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Maritime Intermodal Transport Challenges in a Changing European and Global Environment. Dr. Alfred Baird Head, Maritime Research Group. Overview. Aims of maritime policy Shipping market cycle Trade growth Environmental constraints Regulatory framework Industry consolidation (and scale)
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Maritime Intermodal Transport Challengesin a Changing European and Global Environment Dr. Alfred Baird Head, Maritime Research Group
Overview • Aims of maritime policy • Shipping market cycle • Trade growth • Environmental constraints • Regulatory framework • Industry consolidation (and scale) • Technological change • Modal shift imperative • Fuel costs • Conclusions
Aims of Maritime Policy (a) Reduce Externalities (b) Promote Trade ab (c) Create Maritime Business a abc ac cb b c Source: Hoffmann, 2003
The shipping market cycle OVERORDERING BY SPECULATORS/ BARGAINHUNTERS SHIP PRICES DROP EXCESS OF SHIPBUILDING CAPACITY YARDS REOPENED OR NEW YARDS CREATED
Annual world economic, container and transhipment growth rates, 1991-2004 Transhipment growth is 3 times that of GDP!
Container port demand in north Europe to 2015 (Source: Drewry)
Structural Factors influencing container ship capacity • The difference between supply and demand growth is due to 3 main structural factors: • Increasing trade imbalances • Increasing trade distances over sea • Reduced actual intake compared to nominal capacity • These factors mean that world fleet growth must be larger than world demand growth in order to cater for the transportation needs in the main export markets • Structural factor is between 2.8% and 3.8% (AP Moller)
Container port demand for transhipment in north Europe, 2001-2015 (Source: Drewry)
North European container terminal developments JaderWeserPort Hamburg Amsterdam Felixstowe Bremerhaven Bathside Bay Rotterdam London Gateway Flushing Antwerp Zeebrugge Southampton Le Havre
New transhipment hub locations can reduce mainline ship deviation and feeder distance/cost
Emissions • Pollution • CO2, SOX, NOX, Ballast water • 1.5% sulphur limit in Baltic Sea, North sea/Channel (from May 2006) • Emissions Abatement & Trading • Issues: Suppliers, Storage, Training, Expense • Reduced transport movement • Modal shift
Regulatory framework • International Maritime Organisation (IMO) • World Trade Organisation (WTO) • UNCTAD • European Marine Safety Agency (EMSA) • National and supra-national competition watchdogs • Gradual move towards global standards/controls
Max Payload – Min Operating Cost Is the handbrake on?
Passenger Comfort What goes up …… ……must come down!!! ……or out!!!
Fuel Economy Slow down – the pumps can’t keep up! Can’t you go any faster? Replenishment at Sea?
Reliability If we can’t get another crankshaft I don’t think I can hold her in orbit Captain!!
Multiple vehicle decks (today, up to 250 trailers!)
Increase in container ship size 10,000 Teu Megaship 1,500 Teu Feedership
Slot costs and Total Charter Equivalent (TCE) of large container ships Source: Wijnolst et al (2000).
Why not seaways? What is a seaway?
EU Transport Policy – Motorways of the Sea Policy (Proposal or Regulation 478 14/7/04) • Sea transport is the only real solution to help manage road freight growth • Established Marco Polo II Programme • Improved budget of €740m for 2007-13 • Objectives: • Shift 140 billion tkm off roads • Reduce CO2 emissions by 8,400 million kg • €1 subsidy = €6 social/environmental benefits • EU Member States requested to bring forward MoS schemes
Conclusion • Don’t ignore aims of maritime policy • Shipping market has a cycle (timing is key) • Trade doubling every 10 years/transhipment even faster • Environmental constraints on port expansion, vessel emissions • Regulatory framework – going more global • Industry consolidation (and scale) – also global/all sectors • Technological change – very rapid, short lifecycle, vast scale econ • Modal shift imperative – EU and national gov can assist ‘seaway’ • High fuel costs – moderate speed/high payload = efficiency • Other factors (e.g. flag, tax, port services, outsourcing, logistics) • Sea transport has a great past…and an even greater future!