The Mediterranean corridor From a road corridor to a multimodal corridor A success story for the regional economy
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1 The Mediterranean corridor From a road corridor to a multimodal corridor A success story for the regional economy Jordi Torrent Strategy Manager Barcelona Port Authority May 2014
2 Index of contents 1 Trends in the logistics sector 2 The MED corridor: a success story 3 A new opportunity for the MED
3 Main features of world logistics today Global scale companies (Multinationals) New logistics mega operators Change in typology and amount of Logistics costs ( inventory costs vs. + transport costs) Tightening of logistics schedules as companies cut inventory levels Lead time (Goods delivery in 24 hours) Inland distribution competition (merchant & carrier haulage) & Overseas freight Changes in distribution schemas (one vs. several continental distribution centres) Environmental limitations Changing maritime business Geography of maritime transport Main maritime routes Main straits and canals Countries without sea connections Main navigable rivers
4 Trends in the shipping business: unstable market Freight & connectivity volatility Fuel price increase Environmental considerations Bigger vessels Container Freight Rate SPOT, all in, $ 40 ft container Route Dec 13 Jan 14 Feb 14 Asia to Europe Europe to Asia Dec 13 Jan 14 Jan 14 Feb 14 $ 3,242 $ 3,411 $ 2,992 5% 12% $ 1,111 $ 1,110 $ 1,123 0% 1% Source: Drewry Container Freight Rate Insight Inland transport involvement Slow steaming Concentration (P3 & G6 alliances) Notteboom and Carriou 2009 Less bunker costs, less carbon footprint, longer shipping times & more ships on service
5 The impact of logistics costs on the price of products Logistics costs include all costs of maritime transport (port passage, sea freight), land transport and inventory costs INTERMODALITY is not an option any more. IT IS A MUST
6 Index of contents 1 Trends in the logistics sector 2 The MED corridor: a success story 3 A new opportunity for the MED
7 Relevance of the Mediterranean corridor Natural route connecting Iberian peninsula with the rest of Europe Connecting the main exporting, industrial and logistics areas of Spain to European markets Vital for the development of Mediterranean ports Barcelona, Tarragona, Valencia, Algeciras One of the biggest trade lanes in Europe routing Mediterranean continental flows between Spain and Central and Northern Europe Crucial to attracting major European logistics operators for distribute from the Iberian Peninsula (schemes of multi country distribution, continental and regional) Map of Light Pollution NASA, 2012.
8 A success story Mediterranean flows between Spain and Central and Northern Europe have boosted during the past decade Cars & car parts Chemical products United Kingdom Benelux Germany Rest of Europe Fruits and vegetables France Italy Aragon Also Paper and wood pulp Building materials Solid and refrigerated food Madrid Morocco Múrcia Andalusia Catalonia Valencia..thus transforming the Spanish Mediterranean Corridor into one of the biggest trade lanes in Europe
9 A success story Increase of road and inland waterways traffic Average daily traffic (ADT) in 2 cross border motorways Evolution of barge container transport in France Source: VNF Source: Observatorio Hispano Francés Tráfico de los Pirineos Increase of maritime traffic Evolution of hinterland CONTAINER TRAFFIC in the Port of Barcelona. TEU Evolution of SSS in the Port of Barcelona Calls per week
10 A success story Extremely positive evolution of rail traffic results in the Port of Barcelona Cargo Rail port traffic 2013 (% var. 2012) Rail traffic % var % market share Containers 154,522 TEU +3.7% 10.7% Cars 175,362 Un. -2,3% 30.8% Rail market share in Spain 4.2% 50% considering inland navigation TEU transported by rail Evolution of rail market share in the Port of Barcelona % 10% From 2.6%(2006) to 10.7%(2013) Objective: 23% 8% 6% 4% 2% 0% % use Port of Barcelona, rail port traffic by corridors: 72% Iberian corridor: Barcelona- Zaragoza-Madrid 26% North of Spain: Barcelona- Pamplona-Burgos Only 2% International
11 Why intermodality is important for us? Objectives of port & rail intermodality 1. To enlarge the hinterland 2. Attract multi country distribution 3. Customer loyalty & loyalty of large volumes 4. Development of door-to-door offers 5. Improving the competitiveness of transport corridors + transport offer more diversified + price reduction 6. Fulfil our customers environmental commitments
12 Reasons for success Integration of rail in the supply chain Consolidation of Rail Logistic Operators Operators Container terminals (TCB, Best) Shipping companies (MSC, etc) Truck companies (Transp. Portuarios) Value added services Door to door Direct rail transport and triangulations Knowledge of the needs of importers, exporters, freight forwarders and logistics operators Management of empties Customs formalities Haulage Depot Truck substitution Rail efficiency improvement + Reliability + Productivity + Competition Substantial improvement of the level of service and customer orientation
13 Port s rail strategy 1 Rail port 2 3 Efficiency infrastructures Port network Adaptation of port infrastructure to UIC and 750 m Construction of new rail terminals Enlargement of existing terminals New railway accesses to the port Tariff discounts up to 70% Traffic management unit (ADIF & APB) Electronic rail management tools (PortIC) General rules for priorization between services and loading operators.... Maximum prices for loading & unloading trains Hinterland strategy based on intermodal corridors and inland terminals
14 Main reasons for this success economic and transport development RELIABILITY & PRICE the two factors for INTERMODALITY success Also SPEED and TRANSPARENCY
15 Main reasons for this success Transport and logistics infrastructures AP7 A9 Le Perthus motorway. 1st infrastructure of the corridor. Requirement of the World Bank Ports expansion: Tarragona, Valencia, Barcelona Freight airports : Barcelona, Zaragoza.. Logistic facilities ZAL, Zona Franca, PLAZA.. Rail terminals: public/private Inland navigation: Rhone Main transport and logistics infrastructures Ports Port logistics activity area Logistics platform Road transport goods centre Inland goods terminals of the Port of Barcelona Modal exchange logistics platform (interporto) Air cargo centre Working Under study or construction
16 Main reasons for this success Transport and logistics infrastructures Commitment of the European Commission for the development of a more efficient and sustainable European Logistic System. new opportunities for ports of southern Europe January 2014, new transport infrastructure policy. New Trans European Transport Network (TEN T) Integration of MED ports in the new TEN T. Ports are are considered doors to cargo and the main links with the land infrastructure. The MEDITERRANEAN Corridor is included as number 3. It connects the Spanish Mediterranean coast with Perpignan, Lyon, Turin, Milan, Venice, Ljubljana and Budapest.
17 Index of contents 1 Trends in the logistics sector 2 The MED corridor. a success story? 3 A new opportunity for the MED
18 A new opportunity for the Mediterranean Corridor: rebalance of trade flows Market served by Northern ports Market served by Southern ports 75% Northern Range Bremerhaven Le Havre Antwerp Hamburg Rotterdam Market served by Northern and Southern ports Advantages of Med ports Relevance of the Mediterranean in international trade, specially in Far East-Europe and Europe - American trade. Reduction of environmental costs: shorter distance MED ports -Far East, less fuel consumption and CO2 emissions Reduction of logistics costs: potential reduction of number of ships, fuel consumption, distance and land haulage Millions TEU Tanger Marseilles Barcelona 25% Southern Range Better transit time through the Mediterranean. Even more with slow steaming. European economic and social cohesion as a result of better infrastructures and connections Economic potential of Mediterranean & Northern Africa Avoiding of congestion in Northern infrastructures 100% from Asia
19 Some companies are betting on the MED and BARCELONA in Genoa Manufacturers & distributors. Distribution to Spain, Portugal, France and MED from Barcelona. And 1 st world terminal operator In Tanger To ensure its competitiveness, the companies that have chosen Southern Europe for Euromediterranean distribution REQUIRE GOOD CONNECTIVITY INFRASTRUCTURES & SERVICES TO THE REST OF EUROPE
20 INTERMODALITY is a key in order to be able to take advantage of this opportunity Unfortunately INTERMODALITY in Spain a sector lagging behind 4.2% Spanish rail market share INTENSIVE use of road transport Short trains HIGH PRICES AP-7 motorway congested 10,000 TRUCKS/DAY Swap bodies insignificant LA JONQUERA Low market liberalization No dedicated rail cargo infrastructures FEW RAIL LOGISTICS OPERATORS NATIONAL railway system 25 kv, 3 Kv, 1.5 kv Priorization of passenger trains Barriers to new rail operators IBERIAN / UIC gauges Only 2% of trucks are craneable Geographic barrier Pyrenees ASFA, ERTMS, KVB
21 Intermodal transport in Europe In Spain, ROAD is still the predominant model of handling container volumes Freight flows on ROADS Freight flows on RAIL Data Source NEA 2011.Intermdoal Yearbook EIA And the MED Corridor is one the main corridors of land transport
22 Challenges for the future of rail transport 1. Complete liberalization: among traction providers and rail logistics operators 2. Infrastructure improvements: 750 m Barcelona-Zaragoza-Madrid Connection Spain- France 3. Reduction of costs to compete with decreasing road prices 4. Increase mixed trains and combination of traffics Among customers / competitors (car industry) Among destinations and origins (rail hubs) Between typologies (continental/maritime, swap bodies-tank containers...)
23 CLYMA project Development of the connection Lyon-Madrid on the MED corridor TEN T MED corridor Corridor approach to the Madrid-Lyon section
24 CLYMA project. Development of the connection Lyon-Madrid on the MED corridor What we want to analyse? Remaining intermodal bottlenecks? Cross bordering problems? Infrastructure priorities? New terminals required? Only infrastructure problems? What is a green corridor? What means an integrated corridor? e-freight implementation? Sustainable infrastructures? New services needed? How to be heard in Europe? How to help DG Move?
25 Comprehensive European multimodal corridors All freight flows : road, rail, water and pipelines Rotterdam Hamburg Germany (Duisburg) Source: Power of inland navigation
26
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