Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions - Freight Transport Logistics in Europe - The key to sustainable mobility {SEC(2006) 818} {SEC(2006) 820}
Date: 2006-06-28
Institutions: European Commission
Subjects: carriage of goods, combined transport, environmental protection, sustainable development, transport infrastructure, transport network, transport policy

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 28.6.2006 
COM(2006) 336 final 

COMMUNICATION FROM THE COMMISSION 
TO THE COUNCIL, THE EUROPEAN PARLIAMENT, 
THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND 
THE COMMITTEE OF THE REGIONS 

Freight Transport Logistics in Europe – the key to sustainable mobility 

{SEC(2006) 818} 
{SEC(2006) 820} 

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COMMUNICATION FROM THE COMMISSION 
TO THE COUNCIL, THE EUROPEAN PARLIAMENT, 
THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND 
THE COMMITTEE OF THE REGIONS 

Freight Transport Logistics in Europe – the key to sustainable mobility 

1. 

INTRODUCTION 

As pointed out by the mid-term review of the 2001 White Paper1, logistics plays a key role in 
ensuring sustainable mobility and also contributes to meeting other objectives, like a cleaner 
environment, security of energy supply, etc. 

Europe’s transport policy has been characterised by liberalisation and harmonisation over the 
years. This has slowly shaped the transport system into what it is today. Globalisation and the 
concept  of  wider  Europe  create  further  challenges.  The  fast  growth  of  freight  transport  – 
driven to a large extent by economic decisions – contributes to growth and employment but 
also causes congestion, accidents, noise, pollution, increased reliance on imported fossil fuels, 
and  energy  loss.  Infrastructure  resources  are  limited  and  any  disruption  in  the  supply  chain 
(i.e.  energy)  has  necessarily  a  negative  impact  on  the  EU  economy.  Without  adequate 
measures,  the  situation  will  continue  worsening  and  increasingly  undermine  Europe’s 
competitiveness and the environment that we all live in. 

To  overcome  such  problems,  Europe’s  transport  system  needs  to  be  optimised  by  means  of 
advanced  logistics  solutions.  Logistics  can  increase  the  efficiency  of  individual  modes  of 
transport  and  their  combinations.  As  a  result,  fewer  units  of  transport,  such  as  vehicles, 
wagons  and  vessels  should  carry  more  freight.  Impact  on  the  environment  will  decrease 
accordingly.  Rail  and  inland  waterways  need  to  be  modernised.  Air  freight  should  be  more 
closely  integrated  in  the  system.  The  positive  development  of  short  sea  shipping  should  be 
accelerated. Deep-sea shipping and its hinterland connections need to be enhanced. 

Shifts  to  more  environmentally  friendly  modes  must  be  achieved  where  appropriate, 
especially on long distance, in urban areas and on congested corridors. At the same time each 
transport  mode  must  be  optimised.  All  modes  must  become  more  environmentally  friendly, 
safer and more energy efficient. Finally, co-modality, i.e. the efficient use of different modes 
on  their  own  and  in  combinations,  will  result  in  an  optimal  and  sustainable  utilisation  of 
resources. 

indispensable 

increasing  European 
Logistics  measures  are 
competitiveness and prosperity in line with the renewed Lisbon agenda on growth and jobs2. 
Europe needs to rise to its transport challenges by integrating logistics thinking in its transport 
policy.  The  approach  should  be  market-oriented,  include  social  and  environmental 
dimensions,  and  create  a  win-win  situation  for  all  actors.  To  achieve  these  objectives,  the 

for  maintaining  and 

1 
2 

Keep Europe Moving – sustainable mobility for our continent - COM(2006) 314. 
Cf. Creating an Innovative Europe, Report of the Independent Expert Group on R&D and Innovation 
appointed following the Hampton Court Summit, January 2006. 

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present  Communication  examines  whether  and  where  the  EU  could  offer  added  value  to 
enhancing the development of freight transport logistics in Europe and the world. 

This work could lead to establishing a framework strategy for freight transport logistics. After 
consultations on the present Communication, the Commission plans to present an Action Plan 
for Freight Transport Logistics in 2007. 

2. 

DEFINING THE SCOPE 

Transport  is  an  integral  element  of  the  logistics  supply  chain.  The  Commission’s  approach 
focuses  on  logistics  in  freight  transport  and  covers  all  modes  of  transport.  The  approach 
contains  a  vast  variety  of  areas,  such  as  pure  modal  logistics  and  multimodal  logistics,  and 
emphasises  the  need  for  optimum  complementarity  of  modes  in  an  efficient  and  seamless 
European transport system that can provide the best possible services to transport users. 

Developing  freight  transport  logistics  is  primarily  a  business-related  activity  and  a  task 
for  industry.  Nevertheless,  the  authorities  have  a  clear  role  to  play  in  creating  the 
appropriate  framework  conditions  and  keeping  logistics  on  the  political  agenda.  This 
framework approach concentrates on improving the preconditions that Europe can offer 
for  logistics  innovation  and  leaves  the  internal  running  of  company  logistics  to  the 
companies themselves. 

For the purposes of this Communication: 

•  ‘Freight  Transport  Logistics’  covers  the  planning,  organisation,  management, 

control and execution of freight transport operations in the supply chain. 

•  ‘Co-modality’ means the efficient use of transport modes operating on their own 
or in multimodal integration in the European transport system to reach an optimal 
and sustainable utilisation of resources. 

•  ‘Multimodality’  is  the  carriage  of  goods  by  two  or  more  modes  of  transport, 

irrespective of the types of freight, within a single transport chain. 

•  ‘Third-party logistics’ means that an organisation uses external logistics providers 

that supply all or a considerable number of its logistical activities. 

3. 

THE EUROPEAN LOGISTICS MARKET 

The global logistics industry is estimated at roughly 5,4 trillion euro or 13,8 % of the global 
GDP.  This  leads  to  annual  logistics  expenditure  in  Europe  and  North  America  of  around 
1 trillion euro respectively3. Competition in the European logistics sector is intense. This can 

3 

Estimation  of  Global  and  National  Logistics  Expenditures:  2002  Data  Update  by  A.  Rodrigues,  D. 
Bowersox and R. Calantone (Journal of Business Logistics, Vol. 26, No 2, 2005). The results are based 
on  an  econometric  computation  model  that  considers  29  variables  capturing  information  regarding 
geographic  region,  income  level,  country  size,  economy  level  and  transportation  (road,  rail  and  air 
freight, and container port traffic). 

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be illustrated by the low concentration rate of third-party logistics in Europe with the top 20 
companies only have a market share of 33%4. 

On average, logistics costs account for 10-15% of the final cost of the finished product. This 
includes costs such as transportation and warehousing. 

Globalisation  of  production  and  the  corresponding  supply  chains  increase  the  need  for 
transportation. Logistics is becoming increasingly important not only within Europe but also 
for  Europe’s  international  business  relations.  Competition  between  Europe,  the  US  and  the 
Far East, in particular, is becoming a significant factor and can have consequences on nodal 
points  (especially  seaports  and  airports)  and  infrastructure  capacity.  Market  and  business 
integration through European co-operation with other major logistics centres in the world (e.g. 
with the US, Russia,  Japan,  China,  India, Brazil)  will  need  to  be  ensured.  Transport  market 
access is already addressed in bilateral and multilateral negotiations. 

It  is  difficult  to  have  a  reliable  picture  of  Europe’s  logistics  market,  because  relevant 
statistical information is currently not sufficient. 

There  are  a  number  of  trends,  some  of  which  are  contradictory.  On  the  one  hand, 
centralisation of logistics organisation in European and regional distribution centres is taking 
place, and, on the other, decentralisation is emerging in the light of saturation on the European 
roads,  enabling  quick  response  from  local  warehouses  or  buffer  storages  to  customer 
requirements. A noticeable trend is also outsourcing logistics activities whereby shippers buy 
multifunctional logistics services from external service providers (such as third-party logistics 
providers).  In  recent  years,  this  co-operation  between  shippers  and  service  providers  has 
become more long-term in nature and has been combined with a high level of integration in 
the  organisational  structures  and  informatics.  Furthermore,  when  optimising  their  supply 
chains, enterprises in the EU increasingly recognise that there are competitive alternatives to 
road freight. For instance, large carriers provide comprehensive logistics services integrating 
more modes, because this provides them competitive cost advantages. 

Further  factors  also  influence  logistics  choices.  Examples  of  these  are  environmental 
considerations  (such  as  energy  consumption  and  greenhouse  gas  emissions),  security  of 
energy  supply,  and  company  location.  All  these  have  significant  impacts  that  go  beyond 
transport itself, for instance, in terms of investment, employment and land use. 

4. 

TOWARDS A FRAMEWORK FOR FREIGHT TRANSPORT LOGISTICS 

4.1. 

Linking logistics and transport policy closer together 

The  Communication  “Keep  Europe  Moving”  describes  a  number  of  initiatives  having  an 
influence  on  freight  transport  logistics  that  the  Commission  has  already  taken,  inter  alia,  in 
the  areas  of  liberalisation,  harmonisation,  infrastructure,  standardisation,  promotion,  and 
research. 

4 

Logistics  Value  Chain by  L. Ojala, D. Andersson  and  T. Naula (to be  published  in  Memedovic Olga 
Global Production Networks, UNIDO). 

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One  of  the  latest  initiatives  is  the  Commission’s  proposal  enhancing  security  in  the  supply 
chain5. This proposal illustrates the balance that has to be drawn between security procedures 
fulfilling the highest requirements and the free flow of trade. 

Further  work  on  freight  transport  logistics  should  lead  to  the  introduction  of  a  logistics 
perspective  into  transport  policy.  Logistics  considerations  should  be  an  underlying  factor  in 
decision-making. For example, the current reflection on road cabotage6 will also consider how 
to further reduce empty runs. 

True  complementarity  of  modes  and  advanced  logistics  solutions  allow  effective  planning, 
management,  control  and  execution  of  unimodal  and  multimodal  transport  chains.  Logistics 
excellence could also work as a catalyst to maintaining know-how, skills and jobs in Europe. 

Logistics choices can help disconnect transport growth in Europe from the harmful external 
effects  that  it  produces  (emissions,  accidents  and  congestion).  They  must  go  hand  in  hand 
with  growing  efforts  to  optimise  the  efficiency  of  each  transport  mode.  Increasingly 
environmental  and  safety  considerations  will  have  to  take  into  account  the  entire  transport 
chain. 

4.2. 

Areas of action 

In  February  2006,  the  Commission  published  a  consultation  document  on  intermodal 
logistics7  and  received  over  100  contributions  from  the  Member  States  and  stakeholders.  In 
April  2006,  the  Commission  organised  a  consultation  workshop  with  approximately  70 
participants. 

The  results  of  these  consultations  showed  significant  support  to  establishing  a  European 
framework for freight transport logistics. 

4.2.1. 

Identification of bottlenecks and their solutions 

The  industry’s  role  in  developing  freight  transport  logistics  and  the  authorities’  role  in 
creating  an  appropriate  framework  for  optimising  logistics  require  continuous  co-operation 
and dialogue between the parties. 

At  the  moment  there  is  no  comprehensive  picture  of  concrete  obstacles  (bottlenecks)  that 
hinder freight transport logistics from developing faster in Europe. 

In line with the successful example offered by the “bottleneck exercise” in short sea shipping, 
a group of Focal Points should be established to carry out a continuous exercise of identifying 
and  addressing  concrete  bottlenecks  to  freight  transport  logistics.  These  Focal  Points  would 
represent the Member States and industry (logistics service providers and customers). Apart 
from solving bottlenecks, they could share know-how, provide best practice, and give input to 
policy development. 

5 
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COM(2006) 79. 
Cf. Regulation (EEC) No 881/92 and 
www.ec.europa.eu/transport/road/consultations/road_market_en.htm. 
www.ec.europa.eu/comm/transport/logistics/consultations/index_en.htm. 

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The  participation  of  professional  organisations  and  labour  unions  will  contribute  to  the 
success of guiding and introducing changes in the logistics field. 

4.2.2. 

Information and communications technology (ICT) 

Tracking  and  tracing  of  cargo  in  all  modes  is  a  prerequisite  for  efficient  logistics.  The 
introduction  of  the  satellite  navigation  system  GALILEO  will  have  a  substantially  positive 
impact on this development and so will the Long-range Identification and Tracking (LRIT), 
River  Information  System  (RIS)  and  Automatic  Identification  System  (AIS).  SafeSeaNet 
should also contribute to improving logistics in the maritime field. In rail transport, telematic 
application  for  freight  (TAF)  and  the  European  Railway  Traffic  Management  System 
(ERTMS) should provide applications for integrated railway logistics. 

Smart technologies should be introduced to avoid delays in the supply chain for security and 
other  reasons8.  One  such  technology  is  radio  frequency  identification  (RFID)  which  is  a 
growing  market  but  requires  further  research  and  work  on  radio  spectrum  management, 
interoperability and standardisation9. Further elements in the equation are common messaging 
standards (e.g. EDI/EDIFACT) and new communications platforms (e.g. XML). 

National transport authorities are increasingly seeking alternatives to manage better their own 
transport  systems.  One  such  system  progressing  towards  implementation  is  that  of  road 
network management using intelligent transport systems (ITS). To ensure the integrity of the 
single  market,  it  is  important  that  national  solutions  do  not  become  barriers  to  trade  but 
develop in complementary ways across the EU, based on interoperable standards. 

Companies  should  have  easy  access  to  ICT  solutions.  Closed  systems  entail  start-up  costs 
both  in  terms  of  technology  and  software,  which  raises  the  threshold  for  SMEs  to  fully 
participate in the market. 

Common standards widely accepted by manufacturers and operators, and synergies between 
different systems are the keys to making logistics more efficient. All development should be 
geared towards interoperability and common messaging within an open architecture between 
the  players.  ITS-readiness  should  be  incorporated  in  the  original  design  of  equipment  or 
infrastructure to avoid costly add-ons at a later stage. Exchange of data between modes should 
also  be  in  focus.  A  specific  role  for  interoperability  could  be  found  in  the  exchange  of 
information between businesses and administrations, while the interconnectivity in business-
to-business and business-to-consumer logistics is also vitally important. 

Freight  Transport  Logistics  needs  to  continue  being  a  research  priority  under  the  7th 
Framework Programme because modern technological innovation can open up new avenues 
for the sector. 

4.2.3.  Logistics training 

Shippers, transport users and operators attach particular importance to the skills, knowledge 
and  competences  of  the  personnel  involved  in  transport  and  related  logistics  decisions. 
However, the supply of transport and logistics education and training provided by universities 
and other institutions in Europe varies greatly. 

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Cf. research activities related to Information Society Technologies (IST). 
See the public consultation on www.rfidconsultation.eu/. 

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Training today will prepare us for the mobility of tomorrow. The Commission is considering 
promoting the development of mutually recognisable certification, under a voluntary regime, 
for  freight  transport  logisticians.  Such  harmonised  certification,  and  further  action  on 
networking  training  establishments,  would  contribute  to  the  compatibility  and  quality  of 
training in Europe. Holders of the certificates would have an advantage when marketing their 
human  resources.  Furthermore,  companies  employing  certified  individuals  would  have  the 
assurance of know-how. 

Work on certification and qualifications in the field of logistics has already been undertaken 
under the Leonardo da Vinci Programme. Moreover, the forthcoming European Qualifications 
Framework for lifelong learning could be used as a reference point. 

Training  should  in  no  way  be  confined  to  managerial  level.  Instead,  life-long  learning  and 
training should encompass all layers in the logistics sector to boost the overall performance. 

4.2.4. 

Statistical data 

The  logistics  performance  of  the  European  transport  market  needs  to  be  monitored  and 
benchmarked internally and against other continents. Statistical and other relevant indicators 
need  to  be  developed  to  have  a  reliable  picture  of  the  situation  and  its  evolution  over  time. 
The  Commission  plans  to  work  on  devising  suitable  methodologies  and  indicators  for  this 
purpose. 

4.2.5.  Utilisation of infrastructure 

The quality of infrastructure is a key to logistics in freight transport. Infrastructure planning 
within the framework of the trans-European transport network (TEN-T) and structural funds 
is improving the comprehensive infrastructure network that Europe needs in order to operate 
in an area without internal borders and face the challenges of globalisation. 

Constructing new infrastructure is not an objective in itself. Current infrastructure use can be 
optimised  by  deploying  efficient  and  sustainable  logistics  solutions.  This  includes  fleet 
management,  rail  and  inland  waterway  infrastructure  management,  closer  collaboration 
between  business  partners,  and  infrastructure  managers,  complete  utilisation  of  loading 
capacity,  avoiding  unnecessary  empty  runs,  or  pooling  resources  across  modes  while 
respecting the European laws on competition. However, when lack of suitable infrastructure 
clearly creates a bottleneck, this should be rectified. The EU has identified 30 priority projects 
to be completed by 202010, which should also benefit logistics developments. 

The  efficiency  of  transhipment  facilities,  including  seaports  and  airports,  is  crucial  for 
logistics performance. These facilities should employ modern technological solutions, such as 
advance  informatics,  and  have  quality  infrastructure  connections  for  co-modal  solutions. 
Attracting  and  securing  additional  private  investments  is  essential  and  European  rules  must 
provide  the  appropriate  legal  framework.  Quality  of  performance  must  be  continuously 
improved by the appropriate means, including co-operation, social dialogue and legislation.  

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Decision No 884/2004/EC. 

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4.2.6. 

Service performance 

4.2.6.1.  Recognition of quality 

Industry  uses  a  number  of  performance  indicators  or  benchmarks  to  assess  and  control  its 
service quality. Closely targeted indicators can be used to control a wide variety of services 
and  production  phases.  The  Commission  has  already  examined  comparative  benchmarking 
across  modes11.  Work  should  continue  with  a  view  to  introducing  benchmarks  for  freight 
transport  logistics  and  related  services  at  European  level.  Establishing  a  set  of  European 
benchmarks would create uniformity in assessing logistics performance. In air transport, such 
benchmarks are already widely used by shippers today. Companies could also develop these 
indicators further for their internal purposes. 

Benchmarking and labelling excellence could be used for short sea shipping and motorways 
of the sea. Based on experience to be collected under this exercise, such a quality label could 
be extended to logistics chains using other modes. 

Further to a label dedicated to logistics chains or individual services, this work could also lead 
to  a  wider  company  label  of  quality  encompassing  the  overall  transport  performance  of  a 
company. Such a label should entail minimum administrative procedures and be compatible 
with  other  existing  certificates.  It  would  constitute  a  strong  marketing  tool  in  a  highly 
competitive  environment.  Such  a  label  could  include  environmental  and  best  practice 
considerations. 

4.2.6.2.  A network for rail freight services 

Rail  freight  transport  suffers  from  a  lack  of  reliability  and  efficiency,  caused,  inter  alia,  by 
insufficient  technical  and  administrative  interoperability,  and  by  the  priority  given  to 
passenger trains on lines with mixed traffic. Action is needed to enhance interoperability and 
reduce delays generated by mixed traffic. 

The  Commission  intends  to  propose  an  action  plan  to  encourage  the  emergence  of  a  rail 
freight-oriented network allowing for dedicated freight corridors. Such corridors should help 
to  achieve  considerably  higher  levels  of  reliability,  performance  and  competitiveness  of 
international rail freight services. 

4.2.7.  Promotion and simplification of multimodal chains 

4.2.7.1.  One-stop administrative shopping and “Common European Maritime Space” 

Logistics  flows,  in  particular  multimodal  flows,  can  be  assisted  by  one-stop  administrative 
shopping or single windows where all customs (and other related) formalities are carried out 
in  a  co-ordinated  way  while  the  customer  only  has  a  single  contact  point  with  the 
administrations and submits the necessary documents only once. Also physical checks would 
be co-ordinated and happen at the same time in the same place. The Commission’s proposal 
on  a  paperless  environment  for  customs  and  trade12  provides  a  framework  that  can  achieve 
these results and simplify formalities. It now needs to be adopted and implemented as soon as 
possible. 

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ISL, Bremen, January 2006. 
COM(2005) 609. 

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This is particularly important for short sea shipping where a ship sailing between two Member 
States leaves the EU Customs territory each time it leaves a port to re-enter that territory in 
the destination port. In the recent Green Paper on a Future Maritime Policy for the Union13, 
the Commission launched a wider debate on a “Common European Maritime Space” where 
both the ship’s journey and goods could be reliably and securely tracked all the  way along, 
thereby decreasing the need for individual controls in purely intra-Community trade. 

4.2.7.2.  Multimodal promotion 

The  use  of  different  modes  in  a  single  transport  chain  is  a  contemporary  concept.  This 
requires a change, first and foremost, of mentality. 

A  recent  study14  on  ways  to  promote  intermodality  mainly  modelled  its  work  on  Shortsea 
Promotion  Centres15  and  their  activities.  The  Commission  has  considered  this  approach  and 
started to explore ways to develop the existing network of 21 Shortsea Promotion Centres to 
also encompass the promotion of multimodal logistics solutions in inland transport chains. 

4.2.7.3.  Multimodal liability 

Responsibility  and  liability  in  international  transport  arise  from  international  conventions. 
Often  they  provide  different  rules  for  different  modes.  This  creates  a  complex  multitude  of 
regimes with subsequent friction costs in multimodal chains. 

Shippers  do  not  consider  liability  to  be  a  major  problem,  in  particular,  when  they  use 
outsourced  logistics  providers  that  manage  liability.  Insurance  coverage  can  normally  be 
obtained to cover a transport operation using more than one mode. 

The  EU  should  participate  in  creating  a  multimodal  regulatory  structure  at  global  level. 
Nevertheless,  parallel  to  this  work,  the  added  value  of  an  EU-wide  liability  solution  that 
would best suit European needs should be studied. 

Furthermore,  the  fragmented  nature  of  liability  regimes  could  be  relieved  by  the  use  of  a 
comprehensive transport document that would cover and simplify the entire carriage door-to-
door  (e.g.  multimodal  waybills  or  bills  of  lading).  Further  to  a  comprehensive  liability 
solution for Europe, the Commission could also look into the added value of standardising a 
transport document for multimodal transport operations. 

4.2.8.  Loading standards 

The  Commission  has  taken  the  initiative  to  propose  common  European  standards  for 
intermodal loading units in intra-EU transport16. 

The proposal arises from the current multitude of different configurations of these units which 
creates  friction  costs  and  delays  in  handling  operations  between  modes.  Furthermore,  swap 
bodies  are  generally  not  stackable,  and  standard  containers  do  not  often  fully  utilise  the 

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COM(2006) 275. 
Integrated Services in the Intermodal Chain (ISIC), ECORYS, November 2005. 
See: www.shortsea.info. 
COM(2003) 155, as amended by COM(2004) 361. 

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allowed dimensions in European road transport. European industry needs a better system of 
loading units for intra-European transport to reduce costs and improve competitiveness. 

The Commission will consider appropriate ways to advance European standards in this field. 
It might also be opportune to examine the compatibility of units used in air transport and other 
modes. 

The rules on the dimensions of vehicles and loading units should match the needs of advanced 
logistics and sustainable mobility. 

5. 

THE WAY FORWARD 

Advanced  quality  solutions  are  needed  for  Europe  to  maintain  and  improve  its  logistics 
position  in  the  world  market.  Being  a  centre  of  logistics  excellence,  with  the  appropriate 
measures  and  incentives  in  place,  would  help  economic,  social  and  environmental 
sustainability in Europe and attenuate negative trends, such as relocation of business activities 
and employment away from Europe. Co-modality and high efficiency in the transport system 
are also indispensable for Europe to manage the increasing flows of goods that are transported 
every day on our infrastructures and waterways. 

This Communication presents a set of ideas that might be further elaborated into a strategic 
framework,  taking  into  account  the  views  from  the  European  institutions,  stakeholders  and 
any other interested parties on the feasibility and added value of elaborating a comprehensive 
EU strategy for freight transport logistics and on including the above or other areas of action 
in it. 

The  present  Communication  and  subsequent  consultations  will  lead  to  an  Action  Plan  for 
Freight  Transport  Logistics  in  2007.  The  Plan  will  set  a  landmark  for  advanced  freight 
transport  logistics  development  in  Europe,  and  may,  if  appropriate,  be  accompanied  by 
proposals. 

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