Advantages and Perspectives of North Adriatic Ports and BAC for Sustainable European Regional Development Dr. Stane Bozicnik University of Maribor, Slovenia Port of Rijeka Gateway to Adriatic-Baltic Core Network Corridor Opatija 20-22. Nov 2017
Contents Historical evets important for NAP development NAPA ports advantages Northern European range ports versus NAPA ports: Why are NRP today more successful NAP Expected growth by 2030 Transport, transport infrastructure and regional development NA ports hinterland connections ( BA corridor) Importance of growth of level of services of NAP Crucial factors for sustainable transport on the corridors Conclusions
Historical Events of Relative Importance for NAPA Ports 1945-89: (general trend) focus on transatlantic trade (routes) 1989: Berlin Wall falls, 2001: China joins WTO, growth of importance of Far Eastern economies 2004-13: Central and Eastern European countries join EU
Consequences - New features in the EU Economic/Political Geography? Growing importance of Far Eastern Markets (in relative terms compared to trans Atlantic ones) New macro regional concept of the EU (Danubian, Baltic etc. ) Baltic - Adriatic, Mediterranean and other core trans- European corridors Growing importance of corridor 10 (back to core corridor network?), natural link between Europe -Turkey and Far East New Iron Silky road! Central and Eastern EU countries joining EU (growth of economic potential) Growing environmental awareness Result: North Adriatic ports new transport gateway! The most optimal access to dynamic economies of Central and Eastern Europe
NAPA PORTS
What is NAPA The North Adriatic Ports Association (NAPA), consists of five NAPA ports - Koper, Rijeka, Trieste and Venice. NAPA has a common objective is to become a multi-port gateway, particularly between the dynamic: Asian and Central and Eastern European economies and Northern Balkans;
NAPA North Adriatic Ports (Original membership)
Aims of NAPA Commercial: To attract more cargo to Europe via Adriatic ports Institutional: to further develop transport infrastructure (in particular Trans European Transport Network corridors) needed for efficient and competitive transport/logistics services. NAPA MOTO: Cooperate internationally, compete locally!
Advantages of NAPA ports
Why NAPA? 1. Transport distances 2000 Nm shorter route Up to 8days shorter transit times
Why NAPA? 2. Central & SEE - potential Market of North Adriatic ports 500 km - 71 million inhabitants 700 km - 100 million inhabitants (estimation) 500/700 km - by road in less than 12 h!! OSTRAVA KATOWIC E GRAZ TRIESTE VENEZIA RIJEKA RAVENNA
Why NAPA? 3. Shorter Hinterland Deliveries of NAPA vs. Northern Range Ports
Why NAPA? 4. NAPA Environmental Impact Shipping a container (ship and railway), from NAPA to Munich rather than through North European ports: emission reduction of 135 kg of CO2/TEU!!!
North Adriatic Ports versus Northern range ports
Containers Throughput of Northern Range Ports Versus North Adriatic Ports, 2016 (in TEU) Northern range ports: 35 mill. TEU Rotterdam Antwerp Hamburg Bremerhaven North Adriatic ports: 2 mill. TEU Trieste Rijeka Koper Venice
Northern Range Ports Current Market Source: MDST ECPDM
Logical Division of Market NORTHERN POLAND BENELUX SOUTHERN POLAND
Why are the Northern European range ports dominant in spite of less favourable geographical position?
1. Economies of Scale Average ship size increased North range EU ports on average bigger ships than North Adriatic ports Consolidation between liner companies!
Economies of Scale - Constant Vessel Growth during the last 20 years
2017 over 21000 TEU
Trend mainly driven by increased need to reduce slot cost Slot costs reduce as vessel size increases On the key Asia/Europe trade the cost difference per TEU is clearly visible
2. Other advantages of Northern Ports European North range ports are more competitive because of: Better hinterland transport services (in particular train), frequency, reliability, speed Quality and quantity of all other relevant services Deeper sea in ports Longer trains for hinterland transport etc.
NAPA ports performance 2006-2016
NA Ports Container throughput 2006-2016 2006: 850 000 TEU 2016 2 115 000 TEU + 248%
Reasons?
EU Deep Sea Imports Growth Rates 1996 2015 (%) (CE and SEE!)
EU Deep Sea Exports Growth Rates 1996 2015 (%) (CE and SEE!)
FUTURE? Expected NAPA ports market share in 2030 according to: European Container Port Demand Model Development Scenario
NAPA: 2012 versus 2030 Base Case 2012 NAPA Development Potential Scenario 2030
Northern Range ports: 2012 versus 2030 Base Case 2012 NAPA Development Potential Scenario 2030
Results of 2030 NAPA Development Potential Scenario 2012 NAPA Development Scenario Increase 2012-30 NAPA 1.8 5.9 +227% Northern Range 20.3 28.9 +42% Tyrrhenian 3.6 6.5 +81% Black Sea 0.3 0.6 +100% Other 5.6 10.5 +88% Total 31.6 52.4 +66% Results of the European container port demand model market study: Total growth by 2030 : Estimated 227% growth for NAPA ports: about 6 Million TEU by 2030, NAPA market share increases from 5.5% to 11.3% Northern range ports: expected only 42 % growth by 2030
Transport, transport infrastructure and regional development Literature: strong link between regional economic growth and increase of freight transport (Banister and Berechman, 2001; Goh and Ang, 2000; Hesse and Rodrigue, 2004). High quality transport infrastructure (ports and hinterland connections) is needed to support this growth. interconnectivity and interoperability of corridor networks (infrastructure, terminals, transport modes) is required Challenge: supply chain management, which requires collaboration and networking between all relevant partners (Hesse and Rodrigue, 2004; Mentzer et al., 2001),
NAP preconditions for success NAP PORTS precondition for success versus NR Ports Required competitive quantity and quality of: Transport infrastructure ports, logistic nodes and Hinterland connections corridors for NAP - BA and Mediterranean of crucial importance Services
NAP & Hinterland Infrastructure Baltic Adriatic and Mediterranean corridors are of crucial importance for NAP Corridor X
Baltic Adriatic Corridor 6 Member states 1800 km 13 urban nodes / airports 10 ports 24 rail road terminals
BAC botlenecks Priority: Cross border sections and missing links To achive standards until 2030 (Workplan) 477 projects identified 96,5 EUR billion total value
BAC countries - Current multimodal transport chains intra and ext. EU flows
BAC corridor performance Ports on the Baltic-Adriatic Corridor are gateways to the world markets, their importance is growing and expanding outside the national boundaries. 530 mill. tons/2014) to/from corridor countries The (landlocked) countries on the corridor (Austria, Czech Republic, Slovakia): 28% of their traded goods flow through one of the seaports of the Baltic-Adriatic Corridor. (Great potential for NA Ports) The largest share of trade exchange is with China and the Far East (48%), while the other continents are below 20% each. The intra-eu transport leg to access / leave the ports is mostly undertaken by road (70%), with a relevant share of rail (25%) and lower for inland waterways (5%). Development of competitive combined rail transport services for manufactured products is of utmost relevance in order to increase the rail modal share in the medium-long term. White Paper targets for long distance freight transport (30% of rail or waterborne transport by 2030, and 50% by 2050).
Competitive and sustainable (combined) transport services on the corridors Three crucial factors (to meet White paper requirements) 1. Technology (Use of innovative intermodal solutions, standardisation,...) 2. Optimal flow of goods through the corridor (Time, costs) Baltic Adriatic TEN-T core network corridor study AlpinnoCT 3. Optimal combination of intermodal transport support mesures
1. Technology Innovative (combined) transport and transhipment techn.
2. Efficient support measures for sustainable transport on the corridors Push measures = discourage road transport e.g. tolls Pull measures = financial support for combined transport users Efficient measures combination in practice (2016): Switzerland Italy : 70% by rail, 30 by road France Italy: 10% by rail, 90 by road (source Alpinno CT project)
3. Optimal corridor throughput Optimal flow of goods through the corridor Time Costs Interoperability and interconnectivity of transport infrastructure and transport services See more: Baltic Adriatic TEN-T core network corridor study Alpinno CT
3. Node and transport time performance monitoring on the corridor TIME t 6 t 5 t 4 t 3 t 2 t 1 t 0 v 1 (t 1 -t 0 )=x 1 v 2 (t 3 -t 2 )= x 2 -x 1 v 3 (t 5 -t 4 )= x 5 -x 4 Cargo Handling Inspection Queueing First mile x 0 x 1 Long haul x 2 x 3 Last mile Needed time for: cargo handling documents/cargo inspection/administrative procedures needed (waiting) time for transport /transhipment, Time for interoperability processes of railways etc. E.g.:t3-t2 = transport time for distance between x1 and x2 DISTANCE
3. Corridor costs of transport and costs in nodes monitoring COST C 6 C 5 C 4 C 3 C 2 C 1 C 0 C 3 -C 2 =(X 2 - X 1 )*c 2 C 5 -C 4 =(X 3 - X 2 )*c 3 Fixed Cost Transport Cargo Handling Clearance Damage C 1 -C 0 =X 1 *c 1 First mile X 0 X 1 X 2 X 3 Last mile Costs : as user, we consider all costs that we have to cover in the node/ transport unit As owner: depreciation, insurance etc. Cargo handling (the same user or owner point of view) Customs (clearance) etc. Transport costs xo x1, x1-x2... We can add also other relevant cost elements (e.g. VOT for waiting.etc.) DISTANCE
Conclusion Far East - Europe deep sea container shipping route via Suez Canal is expected to dominate also in the future! Central and South East European regions are expected to grow faster than average EU by 2030 Importance of NAPA ports is expected to grow because of the following reasons: Economic about 5000km shorter sea transport and shorter hinterland transport to fast growing Central and SE Europe area Environmental less CO2 emissions Constant improvement of infrastructure of the NAP and on the NAP related corridors services
Conclusion The expected growth of NAPA ports throughput (6. mill. TEU by 2030) can be achieved, provided all the assumptions of the model are fulfilled, such as: deeper water (at least 15m), improved rail freight (and 750 meter long trains), improved all other related services. Need to Focus on entire supply chain (door-to door services, VAL) On this way North Adriatic ports can meet its potential as a natural gateway for containerized trade to Central, Eastern Europe and the Northern Balkans. There is a threat that Far Eastern partners concentrate, because of economies of scale to the, for their needs, the most suitable North Adriatic port BAC countries great potential for NA ports (Only 28 % currently ) of corridor transport volume through Corridor ports.
Conclusion For substantial shift of cargo from Northern range ports to NA ports the quality of port and other related services, including the corridor transport performance, needs to be further developed. (Similar level as the one in the North range ports is required). Three crucial factors for sustainable intermodal transport on the corridors, (to meet the White paper expectations): Efficient combination of pull/push measures for (combined) transport on the corridors Development and use of innovative CT technologies Monitoring and improving time, cost elements of the entire corridor (including first-last mile deliveries)
Thank you for your kind attention! stane.bozicnik@um.si
References: Michela Fonda, "Trends und Entwicklungen in der Seeschifffahrt - Adriatic why not?" http://www.logistikkongress.at/referenten/michela-fonda/ Robert Sever, "Eigenschaften und aktuelles Probleme des Transportsektors in Slowenien http://www.logistikkongress.at/referenten/robert-sever/ Henning R. Mack, "Die Bedeutung der Adria Häfen aus Sicht eines führenden Logistikdienstleisters" ://www.logistikkongress.at/referenten/henning-mack/ Chris Rowland, MDS Transmodal, Potential of the North Adriatic for container traffic, Slovenian Chamber of Commerce & Industry, Ljubljana,10 December 2013 Jean-Paul Rodrigue and Theo Notteboom, Foreland-Based Regionalization: Integrating Intermediate Hubs with Port Hinterlands, The IAME 2012 Conference, 6-8 September, 2012 Taipei, Taiwan Chris Rowland MDS Transmodal, NAPA Container Market Study, EIA General Assembly, Venice, 18 April 2013 (https://www.port.venice.it/files/event/rowland.pdf) NAPA - North Adriatic Ports Association - http://www.portsofnapa.com/ MERSK - http://www.maerskline.com/ CMA-CGM - http://www.cma-cgm.com/ MSC - http://www.mscgva.ch/ EMC - http://www.evergreen-marine.com/ EUROSTAT - http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/