Abstract. 1 Introduction

Transcription

1 The feasibility of coastal high-speed freight ferry services between Scotland and England A.J. Baird Department ofbusiness Studies, Napier University, Sighthill Court, Edinburgh EH11 4BN, UK Abstract The purpose of this study is to assess the feasibility of high-speed freight ferry services on coastal routes between Scotland and Englandfl]. Developments and trends in high-speed ferry technology are considered, and constraints with regard to trunk haulage reviewed. The paper includes analysis of an existing coastal freight ferry service (in Italy), and an assessment of the UK trunk road market. Interviews were held with potential service operators, and users. 1 Introduction High-speed ferry technology offers shipowners significant opportunities to improve operating efficiency. High-speed ferries in pure freight-cying configuration could be introduced on coastal routes (in the UK) as a substitute for trunk haulage. Trunk haulage costs are continually increasing. Moreover, existing and planned road capacity will be insufficient to cope with forecast growth in road traffic. Conventional freight ferries have already been successfully introduced on a coastal route in Italy. Taking into account the current state of high-speed ferry technology, allied to present road transport difficulties, and previous experience with regard to a specific coastal freight ferry service, this study examines the feasibility of operating high-speed coastal freight ferry services between Scotland and England. 2 High-speed ferries High-speed ferries (i.e. ferries with a service speed in excess of 35 knots) offer operators significant advantages over conventional vessels. Faster

2 662 Marine Technology and Transportation service speed allows a reduction in the number of ships required, resulting in considerable savings on capital, maintenance, and labour costs. Significant market growth on a given route has been demonstrated due to a service offering more attractive transit times; the Scotland-Northern Ireland route experienced a growth rate in passenger traffic of 17% after the introduction of a high-speed service (normal annual growth rate on this route was 3%). Ferry operators can also get twice as many trips out of a high-speed vessel than they would from a conventional ferry, and gain significant benefits from faster port turnaround. Earlier examples of high-speed ferries (e.g. hovercraft and hydrofoils) did have drawbacks, however. Such vessels offered limited cying capacity, typically between passengers. Larger vessels could also cy cars, but coaches and freight still had to travel on conventional ferry services. Hovercraft and hydrofoils were mostly restricted to serving on relatively sheltered routes, such as the Aegean Sea, Dover Strait, or Norwegian Fjords. In heavy weather, such vessels often did not, and when they did in adverse conditions, they offered passengers an uncomfortable passage. In recent years, larger capacity 'wave-piercing' catamarans (e.g. Incat) incorporating water jet propulsion systems, have been introduced on more exposed routes such as Holyhead-Dublin, Fishguard-Rosslare, and Weymouth- Channel Islands. These ships cy between passengers, and cars. More recent versions also have capacity for a limited number of coaches. After early teething troubles, many high-speed catamaran services are offering an increasingly reliable year-round operation. The high-speed catamaran concept has recently taken a major leap forward with the Stena Line order for three very large ships. Currently under construction in Finland, these new vessels will be able to cy 1500 passengers, and 375 cars or 60 freight vehicles, at a speed of 40 knots. When the first of these ships is introduced in October 1995 on the Holyhead-Dun Laoghaire route, it will represent a breakthrough for high-speed freight ferry transport in Europe (a high-speed vessel with freight cying capability has already been introduced into service in Japan). The view of high-speed ferry operators and ship classification societies such as Det Norske Veritas seems to be that it is now only a matter of time before pure freight cying highspeed ferries are built. Such vessels could offer an attractive coastal alternative to trunk haulage. 3 Analysis of a coastal freight ferry service In 1992, the Italian state-owned shipping organisation Fin mare established a subsidiary company, Viamare, to operate a new coastal freight ferry service between Genoa and Sicily. The new service was designed to offer freight operators an attractive and economical alternative to the motorway trip across Italy. The fundamental objective of Viamare was to transfer heavy goods traffic from road to sea. The new service was consistent with Italy's General

3 Marine Technology and Transportation 663 Transport Plan which outlined specific guidelines for the expansion of maritime transport. It was intended to operate the new service with four freight ferries, allowing Viamare to offer two ings each way every day. Ships of 7,323 DWT were ordered, each with a capacity of 136xl2m trailers. Accommodation was provided for up to 50 drivers in 25 cabins. The ships were conventional ferries offering a service speed of 19.4 knots, allowing a trip time of 24 hours, and built for a quick turnaround of 3-4 hours. Considerable attention was given to setting up the terminals at each end of the route. New terminals were built in Genoa (Voltri) and in Sicily (Termini Imeresi, 35 km east of Palermo). Both terminals are directly linked to the motorway network; Viamare believed it was essential for hauliers to avoid driving through the towns if the service was to attract traffic from the road. Of all European countries, Italy has progressed furthest in establishing a network of intermodal terminals (Charlier and Ridolfi[2]). Sailings were specifically timed to meet the needs of hauliers, and a custom-built computer system was designed in order to reduce check-in time to around 1.5 minutes per vehicle. The terminals are open 24 hours a day and have constant security. It was also important that the terminals offered quick and easy access from the sea and to ensure that ships could enter in all sea conditions. Southbound, traffic cied on the ferries includes supermarket products, medical supplies, foodstuffs, mineral water, furniture, clothes and leather goods. Northbound, traffic consists of fruit and vegetables, various other foodstuffs, salt, chemicals, and plastic products. The service also cies large numbers of new and second-hand cars. Fiat cars manufactured in Torino are shipped from Voltri; Fiat also provide good return loads from their plant situated near Termini Imeresi. The trade is unbalanced 2:1 in favour of southbound traffic, resulting in significant numbers of empty trailers being cied northbound. By 1994 Viamare had secured 16% of the by-road market. The company claimed that hauliers could save 25% of trucking costs by using the ferry. Nevertheless, Viamare has experienced a number of difficulties, including: competing subsidiary requirements within the Fin mare Group meant that Viamare was only given two ships, barely enough to provide a daily service; devaluation of the Lira resulted in the company paying much more for its ships than intended; road haulage legislation in Italy is not sufficiently enforced, and; trailers (in Italy) are not of uniform dimensions, making vessel stowage problematic. In hindsight, Viamare are of the opinion that faster ships would have provided for a more attractive service. The company believes that ships offering a service speed of 24 knots or above would be much more competitive. Whilst volumes cied during 1994 were described as 'satisfactory', Viamare has been offered for sale to the private sector (as are other parts of the Fin mare Group) after the Government decided to privatise a number of state-owned organisations. Notwithstanding these difficulties, the Viamare service demonstrates a number of important issues

4 664 Marine Technology and Transportation which ship operators must take into account when considering introducing freight ferry services on coastal routes. 4 Long-distance trunk haulage in the UK In the UK long-distance (i.e. over 200 km) trunking sector, the majority of freight is cied by public haulage contractors (hire and reward), using articulated vehicles[3]. General haulage contactors account for over 80% of all long distance articulated vehicle trunk movements. The general haulage sector is characterised by low rates, and zero or negative margins. Increasingly, the basic trunk haulage part of distribution is being contracted out to owner-drivers. P&O, Wincanton, and other large distribution companies are moving to an all owner-driver trunk haulage operation[4]. However, large distribution companies are increasingly demanding a high degree of sophistication in IT from their suppliers, and small family haulage firms are unable to fund the scale of change. Moreover, there is evidence to suggest that in order to hold down costs, some hauliers have infringed regulations on vehicle weight, maintenance standards, and drivers' hours[5]. Road haulage costs are forecast to rise significantly within the next few years due to the introduction of a variety of regulatory measures such as restrictions on drivers' hours, reduced speed limits, motorway tolls, and increased fuel duties[6]. An additional factor to consider is congestion; congestion is estimated to cost the UK economy 15 billion a year. Moreover, it is becoming increasingly evident that new roads are not the answer to traffic congestion. The recent SACTRA report [7] argued that new roads "induced" more traffic. The Government has since cancelled several new road schemes. Given that heavy goods traffic is forecast to rise by 20-38% between , and that the UK's major motorways are operating over their designed capacity limits every day, there is therefore a clear imbalance between forecast road traffic growth and existing or planned road capacity. Both the UK Government and the European Commission accept that existing over-dependence on road transport will have to be addressed. Intermodal and combined transport alternatives are viewed as possible solutions. EC initiatives in particular will concentrate on providing support for improving the interface between modes in order to ensure a rapid and reliable transfer of goods [8]. The EC also recognises the potential opportunity afforded through the application of new technologies such as higher performance ships (e.g. high-speed freight ferries). 5 Estimating the UK coastal freight ferry market In identifying potential freight ferry routes between Scotland and England, it was first of all necessary to disagreggate traffic flow data (by region) from the Department of Transport's Continuing Survey of Road Goods Transport 1993

5 Marine Technology and Transportation 665 [3]. Initial analysis of this data led to the conclusion that there is sufficiently large quantities of freight moving by road between Scotland and three broad areas of England; the North West, North East, and South East. After examination of this data, the view was taken that there may be scope for further general examination of three coastal routes between Scotland and England. The study then sought to identify ports which could effectively cater for high-speed ferries; such ports would be required to provide adequate access to and from each pre-defined traffic generating port hinterland. Thus, on the basis of existing traffic flow analysis, and, after identification of existing and planned ferry terminals, the following three routes were selected for further investigation (see Figure 1): - (a distance of 375 km); Rosyth-Harwich (690 km); and Rosyth-Teesport (320 km). The port selection decision was also based on criteria laid down for the Viamare service, in particular, direct connection to the motorway network (or at least dualciageway), avoidance of towns, and ease of (24-hour) access from the sea. Ferry Routes Rosyth-Harwich 3. Rosyth-Teesport Figure 1. Proposed Scotland-England coastal freight ferry routes, Based on an average cargo weight of 15 tonnes[3] per full trailer, the market for each route was estimated in terms of the number of 12 metre

6 666 Marine Technology and Transportation (equivalent) trailers. The estimated number of empty vehicles is included in the total figure. Table 1 outlines the total (by-road) market in respect of each route. Table 1. Estimated (by-road) freight transport market for proposed Scotland-England coastal ferry routes (1993 levels) tonnes trailers Route (m) (ooo's) Rosyth-Harwich Rosy th-teesport ,165 Total ,315 6 Potential customers The study consulted a range of potential coastal ferry service customers in an effort to establish likely demand, and to gain some idea of perceptions and views. Based on information received from Viamare, potential customers were assumed to include general haulage firms, logistics and distribution specialists, wholesalers, retailers, and car manufacturers. Long-distance haulage firms questioned were concerned that ports might be too distant from vehicle loading/delivery points. They were also of the view that vehicle transfer at the terminals would not be fast enough. Their main concern, however, was that ferries would be too slow. Logistics and distribution companies also stressed speed as being vitally important, in addition to cost. Because distribution firms already contract out trunk haulage to owner-drivers, a coastal ferry service is viewed as a substitute supplier, and would therefore be regarded as being of a complementary nature to their existing activities. Wholesale and retail firms contacted suggested that for the coastal service to be successful, it would need to guarantee that goods delivery times were maintained, that the service was reliable, and that costs were competitive. Car manufacturers (comprising as much as 20% of total Viamare traffic volumes) also argued that costs would need to be competitive with road, and stressed additional factors including attractive ing times, service frequency, maintained transit times, and no increase in vehicle damage. A common view among all users of trunk haulage was that ships would need to be very fast to compete with road. 7 Ship specifications and service timetables On the basis of views expressed by potential users of a UK coastal ferry service, particularly regarding service speed, conventional ferries were

7 Marine Technology and Transportation 667 discounted as impractical; conventional ferries would take twice as long as trunk haulage. Viamare employ conventional ferries but that service differs in the sense that, unlike here in the UK, it enjoys a significant distance advantage over road (935 km by sea compared to 1540 km by road) and the Italian road network is less sophisticated than here in the UK. Yet even with a distance advantage, Viamare management still consider the speed of their ships to be a real weakness. Thus, it is the view of this study that, for UK coastal routes, only high-speed ferries could effectively compete with road. After consultation with ferry operators and shipyards, the study sought to establish an appropriate high-speed vessel specification for each of the three coastal routes, particularly in respect of vessel speed and capacity. It was subsequently decided that the most appropriate ship would be of catamaran design, with a cying capacity of 100x12m trailers (plus 50 passengers), and a speed of knots. Shipyards consulted estimated that a high-speed freight ferry corresponding to the suggested design and capacity, would cost between $25-30 million (Viamare's conventional ferries cost approximately $47 million each). With two high-speed freight ferries operating on each of the three proposed routes (6 ships in total), an attractive service timetable could be offered. As an example, Table 2 illustrates the proposed - ing schedule. On this route, voyage time is estimated to be 6 hours, with port turnaround of 2 hours. Each vessel would offer three trips per day, providing a ing every 8 hours. The subsequent financial analysis assumed each vessel would operate the equivalent of 6 days per week, 48 weeks a year, leaving sufficient time for maintenance and service downtime. The same service timetable could be offered on the slightly shorter Rosyth- Teesport route, with concurrent fuel savings (due to slight speed reduction). For the longer Rosyth-Harwich route, each ship would undertake one round voyage per day (port-port ing time 10 hours), providing for two daily ings from each port. All ing and ival times were set in order to avoid peak road congestion periods, and to cater for specific local needs. Table 2. Proposed - ing schedule Ship 1 Ship

8 668 Marine Technology and Transportation 8 Service feasibility Given higher operating costs, due in the main to an increase in fuel consumption compared to conventional ferries, a high-speed coastal ferry service would be unable to offer any price advantage over current low trunk haulage rates. The service could, however, be offered at a price equivalent to trunk haulage, and forecast revenues were assessed on this basis (taking into account different haulage rates in respect of each route). On each of the three routes considered, door-door transit times via the ferry (including terminal transfers) would be equivalent to those offered by trunk haulage. Given equivalent price and transit times between modes, a high-speed freight ferry operator would therefore have to stress other advantages to potential users of the service. These advantages would include: less wear and tear on trucks and trailers; the freeing up of trucks and drivers for other work (the study assumed 25% of vehicles on the ferry would be driver accompanied - 40% in Italy), and; access to a frequent, reliable, and high-quality transport system. Operating costs for each service were assessed based on information provided by both conventional and high-speed ferry operators. Assuming that each service experienced a utilisation factor of 65% (the Viamare service breaks even at 65% utilisation), the feasibility analysis found that: - would make a loss of 0.36 million (with 14.3% market share of by-road traffic); Rosyth-Harwich would make a profit of 0.27 million (20.4% market share), and; Rosyth-Teesport would make a loss of 0.49 million (9.6% market share). As Table 3 demonstrates, all three services, assuming they attracted a combined 14.8% market share of Scotland-England trunk road traffic (1993 levels), would generate estimated total revenues of million, resulting in an operating loss of 0.58 million. Table 3. Estimated revenues, operating costs, and profit (loss)/ebit of high-speed coastal freight ferry services (at 65% capacity utilisation) Gre-Birk Ros-Har Ros-Tees Total 12m Trailers (000's) Market share 14.3% 20.4% 9.6% 14.8% Total net turnover( m) Total oper. costs ( m) Operating profit(loss)/ EBIT( m) (0.36) 0.27 (0.49) (0.58) 9 Conclusions High-speed ferry technology offers significant advantages over conventional ferry operations. Given increasing costs in trunk haulage, and with road

9 Marine Technology and Transportation 669 capacity unable to meet forecast traffic growth, coastal shipping represents a practical alternative to long-distance haulage. This study identified three potential coastal freight ferry routes between Scotland and England. However, it is argued that only high-speed vessels would be able to effectively compete with long-distance road transport in the UK; high-speed freight ferries would offer a comparable service to trunk road transport, vis-a-vis price and transit time. It is estimated that all three proposed high-speed freight ferry services would more or less break even at 65% capacity utilisation. This would represent approximately 15% market share of Scotland-England trunk traffic. In view of these findings, Government, shipowners, and the transport community in general, should consider further investigation of the potential for high-speed coastal freight ferry services as an alternative to trunk haulage. References 1. Scottish Enterprise, The Marine Motorway - freight ferry services between Scotland and England: opportunities and impacts, Report by A.J. Baird, Napier University, Charlier, J.J. & Ridolfi, G. Intermodal transport in Europe: of modes, corridors, and nodes, Maritime Policy & Management, 1994, Vol. 21, No. 3, Department of Transport, 77?* Transport of Goods by Road in Great Britain 1993, Annual report of the continuing survey of road goods transport, HMSO, London, Scottish Enterprise, Road Haulage Industry in Scotland, Report by TecnEcon, McKinnon, A. Physical Distribution Systems, Routledge, London, Royal Commission on Environmental Pollution, 18th Report, Transport and the Environment, CM2674, HMSO, Department of Transport, Trunk Roads and the Generation of Traffic, HMSO, London, Council of the European Union, Adopting a specific research, technological development and demonstration programme ( ) in the field of transport, Proposal OJ No.C230, Brussels, 1993.