european logistics bsr's rail freight transport

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№ 6/2010 (38), NOVEMBER/DECEMBER

Report

European logistics

Dredging & maritime construction

Baltic Transport Journal is an official media partner of:

Focus

BSR’s rail freight transport

The East West TC project has an important task: to be a testing ground for innovations, new technology, business models and improved transport management systems which will facilitate more sustainable transport solutions than those of today.

www.ewtc2.eu

– a testing ground for Innovations

The East West Transport Corridor

Lead partner

6/2010 | Baltic Transport Journal | �

Contents

Editorial ................................................................................................................................................ 4

EWTC Newsletter ................................................................................................... 5An innovative instrument for international cooperation

BTJ Calendar of partnership events 2010-2011 ...................................................................... 6

What’s new .......................................................................................................................................... 8

Happy ending – happy beginning .......................................................................................... 13The merger of APM Terminals & Cargo Service

The vision and the spirit .............................................................................................................. 14Stena Line’s historic shift of vessels lifts up Karlskrona-Gdynia route

Striving for stability ...................................................................................................................... 16Interview with Søren Poulsgaard Jensen, Scandlines

Economic cornerstones of the region .................................................................................... 18Investments in Bremen and Bremerhaven

Ships under a magnifier .............................................................................................................. 20New EU regulations to improve maritime safety

Implications of the PROBO Koala case on maritime shipping ...................................... 22Legal ambiguities on ship waste

Making the choice to thrive ....................................................................................................... 24Klaipėda port’s standpoint

A profitable junction .................................................................................................................... 25Investment opportunities in the Port of Gdańsk

Crossing the shoreline using HDD Technology .................................................................. 26Trenchless engineering for marine industry

BTJ Special: Dredging and maritime construction ........................................... 29An indispensable, unknown industryAiming at greater depths

Report: European logistics ................................................................................. 35Europe and the world The top players on the market Russian transport and logisticsA willingness to make changes

TransBaltic Newsletter ........................................................................................ 44Intermodal terminals of the futureEmergence and significance of dry portsNorth West Russia – an area in mobilization

Baltic Ports Organization Newsletter ............................................................... 48Finland has a new port

Focus: The BSR’s rail freight transport system ................................................. 51The place of Øresund BridgeGerman-Scandinavian railway servicesERTMS – from a concept to a mature signalling systemFirst step towards an intermodal terminals network in Poland

The future is still unwritten ........................................................................................................ 58European road freight analysis by Transport Intelligence

Size does matter ............................................................................................................................ 60Oversize transport strategy Mecklenburg-Western Pomerania

Events: Transport Week 2011 ....................................................................................................... 62

Collector’s corner ........................................................................................................................... 64

Transport miscellany .................................................................................................................... 65

Who’s who ........................................................................................................................................ 66

� | Baltic Transport Journal | 6/2010

Dear Readers,

Baltic TransportJournal

President of the Boardbogdan ołdakowski

[email protected]

Publishing Directorpiotr trusiewicz

[email protected]

Managing Editorlena lorenc

[email protected]

Contributing writersand update correspondents:algirdas šakalys, alison nissen,

martyna bildziukiewicz, marek błuś, jörg lattner, iven krämer, marek perzyński,

roland antonowicz, rada ebaltas, janusz kasprowicz, robert osikowicz,

rené kolman, halina brdulak, joanna archutowska, dominik buszta,

małgorzata nosorowska, violeta roso, evelina hansson malm, ernest czermański,

marcin wołek, hans e. boysen, emmanuel brutin, john manners-bell, kristina hunke

English Language Editorsalison nissen

Design and DTPmedon

Art Director&Graphic Designerdanuta sawicka

Publisherbaltic press sp. z o.o.

Address: 8 Pułaskiego Street81-368 Gdynia, Poland

[email protected]. +48 58 627 23 94, tel. +48 58 627 23 95

fax +48 58 621 69 66www.baltictransportjournal.com

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anna [email protected]

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e-mail: [email protected]

Circulation: 2,500

Cover photo: Agnieszka Selig

(Port channel reconstruction in Gdynia)

Subscriptions can be orderedin Kolporter offices in Poland.

For more information call 0801-205-555 or visitwww.kolporter-spolka-akcyjna.com.pl/prenumerata.asp

Editorial

Company indexA.P. Møller-Maersk 13, 38, 39, 40; Abu Dhabi Transmission & Despatch Company 28; ABX Logistics 38, 40; ACR 38, 40; AGA 25; Ahlers International 66; Air Berlin Group 66; Air China 12; AirBaltic 12; Airbus 12; Älvsborg Ro/Ro 8; Amsterdam Container Terminals (ACT) 9; Anese 28; Apache Corporation 28; APM Terminals-Cargo Service 13; Apollo Management L.P. 38; ArcelorMittal 25; Autotransportlogistic 10; AXS Alphaliner 9; Baltic Ground Services 12; Baltic Port Service 25; Banverket 53; Bolloré Group 38, 39, 40; Bornholmstrafikken 66; Boskalis International 34; Boskalis Nordic 33; Brunnsviksholmen LNG Terminal 27; C. Ports 8; Capgemini 37, 58; Cargo Service 13; Cargoline Logistics 38, 39, 40; CAT Logistics Services 38, 39; CEVA Logistics 38, 39, 40; Chemiki 25; Chevron 28; China Petroleum & Chemical Corporation (Sinopec) 28; Christian Salvesen 38, 40; CMA CGM 38, 39, 40; Cobelfret 8; Coffee House Böhm 64; Conservice 34; Consorzio Venezia Nuova 28; Copelouzos Group 12; Copenhagen Kastrup Airport 53; Copenhagen Merchants 25; Copenhagen-Malmö Port (CMP) 51, 53; Dachser 38, 39, 40; Danske Færger 66; DB Schenker 35, 37, 38, 39, 40, 59; DB Schenker Rail Automotive 10; DB Schenker Rail Scandinavia 52; Deepwater Container Terminal Gdańsk (DCT) 25; Delmas 40; DFDS 8; DHL 36, 38, 39, 40, 59; Doraco 34; Dr Cordesmeyer 25; Dredging International 32,33; Drewry Shipping Consultants 9; DrillTec 26, 28; DSV 38, 39, 40; Duke Energy 28; Dutch Landscaping Contractors Association 30; EEW Special Pipe Constructions 61; EGL 38; Eimskip 47; Estonian Railways (Eesti Raudtee) 10; Europa Linien 66; Exel 38, 40; Expeditors 38, 39, 40; Falköping Port 45; Farstad Shipping 8; FIEGE 38, 39, 40; Finnair 12; Finnlines 14; First Container Terminal (FCT) 66; First Quantum Group 66; FlowTex 28; Fosfory 25; Frans Maas 38, 66; Fraport 12; Frost & Sullivan 41; Gaspol 25; Gazprom 28; Gdańsk Bulk Terminal 25; Gedser Ferry Port 16; GEFCO 38, 39, 40, 66; General Logistics Systems (GLS) 38, 39, 40; Geodis Logistics Poland 66; Global Terminal Network 13; Gottwald Port Technology 10; Hainan Airlines 12; Hamburg Port Authority 44; Hamburger Hafen und Logistik (HHLA) 10, 57; Hamina Kotka Ltd. 48, 49; Harwich International Port 14; Hays Logistics 38; HDI 28; Hector Rail 52; Hellmann Worldwide Logistics 39, 40; HNA Group 12; Hochtief 34; Hong Kong International Airport 30; Hook of Holland Port 14; Hutchison Port Holdings 9; Hydrobudowa 34; Hyundai Merchant Marine (HMM) 9; IHG Logistics 40; Iranian Offshore Oil Company 28; JDA Software Group 37; Josef MÖBIUS 32, 33; JV VIS-MOS 28; Kintetsu World Express 39, 40; Klaipėda LNG Terminal 27; Kodeco Energy Co. 28; Koltseva Holdings 12; Kuehne + Nagel 39, 40; La Poste 38, 39, 40; Lahti Regional Development Company 44; Lauda Air 66; LFV 12; Linde Gaz Polska 25; Linde Group 25; Lion Ferry Sweden 66; LLoyd Zigaretten 64; LMR Drilling 28; Logistika-Terminal 66; Logport 10; Logwin 38, 39, 40; London Luton Airport 12; Longbore 28; LOTOS 25; Lucas Group 28; Lufthansa 65; M&M Group 66; Maasvlakte 2,13; Macquarie Group 25; Malmö Sturup Airport 51; Malteurop Polska 25; Marine Current Turbines (MCT) 28; Martin Brinkmann 64; Mears Group 28; Mecklenburger Metallguss (MMG) 61; Mediterranean Shipping Company (MSC) 18, 24; Michels Directional Crossings 28; MIST 45; Nacap 28; Nakskov Skibsværft 65; National Container Company (NCC) 66; Neptun Werft 61; NIKI 66; Norbert Dentressangle 38, 39, 40; Nord Stream 27; Norddeutscher Lloyd 65; Nordsee Nassbagger und Tiefbau 33; North Cape Minerals 25; NSCC-DrillTec 28; Ogden 64; oneworld 66; Øresundsbro Konsortiet 51; P&O Nedlloyd 38, 40; Panalpina 38, 39, 40; PCC Intermodal 56; PerAarsleff 34; Petrolesport 42; PKP Cargo 7, 11; Polferries 16, 62; Port of Aarhus 13, 17; Port of Amsterdam 7, 22; Port of Antwerp 7, 18; Port of Arkhangelsk 46, 47; Port of Bathurst 65; Port Botany 45; Port of Bremerhaven 13, 18, 19; Port of Gdańsk 25, 62; Port of Gdańsk Cargo Logistics (Port Gdański Eksploatacja) 25; Port of Gdynia 14, 15, 34; Port of Gothenburg 6, 13, 14, 15, 45, 49; Port of Hamburg 13, 18, 44; Port of Hamina 42, 48, 49; Port of Helsinki 48; Port of Karlskrona 14, 15; Port of Kirkenes 47; Port of Klaipėda 5, 24, 27; Port of Koper 8; Port of Kotka 42, 48, 49; Port of Le Havre 28; Port of Liepaja 16, 68ł Port of Marseilles 8; Port of Murmansk 46, 47; Ports of Paldiski 10ł Port of Ponta Delgada 8; Port of Riga 16, 24; Port of Rostock 7, 16, 54, 60, 69; Port of Rotterdam 7, 18; Port of Sassnitz 54, 60; Port of Sillamäe 10; Port of St. Petersburg 16, 47, 48, 66; Port of Stralsund 60; Port of Tallinn 24, 62; Port of Trelleborg 51; Port of Ventspils 16, 24; Port of Vostochny 42; Port of Wismar 60; Port of Zeebrugge 9; Port Północny 25; Ports of Stockholm 62; Primorsk LNG Terminal 27; Puttgarden Ferry Port 16; Red Nacional de Ferrocarriles Españoles (RENFE) 55; Rethmann-Gruppe 40; Rhenus Logistics 38, 39, 40; Robert Osikowicz Engineering 28; Robin Hood Airport Doncaster Sheffield 12; Rødby Ferry Port 16; ROLF SCS 42; Rome Fiumicino Airport 12; Royal Mail 40; RWE DEA 40; RWE Innogy 19; RWE npower 28; SafeSeaNet (SSN) 21; SAS Scandinavian Airlines 12; Saudi Aramco 28; Scandlines 16, 66; Schenker Automotive RailNet 10; SEA-invest Group 25; Shell Exploration & Production 28; SHV Gas 25; Sibelco Nordic 25; Singapore Changi International Airport 30; SNCF Geodis 38, 39, 40, 66; St. Petersburg Pulkovo Airport 12; STEF-TFE 39; Stena Line 14, 15; Stockholm Skavsta Airport 12; Stockholm-Arlanda Airport 12; STX OSV Holdings 8; Süd-Chemie 25; Sun Hung Kai Properties 28; SustAccess 45; Swiss International Air Lines Ltd. 66; Sydfynske 66; Sydney Airport 30; Świnoujście LNG Terminal 27; Tallinn Airport 10, 12; Tatco Boring 28; Technip 28; Telstra 28; Terminal Investment 24; Terramare 33; The National Gas Company of Trinidad and Tobago 28; Thiel Logistik 38; Tibbet and Britten Group 38, 40; TMI Logistics 40; TNT Express 38, 39, 40; Tokyo Narita International Airport 30; TOTAL 28; Trafigura 22, 23; TransGas 28; Transporeon 28; Transport Intelligence 56; TransportForsk Föreningen 53; Travemünde Ferry Port 14, 16; Vilnius International Airport 12; Virginia Inland Port 45; Virginia Natural Gas 28; VTB Bank 12; Wallenius Wilhelmsen Logistics (WWL) 40, 42, 43, 66; Weissheimer Malz 25; Wincanton 38, 39, 40; Wizz Air 12; YRC Worldwide 59; ZIEGLER Group 38, 39, 40.

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№ 6/2010 (38), NOVEMBER/DECEMBER

Report

European logistics

Dredging & maritime construction

Baltic Transport Journal is an official media partner of:

Focus

BSR’s rail freight transport Tthe cover of this year’s last BTJ heralds a special section on dredging. We surely devote a lot of attention to engineering, its importance for the maritime industry and impact on countries’ economic development,

particularly in the text by Rene Kolman as well as the article “Aiming at greater depths” which tracks down major dredging-involved projects in the region. Furthermore, Rob-ert Osikowicz with his text on HDD technology provides you with substantial infor-mation on the little known specificity of trenchless engineering and its possible imple-mentation in the marine industry. See our “European logistics” report to get a view of the current situation on the logistics market and the sector’s most significant players. Go to Focus for information on the BSR’s railway cargo transport system and to find what Dariusz Stefański of PCC Intermodal tells about their new inland terminal and the future of intermodal market in Poland. I would also like to draw your attention to the interview with Kimmo Naski about the fusion of Kotka and Hamina ports. In a way, mutual cooperation is this issue’s recurring theme and in a difficult economy it often takes the form of mergers. Integration is surely a positive thing, but the striking number of such operations raises questions about the condition of the industry. With the hope you will enjoy your reading, on behalf of the editorial board, I wish you all a peaceful Christmas time, a Happy Channukah and a healthy, fulfilling new year.

Lena Lorenc


EWTC newsletter

An innovative instrument for international cooperation

Growing competitiveness inspires us to create such forms of cooperation that enable effectively solving transnational transport problems. This summer European and Asian companies received a significant signal for prompting activity within interregional transportation and logistics areas.

The East-West Transport Corridor Association

It is difficult to fit the transport and lo-gistics sector, in a broad sense, into a specific geographic framework, since its development has been heavily affected by globalization trends, as compared to other segments of the economy. In

this context it becomes vitally important to develop and enhance horizontal collabora-tion among countries, notwithstanding their economic or political frameworks, with the aim to systematically eliminate procedural barriers, promoting interstate dialogue and matching national economic interests.

Constitutive conference of EWTCA

On June 29th the international East-West Transport Corridor Association was founded in Vilnius, the capital of Lithuania. The conference at-tracted nearly 100 participants from 14 countries. The newly established EWTCA consists of six business associations, four public administrative institutions, two universities and 14 companies.

First and foremost, the EWTC Association is expected to activate the cooperation of trans-port and logistics companies, intermodal trans-port operators, consignors and consignees, governmental bodies, academic and research institutions, and promote dialogue between the states embracing the corridor with the view of addressing emerging problems. The As-sociation, among its other tasks, will focus on identifying bottlenecks along the EWTC, sim-plification of documentation and procedures, development of innovations and intermodal

Algirdas Šakalys is the newly elected President of the International EWTC Association. In 1991-2000 as Vice Minister of Transport and Communica-tions of Lithuania, he was responsible for transport policy and foreign rela-tions, later as a consultant to the President of Lithuania for transport policy. Currently, he is also an Adviser to the Prime Minister of the Republic of Lithuania and holds the position of Director of the Competence Center of Intermodal Transport & Logistics at Vilnius Gediminas Technical University.

techniques, and naturally, on the representation of the common interests of EWTC partners in various international organizations.

The EWTC Association particularly aims at developing the East-West Transport Corri-dor which is expected in the short run to be-come an important and effective transport link in the global transportation and logistics chain in Europe and Asia. Moreover, the Associa-tion will assist in implementing the transport policy within the EU Baltic Sea Strategy, with special emphasis on environmentally-friendly transport development.

The initial steps

The concept of a ‘green corridor’ gives priority to rail as one of the most ecological modes of transport, as well as to the sustaina-ble integration of all the modes. In accordance with this strategic line, the Association is ori-entated towards promoting more intensive use of rail services, and enhanced railway interac-tions with road and sea transport. In order to identify the starting steps of activity, an in-quiry among EWTCA partners was executed.

According to survey data, initial key activities were determined. They are as follows:

– to form a strategy and Action Plan for im-plementing the EWTC;

– to introduce the EWTCA to international institutions, international businesses and governmental structures (the presenta-tion of EWTCA at EXPO 2010, at the Eu-ropean Commission, at the international conference in Fort Lauderdale (USA);

– to establish the Secretariat of the EWTCA (in Vilnius) and to solve the question of its official residence;

– to elaborate the concept of the green transport corridor;

– to form a common brokerage tool for communication and information ex-change among EWTCA partners;

– to develop partnership links of the asso-ciation in order to eliminate bottlenecks and to create the missing links across the global Asia-Europe land bridge.

Moreover, a regional business seminar of EWTCA partners took place on 8-9th of November, 2010 (Klaipėda-Karlshamn). The seminar attracted partners from Ukraine, Belarus, the Russian Federation (Kalinin-grad region), Sweden and Lithuania. The participants within the Baltic-Black Sea re-gional cooperation framework discussed the prolongation of the Klaipeda-Odessa route (Viking project) towards the North (Swe-den) as well as South (Turkey).

The EWTCA should make a significant contribution and generate added value in terms of handling and developing trade flows between Europe and Belarus, China, Kazakhstan, Rus-sia, Ukraine, and other Far Eastern countries. This shall be supported by the efficient co-operation between shippers, transportation, logistics companies, intermodal terminal op-erators, national, regional and domestic au-thorities and research institutions considering not only the BSR’s market needs, but also the global trade demands of Europe and Asia. �

Dr Algirdas Šakalys


BTJ calendar of partnership events 2010-2011

BTJ 6/2010 (Nov.-Dec. edition) BTJ Special: Dredging and maritime constructionReport: European logistics

Focus: BSR’s railway freight transport systemIssue distributed at:

BPO Seminar: LNG in the Baltic and North Sea12 January 2011, SE/Gothenburgwww.bpoports.com

EuroRail 201122-24 February 2011, DE/Berlinwww.terrapinn.com/2011/eurorail

GreenPort Logistics 2011& Energy for GreenPorts 201123-24 February 2011, IT/Venicewww.portstrategy.com/greenportvenice

Port Centric Logistics Conference 20111-2 March 2011, UK/Birminghamwww.navigateevents.com

Baltic Ports Organization in cooperation with the Port of Gothenburg are jointly organizing the seminar “LNG in the Baltic and North Sea – Business opportunities or the cost factor for the ports”. Among the analyzed matters one should expect prospects for LNG fuel both from the ship-owner and the port perspective, as well as bunkering and distribution issues. The seminar is addressed towards ports, the shipping sector and other related businesses.

Now in its 14th year, EuroRail is the leading platform for rail market CEOs to meet and discuss how to overcome the challenges of today’s competitive environment, and how to capitalise on the opportunities created through rail’s strategic advantages in a market geared towards sustainability.

The event will examine practical, economically viable solutions, as well as applications and case studies in use for reducing carbon footprints and energy consumption management. The talks will have their follow-up at GreenPort’s Annual Congress, 14-15 September 2011 in Hamburg.

The 2nd Port Centric Logistics Conference will bring together relevant supply chain partners to debate on how effective port centric logistics solutions are changing current distribution systems and generating a competitive advantage. Experts from different branches will share their knowledge and experience on trends in maritime trade flows.

BTJ 1/2011 (Jan.-Feb. edition)Issue distributed at:

Transport Week 20111-3 March 2011, PL/Gdańskwww.actiaconferences.com

RORO Shipping Conference 20119-10 March 2011, DK/Copenhagenwww.informaglobalevents.com

Europort Istanbul 201123-26 March 2011, TR/Istanbulwww.europort-istanbul.com

SITL 201129-31 March 2011, FR/Pariswww.sitl.eu

TransRussia26-29 April 2011, RU/Moscowwww.transrussia.ru/eng

Actia Conferences and Baltic Transport Journal (as the main media partner) invite you to a joint event integrating three already well-established international conferences: the 5th Ro-Ro & Ferry Conference, the 5th Baltic Container Conference and the 4th RailPort. The event will be accompanied by a 3-day open trade fair, free seminars and discussion panels, and topped with an evening gala dinner. Integration (and competition) within transport sectors in the Baltic and CEE countries will be the main theme of the market discussions.

Informa’s RORO is becoming an annual event, introducing a new forum for ro-ro owners and operators. The 2011 event this time only includes a conference section, but promises to bring you up to speed on all recent developments in the sector and new challenges facing the industry. The 2012 edition in Gothenburg will traditionally feature both a conference and exhibition.

Europort Istanbul International Maritime Exhibition has proven to be the complete platform for the maritime industry in Turkey and is now moving full speed ahead to bring the international maritime sector to the exhibition and a wide range of conferences and workshops for 11th time. The previous 2009 edition gathered over 200 exhibitors and almost 8,000 visitors from 48 countries, 95% of whom expressed their intention to visit the event in 2011.

For more than 30 years SITL brings together all transportation and logistics communities and presents products and services dedicated to distribution and the supply chain of tomorrow. Last year’s show brought 500 exhibitors, 27 thou. attendees to the trade fair and a cycle of 30 conferences and workshops, and the organizers are heading towards another record breaking result.

The 16th edition of the largest international transport event in Russia and its neighbouring countries is a good opportunity to establish or enhance your company’s presence on the Russian market. Each year the show gathers representatives from all major transport sectors, including freight forwarders, logistics providers, shipping lines, ports, terminals, rail and road carriers, material handling equipment, etc.

Report: Baltic energy marketFocus: IT solutions for transport

BTJ 2/2011 (March-Apr. edition)Issue distributed at:

Transport Logistic 201110-13 May 2011, DE/Munichwww.transportlogistic.de/en

Nor-Shipping 201124-27 May 2011, NO/Oslowww.nor-shipping.com

TOC Europe 20117-9 June 2011, BE/Antwerpwww.tocevents-europe.com

SIL Barcelona 20117-10 June 2011, ES/Barcelonawww.silbcn.com

Since 1978 Transport Logistic has established itself as the most important trade fair for logistics, mobility, IT and supply-chain management in Europe. The 13th edition, once again co-organized with Air Cargo Europe, will provide an expert overview of new markets, trends and innovations in the international transport and logistics industry via its many accompanying conferences, seminars, workshops, presentations, etc.

Notwithstanding the downturn in the European shipbuilding/shiprepair market, 2009 Nor-Shipping was the largest in the history of this event, dating back to 1967. With more than 1,100 exhibitors and 33,000 attendees, the show featured 22 national and four thematic pavilions in six halls. This redesigned thematic exhibition layout plus selection of technical conferences and workshops turned out to be a success, so 2011 will follow a similar concept.

The Terminal Operations Conference & Exhibition traditionally gathers suppliers of container terminal services, handling equipment, systems and software. Hundreds of executives from the port, terminal and shipping sectors will meet to discuss the evolution of global maritime trade and how to improve the performance of shipping, port and hinterland services to support trade growth.

Over the last 13 years, International Logistics and Material Handling Exhibition in Barcelona, has become the reference point for all logistics sectors, as an effective and profitable tool for doing business and making contacts in a professional and friendly climate that is difficult to match. The event will be supported by the Mediterranean Logistics and Transport Forum, a number of technical conferences and dedicated business meetings.

Report: Breakbulk & project cargoFocus: Financing and insurance


BTJ calendar of partnership events 2010-2011

BTJ 3/2011 (May-June edition)Issue distributed at:

European Shortsea Congress 201129-30 June 2011, DE/Hamburgwww.navigateevents.com

GreenPort Congress 201114-15 September 2011, DE/Hamburgwww.greenport.com

Held already twice in Dublin and once in Liverpool, the 4th European Shortsea Congress will first time take place on the continent, comprising a two-day conference catering to bulk and unitized shortsea supply chains. The event is guaranteed to bring numerous networking activities.

The 6th GreenPort Congress moves to Hamburg, the European Green Capital 2011, and will feature a 2-day technical conference, gala dinner, and a study tour of the main ports in the North European range: Hamburg, Bremen, Amsterdam, Rotterdam and Antwerp. The topics will include collective solutions for clean shipping, global regulations on CO

2 emissions, energy efficiency, sustainable

development of land and seaward access, etc. More info at: [email protected].

Report: Ro-ro & ferry marketFocus: Transport and ecology

BTJ 4/2011 (July-Aug. edition)Issue distributed at:

BALTEXPO 20116-8 September 2011, PL/Gdańskwww.baltexpo.com.pl

BPO Annual Conference 20118-9 September 2011, DE/Rostockwww.bpoports.com

Seatrade Europe 201127-29 September 2011, DE/Hamburgwww.seatrade-europe.com

Along with the Polish shipbuilding restructuring process, the private yards continue their production and new areas of their activities require modern machinery and investments. Baltexpo will target these topics during its 16th international exhibition and conference. In over 30 years, the event has always attracted thousands of professionals from the entire maritime sector: ship owners/operators, shipyards, ports, equipment manufacturers/suppliers, etc.

Baltic Ports Organization invites all executives interested in improving the competitiveness of maritime transport in the region, increasing the efficiency of ports/terminals, developing infrastructure and value added services, as well as extending both ashore and hinterland connections, to its annual conference, this year held at and co-organized by the Port of Rostock.

Seatrade Europe brings together key decision makers in the industry for a high-level conference, a major exhibition, travel agent training and an exceptional social programme. This event attracts senior purchasers, technical and hotel directors, itinerary planners and other major players from the world’s cruise and rivercruise market. A rare chance to accomplish months of business in a few days whilst your prime target group is gathered under one roof.

Report: Baltic maritime ranking 2011Focus: Baltic shipyards

BTJ 5/2011 (Sept.-Oct. edition)Issue distributed at:

TRAKO International Railway Fair12-14 October 2011, PL/Gdańskwww.mtgsa.com.pl/title,lang,2.html

Baltic Development Forum Summit 201124-27 October 2011, PL/Gdańskwww.bdforum.org

Europort Rotterdam 20118-11 November 2011, NL/Rotterdamwww.europort.nl

The most important rail meeting in Poland and one of the largest in CE Europe, giving the opportunity to promote agglomeration rail transport, freight forwarding and logistics, present the latest technology and hold business meetings. The exhibition is organized in partnership with Polish National Railways (PKP) together with a number of seminars, conferences and presentations.

For the first time Poland will host the annual BDF Summit. Baltic Development Forum will work closely together with the Polish government during its EU-presidency (second half of 2011) and the European Commission, and hopes that this show will be a good demonstration of how to combine top-down political guidance with bottom-up enthusiasm and entrepreneurship.

A bi-annual event gathering over 30,000 professionals from all segments of the shipbuilding/shiprepair industry, giving an overview of the latest technologies in the maritime industry. Construction of vessels, dredging, fishery, inland navigation, mega yachts, naval specials, offshore, sea shipping, workboats, and much more is waiting for you at the four-day exhibition and its assisting conferences.

Report: Baltic containerizationFocus: Railway transport

BTJ 6/2011 (Nov.-Dec. edition)Issue distributed at:

Intermodal Europe 201129 Nov.-1 Dec. 2011, DE/Hamburgwww.intermodal-events.com

After a 3-years break the Intermodal Europe exhibition and conference will again be hosted in Hamburg. The world’s leading event for all associated with the container and intermodal industries dates back to 1976 (at first named CTC – the Container Technology Conference). Intermodal Europe is organised by IIR Exhibition, a part of the Informa Group.

Report: Bulk transportFocus: Road traffic


MaritimeSTX OSV Holdings Limited has secured new contracts with Farstad Shipping, an interna-tional supplier of large, modern offshore sup-port vessels. The contracts of approx. NOK 1.3 bln include a total of four Platform Supply Ves-sels for delivery 2012-13. Two of those vessels will be delivered from the group’s yards in Nor-way, the other two from the yard in Vietnam.

X-Press Container Line has started a new weekly feeder service linking Gothenburg, Antwerp and Southampton, which is the first direct container service between these ports. Meanwhile the company has cut Antwerp from the Gothenburg Express (AGX) and short-ened the service to a final call at Rotterdam.

Port of Hamburg reported a strong growth of 8% in seaborne cargo handlings with the result of 89.4 mln tonnes in the first nine months of this year. With a total of 5.9 mln TEU the container segment recorded double-digit growth of 10.7%.

Port of Klaipėda has been chosen as a tran-sit hub, through which the United States will send supplies for NATO’s International Security Assistance Force in Afghanistan. The cargo will later go via rail-freight across Russia. Lithuania is the last of the Baltic states chosen to serve as a shipping point for US cargo transit.

Danish ferry operator DFDS and C. Ports (a sister company to Cobelfret) will pay SEK 48 mln to acquire Älvsborg Ro/Ro company, which has been established by the Port of Gothenburg to operate ro-ro termi-nal for the next 25 years. The shares in joint venture of DFDS and C. Ports will be 65% and 35%, respectively. The terminal has seven ro-ro berths and a total area of 463,000 m2. The background of the deal is a decision from February 2010 to devide the port into a mu-nicipal Port Austhority and three separate terminal operating companies. Gothenburg port’s responsibilities will include maintaining

DFDS and C. Ports will own a ro-ro terminal in Gothenburg

What’s new?

Phot

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the harbour and quay’s infra-structure, while Älvsborg Ro/Ro will be responsible for the surface of the terminal area. This operation will open up new opportunities for port employees and the port itself, creating a secure and long-term revenue flow. As Port of Gothenburg’s Chief Execu-tive Magnus Kårestedt states, “DFDS and C. PORTS share our visions with regard to the port, they have sector knowl-edge which is second to none

and they have a long-term strategy. This was a key requirement for agreeing to this long-term deal.” Chairman of the Port of Gothen-burg Sven Hulterström adds, “It feels ex-tremely positive that two of the port’s largest customers have joined forces to run the Ro-Ro Terminal.” The agreement with the Port of Gothenburg will come into effect in January 2011, making DFDS and C. Ports in charge of the terminal company, 320 employees and all customer contracts. Ro-Ro is the first of three terminals in the hands of the private operator. Operations on the container and car terminal in Gothenburg will be transferred next year. �

COMPETENCETAKES YOU THEREwww.upm.comwww.upmseaways.com



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MaritimeMalteurop Polska and Copenhagen Merchants will jointly develop Gdańsk Bulk Terminal. GBT, with warehouse capac-ities of 35 thou. tonnes, is due to launch its operation in autumn 2011.

Extra-slow-steaming (ESS) programmes have increased this winter. According to the analyst AXS Alphaliner, ESS, ena-bling carriers to burn less fuel and absorb excess capacity, is currently adopted on 93% of Far East-North Europe loops and 80% of Far East-Mediterranean loops.

NORDEN’s 2010 Q3 operating profit (EBIT-DA) was USD 22 mln compared to USD 28 mln for the same period in 2009. The total operating profit for the first 9 months increased by 178% to USD 201 mln against USD 72 mln for the same period in 2009.

Maersk Line is the most reliable ship-ping line according to Schedule Reli-ability Insight report Q3 2010 on the 20 largest carriers, issued by Drewry Ship-ping Consultants. Maersk’s schedule reli-ability performance in Q2 2010 reached 78.9%. The second place in the rating belongs to Hyundai Merchant Marine with an on-time rate of 78%, followed by APL (73.8%) and United Arab Shipping Company (67.9%).

The European Commission has launched “blue belt”, a one-year pilot project designed to reduce complex ad-ministrative procedures in shipping as well as ensuring free vessels operations within the internal EU market. Work on the “blue belt” will be carried out by the European Maritime Safety Agency.

What’s new?

The analysts’ view on the crisis in shipping

According to research by the Centre for Mar-itime Studies of the University of Turku, Finland, total cargo volumes decreased by 10% in Baltic seaports in 2009, comparing to the year before. A dramatic fall in all cargo types was noted, but handling of containers decreased the most (by nearly one quarter). Between 2006 and 2009, the total amount of cargo handled in Baltic ports declined by 6%. Measured by total handlings, Russia became the leading country in the BSR, with a share of 23% in 2009, closely followed by

the former leader, Sweden. The prospects for the container shipping market are now looking con-siderably better. A report produced by Hackett Associates and the Bremen Institute of Shipping Economics and Logistics (ISL) shows that in Sep-tember 2010 container volumes at six of Europe’s top ports (Hamburg, Zeebrugge, Rotterdam, Bremerhaven, Le Havre and Antwerp) grew by an average of 12.6%, year on year. The authors of the report predict continuous growth in 2011, but note that it might be slower than this year. �

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Rough times for European container businessAmsterdam Container Terminals (ACT),

an owned subsidiary of Hutchison Port Hold-ings, will reorganize due to the insufficient market demand. The increasing capacity that characterizes container handling in north-western Europe touches ACT directly, as the company is not able to receive the largest

container vessels. ACT will maintain enough capacity to be able to handle deep-sea cargo, functioning from now on as a smaller, but full deep-sea terminal. This operation will include selling a portion of its equipment and result in job losses for 70 employees, for whom a social plan will be provided. �

10 | Baltic Transport Journal | 6/2010

Promoting Estonian ports’ in the Far East

What’s new?

New merger within Schenker

DB Schenker-owned vehicle logistics compa-nies, Autotransportlogistic and Schenker Auto-motive RailNet are merging “in a response to the industry’s greater demand for integrated network solutions for components, as well as finished vehi-cles from a single source,” as it was stated by board member Karsten Sachsenröder. The new com-pany, DB Schenker Rail Automotive is to start operating in Q1 of 2011 and will comprise four di-visions, with separate sales and dispatch structures for finished vehicles. The new structure is aimed at ensuring business neutrality through third-party forwarders for the finished vehicle business. �Ph

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POLZUG Intermodal GmbHContainer Terminal Burchardkai, HamburgTel.: + 49 40 - 74 11 45-0E-Mail: [email protected]

POLZUG Intermodal POLSKA Sp. z o.o.ul. Ks. l. Skorupki 5, WarszawaTel.: + 48 22 - 336 34 00E-Mail: [email protected]

POLZUG_BTJ_184x118_6.indd 1 03.11.10 15:07

LogisticsThe German Logistics Association (BVL) awarded Nord Stream AG with the 2010 German Logistics Award in recognition of its project “Logistics for the Pipeline”, that is, the gas pipeline through the Baltic Sea from Vyborg, Russia, to Lubmin near Greifswald, Germany, connecting natural gas reserves in Russia with the European gas grid.

Kuehne + Nagel has begun the construc-tion of a new distribution centre in Duisburg’s harbour area, Germany, which will enlarge the company’s warehousing facilities in Duisburg Logport by app. 28,000 m2. The new distribu-tion centre for customers from the consumer healthcare industry will open in May 2011.

HHLA together with Gottwald Port Tech-nology, the Institute for Vehicle Technology at RWTH Aachen University and the Institute for Energy- and Environmental Research Hei-delberg, are involved in a research project, aimed at lowering CO

2 emissions through the

use of battery-powered container transport-ers. If the test project results in a success, HHLA will place electrically-powered containers at its Altenwerder terminal in Hamburg.

Estonian Logistics Cluster (EAC), cooperat-ing with the Ministry of Economic Affairs and Communications, the Foreign Ministry and Enterprise Estonia, is promoting the country’s logistical location and competitive advantages in several cities in China and Vietnam. EAC, 70% financed by the EU Regional Development Fund, aims at increasing the potential of the country’s logistics sector on various target markets and to increase export turnover. A number of meet-ings with companies operating on the Asian and Northwest Russian course as well as state

organizations have already taken place. In addi-tion, Enterprise Estonia, which distributes EU structural funds in the country has recently de-cided to provide EEK 12.8 mln (EUR 818 thou.) for the development of the cluster, which involves 18 partners, incl. ports of Tallinn, Sillamäe, Pald-iski, Estonian Railways, Tallinn Airport and the Tallinn University of Technology. The EAC project commenced in June 2010 and will last until December 2012. As a result of its activ-ity, the export turnover of the members should increase by at least 30% within five years. �

6/2010 | Baltic Transport Journal | 11

OverlandRussian Railways signed an agreement with Siemens AG on 18 November to set up an engineering centre which will produce multiple-unit trains for coun-tries with 1,520 mm gauge rail tracks, along with their components, fittings, parts, and details. The parties intend to establish long-term scientific-technical cooperation focused on developing, building, and testing new projects.

The privatisation of PKP Cargo, Eu-rope’s second largest rail freight opera-tor, is scheduled for 2011. The company is to be sold off for approx. PLN 3 bln (EUR 765 mln) to corporate investors or other companies operating in the in-dustry sector.

VR Cargo and Transpoint, two impor-tant Finnish rail logistics operators, have merged and adopted a new name of VR Transpoint, which has therefore be-come Finland’s largest logistics group. The company offers expertise in railway, groupage (LTL), mass goods (FTL) and international logistics.

What’s new?

After 3 years of operation and funding by the European Commission, the LABEL project has resulted in a truck parking area (TPA) label-ling scheme for Europe. The International Road Transport Union (IRU) and International Trans-port Forum (ITF) have become the implement-ing bodies of the results. LABEL’s objectives were to validate existing international draft standards for adequate facilities for professional drivers as well as to establish at least 70 TPA sites certified in Member States. IRU and ITF will now jointly operate, maintain and further develop LABEL

IRU and ITF to implement truck parking labelling scheme

through the TRANSPark web-based platform developed by the two organizations to provide online information on TPA availability, loca-tion and parking site facilities in 40 countries. TRANSPark, beyond its present e-registration and search tools, will host new facilities such as the labelling scheme. IRU Head of Goods Transport and Facilitation, Peter Krausz, stated that this cooperation will increase driver, vehi-cle and cargo security and improve basic con-ditions for observing strict social rules on driv-ing and rest times for professional truckers. �

Single-wagon rail freight services endangeredThe problem of cutting and collapse of single-

wagon rail freight services was touched upon at the Rail Freight Seminar organized by the European Shippers’ Council. According to ESC, many ship-pers dependent on this service will be forced to ei-ther put their goods on lorries again or be left with no alternative, which may result in factories being shut down. Henk Schaafstal, Chairman of the ESC have stated, that it is important for the ship-pers to remain positive and confirm to the single

wagon-load service providers their willingness to look at any solutions to keep such services go-ing. “There isn’t much time to find solutions; but I have to hope there is still light at the end of the tunnel”, Schaafstal said. Among proposed solu-tions there are e.g. rail freight operators combining their operations for international single-wagon services, or customers joining to offer the neces-sary volumes for a logistics company to manage and contract the necessary rail freight services. �


What’s new?

AviationVilnius International Airport (VIA) has decided to entrust technical maintenance of engineering facilities to the private company UAB Baltic Ground Services. The operation is aimed at reducing the airport’s operating costs and improving the quality of services. VIA signed a one year contract with the company and has set a half-year transitional period.

Negotiations on creating a direct connection between China and Estonia have been held by Hainan Airlines and Air China with Tallinn Airport. HNA Group’s subsidiary Hainan Air-lines has recently begun expansion into Eu-rope. In September the company showed its interest in buying 48% of Latvian airBaltic.

From March 2011, Finnair will start a daily connection between Helsinki and Gdańsk, the company’s third destination in Poland in addition to Kraków and Warsaw. The service to Helsinki is to open fast connections to Asia via Finland’s capital to residents of Gdańsk and the the airport’s catchment area.

Stockholm-Arlanda Airport, Swedish air navigation services LFV and SAS Scandi-navian Airlines are jointly involved in a major EU project (SESAR JU) aimed at cre-ating a single European airspace and elimi-nating unnecessarily long routes, for better punctuality, lower fuel consumption and cutting CO

2 emissions by 10% by 2020.

From April 2011 Lufthansa is going to be using biofuel on commercial flights. The “burnFAIR” project, dedicated to the test-ing of biofuel, is backed by the German government within the framework of its aviation research programme aimed at un-derpinning the sustainability of air traffic.

According to the International Air Trans-port Association, European airlines saw a 12.1% year-on-year demand increase in Oc-tober. The last month has also seen growth of 14.4% y-o-y in international air cargo traf-fic. Until then, overall freight volumes had been declining each month since May.

Construction of a new international pas-senger terminal at St. Petersburg Pulk-ovo Airport (LED), Russia’s fourth largest aviation gateway, has been launched by Fraport and its partners in the Northern Capital Gateway consortium (VTB Bank, Cypriot investor Koltseva Holdings, Cope-louzos Group of Greece).

The largest low cost airline servicing Eu-rope, Wizz Air, has announced the opening of its 14th operational base in Vilnius, Lithuania. With this movement, scheduled for April 16, 2011, the company will launch eight new routes from Vilnius to London-Luton, Robin Hood Airport Doncaster Sheffield, Cork, Eindhoven, Stockholm-Skavsta, Milan-Bergamo, Rome Fiumicino and Barcelona. Services to London and Doncaster Sheffield will be in operation five times and twice a week, respectively. Flights

Wizz Air’s new base in the capital of Lithuania

from the company’s facilities in Vilnius will ini-tially be handled by new Airbus A320. As Wizz Air’s chief executive officer József Váradi states, the airline is extremely content on this expan-sion. “Beyond further enhancing the travel op-portunities in the Lithuanian market, we will create hundreds of local jobs and significant revenue uplift for the local tourism industry,” he adds. In addition, Wizz Air also launches direct flights to Brno, the Czech Republic’s second-largest city, from London-Luton. �

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The EU has increased security on air cargoThe European Union has set out a series of

recommendations concerning air cargo secu-rity in response to the security alert on October 30th, when explosive devices were found in cargo shipments from Yemen at airports in Germany and the UK. The terrorist plan failed, nonethe-less it resulted in delays and vast financial losses. EU proposals are focused on three key areas: strengthening cargo security controls, better coordination of actions and information within

the EU as well as joint action at the international level. New legislative steps will concern cargo originating from outside the EU, the first ones will be to define criteria for identifying freight representing a risk and to establish mechanisms allowing for the evaluation of security standards at non-EU airports. The number of EU inspec-tions will be increased. Moreover, further in-vestment in research is planned to improve the performance of current detection technologies. �

LC: six new aircraft by 2015

Lufthansa Cargo will add the equivalent of six MD-11 widebodies, in response to forecasted 5% annual increase in its airfreight traffic from 2012

to 2015, driven by Asian demand. Ac-cording to the company’s executive board member of Product and Sales Andreas Otto, Lufthansa Cargo will begin think-ing about a fleet replacement in five years and the final decision are to be made by 2020. “We have an excellent system in fine-tuning our loads and to generate the best yield,” Otto noted, and mentioned the company’s investment plans – Lufthansa Cargo, in reaction on increasing demand

for medical shipments, will create a hub for phar-maceuticals transport in Hyderabad as well as a warehouse for cooling freight at Frankfurt hub. �

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6/2010 | Baltic Transport Journal | 1�

Maritime

Happy ending – happy beginningThe merger of APM Terminals & Cargo Service

Once upon a time in the Port of Aarhus, there was a cargo handling company, operating next to a container services giant. One September day in 2010 both entities decided to start working together and merge. Will they live happily ever after?

As they announced August 31st, APM Terminals and Cargo Service set up a joint venture called APM Terminals-Cargo Service; the process of merging is to be concluded by the end of

2010. The new, combined offer comprises one 15-metre deepwater berth, one set of truck gates and on-dock container repair facilities with both standard and refrigerated containers.

“We have decided to join forces and merge the two container terminals to create a larg-er, more efficient and competitive container operation. Together we have a much better chance to position ourselves in the interna-tional container market,” explains Lars Krabbe, Managing Director of Cargo Service Holding A/S. Logically, the main goal of the merger is a higher competitive advantage on the Baltic market as well as a wider scope of services. Among other aims the two parties mention in-ter alia reduced environmental costs.

As far as efficiency and cost effectiveness are concerned, the operation may be well worth a mass. According to Bjarne Mathiesen, Direc-tor, Port of Aarhus, the former two operators were both below the critical volume needed to run viable operations. Hence, bringing the vol-umes together would reduce both capital costs and the running costs per unit handled.

Who’s who

APM Terminals is an independent com-pany, yet associated with the A.P. Møller Mae-rsk Group and a part of the Global Terminal Network. The latter consists of 50 operating container facilities in 34 countries on five continents. In the first three quarters of 2010, GTN reached a container throughput of 23.5 mln TEU and USD 3.14 bln in revenue. The company is developing consistently and has for the time being seven new terminal devel-opment projects underway. However, apart from new investments inter alia in German Wilhelmshaven and Dutch Maasvlakte 2, the company’s activities concentrate on the Asia-Pacific and African regions. This is easily ex-plained by numbers: as APM Terminals’ CFO underlined during the Port Finance Confer-ence in London, the biggest business now lies in emerging economies (South America, sub-Saharan Africa, India), where 2/3 of global container throughput is handled.

Going back to Europe and the Baltic Sea re-gion – the other half of the newlyweds, Cargo Service, is operating in three sectors: project, multi-terminal and warehousing. The main ac-tivity within the project division is the handling and loading of wind turbines. “Every year we load on average 80 vessels with wind turbines,

of about 120,000 metric tonnes each,” says Lars Krabbe. The project division also handles any other heavy duty and out of gage cargo. The lat-ter is to remain the key activity of the company, independent of the merger. Cargo Service op-erates in Denmark exclusively, employing ap-prox. 65 people. Until this year, it was handling 5 divisions. However, due to the merger, it has transferred all container related activities and assets (container terminal, repair and EMR) to the joint venture with APM Terminals.

Beneficiaries

The new company will certainly stimulate some thoughts to its competitors, among them other Danish ports, as well as Gothenburg, Bremerhaven or Hamburg. Aarhus is one of the most important ports of the Baltic Sea. The port is ambitious both regionally and locally. Not only is it striving to become a hub for the Baltic (see BTJ 2/2010), but it is also developing local and regional connections. For example, in June 2009, thanks to the efforts of APM Ter-minals, an innovative rail service was opened, allowing quick service to Copenhagen.

It is certainly too early to foresee a success or a failure of the undertaking; however, there seems to be a few benefits and beneficiaries of the merger. According to Bjarne Mathiesen, Port of Aarhus will be one of them, since there is no longer the same need for internal competition in the port itself. By combining forces, the port would gain a more focused image, concentrating on container services as well as, hopefully, bigger cargo volumes.

More mergers ahead?

The Baltic Sea region has been witness-ing numerous fusions recently (port opera-tors, ports themselves) and it seems that this may even be the case more often in the future. Rationalizing operations and consolidating volumes will probably be continued – not only due to the economic downturn. “The up-coming restrictive limits for emissions in the Baltic Sea will probably result in a closer co-operation between shipping lines and ports,” says Mathiesen. This will not necessarily lead to fewer actors, but the roles of the different entities may shift. In the long run the number of market players may therefore decrease. �

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1� | Baltic Transport Journal | 6/2010

Maritime

The vision and the spiritStena Line’s historic shift of vessels lifts up Karlskrona-Gdynia route

Introduction of two new superferries to the Hook of Holland-Harwich service has started a domino effect in Stena Line’s Baltic fleet. Karlskrona-Gdynia has recently received the first one of the thoroughly converted ferries intended for this service.

It is the most significant ship transfer in the company’s history. Two sister giant ferries have been introduced to the Netherlands-UK route. Each one is 240 metres long and comes with a capacity of 1,200 passengers, 230 cars

and 300 freight vehicles. The new vessels have taken over the names of their predecessors and operate as Stena Hollandica and Stena Britan-nica. In the meantime, the ‘old’ Hollandica and Britannica have been moved from the North Sea to the Sweden-Germany service, where they replaced four vessels that formerly sailed between Gothenburg and two German ports – Kiel and Travemünde. Hence, pure freight service to Travemünde has been terminated and the total traffic now goes only on the re-ferred two ro-paxes via the Port of Kiel. Cor-respondingly the ships have been renamed to Stena Germanica and Stena Scandinavica (so the names on the Gothenburg-Kiel route are also kept the same). Finally, the ‘previous’ Ger-manica and Scandinavica are to run between Karlskrona and Gdynia. The first ship has undergone serious conversions and already

entered the line in early November under the new name of Stena Vision. The second unit, af-ter its similar reconstruction, will join in April next year as Stena Spirit.

Good times, bad times

Established 15 years ago, Karlskrona- Gdynia has always been primarily a cargo route, even though it naturally serves people’s trans-fer between Scandinavia and the continent. The service has been developing very well, of-ten with annual double digit growth in both cargo volumes and the number of passengers. It reached its peak of almost 94,000 ro-ro units and over 430,000 pax in 2007. Yet, the route has gone through some tough times within the last two years, reacting extremely fast to the fi-nancial depression already in November 2008. Freight volumes fell to 86,000 in 2008 and then further down to only 66,000 last year. Mean-while the passenger traffic firstly declined to the annual level 375,000 and then to 350,000 in 2009. An important factor was however that the company withdrew one ship from service,

leaving only two vessels on the line. Appar-ently, today there has been a particularly quick recovery seen as well. The first three quarters of 2010 brought 57,000 units which stands for 15% y-o-y improvement. Within the same pe-riod, the route has also carried around 300,000 people, which – even though the peak summer days are over – can be a nice prognosis for to-tal 15-20% annual growth. According to Stena Line executives, freight traffic on this route is well balanced both ways, but as the service was previously provided by one ferry and one char-tered freighter vessel, the company could not make full use of its potential due to the differ-ences in ships. A well equipped Stena Baltica is surely much more attractive to cruise travel-lers than cargo customers. It can facilitate 1,200 people in its hotel section, several restaurants, bars, a night club and wellness centre. On the other hand, the ship can fit max. 80 trucks on its 1,590 lane metres. Adversely, Finnarrow is able to carry up to 120 lorries (2,400 lm), but it is designated for 200 people only and offers prac-tically no leisure opportunities onboard. These, together with the usual problem of filling up day departures (contrary to often fully booked evenings), has caused a number of difficulties in proper line utilisation. Nevertheless, the average freight load rate on one ship in service in Sep-tember 2010 was already at the level of 69%. To-day cargo stands for more than half of the line’s income mix, with the rest shared by passenger tickets and onboard services.

New ferries in service

Running two practically equal ships will be a big change to the Swedish-Polish route. The charter agreement with Finnlines has just come to an end, and Stena Vision has stepped into Finnarow’s place, offering 2,200 lm and accommodation for 1,300 passengers at basic, possible to improve even up to 1,700 people at maximum peak times. As one might notice, today’s cargo space is a bit down, but imple-menting the second sister vessel will raise the overall freight potential by 20% and more than double passenger capacity. This is indeed a huge upgrade in Stena Line’s travel offer, with nicely renovated cabins, a good choice of restaurants and bars, a night-club, modern conference rooms, luxury SPA, a 400 m2 shop-ping centre, sundeck and an open-space living room with a glass wall giving everyone an at-tractive view of the sea. “With two departures

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per ship daily, we are talking about even 7,000 people travelling on this route every day, and we can facilitate everybody with all needs, in-cluding organizing conferences or even con-gresses,” says Niclas Mårtensson, Karlskrona-Gdynia route director. Stimulating passenger traffic is surely the main expected outcome, but modern facilities should not go without attention from the trucking sector. Ferry market observations show that whenever one introduces a modern ship, the line usually also experiences an increase in freight traffic. Of course, cargo will most likely continue as Karlskrona-Gdynia’s bread and butter from Monday to Thursday, just supported with an extra add up of leisure and holiday during the weekends. “Truckers are actually among the best customers of our onboard service, mak-ing wide use of shopping and entertainment,” states Marek Kiersnowski, Stena Line Pol-ska’s managing director. “Many drivers spend a significant part of their lives onboard ships, and we pay particular attention to the quality of their service,” tells Kiersnowski. Thus, there are modern truckers’ lounges at terminals in both ports. Each of the new ferries also has a dedicated restaurant and a truckers lounge room open 24/7. Each one of drivers cabins is equipped with a TV set and an Internet hot spot. The company also runs a special loy-alty programme for drivers that – besides the usual rewards – allows for a free leisure trip to take together with an accompanying guest. Stena Line also distinctly cares for the qual-ity of food service both for the usual passen-gers and the truckers, with the latter having each day a different menu that cannot repeat within a 10-day period. This allows people to drive to/from Scandinavia and back without repeating the same meal.

With the introduction of the first new unit right now, the route management will keep the same timetable and aims at resigning from two different schedules (the peak summer season and low winter season) after the implementa-tion of the second unit. A little exception to this rule will be short Christmas and Eastern holidays. “We trust that one full year sailing will be well appreciated by both passengers and freight customers,” finalizes Kiersnowski.

Boosting Sweden-Poland traffic

As Niclas Mårtensson puts it, the two new ships have the chance to create a unique com-bination of freight/passenger services on the Baltic – quite different to the ones in e.g. the Stockholm area, where you have many lines to numerous destinations, but all the ships (even those with space for 2-3,000 guests) offer max. 800 lm for cargo. Conversion works of the two units cost about EUR 32 mln, and a significant

part of this goes to creating an extra 400 lane metres of freight capacity to each ships. All formerly existing car decks are now dedicated exclusively to cargo, and a new passenger car deck was built in place of the removed 150 cab-ins. “The reason why we have undertaken this huge investment programme is that we still believe in the market, even though we do not expect a further freight boost on this route as we experienced this year,” reveals Mårtensson, at the same time expressing his belief in con-tinued growth of 6-10% in coming years. Any-way, this might be still more than the projected outcome of Danish or German markets (2-3% annual increase). His optimism refers much to the infrastructure improvements currently go-ing on in Poland. “The A1 highway in Poland that should be finished within 1.5 years will be-come an aorta for cargo flows from the Czech Republic, Slovakia and Hungary, and it will go directly up to our terminal in Gdynia,” he says. Meanwhile the new road should also be widely used in transit down to the Mediterranean and the Balkans by Swedish holiday makers. “We will be offering the quickest and most enter-taining way down to the continent, however, we see changing the Swedish travel habits as a real challenge,” Mårtensson points out. Defi-nitely, with the previously used vessels, the company didn’t have the right tools to grow on the Swedish tourist market. The most attrac-tive departures from Sweden were carried out by a cargo ship, which finally resulted in 70% of the passengers being Polish. Due to the lack of proper facilities, there have also been very few coach groups and cruising passengers. Mårtensson also believes in the rising share of unaccompanied trailers. It is still a very small percentage (currently four per cent of total volumes), but Stena Line expects a further

change in the freight pattern due to the visible trend of just-in-time deliveries and more trail-ers coming by rail to Karlskrona from main-land Sweden.

The new vessels are of maximum size that can call at Helskie Quay in Gdynia, so they are perfectly matched to today’s infrastruc-ture. However, even if the ferry terminal can serve 1,700 customers at once, getting to/from the city may soon become a bottleneck, not-withstanding if the city adds extra shuttle bus services or not. Before the crisis, the company was involved in serious talks with the port au-thority to build a new terminal, but the project has been postponed due to the fall in traffic. “It naturally depends on the market, but it’s likely that we will be in need of putting larger ships of 240 m on this route within the next five years,” comments Polish subsidiary managing director. Supposing things go well, this issue can soon step back on the agenda.

The company is also very serious about developing services in the central part of the Baltic. They purchased a majority of shares in Port of Karlskrona this year, and being so far its only customer – it also takes the burden of all the operating costs. Therefore, Stena Line wants to build up the critical mass in Karlskrona by strengthening its connection to Poland, and by starting up new services either themselves, or together with another operator. “Apart from our ships staying in the port, there are still 19 hours a day to fill up traffic and to help us transform Karlskrona into a transport and logistics centre for both freight and passengers,” invites Mårtensson, pointing to the East as the most interesting direction for potential network expansion. �

Piotr Trusiewicz

Stena Vision during its conversion from Stena Germanica in Gothenburg shipyard (October 2010)

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Maritime

Striving for stabilityInterview with Søren Poulsgaard Jensen, COO Freight Based Network, Scandlines

Scandlines, one of Europe’s largest ferry companies, operates 17 vessels on nine of its own routes among 12 ports in the Baltic Sea. About the company’s plans and investments, we talk with a mem-ber of the management board of Scandlines Deutschland.

� You have been responsible for Scandlines’ freight services for one year now. What has changed in this area at the company during this time?

I think the crisis hit Scandlines in a very simi-lar way as occurred in other companies offer-ing transport solutions. The customers simply stopped trading with each other and we, as many others, saw a sharp drop in the volumes. We entered crisis management mode with savings rounds, etc., and are very happy that most economists do not believe in a double dip, so we can now concentrate on catching up. Generally, this year our focus has primarily been on creating route stability following a difficult and challenging 2009. Nevertheless, we have managed to launch a new route be-tween Travemünde and Ventspils/Liepaja in this period as well.

� And how is this line doing? Are you content with the volumes onboard?

Certainly, we are happy with the develop-ment. The transport to and from the Baltics is a market with a lot of competition and a hinterland that can be used for various op-tions. On this basis we are very content to see that our customers have received our ini-tiative well. During the crisis we saw the vol-umes on some of our Baltic routes drop by 50% within one year. This year we have seen it come back with 25-30%. In other words,

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a great improvement measured on the huge loss of the year before. However, this devel-opment describes the BSR’s situation well – the market is not stable yet and the fluc-tuations are dramatic.

� Can you tell about your new investments in Rostock, Germany and Gedser, Denmark?

Scandlines is investing a total of EUR 230 mln in the expansion of the ports in Ros-tock and Gedser and two newbuildings. In Rostock a new berth will be rebuilt accord-ing to Scandlines’ specifications to be ready for the arrival of new ships in 2012. The cur-rent berth will be used as a backup, so that Scandlines will be ready for 4-ship opera-tion, if necessary. In Gedser harbour owned by Scandlines, we will invest EUR 43 mln in its expansion. A new terminal, check-in and marshalling area will be created there, amongst others.

� How do you think the Fehmarn Belt Fixed Link will affect your route net-work? Are there any plans for further modernization of the fleet, besides the Rostock-Gedser service?

We do not expect the bridge to be ready sooner than 2018, so it is 8-9 years from now, a lot can happen during this time. We are considering the continuation of our services on Puttgarden-Rødby, even when the fixed link is ready. We will of course have to adjust our business model to the circumstances, but there may actually still be demand for a ferry business parallel to the link. Our ships on the route will be amortized by 2018, so we will be able to operate at low costs. Nevertheless, we are preparing for a shift in our business, and the newbuildings we just ordered are a sign of that. The Eastern Corridor is becoming more and more important and we will be focusing a lot on developing Gedser-Ros-tock. We are hoping to have hourly depar-tures on this route, we might even operate with four ships in the future.

� Does Scandlines have any plans to add new ro-ro services towards Russia? Do you consider this country a promising market for these services? What do you think about the privatization of Polfer-ries (PŻB)?

We have no current plans towards Russia, but there is no doubt that any Baltic op-erator will always have to keep the Russian market in mind. There has been a huge im-provement over the last decade in Russian ports when it comes to container handling. I worked in Moscow from 2000 to 2004 and when I started there, Riga was by far the most important container hub for Rus-sia. Within two years the traffic migrated to St. Petersburg because that was the strategy from the political side, and business as well as the authorities responded to the call. The entire nature of the ro-ro segment is to get the vessels in turning as quickly as possible, allowing a fast cargo flow. The procedures in Russia today have not yet reached the level that calls for this traffic to find a natu-ral way directly into the Russian market. That will, however, change at some point and all Baltic operators need to keep an eye on Russia when that happens. Regarding Polferries, I can only say that, in general, competing in ferry shipping with state-sup-ported companies as a private operator is unhealthy.

� Today, there are 15 ferry and seven ro-ro operators with regular open freight services on the Baltic (not mentioning car carriers and dedicated industrial shipping that are opening up in the mar-ket). Do you think that the network is already dense enough?

It is hard to say. One can argue that the cur-rent threatening legislation on sulphur emis-sion may potentially create a disturbance in the availability of ferry services, so I hope our politicians are keeping a keen eye on that. �

Lena Lorenc, Marek Błuś

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Maritime

Economic cornerstones of the regionInvestments in Bremen and Bremerhaven

The ports of Bremen and Bremerhaven play a major role in the local and national economy of Germany. Today about 86,000 jobs are directly or indirectly related to them.

Ports and foreign trade have estab-lished the economic base of the Free Hanseatic City of Bremen since the 9th century. The con-stitution of the State of Bremen, therefore, includes provisions

prescribing the construction and maintenance of modern ports and the pursuit and ongoing development of shipping and trade, for the ben-efit of Bremen, Germany and Europe.

The Ports of Bremen nowadays consist of two port complexes located at the river Weser: the City-port of Bremen and the Port of Bremer-haven. The key feature of the twin ports is their universal function and their distinctive division of labour. While Bremerhaven, located only 32 nautical miles from the open sea, specialises in handling container vessels, car carriers and fruit reefer ships, the terminals in Bremen, located 60 km further to the south, concentrate on bulk, general and heavy-lift cargo.

Containers have been the major driving force of growth for the Ports of Bremen over the last 40 years. The quay beside the river We-ser at Container Terminal “Wilhelm Kaisen” is the backbone of the port and can accommodate the world’s largest container ships. Since its early beginning in 1968, Container Terminal Bremer-haven has passed through a continuous process of expansion and upgrading. With the comple-tion of Container Terminal 4 at the end of 2008,

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Bremerhaven offers a total quay length of almost five kilometres including 14 purpose-built berths for mega-container vessels and more than 300 hectares of operating area and storage space. Three independent companies, NTB, Eurogate and MSC-Gate, operate the terminal facilities.

Organization

The remit of the harbour master, such as ship-ping traffic control and other sovereign tasks, is the responsibility of the public port authority “Hansestadt Bremisches Hafenamt”. In 2002 the responsibility for construction work, maintenance, operational management and marketing of the ports was transferred to Bremenports, a company founded under private law. Bremenports, a private company whose prime responsibilities are port construction and port expansion projects. The city is the owner of the infrastructure and hence responsible for building and maintenance costs. The superstructure, however, is owned and main-tained by private companies. On behalf of the Free Hanseatic City of Bremen, Bremenports leases out operation areas to private companies.

The driving forces

The Ports of Bremen and Bremerhaven are one of Europe’s most important centres for cargo handling, transportation and logistics, playing an

important role especially for the Baltic Sea and Scandinavia. Ranked behind Rotterdam, Ant-werp and Hamburg, Bremerhaven is the fourth largest container port in Europe. As one of the world’s most important automobile transhipment locations, Bremerhaven can accommodate almost 125,000 vehicles. Nearly half of the parking ca-pacity is protected in high-bay warehouses. Cur-rently, there are 12 berths available for loading and discharging vessels specialised in the transport of automobiles and other rolling cargo. The technical centres, covering 300,000 m2 and called “Europe’s biggest car workshop”, offer a wide range of pre-delivery services, like depreservation and car-wash plants, finishing booths and numerous car lifts.

Bremen is also the birthplace of cargo vil-lages – GVZ Bremen was established already in 1985 and is now a recognized leader within the league of cargo villages. It offers 496 hectares of intermodular, highly synergized solutions for all requirements of logistics services and production. 150 companies with a total workforce of 8,000 are located in the cargo village of Bremen.

Infrastructure and future investments

In competition with other European seaports, a strong position in the automobile handling and logistics sector can be secured only by continu-ously adapting the port infra- and superstructure. Having evaluated various scenarios, the Senate of


Maritime

Bremen decided to improve seaward access by building a new lock replacing the old Kaiser-Lock, a permanent bottleneck since 1897. Its insufficient dimensions as well as increasingly frequent dis-ruptions and repairs have disturbed traffic. Con-struction works began in November 2007 and the new lock will be inaugurated in April 2011.

The seaward approach to Bremerhaven from the North Sea is the so-called Outer Weser. In order to improve accessibility for large container vessels, the Free Hanseatic City of Bremen ad-vocates the deepening of the Outer Weser navi-gation channel. The river itself is classified as a federal tidal waterway and is not yet navigable by fully loaded Ultra-Large Container Ships (ULCS) independent of tides. The aim of the projected adjustment of the Outer Weser is to provide non-tidal access to Container Terminal Bremerhaven for ULCSs with a maximum loaded draught of 13.5 m. This is equivalent to a future load factor of 93% of a design draught of 14.5 m in S-Class ships. Dredging works are expected in 2011 and will be accompanied by another project expand-ing Lower Weser. Both projects represent de-mand-driven adjustments of the river and prom-ise a significant improvement in the seaward accessibility of Bremerhaven and Bremen.

In view of future container turnover and the growing size of container vessels in leaps and bounds, the Senate of Bremen decided to

co-develop the JadeWeserPort project in Wil-helmshaven (80 km West of Bremerhaven) in order to ensure the region’s position as a major maritime location. The project constitutes a unique, over-regional cooperation between the two Federal States of Lower Saxony and Bremen. Together, they have launched Germany’s only deep-sea port for the future generation of con-tainer ships. From August 2012, the JadeWeser-Port will handle container ships with capacities far beyond 8,000 TEU, lengths of up to 430 m, 58 m in width and draughts up to 16.5 m without tidal constraints. The JadeWeserPort will be the east-ernmost deep-sea port in the European North Range whilst complementing Bremerhaven, with its annual projected handling capacity es-timated at 3.5 mln TEU.

In 2010, the Senate of the Free Hanseatic City of Bremen decided to build a new terminal in Bremerhaven for loading and handling offshore wind energy equipment (such as wind turbines) for destinations in the North Sea. Located close to a number of offshore wind energy component producers, the facility offers nearly perfect condi-tions for the industry. It promises that both indus-try and the city will make a maximum profit from the current boom regarding renewable energy. Up to 25% of offshore wind energy are logistics costs. Hence, companies situated close to the new site should be able to reduce these costs significantly

as land transport can be avoided. Built and oper-ated by a private investor, the new terminal will cover 0.25 km2 with a quay wall of about 500 m in length and enough capacity to handle up to 160 offshore wind turbines per year. Until its open-ing in 2014, offshore wind energy equipment is stored and handled at the south end of CTB. In May 2010 RWE Innogy signed a two-year con-tract with the local container-terminal operator Eurogate to allocate an area of their terminal for storing and handling of heavy-weight equipment for RWE Innogy’s offshore-wind park.

Conclusion

The Ports of Bremen represent a key region within Germany and are among the busiest in Eu-rope serving major international deep sea routes, Northern European routes and the Baltic Sea. While their importance has steadily increased over the years as well as their position among the logistics hubs for the European and German industries, it has become necessary to reconsider and adapt the traditionally established structures of the port. With this guideline in mind, the Sena-tor of Economic Affairs and Ports will further develop the infrastructure in cooperation with port service providers and their customers. �

Jörg Lattner, Iven Krämer


Maritime

Ships under a magnifier

Two thousand years ago the ancient Greek geographer Strabo divided people into three categories: alive, dead and… sailors. This shows that shipping has always been a dangerous profession. In the 21st century, this has not changed much.

New EU regulations to improve maritime safety

F igures for 2009 show that the total number of ships involved in accidents on European sea waters (626) and loss of lives (52 seafarers) were substan-tially lower in comparison to

2007 and 2008. Although they show a sig-nificant decrease in accidents, largely due to the global economic downturn in the last years, the number of vessels involved in ac-cidents in 2009 was still 17% higher than in 2006. One of the reasons is ageing of the world merchant fleet. Today’s average age of a ship is over 13 years and increasing.

In terms of country of registry, 66% of the vessels involved in accidents on EU wa-ters were registered in EU countries, while around 34% flew non-EU flags. European ships are younger than the world’s aver-age, even by half, like the Danish fleet for example, but there are still some 19+ year old ships in exploitation. About 69% of life losses in 2009 were on EU-managed ves-sels, down from 77% in 2008. One way to increase safety is to control ships at ports. In practice, this is the only way.

Regulations today

According to the current rules it is the responsibility of flag states to certify that vessels meet international safety require-ments. It is nothing more than self-con-trol. Currently, 25% of vessels calling at EU Member State ports are inspected. Each year European ports register more than 80,000 individual ship calls and this number re-mains constant. The purpose of inspections is to improve maritime safety on EU waters by attempting to ban sub-standard ships. Vessels which have already been inspected within the previous six months are exempt.

The regime of technical inspections is of crucial importance to prevent maritime accidents, the loss of life at sea and pollu-tion caused by ships. The current regime operates within a ‘national logic’, which means that the selection of 25% of ships for inspection is determined by national au-thorities. It makes the analysis at a pan-Eu-ropean level difficult or even impossible.

The danger comes from all ships. The exchange of information between EU

Member States is regulated under Direc-tive 95/21 and the Paris Memorandum of Understanding of Port State Control, the international agreement by means of which the EU shares port state control with Can-ada, Croatia, Iceland, Norway, the Russian Federation and Slovenia. The new Directive 2009/16/EU on the Port State Control in-spection regime (PSC), commonly known as ‘name and shame’, is one of the legisla-tive measures of the third Maritime Safety Package.

The black list

The new port state control regime will be introduced on January 1st, 2011. The banning provisions will be extended and shipping companies as well as flag states will be monitored more exhaustively with an advanced information system, known as THETIS (named after the Greek goddess of seas), operated by the European Mari-time Safety Agency (EMSA). The agency has been given the technical responsibility for monitoring port state control at the EU level. This involves assessing the function-ing of port state inspection systems set up by individual EU Members, undertaking a comprehensive analysis of global statistics relating to vessels calling at 1,000 EU ports, as well as analysis of data on individual ship inspections.

The new regulations provide methods and tools to rank shipping companies that have had a number of deficiencies detected during technical inspections on ships they own or operate. Ranking of the companies is a factor assigning the frequency of as-sessments. It will show the commitment of a company to safety standards. Records will be public on a website and updated daily. The online register will list companies whose safety performance has been low for a period of at least three months. It will be ‘a black list’, which is a very powerful tool particularly on the ferry market, where competition is very strong and demand is constant.

The new regime also strengthens the EU’s ability to push sub-standard ships out of European waters, making it possible to ban any category of ships, inserting a mini-mum time limit for a ban and, what is very

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important, introducing a permanent ban on ships that continue to flout the rules. The directive implements the refusal of access measure on all the ships that have been repeatedly detained, and publishing and updating the EU list of banned ships on a regular basis.

„The idea of more strict port state in-spection may improve the safety at sea and protect the lives of ship crews,” says Jerzy Uziębło, General Secretary of Polish Cham-ber of Maritime Commerce in Gdynia. “However, some countries may take advan-tage of these regulations to discriminate or inconvenience some shipowners and certain flags,” he worries. This may indeed cause an increase in freight rates and the price paid by the consumers as well as de-crease employment of sailors in the world fleet. “The idea of more strict inspections is very good, but I am afraid of turning it into a lobbying tool for shipping potentates,” warns Uziębło.

Carrot and stick

The companies presenting higher risks will be subjected to very frequent inspec-tions and the ones with good records will

benefit from much fewer inspections. The pan-European system of co-ordination and analysis will allow for more effective use of inspection resources in ports, in particular by targeting high risk ships and companies with low safety performance.

The crucial element for the risk profile is the flag of the ship. The new regulations on flag performance point out the criteria for calculating the risk profile, which de-termines the priority for inspection in EU ports. The criteria will be established by EMSA.

Information on the ships, companies and flag performance, concentrating on the more dubious ships, will be available to all port state authorities via THETIS (The Hybrid European Targeting and Inspection System), tracking every ship calling at EU ports, as well as the safety records of flag states, individual shipping companies and other ‘key actors’. It will be available to all authorities that have signed the Paris Mem-orandum of Understanding. THETIS will receive information regarding ship calls through SafeSeaNet (SSN), which is the EU maritime information exchange system, and from the Canadian and Russian Federation systems. The EU and EFTA Member States

are required to have in place the necessary arrangements to facilitate the reporting obligation through their own national sys-tems, which in turn are connected to SSN.

The pre-arrival notification must be transmitted at least 72 hours in advance to ships eligible for expanded inspection and at least 24 hours in advance for all the ships arriving or leaving a port or anchor-age within the Paris Memorandum of Un-derstanding region. This provision already exists for certain ships, but as of January 1st, 2011, it will be applicable to all ships with a high risk profile and any passenger ship, oil tanker, gas tanker, chemical tanker or bulk carrier, older than 12 years of age. If the voyage is less than 24 hours, which is a common case on the Baltic Sea, notifica-tion shall be given when the ship leaves the previous port at the latest.

EMSA will play a key role in monitor-ing port state control at a European level. To understand how important it is, we have to look at the numbers: 1,000 individual ports in Europe, 3.5 bln tonnes of goods and 350 mln passengers being transported on millions of ship journeys each year. �

Marek Perzyński


Maritime

Implications of the PROBO Koala case on maritime shipping

The discussion concerning the legal treatment of waste generated onboard ships is gathering pace. A recent ruling in the case against the oil trading company Trafigura in Amsterdam (also known as Broom II) adds fuel to the debate on the gaps between the relevant legal regimes and their consequences for shipping petroleum in Europe.

Legal ambiguities on ship waste

On 23 July 2010, Trafigura was found guilty of breach-ing the EU’s Waste Ship-ment Regulation (old) 259/93/EEC and fined EUR 1 mln for illegally export-

ing hazardous waste out of the EU to a non-OECD country. The events in question took place in the Port of Amsterdam, between July 3-5, 2006 and concerned the management of waste products generated onboard PROBO Koala, a product-bulk-ore vessel under char-ter to Trafigura at the time. PROBO Koala’s slops were a mix of spent caustic soda, gaso-line and catalyst, produced as a result of on-board washing of coker naphtha cargo.

After failing to arrive at a commercial agree-ment with the Amsterdam port reception facili-ties operator, Trafigura received authorization to re-load the partially off-loaded slops back onto PROBO Koala and leave the port. These slops were subsequently dumped illegally around the city of Abidjan in Côte d’Ivoire by a local waste management contractor. This illegal dumping in Africa was widely reported in the media and ensured that the court proceedings were highly publicized, particularly in the Netherlands,

which may have distracted attention from the purely technical and legal issues of the case.

MARPOL or Basel Convention?

Central to the Broom II case has been the question of exactly which legal regime should apply to the PROBO Koala slops. Should the slops be governed by the International Conven-tion for the Prevention of Pollution from Ships (MARPOL) or the Basel Convention on the Control of Transboundary Movements of Haz-ardous Wastes and their Disposal? Both inter-national regimes have been implemented at EU level by the Port Reception Facilities Directive (2000/59/EC) and Waste Shipment Regulation (1013/2006/EC), respectively.

Briefly, MARPOL as well as relevant EU and national implementing legislation applies to waste generated onboard ships during a voyage, regardless of its chemical character-istics. After such waste is generated at sea, it is subsequently disposed of at appropriate re-ception facilities at ports. The MARPOL legal framework has been designed in order to pre-vent uncontrolled disposal of waste at sea and is essential to ensure the smooth functioning

of maritime shipping, which is particularly im-portant in busy ports.

On the other hand, the rationale behind the Basel Convention was exactly the opposite of MARPOL: to limit international movements of hazardous waste. However, the Basel Convention is only intended to apply to hazardous waste pro-duced on land. Complex administrative proce-dures apply to such movements, and all import/export of hazardous waste needs to be subjected to prior notification and agreement. Most im-portantly, the Basel Convention and its relevant EU implementing legislation provide a specific exemption for waste generated in the course of the “normal operations of the ship.”

Separation for a reason

Because of their very different objec-tives both legal regimes are structurally separated by the exemption clause in the Basel Convention for ship-generated waste. With hundreds of ships entering EU ports each day, the lengthy administrative proce-dures required by Basel would simply not be feasible in the day-to-day reality of mari-time transportation.

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Implications of the PROBO Koala case on maritime shippingYet the Broom II case heard by the Amster-

dam court has raised the question – what legis-lation should apply to waste generated onboard a ship which has been partially off-loaded in a port and then re-loaded back onto the vessel?

Trafigura’s defence argued that MARPOL could be the only applicable legal regime as the waste was generated onboard a ship. Moreover, PROBO Koala was specifically classed to conduct such onboard operations. The Dutch prosecution, in contrast, argued that the company violated the Waste Shipment Regulation by illegally exporting the waste, and that the processes which led to the production of waste carried out onboard PROBO Koala should not be considered as “normal”. Fur-thermore, the prosecution contended that the sequence of off-loading and re-loading the slops fundamentally changed their legal status with the result that, upon their return to the ship, they fell under the Waste Shipment Regulation.

The Dutch court agreed with the public prose-cutor’s arguments and dismissed the application of MARPOL and its relevant EU/national legislation

to the case, as well as the operational specifics of oil and petroleum products transportation (such as additivation).

Legal uncertainty and its potential consequences

For professionals involved in daily operations like shipping oil and petroleum products, the im-plications of the Broom II ruling are worrying. By dismissing the applicability of the MARPOL regime, the court has arguably created a legal vac-uum. And, since there are no guidelines on what can be considered “normal” in terms of onboard waste generating processes, the court has called into question the legal status of all waste trans-ported onboard vessels in and out of EU ports each day. What has traditionally been considered MARPOL-type waste is now called into question.

This legal uncertainty could now have a number of wide-ranging consequences. Ambi-guity created by Broom II could create a conges-tion crunch at EU ports or could dissuade ship-

-owners and charterers from transporting oil and petroleum product cargoes in and out of EU wa-ters altogether. Such outcomes could seriously end up endangering the security of the EU’s energy supply. Furthermore, the current legal uncertainty could potentially not only affect the liability for charterers and tanker owners, but also for port au-thorities. Increased liability is likely to drive up the costs of protection and indemnity (P&I) for tanker operators which in turn could affect charter costs.

The Amsterdam’s court ruling has been im-mediately appealed by the both sides, and the appeal proceedings are currently pending. Al-though it remains to be seen what the final ver-dict will be, the Broom II case has already created a precedent. Similar circumstances may occur at any time in another EU port which should raise concerns for all involved in the daily transporta-tion of crude oil and petroleum cargoes. The time for a debate on the implications of the PROBO Koala ruling for maritime shipping is now. �

Roland Antonowicz


Maritime

Making the choice to thrive

Thanks to the natural development of economic trading patterns and its geographical location, Lithuania is an important transit country of the Baltic region. A significant role is played by the country’s only port, Klaipėda, generating approx. 18% of Lithuania’s GDP.

Klaipėda port’s standpoint

Economic fluctuations, increasing volumes of maritime transporta-tion, and fierce competition force ports to make rapid operational and administrative changes. Before the worldwide economic down-

turn, throughout 2005-2008, maritime trade in Klaipėda port enjoyed a growth of 28% (from 21.8 mln tonnes up to 27.9 mln tonnes, respectively). There has been tight competition among the ports in the three Baltic States: Klaipėda, Tallinn, Riga and Ventspils. Klaipėda port captures over 9% of total cargo turnover of the Baltics; in the case of the ports of Riga and Tallinn, it is slightly more: 10% and 11%. However, Klaipėda distinguishes itself with the highest growth in maritime trade: from 15 mln in 1999 up to 30 mln in 2008.

Competitive during the recession

Klaipėda is a multipurpose (37 special-ized terminals), deepwater (-15 m) and ice-free port, providing all maritime business services. The port is able to accommodate vessels with a length of 315 m and with a max. draught of 13 m; tankers with 150,000 DWT and dry cargo-carriers with 80,000 DWT. Enjoying a steady growth in cargo volumes, Klaipėda reached a record turnover of 30 mln tonnes in 2008. The economic slowdown slightly affected its results in 2009: 27.9 mln tonnes were handled, which constituted a 6.7% decrease compared to the previous year. Nonetheless, this was the second best result throughout the port’s history.

Fig. Cargo turnover in the Port of Klaipėda.

Today, Klaipėda again goes for surplus tendency in 2010: according to the prelimi-nary data over 30 mln tonnes of cargo will be handled.

In contradiction to what is anticipated during an economic decline, the recession has played the role of a catalyst in Klaipėda port’s development. During 2009-2010 a radical de-cline in construction material and labour costs was observed. For this reason, large scale in-frastructure projects and dredging works were executed and the latest technologies were im-plemented. The port ingeniously used the cri-sis period for its own development: over EUR 174.1 mln will be invested in port infrastruc-ture throughout 2010-2012.

Facing the future

Projected future growth in cargo flows, in-tensified navigation, larger vessel tonnage, and the increasing number of vessels is making the port realize long-term expansion projects. The existing territory of the port, which is histori-cally situated in the neighbourhood of the city, is intensively used for stevedoring operations; thus, the terminals and warehouses cannot be expanded because of the limited area. Klaipėda port development requires larger territories, greater water depth, and a wider navigation channel.

After considering these issues, imple-mentation of the outer deep-water port project was launched. The future port with

a natural depth of 17–17.5 m could be estab-lished in the northern part, next to the port entrance: an artificial island (1.5 km long and 700 m wide) would be constructed 350 m offshore from the coast; the reclaimed area would have road and railway access linked to the existing port. This year, a Feasibility Study and an Environmental Impact Assess-ment (EIA) of this project began. For that purpose, EU co-financing from the TEN-T fund amounting to 50% was granted. Having completed these works, the comprehensive market study will determine the actual con-struction of the port.

A container distribution hub to serve the Baltic Sea is being established in Klaipėda as well. In 2008 Terminal Investment Lim-ited, closely related to Mediterranean Shipping Company (MSC) acquired the stevedoring company Klaipėdos Smeltė. The new owners of the company plan to establish a container distribution hub for the Baltic Sea region. For 2011, the company’s container sites will be ex-panded and port waters will be dredged up to -14.5 m. Widening of the turning basin is also scheduled. Upon completing the reconstruc-tion, the company, with a capacity of 700,000 TEU, will be capable of accepting ocean con-tainer ships and offering transshipment possi-bilities within the Baltic Sea.

Alongside infrastructure development, the competitiveness of the port is being in-creased by reducing port dues. In March 2010 the amendments of the Regulations of Klaipėda Port Dues came into effect, which provided more favourable conditions for ro-ro, ro-pax, container and cruise vessels. Since then, thanks to the decrease in port dues, two new ro-ro lines started to operate in the port. According to H1 statistics, the growth in ro-ro volumes in tonnes increased by 37.2% compared to the respective period of 2009.

The right decisions

The integrity of all components plays a key role for port competitiveness: well-developed infrastructure, effective storage operations and modern facilities, a flexible port dues system and the highest level of services. The credibil-ity of the port was proved by its clients: by the end of 2010, the port will break its own record with over 30 mln tonnes of cargo handled. �

Rada Ebaltas


A profitable junction

The 1st of May 2004, the day of Poland’s accession to the EU, restored the pre-war balance of the European Baltic states’ rights.

Investment opportunities in the Port of Gdańsk

R egrettably, Professor Jerzy Zaleski, the ever memora-ble economist and geographer, who had depicted the vision of an economically united Old Continent, with Poland having its place there, did not live to see this day. The communist authorities launched the Coal Terminal and the Liquid Fuel Terminal in Gdańsk’s

Northern Port. It never occurred to those attending the celebrations that these “strategic, flagship” developments could ever fall into the hands of a business “from behind the Iron Curtain.” The “Act on Seaports and Harbours” imposed an obligation on Polish ports to separate their operational functions and administrative functions, this leading to a formation of independent companies dedicated to the specific functions of port quays and terminals.

Newcomers are welcome

The new opportunities offered by the Polish transformations at-tracted foreign investors. In 1991, SHV Gas, a Dutch company oper-ating in 27 countries on three continents registered its business unit – Gaspol SA – in Poland and built an LPG terminal and a pier in the deepwater part of the Gdańsk port.

Weissheimer Malz, a German company supplying malt to the brewing industry, located its facilities in the old part of the port. After a series of transformations and mergers, cargo handling and malt processing services are now being provided by Malteurop Pol-ska, a company with financial roots in the French valley of Cham-pagne. Prosperity gave an impulse to another development: on October 29th 2010, Malteurop Polska and Copenhagen Merchants announced their agreement to establish GBT (Gdańsk Bulk Termi-nal), now a member of the extended family of the world’s biggest malt producer and owner of 23 plants in Europe, North America, Oceania and Asia. The modern warehousing facilities with a grain drying installation will stimulate local producers of barley, while providing a supply of inexpensive raw materials to the investor.

A German company, Dr Cordesmeyer, is operating at the site owned by Gdańskie Młyny i Spichlerze. Almost on the opposite side, at the site owned by Gdańsk Phosphate Fertilizers Plant “Fosfory”, where services are rendered by the Cargo Handling and Storage Services Company “Chemiki” Ltd., a plant operated by North Cape Minerals has been launched. The company has its origins in the 19th century history of Sibelco Nordic Group. The growing busi-ness has been attracting further investments. Turku-based Baltic Port Service Oy, having its business units in Sweden and Estonia, offered to build a bitu-men terminal. LOTOS, Poland’s leading producer of asphalt running its plant in the neighbourhood of the port, will be among recipients of its services. Another of Gdańsk port’s terminals is operated by Süd-Chemie AG, a leading supplier of bentonite materials for the foundry engineering, construction and drilling industries, present on the Polish market for 10 years now.

The Port of Gdańsk appeared interesting to the German and British-owned Linde Group. Gas products are supplied to the Polish industrial, medical, environment protection and research sectors by Linde Gaz Polska (co-owned by Swedish AGA).

Decisive dates

On June 1st 2007, the first container ship docked at the newly re-claimed berth of the Deepwater Container Terminal Gdańsk SA (DCT), thus opening a new age in the port’s 1,000-year history. Most certainly, the investment will be a profitable one for both the Global Infrastructure Fund II (managed by Macquarie Group of Companies based in Aus-tralia) financing the project and for British DCT as well. The investment yielded record-breaking throughput volumes and the Baltic container hub status as soon as in the third year of its operation.

On May 28th 2010, the ownership of the “Polish flagship, strategic port investment” – “Port Północny” (Northern Port) – was transferred to the Belgian Group “SEA-Invest” and London-based “ArcelorMittal”. Almost 80 hectares of the port’s best land have been designated for a new Baltic Dry Bulk Cargo hub, suited for ocean-going coal carriers.

Vast prospects

Given the Gdańsk port’s extensive area, new terminals can still be constructed here and safe, deep expansions can be wrestled from the sea.

Moreover, the port offers a perfect location for operators. Aware of the profits that can be earned, experienced partners consider it a real oppor-tunity to acquire shares in Port of Gdańsk Cargo Logistics (Port Gdański Eksploatacja SA), the port’s major cargo operator being privatized now.

In mid-September, the Port of Gdańsk exceeded the throughput vol-ume specified in its crisis-adjusted forecast for the entire year 2010. It is apparent today that this will be a record-breaking year in the port’s history.

Terminals owned by foreign partners have contributed to this achievement substantially. Depositing their hopes for good profits in Gdańsk, they have sealed the status of the port, which has sur-vived as a meeting point of sea trade routes for a thousand years. In return for this, the port is generating profits for its investors. �

Janusz KasprowiczPR Officer

Port of Gdańsk Authority SA

Advertisement Ph

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Crossing the shoreline using HDD technology

Horizontal Directional Drilling is a modern method of installing pipelines, which has revolutionized crossing under natural and artificial obstacles. In 2012 we will celebrate the 40th anniversary of its first application in the US. In Europe first projects were carried out successfully in the early 1980s. Since then, HDD has increasingly been used in marine constructions.

Trenchless engineering for marine industry

Today, with the help of large-scale drilling rigs and proper tech-nology, crossing lengths of over 3,000 m are possible. There are installations of steel pipes and polyethylene pipes with a diam-

eter up to 56“ (DN 1400) in almost every kind of soil formation, including solid rock.

The discussed HDD crossings are for shore approaches beneath the seabed. There are three possibilities: land to land crossing (for exam-ple, under shipping channels), land to water (exits in open waters) and water to water (both the entry and exit points being in open waters). The main phases of a shore approach remain the same as a conventional HDD river cross-ing: pilot drilling, reaming, cleaning and cali-bration, installation, but there are additional challenges related to the marine environment.

Technology

A project is preceded by geological investi-gations made in the form of core drilling or geo-electric surveys. The geotechnical conditions

have a large influence on the cost of construc-tion. One of the most critical elements in man-aging successful HDD operations is selecting the right type and size of drilling rig to fit the specific requirements of each project. The size of a drilling unit is usually described by the pullback/thrust force and torque it can devel-op. Also, pumping capabilities are considered as a basic parameter. Offshore projects due to their complexity usually require large or very large rigs characterized by the pulling force in a range from 1,000 to 5,000 kN. A rig, drilling tools, a guidance system, a drilling fluid sys-tem and associate equipment are selected for each crossing based on the results shown in the geotechnical report and the size of the project (length and pipeline diameter).

The HDD profile must remain within the allowable limits for entry and exit angles and radii of the curvature, also the borehole depth (cover below seabed) must be considered. Pi-lot hole drilling requires a precise directional guidance system used to navigate along its pre-designed profile. In most cases magnetic or gyro systems are generally used. During

the drilling process the contractor can use one or two drilling rigs. In classic cases the bore-hole is drilled from the entry to exit point by a single rig (single shot). As an alternative the contactor can choose the intersect (meeting in the middle) method. This is utilized when the length, the soil conditions, or a combination of the two, do not allow the use of a single drilling rig to complete the bore. In an intersect HDD installation, two directional drilling rigs are placed at opposite ends and start drilling to-wards each other guided by a precision under-ground magnetic tracking device. This method allows extending the length of the hole by at least 50% compared to conventional solutions. This option has become more and more popu-lar during the last decade.

After the pilot drilling, the borehole is reamed to its appropriate size. Based on the final desired diameter and soil condi-tions, this process may include one or more stages. The reaming operation can be car-ried out using two options: as pull reaming (from the exit to entry point) or as push reaming (from the entry to exit point).


Maritime

Once the borehole has been enlarged to the required diameter and reached the adequate level of quality, the product pipe, which has been preassembled in one or more sections, is pulled behind the drill string, attached tool and swivel into the underwater tunnel. Installation is complete when the pipeline appears at the en-try point. The pipe is often ballasted during in-stallation to reduce friction in the hole. Pullback is the preferred option. In rare cases the pipeline

can be inserted into the hole from the rig side using a special thrust device. This kind of instal-lation requires an extremely stable and clean hole. It is usually applied in rock conditions.

At this point drilling fluid is also worth mentioning. It is water-based bentonite and/or polymer suspension which circulates from the surface to the drill string, drilling tool and then back to the surface through annular space. The main function of the fluid is to carry drilling

cuttings out of the borehole and to provide sta-bility to the drilled tunnel. HDD contractors usually apply solids control equipment to min-imize drilling fluid consumption and provide economic handling of the drilling wastes.

Marine operations

All marine operations, like vessel move-ments or diving, are more costly and difficult

Tab. The most noteworthy marine-related HDD projects of the last decade

Year Project Location, Country Typeof crossing Contractor Client Length Pipeline

diameter Application

2001 Ma WanIsland Hong Kong Land to land,

land to water Lucas Australia Sun Hung Kai Properties

2 x 1347 m 1369 m 24” 32”

Powertelecommunication

water

2003 Setubal Estuario do SadoPortugal

2 x land to water, water

to water

LMR Drilling Germany Transgas

4600 min

three sections32” + 6” Gas

2004 Hangzhou pipeline

Hangzou BayChina Land to water Lucas Australia

China Petroleum & Chemical Corporation

(Sinopec)

1800 m 28” Crude oil

2003--2004 HubLine

Massachusetts Bay, SalemUSA

2 x land to water 2 x wa-ter to water

Michels Directional

Crossings USADuke Energy

5015 min

four sections30” Gas

2005 Pokohura Taranaki basin

Pacific OceanNew Zealand Land to water Lucas Australia Shell

Exploration 2 x 1850 m 12” + 6” Gas

2005 Mittelplate Oilfield

North SeaGermany

Water to water

DrillTec Germany RWE DEA

7500 min 6 sections

(1100-1400 m)10” 6” Crude oil Water

2006--2007 Kupe Field Tananaki Basin

New Zealand Land to water DrillTec Germany

Origin Energy Technip 2 x 2300 m 20” 11” Gas Light crude oil

2007 Bocca di Malamocco

Venice LagunaItaly Land to land Anese Italy Consorzio

Venezia Nuova 1350 Pipebundle Power

2007--2008

Abu Ali Island-Berry Causeway

Persian GulfSaudi Arabia Land to land Tatco Boring

UAE Saudi Aramco 2 x 3048 m 24” 30” Oil Water

2008Tidal energy

system North Ireland

Strangford Lough North ISea UK Land to water Longbore UK Marine Current

Turbines 434 m 10” High voltage cable duct

2008West Madura and Poleng

Fields

JavaIndonesia Land to water Nacap

Netherlands Kodeco Energy 1978 m 16” Gas

2008--2009

Le Havre Seaport

Havre, shipping channel

FranceLand to land HDI France TOTAL 1500 m 34” Crude oil

2008--2009

Hampton RoadsHarbor

Shipping Channel,Virginia

USA

Land to water, water to

water

Mears Group USA

Virginia Natural Gas 1000-2200 m 24” Gas

2007--2010

MilfordHaven

MilfordHaven Strait

UKLand to land LMR Drilling UK RWE npower 3004 m 18” Gas

2010Jubail

- Al Fahed Island

Abu DhabiUAE Land to land Flowtex Egypt

Abu Dhabi Transmission

& Dispatch Company

1600 m 48” Water

2009--2010 Devil Creek Indian Ocean

Australia Land to water DrillTec Germany Apache 1850 m 16” Gas

2010 Qeshm Island Persian GulfIran Land to land NSCC-DrillTec

UAE

Iranian Offshore Oil

Company3060 m 16” Crude oil

2010--2011 Gorgon LNG

Barrow IslandIndian Ocean

AustraliaLand to water Lucas Australia Chevron 9 crossings 34” Gas


Maritime

compared to standard land activity. Also for marine crossings, weather conditions, cur-rents and tides can have a strong effect on the selection of equipment and methods of con-struction. If the entry or exit point is situated offshore, the drilling platform or vessel should be installed. The steel riser is usually placed between the platform deck and the seabed. The riser pipe will guide the drill pipe from the exit point up to the platform deck as well as to allow the drilling fluid to return, in or-der to be collected in the surface tank. If the pilot hole is drilled through soft and unstable soils, it is also possible to install a steel casing from the entry point to support the first sec-tion of the hole. Upon completion of the final reaming run, the assembled pipeline is towed offshore and attached to an anchor close to the riser pipe, then connected to the bottom hole assembly (reamer and swivel) and pulled into the prepared borehole. One of the most important considerations in marine projects is the handling of the product pipeline before and during its installation in the borehole. The pipeline could be welded offshore or onshore depending on a project’s requirements. If pipe-line construction is continued away from the exit point, the product pipe is usually prepared in a section longer than the borehole measure distance. Part of the pipeline will be left on the

seabed to allow it to connect to the conven-tional laying section. Most HDD companies have software to analyze the loads and stresses imposed on the pipeline during installation which is also important in long term service.

Application

The table shows the most interesting projects using HDD technology in the marine environment over the last decade. Readers can find all types of installations, although the projects related to the oil, gas and petrochemi-cal industries are the most common.

Considering the potential applications of HDD in the Baltic Sea area, we should mention

feasible investments in the region. Among them the following natural gas pipelines are being built, planned or proposed: Nord Stream (Russia, Germany), Baltic Gas Interconnec-tor (Germany, Denmark, Sweden), Baltic Pipe (Denmark, Poland), Balticconnector (Finland, Estonia). Work is advanced on a number of LNG terminals: Świnoujście (Poland), Klaipėda (Lithuania), Brunnsviksholmen (Sweden), and Primorsk (Russia). Horizontal Directional Drilling is being considered for the installa-tion of cable ducts, which will transmit energy from offshore wind farms to the proposed on-shore electrical sub-stations (Germany, Den-mark, Sweden). Sub-stations are necessary to connect the electricity generated by offshore wind turbines to the power grid. The Baltic States might create a common framework to reduce their dependence on Russia. In creat-ing this system Scandinavians may participate as partners. Finland has already laid power ca-ble across the sea to Estonia and is planning to build another such combination. Sweden plans a submarine power cable to Lithuania. At the local level marine pipeline systems should also be taken into account for the trans-portation of water or treated wastewater. �

Robert OsikowiczRobert Osikowicz Engineering

With HDD, we can seamlessly combine offshore and onshore installations, in-cluding:• Oil and gas platforms and processing

plants• LNG and oil terminals• Marine gas pipelines• Fibre optic network• Power transmission network• Water and wastewater pipelines• Offshore wind farms• Tidal energy systems


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Dredging is vital to social and economic development, in particular, to the construction and maintenance of much of the infrastructure upon which our economic prosperity as well as social and environmental well-being depends.

An indispensable, unknown industry

When in January 2010 I assumed the reins as sec-retary general at the In-ternational Association of Dredging Companies, I had no idea how chal-

lenging the dredging industry actually could be. It’s a wide open, pioneering business, filled with so many surprises, continually re-inventing it-self. If you ask me what has struck me the most as I work myself into the dredging industry,

the IADC and its members, it is how little the general public knows about the importance of dredging. Tea and coffee from Malaysia and Indonesia, fruits and vegetables from South America, shoes and clothes from China, hi-tech products from Japan – we take it all for granted, not to mention petrol for our cars and gas heating in the winter. These things just ap-pear in our homes and we hardly ever stop to think about the route they have taken to arrive on our doorsteps. We hardly think about the

elaborate ports and harbours as well as com-plex airports that make this possible. Without dredging, none of this would exist.

What does dredging actually do?

The world’s population depends heavily on dredging solutions for global trade, coastal defence, urban development, energy supplies

continued on page 30

Dredging and maritime construction

Special i n c o o p e r a t i o n w i t h

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BTJ Special

and leisure/tourism. Let’s take the first for instance: global trade has increased steadily between 2000 and 2008 regardless of busi-ness cycles in the global economy. In 2009 its volume decreased by 11.3%; for 2010 and 2011 the International Monetary Fund pre-dicts a growth of 9% and 6.3%, respectively. Container ships are getting larger and faster, putting increased demand on the capacity and efficiency of ports. From 2000 to 2008, seaborne trade increased by 36.5%, measured in tonnes. Dredging solutions support ports in meeting this challenge by maintaining and deepening channels as well as supplying dredged material for building berths, quay walls and hinterland infrastructure. And, since ships will only get bigger, ports will have to accommodate this growth.

Then there is the question of demogra-phy and climate, urban development and coastal defence. The world’s population is growing, especially in coastal areas. Accord-ing to the United Nations, three billion peo-ple are living along thousands of kilometres

of coastal zones. In 2008 more people were living in urban areas than rural areas, and this number will reach nearly 70% by 2050. Eight out of the ten largest cities in the world are located along a coast. People liv-ing there need space and safety. Along these coasts people are confronted with strong fluctuations in atmospheric conditions and a predicted rise in sea levels. According to International Panel on Climate Change data, the frequency and intensity of storms is in-creasing, raising the need for effective and sustainable coastal defence. The dredging industry plays a significant role in providing safety for these growing population centres by reinforcing dikes and coastal barriers; it creates opportunities for further urban ex-pansion through land reclamation.

And, then there is the subject of energy: despite attempts to find alternative energy sources, fossil fuels still dominate. Offshore resources need dredging to prepare the sea-bed and dig trenches for pipelines, and then protect these pipelines by backfilling with sand, gravel and rock. The strong increased demand for liquefied natural gas (LNG), frequently being exported from remote lo-cations, creates a demand of maritime in-frastructure suitable for this purpose. On the sustainable side, more and more wind farms are being placed at sea. Just observe the coastlines of Denmark, The Netherlands, Belgium or Germany.

And last, but certainly not least, dredg-ing supports tourism and leisure activities, an important source of national income for many countries. Although the economic re-cession has had a slightly negative effect on this sector – international tourism declined by 5% in 2009 – the long-term perspectives remain very positive. Sometimes dredg-ing for recreation and tourist attractions has been a spin-off of coastal defence ac-tivities. Other times, as in beach replenish-ment projects from the Wadden Islands in the North Sea, via the Gulf of Mexico to the Mediterranean Sea, from the United Arab Emirates to Australia’s Gold Coast, dredg-ing is a purposeful choice in re-establishing beaches and providing tourism in or near water. In the end, let us not forget marinas and cruise terminals, theme parks and re-sorts as well as all airports built in the sea (like Hong Kong, Singapore, Sydney and Tokyo), thanks to dredging companies which construct airport platforms.

The question of environment

One area where the power and impor-tance of dredging is often overlooked, and which deserves extra emphasis, is its role in

environmental remediation and sustainabil-ity. This includes cleaning up old industrial areas where contaminated soil would oth-erwise prohibit re-development of the land, as it happened in Dublin (Ireland), Avilés (Spain), or Lake of Tunis (Tunisia). We call it making the post-industrial world cleaner. In fact, in recent years, the IADC companies have developed a new concept called ‘build-ing with nature’. This means understanding the integration of projects with the environ-ment, incorporating working methods to mitigate adverse effects as an integrated part of every dredging project. The work meth-ods related to such environmental aspects cannot be isolated from the totality of the project. Sometimes creating additional na-ture or habitats is not only a compensation measure, but enhances tourism and urban development. In the right hands and done properly, dredging creates a positive synergy between ecology and socio-economic devel-opment.

Bridging the communication gap

Although many of the above-mentioned activities are well known, their dependence on dredging as the underlying support sys-tem is often invisible and unrecognized. Actually, in the dredging industry we don’t feel the need to be pat on the back. We know what we do and that is good enough. Prob-lems arise when the public confuses the issue and thinks that we are the source of pollu-tion or uncaring about the environment. As I’ve tried to explain, our role is quite the opposite. We clean up the waste that other industries produce. To counteract some of the negative reactions to dredging and to en-courage others to look more closely at our industry, we are assembling more statistical information on our work and trying to com-municate to a broader public. Recently, the IADC published a document called Dredging in Figures 2009, with carefully collected data on this worldwide industry. It is available at www.iadc-dredging.com free of charge. The IADC website is in fact a great source of information for anyone interested in this sector.

It sounds a bit overblown perhaps, but without dredging, our modern way of life would slowly grind to a halt. Rivers and har-bours would silt up and stifle transportation of goods, gas and oil pipelines could not be laid safely, our beaches would be endangered to continuous erosion and flooding. Thanks to the technology of dredging, our lives are richer and our environment cleaner and safer. �

René Kolman

René Kolman is secretary general of the International Association of Dredging Companies, the umbrella organization for the worldwide private dredging industry. IADC members represent the largest dredging and marine infrastructure companies in Asia, Europe and the Middle East. Before coming to IADC, René Kolman was Deputy Managing Director of the Dutch Landscaping Contractors Association. As secretary general, he takes a leading role in promoting the dredging industry’s long-standing commitment to the environment and sustainability.


BTJ Special

Over the recent years impressive investments have taken place in the Baltic ports, of an immense importance for regional econom-

ic development. In BTJ 4/2010 we wrote of Liepaja port’s ongoing dredging programme and the latest infrastructure investment. The project, executed by Dredging International, one of the operating companies of DEME group, for the Liepaja Special Economic Zone Authority, involves deepening access channels and harbor basins to a depth of 12.5 m; dredging of sandy, silty materials and mo-raine with boulders as well as seamarks and buoys’ replacement. The project in its earlier phase also included the removal of a small shipwreck in access channel. This invest-ment is to be finished by the end of 2011.

Latvia: Riga as the dredging capital

Regardless of the global economic crisis significantly affecting Latvia’s economy, ma-

With the increase in global trade and the fact that vessels are getting bigger, many of the Baltic ports have felt the neces-sity to implement long-term development projects, which are meant to ensure their efficiency and competitiveness.

Aiming at greater depthsPorts’ dredging projects on the Baltic

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jor works are being carried out in the coun-try’s biggest port, Riga. For several years Freeport of Riga Authority (FRA) has been executing a deepening programme, with the long-term goal of enabling the entrance of the largest vessels that sail on the Baltic. As Ainārs Šlesers, chairman of the FRA board, stated, “Already last year we realized that without deepening the port aquatorium and access routes, expansion of the Port of Riga is limited.” In December 2009, the Latvian Port Council adopted a new Freeport of Riga development strategy for the period until 2018. This August, the FRA submit-ted in the Environment State Bureau a work report on the environmental impact assess-ment of this project. “The planned activity is reconstruction of the access channel for ships entering Riga port, necessary to en-sure entrance and handling of heavy ton-nage vessels (up to 130,000 DWT Aframax class tank ships and 175,000 DWT cargo ships) in Riga port, as well as safe ship traffic

by eliminating any possibility of shipping accidents,” Šlesers explained.

Deepening and widening of the har-bour entrance access channels will enable the provision of secure services to vessels with a maximum length of 260 m, beam up to 48 m, and draft up to 15 m. Elabo-ration of the draft design for this project, partially financed from the EU Cohesion Fund through the Latvian Transport Min-istry, began in September this year. Dredg-ing of the navigational channel commenced in December and is being realized by the chosen contractor, again Dredging Interna-tional.

The deepening works will be performed in two stages. The first one, which is to be realized until 2014, includes deepening the part of the ship pass from the reception boom to Rīnūži (berth MKR-1) to -17 m; the second – from Rīnūži to berth KS-34 to -15 m. The latter will be executed throughout 2014 – 2018. Except from this investment, the FRA is realizing three other EU-support-ed projects – reconstruction of east and west breakwaters, development of a new RoPax and Cruise Terminal and development of Krievu Sala, with 65 ha new territories for dry bulk and general cargo terminals, in-volving the construction of seven deepwater berths with a depth up to 17 m.

Lithuania: Klaipėda’s entrance channel reconstruction

This year, throughout the period of January – August, 166 boulders with a di-ameter of up to 1.5 m, and 20 with a diam-eter exceeding 1.5 m, were excavated from the waters of Klaipėda port. The excavation of boulders as well as maintenance dredg-ing of the entrance channel, carried out by Josef MÖBIUS, has been executed in prepa-ration for implementing a large reconstruc-tion of the port’s entrance channel, which is meant to improve navigation conditions in Klaipėda. Presently, a technical project of this investment is under preparations. The works aimed at enhancing the port’s security as well as contributing to the chan-nel’s widening include dredging of approx. 400,000 m3 of sediment and are to be fin-ished in 2011. These will be followed by the investment called “Capital dredging and

6/2010 | Baltic Transport Journal | ��

BTJ Special

widening of the Port entrance channel”, during which the waterway will be extend-ed from 120 m to 150 m up to the quays no. 97-100 and the present channel’s depth will be increased up to 14.5 m from quay no. 10 to quay no. 104. (13.0 m); the depth of the vessel turning circle at quays No. 101-104 will be increased to 14.5 metres. The depth of the dredged entrance channel will be determined by the conclusions of the envi-ronmental impact assessment. The planned scope of these works, to start in 2012, in-cludes dredging of 2.5-3.0 million cubic metres of sediment.

Finland: dredging works at West Harbour in Helsinki

The City of Helsinki is expanding its West Harbour area of about 5.5 ha by dredging and filling operations. The plan will be realized by dredging of approx. 7,500 m3 contaminated sediments and ap-prox. 800,000 m3 of clay and replacing them with about sea sand, taken from the seabed at Tonttu-area outside Helsinki, up to the current seabed level. As a result, the approach channel of 12 m a depth will be moved. Following the expansion of the harbour and the rerouting of the shipping lanes, works on a new access waterway will commence, including dredging of ap-prox. 16,000 m3 of contaminated sediments, 120,000 m3 of clay and about 85,000 m3 of rock excavation. The equipment used by the contractor, a working company within Boskalis Nordic Oy, Terramare, is a back-hoe dredger, a crab dredger, self propelled barges and a drilling platform for hard rock excavation. Contaminated sediments will be removed to the old Jätkäsaari harbour area, clay – to Taulukari dumping area and bro-ken rock to the Saukonpaasi or Sompasaari filling areas. The first phase of started in May 2010 and is practically finished. The second one will be done by June 2011.

Sweden: Trelleborg expansion

The Port of Trelleborg in the late au-tumn of 2010 has started the operation of moving its facilities towards the sea, 540 m out from land, in response to its customers’ announcement of larger ferries deployment, i.e. over 200 m and up to 240 m long (today Trelleborg has traffic permission for ferries up to 200 m). Another important factor is the substantial growth in the ports’ vol-umes, which determines the disposition ar-eas’ enlargement. The development project will include building of three kilometres of new break waters and dredging the fairway

(175,000 m3) as well as the port waters (ap-prox. 200-220,000 m3 of sediment).

The first phase of the project, the de-velopment of new breakwaters, will start in January/February 2011. Phase two, dredg-ing of the port area within the new break-waters, will be activated one year later. The third phase, widening and dredging of the rest of the fairway, is to start by the end of 2012. The public tender assessment is in its final stage and the contractor who will execute the first two phases will be chosen from among 11 companies at the very be-ginning of next year. Phase three remains under the responsibility of the Swedish Maritime Administration.

Trelleborg’s plans for the future include additional berth developments in a south-easterly direction (within the new break-waters). These plans will end up with the closing of today’s inner port by moving the ferries away from the city.

Russia: development of Ust-Luga

Russian Federation’s ambitious plan to upgrade its port infrastructure is aimed at recapturing the country’s own cargo, cur-rently handled in its majority by transit countries (Riga is actually closer to Moscow than any Russian port). Over the last dec-ade the RF has constructed several big oil and coal port terminals and harbours in its part of the Gulf of Finland (Ust-Luga, Pri-morsk and Vysotsk ports). The terminals located close to Ust-Luga town and near Primorsk are among the largest in the re-gion. Ust-Luga aims to be one of the world’s

ten biggest ports in the years to come; Primorsk is the largest oil export port of North-West Russia. Further expansion and the planned activities for these facilities as well as the whole port complexes propose intense dredging, hydro construction works and building of huge coastal engineering infrastructure.

A vast programme of dredging and reclamation works was undertaken in the Ust-Luga port during the period of 2004-2009. It has started in 1997 together with the construction of the first sea approach channel and the first terminal. In the 2010-2015 period, the further expansion project of the port, a part of the federal programme “Modernization of Russia’s transport sys-tem (2005-2009)” as well as “Development of Russia’s transport system (2010-2015)”, are to cost approx. RUB 16.66 bln. At present, the approach channel in Ust-Luga has a depth of up to 17.5 m and a length of 3.7 km. The construction of the second waterway, 1.8 km long, will be completed in 2011. A general contractor for dredging works will be determined on the basis of public tenders issued on specific contracts. Execution of the current dredging works depends on construction plans of the port’s terminals (The new ultra-modern Ust-Luga Container Terminal and Gas Condensate Terminal). All the dredging works within their operating area (as well as the sea ap-proach waterways) must be completed by the time of commissioning the facilities. Construction works of the Gas Condensate

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BTJ Special

Walery TankiewiczVice-President Port of Gdynia Authority SA

The strategy adopted by the Port of Gdynia Authority provides for developing the port infrastruc-ture in a manner to meet the market requirements and to create the best environment for the port operators to develop their business here. Our prime task is to improve the container, ro-ro and ferry handling infrastructure.The project of the Port Channel reconstruction in the Port of Gdynia has been completed – all dredging works have been carried out, the bottom reinforcement and Helskie quay remodelling are close to completion. It has been more than a year now that Helskie quay has been operational with the maximum depth of 13.2 m. The inner entrance, the port channel and the turn-basins have been deepened to the depth of 13.5 m. As far as the approach fairway and the port basins are concerned,

we are operating at the maximum navigational capacity at the moment. As for today, the deepest quays – Holenderskie and Helskie and the approach fairway allow for the operation of vessels with a draught of 13 m and 12.7 m at the container terminal.We are also working on study projects intended to continue deepening activities in a prospect of several years. Both the size and draught of container ships used today keep increasing, the more so that clients tend to prefer large vessels, with a definitely lower cargo unit cost.Deepening the fairway and the bottom along the port quays to 15.5 m would allow for the operation of vessels with the maximum draught of 15 m, but this requires adequate quay construction as well. At the moment, a new part of Bułgarskie quay is being designed (the last section of the port’s undeveloped coast line, over 350 m long). This investment includes also nearly 4 hectares of a container yard, a road system, utilities and land development installations. The technical depth designed for the berth is 15.5 m. At the same time, we are re-designing Szwedzkie bulk handling quay, with the technical depth of 15.5 m being planned there. Currently, we are preparing to order a project design to deepen the entire port and the approach fairway to 15.5 m. Certainly, this is accompanied by navigational and environmental analyses and work scope and cost estimation to give as the most complete informat3n as to what should be expected when planning to continue deepening the port.

Terminal are underway and their first stage is to be completed in 2011. Phase 1 comple-tion of ULCT is planned for 2012.

Germany: Pier III extension in Rostock

A notable project including dredging and reclamation works is being imple-mented in the Port of Rostock and involves extension of the already existing Pier III in the north direction. The extension reaches 180 m into the waters of the river Breitling until the existing shipping channel. The wa-ter depths within the area of extension vary from two metres at the southern boundary to 15 m in the north. An area of 12 ha has to be reclaimed within the borders of a thou-sand metre long sheet pile wall. After relo-cating and removing 1-5 m thick organic silt layers, the whole area will be filled up with 1.3 mln m3 of sand. Soil research has been executed in order to optimize the concept for handling of the silt layers. The contract for the implementation of dredging and reclamation, signed with Nordsee Nassbag-ger und Tiefbau in partnership with Dredg-ing International, consists of the following tasks: piling of 1065 m sheet pile wall with „klap-anchors”; dredging and relocation of 30,000 m³ soft soil and 18,000 m³ glacial till; installing 60,000 m² geotextile under water; reclamation of 300,000 m³ on soft soil by spreader pontoon; reclamation of

1,000,000 m³ as well as installing 1,200,000 m of vertical drains.

Poland: Gdynia and Świnoujście investments

Two major projects involving dredging are being executed in Poland – deepening of the navigational channel in Gdynia as well as the construction of the LNG Termi-nal in Świnoujście.

The Port of Gdynia has recently undergone investment aimed at reconstruction of the port channel by deepening it to the target depth of 13.5 m, that will allow for operation of vessels with a total draught of about 13 m. The port channel leads from the main entrance to the port to the outermost quays: Helskie I and Bul-garian, enabling vessels to approach all the ba-sins and quays. The deepening works along the Dutch, Helskie, Norwegian, French and Slovak (formerly Yugoslavian) quays has allowed for handling of deeper draught vessels and created the possibility of better use of the tonnage of vessels, and thus will enhance the development of maritime shipping. The port turning basins have also been deepened to guarantee better safety during maneuvers, allowing for the op-eration of vessels with a draught of up to 13 m and the length of about 200 m in the Turnba-sin No. 2, and a length of about 250 m in the Turnbasin No. 3. The project included dredg-ing works within the port channel to -13.5 m throughout its length of 5300 m, from the

main entrance to the port, through the turn-ing-basins No. 1, 2 and 3 to the Helskie I Quay and to the Basin III area. Also, the preservation of the structure of several quays by reinforcing their bottom with a geotextile mattress filled with sand was carried out. The contractor for the deepening works was the consortium of Hydrobudowa, PERCiP and CONSERVICE.

Świnoujście is building LNG terminal which is said to be one of the most important energy investments for the wole region, has begun in Świnoujście port. The construction works have begun in the second half of 2010 and are to be completed by the end of June 2014. The sea part of the terminal is designed as an external port sit-uated next to the eastern breakwater with a larger and longer breakwater built in this area from the north-east. The facility is designed for receiving vessels of 70,000 DWT, transporting approx. 145,000 m3 of liquefied gas. Three investors are involved in this project: Polskie LNG (responsi-ble for the construction of the terminal), Szczecin Maritime Office (building of the breakwater as well as dredging works) and The Port of Szczecin and Świnoujscie Authority (the port jetty for the LNG ships, including some dredging works around the pier). The consortium of Boskalis Interna-tional, HOCHTIEF Construction, HOCHTIEF Polska, Per Aarsleff and DORACO has been chosen as a contractor for breakwater and dredg-ing works, and another consortium, led by Josef MÖBIUS, is going to execute the port jetty. �

Lena Lorenc

Baltic TransportJournal


European logisticsEurope and the world ................................................................................................... 36The top players on the market .................................................................................... 38Russian transport and logistics ................................................................................... 41A willingness to make changes ................................................................................... 42

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I t is estimated that in 2013 the share of total revenue generated from logistics by North American and North Asian countries will fall from 77% (2008)

down to 70%. Eastern and Central Europe will increase its market share from 23% to 30% respectively. Moreover, the logistic market value is expected to grow from EUR 210 bln in 2008 up to EUR 292 bln, with the average annual growth reaching 6.8%. A par-ticularly high rate of growth is forecasted for China: from EUR 12.5 bln up to EUR 27.8 bln, i.e. 17.4% per annum.

Warehousing logistics market

Statistics for the European market are still quoted in a breakdown by Western and Eastern Europe. The reason behind can be that countries in these regions vary in terms of both the economic crisis progress and the rate of growth as well. With a total value of EUR 77.3 bln, the European market of ware-housing logistics accounted for 1/3 of this sector’s global market in 2008, with Western

With the dynamic growth of the logistics sector in Eastern and Central Europe, market shares of global leaders will be decreasing, although the existing distribution of power will not change.

Europe and the world Trends in logistics services

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Europe generating a revenue of EUR 72.9 bln and CEE – EUR 5.3 bln (34.7% and 2.5 % of the global market respectively). CEE’s global share is expected to reach 3.3% in 2013 (this translates into the value of EUR 9.8 bln and an average annual growth of 12.8%), while countries of the European Twelve will shrink to 32.4% (EUR 95.1 bln). Their average an-nual growth is forecasted at 5.4%.

Crisis strategies

In response to the global economic slowdown of the years 2007-2008, compa-nies focused on meeting their clients’ grow-ing expectations as regards cost reduction and improved customer service. The reces-sion posed a huge pressure on companies to maximize their efficiency, with less re-sources involved. Enhanced or high cus-tomer satisfaction would be a priority here.

The figure shows how customer expecta-tions evolved under the economic slowdown. Studies that have been made* show that cost reduction has become a priority in both the

USA and EU as well. And yet, maximizing profitability and enhancing customer satisfac-tion are being perceived as equally important in the EU, while in the USA more emphasis is placed on profitability and optimized use of resources. As compared to the studies of the year 2008, the number of responses in-dicating cost reduction as a key strategy factor has definitely increased. The growth was particularly rapid in the EU countries, where the group of companies choosing this strategy expanded by 56.8% against 2008. In North America, the focus shifted from “en-hance customer satisfaction” to “reduce cost” took place as early as in 2006. The proportion between companies focusing on maximizing profit and those maximizing the use of assets has not changed since that year. This shows that at the time of economic uncertainty, a tendency to concentrate on efficiency fac-tors prevails. When analyzing crisis strategy determinants, one can see the role of busi-ness size. Larger companies attach more at-tention to cost reduction, while smaller – to improved customer satisfaction.


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Although the share of responses indicat-ing cost reduction strategy is highest in the USA, only 17% are perceiving themselves as cost leaders. This may imply that companies are striving for efficiency much harder under recession than at a time of prosperity. On the other hand, a majority (48.9%) declares the strategy of combining cost leadership with good quality of services. Nevertheless, it is not easy to choose the right approach at the time of economic slowdown. Competition between large companies seems to be driven by other key factors than those observed in the case of small or medium-sized busi-nesses. It is very difficult for large players to attain the “round the corner convenience store effect”, with its personal and close re-lationship with and between the customers. This is why the customer satisfaction focus is so distinct in the case of small businesses. On the other hand, lean management is a fundamental strategy element from the very beginning of most small enterprises’ exist-ence. Large companies, on the contrary, keep seeking process standardization opportuni-ties leading them to increased “commodifi-cation” of relations as a rule. Operation-re-lated quality indicators are being measured

Halina Brdulak is the head of Department of International Trans-portation and Logistics at Collegium of World Economy of the War-saw School of Economics, the head of the Postgraduate Studies in Marketing and Logistics, adviser to DB Schenker board, organizer of TRANS – Common Europe conference cycle and a member of the Academic Council of the Polish Economics Society.

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Fig. Main determinants of corporate strategies in the EU and USA during an economic slowdown

Optimizing the supply chain

Strategic guidelines for the supply chain are based on three initiatives the companies have commited to in the past: expansion towards new markets, renegotiating contracts with sup-pliers and minimizing inventory levels.

To achieve the above goals, it is neces-sary to optimize human resources, process and technology management. The directions chosen depended on the company size. As the studies have shown, it is not often that major and medium-sized companies initiate expansion to new markets. The reason may be that they have already established a rath-er extensive geographical coverage. When making decisions, large companies are not limiting themselves to their internal proc-esses, but analyzing the entire supply chain, standardizing the processes and taking ac-tions to reduce inventory levels. Smal busi-nesses are mainly concentrating on how to keep their inventories down and – similarly as medium-sized companies – they seek to renegotiate contracts with suppliers.

The economic situation today offers im-provement opportunities for shippers and carri-ers. Activities to be initiated throughout the sup-ply chain should yield an optimized location of points of delivery, manufacturing plants, points of distribution and freight flows. Furthermore, besides improvements to the physical structure, supply chain optimization requires three main

groups of assets – processes, people and tech-nology – to be arranged in a manner enabling the best performance possible in terms of the company’s individual business.

Considering the circumstances, many of the companies decided to redefine their decisions as regards location of assets and include a hybrid geographical model com-bining nearshoring and offshoring solutions into their networks’ corporate strategies. The total cost resulting from all activities within the supply chain, from the product idea to the end delivery of the same should be the main factor determining the supply chain size. In effect, all industries and busi-ness lines are seeking network rationaliza-tion that would enable them to achieve the desired standard of services at the lowest cost. This may bring about an increasingly deeper conflict between short- and long-term goals as regards the supply chain size. With a good long-term strategy successfully built, the entire supply chain gains greater flexibility, this becoming a special value at the time of economic uncertainty. �

Professor Halina Brdulak, Ph.D.

* “18th Annual Trends and Issues in Logistics and Transportation, Drivers of Sustainable Supply Chain Management Practice, Optimization,” Capgemini, The University of Tennessee, Georgia Southern University, JDA Software Group, September 2009.

there, rather than any other factors – usually, the company offers a comprehensive range of services (extensive production range) and global availability, yet operating procedures are much more bureaucratic in their nature in this segment.

Being all things to all people, i.e. meet-ing all expectations of all clients, has been gaining importance since 2006 and taking the lead in the strategy rating. To keep the balance between costs and quality of serv-ices, one needs to analyse each individual transaction in these terms, as the trade-off effect is becoming a matter of special sig-nificance.


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The undisputable market leader of the TOP 24 of European Lo-gistics in 2009 was DHL, which generated more than thirty times the revenue of Logwin (formerly Thiel) – the ‘smallest’ billionaire

on the list (see Table 1). The cumulated reve-nue of the TOP 24 amounts to EUR 142.81 bln. DHL alone generates 24% of this amount. Fur-ther on, two-digit shares are held by only two companies – A. P. Møller-Maersk (APMM) and DB Schenker (11%). If we split DB Schenker activities into railway transport and logistics, the company’s logistics branch would still be in third position with an 8% share.

The leading companies

Companies covered in table 1 are either logistics operators or transport companies that maintain some divisions that focus on logistics activities. They exceed one billion euro of net sales revenue and – thirdly – the shareholders are mainly Europeans or European compa-nies. The exceptions are companies headquar-tered and established in Europe that either due to public trading of shares are today to a vital extent in non-European hands or the capital is relatively anonymous, so that the country of registration of the parent company was decisive for the selection (CEVA).

Over the period of 2003-2008 seven compa-nies which exceeded EUR 1 bln were acquired by other market players. These were: Exel (rev-enue of EUR 9.3 bln in 2004; acquired by DHL), P&O Nedlloyd (EUR 5.4 bln in 2004; acquired by APMM), ABX Logistics (EUR 2.6 bln in 2006; acquired by DSV), Tibbet&Britten (EUR 2.4 bln in 2003; acquired by DHL), Hays Lo-gistics (EUR 1.2 bln in 2003; acquired initially by an American investment fund, and later in 2006 under the name ACR by K+N), Christian Salvesen (EUR 1.3 bln in 2006; acquired by Norbert Dentressangle) and Frans Maas (EUR 1.1 bln in 2005; acquired by DSV).

Over the same period of time three players exceeded the EUR 1 bln threshold of net rev-enue: Rhenus Logistics in 2004, Cargoline (an alliance of German logistics operators) in 2006 and CEVA in 2007. The latter company, in fact a new entrant, was established by the American

The European logistics market accommodates companies of different size, but even among the top market players we can see a huge discrepancy in revenue.

The top players on the marketEuropean Logistics

Tab. 1. TOP 24 market players of the European origin in 2009 by revenue

group of companies revenue 2009(EUR mln)

employment 2009

homecountry

1 DHL 33,689 41,150 Germany

2 A.P. Møller-Maersk: container lines 15,829 N/A Denmark

3 DB Schenker 15,040 88,186 Germany

4 Kuehne + Nagel 9,494 51,075 Switzerland

5 CMA CGM 7,527 16,000 France

6 SNCF Geodis 7,377 25,531 France

7 TNT Express 5,956 75,032 Holand

8 CEVA 5,494 43,113 UK/Cayman Islands

9 DSV 4,846 19,211 Denmark

10 La Poste: Geopost and Coliposte 4,456 27,300 France

11 Bolloré: transport and logistics 4,032 26,863 France

12 Panalpina 3,945 15,301 Switzerland

13 Dachser 3,200 17,130 Germany

14 GEFCO 2,888 9,980 France

15 Norbert Dentressangle 2,719 29,631 France

16 Rhenus Logistics 2,700 15,000 Germany

17 Hellmann Worldwide Logistics 2,470 8,556 Germany

18 Wincanton 2,450 28,200 UK

19 STEF TFE 1,984 14,213 France

20 GLS 1,700 1,750 UK/Holand

21 Fiege 1,500 21,100 Germany

22 Ziegler 1,203 4,280 Belgium

23 Cargoline 1,200 6,400 Germany

24 Logwin 1,113 8,483 Luxembourg/Germany

fund Apollo Management L.P. through a merger of what was left of the disinvested (2006) TNT logistics division and American EGL. CEVA is headquartered in the UK; the direct holding company is registered in the Cayman Islands.

The TOP 24 are companies of diverse busi-ness profiles. DHL is the most versatile one (in fact to be a full-service company it lacks only railway transport). The other almost all-service operator (lacking only airway transport) is Bolloré, which – although headquartered in France – operates traditionally in Africa and more recently in Asia and Europe. APMM and CMA CGM are the top

global container lines with some inland services. DB Schenker and SNCF Geodis are railway cargo incumbents with very strong logistics divisions. La Poste, TNT Express and GLS – rooted in na-tional postal services – are leading express trans-port operators. GLS offers its services mainly to B2B customers. K+N and Panalpina although strong in logistics are key leaders in sea and air freight (forwarding). CEVA, DSV, Dachser, Nor-bert Dentressangle, Ziegler and Cargoline focus mainly on freight management/road transport and contract logistics, despite offering forwarding too. Rhenus, Wincanton, Fiege and Logwin are


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mainly contract logistics operators. Less known is STEF TFE, which is a niche logistics operator of only regional coverage (mainly France, Italy, Spain and Portugal) focusing on fresh, chilled and frozen products. Gefco is rooted in the car manufacturing industry, but already 40% of its revenue is generated from non-affiliates and not necessarily car manufacturers.

According to DHL market analysts (source: Deutsche Post DHL Geschäftsbericht 2009), the TOP 5 players in the overall European road transport market worth EUR 170 bln in 2008 were DB Schenker (3.3%), DHL (2.1%), DSV (1.8%), Dachser (1.3%) and Geodis (1.1%). The leaders in the sea forwarding segment (as per cargo volume) were DHL (9.1%), K+N (8.4%),

Fig. Shares in the cumulated TOP 24 revenue

DB Schenker (4.6%), Panalpina (4%) and the American company Expeditors (2.8%). The five biggest players in the air forwarding segment (as per cargo weight) were DHL (12.9%), DB Schenker (6.5%), Panalpina (4.8%), K+N (4.4%) and Japanese Kintetsu (2.3%). And, the TOP 5 players in the overall European contract logistics market worth EUR 147 bln in 2008 were DHL (8.5%), CEVA (2.4%), K+N (2.1%), CAT Logis-tics (1.8%) and Wincanton (1.8%). Thus, only two non-European companies (Expeditors and Kintetsu) belong to the TOP 5.

The economic crisis halted revenue growth of the top market players. The major revenue slump was experienced, however, only between 2008 and 2009. In 2008 most of the companies

still generated revenue at least equal to that of 2007, with the exception of Gefco (0.99%), Win-canton and Rhenus (0.94%).

In 2009 none of the companies generated revenue at previous year’s level. Only three com-panies generated revenue at a level of at least 95% compared to 2008 (DSV – 97%, STEF-TFE and La Poste – 95%). The worst result was generated by Logwin (54%) – however, it was rather due to major disinvestments than to the economic cri-sis. The threshold of 80% – thus more than 20% revenue loss – was exceeded by Panalpina (71% of 2008 revenue), CMA CGM (73%), APMM (78%), DB Schenker (78%), and Ziegler (79%). In 2009 only three companies generated revenue higher than in 2007 (DSV, Norbert Dentressangle,


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The article is based on the research on top logistics players of European origin held since 2003 by the Department of International Transport and Logistics (Warsaw School of Economics). The top list is published in Rzeczpospolita on a yearly basis by H. Brdulak, J. Archutowska, E. Żbikowska and P. Michalski.

STEF TFE), and twelve – thus only half of the TOP 24 list – generated revenue higher than in 2006 (K+N, CMA CGM, SNCF Geodis, DSV, La Poste, Bolloré, Dachser, Norbert Dentressangle, Rhenus, STEF TFE, GLS and Cargoline).

Before the economic crisis (2003-2008) almost all major players had been consist-ently increasing the sales revenue. The exceptions were TNT, which after a short phase of including logistics services into its business profile eventually withdrew from these activities to focus only on express serv-ices (2006), as well as Ziegler. The only case of an acquisition indigestion that halted an increase in revenue prior to the economic crisis was in the case of APMM and its prob-lems with fully integrating P&O Nedlloyd.

The absolute record of revenue growth is held by CMA CGM and Rhenus Logistics, which both tripled the revenue. For CMA CGM it was organic growth and acquisi-tions, e.g. of Delmas from Bolloré in 2006, with a turnover of EUR 893 mln in 2005 and for Rhenus it was a few big acquisitions – e.g. German IHG in 2009 with a turnover close to one billion euro and Dutch TMI in 2007 with a turnover of EUR 400 mln. Five companies doubled or more than doubled the revenue: Norbert Dentressangle (254%), K+N (229%), La Poste (213%; due to some shifts between fields of activity and smaller acquisitions), DSV (211%), and DHL (198%). Some major acquisitions (target company revenue higher than EUR 1 bln) added to the increase in revenue: Norbert Dentressangle – Christian Salvesen and some parts of disinvested TNT logistics’ activities, K+N – ACR, DSV – ABX Logistics and Fraans Maas, DHL – Exel and Tibbet&Britten.

As far as the shareholding structure and own-ership of the dominant company is concerned, the TOP 24 comprises groups that are owned by state treasuries (DHL, DB Schenker, SNCF Geo-dis, La Poste, GLS by Royal Mail Group – UK’s national postal operator). A number of compa-nies are in fact family businesses (CMA CGM, Dachser, Rhenus through Rethmann, Hellman WWL, Fiege and Ziegler) or quoted family com-panies which raised additional capital through public offerings (APMM, K+N, Bolloré and Nor-bert Dentressangle). Portfolio capital has been invested into Panalpina and Logwin although we can clearly indicate the dominant investor. TNT, CEVA, DSV, Wincanton, STEF TFE are owned by investment funds and private individuals (free float). Cargoline is an alliance of logistics operators and Gefco belongs to PSA Peugeot Citroën. �

Dr Joanna ArchutowskaDepartment of International Transport

and LogisticsWarsaw School of Economics

Tab. 2. TOP 5 market players by segment in 2008 (by DHL)

road transport sea forwarding air forwarding contract logistics

1 DB Schenker DHL DHL DHL

2 DHL K+N DB Schenker CEVA

3 DSV DB Schenker Panalpina K+N

4 Dachser Panalpina K+N CAT

5 Geodis Expeditors Kintetsu Wincanton

Tab. 3. Revenue growth by the TOP 24 in selected years

group of companies 09/08 08/07 07/06 09/07 09/06 08/03

1 DHL 0.81 1.01 1.06 0.82 0.87 1.98

2 A.P. Møller-Maersk: container lines 0.78 1.05 0.97 0.82 0.79 1.71

3 DB Schenker 0.78 1.08 1.05 0.84 0.88 1.79

4 Kuehne + Nagel 0.84 1.09 1.10 0.91 1.00 2.29

5 CMA CGM 0.73 1.19 1.29 0.87 1.13 3.40

6 SNCF Geodis 0.92 1.07 1.14 0.98 1.12 1.28

7 TNT Express 0.90 1.02 0.67 0.91 0.61 0.76

8 CEVA 0.87 1.00 - 0.87 - -

9 DSV 0.97 1.07 1.09 1.03 1.13 2.11

10 La Poste: Geopost and Coliposte 0.95 1.04 1.08 0.99 1.07 2.13

11 Bolloré: transport and logistics 0.89 1.10 1.14 0.97 1.11 1.26

12 Panalpina 0.71 1.06 1.08 0.75 0.80 1.58

13 Dachser 0.89 1.03 1.13 0.91 1.03 1.71

14 GEFCO 0.82 0.99 1.10 0.81 0.89 1.29

15 Norbert Dentressangle 0.88 1.72 1.12 1.51 1.69 2.54

16 Rhenus Logistics 0.87 0.94 1.32 0.82 1.08 3.06*

17 Hellmann Worldwide Logistics 0.86 1.02 1.07 0.88 0.93 1.42

18 Wincanton 0.83 0.94 1.12 0.77 0.86 1.22

19 STEF TFE 0.95 1.08 1.12 1.03 1.15 1.54

20 GLS 0.91 1.07 1.09 0.97 1.06 1.59

21 Fiege 0.83 1.00 1.03 0.83 0.86 1.35

22 Ziegler 0.79 1.01 1.01 0.79 0.80 0.86

23 Cargoline 0.92 1.00 1.19 0.92 1.10 1.39**

24 Logwin 0.54 1.00 1.08 0.54 0.59 1.23

* Years 2008/2004 (since the company has reached EUR 1.0 bln revenue treshold.** Years 2008/2006 (since the company has reached EUR 1.0 bln revenue treshold.

6/2010 | Baltic Transport Journal | �1

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D esigned in the post-World War II era, to the specifica-tion of a now obsolete po-litical and economic sys-tem, the majority of roads, seaports, airports and rail-

ways in Russia today require huge capital injections to meet Western standards. Tak-ing into account, the average utilization pe-riod of roads, the low capacity of seaports, as well as lagging airport infrastructure, it is clear that Russian transportation and logistical infrastructure is in dire need of resuscitation. Highly modern technologies coexist with outdated facilities and equip-ment. This is particularily valid for loaders, trucks and warehouses More than 50% of freight companies are Russian, in compari-son to the contract logistics sector, which is controlled by international providers.

A transformation in the making

Until the financial crisis of 2008, the Russian logistics market grew annually by 10%. Following the subsequent collapse of the economy, the logistics market con-tracted by 20.9%, amounting to EUR 36.0 bln in 2009. What stood behind the reasons for this crash? A sharp decrease in demand triggered a 30% drop in goods transpor-tation, resulting in reduced revenues of transport and logistics service providers. Russian banks, like most banks worldwide, responded to the crisis by restricting cred-its, setting off a halt and even withdrawal of investments. At the same, the weaker mar-ket players went bankrupt and the prices plummeted.

Not without reason, the crisis redefined demand, bringing a positive impact among some service providers. As such, a sharpen-ing of business practices was noted. Russian entrepreneurs started signalling a more sub-stantive approach to their businesses. Market research, business development, and sales strategies all adjusted business activities to the new dictates of the market.

Russian logistics is lagging behind the European market as a result of the country’s low development of transport infrastructure and warehousing facilities. However, today’s market is already in a growing stage.

A rough road aheadThe Russian transport and logistics market

This transformation is most visible among small- and medium-sized enterpris-es (SME). These business activities were streamlined to meet customer needs, and to maintain healthy operations. Excess labour was reduced, prices curbed, and internal operations and communications optimized. Monitoring of costs and financial perform-ance, as well as strategic financial forecast-ing and planning was also introduced among many Russian logistics and transportation SMEs. Market niches, partnerships and in-creased market research suddenly became alternative avenues to increase the competi-tive edge and likelihood of survival.

Signs of recovery

Moscow and St. Petersburg are still the largest, most important logistics centres in Russia; however, cities like Samara or Ros-tov-on-Don are also increasingly important logistics hubs. Industries, such as FMCG, automotive, construction, mining, chemical and pharmaceutical are likely to drive fur-ther growth of the Russian logistics sector.

Transport and logistics infrastructure is a critical factor that affects not only the business climate, but also the perception of Russia as a profitable country to invest in. The Russian government has been in-vesting directly in this sector to improve its functioning and marketability. In 2011 alone, the government is going to allocate EUR 38 bln for transport and logistics

infrastructure, but investors should take these plans in stride, as not every of the previous investments has moved forward.

Future outlook

The priority in Russian civil engineer-ing today should be a stronger focus on im-proving roads and road infrastructure. The possibility of transporting goods by rail is dwindling as more products are perishable, or require timely delivery. Regional devel-opment of European parts of Russia also dictates major investments. Other notewor-thy changes are cost reductions, competi-tiveness of road transport and increasing tariffs on rail and a stable decline in road service prices. Road transport is increasing-ly important as we witness arise in demand for logistics services from OEMs and auto component suppliers, as well as the devel-opment of retail chain stores, especially in the European part of the country. Prior to 2009, the standard practice was to transport goods by road for distances up to 1,500 km, and by rail for longer distances. Since 2009, profitability of road transport increased to 2,000 km. The nation must correspondingly prepare for infrastructural development if this tendency is to grow.

The situation on the Russian logistics market is likely to improve over the next few years. Frost & Sullivan expects stable 10-12% growth (CAGR) until 2015, with a return to the pre-crisis market size between 2012 and 2013. The future belongs mainly to the European part of Russia with its large logistics centres like St. Petersburg and Moscow, as well as the southern regions. �

Dominik Buszta

Dominik Buszta is a Research Analyst at Frost & Sullivan’s Automotive & Transportation practice. With over 45 years of experience, the company enables clients to accelerate development and achieve stronger positions in growth, innovation and leadership, from 40 offices on six continents. To learn more about Frost & Sullivan or to contact Dominik Buszta, please email Nila Bileko-Sulik at [email protected] or visit www.frost.com.


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Interview with Erik Noeklebye, Head of Region Europe, Wallenius Wilhelmsen Logistics

WWL delivers global shipping and logistics solutions to manufacturers of cars, trucks, heavy equipment and specialized cargo. Today, the company has approximately 3,300 employees worldwide, and deploys around 60 modern eco-adapted vessels.

A willingness to make changes

�A joint venture between Wallenius Wilhelm-sen Logistics and ROLF SCS is expected to be set by the end of the year. What is the purpose of this cooperation? What will it look like?

WWL and ROLF are creating a joint venture between their Baltic and Russian terminal ac-tivities, and this agreement is in its final stages of completion. The joint venture will operate the auto and ro-ro terminals in Kotka in Finland, Pe-trolesport in St. Petersburg and Vostochny in the far east of Russia; these constitute the country’s principal entry seaports. Russia is a strategically important market for WWL and will continue to be so. Despite the recent downturn, we be-lieve in this growing market for the long term. WWL and ROLF SCS will each control 50% of the new company. ROLF SCS brings the termi-nal activities they have in Russia (Petrolesport and Vostochny port) and WWL brings Kotka in Finland. The activities of the JV owners will also support the company, with ROLF SCS providing a full range of inland logistics support as well as their expertise and network in the Russian auto-motive market. WWL’s ocean network contributes improved deep and short sea connections, a global

network and extensive expertise in terminal man-agement. This operation will give WWL the ability to offer customers its entire supply chain portfolio for the Russian and CIS markets – ocean services, terminal and technical operations, inland trans-port and supply chain management.

�How do you think the merger between Kotka and Hamina ports will influence WWL’s activity?

We don’t foresee much of an impact on our ter-minal operations. Kotka is specially designed for autos, which is one of our largest cargo seg-ments. But this merger should ease the pres-sure on Kotka’s ro-ro berths and that’s very positive. Overall, we think that the merger will make Kotka even stronger and more resilient.

�How do you see the current logistics mar-ket situation in Europe and future trends in the sector?

I believe that manufacturers will increase their focus on outsourcing their whole or components of their outbound supply

chain, as a result of both the recession and the globalization of competition. We see this trend growing stronger in the upcom-ing decade and this is where a specialized logistics provider like WWL can add value.Increasing scrutiny on the environmental impact of logistics, and the need to act will grow and as legislation hits the market in the very near future, this will have an im-pact on both how we do logistics and price it. For example, shipping costs will dramat-ically increase over the next few years, as ships are required to burn cleaner fuel. Al-ready this past summer, new fuel mandates required vessels to use a low sulphur fuel of 0.1% while staying in the port, and 1.0 % while sailing in Emissions Control Areas (the North Sea and Baltic Sea).Environmental regulations like this will put pressure on shippers and the entire logistics industry to change, to look at things like reduced fuel consumption, and to search for improved velocity at terminals. As the environmental costs of outbound supply chains are internalized into the costs and pricing of logistics, shippers will search for

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The visionary Castor Green Terminal by WWL, location still to be revealed


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systemic changes in their networks, and not simple modal improvements.Short term, there is a clear need for rate in-creases on basic services such as transporta-tion, on the back of higher costs in general, and added environmental costs. For example, the European trucking industry does not seem to be earning enough revenue to keep up with inflation, let alone attract the capital needed for reinvesting in new trucks and equipment. Manufacturers need a stable, modern supply

chain that positions them well for growth, so addressing this problem is in their interest.

�Could you tell our readers about WWL’s green strategy and chosen solutions to reduce its operational impact on the en-vironment?

An efficient supply chain, with reduced en-vironmental impact at every possible step, is one of the surest ways to cut costs and lower risks, while benefitting the environ-ment. At Wallenius Wilhelmsen Logistics we believe the best way to reduce environ-mental risks and costs is to be an ecological forerunner. For example, in 2010 we un-veiled our visionof Castor Green Terminal, powered by wind turbins and giant solar panels, extending our zero emission ambi-tion from the ocean to our land-based ac-tivities. The CGT is an ocean terminal and cargo processing centre that will not release any emissions into the air, land or sea. We believe that the terminal will make sus-tainable intermodal solutions not only vi-able but preferred by our customers and all those who participate in port activities.

�What do you consider today’s most chal-lenging aspects of working in the logis-tics industry?

We tend to work a lot with manufacturers who need a ‘factory to dealer’ journey for high vol-umes of rolling cargo, which is a fascinating and progressive niche to be in. However, the traditional ‘Modal Mentality’ (i.e. planning for each individual mode, instead of planning for the entire supply chain journey) is one of the biggest blockers for outbound supply chain op-timization. Another challenge is the change in cargo ownership. This handover drives up costs (operational and financial) in all parts of the outbound supply chain. We need creative think-ing and a willingness to make changes beyond organizational boundaries; an optimized supply chain is utopia otherwise.A lot of factors speak for increased trans-port costs over the next three to five years, so at some point manufacturers have to let go of ineffective, outdated methods and look to in-novative logistics providers. It has happened already in other industries, successfully. �

Lena Lorenc

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Towards an integrated transport system in the Baltic Sea Region

Emergence and significance of dry ports

One of the concepts that, among other advantages, has a role in decreasing environmental impacts is the concept of a dry port. The first mention of dry ports as ‘ports secs’ by P. Han-

appe dates back to 1986. However, the concept was neglected for many years and only recently resurfaced due to increased interest in environ-mental issues relating to growing containerized maritime transport. Progress alone in the mari-time part of the transport chain (building bigger ships) and in seaports (acquiring bigger cranes), without improvements in seaport inland access, is not sufficient for the entire transportation chain to function. The study of dry ports em-phasizes the importance of efficient seaport in-land access which might be obtained by means of dry ports; the importance is not only for the seaports but for other actors in the transport system and society as well.

Tab. Potential dry port benefits

Seaports Seaport cities Rail operators Road operators Shippers Society

Potential benefits from dry ports

– Less congestion– Increased capacity– Expanded hinterland

– Lower road congestion– Land use opportunities

– Economies of scale– Gain market share

– Less time on congested roads and in terminals

– Improved seaport access– “Green” marketing

– Lower environmental impact– Job opportunities

With its motto: “Towards an integrated transport system in the Baltic Sea region”, the TransBaltic project is seeking to strengthen regional

initiatives aiming at integration of transport patterns and networks in the BSR, as stipulated by the EU’s strategy for the region.

The general approach provides for using joint transport development measures and jointly implemented business concepts. Building on the outcomes of transnational transport projects and pan-Baltic initiatives, TransBaltic is structuring

Dry Ports

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these into one framework and upgrading them by selected pilot business actions.

Along with the work packages focusing on strategies, policies and planning issues, the project includes a group of tasks designed to test practical solutions, to demonstrate their feasibility in a specific business environment and to evaluate their potential for becoming BSR transport blueprints. Among these, Task 5.1 “Dry Port Development” is based on a concept which appears to carry an outstanding potential as an intermodal solution of the future. Implemented under the leadership

of LAKES (Lahti Regional Development Company Ltd.), the task responds also to the interest voiced by two other TransBaltic partners: Hamburg Port Authority and Poland’s Warmińsko-Mazurskie Voivodeship self-government.

The dry port concept is still evolving and not given its final shape yet. For the purpose of the TransBaltic Project application, it has been defined as “a part of a seaport moved some 30-200 km into the hinterland in order to satisfy customers’ demands and at the same time to ease operational constraints (e.g. traffic bottlenecks in the main port

The concept

A dry port is an inland intermodal terminal directly connected to seaport(s) by rail where cus-tomers can leave/pick up their units as if directly at a seaport. “As if directly at the seaport” is a very crucial part of the definition because it implies a certain level of integration with seaports as well as availability of services that may be found at a sea-port, such as storage, maintenance of containers, customs clearance, etc. Therefore, dry ports are used much more consciously than conventional inland terminals, with the aim of improving the situation resulting from increased container flows, and a focus on security and control by the use of information and communication systems. Scheduled and reliable high-capacity transporta-tion to and from the seaport is essential and de-termines the dry port’s performance and its envi-ronmental role. Based on their function and their location, dry ports may be categorized as distant,

midrange and close. The figure next page shows the basic idea behind the concept.

Close, distant and midrange dry ports

Implementation of a close dry port in a seaport’s immediate hinterland increases a sea-port’s terminal capacity which might result in increased productivity since bigger container ships will be able to call at the seaport. This type of a close dry port may serve as a depot, empty container storage. With dry port implemen-tation a seaport’s congestion from numerous trucks is avoided since one train can substitute some 35-40 trucks. Sydney’s Port Botany has a

Environmental problems have received increasing attention during the last decade and with them also the role which logistics concepts can play in reducing those problems.




Violeta Roso is a Postdoctoral Research Associate at the Logistics and Transportation Division at Chalmers University of Technology, Sweden, where she obtained her PhD degree in Technology Management and Economics and her MSc degree in Management of Logistics and Transportation. Her main research area is dry ports as a part of intermodal transport. She has been involved in teaching, including the following courses: Fundamentals of logistics, Freight transport systems and Supply chain design and managment.

Tab. Potential dry port benefits

Seaports Seaport cities Rail operators Road operators Shippers Society

Potential benefits from dry ports

– Less congestion– Increased capacity– Expanded hinterland

– Lower road congestion– Land use opportunities

– Economies of scale– Gain market share

– Less time on congested roads and in terminals

– Improved seaport access– “Green” marketing

– Lower environmental impact– Job opportunities

Fig. The concept of a dry port.a) b)112

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area)”. Task 5.1 Leader proposes the Project Partners to accept the definition worded by Dr Violeta Roso: “The dry port concept is based on a seaport directly connected by rail to inland intermodal terminals, where shippers can leave and/or collect their goods in intermodal loading units as if directly at a seaport.”

Dry ports seem to be particularly attractive in the Baltic context, with its extremely intensive traffic within much limited space, with all the problems this fact is bringing about: constrained road access, long queuing times, and a low share of rail transport mode in cargo supply. Moving some of the traditional port-related services from the seaport to the hinterland solves various problems – not only those of a strictly operational or logistic nature. Reduction of concentrated greenhouse gas

emissions, stimulation of the hinterland’s business competitiveness and generating new employment opportunities are just those most important to be mentioned.

TransBaltic Project Task 5.1 will demonstrate how the dry port concept can contribute to the cohesion and co-modality objectives of EU transport and regional policies; therefore, dry ports can be seen as components of the future Trans-European Transport Network (TEN-T) to be established as a key element in the revised Lisbon strategy. Considering TEN-T’s primary focus to fill the gaps and eliminate bottlenecks in European transport infrastructure, as well as to ensure the sustainability of the transport networks, the dry ports concept is clearly a perfect answer to many of the challenges involved.

The dryport – a development worked upon in TransBaltic project is a good example on how both knowledge transfer and crossover of results can be achieved between other ongoing and previous projects. In this case, this has been SustAccess, a project completed in 2006, where the dryport issue was introduced as an Interreg North Sea Programme important development and the ongoing „Dryport – a Modal Shift in Practice”, both these projects with Region Västra Götaland as a lead partner.

Having introduced the dry ports concept as a component of the TransBaltic project, let us now get a deeper insight into how this innovative solution is expected to work in practice, as an element of the freight transport chain. �

Małgorzata Nosorowska

network of intermodal terminal facilities some of which play the role of a close dry port. MIST terminal in Minto, 45 km from Port Botany, is an intermodal precinct with daily rail shuttles to the seaport, handling 40,000 TEU/year and generating benefits not only for the operator but for the seaport and society as well.

The benefits of distant dry ports derive from the modal shift from road to rail, result-ing in reduced congestion at seaport gates and their surroundings as well as reduced external environmental effects along the route. A re-duced number of lorries on the roads brings down congestion, accidents and road main-tenance costs as well. The distant dry port extends the gates of the seaport inland, with shippers viewing the dry port as an interface to the seaport and shipping lines. In other words the distant dry port improves seaport access to areas outside its traditional hinterland, i.e. ex-tends the seaport’s hinterland and attracts new customers. Virginia Inland Port (VIP) is an excellent example of extending a seaport’s hin-terland and bringing competitive advantage

since all 30,000 TEU handled there come from newly acquired customers for the Vir-ginia port. There is a high level of integration between the seaport and the dry port. It was the Virginia Port Authority which initiated the expansion into the 330 km distant hinterland, i.e. extended the seaport’s interface through the dry port. VIP is considered a US customs designated port of entry where a full range of customs services is available for its customers.

A midrange dry port is situated within a dis-tance from the seaport generally covered by road transport and serves as a consolidation point for different rail services. The high frequency

achieved by consolidating flows, together with the relatively short distance, facilitates the load-ing of containers for one container vessel in the dedicated trains. Falköping dry port is situated 130 km from the Port of Gothenburg on the rail junction to the network of inland terminals and as such is an excellent consolidation point. The facility is undergoing major development and soon, apart from accommodating bigger trains, will offer a range of value-added services for the customers in the area.

Benefits

The table below summarizes potential ben-efits that might result from a dry port.

Although the concept itself should bring numerous benefits to the actors of the trans-port system, there are still many impediments to its implementation. The most common are land use, infrastructure, environmental and institutional obstacles. Therefore, a dry port must fit into the transport system where regu-lations are designed to optimize the use as well as development of existing infrastruc-ture and its belonging modes of transport. �

Dr Violeta Roso

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An area in mobilisationNorth-West Russia

TransBaltic is regarded as a strategic project in the implementation of the priority area 11 “Improvement of in-ternal and external transport links” within the European Union’s Baltic Sea Strategy. The project intends to

deliver a broader perspective for the transport pol-icies in the Baltic Sea region, inter alia, by investi-gating its external accessibility and the potential as a gateway area. In this context the foresight debates concerned two future scenarios for which partici-pating stakeholders highlighted some potential risks. Infrastructure investments in the Eastern part of the region including Russia might not take the greening of transport into consideration, pos-ing the risk of a gradual east-west divide. In turn, investments in the Barents area might change the future freight flows from North-South to an East-West direction. This would decrease the use of the Baltic Sea networks, resulting in moving the eco-nomic centre of the region to the north.

The plans for each way

As a response to the predicted future de-velopments, TransBaltic has formulated a set of actions for each scenario.

In connection with the outcomes of the foresight debates in the “TransBaltic Policy Report 2010”, the project representatives went to North-West Russia to discuss transport investments of this key area in the future geography of freight flows.

Actions for the Green scenario:• to further verify the probability of the

new East-West divide introduced by the implementation of the green concept,

• to examine readiness to launch institu-tional cooperation and to apply a steering mechanism for potential green corridors in various parts of the BSR,

• to discuss pre-requisites for introducing the green corridor concept in Russia and other countries generating interconti-nental freight flows to and from the BSR.

Actions for the Barents scenario:• to verify the likelihood of the Barents

Scenario by investigating transport in-frastructure strategies and investment plans bringing the intercontinental flows closer to the Barents Region,

• to obtain deeper knowledge on the state and prospects of available infrastruc-ture enabling the navigation on the Northern Sea Route,

• to further examine the capacity of land bridge connections for transiting the con-tainerised cargo to the EU in general, and to the Baltic Sea region in particular.

The ports of Arkhangelsk and Murmansk are by the foresight stakeholders deemed as having strategic importance in relation to the develop-ment of the Barents area and the future trade ex-change between North-West Russia and the EU/Norway. Therefore, TransBaltic organised meet-ings with regional and local authorities and trans-port/logistic operators for an overview of invest-ments plans in port, ship and rail infrastructure in the Murmansk and Arkhangelsk area.

Murmansk & Arkhangelsk ports

Murmansk Commercial Sea Port and Arkhangelsk Sea Commercial Port have a lot in common operating in North-West Russia about 1,000 km from each other. At the same time some factors tear them apart. The main difference is that the Port of Murmansk, with its close proximity to the Gulf Stream stays ice-free throughout the year, while the Port of Arkhangelsk freezes dur-ing winter months. Future development plans for both ports have been on the agenda for some years but the slow process is partly due to the reliance on federal government funding. While Arkhan-gelsk still is waiting for a decision, Murmansk has already received such and is now in the phase of

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mobilising for modernisation. Export is the main direction in both ports with over 96% of total cargo being loaded onto the vessels. The main ori-entation is towards North America and Western Europe through the Northern Maritime Corridor.

To be able to receive investment grants from the federal government, the Port of Arkhangelsk needs to prove that it has reached its maximum capacity in serving its own hinterland. This threshold is estimated at 5 mln tonnes (the port turnover was 1.48 mln tonnes in 2007). The han-dled commodities include local products (e.g. timber), as well as commodities shipped to and from the Komi Republic, such as pulp, cardboard, lumber, metal, containers, heavy equipment and fertilisers. Also, some local products are exported to Asia by railroad to St. Petersburg.

Preparing for the expansion

The development plans till 2015 contain a lo-gistics centre, with port-clustered business enter-prises and educational institutions. With a few al-ready established educational institutions, the port authorities see the serious potential of researchers involved in the future development.

At present, the Port of Arkhangelsk conveys no intercontinental cargo transit from Asia. Such a function is generally attributed to the planned one-track rail connection between Arkhangelsk with Perm (Belkomur), which will be comple-mented by construction of a new deepwater port in Arkhangelsk. Before the financial crisis Belkomur was a prioritised federal-level project; yet, due to economic constraints, the federal gov-ernment decided to split the investment into two parts, with the northern section of the line to rely on private funding. Surprisingly, the regional government of Arkhangelsk sees the Belkomur as a solution for interregional transportation (raw materials from the Komi Republic), while the trade exchange with Asia would in its view require an utterly new double-track railway line.

Murmansk is already in the process of modernisation and has for the last decade expe-rienced a steady increase in turnover, peaking at 15.85 mln tonnes in 2009. The port was not considerably affected by the economic down-turn due to its focus on exporting coal and apatite concentrate, and the strategic decision of the port authorities to decrease the tariffs in or-der to uphold the cargo volumes and stimulate economic growth. Impressive investment plans of the port authorities include construction of new terminals on the western bank of the bay for handling coal, oil and containers (the lat-ter are estimated to reach 4 mln TEU by 2025). Railway connections serving the area will be upgraded and together with the proximity to airport, the port can offer extended services. Altogether, Murmansk aims for a turnover of 75 mln tonnes in 2025, which shall be reached

through an intensified trade exchange with Asia and North America via sea routes.

Both ports’ desire to become more universal in cargo handling is partly due to the capacity problems faced in St. Petersburg. Currently, most of the cargo is transported for further distribu-tion by rail via St. Petersburg and the two ports are keen to promote an alternative logistics solu-tion, which guarantees a quicker handling time and lower tariffs than what St. Petersburg can of-fer shippers today. Such a solution points at the Northern Sea Route. Both Murmansk’s need for heavy investments in an improved railway con-nection to St. Petersburg and the enormous in-vestment that the land bridge connection to Asia would mean for Arkhangelsk makes the North-ern Sea Route an attractive option serving the ports’ ambition of increased traffic towards Eu-rope, North America and South-East Asia.

Across the Arctic

The Northern Sea Route was first established for commercial use in 1935 and since then has been of great importance for the economic devel-opment of Russia. To be able to navigate the icy wa-ters, Russian nuclear icebreakers escort the cargo ships, and this is the reason why Arkhangelsk does not consider the freezing waters as something to their disadvantage. Going along the Russian coast exclusively makes the Russian Federation the sole decision-maker of to what extent the route could be used by international shipping companies.

The federal government expressed its desire for more Western companies to use the Russian ports for transit. Yet, some hindrances remain for such a development. Lengthy customs procedures that can be both prolonged and costly are the fore-most discouraging reason. However, the Icelandic

shipping company Eimskip is an example where persistency does pay off. Some years ago they started to call at Murmansk with varying results but did not give up. They are now successful in dis-charging cargo at Murmansk every 10th day, and bringing goods back to Europe.

The scenario highlighting the Barents area as an economic centre of importance in the near future is additionally becoming legitimate on ac-count of possible exploration of oil and gas fields on the Russian/Norwegian border and Finland’s rich mineral recourses in need of a transport cor-ridor. North-West Russia is mobilising and set-ting up for intercontinental transport flows with Murmansk and Arkhangelsk serving as hubs. It might also be so that Norwegian ports, like Kirkenes, will take up the hub competition. Thus, the Northern Sea Route may become the main artery in serving intense East-West flows to the advantage of the land bridge connections, even though they are still of importance for both ports as a complementary option route.

What about the environment?

The greening of transport seems to be dis-cussed at the federal government level but has not yet found enough anchoring in the planned investments. Russia will probably implement the concept only if it offers an economic gain. How-ever, after a conducted study trip, the regional government of Arkhangelsk expressed the wish to formalise further collaboration with TransBaltic.

As the next step TransBaltic will visit Ka-zakhstan, China and India to verify the likeli-hood of the scenarios and carry on the dialogue on the future geography of freight flows. �

Evelina Hansson Malm

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Vasiliy Boyko, Deputy Minister of Transport of the Arkhangelsk Region and Wiktor Szydarowski, TransBaltic


Finland has a new portAn interview with Kimmo Naski, Managing Director, Port of Kotka

� How will you be preparing yourselves up to May 2011, when the new port starts operating?

We will certainly have a lot to do before the new company, Hamina-Kotka Port Ltd, is ready to start. This work is already in progress and I am sure that we will be ready by 1st May 2011.Both ports will operate as normal until that date. Fortunately, no layoffs will be necessary.

� The decision in Kotka City Council was unanimous and made quickly. Hamina, however, had some doubts…

It is not very unusual that the smaller partner has doubts. Additionally, poli-tics in southeast Finland has traditionally been very challenging. The nego-tiations haven’t been easy from a regional and political point of view.

�What will be the first thing you’ll do after entering the new office in May 2011?

In BTJ 4/10 we wrote about the possible merger of the Finnish ports of Kotka and Hamina. Now we can state it for sure: HaminaKotka Port Ltd will start operating in May 2011. Kimmo Naski, the newly appointed MD, tells BTJ of the ambitions and plans the largest Finnish export harbour has.

The priority will be to convince the customers, owners and personnel of the great advantages of the merger in practice.

�What are the strongest elements in the new port’s offer?

We will be a full service universal port for all kinds of cargo, from raw materials to finished products, with a wide range of added value ser-vices. We will be a strong player among the Baltic Sea ports in many cargo sectors. We hope the new elements of the offer are to come due to added competitiveness of the port. I am proud to say that we have almost unlimited expansion potential.

�What will be the advantages of HaminaKotka Port?

Beside the size of the port, our great benefit is its location between Hel-sinki and St. Petersburg. We now have the possibility to maximize our common forces and co-ordinate different cargo groups to most reason-able harbours for each cargo inside the HaminaKotka Port Group. We can also avoid overlapping investments.

�How will the new port be organized and managed?

We are still working on its organization. What we know is that the City of Kotka will appoint five and the City of Hamina – three members of the board. I will hold the position of managing director and Jan Gran, who’s now MD of Port of Hamina, will be vice managing director. Eve-rything else is still open.

�How will the revenues be distributed?

HaminaKotka Port Ltd will be a normal limited liability company with all rights and responsibilities. The City of Kotka will hold 60% and City of Hamina 40% of the shares. It is for the owners to decide if they want to issue dividends (60/40) after each financial year. I would also like to stress that the total cost is relatively low compared to the value of the merger. Naturally, it will be covered by the two ports.

�The most important economic direction for both ports is Russia. What is HaminaKotka Port’s strategy towards its Eastern partner?

We have two main hinterlands: Finland and Russia. Our strength is a combination of Finnish exports and Russian imports, but we are cer-tainly open to any other markets as well. Besides Russia, and all the former Soviet Union countries, plays a considerable role. Continental Europe, Great Britain, Sweden and the whole of Asia are utmost impor-tant destinations for us.

�What are your plans in terms of investments in the new port?

In Hamina, the whole port is situated in the same location. On the other hand, in Kotka there are in total eight harbours in the port. Therefore, we gain a lot of capacity and can postpone the existing investments plans of both ports. It means that we plan to do only minor investments in the next 5-10 years and will postpone the major, hitherto planned investments for the period after that.

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The future between Kotka and Hamina ports will soon be joint, since we will be acting as one company, HaminaKotka Port. The most important advantages of the merger will be creation of the biggest general port in Finland. The advantage of operating as one unit will come from the optimization of the joint activities and traffic patterns in the most cost-effective way. The biggest direct saving will come from postponing major investments. Over the next five years we will save approximately EUR 60 mln thanks to this operation, which is a considerable amount taking into ac-count the size of the new company and the Cities of Kotka and Hamina. I believe this merger can be a model for other ports and we will see more of such operations happening in the future.

Jan GranManaging Director, Port of Hamina

BALTIC PORTS ORGANIZATION • Secretariat Office – Actia Forum Ltd.ul. Pułaskiego 8, 81-368 Gdynia, POLAND, ph.: +48 58 627 24 67, fax: +48 58 627 24 27

e-mail: [email protected], [email protected], http://www.bpoports.com

Upcoming BPO events

BPO Seminar: LNG in the Baltic and North SeaBusiness opportunities or the cost factor for the ports12th January 2011, 900-1600,Gothenburg, SwedenVenue: Quality Hotel 11 & Eriksbergshallen (located in the heart of Port of Gothenburg)

The seminar, organized in cooperation with the Port of Gothen-burg is addressed towards ports, the shipping sector and other relevant businesses. Subjects to be discussed include:– LNG – importing energy and new fuel for shipping in Northern

Europe;– LNG import terminal in Port of Świnoujście, Poland;– LNG in the Port of Gothenburg by 2013;– LNG from a ship owner’s perspective;– Development of bunker regulations, the missing link between

a terminal and vessel;– LNG bunkering in ports;– LNG distribution terminals – opportunities for the ports;– Marine operations in LNG terminal – requirements.

To register please visit www.bpoports.com or contact [email protected].

The number of industrial and logistic companies as well as employ-ees is expected to grow. The competitiveness of the Kotka-Hamina area will increase. The profits of the two ports are expected to grow considerably in a well organized, one common company.

�What numbers in terms of yearly revenues and turnover will you consider a success after the fusion?

We are expecting an average yearly increase of 5-7% in revenue and traffic turnover, which is more than double the long term economic growth of Finland.

�How will the Baltic Sea region benefit from the merger?

Shipping lines operating the north-eastern part of the Baltic Sea will benefit through more efficiency in our port. This also goes for the industry and trade using ports in our area.Additionally, in my opinion, there is a need for a closer cooperation between the ports in the entire Baltic Sea area – cooperation aiming deeper than, for example, common marketing. We would be happy to exchange experiences with other Baltic Sea ports.

�The case of Kotka and Hamina is the first port fusion in Finland. Do you think it will be a kind of good practice for other Finnish ports and maybe a catalyst for their merger decisions?

Well, at least it gives them one possible model for future con-sideration of port mergers – not only for Finnish, but also inter-national ports. Ports located close to each other and having the same traffic profile are potential candidates. A port merger is an excellent way to add effectiveness, specialize and avoid overlap-ping investments. It is worthwhile to consider a merger as a solu-tion for a better future.

�There are hundreds of ports in the Baltic. “I feel that around 50-60 would be enough,” said Markus Nyman of the Finnish K+N when we asked him about the possible Kotka-Hamina merger in the previous issue of BTJ. Would you agree?

In my opinion, physically, there is a need for a larger amount of ports in the Baltic Sea than only 50-60. This is because of the long coast line and due to the fact that there are nine independ-ent countries around the sea. More important is the fact that there are too many port organizations and port authorities. With specialization through mergers there is a huge potential to re-duce the number of them, which would serve the BSR well. �

Martyna Bildziukiewicz

Merging the ports of Hamina and Kotka will constitute the largest seaport in Finland. According to estimates, based on the both ports’ statistics for the January – October 2010 period, the joint turnover of the two ports will reach approx. 15.3 mln tonnes, including ap-prox. 500,000 TEU. In terms of total turnover, HaminaKotka Port Ltd is likely to take 15th (or similar) place in the Baltic ports ranking. Si-multaneously, it would become the third largest container port.

ContactMesse München GmbHGermany Tel. (+49 89) 9 49-1 13 [email protected]

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The BSR’s rail freight transport system

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Øresund Bridge – a key element of the Scandinavian road and rail transport system – links the Scandinavian Peninsula to Denmark, providing a connection between the capital city of Copen-hagen and one of Sweden’s major urban centres, Malmö.

The place of Øresund Bridge

Tihe construction of Øresund Bridge was commenced in 1995 and completed 5 years later. The bridge is operated and maintained by Øresundsbro Konsortiet, a com-pany owned by the governments of

Denmark and Sweden in equal shares. The entire connection consists of 3,510 m long Drogden Tunnel, the artificial island of Peberholm (4,055 m in length), and the proper bridge of 7,845 m. And thus, although the bridge itself constitutes not much more than half of the entire structure’s length, the name Øresund Bridge has caught on.

The connection includes a dual motor-way (four road lanes) and a twin track of rails. This is the longest bridge in Europe and the world’s longest bridge construction connecting two countries. The bridge mo-torway is a part of the European route E20.

The bridge has brought significant progress to the Swedish region of Scania (Skåne). The area of Øresund is characterized by a high level of economic development, with some

20% of Denmark’s and Sweden’s joint GNPs being generated here. Situated in the direct neighbourhood of the bridge, Copenhagen-Malmö Port (CMP) is the 13th biggest port in the Baltic (18 mln tonnes in 2008, 15 mln in 2009) and one of the most important hubs for distribution of cars in the BSR. CMP’s plans for the nearest future provide for building new ferry, container and combi terminals (by 2011), a logistics park (by 2012), a new cruise ships quay and new container terminals in Copenhagen (by 2018). Copenhagen-Malmö area is also one of the Baltic region’s major hubs for air travel-in 2009.Copenhagen Kas-trup Airport handled 21.5 mln passengers in 2008 and 19.7 mln last year. Sweden’s fifth busiest Malmö Sturup Airport is situated just some 50 km from Kastrup and features an-nual traffic pf 1.5 mln people (2009).

Øresund Bridge allows for both road and rail transport. The maximum through-put capacity of the structure is 4,000 cars per hour in each direction.

Due to its location, the bridge provides ac-cess to two of Sweden’s six major rail transport corridors, i.e. Corridor 1 (Luleå-Mälard-alen-Malmö/Trelleborg) and Corridor 5 along the west coast of Sweden (Norway-Gothenburg-Malmö) which goes along the European Highway E6). Corridor 1 covers the European Highway E4 (Helsingborg-Haparanda section), the main railway line leading from the north of Sweden, the East Coast line and the main line in the south of Sweden. This is one of the cargo transport corridors with the highest traffic intensity.

Corridor 5 is of high significance for Norway, as Oslo – Svinesund/Kornsjø is Norway’s most important corridor for inter-national passenger and freight transport, an element of the Nordic Triangle (Copenha-gen/Malmö-Gothenburg/Oslo-Stockholm/Helsinki) and of the TEN-T network.


�2 | Baltic Transport Journal | 3/2009�2 | Baltic Transport Journal | 6/2010

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Table 1. Freight transport by rail to/from Norway via Øresund Bridge in 2008 [t]

Ital

y

Aus

tria

Cze

ch

Rep

ublic

Slov

akia

Slov

enia

Cro

atia

Bos

nia

an

d

Her

zeg

ovin

a

Serb

ia

Mon

ten

egro

Hun

gar

y

Norway–exports 75,282 9,869 8 71 546 0 0 0 0 0

Norway–imports 66,683 7,682 2,737 14,615 624 247 194 45 0 563

TOTAL 2008 141,965 17,551 2,745 14,686 1,163 247 194 45 0 563Source: authors’ analysis based on StatBank Norway, http://statbank.ssb.no/statistikkbanken.

Tab. 2. Freight transport by rail to/from Sweden via Øresund Bridge in 2008 [t]

Ital

y

Aus

tria

Cze

ch

Rep

ublic

Slov

akia

Slov

enia

Cro

atia

Bos

nia

an

d

Her

zeg

ovin

a

Serb

ia

Mon

ten

egro

Hun

gar

y

Sweden–exports 417,426 107,946 20,898 21,616 14,000 0 0 0 0 38,493Sweden–imports 68,697 24,212 83,519 33,689 4,000 0 0 0 0 28,244TOTAL 2008 486,123 132,158 104,417 40,746 18,000 0 0 0 0 66,737

Source: authors’ analysis based on scb.se, istat.it, data published by the Statistical Office of Slovenia, data obtained from the Statistical Office of the Czech Republic, data obtained from the Statistical Office of the Slovak Republic.

Rail freight carried across Øresund

Problems with rail infrastructure’s through-put capacity in Norway, Sweden, Denmark and Germany have their impact on the operation of the railway connection across the Øresund strait. The list of main bottlenecks includes the Copen-

hagen-Ringsted section of the railway line, Ham-burg railway station, the low throughput capacity of the bridge across the Kiel Canal, the low qual-ity of the Storlien–Trondheim section and lack of any regular connection across the Fehmarn Belt.

In the year 2009, railway carriage of goods via Øresund Bridge was performed by two

operators, i.e. DB Schenker Rail Scandinavia A/S and Hector Rail AB, the share of the latter being relatively low. Since 2006, the rail freight traffic has been growing slightly but steadily, to reach the figure of 7,402 in 2008 and 7,250 trains in 2009. With its 94% share in the total number of trains crossing Øresund Bridge in

6/2010| Baltic Transport Journal | ��

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The above article is based on information from: Port of Copenhagen–Malmö Annual Report 2008; Copenhagen Kastrup Airport Annual Report 2009; The Swedish Goods Transport Corridors. Follow up since 1997. English summary, SIKA Report 2004 No. 6; Tunga Tåg. Studie för Skogstransportkommittén. TransportForsk Uppdragsrapport 2007 No. 1; Future Plan for Railways 2007-2015, Banverket.

2009, DB Schenker Rail Scandinavia was the dominant carrier here. Hector Rail operated 435 trains in the same period.

Worth noting is that the volume of freight grew by 64% in the period 2001-2008, to over 4 mln tonnes in 2007 and 4.89 mln tonnes in 2008. Thus, the freight volume grew by 22% in 2008 against 2007 and. The average net weight per train was 661 tonnes in 2008.

The volume of rail transport between Nor-way and Central/Southern Europe was close to 179,000 tonnes in 2008, showing a drop by 15.6% against 2007. Imports accounted for 52% of the total turnover. The highest volume of freight was transported by rail to/from Italy, representing 79% of the total freight turnover between Nor-way and Central/Southern Europe, with a slight advantage of exports observed. Exchange with Austria, Slovakia and the Czech Republic was not inconsiderable either. Overall, the freight turno-ver between Norway and Italy, Austria, Slovakia and the Czech Republic represented 99% of the total cargo carried by this line, while the role of the Balkan states and Hungary was insignificant.

Unlike road carriage of goods, rail transport was showing a better balance of turnover between Norway and Italy-exports accounted for 53% of the total turnover in 2008.

International carriage plays a significant role in the structure of Sweden’s railway transport

– 23,244 thou. tonnes accounted for 35% of the overall freight volume carried by rail in Sweden, with 14,299 thou. tonnes of iron ore and 2,263 thou. tonnes of intermodal cargo. Cargo carried by railroad cars accounted for 28.7% of this cat-egory (6,681 thou. tonnes).

Cargo turnover between Sweden and Central/Southern Europe amounted to some 848 thou. tonnes, with exports accounting for nearly 75% of this volume. This was some 20% less than in 2007.

Analysis of the structure of railway carriage between Sweden and the states referred to con-firms the dominant role of Italy in transport via Øresund Bridge. In 2008, railway carriage of car-go between Sweden and Italy accounted for 57% of the total volume of freight transport to and from Central/Southern Europe. When compared to 2007, the volumes of railway-carried cargo be-tween Sweden and Italy dropped by as much as 20%. This fall involved such factors as a 24% im-ports decrease and a 20% exports decrease, down to 417 thou. tonnes in 2008. Similarly to previous

years, the structure of railway-operated freight turnover between Sweden and Italy remained notably unbalanced, with exports accounting for as much as 86% and imports for only 14%.

In 2008, rail cargo between Sweden and Austria accounted for 15.6% of the total turno-ver between Sweden and the referred countries. Similarly as in the case of Swedish-Italian freight exchange, exports share of 82% was definitely prevalent in total turnover. On the other hand, imports gained a clear-cut advantage of 80% over exports in the structure of cargo carried by rail-way between Sweden and the Czech Republic. Freight turnover between these states accounted for 12.3% of the total volume of cargo carried between Sweden and Central/Southern Europe. The volume of transport to and from Italy, Austria and the Czech Republic represented more than 85% of the total railway cargo traffic in 2008. �

Dr Ernest CzermańskiDr Marcin Wołek

University of Gdańsk

�� | Baltic Transport Journal | 3/2009�� | Baltic Transport Journal | 6/2010

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Further development assuredGerman-Scandinavian railway services

The region of Northern Europe is characterised by large trade flows. The biggest trading partner of Denmark and Sweden is Germany, which is also the second largest partner of both Norway and Finland.

E fficient freight transportation between Scandinavia and Ger-many is of great importance for Northern Europe. The Royal Institute of Technology in Stockholm is performing a

railway study within the EU-funded Baltic Sea region project Scandria (www.scandri-aproject.eu), which aims at developing a growth corridor between the Scandinavian triangle and the Adriatic Sea via North-Eastern Germany. Continued growth is fore-casted for the amount of cargo carried by rail in this region. In regard to Swedish cross-border freight handled by rail, wagonload and unit trains dominate while intermodal freight shows the highest growth rate, hav-ing nearly doubled from 2004 to 2008.

Continuous growth

The dominating routes for rail freight are the parallel train ferry lines connecting the German seaports of Rostock and Sass-nitz with Trelleborg in Sweden, which com-bined carry more tonnage than the overland railway route through Denmark as well as across the Storebælt and Øresund bridges. The two ferry routes are served by a total of five departures per day, each with 711 m to 1,110 m track capacity and handling a large share of the wagonload traffic.

An example of a large coordinated flow between Scandinavia and Germany is that of paper from several mills, consolidated at Hallsberg into three daily direct trains to northern Germany, where it is split for vari-ous destinations. This is supplemented by another two daily trains to Germany from late 2010, to be consolidated as far north as Ånge in central Sweden.

Intermodal trains carrying containers, swap bodies and trailers also operate daily between multiple points in Sweden, Denmark and Germany. New intermodal terminals are being opened at a high pace, the most recent one being Katrineholm, serving as a starting point for five trains per week to Germany. The new services are being launched by a variety

of domestic and international operators, some of them covering increasingly long distances.

Solutions and investments

Competitiveness as well as capacity is being improved by growing train sizes. As of December 2009, the maximum trailing mass in Denmark was raised from 2,000 tonnes to 2,500 tonnes (previously by exception). Similarly, the maxi-mum train lengths between Hamburg and Pad-borg are to be raised from 670 m to 835 m as of December 2010, thereby matching the maximum length already permitted through Denmark. The increased length will mainly bring benefit for intermodal trains, which are comparatively light per metre, whereas many of the heavier wagon-load trains will still be limited by mass rather than by length. Additional freight train paths for 120 km/h through Denmark, interspaced between passenger trains, are being planned to increase freight capacity during daytime.

For individual wagonloads taking the land route, capacity is restricted by metre load and axle load limitations across the Rendsburg bridge be-tween Hamburg and Padborg. This bridge is be-ing reinforced, with completion planned for 2013, which may lead to an increased share in wagon-load traffic on the land route through Denmark.

Other improvements which are either underway or planned include, with planned opening dates:

– city tunnel through Malmö, separat-ing passenger and freight trains (De-cember 2010);

– double track Gothenburg-Trollhättan and Mjölby-Motala (2012);

– track upgrade Berlin-Rostock, raising maximum axle load to 25 tonnes/axle (2013);

Hans E. Boysen is a researcher at the Royal Institute of Technology (KTH) in Stockholm, Sweden. The author has more than 22 years of professional experience in the railway industry focusing on de-veloping railway vehicles as well as railway systems. He holds two graduate degrees from KTH (Master of Science and a Bachelor’s de-gree in Engineering) and one from the University of Washington in Seattle (Master of Science in Mechanical Engineering).

– triple track Lüneburg-Hamburg (2015);– double track Vojens-Vamdrup (2015);– extended sidings for longer trains Trel-

leborg-Malmö (2015);– Hallandsås Tunnel between Ängelholm

and Laholm, raising the number of train paths per day and facilitating heavier freight trains (2015);

– upgrade of the eastern freight corri-dor Regensburg-Magdeburg-Uelzen (around 2017);

– new main line Ringsted-Køge-Copen-hagen (2018);

– fixed link across Fehmarn Belt, reducing the distance Hamburg-Copenhagen by 160 km and adding some 48 freight train paths/day (2020).

Holistic approach

In the field of standards, existing lines in Sweden, Norway and Finland continue to be upgraded to longer trains, 25-tonne axle load, larger loading gauges and taller intermodal gauges. To maximize the effect of the invested capital, it is important to consider the whole of each functional cor-ridor, looking across national borders to identify bottlenecks and the weakest links, and to strengthen these to at least the same standard as the rest of the corridor. This is the way to improve capacity as well as pro-ductivity and service quality. Coordination is the key.

Within the EU project Scandria the Royal Institute of Technology in Stockholm is further investigating rail infrastructure and service performance, analyzing both rail freight production and rail passen-ger transport systems, with the purpose of identifying bottlenecks and weak links with respect to freight flows, markets and competitiveness, as well as investigat-ing scenarios for further development. �

Hans E. Boysen


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Fig. Top 15 ERTMS investments (tracks km), September 2010.

Source: UNIFE

From a concept to a mature signalling systemERTMS

Over the past few years, the European Rail Traffic Management System (ERTMS) has recorded considerable achievements. Whilst originally designed to ensure interoperability on the European railway network by replacing more than 20 national signalling systems inherited from the past, it is now emerging as the global signalling standard.

T he ERTMS is an industrial project developed by sev-eral members of UNIFE (Association of the European Rail Industry) in close cooperation with the European Union, railway stakeholders and the GSM-R industry. More than 33,000 km of lines (of which nearly 50% are outside of the EU) are either already running or

are contracted to be equipped with the system. This success in non-European countries demonstrates that ERTMS is price-competitive and brings significant benefits – enabling higher levels of safety, speed and capacity. It also opens exciting new opportunities for the rail industry – for instance, being gradually embraced by Middle East countries, in a move to ensure interoperability between the railway networks that are currently being built in that region.

The deployment

The Spanish high-speed network is now fully running with ERTMS, and trains record next-to-perfect reliability and punctual-ity rates, enabling the Spanish railway operator (RENFE) to fully reimburse customers when delays exceed five minutes on certain lines. Similar results have been achieved in Italy, where a new worldwide tunnel speed record was achieved at 362 km/h. In Swit-zerland, one of the busiest railway networks in Europe, the system allowed for a major increase of traffic capacity.

High-speed ERTMS cross-border traffic started at the end of 2009 between the Netherlands and Belgium and outside of Europe as well, for example on the 1,000 km-long Wuhan – New Guangzhou line in China. In these countries, ERTMS has helped rail transport to become more competitive to road and air travel. It is worth add-ing that among other non-European countries opting for ERTMS are Algeria, Australia, India, Kazakhstan, Libya, Mexico, Morocco, New Zealand, Saudi Arabia, South Korea and Taiwan. Tomorrow, ERTMS might well be used in other markets, such as the US.

Improving freight operations

The time when the system was referred to as ‘immature’ or ‘in development’ is clearly over. However, its roll-out on Europe’s rail freight network has been relatively slower, comparing to its deploy-ment on high-speed lines and abroad. This may be explained by different factors: whilst in the case of a new railway line the use of ERTMS incites no debate, concerning the existing freight lines, where older signalling systems are already running, the installation of ERTMS represents an extra cost. For this reason, the system only brings its full benefits (i.e. seamless traffic between countries) if investments are adequately coordinated on a number of interna-tional freight lines. Conversely, the reluctance from just one Mem-ber State to invest in the European Rail Traffic Management Sys-tem may damage the efforts made by its neighbours. Overcoming such a problem was the key rationale behind the European ERTMS

Deployment Plan (EDP) adopted by the European Commission in July 2009, which gradually makes this system of investments man-datory (by EU law) along the six designated pan-European cor-ridors and a number of additional freight lines. The plan should result in the creation of several fully-equipped corridors, which already account for a major share in European’s rail freight traffic. In this respect, one cannot overstress the importance of such a co-ordinated approach. In many ways, the current level of investments in Europe shows that the pace of implementation differs largely from one country to another. This is happening at the expense of the EU railway community as a whole – as long as corridors are not fully equipped with ERTMS, railway companies have to bear the costs of having several signalling systems on-board their locomo-tives. At the end of the day, the only winners of today’s situation are road and air transport – which do not face the major obstacle of having to cope with different signalling systems.

Coordinated deployment of ERTMS will soon enable rail to level the playing field with road transport. Moreo-ver, a fast migration towards it will provide considerable ben-efits for the environment and Europe as a whole as well. �

Emmanuel Brutin

Emmanuel Brutin is a senior public affairs manager at UNIFE, an organization that has represented the European Rail Industry in Brussels since 1992. For more information about the European Rail Traffic Management System, please visit www.ertms.com.

�� | Baltic Transport Journal | 3/2009�� | Baltic Transport Journal | 6/2010

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First step towards an intermodal terminals network in PolandInterview with Dariusz Stefański, Chief Executive Officer, PCC Intermodal

� What are the main advantages of your new terminal?

Kutno is an ideal place for a transshipment point for Central Poland and intra-European freight as well. It will be the first fully equipped modern intermodal centre in the whole country, able to serve shipments in East-West relations as well as in the South-North axis. It’s got an excellent loca-tion at the intersection of major rail routes (E20 and E65), close to important business and in-dustrial agglomerations: Warsaw, Łódź, Poznań, Bydgoszcz, Płock, Włocławek, Konin, Kalisz, etc. The investment’s operation area is 80,000 m2 and the initial annual capacity 100,000 TEU, plus 4,000 TEU storage space. We start with two rail tracks of 600 metres each and three reach-stackers. Then, the second and final stage of the construction, to be completed in 2014, will add two more rail tracks suppported by two gantry cranes, which shall prepare the terminal for a throughput of 200-250,000 boxes per year.

� How will the new terminal influence PCC’s network?

We treat Kutno as the basis for our further op-erations. We will redirect part of our traffic from other locations and use it as the consolidating hub. Today, we rent a little terminal in Krzewie (12 km

PCC Intermodal, a Polish private railway operator, is opening the first of its greenfield inland terminals in Kutno early 2011. On the intermodal market changing in Poland (and beyond) after the terminal’s kick-off, we talk to the company’s CEO.

from Kutno), where we go daily from the Gdańsk and Gdynia ports, twice a week from Hamburg and three times weekly from Rotterdam. After establishing our own facility we will finally have room for expansion. We will definitely increase traffic frequency with Rotterdam to four trains per week, and prolong the service to Moscow shortly after. Even though there is no critical mass to fill the trains with goods from Moscow to Rotterdam (nor the other way round), intermodal works just like passenger services do. We will then load/dis-charge goods on the way already at the first stop in Herne, serving the Ruhr area, then in Frankfurt (Oder) with shipments to/from the Eastern part of Germany and Western Poland, meanwhile con-solidating goods from Hamburg and Bremerhaven there. Next we will clear at Kutno for Central Po-land, at the same time feeding the train from the North (Finland, Scandinavia) and South (Adri-atic, Austria, Czech Republic, Slovakia, Southern Poland). Finally the service will head to Moscow via Minsk, additionally supplying the Belarusian market. Naturally, the same pattern is going to function in the opposite direction.

�Will this be competitive to Baltic feedering?

Overseas freight will most likely play a marginal role in this business, as when going to Russia, the ocean carriers will try to keep cargo as long

onboard as to St. Petersburg. Our service is par-ticularly targeted towards hundreds of small and medium-sized companies in Europe, which today need to use trucks to send their goods even on 2.5 thou. km routes. Products made in the Rot-terdam area, the Ruhr region, East Germany, the Polish chemical industry (major European chemi-cal production plants are located within 100-200 km from Kutno) should more than welcome this change. The demand is actually even better in the East than in the West, mostly in semi-products (Russian wood, aluminium, oil products, etc). However, in order to run a successful intermodal business you need to deliver the product first, i.e. a good, reliable logistics service. Only then will the volumes come.

� And what about potential expansion to the Caucasus and China?

The Caucasus is tough, and China will never really work out, with maybe the only exception being when someone has the goods manufactured in northern PRC, 3-4 thousand kilometres away of the Chinese ports. This takes five days by rail and then another 30 by ship. Only then will a direct rail service to Europe become a good alternative. But the total potential of this route has been specified for just 100-200,000 TEU yearly, both ways. This is merely the capacity of 10, maybe 20 container vessels – peanuts in comparison to the volumes that go, and will go, to Europe by sea. There were some feasibility studies several years ago which showed that this business may be profitable only when sea freight rates are over USD 3,000 per a 20 ft. box. However, when you take the distance of the land route and its transit time of about 19 days (as they say), one platform will not even make a full turnaround in one month, or – in other words – less than 10 roundtrips a year. How this business might work when one platform costs around EUR 100,000 – even one produced in China…

� And how will the terminal in Kutno im-pact the Polish intermodal market?

Logistics operators need a reliable network of connections and modern distribution/storage points, and they do not find something like this in Poland today. This forces carriers to lean most-ly on long-distance trucking. In fact, for the time being, there is no real alternative to reach Łódź from the Polish ports by any other means than by truck. This also makes carriers work in trian-gle routings in search of cargo loads, because it’s so rare you have a return shipment directly from your destination point. However, I do not think

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going in triangles can be effective in more than 50% of cases. After Kutno terminal opens, a full container arriving from a Polish port on track and destined to Łódź will be able to come back empty to the terminal after its discharge (it’s only a 55 km distance), and then being washed and stored for a couple of days, carried to e.g. Płock, from where it will take new freight to a new destination. But Kutno is just our first step. The second terminal will be raised in Brzeg Dolny (Southwest Poland), another in Sosnowiec (Silesia region) and the last one in Zajączkowo near Tczew (in the North). Tczew’s prime function will be consolidating car-go from Polish seaports. This year, Polish ports for the first time are to exceed 1 mln TEU an-nually. In Gdańsk and Gdynia alone, for which Tczew will be a natural hinterland redistribution point, there are five maritime terminals handling containers. Today’s volumes of each terminal sep-arately do not justify a daily shuttle train down to the country, but just after the start-up in Kutno, we will offer one service collecting goods from all these terminals. Yet, Kutno will not make it alone. The port handlings in Poland in 10 years from now are prospected to reach 4 mln TEU, and the prognosis has already been modified by the global downturn, as the forecasts before the crisis showed that this might happen already in 2018. One million containers out of this can

go intermodal and if so, we will be happy with just half of them. This is why – in the long term – we need this facility near Tczew and our goal is to send a block train every 30 minutes to all the maritime terminals from there. This concept is of regional importance, and it should be done in a public-private partnership, as it will help let huge amounts of cargo out of the ports without completely jamming the cities, which will surely happen otherwise. Yet, whether this captures the attention of the local authorities or not, we are prepared to do it on our own, naturally with the terminal being open to everyone. Tczew’s loca-tion gives at least one more advantage. A pos-sibility to make a roundtrip by truck to Warsaw within one day (a 4-hour drive each way), some-thing that is not possible from Gdynia unless you break the law. This is also a new way of think-ing about trucking in Poland, with drivers ide-ally going every day to various locations within a short 100-150 km range and living a normal life at home.

� What would you suggest to better stimulate intermodality in Poland?

Surely, the government should support con-struction of a consolidated terminals network. In order to serve the whole territory you need

just 5-6 open access facilities. One in West-Central Poland (Wielkopolska and Poznań) where there is a new terminal being developed by HHLA, one for South-West (Wrocław area), one in Kutno (for Łódź and Warsaw), one in Silesia region, one in the Southeast, and maybe one more in the Northeast, depending on in-dustry development in this region. We are just completing the first step to make it all happen. Another problem lies in unequal costs of ac-cess to infrastructure. Long-distance trucking is harmful to society and the environment, and should not normally be economically vi-able for anyone. Yet, freight vehicles do not pay for going through the territory of Poland at all. Contrary to Germany, where no one sends shipments to destinations further than 300 km from the port by trucks, but uses or establishes a new shuttle service. This further stimulates founding of inland terminals. However, in Ger-many – infrastructure access costs are much more equal among the modes. Poland should definitely implement a road tolling system for the benefit of us all. Finally, the Polish railways should finish infrastructure upgrade and recon-struction works on the main rail routes which will improve transit times. That’s practically it. �

Piotr Trusiewicz


The future is still unwrittenEuropean road freight analysis by Transport Intelligence

The road freight industry has been amongst the hardest hit of the transport sectors in Europe. At the worst point of the downturn in mid-2009, Ti estimates that road freight companies’ revenues fell by about a quarter.

The downturn experienced by trucking companies was in line with that seen in the international freight sector, with a major divergence from historic rates of growth which have typically displayed a correlation to GDP. This can be put down to a number of factors. Firstly, the European road freight sector is now highly dependent

on the movement of imported goods. Manufacturers and retailers at the outset of the economic downturn found that they had a signifi-cant inventory overhang, and reduced the number of orders they were placing with remote suppliers (most based in the Asia Pacific region). This reduced the container flow through European ports as well as break bulk operations and the flow of goods to distribution centres.

Conditions during the recession

One of the crucial factors of this situation was the suddenness of the crisis. Road freight companies had been investing heavily in new capacity, and the owner-driver segment had been strong, with new entrants being attracted by the buoyant state of the market. When volumes started to fall in the third quarter of 2008, excess capacity had a highly detrimental impact on rates, which resulted in a negative multiplier effect: plummeting rates and falling volumes impacting on revenues. Consumer behaviour was also a factor. The high levels of uncertainty in the financial sector resulted in consumers either un-able or unwilling to access credit to buy ‘big-ticket’ items (such as ve-hicles) and had a big effect on the real estate market. This led to the cessation of many building and housing projects (a sector of major importance for the road freight industry) and a downturn in demand for new white goods to fill these properties. Consequently, whilst the

Overland

fast moving consumer goods sector was hardly affected (people al-ways need essential items such as toiletries and food), the movement of consumer durables and the automotive logistics sector felt consid-erable pain. The two figures illustrate the wide variance in the output of the European sectors across the period of the recession.

Capacity and price

European consultancy firm Capgemini Consulting and TRANS-POREON publish a quarterly report entitled Transport Market Moni-tor, outlining developments in European road transport rates and ca-pacity. The indices in the report are based on an electronic trading platform, which handles a yearly transport volume of more than EUR 2 bln. The headline results for the latest edition show that transport prices increased in Q2 2010 to an index of 100.9, a rise of 13.5% com-pared to Q1 2010 and that for the first time, price levels equalled the levels of the pre-crisis period H1 2008. However, they are still 2.2% below the second quarter 2008. The report asserted that the significant drop in available capacity was without doubt one of the main drivers for the price increase: the available capacity index decreased by 44% when comparing Q2 2010 with Q1 2010. The Q2 capacity index figure of 61.3 is the lowest level that has been measured since January 2008. Although fuel and labour costs have also increased since Q1, their im-pact has been relatively less.

The authors of the report believe that the drop in available capacity was due to increased demand for transportation caused by the positive economic trend and a clear seasonal pattern. A third factor may be that the modal choice trends changed during the economic downturn. Ac-cording to the authors, shippers may have switched volumes on to road from rail, due to competitive pricing, resulting in additional demand.

On the supply side carriers reduced their fleets significantly during the recession, and have yet to re-invest in new capacity to any major extent. The authors point to modest sales of new trucks, showing that confidence has yet to fully return to the market.

Nevertheless, it is unclear whether the price index will remain above the index 100 mark during H2 2010. The authors say that prices may have peaked in Q2 2010 due to market dynamics: demand and capacity might be better aligned in the second part of this year. However, input cost levels are expected to become more of an issue both for diesel and labour, with the latter being affected by a shortage of skilled workers.

The importance of employee costs and fuel can be notable, account-ing for over 50% of vehicle operating costs. Of course, the price of fuel is highly variable. After many years of sustained growth through much of the 2000s, the price of oil slipped by a third from its peak in 2008. Since then, the market has been characterized by volatility as uncertainties about oil demand re-emerge amid disappointing macroeconomic data and concerns about the impact of Europe’s debt crisis. From USD 82 a barrel in April 2010, the price fell back to USD 72 in August, before once again breaching USD 80 in October.

Increased regulation and deregulation

Adding to cost pressures will be increased regulation of employ-ment. In June 2010, the European Parliament approved a proposal put

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forward by its Employment and Social Affairs Committee which recommended self-employed lorry drivers must be subject to the same rules as those employed by companies. Currently, self-em-ployed drivers, like all commercial drivers, are subject to Regula-tion 561/2006 on driving hours and rest periods but not the di-rective on drivers’ working time. Directive 2002/15/EC covers activities such as driving but also other aspects of working hours in road transport, like loading and unloading, cleaning and main-tenance, and formalities with police and customs. It sets a weekly limit of 48 hours a week on average, which can rise to 60 hours a week provided the average of 48 hours a week over a four-month period is not exceeded.

Although it is almost inevitable that the employment regula-tions will be tightened, other aspects of the industry have been de-regulated. In late 2009 the ‘EU Road Transport Package’ was adopt-ed by the European Parliament and the Council of Ministers which has important implications for the competition. The agreement addresses the difficult question of ‘cabotage’ or movement of goods by trucks from another country. Although in theory a free-trade zone, in reality truck drivers cannot work freely across the differ-ent countries of the European Community. The new regulations on cabotage now permit drivers who have entered a foreign EU state to deliver goods, to make one collection and delivery in that state within a seven-day window. The driver may go on to make a collec-tion and delivery in a further two states that he crosses in order to return to his country of origin. This represents a significant move towards a freer and more coherent road freight market in Europe.

An important corollary to this is the movement towards stand-ardization of operating licenses for road freight companies in the EU. These will oblige countries to ban both companies and indi-vidual drivers who have been found guilty of criminal or driving offences. Within two or three years national authorities hope to establish an electronic database of transport companies that can be accessed by other governments enforcing road traffic legislation within their borders.

Impact of the recession – structural change

The crisis in the European road freight sector has led to a re-duction in supplier pool as companies liquidate and a reduction in capacity as the surviving companies downsize their fleets. Ti believes that medium-sized companies have particularly felt the pain with many going out of business, although these are not widely reported outside of local press. These companies will take time to be replaced, which has implications for quantity (price) and quality. This is espe-cially important for asset light road freight forwarders (such as DHL and Schenker) and other ‘carrier managers’.

During the downturn the number of smallest sub-contractors is diminished due to low levels of commercial awareness. Micro/small enterprises are less able to respond to increasing costs which often erode profits. This pool is augmented in times of economic downturn

Headquartered in the UK, Transport Intelligence (Ti) is a well-established provider of expert research and analysis dedicated to the global logistics industry. Utilizing the expertise of pro-fessionals with many years experience in the mail, express and logistics industry, Ti has developed a range of market leading web-based products, reports, profiles and services used by all the world’s leading lo-gistics suppliers, consultancies and banks as well as many users of logistics services.

Fig. 1. Automotive: growth rate Fig. 2. Consumer/retail (non-durables) growth rate

with new entrants (usually recently made redundant). The level of overheads employed by medium-sized companies counts against them when volumes drop. Many either go bust or are acquired by larger competitors. Large players, with their flexibility to switch be-tween business models, have resources to ride out the recession (al-though in the US there is still potential for major company failure, e.g. YRC Worldwide).

Prospects

The obvious commoditization and high volatility of the road freight sector has led many companies to focus on the development of the contract logistics business model due to its greater stabil-ity. In some cases operators actually saw margins increase in the recession. This is not to say that all companies in the sector pros-pered. Whilst FMCG/retail specialists were not severely affected by the recession, automotive logistics companies were. Downstream distribution was less affected as retailers and manufacturers drew down on their excess inventory– whilst inbound (especially inter-national) logistics was severely affected.

Conclusion

The road freight market and the wider logistics sector strongly reflect the macro-economic picture. There is considerable opportunity for in-vestment with rising demand and rising prices. However, there is a wide-spread reluctance to invest. This, combined with the prospects of the fuel price and driver shortages, is likely to result in continued tight-capacity.

The conditions experienced over the recession and the pros-pects for the medium term future are likely to result in a notice-able amount of restructuring, although there are no indications that consolidation of any scale is at present occurring in the mar-ket. The latest figures show that although merger and acquisition volumes are only down at 2005 levels, their values have declined dramatically. This suggests that deals are taking place, but at the margins of the industry. The larger companies are not using the depressed market as an opportunity to grab a slice of the pie. �

John Manners-Bell

European Road Freight 2010

Analysis of the European road freight sector including trends, developments, market sizing

and forecasts including operator profiles October 2010

Report Code: TIERF1010


Overland

Size does matterOversize transport strategy of Mecklenburg-Western Pomerania

Enlargement of the European Union to the East in 2004 opened up the market and trade to Poland, the three Baltic States and Russia. New trade routes were found and demand for the exchange and transshipment of goods to and from the Eastern nations increased.

D emand for the usage of renewable energy power plants in Eastern Europe has increased enormously in the last years but, unfortunately, the industries of these countries are not yet ready to design and pro-duce these innovative power generating systems. Therefore, large generators and windmills need to

be shipped eastwards from Western Europe. At the beginning such operations caused a lot of bureaucracy as well as losses of time and money because of the need to build and reconstruct some of the roads and bridges along the way, long permission processes and the inexperienced personnel of transport operators.

Getting ready for the growth

The German region of Mecklenburg-Vorpommern is an impor-tant transit market for the oversized transports to the Eastern coun-tries due to its logistical location and connections to Scandinavia and the new EU Member States. In addition to the increasing demand in regional oversized transportation, worldwide project cargo (single segments of ships, power plants, machines, etc.) is becoming bigger and heavier each year. According to the maritime transport forecast for 2025, prepared on behalf of the German Federal Ministry of Trans-port, Building and Urban Development, the total handlings in the four ports included in the study (Rostock, Sassnitz/Mukran, Stralsund and Wismar) will more than double from just under 30 mln tonnes in 2004 to over 73 mln tonnes by 2025. The assumption is that the amount of oversized cargo will increase in this period correspondingly. Due to these facts, a new oversized transport strategy for the region Meck-lenburg-Vorpommern, prepared in relation to the EU project Over-size Baltic, will gain high importance in future years. Infrastructure will be adjusted and improved as well as the safety of such transports. Furthermore, there are public benefits to outline, i.e. low congestion on roads and railways, lower emissions due to innovative transport means and routes, and consumer cost savings due to economical transport solutions.

Legal frame and permits

Oversized and abnormal transports are done by over-dimensioned vehicles usually carrying project cargo, or vehicles with heavy loads of goods over 40 tonnes. German law regulations specify that an oversized transport is only allowed if the cargo is non-divisible (transport other than in one piece is impossible). However, next to the growing number of project cargo shipments, the trend leans towards heavier cargo move-ments of goods with abnormal road trucks. Today, a towing vehicle with trailer is allowed to have a maximum length of 18.75 m and a weight of 40 tonnes, but there are initiatives and tests for mega-trucks with a length of 25.25 m and weight of up to 60 tonnes. In some European countries, like Sweden, such LHVs are already running.

Project shipments in Germany require special permissions from re-sponsible transport authorities, generally the official road authority of the corresponding Federal State. Today the permission process has been made easier, thanks to a one-stop-shop system for all oversize trans-ports throughout Germany, called VEMAGS (Verfahrensmanagement für Großraum – und Schwertransporte). The operators are not bound to apply for permission at a specific authority (e.g. the starting point of the transport route or the location of the business) but can choose their preferred authority. Also, there are possibilities for a transport operator to apply for multiple permissions or a long-term permission, bound to certain vehicle combinations or on fixed routes.

The clients

Transport clients in Mecklenburg-Vorpommern are numerous, since not only local manufacturers use oversize transport in/from/to the region, but also because the transit market in Mecklenburg-

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-Vorpommern is large. Two of the largest players in the oversize trans-port market are the maritime industry and wind power energy sector.

There are many large-scale industrial locations, e.g. shipbuild-ing yards (Neptun Werft), offshore pipeline construction companies (EEW Special Pipe Constructions GmbH), construction companies for ships’ engines (Mecklenburger Metallguss) and sites for maritime logistics in the region, which often require over-dimensioned goods and very heavy lifts. Furthermore, the Ministry of Agriculture, the Environment and Consumer Protection of Mecklenburg-Vorpom-mern expects to have 100% power supply generated by renewable energy sources by 2050. According to the German Wind Energy As-sociation (BWE), the region has excellent conditions for wind energy and solar insolation (up to 1,800 sun hours a year), one of the highest results among German regions. This leads to the assumption that de-mand for wind farms will increase in the following decades. Not only there, however, but in other regions (incl. Eastern Europe and the Baltic states) as well, establishing Germany as one of the most im-portant locations for construction and export of windmills. In order to ensure a smooth transport chain for oversized goods movements, specifically the East-West connections need to be more efficient.

Oversize and overload strategy

Products transported regularly in the Mecklenburg-Vorpommern region, not only internally but also as exports, are windmills and their parts. A standard housing of a windmill weighs around 70 tonnes, new ones even more than 100 tonnes and the tower segments have a length of more than 22 m and a diameter of around 4.0 m. Considering that normal bridges across German roads have heights of 4.2 m and the tower segment lies on a trailer, there is almost no headroom left for the transporting vehicle to fit under the bridge. These make the whole thing challenging for the operator and the customers who take the costs of route planning, reconstructions and time investments in the end. All roads, curves, bridges and potential bottlenecks are indicated and inves-tigated before the operation starts.

The network for such transportations can be divided into dif-ferent parameters, according to transport means and cargo classes. The usage of suitable transport means depends on the weight and dimensions of the oversized cargo. Some cargo does not fit on a road truck, some need to be transported to various locations where no other access than by road is possible.

In such cases, where a high increase in oversized transports is expected, it might be efficient to build new connections, either road reconstructions or new railways (e.g. in the seaport hinterland in order to supply offshore wind parks). If such a need is confirmed, it may be reasonable to cluster oversize transport clients, since the conditions for

Kristina Hunke graduated as Master of Science in the study programme “Operation and Management of Maritime Sys-tems” and works as a project associate for Wismar University of Applied Sciences-Technology, Business, and Design in dif-ferent EU-funded logistics projects.

a transport permit in Germany are the same for every business, regard-less of the sector, company size or transport volumes. However, there is no defined route, functioning as a corridor so far, since oversized cargo transported in this region is treated more or less individually.

Mecklenburg-Vorpommern is not only a strategic location for new technological developments and construction, but also a very important transit market for oversized cargo. The main partners for the transit trade of Mecklenburg-Vorpommern are the Scandinavian countries, the Baltic States (with their further connections to Rus-sia), Poland, southern Germany and neighbouring countries to the south. The increasing demand for oversize shipments to the Baltic States and Russia will strengthen this German region even more as a transit and export market.

Mecklenburg-Vorpommern already has the logistical poten-tial to fulfil the requirements of the transport strategy for over-sized cargo. The main routes already exist, but will be renewed, en-larged over the next years. Yet, the seaports are assumed to be well prepared for abnormal transportation and able to fulfil the posi-tion of logistics centres for the region and whole Germany. �

Kristina Hunke

Source: Logistikinitiative Mecklenburg-Vorpommern


Events

Integration and competition within modesTransport Week 2011, 1-3 March 2011, Gdańsk, Poland

Integrating three well established conferences – the fifth Ro-Ro & Ferry Conference, the fifth Baltic Container Conference and the fourth RailPort, Transport Week has the chance to become the biggest international all-sector event in Poland. BTJ is the main media partner of the first edition.

Tihe event is partnered by the Port of Gdańsk Authority SA, and held under the honorary patronage of ESPO, BPO, Polish Ministry of In-frastructure, Polish International Freight Forwarders Association,

the City of Gdańsk and Marshal of the Pomorskie region. The conference section will be accompa-nied by free trade fairs and panels conducted by Baltic Transport Journal editorial team, Invest-GDA (Gdańsk Economic Development Agency), aircargo.pl Internet portal and Gdynia Maritime University, and topped with an evening Gala Dinner. The event expects to gather around 500 executives, who will try to answer what lesson we have all learned from the crisis. Discussions will touch changes in trade patterns amd impact of emerging markets (China, India, Russia, Brazil)

with focus CEE in its relation to the Baltic and Scandinavia, North, Black, Mediterranean and Adriatic seas – all in the eye of drawing new transport corridors on the map of Europe with TEN-T network’s and White Paper’s revision.

The organizers, Actia Conferences, have been involved in linking transport society from various countries and sectors for years with their high-level industry meetings. “It is a very good initiative. We need to get together from the whole Baltic region to focus on common issues, challenges, problems, and to share our different views”, comments Erik Andersson, Head of Pub-lic Affairs at the Ports of Stockholm, host of Ro-Ro & Ferry Conference in 2008. Aneta Wencel, Shipping Policy Division Director of Polferries goes hand in hand. “Sometimes, it’s worth to take part in such meetings even for just one heard

thought or idea. I, however, have found many things worth remembering here”, she says. On the other hand, Erik Ringmaa, Chief Commercial Officer of the Port of Tallinn, marks importance of specialized panels, explaining that the main thing driving him to participate annually (besides quality of topics, speakers and organization level) is that Actia runs the only pure container confer-ence particularly dedicated to the Baltic region. Therefore, we all hope that the planned innova-tive formula of thematically dedicated days inter-linking with extra seminars, panels and exhibi-tion, will provide a good platform for everyone to get useful know-how and important contacts. �

First dayRo-ro & Ferry Conferencekey questions/topics:

– Is ro-ro market finally getting out of the depression in the region?

– Today’s market trends (consolidation, fleet restructuring, investing in ports/terminals).

– Is the network full or there are some visible new routes on the map?

– How to adjust to eco-requirements (including new IMO regulations)?

– Ro-ro, con-ro, lo-lo and intermodality.

Confirmed speakers:– Maciej Matczak, Actia Consulting Senior

Consultant, Gdynia Maritime University– Anders Refsgaard, Vice-President, DFDS– Johan Röstin, CEO, Copenhagen Malmö Port– Jim Leveau, Traffic & Security Manager,

Port of Trelleborg– Birger Latki, Dipl. Ing. Transport Logistics,

Baltic Marine Consult– Prof. Ulla Tapaninen, Centre for Maritime

Studies, University of Turku

Second day Baltic Container Conferencekey questions/topics:

– Is slow steaming and super-slow steam-ing still a valid concept?

– Big or smaller ships in the Baltic?– Baltic hubbing and direct calls?– Market in the structural change (mergers,

takeovers in ports, terminals and shipping).– Cooperation with Mediterranean and

Adriatic regions.– Development of infrastructure, intermo-

dality and integrating logistics chains.

Confirmed speakers:– Anna Wypych Namiotko, Undersecretary

of State, Polish Ministry of Infrastructure– Patrick Verhoeven, Secretary General, Eu-

ropean Sea Ports Organization– Julian Skelnik, President, Baltic Ports Or-

ganization– Janusz Strzyżewicz, President of the

Board, Port of Gdańsk– Michael Deleuran, Group Senior Vice-

President, Maersk Line

Third day Railport Conferencekey questions/topics:

– Maritime market changes and their im-pact on intermodal transport.

– Why rail operators invest in port opera-tions and container lines go intermodal?

– The role of inland container terminals. – Logistic services in the ports or logistic

centers around the ports?

Confirmed speakers:– Manfred Michel, CEO & President of the

Board, DB Port Szczecin– Joop Mijland, Director of Inland Opera-

tions Europe, CMA CGM– Arvid Guthed, Senior Manager Public Af-

fairs, Port of Gothenburg– Christian Ramberg, Managing Director,

Port of Turku– Peter Plewa, Managing Director, HHLA

Intermodal

More detailed info on the event, including speaking, exhibiting and sponsorship opportunities, as well as visitors pass and recommended accommodation are available on www.actiaconferences.com, where you can register online.

BTJ & Transport Week special deal: everyone who registers for Transport Week 2011 until 28th February 2011 will get 20% discount on BTJ’s printed edition annual subscription. Just e-mail us at [email protected] and make sure today that 6 bi-monthly BTJ editions filled with Baltic market statistics/analyses get at your desk for the price of EUR 60 only (0% VAT, postage included).

16th INTERNATIONALEXHIBITION & CONFERENCE FOR TRANSPORT AND LOGISTICS

26 − 29 APRIL 2011EXPOCENTRE • MOSCOW • RUSSIA

www.transrussia.ru/eng

• Ministry of Transport of Russia (incl. railway, road, sea/river and air transport agencies)

• Federal Customs Agency of Russia

• JSC Russian Railways

• Freight Forwarders' Association of Russia

• EuroAsian Transport Union

• The Guild of Freight Forwarders

TRANSRUSSIA

Official Support

TransRussia moves to

a larger pavilion in 2011

Enquiries

Julia Wocka-Gowda, Senior Event ManagerT: +44 (0) 20 7596 5188E: [email protected]

GENERALSPONSOR

TR 2011 Advert.qxd:Layout 1 22/11/10 09:39 Page 1


What has happened to trading cards?

People mostly enjoy collections gathered by our ancestors and trading cards have a special sta-tus among all collectibles. Cards have been popular since the last decade of the 19th century until

the late 1950s. Our parents, grandparents, and parents of the latter, used to find small cards with pictures attached to various kinds of pack-aging with purchased household goods. The found (or exchanged) items were then glued into prepublished albums with 50-200 empty frames and were sometimes also provided with captions. Cards were published in thematic se-ries, which contained images of people, things, pets, places, events or depicted ideas (including political propaganda!). They often also carried descriptions on their back side. The ingenuity of the editors was truly unlimited and the authors created new themes in hundreds. For example, manufacturers of cigarettes, chocolates, chew-ing gum, snacks, washing powder, soap, coffee or pasta published cards with maritime motives de-picting not only the portraits of ships, but also of house flags, uniforms, funnels, cap badges, ports, equipment, lighthouses, etc. Hence, thousands of sets were published. Particularily, the ciga-rettes and chocolates producers were in the lead of introducing the ‘card-carrying’ products. As a

result, in some countries all collectible cards are called the “cigarette cards”.

Such a hobby had strong educational value. This can be illustrated by the depicted page of col-lector’s album ‘Die Welthandelsflotte’, published in 1933 by the tobacco company Martin Brinkmann AG from Bremen. Each caption includes basic data of a ship, the name of its owner, the shipyard and a description of the line served. The same in-formation is repeated on the reverse of each card attached to boxes branded Lloyd Zigaretten. All together this created a register of ships (120 cards with German units, 78 with ships of 16 other na-tions and two works in shipyards). Although the hobby had its heyday during the interwar period, the market for such kind of antiquaries still goes strong, so the commodity is well researched, de-scribed in books and catalogued.

One can say that we know almost everything on the subject. Or, is that really so? Now we are slowly getting to the main point of the current is-sue’s Collector’s corner.

Actually, the picture is more or less restricted to achievements of trade cards ‘empires’, like Ger-many and the UK (in Europe). General awarness of cards edited in smaller (or less industrialized) countries have never practically existed, even in-side those countries! The reasons are manifold. Interest in cards seems narrowed by national

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achievements. The less success stories one could have come up with, the fewer enthusiasts were found. In some cultures, such a hobby was rather treated as childish and embarrassing. Manufac-tures in small countries published few sets in limited series. Wars destroyed many stocks, etc. In the Soviet Bloc countries there were additional reasons which led to further damages. The lack of an antiquities market stopped the flow of cards and albums to people who could have given them better care and some owners destroyed numer-ous items edited abroad (by ‘Western imperial-ists’) due to political terror.

Saying this, the following questions arise. Was anything published in the countries of the Baltic region and were cards collected here as well (besides Germany)? Did they survive? And they are hard to answer. The situation brings us to the idea of putting together all data on trading cards dealing with transport. We will be very obliged for each piece of information and every kind of illustration of cards edited in your country. We are also interested in stories about trade card collecting (i.e. were cards collected like stamps or glued into ordinary notebooks?). We believe that trading cards are a part of our culture and heritage, and the history of transport as well. �

Marek Błuś



Transport miscellany

An old beauty

We don’t know if this is a true story or merely a legend, but it is said that the galley in small submarines, Type 205 (German) and Kobben (Norwegian) classes, is modelled after this facility on a jumbo jet plane. Looking at the picture made aboard the Danish museum boat Sælen (ex. Norwegian Uthaug), we cannot imagine flying with a pot of soup, especially whilst experiencing turbulence…

It looks like oversized cargo but in fact the photograph depicts the flight deck of the German aircraft depot ship Schwabenland be-fore the launch of a flying boat – Dornier Wal class. Rails under the plane are part of a huge catapult able to ‘shoot’ a 14-tonne unit. Dur-ing 1934-39 Lufthansa maintained a regular postal service from Europe to Río de Janeiro (two flights per week) utilizing so-called ‘cat-apult ships’ as refuelling stations in the mid-Atlantic. In the African Port of Bathurst post was transshipped from an ordinary plane to a flying boat which had to land in mid-ocean, was picked up on board, refuelled and cata-pulted to a destination in Brazil – and vice versa. Catapult made take-off more reliable, saved aviation fuel, ergo increased cargo ca-pacity of the service. Until 1939 over 500 such supported crossings were made.

She could now be 65 or 70 depending on her launching or delivery date-and she could still win beauty contests. Her sloping masts call for fore-and-aft sails… But ships are short-living creatures; she disappeared in Japanese foundries in 1964 because beauty of practical things not always pays. Stowage of cargo by her small hatches (especially to

Intermodal galley?

To Río by catapultA common Baltic heritage

The war veteran

This traditional owner’s postcard depicting Norddeutscher Lloyd’s Berlin reminds of passen-ger ships which bore more than one flag of Baltic countries. Built as Stockholm for Svenska Ameri-ka Linien in 1925, she was the first motorship

We remember that American industry fed the war machine in Europe with ships, cars and airplanes, but it is often forgotten that liberated railway networks needed vehicles too. Between 1942-1945 over 2,100 steam locomotives S160 class were ordered – most by the US Army Transportation Corps – and about 1,500 fol-lowed allied forces to Italy and France. After the war many were given to UNRRA or sold to Po-land (575 units) and Hungary (510). 23 survived in museums and heritage railways. The depicted one is preserved in Jaworzyna Śląska (Poland).

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ever in transatlantic passenger services. During World War II she worked as a Red Cross repa-triation ship for both sides of the conflict. In 1954 the old lady was bought by NDL to spend her last 12 years on the Bremen-New York run.

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holds Nos. 2 and 3 under the superstructure!) costs the earth, even Greek owners failed to make money off her. We are talking about the Danish ‘lo-pax’ Falstria (60 passengers) launched in 1940 and completed in 1945 in Nakskov. Ordered for the Europe-Bangkok line she spent 16 years in transatlantic service between Copenhagen and New York.

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Who’s who

Danske Færger’s new management member

Danske Færger (Danish Ferries), which will soon merge with Bornholmstrafikken and Sydfynske, has appointed John Steen-Mikkelsen as Chief Executive Officer. Prior to joining the company, Steen-Mikkelsen held the position of COO at Scandlines Group (2005-2010), and before that he worked as Line Manager Østersøen for this company (1998-2005). During his earlier career he held various executive positions at such companies as Europa Linien and Lion Ferry Sweden, among others.

Air Berlin’s sales team strengthened

Christian Lesjak has been named Executive Vice President Sales Scheduled Services with Air Berlin, he now reports to the company’s CCO, Christoph Debus. In the past Lesjak worked as Director of Sales, Marketing and Network Planning at the company’s group member NIKI. He has over 15 years of experience in the aviation industry, which he gained working for airlines such as Lauda Air and Swissair. The Air Berlin Group is Germany’s second largest airline. Strengthening its sales team is designed to prepare for the company’s full membership in the oneworld aviation alliance, which is due to take place at the start of 2012.

New manager of M&M’s Wrocław branch, Poland

During her previous career in the TSL sector, Gabriela Kowalska gained experience through working for Geodis Logistics Poland (member of the SNCF Group), Frans Maas Poland and GEFCO Poland. Before joining M&M Group, Kowalska was also involved in promoting the logistics industry in collaboration with the academic circle of transport, shipping and logistics at the Foreign Trade Policy and European Studies Institute, Warsaw School of Economics, of which she is an honorary member of the board. As a new member of M&M’s management team, she will be responsible for supervising the company’s branch in Wrocław.

WWL’s new executive

Erik Noeklebye has become the new Head of Region Europe of Wallenius Wilhelmsen Logistics. He will be based in Stockholm, where WWL’s European operations and management board are located. Noeklebye is a graduate of BI Norwegian School of Management in Oslo, where he became a Master of Business and Economics, specializing in Logistics Management. He has 14 years of experience in shipping and logistics. Before assuming this position he was WWL’s Head of Commercial for Asia. The new president of European region has been with WWL since 1999, developing a deep understanding of the industry while working in Oslo, Stockholm, Tokyo and the USA.

Changes in NCC’s leadership team

Vladimir Odintsov, who recently took up the position of Director of Logistics at National Container Company, has managerial and executive experience from a number of prominent multinational businesses, such as First Quantum Group and Ahlers International. He holds a degree in marine transport operation from St. Petersburg Academy of Marine Engineers as well as business development from The Stockholm School of Economics. Before gaining his current position at NCC, he was CEO of Logistika-Terminal (Shushary, St. Petersburg).

Logistika-Terminal has a new CEO

Vitaly Mishin has been appointed Chief Executive Officer for Logistika-Terminal. Mishin started his career as a stevedore at the Sea Port of St. Petersburg in 1980 where he reached executive positions. He held the post of CEO at ZAO ‘First Container Terminal’ (from 1994) as well as Director of Operations (from 2006). Prior to becoming CEO at NCC’s Logistika-Terminal, he worked as managing director of OAO Sea Port of St. Petersburg.

Lena Lorenc

pomorskie reklamy asia 2010.indd 31 2010-11-19 10:20:42

Creating land for the future

Partners in sustainable developmentDEME has been a top player in every segment of worldwide dredging, hydraulic fill and marine engineering for decades.

We have participated in the construction, deepening and or widening of important waterways and navigation channels in every corner of the world for over 150 years.

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Extension of Pier III in the harbour of Rostock, Germany.

Deepening works in the Port of Liepaja with TSHD Mellina, Latvia.

adv_DEME Baltic Journal.indd 1 19/11/10 15:27

european logistics bsr's rail freight transport

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