CASE STUDY 5. Extension of the Adriatic-Ionian ferry corridor from Peloponnese to Crete" University of the Aegean Dpt. Shipping, Trade & Transport
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1 Lisbon, 15 December 2011 CASE STUDY 5 Extension of the Adriatic-Ionian ferry corridor from Peloponnese to Crete" University of the Aegean Dpt. Shipping, Trade & Transport The concept of the Case Study Development of an integrated transport chain between Western/central Europe and Crete avoiding deviation through Piraeus University of the Aegean Dpt. Shipping, Trade & Transport 1
2 Extension of the Adriatic-Ionian ferry corridor from Peloponnese to Crete Description of the new business model Patras Kalamata Chania University of the Aegean Business School of Dpt. Shipping, Trade & Transport 2
3 Main problem for the current situation Interconnectivity problem: a missing link Important demand of passenger transport for tourist purposes between western and central Europe through Italy and the Adriatic Ionian corridor to Greece. Crete constitutes an extremely popular tourist destination The port of Patras, located in the north-west of Peloponnese represents the western gate of the country Maritime transport (ferry) services linking continental Greece (including Peloponnese) to Crete based on the Piraeus port. Irregular (seasonal) low frequency ferry lines between southern Peloponnese and Crete do not really allow avoiding deviation through Piraeus As a result of the missing link, the majority of passenger flows use the Piraeus port thus creating important trip deviations. Case classification Intermodal prototype (WP2) emphasis on links Proposed business model: Alternative network configuration, new corridor, integrated door-to-door service 3
4 The survey Survey site selection Port of Patras: the critical nodal interchange defining alternative corridors Survey implementation PLACE: Port of Patras (passenger terminal, ships, rest areas near the terminal) DATE: September 2010 INTERVIEWERS: 10 people FINAL SAMPLE: 560 travelers (with more than 600 S.P. experiments, based on 270 questionnaires) 4
5 Revealed Data Questionnaire - travel information - information concerning modal choice of customers, - information at the Interchange level - Alternative routes - Personal information Stated Preference data - Stated Preference experiments - assess the attractiveness of the alternative chain proposed, - identify the conditions under which the demand for the new - integrated transport service can be expressed Current business model Current value proposition There is no actually a business model as such. The trip is based on independent separate services ; the customer builds the chain. 5
6 Transport Demand at the main hub Transport Demand at Destination foreigner tourists yearly Air transport: Coastal shipping:
7 Geographical coverage (O-D pairs) Origin Attica appears to be the basic feeder of the passenger traffic (29%) Final Destination 36% Italy while the corridor Italy - Austria Germany assembles the 48% Transport modes Trip purpose Main purpose: vacation (62%) Mode used to arrive to the port of Patra Dominant mode: private car (57%) 7
8 New Business Model Development of an integrated transport chain between Western/central Europe and Crete avoiding deviation through Piraeus Conditions: Improvement of medium distance ferry service (Peloponnese-Crete) Coordination of both maritime transport services involved Creation of a shuttle inland transport service (either bus or rail) connecting port of Patras to Kalamata University of the Aegean Dpt. Shipping, Trade & Transport New BM: Value Proposition For the customer Service improvement: travel time reduction, cost reduction THE MAIN DRIVER IS TRAVEL TIME Service enlargement: integrated package including transport and touristic services (accommodation, cultural activities etc) 8
9 Expected socio-economic benefits 1. Market expansion for passengers and freight 2. Sustainability Reduction of the total vehicle-km produced Alleviation of congested road corridors and terminals Promotion of new Short Sea services In general, more environmental friendly solutions Integration of -previously independentmaritime services Synergies between passenger and freight transport New dynamics for Short Sea Shipping Description of the new Business Model Service offeringspecification: STANDARD SERVICE Integrated transport service from the port of Patras to Crete (Chania) via the city of Kalamata including handling services at the port of Patras and Kalamata. PREMIUM SERVICE Transfer from Kalamata to Chania, handling services at the ports, daily tour to popular destinations in Peloponnesus and overnight stay 9
10 Combination of 2 methodological approaches 1. Model development for identifying passenger segments and market potential for new long distance intermodal services 2. Feasibility assessment of the proposed services Mixed Multinomial Model Car & Ferry (Patra Piraeus- Crete) Car & Ferry (Patra Kalamata Crete) Bus & Ferry (Patra Kalamata- Crete) Rail &Ferry (Patra- Kalamata Crete) 10
11 Customer Segments Customer Segmentation Based on the descriptive data the sample was segmented based on the number of stops variable and two market segments were created 1. Non-Stop Travellers: all the individuals that conducted less than/equal to three stops during their reported journey 2. Travellers with Stops: all the individuals that conducted more than 3 stops during their reported journey. Customer Segments Market Share forecasts Based on the model estimation results for the two customer segments: Modal Split Non-Stop Travelers Travelers with Stops Car _ Patra_Piraeus 10,00% 8,00% Car 57,00% 33,00% Bus 7,00% 4,00% Rail 25,00% 55,00% 11
12 Customer Segments Value of Time (VOT) Values of time for the different alternative modes per customer segment Values of Time (VOT) Non-Stop Travelers Travelers with Stops Car Bus Rail Initiator and Key Partnerships Considering the nature of the proposed Business Model, the initiator might be either a Public Authority or a Professional Chamber The proposed structure is to integrate all the services into a single service bundle under the command of one 3rd Party Povider. The 3rd party provider can be introduced - after a call of interest made by the initiator - Either by the creation of a new Public body with the participation of the Public Authorities (Port of Patras, Port of Kalamata, Prefecture of Crete, Prefecture of West Greece, Messinian Chamber of Commerce and Industry etc) 12
13 Key partners Shipping lines KTEL (inter-urban bus) TRAINOSE (railway operator) Travel agents tour operators Motorway operators Port authorities Local Authorities Other private economic actors Key Activities by a 3rd Party Provider The Key activities are related to the managementand the monitoring of the service offering. - Implementation of a Platform in order to manage and to monitor all the services - Implementation of a system of repair services by the transport operators - Ensuring the provision of transport and the high level of handling services - Offering an upgraded booking system - Customer support before during and after the trip - The implementation of a contingency plan 13
14 Feasibility assessment 7 steps: Services exploited Saving areas and assumptions of savings parameters Drivers causing savings Average trip value Quantification of trip value Cost of providing the service Breakeven analysis Coordination of timetables Definition of time savings Arrival at Patras11h30 is the case of one major sea liner serving the connection between Greece and Italy. Other vessels arrive at 13h30. Departure from Piraeus21h30 all services depart from Piraeus at the same time Avgtime from Patrasto Piraeus9h (land leg) Avg travel time from Piraeus to Crete (Itaklion) 9h (sea leg) Departure from Kalamata16h00 paxfrom both sea liners can be collected Avgtime form Patrasto Kalamata4h (land leg) Avgtravel time from Kalamatato Crete (Hania) 5h (sea leg) Avglength of stay for PREMIUM users24h. 14
15 Cost Structure Table 1 :Costs per category and individual service (bus, ferry, handling, recreation) Bus (EUR/year) Ferry (EUR/year) Terminal Handling (EUR/year) Recreation (EUR/visito r-day) Total Fixed Costs Acquisition/ leasing/ rental (vehicles, equipment, facilities) Cost of Service Wages Maintenance Administration Upstream Accommodation, F&B 100 Recreation (cultural, 20 sports) Shuttle services 12 Other Total Variable Costs Fuel / Energy Tolls Other Cost Structure Break even analysis The viability of the services was assessed by calculating the minimum required demand and we assumed the worst case scenario Table 3 :Results of the break-even analysis per service variant and user class The corresponding service variant is feasible Breakeven Pax Non-Stop Travelers Travelers with Stops Service Variant Car Bus/Rail Car Bus/Rail Standard Premium Discount rate 1% 14% The corresponding service variant is feasible The corresponding service variant is not feasible 15
16 Cost Structure In Summary : For 245,79 EUR, the minimum required demand for the STANDARD service is 6.707/year no PREMIUM service at this price For 156,06, EUR the minimum (breakeven) demand is /year no PREMIUM service at this price For 139,05, EUR the breakeven demand for the STANDARD service is /year, of which 465 pax(that is 4% of the min STANDARD demand) render the PREMIUM service viable For 132,39, EUR the breakeven demand for the STANDARD service is /year, of which pax(87%) render the PREMIUMservice viable. Added value and lessons A paradigm of upgrade of a nodal interchange through the establishment of a new service, related to a missing link, based on the principle of integrated intermodal chain. The proposed solution: creates important time and cost savings. stimulates more rational modal shifts, alleviate congested corridors. Innovative elements: Case Study 5 proposes more than one alternative of service offering. a combination of transport and touristic services in integrated packages Methodological framework Case Study 5 developed a combination of inter-related methodologies (Multinomial Logit Model combined with a Feasibility Study Model). A problem specific survey design preceded the models development. The whole framework has been successfully validated. it can be applicable in numerous cases with missing link problems. The combination of transport services with services of another nature (e.g. touristic) can also be a new field of further investigation 16
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