continues to analyse interesting routes to
improve the knowledge on the market shares and competitive situation between trucking and
intermodal transport by sea.
5. DATA BASE AND ROUTE ASSIGNMENT MODEL
To simulate traffic shift potentials from road to sea, the European Continent has been divided into
77 regions based upon the NUTS-2 regional units see Map 1. For these regions several
sociodemographic and economic parameters have been compiled from various sources and a
classification of these zones with respect to European shipping has been carried out. Moreover, a
semi-matrix has been set up containing 2.926 origindestination relationships4. Out of these pure
32
landland relationships have been excluded from further analysis resulting in about 700-800 interesting
OD pairs from short sea shippings point of view. For a sample of OD pairs mode-specific freight flows have been compiled from different sources
trade, transit, transport, port and ferry statistics. By applying transport prices, handling charges, port
fees, travel time and other determinants of mode as well as routeport choice, a route assignment
model has been applied which is capable to simulate the impacts of the variation of several parameters
including price reductionincrease, alterations of the transport policy and measures of the transport
policy. An example of such a route assignment is attached as Map 2.
6. OVERVIEW ON SHORT SEA SHIPPING PROJECTS IN EUROPE
There is a large number of projects on the European level, but also on national and even regional
basis. In July 1995 the European Commission published a strategy paper on The Development of Short
Sea Shipping in Europe Prospects and Challenges, focussing on the improvement of quality and
efficiency in short sea shipping as well as on the improvement of port infrastructure and port
efficiency. Increasingly, the use of modern telematics within short sea shipping and intermodal
transport are promoted by the EU-Commission DG VII, frequently joined with DG XIII. Moreover,
the planning of Trans-European networks contains also the role of ports and shipping. The implementation of a task force maritime system of the future in 1995 took the obligation to
co-ordinate short sea shipping projects as part of the 4th Framework Programme and those on a
national level. After an evaluation procedure in June 1997 by independent experts in Brussels, a
number of about 10 research and consulting projects has been selected to be financed by the
EU Commission. The average valueinvestigation of these projects is about one million ECU each. The Alliance of Maritime Regional Interests in Europe AMRIE deals with European shipping
under the headline Regional Aspects of Short Sea Shipping. Participants are delegates of public
organisations, of regional units, companies and associations with relation to the maritime economy. This working group is involved in the elaboration of political statements from a regional point of view. Concerning maritime transport, AMRIE delivered substantial input to EU guidelines Trans European
Networks as well as Round Tables. AMRIE was also involved in the setting up of the G7 pilot project
MAR15 Maritime Information Society. The latter has close relations to short sea shipping via its
module MARTRANS. The CommissionDG VII decided to establish several concerted actions in the field of
Waterborne Transport. One of the most important is that about Short Sea Shipping, also known as a
project short sea shipping-CA. The objectives of short sea shipping-CA are
compiling the state of the art in this broadly defined area
monitoring progress in related research and other work
setting the terms of reference for pilot projects and demonstrators
identifying key focal points for short sea shipping future developments, and
33
providing the widest possible exposure and dissemination of the results of the action. Representation is open to all EU countries and other countries associated with the research
programme according to the association protocol. With the exception of Austria and Luxembourg,
all EU countries plus Norway officially participate in the action a total of 14 countries. The representatives of each participating country contribute input, advice, and other expertise to
the action. Such input typically represents information coming from the specific country e.g. relevant
research carried at the national level, suggestions for pilot projects, etc..
Whenever necessary, special
ad hoc task forces are formed among other action participants, which will be assigned to collectively
tackle specific issues relevant to the action. In addition to nominated regular action participants,
several observers may be invited to action meetings, representing organisations with an interest in
short sea shipping. Such organisations include ECSA, ESPO, FEPORT, and others. Every two years a so-called Short Sea Shipping Conference is held 1992 Delft 1994 Athens
1996 Bergen where scientist and participants from government associations and the industry discuss
problems and solutions for the promotion of short sea shipping and intermodal transport. NOTES
1. 2. Commission of the European Union The development of short sea shipping in Europe. Prospects and
challenges.
Communication from the Commission to the European Parliament, the Council, the Economic
and Social Committee and the Committee of the Regions, Luxembourg 1995. This is equivalent to about 2.5 of total German long-distance road haulage measured in tonnes due to
longer distances within this specific freight market 7 of long-distance road haulage measured in t-km. 3. Market Shares for sea transport between 2 Stuttgart-Lisbon and 94 Bremen - average trucking
4. price DM 1 85 per kilometre. 77 x 77 -77 2 2 926
The diagonal 77 fields of the matrix intra-regional flows is not relevant. 34
Map 1. Regions for Transport Modelling in Europe
Source Institute of Shipping Economics and Logistics ISL, Bremen, 1997. Map 2. Example of Route Assignment Number of Containers
Source Institute of Shipping Economics and Logistics ISL, Bremen, 1997. SHORT SEA SHIPPING AN ALTERNATIVE TO EUROPEAN INLAND TRANSPORT OR
A COMPLEMENTARY MODE
Report adopted by the ECMT Ministers of Transport at the Council of Ministers
Prague, 30-31 May 2000
37
This report was drafted at the request of the Combined Transport Group of the ECMT at its
meeting on 15 October 1998. Its purpose is to analyse the development of short sea shipping in Europe
in the light of the most recent initiatives taken, particularly at European Union level, so that the ECMT
will be able to adopt an innovative approach to the issues and formulate concrete proposals for
addressing them. The report follows on from previous documents, but is not intended to be an update of these
documents. On the contrary, it attempts to enlarge upon them in order to give the Group an overview
of the broad issues in short sea shipping in Europe with the aim of determining what the ECMT,
specifically, could usefully contribute to improving the utilisation of short sea shipping throughout
Europe from a policy-makers perspective. EXECUTIVE SUMMARY
Short sea shipping already accounts for a large share of intra-EU trade around 30 per cent in
volume terms, of which a significant portion more than 80 per cent in volume terms is bulk
commodities. For some years now, short sea shipping SSS has benefited from a number of
government initiatives aimed at promoting its development. In seeking to secure more intensive use of
this mode not only within the EU but throughout Europe, the aim has been to promote a more
balanced modal split in transport in Europe while also contributing to other objectives, such as
reducing the impact of transport on the environment, ensuring greater European cohesion and, lastly,
promoting a sustainable transport system in Europe. Short sea shipping has therefore aroused interest at policy level as an alternative to road transport,
the predominant mode in Europe. However, a review of overall transport policies in Europe shows that the current view of short sea
shipping as an alternative to road transport is probably too narrow to exploit the full potential of this
mode of transport as a means of achieving the objectives outlined above and does not take sufficient
account of the way in which transport market structures in Europe have developed. Firstly, as globalisation and the constant effort to improve production processes have increasingly
become features of economic development, transport operations become an integral part of the
management functions of firms. Consequently, transport networks have become the basis of a high-
value-added function logistics. 39
Secondly, opening access to transport markets encourages competition within and between modes
at the same time as giving users a wider choice of mode. Shippers expectations are now focusing on
the conditions of access to transport networks integrating the different modes, so that they can
optimise their logistics chains. While the traditional competition between modes continues, it is now
supplemented by relations based on mode complementarity. These trends present policy-makers with new challenges. Market regulation, the implementation
of competition rules, the need to adopt a co-ordinated approach to the different transport modes, and
the need to take into account policies in other sectors environmental and regional policy for instance
make co-ordination a key factor in the effectiveness of government policies.
Lastly, the rapid
development of markets requires that governments be able to forecast which regulatory trends are
most appropriate to ensure sustainable mobility. In this context, short sea shipping warrants being part
of an integrated strategy promoted throughout Europe. 40
INTRODUCTION
Short sea shipping review of main features, its importance,
advantages and obstacles to development
1. The main characteristics of short sea shipping in Europe
1.1 Lack of statistics
As a result of the abolition of customs frontiers between the Member States of the European
Union in 1993, and until new statistical resources become operational from 2000, figures on intra-EU
maritime transport are currently rather unreliable. It is estimated that maritime transport carries
approximately 30 per cent of intra-European freight. The very general pointers available to us1 do show, however, that short sea shipping now carries a
substantial share of intra-European freight flows, but the supposed trends do not suggest growth on a
scale that indicates that it has won market shares from other modes, particularly road. Nor do they
permit an analytical approach -- by type of freight or by shipment origin or end destination -- that
would be essential for a thorough understanding of the sector and for determining its potential in terms
of achieving a more balanced modal split in the organisation of transport throughout Europe. 1.2 What is short sea shipping? This report covers maritime transport between European ports. This includes
i
ii
iii
national coastal traffic between two ports in the same country
international traffic from one European port to another, and
the European leg of inter-ocean trades. We chose to use this broad definition because of the need to look at the potential role of short sea
shipping as an alternative to inland transport2. In this context, the issue of a modal shift from road to
sea concerns all types of transport regardless of the origin or end destination of cargoes whenever the
operation concerned includes a European leg. Short sea shipping comprises different types of carriage as follows
Tramping of dry goods or liquids in full bulk carriers, for a shipper or a limited number of
shippers. Tramping accounts for the major share 80 per cent of intra-Community maritime
transport by volume. 41
The carriage of general cargo, usually unitised containers by carriers which, in theory at
least, operate regular services for a large number of shippers liner services. A variety of
vessels are used multipurpose ships, containerships, roll-onroll-off vessels. In the discussion that follows, we take the view that the issues that have to be resolved at
pan-European level concern bulk commodities and general cargo transport equally. These are not hard
and fast categories and the long-term trend is towards containerisation of both general and bulk cargo. It is in fact possible to unitise some cargoes that have traditionally been shipped in bulk referred to as
neo-bulk cargoes, particularly dangerous goods. At European level, some modes of inland
transport well suited to bulk transport rail, inland waterway and are competing effectively with
maritime transport. Even road, which at first glance is not well suited to the transport of large cargoes,
is competing with maritime transport. History shows, for example, that national coastal traffic has lost
out to road and rail whenever HGVs and trains have been able to compete with seagoing vessels in
terms of both loading unit capacity and speed of carriage. Bulk freight is mainly carried by unimodal transport. With a view to a more balanced modal split,
it is hardly realistic to trust that there will be a shift from one mode to another.
In contrast, the
continuing containerisation of certain goods currently transported in bulk, and greater recourse to a
combination of non-road transport modes well suited to bulk traffic chiefly inland waterwaymaritime
transport could be viable solutions that address current policy concerns. 1.3 Main structural features of the short sea shipping market
The short sea shipping market is regarded as highly competitive. Two techniques are used
alongside each other traditional unimodal port-to-port transport, chiefly for bulk transport, and
multimodal transport comprising a maritime leg, for general cargo. General cargo traffic is generally
dependent on feeder or tonnage contracts with one or more shippers, in order to ensure sufficient
freight flows to enable more frequent round voyages. Non-contract transport or spot charters
supplement feeder and contract cargoes. The low returns on short sea shipping, due equally to
intra-modal competition and competition from inland transport, is partly offset by the fact that
multimodal techniques enable more efficient management of container fleets, facilitate repositioning
and, lastly, reduce voyages with empty containers. The majority of operators specialising in short sea shipping are niche carriers for whom
national coastal shipping has recently expanded to Community-wide and even Europe-wide traffic
intra-European international transport and who still have a traditional approach to their business,
although they are capable of offering a door-to-door service. However, this is a sector that is changing
radically. Many services have been set up over the last few years, but many have been short-lived. In
contrast, it should be noted that the most recent innovations have been where maritime carriers have
been able to offer inland carriers an alternative to road road trailer transport in the Mediterranean or
to integrate themselves into the logistics chains of shippers, going so far as to provide floating storage
on their vessels for the automobile industry and whisky exporters. In the Adriatic, the development
of links served by high-speed combination ro-ro ships has been going on for some years now. Lastly,
intra-European maritime traffic is increasingly being served by modern, high-performance
containerships. However, we would point out that ro-ro ships still only have a weak presence on the European
market. The economic explanation is the additional cost of ro-ro ships construction and operating
costs due to their inevitably lower load factor compared with containerships. Another explanation is
what we might term a cultural one setting up logistics operations of this kind necessitates
42
a radical rethink of the logistics solutions currently used by shippers
i major investments by ship owners
ii
iii equally radical changes in the behaviour of road hauliers and
iv
the introduction of new methods of working, based on complementarity rather than
competition between inland and maritime carriers. This said, from a technical standpoint, ro-ro ships have none of the problems with incompatible
unit loads that containerships experience.
Swap-bodies are the simplest way of linking inland and
maritime transport, albeit at the price of using three transport components the container, the chassis
and, lastly, the ship. 1.4 Looking ahead
In the future, it is reasonable to assume that the volume of maritime trade in Europe overall will
increase as a result of a combination of four factors. 1. Natural growth -- linked to GNP growth and stronger trade -- which will generate a further
escalation in intra-Community flows with the introduction of the Euro, as was the case with
the earlier phases of building the new Europe, and in extra-Community flows with
neighbouring CEECs and Mediterranean countries, which are already linked to the European
Union through association agreements Euro-Mediterranean partnership agreements. 2. Growth by constraint environmental, technical and social standards will prompt certain
shippers to integrate maritime transport or combined maritimeinland modes into their
logistics chains more closely than in the past. The transport of dangerous goods and of
products that are the most heavily penalised by current or future road only constraints, will
be the first to be affected by this trend. 3. Growth through efficiency developments in Community policies on infrastructure financing
and charging for transport services will result in fairer competition between the various
transport modes on a financial basis. We know that short sea shipping has been and still is
adversely affected by competition from the other modes, which are exempt from various
direct and indirect costs or are more heavily subsidised. Encouraging a level playing field for
all modes should therefore benefit the maritime industry. 4. Growth stemming from logistical improvements the development of nodal distribution and
the need to achieve economies of scale are factors conducive to short sea shipping. Feeder
transport has increased by more than 20 per cent per year over the past decade for these
reasons, and today it accounts for over half of the maritime container traffic in Europe. 2. Advantages of short sea shipping
Maritime transport has several competitive advantages over other transport modes. 2.1 Maritime transport and the environment
Taking all modes together, transport is responsible for 25 per cent of CO2 emissions worldwide. This 25 per cent breaks down as follows maritime transport, 7 per cent air transport, 12 per cent road
vehicles, 75 per cent other modes, 6 per cent. Transport is specifically targeted in the current
43
negotiations on environmental protection. Maritime transport, including short sea shipping, is
generally regarded as an environmentally friendly mode.
The best known indicators are those for
atmospheric pollution see annex 1. 2.2 An economic mode
The advantage of maritime transport is that it uses a no-cost infrastructure, the sea. Port
infrastructure requires smaller investment budgets than rail or road infrastructure. For instance, over
the period 1990 to 1995, gross investment expenditure by the 18 Western European countries of the
ECMT on inland infrastructure totalled an average of ECU 71 500 million per year at 1995 exchange
rates, as opposed to ECU 2 400 million on port infrastructure. Investment in this mode being less
substantial, maritime transport can adjust more easily to fluctuations in traffic. Maritime transport and
ports take up little unspoiled land.
It is also an energy-efficient mode see annex 1. 2.3 Maritime transport and regional economies
Europes physical and economic geography lends itself to maritime and waterwaymaritime
transport. The European Union alone has 67 000 kilometres of coastline and 25 000 kilometres of
navigable waterway. One advantage of maritime transport is that it is able to reach what are known as
peripheral regions that are impossible or difficult to reach by other modes. This is the case for
Ireland, Norway, regions on the Baltic Sea, the Black Sea and the Eastern Mediterranean. From this
standpoint, short sea shipping is the leading mode of transport for trade in goods between Eastern and
Western Europe and between the countries of the Mediterranean basin. 2.4 Maritime economy
Short sea shipping generates work for European shipyards. In 1995, the European Commission
estimated that 50 per cent of the ships built in the European Union were for short sea shipping. The
prospects of replacing this older fleet by one more suited to the needs of the market containerships,
ro-ro ships, self-unloading bulk carriers, and fast freighters can only increase this sectors
contribution to European shipbuilding. Shipbuilding is not the only activity related to maritime
transport to benefit from the expansion of short sea shipping. Short sea shipping is a major source of
employment accounting for almost 60 per cent of French sea-going jobs. Another factor to be taken
into account is its contribution to the turnover of the insurance, brokerage and freight forwarding
sectors, for example. Lastly, short sea shipping develops as a logistics business it will almost certainly
require highly specialised personnel. 3. Obstacles to the development of short sea shipping
Numerous studies on barriers to the development of short sea shipping have been carried out
since 1992. The major barriers identified are listed below. 44
3.1 Poor image
Short sea shipping is still regarded as a mode of transport that is
1. Complex to organise. Red tape and the complexity of through-carriage involving a maritime
leg due to overlapping contracts of carriage and liability regimes are often criticised. Public
health inspections, customs formalities and dangerous goods regulations are cited as
obstacles to the development of short sea shipping. Most of the time, maritime freight
transport is part of a multimodal, not a unimodal, operation. Successive modal transfers
entail additional risks and costs for shippers, consignees and forwarders. The problem of
modal transfers and their cost is a general one, shared by all alternatives to road transport as
soon as they form part of a multimodal chain. 2.
Technically not flexible enough and slow. In Europe, the vessels used for short sea shipping
are old about 20 years old and generally not purpose-built between 57 and 72 per cent of
the fleet used for short sea shipping are reported to be multi-purpose vessels3. The current
trend towards gradual replacement of the present fleet by faster, better designed and more
commercial vessels is likely to become more marked over the next few years combined
high-speed ro-ro ships, self-unloading bulk carriers, small containerships able to cater for
40 containers and better suited to inland transport loading units than 20 containers. Another
factor that contributes to inflexibility is the low penetration of maritime transport inland -- an
obstacle that inland waterwaymaritime transport could help to overcome. 3. Difficult to assess. The lack of statistics is an added handicap. The result is that potential
users have only a patchy picture of this mode of transport. The lack of transparency with
regard to existing or potential services, provided by regular lines or not, is often quoted by
shippers as a factor which puts them off using short sea shipping. The lack of statistical data
also makes it difficult, for governments to assess the efficiency of policies implemented and
hampers their ability to forecast market trends. 3.2 Costs and standard of port services a disincentive
Maritime transport professionals in the European Community estimate that stevedoring charges
plus port taxes account for over 50 per cent of the costs of short sea shipping in Europe on average. Here again, the statistics should be treated with caution. Comparisons between two ports can be
queried because charges are not sufficiently transparent and the structure of transit costs varies with
local practice, which inevitably leaves comparisons open to question. However, we would point out
that, on average, the deterrent nature of port transit costs is cited with regard to ports in Southern
Europe as much as to those of Northern Europe. The slowness that is still a feature of maritime transport can largely be put down to time spent in
port, as owners estimate that an average of 50 per cent of the turnaround time of a short sea vessel is
taken up by the approach to and stay in port. As well as time spent in port, another factor that affects
the competitiveness of short sea shipping is the time necessary for transit through the port area. In
addition to the efficiency of port handling and warehousing facilities, the issue here is the
improvement of transfer facilities, where necessary. Over and above the need to modernise gear on
general cargo ships self-unloading bulk carriers, it is the conditions under which some ports currently
provide interface services from the vessel to other modes of transport road, rail, inland waterway
which are regarded as one of the main obstacles to the development of short sea shipping 24h access,
organisation of warehousing and distributions areas, land access facilities. 45
3.3 Intermodal competition
One of the most frequent demands of maritime carriers is for the different modes to be allowed to
compete on equal terms. A demand that is generally formulated by the idea that all transport users
should pay for the infrastructure they use. The publication by the European Commission of a Green
Paper in 1996, then a White Paper on fair payment for infrastructure use, in 1998, has brought this
issue to the fore. 3.4 Pre- and post-shipment carriage
Lastly, the issue of land access to ports is regularly cited as a major obstacle to the development
of maritime transport. From a multimodal standpoint, it is essential that ports have adequate, efficient
links to land transport networks. The planning of land access infrastructure is vital for a ports
development. Infrastructure investment and user charging policies also play an important role in ensuring a
coherent European port network and in competition between ports. As well as the problems of road,
rail and inland waterway infrastructure and their connections to ports, the challenge that ports are now
facing is their competitive position compared to other land transfer terminals. As well as network connections, different standards for loading units for land and maritime
transport are also holding up the development of maritime transport. Sea containers are not really
suitable for European pallets and, when they are used, stuffing rates are low. Consequently, low
returns are a problem when sea containers are used on land routes. 46
PART I
Policy initiatives in recent years
The current organisation and operation of short sea shipping in Europe is the result of policies
implemented by the EU from both a pan-European and a Community perspective. Within the EU,
development has not been uniform.
This is because
i Community policies have flaws which affect the modes to different extents and
ii
the majority of these policies have been implemented by directives that leave a large degree
of discretion to Member States as to their introduction into domestic law. In non-EU Member States, development has been even more uneven. Iceland, Liechtenstein and
Norway are covered by the Community Regulations through the Agreement on the European
Economic Area. They are also used as benchmark in Switzerland and for policy and regulatory
development in the New Independent StatesCentral and Eastern European Countries NISCEECs.
However, these latter countries all have their own highly specific characteristics the common
denominator being their recent transition to a market economy which explains the necessary
adjustments to the free-market principles that are applied more or less strictly within the European
Union. A further complicating factor is that the current organisation and operation of short sea shipping
in Europe is the result of proposals specifically aimed at maritime transport and of others relating to
overall transport policy. Seen in this light, the promotion of short sea shipping is the result of policy
proposals for the sustainable economic development of the Community and of components of overall
transport policy, rather than of any commitment to develop a structural policy for maritime transport. 1. Policy initiatives for the development of short sea shipping
Many Community-level policy proposals on maritime transport, including short sea shipping,
have been announced by the European Commission, chiefly in a series of Communications and
Green Papers. At the risk of drawing attention to a certain discrepancy between the intentions and
the tangible results achieved, we have to say that the many recommendations contained in these
documents -- although by no means all of them resulted in regulatory reforms -- have helped to make
governments and transport professionals aware of the problems involved in making short sea shipping
more efficient. One of the most visible results of Community policy has been the measures supporting
research and innovation, to facilitate modernisation of the sector and its closer integration into the
European transport system, while co-operation programmes with neighbouring countries were initiated
to help ensure greater consistency of maritime transport and the port network throughout Europe. 1.1 The basis of Community policy on maritime transport
A first communication in 1985, Towards a common transport policy -- Maritime Transport,
expressed a commitment to liberalise the various modes of transport by promoting a policy of free
access to markets, announcing a package of four regulations which would be adopted by the Council
of Ministers Transport on 22 December 1986. A few years later 1989 the Commission presented a
more specific policy proposal in its Communication, A future for the Community shipping industry
COM89266. 47
With the completion of the Single Market, the aim was to develop an overall policy that would
contribute to sustainable mobility of goods and people, i.e. the introduction of a sustainable
transport system for future generations. The Commissions White Paper, The future development of
the common transport policy. A global approach to the construction of a Community framework for
sustainable mobility COM92494 of 2 December 1992 sought to achieve multiple objectives
environmental,
improved
interoperabilityinterconnection between transport networks. This gave birth to the idea of promoting a
shift from road mode to maritime mode in order to develop a more environmentally friendly transport
system and eliminate current and future bottlenecks on Europes roads.
social, and economic, a more balanced modal
spilt, and
On several occasions between 1991 and 1996, the European Commission outlined the
components of a sectoral policy for maritime transport. A 1991 Communication, New Challenges for
the Maritime Industries COM91335 resulted in the creation of the Maritime Industries Forum
MIF. The objective of this initiative was to provide a forum for the main players in the maritime
industry carriers, shippers, shipbuilders, etc., to discuss the sectors problems and identify ways in
which its efficiency could be improved. The MIFs short sea shipping panel drafted recommendations on initiatives to promote the
development of short sea shipping in Europe. The work of this panel may be regarded as having
substantially improved our knowledge of this sector and the obstacles hindering its development. The
Forums main problem was in implementing concrete initiatives. The short sea shipping panel solved
this problem by encouraging countries to hold round tables on ports, which bring together sector
professionals and are responsible for implementing commercial reforms and for setting up
promotion bureaux to foster greater co-operation between industry and government with a view to
setting up transport operations that integrate the maritime sector more closely. Lastly, more recently,
the Forum has recommended the institution of national Focal Points contact points who are
responsible for promoting the interests of short sea shipping at government level by providing
information and acting as co-ordinators. Based on the work of the MIF, the Commission published a Communication, The Development of
Short Sea Shipping in Europe Prospects and Development COM95317 in 1995. This
Communication lists obstacles hindering the development of short sea shipping and proposes an action
programme. It goes on to analyse eight corridors with the greatest potential for shifting traffic from
road mode to maritime transport. Two Communications from the Commission in 1996, Towards a New Maritime Strategy
COM9681 and Shaping Europes Maritime Future. A contribution to the Competitiveness of
Maritime Industries COM9684, are aimed at defining or redefining the guidelines for Community
maritime policy. Specific aspects, such as maritime safety and external relations, are covered in
separate communications or reports. Although these Communications do not deal specifically with
short sea shipping, they will nevertheless influence the sector, since they define the policy framework
in which it operates. Lastly, several EU Council resolutions express Member States backing for measures to promote
short sea shipping. For example, the Council Resolution of 11 March 1996 states that the main
objectives of short sea shipping policy are
48
to achieve balanced growth in this mode of transport and
positive and active integration of short sea shipping, including feeder services, into the
intermodal transport chain. It refers to Member States intention of promoting, in the interest of the users, free and fair
competition between modes of transport in which all modes bear their full costs, including external
costs ...
and ... fostering free and fair competition between Community ports and between shipping
lines.4
For a long time, the ports sector had been left on the sidelines of the new Europe. Certainly, even
before the completion of the Single Market and the obligations to liberalise the provision of services,
which followed on from it, the Commission and judicial bodies of the Community enforced the
general provisions of the Treaty of Rome regarding port dues, pilotage rates and conditions for
handling operations. Now, in addition to ensuring that the regulations governing ports comply with the
Treaty, port operations and competition between ports are now under the Commissions control in
accordance with articles 81 ex article 85 and 82 ex article 86 of the Treaty. The first building blocks of a Community port policy were seen in 1997 with the publication of
the Commissions Green Paper, Sea Ports and Maritime Infrastructure COM97678 Final of
10 December 1997. The Green Paper contains recommendations on
to
trans-European transport networks improving the role of ports as transfer points in the multimodal
transport chain short sea shipping, improving the role of ports in maritime safety and, environmental
protection. Lastly, the Commission recommends greater transparency in port charges. It advocates a
charging system based on the user-pays principle and the introduction of a regulatory framework
aiming at a more systematic liberalisation -- although this would proceed in phases -- of the port
services market in the main ports with international traffic. linking sea ports
1.2 Research and development aid
In order to promote maritime transport in general and short sea shipping in particular, the
European Union and the Member States recently allocated, and are continuing to allocate, substantial
amounts to fund research and development. Fifty-five projects were implemented under the
4th Framework Research and Development Framework FRDP -- 19941998. These are co-financing
measures totalling approximately ECU 45 million. Short sea shipping benefits from a special Joint
Action measure. Due to their sheer number, research and development initiatives pose co-ordination
and priority problems, which the Commission analysed in its Communication of 19 October 1994
COM94438 Final. On the basis of this analysis, the European Commission set up a Task Force on
Maritimes Systems of the Future to co-ordinate the initiatives of all of the Directorates-General likely
to undertake or co-finance projects directly or indirectly related to maritime transport. Lastly, short sea
shipping is also eligible for support under PACT5 and other programmes PHARE, TACIS and for
funding FEDER see Mr. Papadimitrious report. 1.3 The pan-European dimension of the policy to promote short sea shipping
Community transport policy instruments would not be very effective if they confined themselves
solely to Community level. The efficiency of the transport system is also dependent on the quality of
its natural extensions outside the Community, that is, to the whole of the continent of Europe and even
certain areas of the Mediterranean basin. 49
The gradual rapprochement between EU Member States and the CEECsNIS stems, first from the
latter countries shared desire to develop into market economies. This development was facilitated by
various Community association and partnership agreements by the initiation of a policy dialogue with
the Member countries of the OECD in general by granting some countries observer status with the
OECD and by paving the way for the accession of CEECs to the European Union. Today, all of the
CEECsNIS are Members of the ECMT and are therefore committed to promoting the implementation
of resolutions and other types of undertaking negotiated under the aegis of the ECMT, particularly
those relating to co-ordinating its Member countries policies. Some of the support programmes 4th FRDP, PACT, PHARE, TACIS include maritime projects
of interest to the CEECs. More recently, the European Commission and 10 states on the Baltic Sea
including Norway set up a Co-ordinating Committee to review the status of maritime transport and
ports in the region and define future avenues for co-operation in these sectors. Further south, under a
Euro-Mediterranean partnership agreement, numerous co-operative initiatives are under way with a
view to achieving better network integration, establishing an area in which goods and people can
circulate more freely and, lastly, facilitating increased trade in goods and movement of people in the
region. As regards the 11 candidates for accession to the EU including Bulgaria, Estonia, Hungary,
Latvia, Lithuania, Poland, Romania, Slovak Republic, Slovenia and the Czech Republic, the
Transport Infrastructure Need Assessment TINA programme was instituted in 1996 in order to
co-ordinate the development of an integrated transport network and to bring networks in these
countries into line with networks in EU countries. Under this initiative, 10 pan-European corridors
were defined in Eastern Europe. In addition, four pan-European transport areas were set up which
concern candidate and other countries equally Helsinki Conferences, June 1997. Community aid for
upgrading the networks of the countries concerned takes the form of co-financing for studies, rather
than aid for infrastructure programmes under PHARE or TACIS, or through the Instrument for
Structural Polices for Pre-Accession ISPA. In the regulatory field, NISCEECs are gradually bringing their regulations into line with
Community standards. The ECMT plays a major role in liasing between EU Member States and the
other countries of Europe in the regulatory and policy area. The United Nations Economic
Commission for Europe has a more technical research and advisory role.
2. Short sea shipping and overall transport policy
It is virtually impossible to analyse trends in one mode -- short sea shipping -- without taking into
account trends in other modes, if only because the modes are competing with each other. It is therefore
important to review the different aspects of overall transport policy and the impact that they have had
on the organisation and operation of European transport markets. These determine the environment in
which short sea shipping is operating today. Important aspects of Community transport policy cover
infrastructure planning, market access liberalisation which varies significantly from one mode and
one country to another, with marked differences between EU Member States and third countries and
the creation of a level playing field including on environment and safety matters, an undertaking that is
still far from complete. 2.1 Infrastructure planning
At Community level, a first three-year programme 19901992 adopted in November 1990
provided for financial support initiatives for projects in the interests of the Community. However, the
50
real launch of an infrastructure planning policy was based on the amendments that the Maastricht
Treaty added to Title XII articles 129B-129D of the Treaty establishing the European Community. The political impetus was given by the June 1993 meeting, in Copenhagen, of the European
Community Council transport, following which three outline plans for trans-European combined
transport, road and inland waterway networks were adopted. With the publication of the White Paper,
Growth, Competitiveness and Employment, in December 1993 the establishment of trans-European
networks, particularly in the transport sector, became official policy, with a view to completing the
internal market and opening the European Union to the countries of Eastern Europe. At the European
Councils in Corfu and Essen in 1994, 14 priority projects were selected.
At the time, capital
investment in these projects was estimated at around ECU 100 billion over the period 1995-2010
36 per cent on rail projects 11 per cent on road projects 40 per cent on combined transport projects
11.6 per cent on roadrail connections 1 per cent on airport projects. This network policy was
formalised in 1996 with the adoption of Community guidelines for the development of the
trans-European Network of 23 July 1996, OJ No. L228, 9 September 1996. Trans-European transport networks TEN-T are regarded as an effective means of achieving
economic and social cohesion throughout Europe. They rank high in co-operative programmes
between the European Union and the CEECs. Short sea shipping is not mentioned in the 1996 guidelines. However, it is concerned to some
extent, since TEN-T have determined the major transport corridors at both pan-European and
Community level.
As well as helping to shape land access to sea and inland ports in Europe,
Trans European transport networks are exerting a decisive influence on the relative competitive
positions gradually being established between the different modes of transport as market liberalisation
progresses. One of the challenges in reviewing these outline plans in 1999 will be to clarify and
strengthen the position of seaports, inland ports and intermodal terminals in the trans-European
transport network preamble to the Proposal for a European Parliament and Council Decision
amending Decision No. 169296EC. 2.2 Progress on liberalisation, but uneven across the different modes
At Community level, liberalisation was regarded as an end in itself, because freedom to provide
services, in other words, freedom of access to markets, was regarded as a means of achieving
economic efficiency. However, the impact of this mode-based liberalisation policy on competition has
substantially influenced the structure of transport in Europe.
In the CEECs, current market access
conditions are far from uniform and still a long way behind conditions in Western Europe, particularly
in the road and railways sectors. Maritime transport
In the maritime transport sector, liberalisation came into effect from 1987 Council Regulation
EEC No. 405586 applying the principle of freedom to provide services to maritime transport
between Member States and between Member States and third countries Council Regulation EEC
No. 357792 applying the principle of freedom to provide services to maritime transport within
Member States maritime cabotage. Except for national coastal shipping services to islands,
liberalisation has now been achieved. Apart from forcing freight rates down, due to stiffer competition and the increasing use of
open-registry vessels, liberalisation at Community level has not had any very marked impact on the
structures of short sea shipping and it would be imprudent to try to say which changes in the
51
current organisation of the European maritime markets are the result of liberalisation at European level
and which are the result of liberalisation of the maritime sector at world level, or of economic
globalisation. It is more important for our purposes to note that it is the major ocean carriers who have the
greatest influence on the structure of inland networks and transfer terminals in Europe. The trend
towards flow consolidation through concentration for example the merger of the container transport
business of English operator PO with the Netherlands operator Nedlloyd or through the formation
of strategic alliances, together with major owners tendency to control pre- and post-shipment inland
carriage have resulted in major legal battles on the application of Community competition law
Commission sanctions on inland rate fixing by shipping conferences6 and in the development of
inland hub and spoke networks. However, the majority of these logistics facilities are still closed,
i.e. depot networks are still private the depots set up on a trial basis by TACA shipowners in
Frankfurt, Lyon and Munich are a case in point. The main obstacles to the development of maritime transport are no longer at sea, but on land. Port services and transport ancillary services
The terms of access to port services, the rules governing the establishment of firms in other
countries or the operation of a business under free market conditions the right to provide services all
affect the efficiency of maritime transport and investment conditions in the maritime and port sector. We would point out that one of the Commissions priorities in its Green Paper Sea Ports and Maritime
Infrastructure was a more systematic liberalisation in the port services stevedoring, tugging, pilotage,
for instance. Road sector
At Community level, access to road transport markets was liberalised in two stages on 1 January
1993 for intra-Community international transport and on 1 July 1998 for cabotage. Except for the
eco-point system required for transit through Austria, market access is now subject only to
qualitative criteria good repute, financial fitness and professional competence of carriers not to
quantitative criteria quotas, permits. In the road transport sector, a strong trend towards concentration
-- through internal growth or through take over -- is noticeable, together with a rapid growth of
out-sourcing. This trend has been accentuated by the formation of a strategic alliance between
carriers from different European Union Member States7, whose aim is to provide integrated transport
solutions for shippers on a Europe-wide scale. Calling themselves transport architects, these road
transport firms have become providers of integrated world-wide logistics services, managing air and
maritime operations as well as road transport operations.
Lastly, they have focused their efforts on the
use of clean vehicles. Among ECMT Member countries road transport, other than national cabotage, is governed by
different regulations depending on the nature and size of shipments. Transport for hire or reward and
vehicles with a permissible maximum weight of over 6 tonnes or a payload of over 3.5 tonnes
require permits. Below these limits and unless specific reservations, there are no quantitative
restrictions on transport between ECMT Member countries. Cabotage, authorised within the European
Union, is still prohibited or subject to licence requirements in other ECMT Member countries. The
process of deregulation brought stiffer competition, a reduction in rates charged lower returns and
ageing vehicle fleets due to lack of investment. The process of privatising former public undertakings
combined with the trend towards setting up private companies led to the fragmentation of the market. 52
The risks of creating an oligopolistic market do not seem to have caused the concern that it did in
Western Europe. From the point of view of enterprise structure, the Easts problem seems to be the
existence of small, competitive firms alongside state enterprises, which are now obsolete. Rail sector
At the start of the 1990s, the railways were a special case in that they were mainly monopolies
heavily in debt from having to finance infrastructure for which they were virtually the sole users, and
had been sheltered from market forces. The 1990s were the period in which the sector was gradually
prepared for a free market environment. The preparation mainly consisted in
i
encouraging the emergence of railway service operators responsible for their own
commercial management and separate from rail infrastructure managers the means by which
this was done was left up to individual Member States, currently 10 of them have separated
operations from infrastructure management
ii promoting the modernisation of the sector through co-operation rather than competition,
although on this latter point only a few limited trials took place under the freight freeway
initiative. At Community level, Council Directive 91440EEC of 29 July 1991, grants access rights for
international rail traffic to railway undertakings and international groupings. In practice access is
restricted to certain types of undertakings under conditions that were defined later Council
Directive 9518EC and Council Directive 9519EC, which were to be transposed into national law by
June 1997. Pending a more ambitious liberalisation of the sector initiated recently by a series of
European Commission proposals for the amendment of Council Directive 91440EEC it is the 17 rail
freight freeways recommended by the Commission in its July 1996 White Paper COM96421 that
will start to step up competition on the rail market. The rail freight freeways are to be administered via
a one-stop shop OSS that will handle transport operations, allocate train paths, co-ordinate border
crossings, but will allow freedom in setting charges.
The success of rail freeways, to judge by the disappointing utilisation rate, is moderate. There
have been some experimental schemes, of which the most notable are
The Malmtrafickk consortium Swedish and Norwegian railway companies, which
transports ores in Sweden and Norway
European Rail Shuttle ERS, set up by shipping companies PO - Nedlloyd, the
Anglo-Dutch venture the American company, Sealand and the Danish company, Maersk
and German national railway companies, operating daily services between Rotterdam,
Hamburg and Milan. Until September 1998, NDX, set up by the American company CSX parent company of
Sealand, the American shipping company, German railways DB, Netherlands railways
NB, which operated several international routes within the EU between Rotterdam and
Munich, Antwerp and Barcelona and between Hamburg and Milan. In September 1998
almost all of NDXs operations were sold to one of the major European forwarders.
53
Other corridors that could be cited are
Muizen near Antwerp to Gioia Tauro southern Italy, via Lyon and Genoa
The extension from Lyon to Marseilles
The extension from Lyon to Barcelona, via Avignon
Glasgow, Liverpool, London, Dunkirk, Metz with a spur to Le Havre, Strasbourg,
Frankfurt, Würzburg, Wels, Linz, Vienna and Sopron Austro-Hungarian border. Subject to a more detailed analysis, it would seem that the low train path utilisation rate illustrates
the difficulty of making a return on multimodal transport chains in the framework of a freight freeway
as opposed to a network when there is not yet full open access to the railways and their managers are
still partially sheltered from market forces. The as yet only partial liberalisation of the railways is
holding up intermodal integration of the European networks and at the same time creating major
discrepancies in the competitive development of the transport modes. Of course, since 1996, the
phasing in of freeways and other initiatives by the railway industry like the setting up of dedicated
block train services for OOCL Orient Ocean Container Lines - an Hong Kong shipping company and
Chrysler from Antwerp to Graz have improved commercial flexibility. However these initiatives are
still limited to dedicated freight transport or freight freeways, which are the exception, while user
demand tends to be for more general needs, which would require flow higher volume flows along
corridors whose ability to meet market needs, probably warrants further evaluation. Completing open access to the railways in Europe is a lengthy process. At the Council held on
9 and 10 December 1999, a common Position was agreed upon opening up the trans-European rail
freight network by 2003. In the other countries of Europe, ECMT Resolutions 936 and 953 aim to extend the principles
behind Community Directives 91440EEC, 9518EC and 9519EC to its Member countries. The
objectives of the Directives are to ensure
i
ii
iii
the designation of an infrastructure manager
accounting separation for infrastructure management and transport operations and
that managers operate on a sound financial basis. Accounting separation which has now been implemented in 14 of the 15 Member States of the
EU has now been implemented in the majority of non-EU ECMT Member countries. Practical
measures for non-discriminatory access to infrastructure have still to be implemented. At present,
national monopolies are the only companies that have been granted access rights. Lastly, the freedom
to set charges is an objective to be achieved throughout the CEECs. Inland waterways
The inland waterways sector is very uneven. There has been open access to some waterways for
years. On the Rhine, for example, the principle of free navigation for bordering countries is stipulated
in the Mannheim Convention. Other waterways are also highly regulated and some of them have been
closed to competition for years. In the European Union, coastal shipping has been permitted since
1 January 1995 and Directive 9675EC provides the legal basis for liberalisation of the sector. Arrangements for the free negotiation of charter contracts and prices abolition of rotation systems are
to be phased in at national level by 1 January 2000, with transitional arrangements to be put into effect
in the run up to this deadline. In many non-EU countries of Europe, access to inland waterways is
restricted to vessels under national flags. This is the case in Russia, among other countries, where,
because of its vast network and its potential for inland and maritimeinland waterway transport, these
54
restrictions are a substantial obstacle to the integration of waterway transport into the trans-European
transport network. The share of inland waterways in pre- and post-shipment maritime transport varies substantially
from one port to another.
While it accounts for over 50 per cent in the port of Rotterdam, the
percentage is much
in French ports Le Havre 5 per cent, MarseilleFos 2 per cent,
Rouen 14 per cent. lower
Combined transport
The European Union has repeatedly stated the need to promote and support combined transport,
in particular as a competitive alternative to road transport, bearing in mind the aim of sustainable
development and the current situation regarding road safety and road congestion. This political will
lead, among others, to the adoption of Directive 92106EEC. Under this Directive, quota and
authorisation systems do not apply to certain types of combined transport. Tax exemptions may be
granted to road hauliers, as is the case in five EU Member States. Some non-EU countries -- the Czech
Republic, the Slovak Republic, Bulgaria, Romania and Switzerland -- grant similar tax concessions. The legal restrictions on weight may also be relaxed for road trains Germany, Austria, France,
Greece, Portugal, Spain, and United Kingdom. Combined transport still only accounts for 5 per cent of intra-Community international road
traffic in tonne-kilometres. In contrast, it accounts for 23 per cent of cross-frontier rail traffic in the
EU roadrail transport is moreover the only source of rail freight growth in the EU, but only half of
this is intra-Community traffic. The other half is inter-ocean trade sea containers. The implementation
of this Directive has been hampered by the commercial and technical limitations inherent in rail
transport, while the liberalisation of inland road cabotage as of 1 July 1998 renders this exemption
policy less effective. This explains the objective of the current process of amending the 1992
Directive, which is to make greater use of combined transport as a means of encouraging a shift in
freight transport from road to other modes. With regard to intra-community freight transport,
intermodal transport will in any case be limited since economists estimate that 85 per cent of the goods
produced and bought in the European Union are transported a distance of less than 150 km8 -- at that
distance road only is still more competitive than other modes including combined transport. Combined transport benefits from the active support of governments, and of the European
Commission in particular. The Pact programme, set up in 1992, aims to promote combined transport
services in order to make them more competitive with road only modes. It provides for the co-
financing of feasibility studies up to 50 per cent or the costs of actions of an innovative nature
30 per cent. The programme was recently extended for five years 19972001. Over the period
19971998, PACT provided financial support for 46 combined transport projects. Ten of them were
more or less, maritime transport projects. According to specialists in this mode, the returns are eroded
by the poor performance of the rail leg high costs, lack of commercial flexibility. While the railways are making progress with restructuring and improving their productivity gains
and responsiveness to clients development of shuttles, freight terminals, the completion of the open
market in rail services seems, in the light of our-admittedly limited-experience to date, the key to the
development of combined transport in Europe. 55
2.3 Patchy harmonisation delays in transport market regulations
With the parallel moves towards liberalisation and the provision of interconnected infrastructure,
co-ordinated action to establish a level playing field for market actors as regards network operation
was put on the back burner for a while, although it had first begun years earlier9. The fact that the
regulations in the various European Union Member States -- and in the other countries of Europe -- all
differ may have had unwanted effects on competition. This raises the question of the need for
harmonisation of the social, technical and fiscal regulations within each mode. Harmonisation is
critical for establishing
i
ii
the reliability of the transport mode concerned and the rules for fair competition between its
operators and
a level playing field for the different modes. Harmonisation and the effective implementation of the rules, together with competition law, are
the basic instruments available to the different countries for defining the rules of the game for
operators within a single mode and for competing modes. In the maritime sector, many operators claim that they have fallen foul of operating rules which
put them at a disadvantage to their open registry competitors. An analysis of the costs wages and
social security contributions of seamen vessel and maritime company taxes show differences which
the industry sees as distorting competition. In the maritime industry, the possibility of relocating
companies and the means of production very easily creates a climate of competition between
countries. The majority responds by setting up systems targeted towards attraction of foreign maritime
investments.
The widespread trend towards flat-rate company taxes tonnage tax10 that we have
witnessed over the last 10 years is one example. In areas relating to maritime safety, both from the
technical and social angle, Community regulations provide for the harmonisation of transport
conditions. However, wider harmonisation was an issue that brought countries into a long-running
conflict and was ultimately rejected, as demonstrated by the dropping of the EUROS project11. The situation in the road transport sector is similar. Within the European Union standards are
brought into line through Directives that leave the Member States some discretion as to the ways and
means of implementing the principles agreed at Community level. A classic example of the difficulty
of harmonising technical standards is vehicle weights and dimensions that may give an economic
advantage to ports located in countries where the standards are less stringent, because larger sized
lorries are allowed to serve their hinterland. In most Central and Eastern European Countries the
abrupt liberalisation of the road transport sector prompted governments to introduce restrictions
largely based on those implemented at Community level. Some of them are considering restoring
quantitative control measures. A number of multilateral conventions ADR on the carriage of
dangerous goods AETR on driving time CMR on the international carriage of goods by road, TIR on
customs transit have helped to harmonise international transport conditions in Europe, even if some
ECMT Member countries have not yet ratified all of these conventions. However, intra-European
traffic is still penalised by numerous obstacles and discrepancies. The main problems, other than the
lack of harmonisation, are poor control of social standards and customs frauds. In Europe, the regulations on inland waterway transport differ substantially from one country to
the next. The lack of harmonisation at regional level is frequently pointed out. The experts generally
agree that a compromise between the Mannheim Agreement and the system currently applicable to
other networks, such as the Danube, is a priority objective. Incompatible ship dimensions and
administrative red tape particularly customs make a multilateral approach to the organisation of
Europes inland waterways essential if they are to be integrated efficiently into European transport
networks. The development of inland waterway and inland waterwaymaritime transport is also
56
dependent on numerous other factors, particularly the upgrading of national networks the
modernisation of fleets and the industry better transhipment conditions, inasmuch as ships carrying
out inland waterwaymaritime transport operations claim that the conditions applied to them when
they enter port areas are a disincentive application of maritime handling regulations, transit and push
towing dues, etc.. While progress has been made on social and technical harmonisation, it is on taxation -- a field in
which Community regulations are subject to a unanimous vote -- that the least progress has been
made. In 1996, the Commission presented proposals for internalising costs through infrastructure
charging. A White Paper published in July 1997 proposes to establish a framework in order to ensure
that infrastructure charges are transparent and that they integrate the environmental and social costs
they generate. Charging policies that integrate social costs are notoriously complicated. In practice, the
methods of internalising costs raise policy trade-off problems. Solving them is a difficult task that be
further compounded by the fact that, under the subsidiarity principle, Member States will be
responsible for the practical implementation of the method outlined in the framework established at
Community level, according to the Commission.
This is a field where the gap that separates progress
on policy proposals in Western Europe and the CEECs is at its widest. Lastly, competition law, as a policy instrument for regulating market operation, is likely to
become increasingly important. Already a fact of life in maritime transport, it is still in its infancy in
the other modes. In the road sector, the recent trend towards an oligopolistic market is liable to prompt
the enforcement of competition regulations. The same thing is likely to happen in the rail transport
sector, for the same reason, as a result of its gradual entry into a market economy. 57
PART II
Main characteristics of the transport system in Europe
and its implications for future government policy
1. Main characteristics of the structure of logistics in Europe from the standpoint of ports and
maritime transport
While government policies in Europe were concentrating on three principles infrastructure
improvements free access to market creation of a level playing field, including environment and
safety matters, the transport system in Europe was changing radically. Over and above the
developments reviewed in Part I, it has frequently become apparent that the role of actors in the
European transport market has changed from straightforward haulage operations to the provision of
logistics services. This has had major implications for the analysis of opportunities for short sea shipping and the
part that it can play in an efficient, safe and sustainable European transport system. 1.1 From transport to logistics
Firms desire to be in control of their freight flows, the globalisation of trade and, lastly, moves
towards the liberalisation of transport in Europe have radically altered the operational role of the
players in the transport chain manufacturers, carriers, forwarders and ports. While the traditional role
of transport was to deliver goods to the right place at the right time, logistics aims to do more. Logistics is part of the management function of a firm increasing productivity reducing costs
customising services standardising products just-in-time inventory management in that it controls
internal and external flows in an environment in which industrial activities are dispersed
decentralisation site specialisation. As a horizontal function, logistics is involved at all the various
stages of the production and selling of goods procurement, manufacturing, intra-company transfers,
product distribution, after-sales support, inventory management. It relies on managing information
and communications flows. It is a determining factor in the competitiveness and the competitive
advantage or disadvantage of firms competing on the market.
It is a source of value-added for the
industry. 1.2 How transport and logistics are inter-related
The transport function is now just one of a range of logistics services in which transport
operators compete to win shares of the market not just by transporting larger volumes of goods, as
before, but by becoming actively involved in the logistics strategies of firms. In this way transport
operators are becoming providers of a complex, wide-ranging service, for whom the earnings from the
transport operation itself matter less than what they can gain in value-added at each stage of the
logistics chain. In another sense, the development of logistics functions has radically transformed the key
concepts of transport, as they are traditionally understood. The concept of a port hinterland is now
losing any relevance it may have had, since distance is a relative concept that is factored into the
logistics chain on the same basis as other criteria, such as density of the area served higher volume
58
flows or facilitating transit and transhipment operations geographical location and efficiency of
transfer points. In this context, logistics operators would ideally be totally free to choose the mode of
transport and in most cases, the combination of modes they could use with no extra technical or legal
constraints -- on either infrastructure or its use -- to limit their transport choices. That being the case, it
is to be hoped that road transports share would be limited to traffic that absolutely had to use that
mode, and that modes more concerned with environmental protection would experience faster growth. 1.3 The emergence of a new profession
In the maritime transport sector, the globalisation of services, the emergence of world-wide
ship-owners co-operating through strategic alliances, the increase in the size of containerships and the
concentration of flows through a limited number of port hubs are the outcome, as in the road transport
sector, of both efforts within the sector to achieve economies of scale and efforts by industry outside
the sector to take at least partial control of the logistics function. The concentration of flows and of
maritime transport operators has contributed to congestion problems on the approach to ports that we
are trying to prevent to today -- paradoxically enough by counting on the development of maritime
transport. In the road transport sector the parallel trends towards flow concentration and the creation of
strategic alliances is not unlike the structural developments seen in inter-ocean trades in the maritime
sector and for the same reasons to be able to offer shippers integrated services on world-wide
networks. In the rail sector, co-operation -- an underlying principle of Community policy since the
beginning of the 1990s -- has resulted in the emergence, albeit at a slower pace and in less radical
forms, of companies or groups with the same objectives as in other sectors. The delayed
implementation of liberalisation in the sector suggests that rail transports breakthrough into
logistics is yet to come. Even inland waterway transport, with its reputation -- often mistaken -- for being behind the
times, has joined the trend. It is able to provide logistics solutions for problems in handling heavy bulk
freight, as demonstrated by its services to the largest terminal in Europe rebuilding of the Potsdamer
Platz in Berlin.
It is now becoming capable of providing logistics for containerised flows. For
example, the most modern containerships, with the right clearances for the Rhine, have a carrying
capacity of over 270 TEU, i.e. equivalent to more than five trains or a road convoy over 3.5 km long. This potential can be fully utilised only by facilitating interconnections with other transport modes,
particularly with maritime transport and by actually implementing free access to inland waterways. Heavy investment will be required for modernisation, in order to bring Europes inland waterway
networks up to standard and ensure their interoperability. With the prospect of a high value-added
logistics chain in mind, this now seems possible.
From this standpoint, inland waterwaymaritime transport is particularly interesting technique as
regards achieving the overall objectives of a more balanced modal split and environmental protection,
because it limits the negative effects of transhipment and enables freight to be carried further into
Europe. Similarly, ports now serve as more than just transfer, warehousing or brokerage centres. They are
developing into freight distribution hubs and so is becoming an integral part of the actual organisation
of firms logistics functions. Ports are taking on an active role in the development of inland logistics
chains, either through their active involvement in the definition of freight corridors or through their
part in determining the geographical location of logistics hubs. More than their connections to
59
transport corridors, once again, it is whether or not a port is integrated into transport and logistics
networks that determines how it performs. The development of dry ports illustrates this point. The breadth of these developments is reflected in the tendency for logistics service providers to
come from any transport background the transport architect may be a function developed by a firm
from the inland transport sector like the E1 road transport group, the railmaritime sector ERS, the
inland waterway sector, or by a partnership of firms from any of these backgrounds. This trend has
enabled transport intermediaries cargo intermediaries, forwarders to take a lead role in the
organisation of logistics chains. For many years, transport actors and users, freed from the constraints
of operating dedicated services, experienced in weighing up alternative modes, they are also at the
centre of the process of flow concentration for example, the take-over of NDX by Transfracht and
appear to be the key professions in decisions on modal and intermodal choice. Therefore, today, the
backing of these professionals for European transport policy would seem to be crucial for its success. 2. New challenges for governments
2.1 Financing and use of infrastructure
While the development of efficient, interconnected and interoperable infrastructure is essential,
changes in the industry mean that these are now no more than a pre-condition for the efficient
operation of logistics services. For example, all of principals on which policy proposals to promote
short sea shipping are largely based -- a better balance between modes, alleviating congestion on
inland routes, greater environmental awareness -- are issues that require governments to look closely
at the ways in which the operation and utilisation of transport networks can help them to achieve the
common interest objectives in the transport sector. The effectiveness of government policies now
depends just as much on the intrinsic quality of the infrastructure networks planned as on the
efficiency of the logistics operations served by those networks.
Faced with the development of a logistics-based economy, what should the proportion of public
finance to private finance be for logistics terminals infrastructure? This is a question that the European
Commission is currently looking into as it revises the Guidelines for the development of the
trans-European transport network Decision No. 169296EC. 2.2 Optimising logistics operations
For governments, giving firms a wider range of logistics choices means making the integration of
the different transport modes and their interconnection or transhipment points including sea ports, dry
ports, inland terminals their objective. A systematic implementation of open non-discriminatory
access to infrastructure, together with harmonisation in technical, environmental, social and fiscal
matters, should therefore be considered priority objectives. Other than the administrative streamlining
aspects, the organisation of the different modes should be viewed in terms of complementarity and
integration -- for the sake of the efficiency of logistics chains -- and not simply in terms of modes
competing against each other. From this perspective, the positions of the most environmentally
friendly modes are further strengthened. Lastly, recent transport developments in Europe show the limited impact of a modal shift policy. Even if the objectives of liberalisation and efficient market control have been achieved, the merits of
the corridor approach chosen which, true, accommodated the specific circumstances of the railways
should be compared with a hub and spoke arrangement. In addition, the question of how far the
60
compulsory aspects of transport policy should be increased arises limiting road transport to certain
areas or certain types of traffic, for example. 2.3 Policy co-ordination
Existing policies are coming up against a number of paradoxes, which will require a major co-
ordination drive by governments, in the years to come. For instance, rail freight freeways are a
response to the trend towards higher volume flows, but seem to be handicapped in precisely this area
by their operators inability to consolidate flows. At the same time, the way they are designed directly
benefit certain ports, increasing the risk that some ports will become congested. How can we prevent a
maritime transport support policy from just shifting congestion to another location? Likewise, how do
we tell in advance that facilitating border formalities -- a problem which, in a way, can be said to be to
the advantage of maritime transport -- will not lead to increased use of road transport in the future? Finally, how to reconcile the need for competition between transport modes with complementarity,
which is equally necessary?
These are the issues, and there are others too, which make government
policy choices so difficult. CONCLUSION
Short sea shipping must now be regarded not simply as an alternative to road transport, but also,
in the context of modal complementarity, as a separate component in its own right of an integrated
transport network aimed at optimising the efficiency of logistics. The ECMT has already led numerous initiatives promoting an integrated Europe-wide transport
policy. Without listing in detail the many Resolutions it has adopted on sectoral issues here, the main
policy principles for transport in Europe recommended by the ECMT are contained in the Joint
Statement by the Ministers of Transport of the ECMT, issued in Berlin in 1997. 61
NOTES
1. See Annex I. 2 . This definition is not consistent with the one currently used by ECMT and EU, as explained in Annex II,
but has been kept for the coherence of the report itself. 3. 4. 5. 6. 7. 8. 9. See CEMTCSCOMB973. A progress report following the Council Resolution of 11 March 1996 on short sea shipping has been
edited under reference COM99317Final dated 29 June 1999. Pilot Actions on Combined Transport. See Commission Decision of 16 September 1998 regarding the TACA. This strategic alliance, called E1 comprises Dan Transport Holding Denmark, Dubois France, Saima
Avandero Italy and Royal Nedlloyd Netherlands.
Figure quoted in Containerisation International, August 1997, page 68. In the social field, for example, the first Community regulation on working time in road transport dates
back to 1969. 10. With such a system, ordinary tax law is not applied to shipowning activities and companies are liable to
fleet rate income taxation, generally based on the tonnage of the fleet they control. 11. This was a project to set up a Community register alongside national registers and was to serve as a vehicle
for standardising operating conditions on Community vessels. 62
ANNEX I STATISTICS
Table 1. Intra-EU trade by mode of transport and commodity group, 1995
In million tonnes
Commodity group
Sea
Rail
Road
Inland
waterway
Others
Total
1995
Total
1994
32.3
7.3
30.1
31.3
271.4
29.9
25.2
16.9
2.4
94.9
13.4
17.5
IMPORT
Agricultural produce and live
animals
Foodstuffs and animal food
Solid mineral fuels
Petroleum products
Ores and metal wastes
Metal products
Crude and manufactured
minerals, building materials
Fertilisers
Chemicals
Machinery, transport equipment,
manufactured articles and
miscellaneous articles
TOTAL
Percentage share of total all
modes
EXPORT
Agricultural produce and live
animals
Foodstuffs and animal food
Solid mineral fuels
Petroleum products
Ores and metal wastes
Metal products
Crude and manufactured
minerals, building materials
Fertilisers
Chemicals
Machinery, transport equipment,
manufactured articles and
miscellaneous articles
TOTAL
Percentage share of total all
modes
Source ISL Bremen, Eurostat, October 1997. 23.5
15.5
2.5
102.2
9.4
18.5
34.6
277.1
30.5
36.5
6.6
27.8
0.0
8.3
0.1
42.6
0.1
0.0
1.4
0.0
1.7
25.9
80.2
8.8
0.1
8.4
0.0
53.6
0.0
0.0
1.4
0.0
2.0
13.7
79.3
8.7
86.2
84.7
11.6
179.4
61.9
73.2
133.6
20.7
106.4
150.4
908.1
100.0
82.7
88.4
12.7
199.0
47.7
74.1
135.7
19.1
96.7
151.3
907.3
100.0
66.0
75.7
15.0
162.4
51.7
55.7
177.1
18.2
87.0
103.4
752.2
63.8
77.8
12.4
183.2
36.7
61.7
121.6
17.0
78.7
118.0
770.9
47.9
52.2
4.5
10.3
12.3
37.9
52.8
7.3
62.3
6.0
5.2
3.1
29.3
30.6
2.7
42.1
4.6
7.1
87.3
375.0
41.3
0.2
130.9
14.4
46.2
55.9
4.0
8.8
13.1
34.7
56.6
6.3
54.9
7.4
5.8
4.3
32.2
8.9
4.7
36.4
4.8
7.5
91.7
372.1
41.0
3.5
155.5
12.7
7.0
2.1
1.6
2.2
5.4
15.0
4.9
1.5
5.3
5.6
50.6
5.6
5.5
2.8
1.9
2.1
16.3
16.2
4.8
1.4
4.5
7.8
63.3
7.0
63
Based on statistics provided by the European Commission and for EU countries only, short sea
shipping rose by 17 per cent in volume and by 23 per cent in tonne-kilometres between 1990 and
1997. The respective shares of container short sea shipping and Ro-Ro transport are equivalent in
national traffic respectively 43 and 42 per cent in tonne-kilometres. In international traffic, short sea
shipping SSS has a predominant share 69 per cent. After modest growth of 4 per cent between
1990 and 1993, SSS developed more rapidly from 1993 to 1997 up 18 per cent. Only 6 per cent of
aggregate intra-Community trade tonnage national and international are sent via short sea shipping,
whereas 84 per cent of this trade is carried by road. With regard to extra-Community trade tonnage,
the respective shares of these two modes are 33 and 45 per cent. A number of additional figures underscore for instance the extent of short sea shipping in French
ports
1997 20 million tonnes, or 6 per cent of aggregate tonnage
Estimated roughly at several billion tonne-kilometres in equivalent land transport in
maritime freight, 10 billion tonne-kilometres, half of which in bulk liquids, essentially
petroleum products
1995 Over 115 million tonnes in trade with other European Union countries, including
42 million tonnes in oil traffic and more than 35 million tonnes in cross-Channel road traffic. These figures, when compared with data for other modes of transport 20 million tonnes in trade
between France and other European Union countries via rail and 130 million tonnes by road show
that short sea shipping is far from insignificant. Table 2. Air Emission Factor ranges for Truck, Rail and Marine, in gtonne-km
Pollutant
CO
CO2
HC
NOX
SO2
Particulates
Truck
0.5
98
0.2
1
0.03
0.08
Trains
0.2
28
0.1
0.5
0.04
0.03
Marine
0.04
15
0.01
0.3
0.3
0.006
Source Eurostat Trends Project. Tableau 3.
Energy consumption by mode of freight transport
In kJtonne-km
Inland waterway
423
Road
2 890
Rail
677
Air
15 839
Pipeline
168
Source Whitelegg, Transport for sustainable Future the case for Europe, 1993, quoted by the
Commission in COM95317 Final, Short sea shipping challenges and prospects, 5 July 1995. 64
ANNEX II
DEFINITIONS
Intermodal transport
The movement of goods in one and the same loading unit or vehicle which uses successively
several modes of transport without handling of the goods themselves in changing modes. Source ECMT. Combined transport
Intermodal transport where the major part of the European journey is by rail, inland waterway or
sea and any initial andor final legs carried out by road are as short as possible. Source ECMT. The transport of goods between Member States where the lorry, trailer, semi-trailer, with or
without tractor unit, swap body or container of 20 feet or more, use the road on the initial or final leg
of the journey, and on the other leg, rail or inland waterway or maritime services where this section
exceeds 100 km as the crow files, and make the initial or final road transport leg of the journey
between the point where the goods are loaded and the nearest suitable rail loading station for
the initial leg and between the nearest suitable rail unloading station and the point where the
goods are unloaded for the final leg, or
within a radius not exceeding 150 km as the crow flies from the inland waterway port or
seaport of loading or unloading. Source Council Directive 92106EEC. Short sea shipping
Maritime transport between ports in mainland Europe, including
i
ii
iii
national coastal shipping, between two ports of the same country
intra-European international shipping whose ports of origin and destination are European
ports and
the European leg of inter-ocean trades. Source Confavreux, Report CEMTCSCOMB991. 65
RECOMMENDATIONS ADOPTED BY THE ECMT MINISTERS OF TRANSPORT
DURING THE COUNCIL OF MINISTERS HELD IN PRAGUE
ON 30 AND 31 MAY 2000
67
The conclusion to emerge from the report on Short sea shipping an alternative to European inland
transport, or a complementary mode? CEMTCM20009, which deals exclusively with freight
transport, is that short sea shipping SSS, must now be regarded not simply as an alternative to road
transport, but also, in the context of modal complementarity, as a separate component in its own right of an
integrated transport network aimed at optimising the efficiency of logistics. It is important to acknowledge
in this respect the global character of the shipping industry as a whole. Although statistics are lacking, it is
generally estimated that 30 per cent of intra-European freight is carried by maritime transport and a major
part of this by short sea shipping. Short sea shipping is particularly relevant to countries with a coastline on
the enclosed seas bordering Europe in particular, the Baltic Sea, the Black Sea, or indeed the
Mediterranean Sea and is expected to expand with the increasing globalisation of trade. Certain of the main features of short sea shipping reviewed in the report prompt a number of
conclusions, in some cases inescapable, as regards short sea shipping in its own right and as part of the
transport chain, more particularly the combined transport chain. The present summary focuses however
solely on the role that short sea shipping could play in combined transport. 1. Promoting short sea shipping
By integrating short sea shipping with combined transport, the aim is to include maritime shipping as
a type of transport in multimodal traffic flows. It will thus be possible for the combined transport sector to
achieve the modal shift from road to alternative environmentally-friendly transport modes in this case,
the waterborne transport chain - on a wider scale. Ports as interfaces - are particularly important for the integration of short sea shipping with
combined transport modes. For combined transport, ports are major transhipment points at which road, rail
and river and sea traffic converge. As such they, and particularly the port transfer terminals they require,
should be included in appropriate combined transport promotion programmes, responding to the criteria set
up in paragraph 6 below, just as inland transfer terminals are. This is a role that could be played by the
short sea shipping information bureaux that have already been set up in some European ports. Land and river access is increasingly a key factor in the competitiveness of seaports. If short sea
shipping is to be integrated with combined transport, it is vital that rail and river infrastructure links and
where necessary for access to ports, road infrastructure links, be improved. 2. Harmonising terms of competition and progressive market liberalisation
While free and non-discriminatory access to Europes transport markets is vital for the efficient
operation of transport networks and logistics services, market liberalisation will not be enough to ensure
sustainable mobility, without incentive measures. The first step is to establish a level playing field as soon
as possible, particularly as regards social, environmental, technical and fiscal conditions. Given the high
costs of transport infrastructure, particularly for rail and inland waterway modes, the longer term would
require a more sustained effort to internalise external costs. Since neither a level playing field nor free
market access has been achieved at this stage, government policy to develop combined transport in Europe,
including short sea shipping, needs to be strengthened. As market regulators, governments have to ensure that markets are fair. The problem of fair
competition can be approached in a number of ways, depending on whether the focus is competition
between modes or competition within modes. In both cases, another issue that arises is the harmonisation
of the terms of competition in the transport sector and its regulation.
69
3. Infrastructure investment
As regards infrastructure investment planning, the challenge now is to integrate ports more closely
into the TEN-T, taking into account their transhipment function nodes. The European Commissions
Communication of 29 June 1999, The Development of Short Sea Shipping in Europe, Second Two Yearly
Progress Report COM99317, deals with the practical and operational functioning of the infrastructures
and superstructures in ports. This Communication therefore makes for a better understanding of the role of
governments in infrastructure planning and the respective role of public and private sector operators in
financing infrastructure for both seaports and the inland terminals linked to them. To this end, the
conditions for private investment in port areas -- in handling operations, for example -- could usefully be
reviewed, without ruling out the possibility of extending the scope of private activity.
4. Optimising logistics chains developing interoperability between modes and networks
With reference to the development of interconnected and interoperable transport networks and the part
that they can play in optimising logistics chains and, more generally, with reference to facilitating intra-
European freight flows, central government should ensure that the efficient utilisation of the networks is
not hampered by inappropriate regulatory, administrative or technical standards. For instance, the problems
posed by customs transit and other administrative formalities e.g. public health formalities and the
incompatibility of loading units are often mentioned as major obstacles to the development of maritime
transport and its integration into transport networks. From this standpoint, the development of inland waterway transport in general and inland
waterwaymaritime transport in particular as an integral part of inland port development policy, will
necessitate
the use of sea-going vessels with suitable characteristics, draught and overhead clearances for this
type of navigation
technical modifications and open access to inland waterways. Moreover, in order to ensure the interoperability of the different modes of transport, close attention
should be paid to the compatibility of loading units, the priority considerations being compatible internal
and palette dimensions, overall dimensions compatible with all modes, and reliability and safety,
particularly where maritime transport is concerned. It should be noted that the dimensions of ISO1
containers are not compatible with Europallet sizes, thus making automated loading operations impossible. As ports are vital interconnection points the key elements needed to encourage greater use of short sea
shipping in Europe can be defined as follows
improved port services, to reduce ships costs and transit times in ports
better integration of ports into modal infrastructure networks and connection to intermodal
terminals, and
streamlined administrative formalities for ships and cargoes passing through ports. Furthermore, integrating short sea shipping services into an efficient information system EDI
compatible with the methods used by government administrations customs, for example and by other
transport operators, would seem to be essential for the efficient operation of an integrated logistics chain. Despite the improvements foreshadowed, the development of logistics chains which include a short
sea shipping leg is encountering major problems first, except in certain specific regions of Europe, i.e. the
Baltic Sea, logistics trends over the last 10 years seem to be running counter to this type of chain second,
70
for short sea shipping to be more cost-effective than inland modes, freight origin and destination points
have to be relatively close to ports. 5. Improving legal rules for inland waterwaymaritime transport and adapting
administrative structures
Another disadvantage of maritime transport that is often mentioned is its lack of flexibility, compared
with road transport mainly because it does not penetrate very far inland in Europe. In this connection, the
first priorities should be to ensure permanent free access to inland waterways and to abolish the unfair
conditions that seaports still apply to vessels operating inland waterwaymaritime transport services. Given the extensive inland waterway networks in Central and Eastern Europe, short sea shipping and
inland waterway transport throughout Europe could become a much more attractive option if they could be
integrated and use inland waterways without hindrance. While it is generally agreed that the role of governments is primarily to facilitate the integration of the
transport modes, often they are handicapped by the fact that their functions are organised on a modal basis. Efforts to reorganise administrative structures should focus on improving the documents required in ports
and on port procedures, including customs and phytosanitary procedures. One of the achievements of the
Maritime Industries Forum was to have encouraged the appointment within national administrations of a
contact point for short sea shipping. Given the pan-European dimension of short sea shipping, other
European countries could also usefully designate contact points. 6. Support for the modernisation of the sector
Although some short sea shipping traffic is state of the art, modernising the sector in order to integrate
it into the European transport and logistics system will entail major investment -- and major financial risks
-- particularly to modernise fleets and improve port productivity. Given the scale and number of research
and development initiatives directly or indirectly related to the short sea shipping sector, the transparency
and co-ordination of innovation support measures should be considered essential for the furtherance of the
objectives cited in paragraph 1. Under certain conditions, policy-makers may consider it appropriate to contribute to the investment
costs of combined transport development projects which include an short sea shipping component, in
which case they would wish to ensure that projects do actually promote a switch from road to sea transport. They would also have to ascertain that a number of other conditions are met, such as
Additionality any government contribution should be to finance additional development and
should not simply be a substitute for private sector investment that would have been forthcoming
in any case. Competitiveness the project would have to do more than simply absorb traffic from other short
sea shipping movements or other environmentally-friendly transport modes. Viability the project would have to be financially viable itself in the long term, without further
government support. Minimum intervention government funding should be limited to the minimum necessary for the
project to continue.
This ensures that public funds are used efficiently and that financial resources
will be available for other projects. 71
Moreover, transport seems to be one area that shows how our societies are developing towards
economies based on the flow of information and on new skills. The development of logistics services calls
for such new skills. In order to establish a favourable climate for maritime transport and integrate it more
closely into logistics chains, support should be provided for initiatives to train personnel who need to
develop their logistics skills and to familiarise them with current best practice. At present, training
initiatives are essentially the province of maritime sector co-ordination bodies. They could be particularly
useful for the countries of Central and Eastern Europe and the New Independent States, inasmuch as
improving skills is a key factor in achieving the balanced development of transport and logistics systems
and practices on a Europe-wide scale.
7. Co-ordinating transport policy
Given the geographical coverage of its Member countries, the ECMT could play an important role in
developing a coherent, co-ordinated transport policy throughout Europe that still leaves some scope for
competitiveness. A dual policy of co-operation and co-ordination now seems more crucial than ever as the
role of government has changed with the changing structure of the market where traditional transport
services are increasingly being integrated into complex logistics management services. As the market
evolves towards a transport and logistics system, governments will have to adopt or intensify a multimodal
approach in framing their transport policies. Preferably, at least for maritime transport and ports, co-operation and co-ordination efforts should
focus on all aspects of transport policy including infrastructure finance, the definition of rules for ensuring
a level playing field in the transport market, and further efforts towards harmonisation in conjunction with
market liberalisation. At national level, Member countries should also ensure that the policies implemented by other bodies
or other sectors regional or environmental policy, for example will contribute to the transport policy
objectives and vice-versa. In implementing these policies it is important that support financial, fiscal or other granted by
governments be co-ordinated in order to further the general policy objectives referred to above and to
avoid distortions or discrimination that would be counterproductive, particularly for the development of
short sea shipping. Lastly, the need for a better understanding of markets and, for governments, the need to anticipate
how those markets will develop in the future, makes the availability of reliable, consistent statistics and as
detailed as possible an inventory of bottlenecks doubly necessary. 72
The Council of Ministers, meeting in Prague on 30 and 31 May 2000,
NOTES the report on the development of short sea shipping CEMTCM20009 and the summary
preceding this Resolution
RECALLS previous Resolutions on the development of combined transport, in particular the Resolution
adopted in Annecy in 1994 CEMTCM9413final and the Declaration adopted in Budapest in 1996
CEMTCM9616
SUPPORTS ECMT efforts, in close co-ordination with the European Union and the other policy bodies
concerned, to
continue with studies aimed at paving the way at pan-European level for a coherent policy that will
ensure fair competition for all modes, principally through the formulation of a policy designed to
internalise the costs of infrastructure usage so that each mode will cover all of the costs it
generates
support, within the frame of international law and commitments, the harmonisation of social,
technical and fiscal regulations applicable to each mode of transport at pan-European level
take an active part in the extension of EU legislation to the whole of Europe, thereby strengthening
its role as a bridge between EU member and non-member states
NOTES also that short sea shipping can play a significant part in achieving the objectives of a sustainable
transport policy, by facilitating the implementation of an integrated, efficient and safe pan-European
transport and logistics system, in a context of open, non-discriminatory access to competitive markets,
in particular through the use of the most appropriate transport modes. RECOGNISES the importance of short sea shipping not simply as an alternative to road transport, but
also as an integral part of a transport system that is based on complementarity between modes, even
though its area of development is geographically limited. CONSIDERS that, as part of overall transport policy, short sea shipping can help to improve the links
between ECMT Member countries and, in particular, help to revitalise peripheral regions
and that, to this extent, specific initiatives must be taken to ensure its development
RECOMMENDS for these purposes that Member countries, on the basis of work conducted by all of the
organisations concerned
take measures to ensure that coherent and reliable statistical data is available, taking into account
the joint action developed by the organisations concerned
carry out as detailed as possible an inventory of bottlenecks that could hinder the development of
short sea shipping
step up the co-ordination of infrastructure investment, harmonising terms of competition and
progressive market liberalisation, and the definition of the conditions needed to ensure a level
playing field in the transport and logistics markets
73
ensure that support measures -- financial, fiscal and others -- are co-ordinated so that they
contribute to the efficiency of the transport and logistics network at pan-European level
intensify efforts, at both national and international levels, to co-ordinate environmental and land-
use development policies with transport policy, including policy on ports
review, on an on-going basis market conditions for combined transport incorporating a maritime
leg
RECOMMENDS, in particular,
in regard to the role of ports as interfaces between transport modes that
i active support be given, in conjunction with the organisations concerned, to technical or legal
initiatives that could improve network transfer operations
ii short sea shipping information bureaux, as already set up in some European countries,
regions and ports, be encouraged
promotion of the development of inland waterwaymaritime transport in Europe and, with this
in view, restates the need to
i continue to bring networks up to technical standards, particularly from an environmental
standpoint, and to ensure their compatibility
ii continue the policy of liberalising access to these networks under non-discriminatory terms
iii harmonise and simplify the regulations and administrative procedures for this type of
transport
SUPPORTS, in the interests of continuity of the transport supply, the designation in the non-EU member
states concerned of contact points for the promotion of short sea shipping which will be responsible
for
seeing that government policies, in particular their social, environmental, technical and fiscal
aspects, that could have an impact on the development of short sea shipping in their country are
compatible with this mode and
encouraging the streamlining of administrative procedures for short sea shipping in Europe, if
necessary, through their harmonisation.
INSTRUCTS the Committee of Deputies
to make the report and Resolution available to all national, international, government and
industry organisations concerned with short sea shipping
to develop means by which the ECMT could contribute to the co-ordination of initiatives to
support the modernisation of the sector, in collaboration with the other organisations concerned
-- chiefly the European Union -- in order to help achieve the objectives outlined above
in particular, to co-operate with the EU on the work concerning inventory of bottlenecks by
addition of a similar inventory for non EU countries
to report in due time on actions taken and progress on the recommendations set out in the present
Resolution. 74
GLOSSARY
EDI
ISPA
JIT
LO-LO
OD
CTP
R-D
TEN-T
GT
SSS
DWT
Exchange Data Information
Instrument for Structural Polices for Pre-Accession
Just-In-Time
Lift On - Lift Off
Origin Destination
Common Transport Policy
Research - Development
Trans-European Transport Networks
Gross Tonnage
Short Sea Shipping
Dead Weight Tonne
75
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