FinEst Link WP 2Comparative Impact Analysis

Cargo Transport Scenario (CTS)

Cargo volume estimationsMemo / report29 May 2017

Sito: Ilkka Salanne, Erkki Jaakkola, Iida-Maria Seppä, Marko Tikkanen

Cargo Transport Scenario (CTS)

Description

Objectives, methodology, main phases

Objectives

• To produce diverse estimations on cargo potential for year 2050 for maritime and railway tunnel transports between Helsinki and Tallinn in alternative scenario situations.

• Compare the route using Helsinki–Tallinn tunnel and Rail Baltica with other routes to/from Warsaw.

Methodology

• The analyses are performed using FRISBEE freight model.

• Model is described profoundly in Annex.

Main phases

1. Logistics study on driving factors (source materials, statistics)

2. Volume estimations

Scenario 0, base scenario, current situation

Scenario 0+, existing transport system between Helsinki and Tallinn; Rail Baltica on operation, forecast year 2050

Scenario FL, Helsinki–Tallinn tunnel on operation, Rail Baltica on operation, forecast year 2050

3. Sensitivity analysis (3)

4. Comparison of routes

5. Common analysis and conclusions

6. Reporting

This memo/report on hand considers the methodology and results of cargo volume estimations (phases 1 and 2).

Main sources• Directferries.fi. Year 2017.

• Foreign Trade Statistics, Logistics Statistics, Transport Statistics. Finnish Customs. Year 2016.

• Helsinki and Tallinn on the move. Final report of H-TTransplan project. Year 2012.

• Maritime Transport Statistics, Foreign Shipping Traffic. Finnish Transport Agency. Years 2012–2016.

• Pre-feasibility study of Helsinki–Tallinn fixed. Final report. Year 2015.

• Preparing the Northern Dimension Partnership on Transport and Logistics. NORDIM. Final Report, Updated. Year 2011.

• Rail Baltic Estonia. General technical description and operational plan of Rail Baltic railway. Year 2016.

• Rail Baltica Global Project Cost-Benefit Analysis (CBA), 30 April 2017.

• Statistics. Port of Helsinki. Year 2016.

• Strategic development of the transport system with the aid of modelling. Federation of Finnish General Industry. Year 2011.

• Tallink Grupp AS, Group Annual Report 2016. Year 2017.

• The Northern Transport Axis. Final report. Year 2007.

• Traffic between Finland and Russian Federation 2020 and 2030. Ministry of Transport and Communications of Finland. Year 2013. Includes economic forecast for years 2020 and 2030 of ETLA – Research Institute of the Finnish Economy.

Maritime cargo transports between Helsinki and Tallinn ports

in years 2012–2016

Picture © Port of Helsinki

Maritime cargo transports between Helsinki and Tallinn in years 2012–2016 – Overview

• In year 2016 close to 3.8 million tons of cargo was transported, in the Tallinn–Helsinki direction approximately 1.8 million tons and in the Helsinki–Tallinn direction approximately 2.0 million tons.

• Cargo tons increased from 2013 to 2016 by 34%.

• Most common type of goods was groupage, which percentage was over 90% of all the types of goods.

• Most common types of ships were roro passenger ship and roro cargo ship. In year 2016 roro passenger ships transported approximately 83% of the cargo tons and roro cargo ships approximately 17% of the cargo tons.

• Over 99% of the cargo tons were transported in units: in trucks 93–97% (approximately 2.6–3.6 million tons per year) and in trailers 3–7%.

• Number of units increased from 2013 to 2016 by 27%.

• In year 2016 close to 326 600 units were transported, in the Tallinn–Helsinki direction approximately 156 600 units and in the Helsinki–Tallinn direction approximately 170 000 units.

• In year 2016 on average 854 trucks per day were transported.

• Almost all of the containers transported were empty, but the total number of containers was small.

• In the both Helsinki–Tallinn and Tallinn–Helsinki directions the cargo volumes and the number of units are quite similar.

Cargo transports by types of goods

• The cargo transported between Helsinki and Tallinn ports consists mainly of groupage.

• In year 2016 close to 3.5 million tons of groupage was transported between Helsinki and Tallinn ports.

• The percentage on the groupage was in year 2012 approximately 89% and has been over 90% since year 2013.

• The share of groupage of all the types of goods is a bit bigger in the Tallinn–Helsinki direction than in the Helsinki–Tallinn direction.

• The second biggest type of goods was paper and cardboard which share has been approximately 6% in recent years.

• In the Finnish Transport Agency’s statistics, there are 16 types of goods and 10 on them were transported between Helsinki and Tallinn ports.

Volume estimations

Methodology and data

Description of the scenarios 1/2

• The freight transport scenarios were created by the FRISBEE model (see annex).

• The analyses were performed to allow comparison with the existing transport system.

• The scenarios areo Scenario 0, current situation year 2016

o Scenario 0+, base scenario, existing transport system between Helsinki and Tallinn, Rail Baltica on operation, forecast year 2050

o Scenario FL (for all cargoes/goods and for unitized cargo), Helsinki–Tallinn tunnel on operation, Rail Baltica on operation, forecast year 2050. Scenario FL will be compared with the base scenario 0+.

Description of the scenarios 2/2

• In this study rail tunnel is alternative “physical” connection mainly to sea transport connection (liner traffic by passenger roro ferries and roro ships) between Helsinki and Tallinn. Concerning transport potential for these above mentioned connections modelling covers all ports and transports.

• In the volume estimations 2 different alternatives were studied separately:– Study where only the cargo possible to transport in big units (trucks, containers, semitrailers

and trailers) was taken into account and

– Study covering all cargoes (types of goods) as total.

• Also the air cargo transported by trucks and ships to Europe is included in transport volumes and potentials.

• The model calculates the theoretical potential for the tunnel and Rail Baltica. Thus the modelling results presume, that there are no operative or infrastructure related restrictions/capacity limitations as an example in terminals or in tunnel.

Forecast in year 2050

• The forecast of Finnish import and export is based on ETLA’s economic forecast on transport demand by types of goods for year 2030.– Ministry of Transport and Communications of Finland. Year 2013.

Includes economic forecast for years 2020 and 2030 of ETLA –Research Institute of the Finnish Economy.

• In this project the forecast has been updated taking into account the economic development during 2010–2016.

• In scenarios 0+ and FL it has been assumed that ETLA’s forecasts in year 2030 level will be obtained in year 2050 (moderate forecast).

• Concerning other European countries it has been used updated forecasts collected and used in European Commission’s projects– As an example Preparing the Northern Dimension Partnership on

Transport and Logistics. NORDIM. Final Report, Updated. Year 2011.

FRISBEE modellingData

Demand

• Origin–destination freight flows (matrices) by commodity groups in year 2050 Possible to transport in the big units, SITC2 classification

1) Finland’s import (18 million tons per year) and export (17 million tons per year)

2) Import and export of all the European countries.

New supply 2050

• Helsinki–Tallinn tunnel Riihimäki–Muuga, distance 120 km

Average speed (cargo train) 100 km/h

• Rail Baltica Tallinn–Pärnu–Riga–Panevézys–Kaunas–Warsaw–Berlin

Average speed (freight train) 100 km/h.

FRISBEE modellingData

Time (Helsinki–Tallinn tunnel and Rail Baltica)

• Average loading and unloading time 2 hours (containers, combined vehicles, trucks)

Truck must be on the platform for loading 30 minutes before departure at latest (combined transport)

• No stops on the country borders (only in terminals)

• No extra delay caused by different gauge width.

FRISBEE modellingData: Price and market development 1/2

• In this study the price defined in Pre-feasibility study (later pre-study) Helsinki–Tallinn fixed link has been used as the base price: 450 euros per truck per one direction.

• In pricing the Eurotunnel pricing has been used as reference. In the pre-study it has been presumed, that customers are willing to pay almost twice for the fast train service compared to lowest maritime freights. In the price definition it should also be taken into account that the fees collected from cargo transports and passenger traffic would cover the operational and investment costs of the tunnel. Also in that sense probably the tunnel price for cargoes should be higher than maritime freights.

• The pricing depends naturally also the expected volumes of cargo and passenger traffic; it should be low enough to attempt the traffic, but also high enough in the proportion of traffic amount to cover the costs. The pricing depends also on many other factors like capacity and safety (transports of dangerous goods) limitations of tunnel, which affects the possible volumes of cargoes.

• Current maritime transport prices are presented below as a reference (source Directferries.fi):

– 200–250 euros per truck (12 metres, max. 13 tons) per direction

– 300–400 euros per truck (18 metres, max. 44 tons) per direction

• In Rail Baltica it has been used average train freight prices in transit countries (see annex FRISBEE model).

FRISBEE modellingData: Price and market development 2/2

• In this study it has been performed sensitive analysis of the effects of different tunnel prices on the transport volumes for illustrating the alternative market situations.

• In the case of Eurotunnel the markets has been reacted so that the tunnel price and maritime freights have been closing each other. Currently they are almost at the same level.

• Shipping companies can react very fast to tunnel prices and lower their freights. This is the situation especially in Finland, where most of the sea transports between Helsinki and Tallinn are operated by passenger roro ferries. In this market the most of the incomes comes from the passenger traffic (tickets and related services). The share of the revenue of cargo transports of the total revenue is about 11 % (source: TallinkGrupp As, Group Annual Report 2016).

• The market situation of Helsinki–Tallinn tunnel differs strongly from the market situation of Eurotunnel.– Direct railway transports between Finland and Eastern Europe via Rail Baltica play major role for cargo

potential of Helsinki–Tallinn tunnel. That is because Rail Baltica will be sole and competitive alternative to truck or train/maritime/truck or train transports between these areas. This is tempting the long transports to/from eastern, central and southern Europe to use the tunnel. Most of the potential to tunnel may then consists of these transports. Railway transports are most competitive at long distances.

– The Eurotunnel serves much bigger immediate market areas / economies with higher overall transport demand at both ends of Tunnel (United Kingdom and France) than Helsinki–Tallinn tunnel (reflecting overall potential cargo volumes).

Average cargo train / information for interpretation of results

• Max. 96 TEU per train (source Pre-feasibility study of Helsinki–Tallinn fixed link)

• Max. 48 trucks per train (source Pre-feasibility study of Helsinki–Tallinn fixed link)

• 600–700 tons per train (total trucks and containers)

• Average length of train 800–1 000 metres

• Average cargo 8 tons per TEU (source Port of Helsinki)

12–13 tons per truck per trailer (source Finnish Transport Agency).

REMARK:- These figures are at this point only for preliminary interpretation of results (One can make

some preliminary calculations based on the presented volumes). Train type (truck shuttle, container train), length etc., at this point only answers the transport demand (potential).

- They do not affect the modelling results, when estimating overall transport potential, because no capacity limitations (in tunnel, in Rail Baltica or in maritime connections) has been taken into account in this phase. When information is available on these limitations etc. from WP3, these estimations will be specified.

- However the number of the trains presented in this memo has been calculated using the information presented above.

Volume estimations

Results concerning

all cargoes

Cargo volumes 2016 and 2050Potential of all cargoes

Scenario 0, year 2016 (no Helsinki–Tallinn tunnel)• Helsinki–Tallinn maritime cargo

3.7 million tons per year

Scenario 0+, year 2050 (no Helsinki–Tallinn tunnel, Rail Baltica on operation)• Helsinki–Tallinn maritime cargo

6.9 million tons per year

Scenario FL, year 2050 (Helsinki–Tallinn tunnel in use)• Helsinki–Tallinn maritime cargo and tunnel cargo

8.2 million tons per year total transports

• 4.5 million tons per year maritime transports

• 3.7 million tons per year transports via tunnel

Potential cargo volumes in Scenario 0+Potential of all cargoes

Potential cargo volumes in Scenario 0+

Potential of all cargo

From Tallinn to Helsinki

From Helsinki to Tallinn

Total (both directions)

Tallinn–Salaspils

Salaspils–Kaunas

Kaunas–LT/PL border

Based on transport demand of Finland

in year 2050

Based on transport demand of all European

countries (including Finland) in year 2050

Maritime transports between Helsinki and Tallinn

Million tons per yearPotential for maritime cargo transports will remain

the same (no effects) compared to potential based

on demand of Finland

2.8

4.1

6.9

1.4

Potential railway transports for Rail Baltica

Million tons per year

1.5

1.5

6.1

7.8

17.3

Million tons per year

Cumulative

Potential cargo volumes in Scenario FL

Potential of all cargo

From Tallinn to Helsinki

From Helsinki to Tallinn

Total (both directions)

Million tons

per year

Trains

per day

From Tallinn to Helsinki 1.4 5‒6

From Helsinki to Tallinn 2.3 9‒11

Total (both directions) 3.7 15‒17

Tallinn–Salaspils

Salaspils–Kaunas

Kaunas–LT/PL border 3.1

Railway transports via Helsinki–Tallinn tunnel

Potential cargo transports for Helsinki–Tallinn tunnel

will increase only slightly (40 000 tons per year)

compared to potential based on demand of Finland

Potential railway transports for Rail Baltica

Million tons per year

3.4

3.2

8.0

9.5

19.0

Million tons per year

Cumulative

Based on transport demand of Finland

in year 2050

Based on transport demand of all European

countries (including Finland) in year 2050

Maritime transports between Helsinki and Tallinn

Million tons per yearPotential for maritime cargo transports will remain

the same (no effects) compared to potential based

on demand of Finland

1.9

2.6

4.5

Potential cargo volumes in Scenario FLPotential of all cargoes

Potential for the Helsinki–Tallinn tunnel: Types of goods (potential of all cargoes)

Type of good Share (%)

Paper, paperboard and articles 30

Machinery and transport equipment 25

Manufactured miscellaneous goods 15

Chemicals and related products 10

Other types of goods 20

Total 100

* The transports of petroleum and mineral fuels are not targeted to tunnel according to modeling results.

Scenario FL, year 2050, Potential of unitized cargo

Conclusions, remarks this far

Main conclusions

• The main potential to tunnel seems to consist of long distance transports using Rail Baltica.

• This means that there may be shifts from trucks to containers and connection may tempt also “long distance” conventional cargoes.

• According to the modelling results the potential of conventional cargoes (other than unitized cargoes) for tunnel would be about 1 million tons per year in year 2050.

• The total price and level of service (See annex.) of the transport between origin and destination is then meaningful, not only the price or level of service of one part of the transport chain like tunnel (as an example total price between Helsinki and Warsaw).

• The potential of Finland for Rail Baltica in FL scenario is double or more compared to 0+ scenario– 100 % increase concerning only unitized cargoes

– 127 % increase concerning all cargoes

• In 0+ scenario there is potential mostly for transports via Rail Baltica between Finland and Eastern Europe.

• in FL scenario there is in addition to that also potential for transports via Rail Balticabetween Finland and Germany/Central Europe.

Shifts to tunnel in year 2050

• In this study theoretical potential for tunnel based on prices, transport time, lead time etc. and transport system optimum as a whole has been defined.

• Potential based on transport demand in year 2050 for Helsinki–Tallinn tunnel consists of shifts of cargo flows from followed routes (comparison between scenario 0+ and scenario FL)o Maritime transports between Helsinki and Tallinn 1.4 million tons per year

(shift to tunnel 25%)o Maritime transports between Helsinki/Hanko/Rauma and Gdansk 1.1–1.6

(unitized cargo–all cargo) million tons per yearo Maritime transports between Finnish ports and Northern Germany ports

0.3–0.7 (unitized cargo–all cargo) million tons per year

• When taking into account all types of goods instead if only considering the unitized cargoes the theoretical potential for the tunnel increases by 30 %.

Orientation of potential cargo flows in scenario FL

• 99% of maritime transports would be transports between Finland and the Baltic countries. 65 % would be transports between Finland and Estonia.

• 83% of transports using the Helsinki–Tallinn tunnel and the Rail Balticawould be transports between Finland and countries in Eastern Europe and in Central Europe. 8% would be transports between Finland and Estonia.

• From total transports (summing maritime and tunnel transport potentials) 66% would be transports between Finland and the Baltic countries.

• From total transports (summing maritime and tunnel transport potentials) 43% would be transports between Finland and Estonia.

Preliminary sensitivity analysis

Sensitivity analysisThe effect of tunnel price (based on transport demand in year 2050) on share of the cargo volumes in tunnel and in ships, unitized cargo transports

Change of the used tunnel price (base price 450 euros per truck) by -40% to +25%.

Theoretical potential: no capacity or other limitations in tunnel

Sensitivity analysis

Change of the used tunnel price (base price 450 euros per truck) by -40% to +25%.

Theoretical potential: no capacity or other limitations in tunnel