EUROPEAN SSS 2014: TIME FOR A RETHINK? O N B E H A L F O F T H E E U R O P E A N S H O R T S E A N E T W O R K
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1 EUROPEAN SSS 2014: TIME FOR A RETHINK? DR ALKIS JOHN CORRES O N B E H A L F O F T H E E U R O P E A N S H O R T S E A N E T W O R K GREEK PRESIDENCY - LISBON
2 Ladies and Gentlemen, friends of Short Sea Shipping, Welcome to Lisbon. This will be a short review about where we come from and where we wish to end up. It may also be a short test on the consistency of our aims and aspirations
3 Short sea shipping is important.
4 Short Sea Shipping has always been there.. However it has assumed a special meaning in the context of the EU....it has been accepted by all EU institutions in its twenty years course....and let s be fair, despite efforts - it has never quite made it to beat road transport.
5 Let me now raise five questions to get the ball rolling. A. Twenty years ago SSS was a hot subject. Is this still the case? B. Wijnolst and Waals have been telling us that the EU SSS fleet is ageing fast, is that still true? C. What have been so far been the concrete gains from the Motorway of the Seas so far? D. How far will the SECAs reverse the Short Sea initiative? E. What does it take to make the EU an LNG powered region?
6 Question A: SSS still a hot subject? In favour of YES: It still is a green means of transport. It moves the greatest part of dry and liquid goods in the EU. It has become a lot more intermodal. It is now well integrated in Green Corridors and the TEN-Ts In favour of NO: It became apparent it cannot match the expansion of road transport. It has been around for two decades, it is an old concept. Advances in ship and port technology have been less than spectacular The EU coastline remains fragmented
7 Question B: Do we have an age problem? YES Relatively few new SS ships were built outside the boom period. Many EU shipyards have either closed down or only do repairs work. Finance has been thin over extended periods. Profit margins have been generally low. NO The EU will lift its ban on shipbuilding credit and guarantees Incentives will ensure EU domestic fleet stays competitive A high profile pollution incident will kick-in a rebuilding program The single coastline around the EU will bring more business to EU flagged ships.
8 Question C: Have the MoS revitalised SSS? YES MAYBE NOT REALLY NO
9 QUESTION D: Will measures in SECA hurt SSS? The way SECAs may hit SSS is through backshift, i.e. the return of cargo traffic from the sea to the roads. In favour of YES: The Finns are very worried about implications on industry and trade. The Norwegians are expecting a backshift between 10 and 20% and are considering new ways of fostering coastwise marine transport. The Swedes are also concerned about environmental implications. The Commission is also concerned and has created the ESSF. In favour of NO: No one
10 Final Question E: Can the EU become an LNG region? Conceptually it is simple: One needs LNG powered fleet and an extended network of LNG bunkering stations. How long does it take to create an LNG network? 5-10 years. I have no estimate for what this would cost, but it would need customers to sell to. As infrastructure it will be partly subsidized.
11 ...and what about the LNG fleet? How long does it take to convert and build new LNG burning fleets? Say, years. What will happen to conventional ships? Most of them will be scrapped, the youngest will be sold/converted. What would be the cost of a conversion/renewal program? Off the cuff, between 150 and 200 billion euro.
12 Based on the previous thoughts the answer to the last question may be as follows: Assuming there is finance and reasonable employment expectations for the new ships, one might see an exclusively LNG powered short sea fleet in about years. That would imply something like ships per year on average, with conversions in the beginning and all new subsequently. EU shipyards can spring back to life within 2-3 years and the use of the Corres/Psaraftis common ship sections production method can treble each yard s annual output. The EU could have an LNG network in about 10 years and by then there could be around 3,000 LNG burning ships. The dream of DG Environment about an all LNG short sea fleet could be realized circa 2040.
13 Let me stop and recap now. Although the SSS initiative is an old idea and it cannot be a match to road transport, it remains an extremely important issue as it fits perfectly in a green transport perspective. Yes, there is a fleet age problem today which may go away in future if there is an incentives policy in support of LNG. Otherwise, I see big problems. The MoS traffic results to date are below expectations. The concept needs a facelift. We do expect a certain amount of backshift in the SECAs which may come back when the market stabilizes later. Yes, in theory, the EU could realisticaly expect to have an LNG powered SS fleet in future if it can put together a realistic policy of incentives but this will take a quarter of a century.
14 In short we need to re-examine some of our strategies. Here are some ideas: A. Shipping must move freely within the EU maritime space. Either Regulation 3577/92 on Cabotage will be amended, or scrapped altogether and adopt a Common Maritime Space as suggested earlier. B. Europe must start seeing SS as its own domestic fleet, not as a makeshift variate of national fleets. The replacement of the SS fleet is unavoidable, but we still have those shipbuilding directives. If not repealed, 200 billion euro newbuilding business will go to third countries. C. Regarding investments in ships the EU has grave problems. While communist economies used to rely on the Plan, capitalist economies can only be driven with incentive policies. The EU has neither of them, so it cannot score any results. Economic incentives are presently hostage to Competition policy restrictions and that strangulates any growth prospects for the entire region. D. Economic austerity policies in the EU have a damping effect on trade and medium term economic forecasts are negative in many EU members. We need to get out of this trip. E. In these days where defense power matters, the EU should reconsider its position regarding political and economic survival before it is too late.
15 Ladies and Gentlemen, thank you for listening and remember... We can always do better.
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