BTJ 4/2011

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There’s still a need to increase safety at sea

Focus

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Maritime Ranking 2011Have the good times returned?

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Baltic Transport Journal

President of the Boardbogdan ołdakowski

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Publishing Directorpiotr trusiewicz

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Managing Editorlena lorenc

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Executive Editormarek błuś

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Associate Editorprzemysław myszka

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Contributing writersmartyna bildziukiewicz,ignacy h. chrzanowski,

inge heike flämig,nico herz,

magdalena jażdżewska-gutta,nathan kai-cheong chan,

krzysztof luks,john manners-bell,

małgorzata nosorowska,justyna rataj,

jutta wolff

English Language Editoralison nissen

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b i m o n t h l y - d a i l y c o m p a n i o n

№ 4/2011 (42), JULY/AUGUST

Baltic Transport Journal is an official media partner of:


Focus

Baltic ShipyardsWhere is the bottom line?

Report

Maritime Ranking 2011Have the good times returned?

ISSN

173

3-67

32

Dear Readers,As always I am happy to greet you here, hopefully stress-free after the summer. The

Maritime Ranking 2011 we’re featuring in this BTJ issue, with the main article „Have the good times returned?” by Marek Błuś, will certainly not spoil your mood. It is fairly optimistic, as Baltic maritime transport seems to have recovered over the level of 2008.

Go to our Report to learn more, but don’t forget to read about the economic situation in the region in the text “After a year of recovery” by Magdalena Jażdżewska-Gutta, to get the bigger picture.

On the other hand, the article „The Baltic shipyards – Where is the bottom line?” brings some alarming news, as our region’s position as a ship supplier to the world market keeps decreasing. You will find more information on this in the Focus section. This matter has also been touched upon in the article „EU-South Korea Free Trade Agreement (FTA) - Who will benefit?” by Justyna Rataj, you will find it in the Economy section. Another piece there, very much worth recommending, is the article by Ignacy Chrzanowski who tackles the question of transport’s influence on the process of globalisation. I’m sure you will find it very interesting.

Another report in this edition of our magazine, “There’s still a need to increase safety at sea”, presents the EMSA data concerning safety issues on the European waters. As you will read through it, you’ll discover that while there have been no major disasters for more than ten years, there continues to be hundreds of accidents each year, so this issue should still remain on the agenda. We also touch upon the topic of environmental challenges that the Baltic is currently dealing with, as well as their potential answers. One of them – LNG as a ship fuel – takes the lead. Read the text „The best solution is LNG” by Nathan Kai-Cheong Chan as well as the interview with Monica Gullberg, Team Leader for the consultant’s team of the project “A feasibility study for an LNG filling station infrastructure and test of recommendations,” entitled „Maritime LNG infrastructure within the SECA” to learn more.

And finally, the third report material can be found in the Logistics section. The article “Chasing the pre-recession levels” by John Manners-Bell tackles the question of contract logistics in 2011 and the growth of this industry together with the world economy’s continuing evolvement through the development of global supply chains.

I do hope you will enjoy your reading.

Lena Lorenc

Admiralteyskiye Shipyard 54; Aker Yards 54, 55; Antwerp Port Authority 11; Arctech Helsinki Shipyard 11, 54; Arkas 55; AUA 65; Aus-trian Airlines 65; Baltic Container Terminal Gdynia 10; Baltic General Cargo Terminal Gdynia 9; Baltiysk Stevedores Company 10; Balti-ysky Zavod 54; Baltkran 10; BBC Chartering 55; BLG Logistics 60; BMW AG 60; Bore Line 55; Canadian Imperial Bank of Commerce 16; Cargotec 22; CEVA 58, 59; CMA CGM 66; Cobelfret 55; Color Line 54; Copenhagen Malmö Port 66; Creuers del Port de Barcelona 66; Daimler AG 60; Damen Shipyards Gdynia 55; Danish State Railways 65; DB Port Szczecin 9; DB Schenker Logistics 10, 59; DB Schenker Rail 9, 60; Deepwater Container Terminal Gdańsk 8, 10; Dell 15; Deutsche Post DHL 58, 60; DHL Supply Chain 59; DNV 24, 25; Eckes-Granini Group 66; ECT Delta Terminal 49; Exel 59; Færgen 54; Fassmer 10; FIEGE Logistik 59; Finnlines 62, 66; First Container Terminal 11; Flensburger Schiffbau-Gesellschaft 54, 55; Ford Motor Company 60; Förde-Reederei Seetouristik 11; Friday Clipper Group 11; Futurestep Finland 66; Gdańsk Container Terminal 8; Gdańsk Shipyard 10; Gdynia Container Terminal 10; GEFCO 60; General Mo-tors Company 60; Global Ports Investments 9; Greenpeace 10; Hammonia Reederei 55; HH-Ferries 11; Hitachi Transport System 59; Hjejlen 64; Huhtamaki 66; Hupac Intermodal 11; JSC Sodruzhestvo-Soya 10; Karstensens Skibsværft 54, 55; Kombiverkehr 66; Kuehne + Nagel (K + N) 59; Lidl 60; Lindenau 54; LKW Walter 66; Logistika-Terminal 11; Marine Projects 54; Menlo Worldwide Logistics 59; Meriaura 55; Metro 60; Minsk National Airport 10; Mitsubishi 60; Mitsubishi Logistics Corporation 59; Moby Dik 9; Mols-Linien 11; Multi-Link Terminals Ltd Oy 9; National Container Company (NCC) 11; NCC Logistics 11; Neptun Werft 55; New Szczecin Shipyard 54; Norbert Dentressangle 58, 59; Nordic Yards Warnemünde 54, 55; Northern Shipyard 54; Odense Steel Shipyard 54, 55; Onega Shipyard 54; Oskarshamns Hamn AB 46; P&O Ferries 53; P+S Werften 54, 55; Partner Shipyard 54; Peene-Werft 54; Penske Logistics 59; Petrolesport 9; POL-Euro Shipping Lines 55; Port Cranes 23; Port of Elbląg 47, 48; Port of Gdynia 62; Port of Gedser 11; Port of Gothenburg 46, 62; Port of Helsinki 9; Port of Hong Kong 16; Port of Kalajoki 46; Port of Kalmar 46; Port of Karlskrona 62; Port of Kiel 62; Port of Klaipėda 8, 48; Port of Kotka 9; Port of Rostock 6, 11, 50; Port of Rotterdam 49; Port of Shanghai 16; Port of Singapore 16, 33; Port of St. Petersburg 9, 10, 11, 48, 54, 60; Port of Swietły 47; Port of Tallinn 9, 48; Port of Ust-Luga 8, 10, 11; Port of Ventspils 8; Port of Vysotsk 10; Province of Antwerp Development Corporation 11; PSA Peugeot Citroën Group 60; Remontowa Group 54; Rhenus 59, 60; Rosmorport 10; Rudolf 60; Russian Railways 11; Russkaya Troyka 11; Ryder 59; Sankyu 59; Sanoma Corporation 66; Satatuote 66; Scandinavian Ferry Lines 65; Scandlines 11; Schenker Contract Logistics 60; Schneider National, Inc. 59; Schnellecke Logistics 60; Sea Commercial Port of Kaliningrad 8, 47; Ship Cleaning Services Hans Langh 66; Ship Repair Yard GRYFIA 54, 55; SNCF Geodis 59; Søby Værft AS 55; Sovcomflot 11, 55; Stena Line 11, 55, 62; STX Corporation 13; STX Europe 11, 13; STX Helsinki 54; STX Rauma 53, 54, 66; STX Turku 54, 55; Suardiaz Group 66; Suez Group 66; Sundbusserne 65; Suomen Unilever 66; Sysav 66; Świnoujście LNG Terminal 10; TDG 58; Toll Global Logistics 59; TransContainer 9; TT-Line 66; Uki Workboat 53, 55; Unipart Group 59; UPS SCS 59; Viking Line 55; Volkswagen Group 60; Volkswerft Stralsund 54; Volvo Logistics 60; Vopak E.O.S. 9; Vostochnaya Stevedoring Company 9; VR Group 66; Wadan Yards 54, 55; Walmart 15; Western Baltija Shipyard 54; Wincanton 59; Wisła Shipyard 54; Ystad Hamn Logistik 66.

C o m p a n y i n d e x

� | Baltic Transport Journal | 4/2011

Contents

12Economy

12 EU-South Korea Free Trade Agreement (FTA) – Who will benefit?

1� Globalisation and the transport industry – The world is not getting any smaller

18Maritime

18 There’s still a need to increase safety at sea

22 Foretelling the future in half a century

2� The best solution is LNG27 Maritime LNG infrastructure within

the SECA

�Regular columns

� Editorial6 BTJ calendar of partnership events8 Market SMS Extended10 What’s new?62 Events6� Collector’s corner65 Transport miscellany66 Who’s who

TransBaltic�6 The future of small ports�7 Port of Elbląg and the Vistula

Lagoon – Key factors to its development

�8 A hotspot for empty flows

Baltic Ports Organization50 Twenty years later

EWTC II52 The ultimate vision: more

transport, less traffic

�6Newsletters

Contents

4/2011 | Baltic Transport Journal | 5

�1Report

Baltic maritime ranking 2011�1 Economic situation in the region

– After a year of recovery�� Have the good times returned?

5�Focus

Transport and ecology5� Baltic shipyards –Where is the

bottom line?

57Logistics

57 Contract logistics in 2011 – Chasing the pre-recession levels

I n t h i s i s s u e

The 7th issue of BTJ’s maritime ranking is optimistic – if the numbers don’t lie, Baltic maritime transport has recovered over the level of 2008.

Marek BłuśRead more in the article entitled: Have the good times returned?, p. 34

of 6 upcoming BTJ issues of 6 upcoming BTJ issues

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and receive 2 posters with BALTIC RORO/FERRY and CONTAINER maps

FOR FREE* BALTIC RORO/FERRY map is a free supplement to BTJ - /201* BALTIC CONTAINER map is a free supplement to BTJ Sept.-Oct. 5/201

May June 3 11

6 | Baltic Transport Journal | 4/2011

BTJ calendar of events

BTJ �/2011 (July-Aug. edition) Special: 20th anniversary of BPO | Report: Baltic maritime ranking 2011 | Focus: Baltic shipyards

Issue distributed at:

BALTEXPO 2011, 6-8 September 2011, PL/Gdańsk, www.baltexpo.com.plAlong 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. For 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.

BPO Annual Conference 2011, 8-9 September 2011, DE/Rostock, www.bpoports.comBaltic 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.

GreenPort Congress 2011, 14-15 September 2011, DE/Hamburg, www.greenport.comThe 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].

European Road Transport & Logistics 2011, 13-14 September, NL/Amsterdam, www.flemingeurope.comDuring the conference transport and logistics experts will gather under one roof to discuss the importance of road freight and prospects of its development in the changing economy. Debaters will particularly focus on the practical approach to cost effectiveness, alternative fuels, transport management, the development of road infrastructure and integration with other transport modes. Among the speakers are top managers from logistics, forwarding, spedition and trucking companies.

�1st WISTA Conference, 14-16 September 2011, SE/Stockholm, www.wistaconference.orgThis year the annual Women’s International Shipping & Trading Association Conference will be held in Sweden for a third time. The main theme of the summit is “Leadership – opportunities for the future”. H.E. Efthimos Mitropoulos, the IMO secretary-general, will present the key-speech, fol-lowed by various workshops and panels on such topics as “Managing Multicultural Teams” and “Women on the Board”. Besides the conference itself, WISTA Sweden organizes a tour around Stockholm for all interested participants of the meeting to learn more about the Swedish capital.

LNG Fuel for Shipping: A Commercial Reality? 20-21 September 2011, SE/Stockholm, www.informaglobalevents.com The conference will lead the way in the analysis of the commercial reality of using LNG as ship fuel. The foremost industry experts will ques-tion the business case for LNG fuel and what this means for the maritime and bunkering industry. The summit will include insights from representatives across the LNG supply chain, practical and commercial realities of switching to LNG, analysis on the availability and pricing of the fuel and realistic cost estimations along the LNG value chain.

8th HanseLog 2011, 22 September 2011, DE/Hamburg, www.bvl.de/en/Events/8th-HanseLog/8-HanseLogHanseLog, held annually by BVL, has developed into one of the most important logistics events in the north of Germany. For the 8th time supply chain experts will gather in Hamburg to discuss opportunities and problems that their industry faces. This year’s principal themes of the conference will concern ecological issues – green ports, green facility concepts and energy efficiency, with particular emphasis on projects in the North and Baltic Sea regions of Germany.

Seatrade Europe 2011, 27-29 September 2011, DE/Hamburg, www.seatrade-europe.comSeatrade 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.

5th Port and Terminal Infrastructure Development 2011, 30 September 2011, RU/St. Petersburg, www.bsforum.ru/index-eng.phpThe event is dedicated to design and development of ports and terminals. Representatives of states, ports and terminal authorities, research institutes, public unions and companies from the sea industry will discuss the issues of anticorrosive protection of port facilities, marine electronics, the usage of hydraulic structures and dredging operations in harbours, among others. The event will create a chance to investigate the sea image of North-West Russia.

Railway Days – Wider Black Sea Area Summit 2011, 4-5 October 2011, RO/Bucharest, www.clubferoviar.roAttended by more than 200 railway leaders, the event will focus on debating the impact of the internationalisation strategies of manufacturing companies in the emerging markets of the East, on analysing all stages of the railway freight transport process from East to West, through the WBSA, and identifying the most efficient concepts for boosting the volumes of freight carried on rails.

BTJ 5/2011 (Sept.-Oct. edition) Special: Baltic Container Map 2011 |Report: Baltic containerization | Focus: Railways


European Transport Conference 2011, 10-12 October, UK/Glasgow, www.aetransport.orgThe European Transport Conference is the annual event for transport planning professionals organized by the Association for European Transport. ETC is a forum for transport practitioners to come together and debate on policy issues, research findings and best practice across their sector. Besides the professional discussion sessions the conference’s structure also gives an opportunity for informal meetings.

TRAKO International Railway Fair, 12-14 October 2011, PL/Gdańsk, www.mtgsa.com.pl/title,lang,2.htmlThe 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.

28th International Port & Terminal Technology Conference 2011, 19-20 October 2011, DE/Hamburg, www.millenniumconferences.comAn impressive technical and well-structured programme of industry experts and market leaders will explore the latest developments, issues, trends and technology affecting ports and terminals around the globe. The conference will provide delegates an invaluable learning opportunity as well as an excellent platform for discussion, debate and networking.

International Supply Chain Conference 2011, 19-21 October, DE/Berlin, www.bvl.de/en/glc/28th-International-Supply-Chain-ConferenceFor the 28th time the ISCC will bring together experts from the industry, trade and service sector as well as scientists from over 40 countries. This year participants will share their knowledge and experiences in the supply chain under the keynote: “flexible – secure – sustainable” and topics will include risk management in supply chains, brands and marketing in logistics, agility-focused strategies and supplier integration in global markets. The meeting is a perfect occasion to exchange ideas on up-to-date supply chain resolutions.

BTJ calendar of events


– continuedIssue distributed at:

Baltic Development Forum Summit 2011, 24-27 October 2011, PL/Gdańsk, www.bdforum.orgFor 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 and the European Commission in an effort to demonstrate how to combine top-down political guidance with bottom-up enthusiasm and entrepreneurship.

Europort Rotterdam 2011, 8-11 November 2011, NL/Rotterdam, www.europort.nlA 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.

BTJ 6/2011 (Nov.-Dec. edition) Report: Bulk transport | Focus: Road traffic


Rail Revenue and Customer Management 2011, 7-9 November, NL/Amsterdam, www.terrapinn.com/2011/rail-revenueThe conference gathers high speed, non-high speed and metro rail operators from all over Europe. The main theme of the event is maximizing revenue opportunities from increased customer engagement. During the three days Europe’s leading rail operators will present case studies, take part in panel discussions, brainstorm sessions and debates. The main topics include increasing revenue by creating customer-centric rail solutions, using customer analytics and taking advantage of new ticketing platforms. Maximizing ancillary revenue and the growing rail market share are also key issues to be discussed.

Smart Stations & Terminals World 2011, 8-10 November 2011, NL/Amsterdam, www.terrapinn.com/2011/rail-stationsThe conference is dedicated to station and terminal owners and operators to discuss new revenue and development strategies, meet with investors, property developers, operators, infrastructure managers, designers and technology solution providers in order to deliver Smart Terminals of the future. The event will be divided into three sections: “Rail Terminal owners and operators come to Rail Stations & Terminals World and learn”, “World class solution providers attend” and “The Rail Stations & Terminals World focus.”

7th International Airports Conference 2011, 16-17 November, PL/Warsaw, www.actiaconferences.comThis two-day conference is split into three sessions with diverse lectures, discussion panels and a think-tank on the first day. The opening day is going to be dedicated to “Airports and their surroundings”. The day will end with a special event, the Awionetka Gala 2011, which includes the 3rd aviation business meeting, the Baltic Ballroom, and awards presentation. The second day will feature “Non-aviation revenues” and “Air cargo” sessions.

TRANSLOG Connect Congress 2011, 22-23 November 2011, HU/Budapest, www.translogconnect.euThe event is going to offer the possibility for solution providers (limited to 100 delegates) to present their products and services directly to around 500 decision makers of target clients throughout Central and Eastern Europe. During two days, service providers will meet with the leading directors through a number of pre-arranged one-to-one business meetings. Several weeks before the Congress, participants will receive individualized passwords to access the website, where they can select key presentations, pre-schedule one-to-one meetings and confirm their presence at additional networking activities, an option which will greatly help them to create their own itinerary prior to the Congress taking place.

Intermodal Europe 2011, 29 Nov.-1 Dec. 2011, DE/Hamburg, www.intermodal-events.comAfter a 3-year 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. The conference will host the Baltic Transport Journal session.

�rd Annual Tanker Economics, 5-6 December 2011, UK/London, www.platts.com/ConferenceDetail/2011/pc163/indexThe event represents an opportunity to discover what strategies are being adopted by the shipping industry and other organizations to deal with challenges faced by the liquid tanker industry. The conference will focus on the assessment of today’s tankers market and the supply and demand situation, bunker fuels and their alternatives along with a discussion on how to minimize the risk of piracy.

�th International Ports & the Environment Seminar, 8 December 2011, NL/Amsterdam, www.millenniumconferences.comScheduled to take place in Amsterdam in December 2011, the one-day seminar will deliver a varied, in-depth and informative programme, ensuring delegates an invaluable learning opportunity and platform for discussion, debate and networking. MCI Media Ltd is committed to delivering an event of the highest calibre, not only in-depth and informative, but also stimulating and enjoyable.

BTJ 2012 partnershipsIssue distributed at:

Transport Week 2012, 6-8 March 2012, PL/Gdańsk, http://www.actiaconferences.com/transport-week-2012.html Actia Conferences invite you to the 2nd edition of International Transport Week 2012 which will be held in the Polish Baltic Philharmonic in Gdańsk. The event is a discussion platform for representatives from the maritime, railway and intermodal sectors. Transport Week 2012 will be accompanied by conferences, exhibition areas, discussion panels, seminars and topped with an evening gala dinner.

RORO 2012, 22-24 May 2012, SE/Gothenburg, www.roroex.comThe only dedicated exhibition to the roll on-roll off industry is returning to Gothenburg. The meeting will gather professionals from over 50 countries, who will analyze the newest threats and opportunities accompanying the ro-ro industry, i.e. the upcoming regulations such as the Emission Control Areas (ECA) and Marpol Annex VI.

Posidonia 2012, 4-8 June 2012, GR/Athens, www.posidonia-events.comIn 2012 Posidonia relocates to the Metropolitan Expo Centre situated within the Athens International Airport complex. It is again expected to attract more than 1.800 exhibiting companies from over 80 countries, highlighting the leading position of Greek shipping and its commitment to renewing and upgrading its fleet. The international shipping exhibition will host conferences and shipping association gatherings, chaired by industry leaders, debating and shaping the challenges facing the industry. Apart from business meetings, the event will also hold the Posidonia Cup yacht race and the Posidonia Shipsoccer Tournament.

Transfairlog, 12-14 June 2012, DE/Hamburg, www.transfairlog.com/enThe event will concentrate on optimization of local and global international freight transport and logistics. At the Trade Fair Centre Hamburg decision-makers, experts and companies from the logistics and transport industries will participate in the showcase of products, services and solutions for day-to-day operations of present and future logistics.


Market SMS extended

During the first six months of 2011 cargo turnover at Port of Ust-Luga totalled 8.83 mln tn (+55.2% yoy). The handling of liquid cargo doubled to 1.95 mln tn (+100%), dry bulk amounted to 5.98 mln tn (+23.8%) and gen-eral cargo rose to 903 thou. tn (+5.1%). The port’s throughput of coal increased by 30.7% year-on-year to 5.5 mln tn, metal marked a 26.2% rise (411.5 thou. tn) and timber amounted to 135.9 thou. tn (+37% yoy). In the same time period the car transhipment nearly tripled to 54 thou. units (+272.6% yoy).

Port of Ust-Luga: 8.83 mln tonnes handled in H1 2011 (+55.2% yoy)

Sea Commercial Port of Kaliningrad: 1.91 mln tonnes in H1 2011 (+17.9% yoy)

DCT Gdańsk:290 thou. TEU in H1 2011 (+67.6% yoy)

During the first six months of 2011 Port of Kaliningrad handled 1.91 mln tn of cargo (+17.9% yoy). In the first half of the year the turno-ver of dry cargo amounted to 1.58 mln tn (+17.24%), ferrous metals went up to 781.9 thou. tn (+3.15%); oil products grew to 334.8 thou tn (+20.65%); minerals rose to 46.8 thou. tn (+63.64%) and the con-tainer handlings more than doubled to 76 thou. TEU (+250% yoy). On the other hand the throughput of dry bulk decreased to 165.8 thou. tn (-27.7%) and the turnover of coal and cake went down to 87.30 thou. tn (-14.33% yoy).

Container handlings at Deepwater Container Terminal Gdańsk, Poland, grew by 67.6% to 290 thou. TEU in the first half of 2011. In the same period the import of containers amounted to 141 thou. TEU (+70% yoy) and the export of boxes increased by 64.4% to 148 thou. TEU.

GTK marked a 34.5% downturn in total container handlings during the first half of 2011 (24.5 thou. TEU). Import of containers de-clined by 38.5% to 7.5 thou TEU and the export of boxes decreased to 17 thou. TEU (-32.5%).

Gdańsk Container Terminal (GTK):24.5 thou. TEU in H1 2011 (-34.5% yoy)

Riga’s port marked an overall 15.4% growth in freight turnover from January to June 2011 (16.82 mln tn). This year’s first half showed a 45.2% rise in oil products (4.28 mln tn), coal went up by 10.5% to 6.45 mln tn; grain surged by 150% to 225 thou. tn; timber minimally grew by 1.9% to 1.38 mln tn; ore rose by 19% to 309.5 thou. tn; chemicals and fertilizers increased by 12.1% to 784.5 thou. tn and container handlings amounted to 142 thou. TEU (+22.8% yoy). However, the turnover of wood chips declined by 20.4% to 495.2 thou. tn. Moreover, the handling of rolling cargo declined by 16.3% to 261 thou. tn.

Port of Riga:45.2% rise in oil products in H1 2011

Fig. 1. Dry and bulk cargo – detailed commodities share in H1 2011

Port of Klaipėda: 15.26 mln tonnes in H1 2011 (+22.6% yoy)

From January to June 2011 Port of Klaipėda saw a 22.6% year-on-year in-crease in cargo turnover (to 18.41 mln tn). The biggest percentage growth (of 49.3%) was seen in container handlings (210,604 TEU), followed by a 25.9% rise in dry and bulk cargo (to 7.04 mln tn), then a 23.3% yoy increase in general cargo (to 5.71 mln tn), ending with liquid cargo, which amounted to 5.66 mln tn (+18.4% yoy). Port of Klaipėda also marked a 100% yoy burst in ore turnover (258.9 thou. tn handled), a 71.2% rise in natural and chemi-cal fertilizers (257.3 thou. tn), a 23.7% growth in timber and forest products (381.7 thou. tn). The throughput of agriculture products decreased in H1 2011 to 596 thou. tn (-19.2% yoy), peat weakened to 10.1 thou. tn (-4.3%) as well as molasses dropped to 7.6 thou. tn (-45.6% yoy).

Port of Ventspils: 14.48 mln tonnes handled in H1 2011 (+6.4% yoy)

Port of Ventspils saw a 6.4% year-on-year increase in total cargo handlings in the first half of 2011 (14.48 mln tn). Liquid cargo, the main commodity of Ventspils port, totalled 7.77 mln tn (+1.7%). Dry bulk amounted to 5.43 mln tn (+8.6%), while general cargo rose to 1.28 mln tn (+32.7% yoy). The throughput of ferrous metals increased by 220% yoy (to 16 thou. tn), raw sugar by 131.1% (to 141 thou. tn), chemistry products went up by 65.2% (to 76 thou. tn), coal increased by 46.8% (to 2.99 mln tn), ro-ro cargo by 39% (to 873 thou. tn) and fertilizers marked a 18.6% growth (1.48 mln tn). Yet, many commodities also weak-ened. Grain decreased to 27 thou. tn (-92.9% yoy), iron ore fell to 624 thou. tn (-41.2%), ammonia declined to 252 thou. tn (-14% yoy), forest products dropped to 394 thou. tn (-11.1%), whereas the handling of crude oil reached the very bottom of 0 tn (-100% yoy).

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Market SMS extended

4/2011 | Baltic Transport Journal | �

The company’s container handlings slightly decreased to 26.6 thou. TEU in the first half of 2011 (-6% yoy). During that time the import of boxes went down to 13.5 thou. TEU (-2.9%) as well as container export, which amounted to 13.15 thou. TEU (-8.7% yoy).

DB Port Szczecin: 26.6 thou. TEU in H1 2011 (-6% yoy)

DB Schenker Rail made a 21.8% yoy growth in freight turnover in 2010 (415.4 mln tn). The number of tonne/kilometres also in-creased and amounted to 105.8 bln (+12.6% yoy). Total revenues rose by 13% year-on-year to EUR 4.58 bln.

DB Schenker Rail:415.4 mln tonnes in 2010 (+21.8%)

During the first quarter of 2011 TransContainer’s rail cargo volumes amounted to 313.2 thou. TEU (+23.5% yoy). At the same time the biggest increase (+63.6%) was seen in the import of containers (51.5 thou. TEU). Domestic volumes carried totalled 179.1 thou TEU (+13.9%). The compa-ny’s share of international boxes handling increased from 38% to 42.8%.

TransContainer: 313.2 thou. TEU carried in Q1 2011 (+23.5% yoy)

Global Ports Investments’ terminals: 1,095,625 TEU handled in 2010 (+81% yoy)

GPI has fought off the crisis downturn with a remarkable 81% yoy increase in container handlings (1.09 mln TEU handled). Also, the turnover of ro-ro cargo units rose by 60% yoy to 59 thou. units, while the total cargo turnover totalled 19.2 mln tn (+7.4% yoy). In 2010 all of the GPI’s steve-doring companies marked growth, comparing to the year before. Pe-trolesport (St. Petersburg) terminal handled 541,120 TEU (+176% yoy). Vostochnaya’s (St. Petersburg) boxes handlings increased by 59% yoy to 254,296 TEU. Moby Dik (Kotlin Island near St. Petersburg) handled 141,026 TEU (+34% yoy). Container handlings by Multi-Links Terminals in Helsinki and Kotka grew by 11.6% yoy to 159,183 TEU in total. Vopak (Tallinn), the biggest oil terminal in the BSR, handled 18.13 mln tn (+8% yoy).

BTDG achieved a burst in container handlings by 174% to 4.38 thou TEU in the first half of 2011. During the first six months of 2011 im-port of containers increased to 2.21 thou. TEU (+187%), while export rose by 165% (2.2 thou. TEU).

Baltic General Cargo Terminal Gdynia (BTDG): 4.38 thou. TEU in H1 2011 (+174% yoy)

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What’s new?

The European Commission has launched three Calls for Proposals with a total budget of EUR 180 mln to develop high pri-orities on the Trans-European Transport Network (TEN-T). The biggest amount of money (EUR 100 mln) will go to the European Rail Traffic Management Sys-tem to enable interoperability on the European rail network. Mo-torways of the Sea will receive EUR 70 mln to make a transporta-tion shift from roads to sea routes. The remaining EUR 10 mln will go to the River Information Serv-ices to manage inland waterway traffic infrastructure. The dead-line for submitting proposals is 23rd of September 2011. TENT-T funding is directed towards EU Member States.

Three Polish container termi-nals, Baltic Container Terminal Gdynia (BCT), Deepwater Con-tainer Terminal Gdańsk (DCT) and Gdynia Container Terminal (GCT), have been granted invest-ment funds from the EU. BCT is going to get EUR 13.5 mln to im-prove its equipment, infrastructure and computer systems (the total budget of the project is EUR 38.2 mln). EU contribution to DCT is EUR 12.75 mln, aimed to finance new transhipment equipment and development of the train siding (total budget: EUR 37.5 mln). GCT is going to receive EUR 6.5 mln to extend the terminal’s area (total budget: EUR 16.2 mln).

DB Schenker Logistics has established its own branch with offices in Minsk, Belarus, and at Minsk National Airport. The company offers air, land and sea import and export of part- and full-loaded freight to and from the customs union of Belarus, Russia and Kazakhstan, alongside with handling all customs formalities.

Rainbow Warrior III, Greenpeace’s new “eyes and ears” vessel against environmental destruction, is going to be officially launched for the organization’s 40th birthday. The estimated cost of the ship is EUR 23 mln (10-15% of

the organization’s total annual budget). The ship is built from scratch according to Greenpeace standards with parts that meet European norms and materials from Europe (i.e., no Chinese steel or Russian plywood). The hull of the ship was made at Gdańsk Shipyard, but the construction proceeds at German shipyard Fassmer. The vessel is 58 m long, weighs 680 tn, can speed up to 10 knots (electric generator) or 15 knots (diesel engine), but can also be powered by sails. The ship is equipped with air conditioning, wastewater treatment and a lab-oratory. Traditionally, the ship bears the logo of a white dove and rainbow on each side of its green hull.

Another warrior for the environment

LNG Terminal in Świnoujście, Poland, has entered the construction phase of covering the foun-dation of the first gas tank with concrete, while the second tank’s foundation is currently being rein-

forced. The walls should be finished by the end of the year, whereas the tanks’ roof construction should be finished in 2012, and the whole LNG Terminal in June 2014. The LNG full-containment tanks will be 46 m high, will have an 80 m diameter and each of them will have a capacity of 160,000 m3. The terminal will be able to annually receive 5 bln m3 of Liquefied Natural Gas with the pos-sibility to expand it to 7.5 bln m3 per year (Poland’s annual gas consumption is approx. 14 bln m3).

LNG terminal construction enters new phase

Rosmorport’s expansion programme has seen the light of day. By 2030 the state unitary enterprise responsible for constructing and maintaining the vast majority of Russian marine infrastructure intends to construct a deepwater port in Primorskaya Bay of Baltiysk in Kaliningrad oblast. The en-terprise also encompasses renovating Port of Vysotsk; laying rail lines to Primorsk and Vysotsk ports; building terminals for liquid bulk, dry bulk and containerized cargo in Port of St. Petersburg and in its harbours as well as in Port of Ust-Luga; constructing a bulk cargo terminal near the village of Vistino; expanding the Baltiysk Stevedores Company’s container terminal and launching the second phase of the terminal of JSC Sodruzhestvo-Soya. The expansion is going to be funded under Rosmorport’s “Strategy of development of sea port infrastructure of Russia until 2030.”

Russia’s ambitious plans

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Baltkran is going to deliver four wide-span con-tainer cranes for a newly developed dry port near the village of Tsemdolina in the Novorossiysk oblast. The cranes will have a capacity of 38 tn, their span length will be 32-42 m and have a stacking height of 1 over 4. The cranes will be equipped with micro motion, container trim and skew adjustment sys-tems; but, above all, the cranes will feature a double girder lattice portal’s structure in order to withstand the region’s strong winds and severe storms. Re-cently the company has delivered a 35 tn crane to Arkhangelsk and will also supply the intermodal ter-minal near Nalchik with a 41 tn crane.

What’s new?


Mols-Linien has closed its non-profitable freight route Kalundborg–Aarhus and has sold Maren Mols and Mette Mols, two ro-paxes operating on that link to FRS GmbH & Co. KG. Due to the closure, the only alternative for trucks between Zealand and Jutland is the run over Denmark, but this will come to a halt very soon, since Friday Clipper Group has signed an agree-

ment with Scandlines to charter the ferry Ask to ply between Kalundborg and Aarhus. The company is also planning to deploy one of its own ferries on the mentioned link from the end of the year.

Arctech Helsinki Shipyard has begun the construction of two multifunctional icebreaking supply vessels (MIBSV) for Sovcomflot at STX Europe’s Vyborg Shipyard. The vessels are designed for the harsh conditions of Sakhalin region with its thick drifting ice and temperatures oscillating around -35oC. The ships will cost USD 200 mln. Keel laying is scheduled for January 2012 and both units will be delivered in April 2013.

National Container Company (NCC) has set up their own rail operator, NCC Logistics. The new company offers block trains to and from NCC’s terminals alongside with local delivery service by trucks. Up to now NCC Logistics has tested operating block trains from First Con-tainer Terminal in St. Petersburg (FCT) to Logistika-Terminal, Mos-cow, and Kaluga region. After the new container terminal is launched in Ust-Luga, the company will also start block trains service there.

The Province of Antwerp Development Corporation, Antwerp Port Authority and the Belgian Administration of Customs & Excise have launched the Antwerp-Chongqing (Bel-gium-China) rail cargo service. Intermodal operator Hupac pro-vides a daily connection from the Combinant terminal in Port of Antwerp to Schwarzheide in Ger-many, and then Hupac’s partners, Russkaya Troyka and Eurasia Good Transport, transport the goods through Poland, Ukraine, Russia and Mongolia to China. Bel-gium Customs aims at making this rail connection a “Green Lane”, minimizing the customs proce-dures to ensure the smoothest possible flow of the cargo.

Modern ‘silk route’ Belgium-China

Scandlines is going to invest EUR 228 mln in Port of Gedser and in two new ferries, Copenhagen and Berlin to start operating on the Gedser–Rostock route from 2012. The company will construct new lanes for cars and lorries, a new terminal building and gangway. The investment will upgrade the Port of Gedser lane area to 3,740 m (cur-rently it has 3,420 m), and increase traffic capacity to 1,500 passengers (977 at the moment) and 96 trucks/460 cars (42/210 today). As of now the Gedser fairway has been dredged further by 0.5 m and extended towards south by 1.5 NM. In addition the two ports will receive almost EUR 25 mln from the Motorways of the Sea programme to support the investment. The initiative is a part of the EU project to fight-off road congestion and to increase intermodal transportation on the Copen-hagen-Berlin axis. Moreover, the company is going to invest over EUR 11 mln in the Helsingborg–Helsingør route. In the first place the plans are to renovate the ferries Tycho Brahe, then Mercandia IV and Aurora. The works are going to start this autumn and will finish by spring 2012. Furthermore, the consortium of Scandlines GmbH along with Scan-dlines AB and HH-Ferries (two latter owned by Stena Line) will in-vest EUR 16.4 mln in the mentioned link.

Scandlines’ major investments

Russian Railways (RZD) has set out a strategy for modernizing its rail infrastructure for the 2018 FIFA World Cup, hosted by Russia. The plan expects high speed (300-400 km/h) passenger service on routes: Moscow-St. Petersburg; Moscow-Nizhny Novgorod; Nizhny Novgorod-Kazan (with a further extension to Yekaterinburg). Lower speed (160-200 km/h) services will be commissioned on the Moscow-Kharkov-Rostov-on-Don-Krasn-odar-Adler link and between Moscow and Yaroslavl. Also, international high speed connections are intended on routes: Moscow-Minsk-Warsaw-Berlin; Moscow-Kiev; Moscow-Riga; St. Petersburg-Tallinn. Besides upgrading railroads, RZD is planning to build new intermodal passenger hubs and improve the existing ones.

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Economy

EU-South Korea Free Trade Agreement (FTA)

Who will benefit?

The agreement is the first completed one of the new FTA generation. The process was launched by the EU in 2007, a year after the Global

Europe Trade Policy Strategy designated South Korea as a priority FTA partner.

Global Europe had doubts whether the ambitious project of the FTA, with Seoul aiming for the highest possible degree of trade liberalization, was exactly in the inter-est of both sides. However, on 15th October 2009, after eight rounds of talks between the EU and representatives of South Korea, the FTA was initiated. The document was signed on 6th October 2010 and came into effect on 1st July this year.

Key elements of the EU-South Korea FTA document include: eliminating Ko-rean import tariffs on agricultural and industry goods with EU origin (the total number of eliminated Korean customs duties amounts to EUR 1.6 bln annually). Furthermore, the agreement aims at elim-inating EU import tariffs on agricultural and industry goods coming from South Korea (EUR 1.1 mln annually), as well as limitation or elimination of non-tariff barriers in all market branches with spe-cial focus on the car, chemical and elec-tronic industry.

The EU-South Korea FTA is the most comprehensive free trade agreement ever negotiated by the Euro-pean Union. The understanding brings together the EU-27 Member States, the world’s largest economic bloc, and increasingly affluent South Korea, Asia’s fourth largest economy.

Economy

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Implementation of understanding ought to contribute to significant liberalization in the scope of services, especially concerning transport. The new agreement is to result in an increase in transparency and predict-ability in the range of mutual economic re-lations. FTA resolutions presume creating an effective system of dispute settlement; general rules of cargo origin included in the FTA have been simplified in comparison to the state before the agreement’s conclusion. Nevertheless, some restrictions have been preserved on fragile cargo, e.g. in the case of cars, the settlement assumes a slight rise in the permissible level of foreign components (from 40% to 45%).

Over the next seven years both consign-ees will eliminate 28% of duties on cargo. In the case of the food and fishing industry, the period of duties’ elimination will last longer than 7 years.

Export – import correlationsSouth Korea, with a total trade value

of USD 884.2 bln in 2010, is a strong and export-orientated country. This figure also makes Seoul the 7th largest exporter and 10th largest importer in the world.

Going back to 2003 we can notice that Korean foreign policy has been focused on

establishing a network of free trade agree-ments in order to boost trade and tighten economic links with other countries. As a result, South Korea currently has five FTAs in effect, three FTAs where discussions have been concluded and over 20 under negotia-tion. On the top list of South Korean export goods are motor vehicles, computers and cargo ships. Nevertheless, with a lack of its own natural resources, the country has a high dependence on import of raw materi-als and industrial supplies.

After the 2009 recession, when the European Union exports to South Korea amounted to EUR 21.5 bln, the year 2010 brought a significant growth. European companies have constantly been present on the South Korean market and are the big-gest investors in that country, representing a cumulative total of approximately EUR 30 bln since 1962.

Tips for the European shipbuilding industry

The shipbuilding industry is a vital area for the EU marine industry and covers the highest technological segment of world production: cruise ships, ferries and ro-ro vessels, tankers, chemical and gas carriers, offshore ships, sophisticated fishing vessels

Economy

4/2011 | Baltic Transport Journal | 1�

and small, specialized ships. Historically, it has been facing trouble for some time due to a lack of balance in supply and de-mand. The shipbuilding industry in the EU has suffered from an absence of global rules and changes in tendency of state-subsidized investments due to the fact that shipyards offer a wide range of technolo-gies, employ a significant number of work-ers and generate foreign currency income, as the shipbuilding market is dollar-based and a global one. Many of the resulting problems are still troubling the European and Baltic industry.

South Korea is home to the world’s six largest shipbuilders by sales. Ships are one of the country’s largest export products. Moreover, the South Korean industrial chaebol STX Corporation is also the own-er of STX Europe – the largest European shipbuilder.

The understanding gives an opportu-nity to balance the proportions concerning the shipbuilding market as it promotes fair and competitive conditions and its stabili-zation. On the other hand, it is a great chal-lenge for the EU shipyards to catch up to the current Korean level of ships’ export.

The FTA provides an elimination of import duties and far-reaching liberaliza-tion of trade. Practically all customs duties will be removed within the first five years. FTA regulations improve security, while facilitating trade of containers and other shipments imported into, transshipped or transiting both consignees. They also lead to full market access for EU shipping com-panies and the right of establishment in South Korea, as well as non-discriminatory treatment in the use of port infrastructure and services. New business opportunities for EU companies are also a chance to ex-pand for many maritime makers of ship equipment and outfitting.

FTA regulations and the European car industry

Specific commitments designed to eliminate and prevent non-tariff obstacles to trade regarding the automobile industry have been enclosed in the EU-South Korea FTA. The agreement contains wide provi-sions to address non-tariff barriers in this sector. This issue has been perceived by the EU industry as the most significant obsta-cle to exporting to South Korea. It gener-ally provides a wide-ranging recognition of international standards by the country – European standards are now considered as equivalent to Korean. This also covers all those standards observed by industry as being meaningful trade barriers. Moreover,

South Korea is obliged to align its regula-tions to EU standards during the five-year transitional period (till 2016).

According to the agreement, EU car producers are given one year flexibility to comply with Korean emissions standards. In the absence of flexibilities on the afore-mentioned issue, it would be very difficult for European carmakers to maintain and expand their presence on the Korean mar-ket, since most sales are concentrated in a high segment of the market.

Any new standards ought to be based on UN-ECE standards. This implies that an EU car producer will be able to sell cars in South Korea produced in accordance with European standards without addi-tional testing or homologation. There will be no need to conduct specific, expen-sive tests to show compliance with a wide range of safety standards as the tests made according to EU standards will be recog-nized in South Korea.

The FTA is designed to reduce costs and provide new opportunities to expand sales. Also, it will prevent a situation in which some EU car brands currently present on the Korean market would have to withdraw from it. Furthermore, the 8% tariff on EU cars exported to South Korea will be re-moved. It literally means that for every car exported to South Korea worth EUR 30,000, EUR 2,400 in duties will be saved.

Threats and opportunitiesThanks to far-reaching liberalization of

trade in services including all modes of sup-ply and elimination of nearly all products import duties, a significant increase in flow of goods and services between both con-signees will be possible.

Economists estimate that the agree-ment between the EU and South Korea is expected to more than double bilateral trade over the next 20 years compared to a scenario without the FTA. In the docu-ment there are elements very favourable to trade, such as gradual repeal of almost all tariff and non-tariff barriers between both sides and a mutual increase in access to markets in the scope of investments and services.

A ‘deep’ FTA between the EU and South Korea may turn out to be the best option to maximize the economic benefits for the EU. The FTA also implements higher standards and enables cheaper consumption of im-ported goods.

On the other hand, potential over-lib-eralization of trade may reduce the com-petitiveness of European shipyards and be a considerable factor in extending the import to export difference as EU im-port from South Korea still significant-ly predominates over export. �

Justyna Rataj

Tab. 1. EU export to/import from South Korea

Trade in goods (2010) Trade in services (200�)EU export to South Korea EUR 28 bln EUR 6 bln

EU import from South Korea EUR 38.7 bln EUR 3.9 bln

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1� | Baltic Transport Journal | 4/2011

EconomyEconomy

Globalisation and the transport industry

The world is not getting any smaller

Some evidence already exists of what could be termed “reversed globalisa-tion”. The process itself, frequently re-ferred to as “modern”, came about in

three great waves, with the most recent one still unfolding. The scope and intensity of globalisa-tion are in fact changing, almost in front of our eyes. There is one aspect of this process that is particularly sensitive to change and that is its strict dependence on the cost of transport.

What has brought on the revolution?When a day passes without a major cri-

sis such as the recent wave of protests in the Arab world or other disaster such as that of the Fukushima nuclear plant, people easily forget that the rhythm of their everyday lives is set by the rules of economics, or more spe-cifically, by the bottom line of economics. To put it differently, everything we do has its cost that can be expressed in dollars (or euro) and cents. So does globalisation and its close dependence on transport. But have transportation costs, and in particular the freight rates in ocean shipping, really been so low that it has become economically via-ble to carry low-value goods over longer and longer distances? “No” is the answer of many serious researchers who have conducted

Contrary to popular opinions, globalisation is hardly a phenomenon of the last few decades, neither is it com-plete. And, which may appear surprising at first glance, it may not be irreversible. There are analysts who seriously believe that the course of uninterrupted globalisation may actually be drawing to its end.

detailed studies on the impact of transport costs on the progress of globalisation in the latter part of the 19th and 20th centuries.

Modern globalisationIn modern history globalisation is be-

lieved to have arrived in three great waves: during the period 1870-1913; after WWII and during the 1980s and 1990s with the un-precedented growth of e-commerce. Natu-rally, such a classification may be debatable, but no one will argue with the view that this process has penetrated almost every field of the economic life of nations.

During the period of 1870-1913 steam be-came a universally adopted mode of propul-sion in ocean shipping. This first era of modern globalisation had witnessed an unprecedented growth of world trade. It increased fourfold. Ocean freight rates decreased by a mere 40% over the mentioned period. In other words, only one tenth of the increase in the world’s trade volume is attributable to the lowering of transport costs. The remaining 90% is due to other factors, and in particular to the over-all improvement of economic welfare. As we shall reveal further on, the decline of ocean shipping costs cannot sufficiently explain the progress of globalisation in this period.

The first era of modern globalisation came to an abrupt end in 1914 with the outbreak of WWI. Although its pace somewhat picked up after WWI, the Great Depression of 1929-1933 dealt a coup de grâce to the first era of globalisa-tion. The main challenge at this juncture is to provide an answer to the following question: if the lowering of freight rates does not explain sufficiently well the rapid progress of globalisa-tion, what are the other factors that do?

Research carried out by various academi-cians provide at least a partial answer. S. Baier and J. Bergstrand used a general equilibrium gravity model and found that some 2/3 of the world’s trade growth after WWII can be at-tributed to the overall growth of income. D. Jacks and K. Pendakur argue that roughly a quarter of the growth of world trade can be explained by tariff reductions and less than 10% by a reduction in transport costs. Other research seems to provide similar results: transport costs were not the only factor that contributed to the rapid progress of globali-sation: not even the major one.

Is ‘death of distance’ really true?There is an even more surprising conclu-

sion and it relates to the much-touted ‘death of distance’ proposition. D. Jacks and K. Pendakur

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argue that the effect of distance on trade pat-terns does not diminish over time, and contrary to popular belief, the world is not getting dra-matically smaller. Following this path and us-ing highly disaggregated data M. Berthelon and C. Freund actually found that distance-related costs have been on the rise and not falling over the years as it was generally believed.

The lowering of transport costs through whatever means, such as technological im-provements, simplification of procedures, information technology, etc., might have played out as a factor of uninterrupted progress of globalisation. Moreover, fac-tors other than transport costs have con-tributed to the rapid progress of globalisa-tion the world has seen over the past 50-60 years. If the above conclusions are correct, the whole issue of globalisation has to be re-examined. This, however, must be a top-ic for a separate contribution.

Globalisation and the future role of transport

What has been argued hitherto does not necessarily mean that transport will from now on play a lesser role in the future of globalisation. Far from it. However, its role will change, in particular – the tradi-tional pattern of modal split of traffic.

For passenger traffic, the role of maritime transport has long ago been relegated to local connections and short sea-trades. Only two types of passenger shipping remain: ferry connections and pleasure shipping (cruising). Insofar as freight transport is concerned, the domi-nant position of sea transport is seemingly unthreatened, but new trends in carrying time-sensitive goods such as electronics, apparel and other precious goods, are emerging. Such goods are increasingly shifting from sea to air transport.

The spectacular growth of air cargo in the past few decades implies that larger and larger volumes of high-value, time-sensitive goods are being transported by air.

Over the 50 years from 1955 to 2004 world trade increased from 880 mln tonnes to 6,758 mln tonnes (by 7.7 times). In terms of value expressed in constant pric-es, world trade grew over the same period from USD 505 bln to USD 8,164 bln (16.2 times), more than twice as fast as the ton-nage increase. This unprecedented growth in the value of world trade was primarily due to the increased share of manufactured goods, from USD 222 bln (44% of world trade in 1955) to USD 6,022 bln (74% of the world trade) in 2004, or by 27 times.

One of the main factors in the chang-ing modal split of traffic is the spectacular growth of express carriers in air transport. What is more, most large airlines operate their own express services or possess major shares in companies in this business. While air cargo represents only 1% of world trade in terms of tonnage, it has a much higher share in terms of value. Between 1975 and 2004 air cargo increased in quantity by nearly 800%, while seaborne trade grew by only 360%, i.e. less than half the speed.

Air freight is growing in importance because the traditional stockpiling of inven-tory has now been widely replaced by the ‘just in time’ schemes and other logistics arrangements. Even if air cargo movement involves much higher unit costs of transport for certain categories of goods, air transport is definitely a better option than all-sea con-veyance. The informative example of the re-tail giants Walmart or Dell computers is the best illustration of this trend.

For the vast majority of low-value com-modities, however, and in particular crude oil and its derivatives, as well as other en-ergy sources, such as coal, ocean transport will for years to come remain the most im-portant transport option. And, it is precisely in this sector that the impact of changing


Economy

Dr. Ignacy Chrzanowski is currently a professor of economics and management at the Szczecin Maritime Academy. His vast and di-versified career includes, apart from academic work, more than 30 years of work in assisting development in the field of transport and international trade. His most recent assignment was in Ghana where he was interim team leader and senior transport econo-mist for the EU-financed project ‘’Integrated Transport Plan for Ghana’’.

Economy

transport costs on the further progress of globalisation will be felt.

It would be somewhat trivial to state that low-value goods, and in particular most raw-materials, are distance-sensitive in terms of transport costs. Consequently, every percentage point of increase of these costs may result in more than a proportion-ate decrease in the volumes carried.

The issue of increasing transport costs as a factor that can diminish, or even reverse the course of globalisation, has received a lot of coverage prior and during the ongoing financial crisis. Events in North Africa, the Middle East and Japan in the first quarter of 2011 have added more fuel to this issue.

Transport costs and the future of world trade

Although the extent to which transport costs will affect the future course of globali-sation may be arguable, there is little doubt that they will play a more crucial role in the development of the world economy and international trade. And, they will almost certainly keep rising.

Jeff Rubin, the colourful and some-what controversial former chief econo-mist of the Canadian Imperial Bank of Commerce (CIBC), along with his col-league Benjamin Tal, caused quite an up-roar with their now infamous publication entitled: “Will Soaring Transportation Costs Reverse Globalization?” Their argu-ments deserve a closer look.

One of the major faults critics find with their article is that evidence that prevailed after its publication did not support their strong opinion that rising transport costs may affect globalisation in a major way. This may be so, but one must not forget that the paper was published just weeks, if not days, before the appearance of the first symptoms of the infamous “credit crunch”, which made commodity prices tumble. In Octo-ber 2008 a barrel of crude oil was selling at USD 35, a far cry from the peak of nearly USD 150 just a few months earlier. And, they built their scenario on a price range of USD 150-200 per barrel. No wonder that their strong views were quickly dismissed as sheer nonsense by many an analyst in the

aftermath of the credit crunch when the world economy entered a deep recession.

With the passage of time and with a barrel of crude oil once again in the USD 110-120 range, their claim is regaining appreciation. The prospects of crude oil costing USD 150, and perhaps even USD 200, cannot be totally ruled out. If such prices materialize, globalisation will face quite a new reality altogether.

The bulk of the data quoted below is tak-en from Tal and Rubin’s paper mentioned earlier. The two claim, and one cannot disa-gree, that transport costs are highly sensitive to the price of oil. Between 2001 and 2008 the share of fuel costs in the operating costs for all modes has increased from 20% to 50%. If oil prices reach the USD 150 thresh-old, something that cannot be ruled out over the next few months, particularly with Japan reconstructing after the catastrophic tsunami, the share of fuel costs in the total operating cost of transport will reach 60%. At USD 200 a barrel this share will repre-sent a staggering proportion of 75% of the total operating cost of transport. Such prices would significantly affect the further evolu-tion of world trade and globalisation.

At the beginning of the 3rd millennium the total cost of shipping a 40’ container from Shanghai to the East Coast of the USA was roughly USD 3,800, of which the sea leg represented some 75%; the remain-ing 25% accounted for inland transport. By 2008 this cost rose to some USD 8,000, with similar proportions between the sea and land transport costs.

If the authors are proved right, at USD 150 a barrel the cost of moving a 40’ con-tainer over the same route will be in excess of USD 10,000, or more, if general inflation is built into the model. At USD 200 a barrel the cost would reach USD 15,000, i.e. over four times more than it was in 2001.

Such expensive transport will almost cer-tainly change the traditional patterns of world trade. The competitive advantage of some exporters (such as China) obtained mainly thanks to lower labour costs, will slowly erode. Globalisation may lose its momentum.

One of the areas where this change al-ready seems to be taking place is that of

steel exports to the USA. The competitive advantage China enjoyed over American steel makers has been compromised, and this is mainly due to rapidly increasing costs of ocean transport. An unexpected result of these higher costs is that some Ameri-can steel manufacturers are now reopening their mills as they have regained a competi-tive edge over their Chinese counterparts.

Will technology solve the problem?Critics of the abovementioned article

argue that rising oil prices, which are caus-ing a rapid increase in transport costs, will be offset by technological advancement in ocean transport. This may be true to some extent. There are, however, limits to techno-logical advancement in this area.

Generally speaking there are two ways to reduce unit costs of ocean transport: (1) a continuous increase in the size of ships, and (2) breakthroughs in terms of ships’ technology, such as computerisation, au-tomation, improved propulsion systems, etc. Nonetheless, progress in both these areas has definite limits. Ships are already very large and the number of ports they can enter is continually shrinking. Fur-thermore, concentration of traffic in fewer ports which serve as hubs (such as Shang-hai, Singapore or Hong Kong), requires ex-tensive networks of feeder services which can offset the gains from the economies of scale (ship size). Moreover, contemporary ships are already very advanced in terms of technology and there seems to be little room for a real breakthrough. As far as alternative energy sources are concerned, there are few signs that oil-powered en-gines will be replaced on a massive scale by new types of energy any time soon. Unlike passenger cars, ships are not very likely to be powered by electricity alone while solar and nuclear energy seem dis-tant prospects at best. There may be some prospects for gas-powered ship engines, but this would require massive investment in the system of bunkering facilities in the ports throughout the world. Thus, for many years to come oil might remain the main source of power in ocean transport. And it is not going to be cheap again.

As a result, the chances of stopping the current trend of rising transport costs in world ocean shipping are limited indeed. And, rising transport costs will hurt the progress of globalisation. Whether they will reverse its course or merely slow it down, remains to be seen. �

Ignacy H. ChrzanowskiProfessor of the Maritime Academy of Szczecin


Maritime

Maritime Accident Review 2010 by the European Maritime Safety Agency


T here have now been no shipping accidents on the scale of the Estonia disaster in the Baltic Sea for nearly 17 years, and no accidents involving major pollution since the Prestige disaster off Spain over 8 years ago. This may be an indica-

tion that the various maritime safety initiatives taken by authorities at the national, EU and global levels are having a significant positive effect. However, although the severity of accidents has substantially been reduced in recent years, the 2010 figures show that both the total number of ships involved in accidents and also the number of lives lost are once again increasing. In addition, the progressively lower number of potential pollution incidents spotted by EMSA Clean-SeaNet system satellites might suggest that shipping is becoming more aware of being monitored from above.

The scope of the reviewThe European Maritime Safety Agency (EMSA) has issued a re-

port, focusing on significant accidents involving commercial vessels of all ages and sizes (including fishing vessels), which occurred dur-ing 2010. The scope of the research included the Atlantic coast (in-corporating the North Sea and the English Channel), the Baltic Sea and the EU-related parts of the Mediterranean Sea and the Black Sea, as well as the waters around Norway and Iceland.

With the exception of January and December, 2010 showed a classic annual accident profile with winter peaks and lows in the warmer months when the weather was better. The period at the end of 2009 and the beginning of 2010 was particularly interesting because there was a jump from around 40 accidents both in No-vember and December 2009, to 60-70 accidents in January, Feb-ruary and March 2010 (an increase of over 50%). With respect to loss of life, February (11 lives lost) and March (15 lives lost) togeth-er accounted for around 43% of the total fatalities. For accidental

While there have been no major disasters for almost a decade, there continue to be hundreds of accidents every year, with a substantial proportion leading to vessel damage, pollution and/or loss of life.

pollution, the only significant spills in 2010 occurred in Febru-ary, June, October and December.

Total numbers for 2010644 vessels were involved in 559 accidents (sinkings, collisions,

groundings, fires/explosions and other significant accidents) in and around EU waters during 2010. The figures show that, although the number of vessels involved in accidents in 2010 was substantially lower than in the peak years of 2007/2008, it was still higher than in 2009. In this regard, it is important to note the difference in the overall number of vessels involved in accidents before and after the start of the economic downturn at the end of 2008.

Post-2008, it is estimated that maritime traffic dropped by between 15-20% and so it is not surprising that, as a result, there have been fewer accidents. It was reported that 61 seafarers lost their lives on commer-cial vessels operating in and around EU waters in 2010 (compared with 52 in 2009 and 82 in both 2008 and 2007). The majority of these were in accidents involving fishing vessels (33%), while accidents on general cargo ships accounted for 28% of lives lost in 2010.

Tab. 1. Lives lost by ship type in Europe

Types of vessels 2007 2008 200� 2010Cargo Ships* 20 24 19 17

Tankers 3 9 2 5

Container Ships 0 2 1 0

Passenger Ships 10 6 4 7

Fishing Vessels 31 30 16 20

Other vessels types** 18 11 10 12

Total 82 82 52 61

Source: EMSA* this category comprises general, ro-ro and refrigerated cargo ships, bulk carriers and

vehicle carriers** including: tugs, offshore support vessels, mobile oil platforms/drill ships, anchor han-

dlers, barges, research vessels, heavy lift vessels and dredgers

Last year it was reported that the largest number of vessels en-gaged in accidents was involved in collisions and contacts with in-frastructure (45%). Around 22% were involved in groundings (sub-stantially lower than previous years) and around 13% in fires and explosions. Less than 5% sank, making the number of reported sink-ings in 2009/2010 significantly lower than the levels in 2007/2008.

Fig. 1. 2010 accidents by ship type

Source: EMSA

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The Baltic Sea and its approachesThe EU coast of the Baltic Sea and its approaches include

the coastlines of Sweden, eastern Denmark, north-eastern Ger-many, Poland, Finland, Estonia, Latvia and Lithuania. The Bal-tic coast also includes two regions of the Russian Federation (the eastern end of the Gulf of Finland and Kaliningrad), but the accidents that occurred in these areas are not included in this review. This part of the EU coastline is by far the most prone to ice conditions, with most occurring in the northern Baltic and also the Gulf of Finland.

The extent of the ice varies from year to year, and the win-ters of 2009/2010 and 2010/2011 saw more ice than had been experienced in the previous 20 years. This was after relatively mild Baltic winters in 2007/2008 and 2008/2009. This period of heavier than normal ice meant that many ships needed ice-breakers to free them after they had become stranded.

The great majority of the shipping traffic in the region uses the southern and central parts of the Baltic Sea and the Gulf of Finland, and despite the present economic conditions, ship voyages and cargo volumes are generally increasing. One of the main reasons for this may be the transport of crude oil from the Russian Federation. The main bottlenecks in the region are in the south-western approaches between Denmark and Swe-den, while the Finland-Åland-Stockholm corridor and parts of the Gulf of Finland also see a significant number of accidents. These areas also have the greatest traffic concentrations.

Maritime Accident Review 2010 by the European Maritime Safety Agency

There’s still a need to increase safety at seaTab. 2. Number of vessels involved in accidents (2007-2010) in Europe

Types of Accidents 2007 2008 200� 2010

Sinkings 55 61 28 32

Collisions/Contacts 304 308 292 288

Groundings 197 217 177 143

Fires/Explosions 91 89 67 83

Other 115 79 62 98

Total 762 75� 626 6��

Source: EMSA

Tab. 3. Number of cargo ships involved in accidents (2007-2010) in Europe

Types of Accidents 2007 2008 200� 2010Sinkings 11 10 6 6


Groundings 108 115 76 72


Other 50 36 20 42

Total ��0 �07 225 2��

Source: EMSA

Tab. 4. Number of container ships involved in accidents (2007-2010) in Europe





Other 9 7 10 7

Total 65 60 52 �8

Source: EMSA

With regard to accidental pollution, there were five cases where spills of over one hundred tonnes were reported, and several others well below 10 tn each. Without a particular jet fuel spill (from the double-hulled crude oil tanker Mindoro off the southern Netherlands’ coast in October 2010), the estimated amount of oil spilled in reported accidents would once again have been, this time to 1,000-1,500 tn (in comparison with 1,500-2,000 tn in 2009, 2,000-3,000 tn in 2008 and 7,000-8,000 tn in 2007). However, the jet fuel spill was estimated at around 7,000 tn by the Dutch authorities, which increases the 2010 estimate to over 8,000 tn. This would have been of greater concern if it had been heavy oil.

20% of the vessels involved in accidents in 2010 were reported to be under 500 gross tonnage (gt), 41% were in the 500-5,000 gt category and 39% were over 5,000 gt. 76% of the vessels which sank were under 500 gt, with 72% of these being fishing vessels. Over 52% of the lives lost were on vessels under 500 gt, with the great major-ity being on fishing vessels and general cargo ships. Pollution spills over a hundred tonnes were from a variety of larger vessels.

By country of registry, the majority (63%) of the vessels involved in accidents in and around EU waters were registered in EU coun-tries, while around 37% flew non-EU flags. These proportions have been relatively consistent over the last four years. Ph

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Fig. 2. Vessels involved in accidents by region (2007-2010)

Source: EMSA


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in the region. As seen in previous years, the largest number of vessels was involved in accidents along the Swedish and Danish coastlines, and particularly in the south-western approaches off eastern Denmark. The vessel accidents in these areas ac-counted for 73% of the regional total, and for almost 88% of the groundings. The areas also accounted for 68% of the colli-sions and contacts, and for over 71% of the fires on board ships. The potential for accidents increases significantly when ships operate in relatively confined waters, such as in parts of eastern Denmark, in bad weather and/or without a pilot.

Looking aheadThe marked decline in the number of accidents and the loss

of life in 2009 in comparison with the economic boom in years 2007-2008, followed by a smaller increase in 2010, suggest that there is a link between accident numbers and economic activ-ity. Furthermore, there is the potential for greater accident consequences with the delivery of bigger and bigger ships. There are questions about the ability of current response sys-tems to deal with the removal of some of these very large ves-sels from an accident site, and any associated pollution. Con-sequently, it is important that initiatives aimed at improving ship, cargo and pollution monitoring, accident response and maritime safety in general continue to be implemented. �

Lena Lorenc

Maritime

Fig 3. Distribution of accidents reported in and around the Baltic Sea (2010)

The total number of vessels involved in accidents in the region in 2010 (89) was up almost 19% in 2009, but significantly lower than the high of 2008. Once again, the relatively low levels of accidents in 2009/2010 coincided with the economic crisis.

Tab. 5. Total number of vessels involved in accidents in the BSR (2007-2010)





Other Types 15 11 5 14

Total 106 120 75 8�

Source: EMSA

The Baltic Sea vessel accident total represented almost 14% of the EU total for the year, which is similar to previous years. The most notable observation is that, although the vessel ac-cident total was higher than in 2009, the 2010 figures were sub-stantially lower than in 2007/2008. Reported groundings, in particular, were at much lower levels during the last two years. These represented 36% of the regional accident total. Collisions and contacts together accounted for over 31% of the regional total, which was similar to 2009, but up in previous years. Al-though always significantly lower than the other EU regions, the Baltic Sea achieved a four year low for the number of sink-ings in 2010 as well as for the number of lives lost, and none of the five relatively large oil spills reported in 2010 occurred

This article is based on the fourth in a series of annual EMSA reviews, aimed at making both the EU maritime com-munity and EU citizens aware of the ac-

cidents occurring in and around EU waters. The information con-tained in this review comes from a number of sources, including the media monitoring service of the European Commission, reli-able accident information sources, recognized shipping informa-tion systems, the maritime and general media and a wide range of Internet-based publications. For further information or to obtain a copy of the report please visit: www.emsa.europa.eu.

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www.greenport.com/congress

The GreenPort Congress will provide decision makerswith a meeting place to both learn about and discussthe latest in sustainable environmental practice. Thisknowledge will enable them to effectively implementthe changes needed to reduce their carbon footprint

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The Green Port and the City:Managing environmental externalities

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The emphasis of the Congress is on delivering practical and sustainable solutions using illustrative

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Maritime

Cargotec’s “Port 2060”

Foretelling the future in half a century

Containerization of the shipping industry began on 26th of April 1956, when a crane lifted 58 aluminium truck bodies on S/S Ideal-X moored in Newark, New Jersey. On 9th of January 1959 the world’s first purpose-built container crane started

operating at Alameda terminal in San Francisco Bay. It had the capac-ity to move 20-tonne boxes every three minutes, excelling more than 40 times the effectiveness of traditionally used shipboard winches.

Nowadays Cargotec, a global port and terminal equipment man-ufacturer, has launched its “Port 2060” project to predict the future evolution of ports and their logistics environment. Cargotec’s ‘out-of-the-box thinking’ is meant to affect ideas and processes, which will un-derpin containerization, ports and ships in approx. 50 years’ time.

According to Cargotec, mega ports will be situated offshore on ar-tificial islands with optimizable layouts and will be supported by float-ing or jacked-up feeder/river terminals that can be moved around due to changing demands. Standardized containers will remain in use, but will be enhanced. The materials from which containers are made up will change, allowing boxes to fold. They will be equipped with intelli-gent and fully automatic lashing systems to create container packages as one moveable unit (up to 64 boxes). Additionally, containers will have an inbuilt communication interface to inform what commodi-ties are inside, what their status is, on what route they are transported, etc. But boxes will not only notify about the cargo inside of them, they will also give information about themselves, i.e. if a container gets damaged, it will automatically call for mending. Supposing that containers will be able to form a big-box as mentioned above, new

Although looking into a crystal ball for such a long period into the port industry’s future may seem risky, one can safely assume that the future will resemble present times, only bigger and better. The key notions will be automation, safety, sustainability and productivity.

Maritime

technology cranes will have to be designed to handle them. Currently, cranes have a capacity between 30-120 tonnes; according to Cargotec, in 2060 they will be capable of managing up to 1,000-2,000 tonnes. Bigger cranes will also mean time-saving for vessels, since the freight will be loaded or unloaded more swiftly. The “Port 2060” vision fore-sees that goods will be stored in underground silos because land in 2060 will be of great value. Subterranean warehouses will feature solar panels on their top and an automated tracking system, placing the in-bound containers inside the silo and sending outside the needed one to expectant vessel. Feeders will be minded by flying spreaders, us-ing nano-fibre technology. The port’s transportation will be handled by airships and air/magnetic cushion “transport platforms” with the ability to unite into “trains”. Alike containers, all of the port’s equip-ment will automatically monitor its wear and tear.

What would a future port be without new technology ships? Al-though many vessels built in the near future will still be sailing in 2060, Cargotec predicts that the maximization of sustainability will be the chief notion of future ships. Photovoltaic solar panels and sails, opti-mizing their position in accordance to the sun’s movement, wind tur-bines and wave energy collectors will be high-water mark solutions. The new types of containerships will be fully automated or will have only a small crew. Besides storing the goods, the ship’s cargo hold will serve as a central hub, monitoring the condition of containers. The op-posite side of the coin is that vessels without a crew will be a titbit for fu-ture pirates, commencing cyber-attacks on the ship’s operating system and easily boarding the unit. On the other hand, one can think about

A vision of the port of the future, around the centenary of containerisation, where mega ports are artificial islands and containers are organised in underground silos, Photo: Cargotec 50 years into the future feeder vessels could be partially loaded by flying spreaders Photo: Cargotec

Maritime


countermeasures, i.e. weaponry within the ship operated by men thou-sands of kilometres away (like in unmanned jet-fighters), cyber anti-terrorists and offensive Artificial Intelligence.

Ismo Matinlauri, senior vice president of Port Cranes and the per-son behind the “Port 2060” workgroup, says that all in all the project is

meant to explore the possible, the impossible, the problems, controver-sies and daydreams; about opening minds and starting to dream. “You never know what we might come up with together,” he concludes. �

Przemysław Myszka

50 years into the future feeder vessels could be partially loaded by flying spreaders Photo: Cargotec The concept imagines automated lashing systems that can alone form ‘packages’ consisting of up to 64 containers, Photo: Cargotec

The fastest route to EuropeBoasting the capacity, productivity and full range of services you would expect from one of the world’s largest ports, the Port of Antwerp is the first choice for every kind of cargo in Europe. Thanks to its cen-tral location, the port also offers the fastest and most efficient onward connections by rail, road and barge to Europe’s major industrial and commercial centres. And with constant investments in state-of-the-art infrastructure and handling facilities, the Port of Antwerp is more than prepared for the future.

www.portofantwerp.com


Maritime

Greener shipping in the Baltic

The best solution is LNG

The Baltic Sea has encountered serious environmental challenges as a direct consequence of the current shipping industry.

The area constitutes over 11% of the global shipping trade volume*. This shear magnitude equates to about 2,000 ships present in the Baltic Sea at any point in time – this is one of the areas in the world with the highest density of ships.

The IMO responseFrom an environmental point of view, comparing Baltic Sea ship-

ping NOx and SOx emissions to the total land-based emissions of

Maritime

Sweden and Denmark should raise an eyebrow. Baltic Sea shipping NOx emissions are at the same level and SOx emissions are twice the level of land-based emissions.

In response to this, the International Maritime Organisation (IMO) has established the area as an Emission Control Area (ECA), whereby fuel sulphur content will need to be reduced to 0.1% by 2015, and a Tier III limit will be enforced, requiring more than a 75% NOx reduction for ships built after Jan 1, 2016.

Fig. 1. New international legislation on maritime engine emissions for 2010-2020

Enforcement Reference Legislation Legislator Area Target Consequences Ship owner’s typical options

01.01.2010 2005/33EC

Sulphur content in fuel <0.10% when at berth in EU harbours and in canals

EU EU Sailing and new ships

Possible equipment adaptations, higher voyage costs

a) Change to 0.10% sulphur fuel when at berth and in canals

b) Use LNG as fuel

01.07.2010 IMO Annex VI

Sulphur content in fuel <1.0% in ECAs IMO ECA Sailing and

new ships

Possible equipment adaptations, or exhaust gas purification. Higher voyage costs

a) Use <1.0% sulphur fuelb) Use >1.0% together with scrubbersc) Use LNG as fuel


Reduction of NOx to Tier II level, approx. 20% below current Tier I level

IMO Global NewbuildsSpecial engines or exhaust gas purification. Higher voyage and capital costs

a) Choose (or modify to) low-NOx enginesb) Use Tier I rated engines with SCR, EGR,

HAM, water emulsion, etc.c) Use LNG as fuel


Sulphur content in fuel <3.5%, progressively towards 0.5% sulphur by 2020 (maybe later)

IMO Global Sailing and new ships

Potential higher voyage costs

a) By 2012: Change to 3.5% sulphur fuel. Towards 2020: Low-sulphur fuel or conventional fuel with scrubber is required

b) Use LNG as fuel


Sulphur content in fuel <0.10% in ECAs IMO ECA Sailing and

new ships

Higher voyage costs, possible equipment adaptations or exhaust gas purification

a) Use <0.1% sulphur fuelb) Use >0.1% sulphur fuel with scrubbersc) Use LNG as fuel


Reduction of NOx to Tier level III in ECAs, approx. 75% below Tier II level

IMO ECA Newbuilds

Exhaust gas purification (unless engines are significantly improved). Higher voyage and capital costs

a) Install exhaust gas purification such as SCR, or other possible measures

b) Use LNG as fuel

* Article “Have the good times returned” in the Report section (p. 34) provides that the BSR makes 8% of the global seaborne cargo [editors note].

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LNG – the best and safest solutionSwitching to low sulphur fuel or installing an exhaust gas

scrubber is the only other option to switching to Liquefied Natu-ral Gas (LNG) fuel in order to meet the strict legislations. Low sulphur fuel resources such as Marine Gas Oil (MGO) and Ma-rine Diesel Oil (MDO) are depleting and there is a high price uncertainty due to rising demand. Scrubbers require significant alterations onboard, special waste disposal, and increased power consumption.

On the other hand, the third option of switching to LNG fuel is not only the cleanest form of fossil fuels available, it also re-quires no additional abatement measures in order to meet re-quirements. However, an LNG-fuelled ship requires purpose-built or modified engines and a sophisticated system of special fuel tanks, a vaporiser, and double insulated piping. Available space for cylindrical LNG fuel tanks onboard ships has been one of the main challenges so far, but new hull integrated tanks are expected to simplify this issue. LNG operations have had an ex-cellent safety record for over 40 years; there is a fleet of about 350 ships today. There will be a need for specific operations, but the operations are, and will continue to be, safe.

Fig. 2. Environmental emissions for alternative concepts for a typical Baltic sea cargo ship

* Low sulphur fuel contains maximum 0.10% sulphur* Conventional fuel as per 1 July 2010, containing maximum 1.0% sulphur

Fig. 3. Ships emission reduction potential

Fig. 3. This shows how an increase in LNG fuel consump-tion in the Baltic will reduce total ship emissions. Switching will eliminate close to all of its emissions.

Best economic performanceBasing on experience from ships built or under construction, DNV

has established economic models comparing the three options men-tioned, specifically their ECA abatement measures, (only differential costs have been included and revenue excluded).

Findings included:• the LNG solution has the lowest present value of costs over a

20-year perspective;• LNG fuel for retrofits in general is still the best option, but de-

pends on a ship’s characteristics;• higher economic advantage of LNG fuel with increasing fuel

consumption.

Best environmental impactOf the three options for meeting requirements, LNG fuel has

the highest emissions reductions of NOx (80-90% less), SOx and particles (close to 100%), and CO2. The net GHG emissions are reduced by 15-20%. It is also the only option that meets 2015 SOx demands and the 2016 Tier III NOx requirements. The aforementioned are based on emissions during LNG combus-tion, but by considering the entire life cycle of these fuels, LNG fuel is still the better option because it has lower acidification and eutrophication potential than all other marine fuels, and GHG emissions from the lifecycle are the lowest.

There are different types of issues to consider for the various types of ships when assessing whether to go for LNG fuel, scrub-ber, or low-sulphur conventional fuel. In addition to newbuild-ings, DNV expects that significant numbers of refittings will be completed in the near future on ships as LNG tanks are relatively easy to install.

Technically no showstoppersThere are two main engine concepts:

• dual fuel – runs on LNG and conventional fuel, which is a flex-ible solution when LNG availability is uncertain;

• single fuel LNG – runs on LNG alone. It is simpler to install on-board and a good choice to operate in regions with a developed grid of LNG bunkering stations or for ferry routes with dedicat-ed ferries.

While all technical issues have been solved, current engine manu-facturers are “almost there” when it comes to eliminating methane slips where small traces of gas fuel pass non-combusted through the engine and are emitted with the exhaust gas.

A need for efficient infrastructureSome options have been considered to establish infrastructure:

(1) natural gas from a pipeline and small liquefication for further distribution to bunker stations, (2) full size carriers anchored in suitable locations for further distribution to bunker stations, (3) full size carriers that can deliver to local LNG terminals which serve as a hub for further distribution to bunker stations, and (4) ships bunker LNG fuel directly from terminals.• Option 1 is made available to most LNG-fuelled ships operating

in Norway today, but not considered a viable solution from a long term economic standpoint as it is dependent on economies of scale.

• Options 2 and 3 are based on buying LNG from efficient scale plants on long term contracts that offer the most price competi-tive solutions.

• Option 4 cannot accommodate a large number of ships, there-fore it is unrealistic.


Maritime

*Zeus Virtual Energy Library – Liquefied Natural Gas (LNG)

This map shows the pro-posed terminals as part of a fu-ture supply infrastructure which should be sufficiently efficient.

Mutual interdependence is vital for LNG fuel supply infra-structure to get underway. Ship owners will not invest in LNG-fuelled vessels until adequate in-frastructure is in place, LNG-fuel suppliers will not invest in in-frastructure until there is a large fleet of them. So what now? Gov-ernmental bodies and the private sector must cooperate and coor-dinate their strategies. But gov-ernments need to move first by encouraging the establishment of LNG bunkering infrastructure in the Baltics, and then everything else should fall nicely into place. �

Nathan Kai-Cheong ChanDNV

adv_Europort_184x118_UK-new.indd 1 8-8-2011 15:35:34

DNV is a global provider of services for managing risk and helping customers to improve their business performance. The company serves a range of industries, with a special focus on the maritime and energy sectors. For more information about DNV or the issues touched upon in the above article, please contact Lars Petter Blikom at Lars. [email protected].

Fig. 4. Proposed LNG import terminals in the Balic area*

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Interview with Monica Gullberg of ÅF Industry, Team Leader for the consultant’s team of the project “A feasibility study for an LNG filling station infrastructure and test of recommendations”

Maritime LNG infrastructure within the SECA

� Could you give our readers more details on the LNG infrastructure project?

From 2015 the competitiveness of short sea shipping is going to be under intense pressure because of new regu-lations on sulphur emissions reductions in the SECA area, implying the need for new competitive ship bunkering. We talk with Monica Gullberg about the project which is to set up recommendations on the feasibility of a marine LNG filling station infrastructure within the areas covered by the new regulations from 1 January, 2015.

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The project “A feasibility study for an LNG infrastructure and test of recommendations” is mainly driven by the sulphur regulations

on fuel being imposed on the maritime sec-tor and within the SECA (Sulphur Emission Control Area) that covers the Baltic Sea, the English Channel and the North Sea. The re-strictions that will come into force by Janu-ary 2015, will lead ship owners to act and opt for low sulphur alternatives for fuelling ships. One possibility for the shipping industry to meet the new requirements is to shift to Liq-uefied Natural Gas (LNG). However, the LNG option will rely on an LNG filling station in-frastructure to be developed and established.The consultant team, consisting of ÅF In-dustry, SSPA and DNV will prepare a feasi-bility study and set up recommendations for both private and public sector stakeholders with regard to different aspects for the estab-lishment of an LNG infrastructure. We will work for ten months together with twelve partners from the sector and the region. The partners include gas suppliers, ship owners, Ph

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A d v e r t i s e m e n t

port authorities and engine manufacturers. Their input and active participation will en-sure that the study target the most relevant issues for infrastructure establishment.The Danish Maritime Authority has taken the initiative to this project within the Euro-pean Union TEN-T programme Motorways of the Seas.

� What is the project’s strategy concerning regulations and industry standards?

We will study existing standards and fol-low the on-going work on ISO standards

and identify gaps and weaknesses.An inventory and analysis of existing stand-ards and regulations such as the Internation-al Code on Safety for Natural Gas Fuelled Ships (IFG), Society of International Gas Tanker and Terminal Operators (SIGGTO) show, for example, that for LNG bunkering there is a lack of international guidelines and recommendations in general for small-scale LNG activities. Uniform global standards re-garding the usage of LNG as fuel will ensure safe development of the industry which is of essence if investments are to be made. This is also an important issue at national level in order to enable for the industry to grow and at the same time reach solutions that allow for an open market where ship owners can choose filling stations rationally.

� As far as the necessary infrastructure is concerned, there is the chicken and egg dilemma of what should come first - de-mand or supply. Your project is aimed inter alia at finding a possible location for LNG terminals in the Baltic and North Seas. Are you sure that demand will come to the BSR?

For energy infrastructure in general, there is a tendency that the supply side needs

to be established before demand can truly grow. The market for gas generally, and LNG specifically, will grow in Europe and northern Europe according to present trends and predictions. For example, Eu-rogas predicts that LNG could represent 25% of the EU’s total supply in the long term, i.e. by 2030.With LNG, the gas market is globalised and the maritime sector is global as well. To begin with, the LNG market may well be centred around a few larger bunkering sites in larger existing harbours. Howev-er, there will also be a local demand and, probably, line shipping on shorter routes can become a pioneer in early implemen-tation of LNG in northern Europe.

� From 1 Jan. 2015, the shipping industry in the Baltic will face a serious challenge. What, according to you, will be the im-mediate outcome of the implementation of the IMO’s SOx regulations?

An immediate effect will probably be that shipping will become relatively more ex-pensive. This in turn has negative conse-quences for the shipping industry as it may result in a shift of transport mode to road or rail-road. A much debated negative effect

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Turku

www.portofturku.fi

Choose the expressway between east and west.

Project organizationThe Danish Maritime Authority, together with the Flemish Ministry for Mobility and Public Works, is in charge of the overall project management, and is the leading coordinating partner.

PartnersStates: Belgium, Denmark, Finland, Sweden and NorwayRegional: Council of Nordic MinistersPorts: Port of Hirtshals (DK), Port of Zeebrugge (BE) and Szczecin and Swinoujscie Seaports Au-thority (PL)LNG terminals and gas distribution companies: Fluxys (BE), Gasum (FI), Gasunie (NL), Energinet.dk (DK), Energigas Sverige (SE), Gasnor (NO) and Gazprom LNG (RUS)The maritime cluster: Germanischer Lloyd (DE), Bureau Veritas (DK), MAN Diesel & Turbo (DK), Lauritzen Kosan A/S (DK)

from the new regulations in the SECA may be the competitive disadvantage of indus-tries in northern Europe, i.e. forest, paper, mining and steel industries.

� In your opinion, how big is the poten-tial of LNG as shipping fuel? Can it re-place oil in the future? If so, what kind of timeframe are we talking about?

The potential for LNG is significant if the critical enablers of infrastructure devel-opment are addressed. It is for example important to develop proper regulations for small-scale LNG and LNG bunkering. Liquefied Natural Gas can potentially re-place oil . However,it is likely that oil will remain an important energy carrier for at least another 50 years. Besides Liquefied Natural Gas, Liquefied Bio Gas can com-plement and support the LNG alternative. Broadly speaking, the energy sector is slowly moving from coal and oil towards gas and renewable energy.

� What are the technical possibilities for fuelling ship engines with LNG?

Possibilities include conversion of exist-ing engines and the design of new engines.

New engines can be designed for Single Fuel (for example pure LNG) or Dual Fuel (LNG and HFO/MGO/MDO).

� What are the challenges to choosing this type of fuel for ship propulsion?

Foremost, there is a cost associated with changing fuel because of the new engine requirements. Also, converting to LNG as a fuel affects practical issues such as the time and routines for bunkering. Above all, in order for LNG to become a realistic option for ships, there needs to be a prop-er supply infrastructure.

� TThe project’s port partners are Hirtshals, Zeebrugge and Szczecin-Świnoujście. What role are these seaports playing?

They share their experiences regarding in-vestment costs and possible operational models for LNG supply terminals in har-bours throughout the study. In addition, the port authorities are hosting our workshops in order to test recommendations in Decem-ber 2011 and January 2012. The workshops embrace on site discussions and testing of recommendations.

� Thank you.Lena Lorenc

Baltic maritime ranking 2011

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Economic situation in the region

After a year of recovery

According to the IMF’s assessment, global GDP grew by around 4% in 2010. Projections for subsequent years indicate econom-ic growth of around 3.5% annually. However, growth in many advanced economies is still weak, in some countries too weak

to quickly recover the losses resulting from the recession. Relatively low GDP growth was recorded in the United States. The IMF predicts that this ratio will not exceed 3% in subsequent years. Forecasts also indicate a slowdown in Japan as a consequence of this year’s earthquakes. Growth in most emerging and developing economies remains strong. Among the BRIC countries, China and India achieved the highest growth of around 10.3-10.4% in 2010. Lower ratios were reported in Brazil (7.8% in 2010) and in Russia (3.9%); however, the Russian economy is expected to grow rapidly as a result of the recent increase in oil prices.

Real GDP of the EU grew by 1.8% in 2010, which was not sufficient to bring the economy to the pre-recession level. According to Eurostat’s forecast, the index will remain at the same level in 2011 and 2012.

Taking into account global and European economic indi-ces, the situation of the BSR countries* is rather optimistic. As

In 200�, the economies of many countries experienced the effects of the global recession, while 2010 was a year of economic recovery. Despite recent turmoils in the financial markets, projections for subsequent

shown by data for 2010 and forecasts, the BSR countries are the fastest developing countries in the EU. GDP growth of all EU BSR countries reached 3.7% in 2010, which is higher than in the whole European Union and only slightly lower than the world average. However, according to Eurostat data, BSR economies will slow down to 2.9% in 2011 and 2.2% in 2012, which is main-ly due to the poorer performance of Germany, the largest EU BSR economy. In 2010 only one country – Latvia – recorded a decline in GDP (-0.3%), which was a continuation of the decline from 2009 (-18%). Forecasts for 2011 and 2012 indicate stable growth. Latvia, Lithuania and Estonia are expected to be at the forefront, however, one must remember the three Baltic States experienced far more than a 10% decline in GDP in 2009, mean-ing that economic growth in proceeding years is rather a kind of making up for losses than rapid development. Estonia also expects to benefit from joining the eurozone in 2011.* In the article BSR countries are Baltic Sea region countries being members of the EU, unless otherwise stated.

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Tab. 2. Foreign trade of BSR countries 2009-2010 (mln tonnes)

EXPORT IMPORT

200� 2010 yoy change 200� 2010 yoy

changeGermany 337.6 361.2 7.0% 534.4 592.5 10.9%

Denmark 43.0 44.0 2.2% 45.0 45.1 0.3%

Estonia 9.8 11.9 21.7% 8.5 9.1 6.8%

Finland 35.5 43.3 22.1% 52.8 61.0 15.4%

Lithuania 19.3 21.2 10.1% 21.1 24.4 15.4%

Latvia 13.4 17.2 28.9% 8.5 9.5 11.6%

Poland 69.4 78.0 12.4% 103.6 117.5 13.5%

Sweden 79.1 89.0 12.4% 69.5 81.2 16.8%

Source: Eurostat

Fig. 1. Real GDP growth in BSR countries in 2009-2012 (%)

Source: Eurostat and IMF

Fortunately, BSR countries have so far avoided the eco-nomic problems that have affected some debt-driven countries like Greece, Portugal and Ireland. Of all the BSR states, only German debt exceeded the threshold of 60% of GDP in 2010. However, there are some uncertainties arising from higher commodity prices. Oil prices increased by 27.9% in 2010 (as a result of tensions in the Middle East and North Africa, and natural catastrophes in Japan and Australia) and are expected to rise by another 34.5% in 2011 (according to IMF estimates). This in turn may result in higher inflation in BSR countries in 2011. High inflation is expected in Estonia (4.67%), Poland (around 4%), Lithuania and Latvia (3%). The highest inflation ratio is forecasted for Russia (7.93% in 2011 and 7.93% in 2012) which is also a result of rapid economic growth.

TradeAfter an almost 11% decline in 2009, the global trade vol-

umes of goods and services increased by 12.4% in 2010. In the case of BSR countries, the increase was significantly higher and reached 19.6% in exports and 21.4% in imports. This increase depends mostly on German trade as the country is the largest trader of the Baltic Sea region, responsible for around 70% of total BSR imports and exports. German exports rose by EUR 150 bln and imports by EUR 140 bln in 2010, which represents most of the growth of all BSR countries.

Exports and imports of all BSR countries increased in 2010. The highest growth in trade volumes was reported in the Baltic States (Latvia, Lithuania and Estonia) as well as Sweden, and the lowest in Denmark. Also Russian trade volumes increased by around 24% in imports and more than 9% in exports. How-ever, the recovery was not strong enough to reach the pre-re-cession level. As shown in the tables, in most BSR countries (apart from Estonia, Finland and Lithuania) the value of ex-ports is increasing more rapidly than the volume of exports, which means that they are shifting to exports of more valuable and more processed items.

A further increase in trade volume was reported in Q1 2011. Estonian exports and imports rose by more than 50%, and Latvian and Lithuanian by over 40% in comparison to the same period a year before. However, according to an IMF fore-cast, the increases in trade levels are expected to reach only up to 10.5% (exports) and 11.5% (imports) in Lithuania and 9.4% (exports) and 11.8% (imports) in Finland on an annual basis. After strong increases in 2011 the trade growth levels are expected to stabilize between 4-8% on an annual basis. Only in Russia will the growth be higher, between 8-10% annually.

Tab. 1. Value of foreign trade of BSR countries in 2009-2010 (bln EUR)

EXPORT IMPORT BALANCE

200� 2010 yoy change 200� 2010 yoy

change 200� 2010

Germany 803.0 957.1 19.2% 664.1 804.7 21.2% 138.9 152.4

Denmark 67.3 73.7 9.4% 59.3 64.0 8.0% 8.1 9.6

Estonia 6.5 8.8 34.9% 7.3 9.2 27.1%% -0.8 -0.5

Finland 45.1 52.8 17.2% 43.7 51.8 18.7% 1.4 1.0

Lithuania 11.8 15.7 33.2% 13.1 17.7 34.5% -1.3 -1.9

Latvia 5.5 7.2 30.1% 7.0 8.8 25.2% -1.5 -1.6

Poland 97.9 117.5 20.0% 107.2 131.0 22.2% -9.3 -13.5

Sweden 93.9 119.4 27.2% 86.1 112.2 30.3% 7.8 7.2

Total BSR 11�1.0 1�52.2 1�.6% �87.7 11��.� 21.�% 1��.2 152.8

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Tab.3. Value of foreign trade of BSR countries in Q1 2010 and Q1 2011 (bln EUR)

EXPORT IMPORTQ1 2010

Q1 2011

yoy change

Q1 2010

Q1 2011

yoy change

Germany 219.00 260.30 18.86% 181.57 219.74 21.02%

Denmark 17.22 20.31 17.92% 14.65 17.26 17.83%

Estonia 1.78 2.75 54.62% 1.95 2.95 51.15%

Finland 10.56 14.08 33.28% 11.25 14.74 31.04%

Lithuania 3.05 4.57 49.69% 3.48 5.22 49.88%

Latvia 1.43 2.04 42.39% 1.75 2.43 38.56%

Poland 27.31 32.76 19.96% 30.23 35.90 18.77%

Sweden 26.23 34.61 31.95% 24.80 31.74 28.00%

Source: Eurostat

Tab. 4. Import volume of goods (percentage change)

200� 2010 2011 2012 201� 201� 2015 2016Denmark -14.891 4.267 2.626 4.048 4.3 4.2 4.2 4.2

Estonia -37.788 22.621 2.428 3.968 4.793 5.849 6.162 6.44

Finland -20.526 9.844 11.82 6.796 5.04 5 5 5

Germany -10.016 13.614 5.482 3.797 3.8 3.8 4.24 4.41

Latvia -28.5 10.669 4.869 6.1 5.3 5.1 5 4.9

Lithuania -28.387 17.645 11.507 8.401 7.411 7.111 7.096 7.22

Poland -12.433 10.714 5.868 6.252 6.604 6.547 6.491 6.694

Sweden -15.848 14.145 7.165 5.78 6.72 2.668 4.775 2.976

Russia -31.247 23.144 17.183 11.360 10.656 9.730 9.338 9.098

�forecast/estimation, source: IMF

Tab. 5. Export volume of goods (percentage change)

200� 2010 2011 2012 201� 201� 2015 2016Denmark -10.264 5.031 2.643 3.8 4 4 4 4

Estonia -27.162 29.984 3.106 4.444 4.511 4.64 4.764 6.5

Finland -22.876 10.019 9.417 7.272 5 5 5 5

Germany -16.608 15.83 7.554 4.494 4.2 4.1 4.2 4.19

Latvia -14.432 11.287 5.81 5.5 5.1 4.8 4.7 4.6

Lithuania -12.746 16.315 10.522 8.5 7.997 7.791 7.798 7.799

Poland -6.806 10.213 7.015 6.223 6.22 6.225 6.225 6.325

Sweden -15.825 14.212 6.929 5.658 5.297 4.997 4.996 4.956

Russia -9.780 9.166 1.762 3.635 4.146 4.152 3.787 3.636

�forecast/estimation, source: IMF

Fig. 2. Seaborne trade between BSR countries and main cross-ocean partners – 2010/2009 (%)

Source: Eurostat

The transport sector’s reactionEconomic recovery also influences transport

volumes. Apart from Germany, most BSR coun-tries are trading with their closest neighbours, i.e. other BSR states. Especially the smaller economies are highly dependent on this direction of trade, e.g. 64% of Estonian imports (72% including Rus-sia) have their origin in other BSR states (2010, Eurostat). The share of extra EU-27 trade of BSR countries in total extra EU trade is relatively high as it reaches 38%; however, most of these exports and imports are generated by Germany.

Total extra-EU exports of BSR countries amounted to EUR 411 bln in 2009 and increased by 25% to EUR 525.3 bln in 2010. Most of extra-EU trade is served by maritime transport, which is highly dependent on the economic situation. Total BSR volumes of imports and exports with cross-ocean partners increased in 2010 in all main directions. One must, nevertheless, remember that these results are again driven by high increases in German trade, while smaller economies, especial-ly Baltic States, sometimes reporting a decline. A

positive sign is that exports are growing faster than imports in almost all directions, apart from Singapore, Australia and Canada. But there is another side to the coin. A lower increase in imports also means results from weaker consumer-spending which affects the perform-ance of some European ports. However, the performance of some Baltic ports of Russia and Poland denies this trend.

In conclusion it is worth mentioning that the economic growth of the BSR countries seems to be quite strong and stable. The economic recovery is proceeding, however, not all the countries have managed to make up for their losses during the recession. Large increases can be expected in Russia. Another important factor is the German econ-omy, which determines most of the indicators achieved by the BSR countries. And so far, the crisis of public finances has not reached the Baltic Sea, but governments should keep an eye on it. Among the risks and uncertainties one could certainly include an increase in commodity prices, especially oil, and the threat of inflation. �

Magdalena Jażdżewska-GuttaInstitute of International Business, University of Gdańsk

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In 2010 the rise was bigger than the drop in 2009 and the future seems bright. New ports and terminals constructed in many Bal-tic coastal areas will meet their ships and cargo.The total freight traffic carried onboard the vessels in 2010 amounted

to 626 mln tonnes of which about 204 mln (32%) was intra-Baltic (in-cluding domestic shipping). It means that a total of 834 mln tonnes passed over quays in ports of the region (we should count 206 mln tonnes twice, as it is cargo loaded and discharged in the Baltic). Turnarounds of intra- and extra-Baltic cargoes in seaports are almost equal. Again, Swed-ish ports – after a one year break – are at the top (see Table 1).

Tab. 1. Baltic seaports’ turnover by countries in 2010

Ports total [mln tn]

Yoy change(%)

General cargo[mln tn]

Dry bulk [mln tn]

Liquid bulk [mln tn]

Sweden 179.6 +11 79.7 32.7 67.1

Russia 177.1 +4 36.5 34.6 106.0

Finland 109.9 +11 37.3 39.7 32.9

Denmark* 87.1 -4 35.3 22.3 23.6

Germany 68.5 +7 50.4 12.2 5.9

Poland 64.7 +29 23.8 24.6 16.3

Latvia 61.2 -2 10.9 29.1 21.2

Estonia 46.0 +19 7.0 11.2 27.8

Lithuania 40.3 +11 9.7 11.8 18.8

Total 8��.� +8 2�0.6 222.2 �1�.6

Remarks: *Including North Sea ports (total turnover 6.5 mln tn)

Baltic Maritime Ranking 2010

Have the good times returned?The 7th issue of BTJ’s maritime ranking is optimistic – if the numbers don’t lie, Baltic maritime transport has recovered over the level of 2008.

1. Figures for Denmark, Finland and Sweden are derived from national statistics; in the case of Denmark the sums of the three cargo classes don’t add up to the total because the detailed statistics cover only the ports which handle over 1 mln tonnes annually.

2. In the case of Germany the sources are regional statistics of Mecklen-burg Vorpommern and Schleswig-Holstein (only the Baltic coast) cor-rected for major ports according to ports’ statistics.

3. Latvia: the sources are statistics of major ports corrected for minor ports according to data from national statistics.

4. Poland and Russia: the sources are ports’ statistics and market reports; in the case of Poland only major ports (over 1 mln tonnes) are includ-ed, which could reduce the total volume by less than 1 mln tonnes.

5. Lithuania: source – a yearly report by the Port of Klaipėda Authority.6. Estonia – total turnover derives from national statistics, other data an-

ticipated, based on incomplete information from ports except Port of Tallinn (operators are obliged by law to reveal only total turnover).

Maritime transport in the Baltic Sea is very intensive and the net-work of sea routes is extremely dense in some places. Our sea – including the Danish Straits – makes up only 0.11% of the total area of the world’s oceans but it is a route for about 8% of the world’s seaborne cargo. On the other hand, small dimensions of the water area and short distances between ports cause that the Baltic’s share in world maritime transport is much smaller than in the transported cargo – only 1.8%. But if we only take into consideration intra-Baltic traffic, the difference in both shares is extremely high – 2.6% of world seaborne cargo only 0.06% of the world’s transport performance.

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Have the good times returned?

Trading with neighboursSwedish transport statistics show this phenomenon in de-

tail – the average distance of cargo travelling via international sea traffic to and from Sweden was 105 nautical miles (NM) in 2010. The average for all crude oil imported by Swedish refin-eries, mostly from Denmark, Russia and the United Kingdom, was only six miles longer (111 NM), but for all ro-ro cargo it was only 16.2 miles! On the other hand – the average distance in domestic (coastal) traffic was 350 miles – three times more than in international traffic, and is still growing. The differ-ence reaches an extreme with regard to container traffic – one container shipped over national boundaries results in an aver-age distance of 64 miles but travelling between national ports quadruples the distance and increases it to 263 miles.

Such figures show that maritime exchange mostly takes place among a country’s closest neighbours (see Tables 2 & 3). In the case of Sweden, 46.5 mln tonnes passed the shortest way across narrow bays and straits of the Baltic (to and from Denmark, Finland and Germany; totalling 30% of international traffic). Trade with Baltic countries located further away rep-resented a turnover of 43 mln tonnes in Swedish ports (28% of international traffic).

Tab. 2. Baltic seaports’ turnover by destination 2010

Coastal [mln tn]

Intra-Baltic [mln tn]

Rest of Europe [mln tn]

Rest of the world [mln tn]

Sweden 24.6 89.4 47.6 18.0

Russia 1.0 57.2 80 40

Finland 16.6 59.1 25.3 8.9

Denmark* 24.4 35.6 18.9 8.0

Germany 1.0 60.0 4.5 3.0

Poland – 23 28 14

Latvia – 20 28 14

Estonia – 12 20 14

Lithuania – 22.8 28 14

Total 67.6 �7�.1 280.� 1��.�

Remarks: *Including North Sea ports.

1. Figures for Sweden, Finland, Denmark, Germany and Lithuania are derived from national and port statistics. Other data partly calculated from the aforementioned ‘foreign’ statistics or from in-complete information from ports, but partly anticipated.

2. Figures in the column “Intra-Baltic” include traffic to all German ports; to exclude German North Sea ports the figure 37 mln tn should be extracted from the totals.

3. Column ‘Rest of Europe’ includes both EU and non-EU countries.

In Finnish trade the “coefficient of proximity” is even higher – its three closest neighbours (Estonia, Russia and Sweden) make up 36.3 mln tonnes which constitutes 39% of the country’s in-ternational traffic. The share of all intra-Baltic traffic in Finnish ports amounts to 64%. Among Nordic countries the least Baltic-orientated is Denmark with a share one point less than Sweden’s – 57%. Domestic shipping in all three aforementioned countries makes up 17.6% of their ports’ turnover (see Table 4).

The case of German Baltic ports is exceptional because they are really regional ports focused on BSR traffic – 88% of their turnover is conducted with eastern and northern neighbours by land and sea.

Tab. 3. Main intra-Baltic cargo routes

Total [mln tn]

From first to second [mln tn]

From second to first [mln tn]

Germany-Sweden 24.5 11.1 13.4

Germany-Russia 23.0 10 13

Denmark-Sweden 16.1 9.9 6.2

Finland-Sweden 16.0 7.0 9.0

Finland-Germany 14.7 8.9 5.8

Finland-Russia 14.6 0.2 14.4

Russia-Sweden 12.4 11.5 0.9

Denmark-Germany 12.3 6.5 5.8

Remarks: Traffic to/from Denmark and Germany include North Sea ports.

Tab. 4. Ports’ turnover by coastal shipping of the Nordic countries

Total [mln tn]

General cargo[mln tn]

Dry bulk [mln tn]

Liquid bulk [mln tn]

‘One way’ cargo* [mln tn]

Sweden 24.6 4.7 9.2 10.7 0.2

Denmark 24.4 8.3 9.0 7.1 2.2

Finland 16.6 0,3 7.7 8.6 –

Total 65.6 13.3 25.9 26.4 2.4

Remarks: *‘One way’ cargo loaded or discharged at sea, included in the column

“Dry bulk”, in Denmark consist mostly of aggregates dredged at sea

The domination of intra-Baltic trade disappears on its eastern shores because of overseas export of fossil fuels and raw materials from Russia and other continental countries. But still, the majority of intra-European traffic occurs in Russia and in its western neighbours.

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Technology splitShort distances and the huge trade of processed material

explain the split in technologies of general cargo which flows through Baltic ports. The work of ro-ro ships and terminals lead the chart both in total figures and in five countries. Contrary to popular belief, underlining the role of containers, boxes constitute only 22.6% of general cargo handled in ports of the BSR, while ro-ro cargo makes up twice as much – 50.5%. If we take into account only short-sea trade the difference is even higher – almost all roll-ing cargo travels intra-Baltic and intra-Europe but only about 10% of containers received or shipped in Baltic ports serve the same fields. It means that one in every 10 tonnes of unitised cargo in short-sea traffic is enclosed in a box. Its share in intra-Baltic traffic alone is probably less.

Tab. 5. Technology split

Ro-ro cargo [mln tn]

Lo-lo break bulk [mln tn]

Containers [mln tn]

Containers [mln TEU]

Sweden 44.2 22.2 12.9 1.408

Germany 43.5 4.8 1.1 0.126

Finland 12.3 20.7 10.2 1.245

Russia 2.5 12.0 22.0 2.162

Denmark 25.4 4.7 5.2 0.734

Poland 8.0 6.3 9.5 1.050

Lithuania 4.3 1.9 3.5 0.295

Latvia 1.3 6.9 2.7 0.254

Estonia 3.6 2.1 1.3 0.160

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The same split in tonnage doesn’t reflect the differences in the big picture – Baltic and Nordic (including Norway) container traf-fic was served by about 130 ships with a total gross tonnage (GT) of 1.25 mln, but the fleet of ships with ro-ro decks counts about 200 vessels with a total GT over 4 mln. The difference lies mainly in the length of routes – an average loop of a Baltic container is longer than 1,500 NM but an average ferry route is less than 50 NM (one way). Container traffic is homogenous in organisational forms and technologically uniform – most boxes are carried by cellular con-tainer ships in regular services often dealing simultaneously with feedering and short-sea traffic. Ro-ro trade is much more complex – the capacity of most ships is divided between cargo and passen-gers to different extents. Pure cargo vessels also trade on industrial services, closed to the market. A separate subcategory is the group of ro-ro vessels dedicated to brand new cars (car carriers).

Tab. 6. Top 10 ro-ro cargo ports in 2010

Country Port Cargo units [mln]

Yoy change (%)

1 DE Lübeck 0.710 -1

2 SE Trelleborg 0.662 +6

3 FI Helsinki 0.489 +13

4 SE Gothenburg 0.443 +3

5 DE Rostock 0.430 +11

6 SE Helsingborg 0.406 +3

7 SE Stockholm* 0.389 0

8 DK Helsingør 0.359 +3

9-10 DE Puttgarden 0.351 +3

9-10 DK Rødby 0.351 +3

Total – – �.5�0 –

Remarks: *including Nynashamn (0.163 mln units) and Kappelskar (0.074

mln units)1. “Cargo unit” means road or rail vehicle: lorry with or without

trailer, articulated vehicle, semi-trailer, rail car.2. The Figures for Trelleborg, Rostock and Stockholm include rail

cars, for Puttgarden and Rødby exclude rail cars.3. No 11. is the Port of Tallinn with 0.308 mln units (according to

the Estonian national statistics).

But there are two sides to every coin. The domination of ro-ro car-go – most of it travels on tyres and on the shortest possible ferry routes – shows the growing competitive advantage of road haulage. The same conclusion could be drawn from the growing average distance in coast-al traffic in Finland and Sweden (the same phenomenon is noted in Ph

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Norway and the United Kingdom). Commodities destined for Europe – especially valuable cargo – are only shipped when absolutely neces-sary and on the shortest possible route by the cheapest handling mode. This means that the winner usually is… a bridge or tunnel.

�00 ports, maybe moreOur total Baltic and national statistics cover at least 293 ports and

shipping places of all kinds and sizes, including 121 Danish, 70 Swed-ish, 54 Finnish, 16 German, 10 Estonian, 10 Latvian, 6 Russian, 5 Polish and 2 Lithuanian ports (counting separately all harbours, which form together clustered authorities or companies like the Port of Tallinn), but a view at Top 25 give an adequate picture of the market.

Tab. 7. Top 25 Baltic ports in 2010

Country Port Total turnover [mln tn]

Yoy change (%)

General cargo [mln tn]

Dry bulk mln tn]

Liquid cargo [mln tn]

1 RU Primorsk 77.6 -2 – – 77.6

2 RU St. Petersburg 58.1 +15 32.3 9.2 16.3

3 SE Gothenburg 43.8 +11 21.2 – 22.7

4 EE Tallinn 36.6 +16 5.4 5.5 25.7

5 LT Klaipėda 31.3 +12 9.7 11.8 9.8

6 LV Riga 30.5 +3 6.5 17.4 6.6

7 PL Gdańsk 27.2 +44 6.1 6.6 14.4

8 DE Lübeck 26.7 +2 26.7 – –

9 DE Rostock 25.3 +10 13.7 7.0 4.6

10 LV Ventspils 24.8 -7 2.0 8.7 14.1

11 SE Brofjorden 21.0 – – – 21.0

12 PL Szczecin-Świnoujście 20.8 +26 8.5 11.3 1.0

13 FI Sköldvik 20.2 +6 – – 20.2

14 FI HaminaKotka 15.8 +43 11.8 1.0 3.0

15 DK/SE CMP 14.8 -1 5.3 2.7 6.8

16 PL Gdynia 14.7 +11 8.2 5.6 0.9

17 RU Kaliningrad 13.8 +12 2.6 3.2 7.3

18 DK ADP (Fredericia) 13.7 -3 1.1 1.9 10.8

19 RU Ust-Luga 11.8 +14 1.5 10.1 –

20 FI Helsinki 10.9 +11 9.6 0.9 0.4

21 SE Trelleborg 10.8 +6 10.6 0.1 0.1

22 DK Aarhus 9.4 +7 5.9 2.2 1.6

23 SE Lulea 9.3 +45 0.3 8.5 0.5

24 LT Butinge 9.0 +8 – – 9.0

25 SE Stockholm 8.4 +17 7.0 0.8 0.6

Total – – 586.� – 1�6.0 11�.5 275.0Remarks:

Ports following this list, in order of cargo turnover: 26. Nanatali (8.1 mln tn); 27. Helsingborg (7.4 mln tn); 28. Oxelosund (7.4 mln tn); 29. Statoil-havnen (7.0 mln tn).

Positions determined by the total volume handled are shown in Ta-ble 7, but one fact is worth noting – the Top 10 ports are still the same as in our first ranking in 2005, second in 2006, etc. (a rare exception was when Gdańsk was out of the Top 10 and this position was either occupied by Szczecin-Świnoujście or Sköldvik). Even the figures are similar – for example St. Petersburg handled 57.5 mln tonnes in 2005, Tallinn – 37.4 in 2004 and CMP – 15.2 in 2005. Of course, the new order is different – Primorsk overtook St. Petersburg, probably forever; Gothenburg passed Tallinn. Nonetheless, the biggest and most stable progress was achieved by Port of Klaipėda – it has moved from a 10th (in 2004 and 2005) to a 5th position. In the second ‘10’, the positions were often reshuffled – it hosted Aarhus and Trelleborg until 2009, but the only real new entrant is the expanding Port of Ust-Luga. Ph

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Tab. 8. Top 10 general cargo ports in 2010

Country Port General cargo [mln tn]

Yoy change (%)

1 RU St. Petersburg 32.3 +22

2 DE Lübeck 26.7 +2


4 DE Rostock 13.7 +8

5 SE Trelleborg 10.6 +6

6 FI HaminaKotka 11.8 +59


8 LT Klaipėda 9.7 +26

9 PL Szczecin-Świnoujście 8.5 +5

10 SE Stockholm 8.0 +17

Total – – 152.� –

Tab. 9. Top 10 dry bulk cargo ports in 2010

Country Port Bulk cargo [mln tn]

Yoy change (%)

1. LV Riga 17.4 -7

2. LT Klaipėda 11.8 +22

3. PL Szczecin-Świnoujście 11.3 +34

4. RU Ust-Luga 10.0 +20

5. RU St. Petersburg 9.2 +17

6. LV Ventspils 8.7 +12

7. SE Lulea 8.5 +45

8. DE Rostock 7.0 +11

9. PL Gdańsk 6.7 +13

10 PL Gdynia 5.6 -1

Total – – �6.2 –

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Tab. 10. Top 10 liquid cargo ports in 2010

Country Port Liquid cargo [mln tn]

Yoy change (%)

1 RU Primorsk 77.6 -2

2 EE Tallinn 25.7 +12


4 SE Brofjorden 21.0 n/a

5 FI Sköldvik 20.2 +6

6 RU St. Petersburg 16.3 +2

7 PL Gdańsk 14.4 +52

8 LV Ventspils 14.1 -19

9 DK ADP 10.8 -8

10 LT Klaipėda 9.8 -7

Total – – 2�2.6 –

The rankings of Top 10 ports in regards to main cargo catego-ries (see Tables 8-10) inform also about a level of concentration. It is highest in the case of liquids – the 10 largest ports handled 72.7% of the total Baltic turnover; and the smallest in the case of dry bulk – 43.3%, respectively. The Top 10 general cargo ports’ level of con-centration amounted to 49%.

The ranking of the Top 25 Baltic ports (Table 7) reveals another phenomenon – the leading country in total cargo turnover, Sweden, has only one port in the Top 10, and Finland – number 3 – has its largest port in the 13th position thanks to the merger of Hamina and Kotka. The reason is obvious – cargo turnover in the Nordic countries is dispersed along the coast in industrial centres with their own ports but without ‘hinterlands’. Opposite to this, ports off the eastern coasts – from northern Finland to Gdańsk – serve a huge continent behind them – Russia, Belarus, Ukraine, CIS states in Asia and also Central Europe. They concentrate flows of cargo from many places which make them dependent on transit (and on the national policies as well…).

Transit from the east and south amounted in 2010 to 117 mln tonnes and employed 21 ports – with Kokkola (2.7 mln tonnes) be-ing the northernmost transit port. Finnish ports involved in Russian cargo transit handled a total of 7.2 mln tonnes (the biggest turnover was witnessed in HaminaKotka – 3.5 mln tonnes). Estonian ports handled about 33 mln tonnes of foreign cargo, Latvian – approx. 49 mln tonnes, Klaipėda 12.5 mln, and Polish ports’ throughput amounted to about 15 mln (including transit to Germany).

Stagnation in St. Petersburg and in transit-dependent ports has been caused mainly by the creation of a new export route for

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Fig. 1. ‘Hub and spokes’ of the Swedish trade

Legend: Turnover by the sea (mln tonnes)

Legend: Turnover by the sea (mln tonnes)

Fig. 2. Other trade routes by the Baltic

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Russian crude oil and oil products. Port of Primorsk established in December of 2001 has redirected the flow of crude oil from Vent-spils and other foreign ports to one place on the Russian coast, north of St. Petersburg.

It is worth mentioning that at the beginning of the 21st century Russia made plans to develop its own handling capacity in Russian ports on the shores of the Gulf of Finland to 330 mln tonnes in 2010, which was only partly achieved (50%).

Passengers and tourists as oneSince its very beginning ro-ro traffic has been connected with

passenger carriage. The first cargo on wheels to roll on ships (except

guns) were passenger rail cars. Railways remodelled short passenger services to genuine ferry lines – in the Baltic the first rail and pax ferries plied between Helsingborg and Helsingør in 1892, 10 years later a route between Gedser and Warnemünde opened.

Tab. 11. Baltic ports’ seaborne passenger traffic 2010

Ferry pax [mln]

Yoy change(%)

Cruise pax [mln]

Yoy change(%)

Denmark 32.3 -4 0.680 -5.2

Sweden 30.2 -3 0.545 -6

Finland 16.7 +3.6 0.351 -5

Germany 10.9 0 0.520 +13

Estonia 7.5 +10 0.390 -6

Poland 1.6 +2.6 0.145 -8

Latvia 0.8 +10.5 0.058 -16

Lithuania 0.3 +18 0.035 +5

Russia 0.2 – 0.428 -2

Total 100.5 -1.0 �.152 -1.�

Remarks:1. Figures for the “Ferry pax” column are derived from national and

port statistics.2. “Cruise pax”: sources are statistics of the Cruise Baltic Organiza-

tion corrected according to data from national and ports’ statis-tics and market reports.

Today all traditional links are losing passengers because of the competition of land routes and bridges over the Danish Straits (Ta-ble 11). Harbours with the oldest connections fell from the lead-ing positions after two consecutive years of double-digit decreases

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(Table 12). Port of Rostock, the successor of Warnemünde, for years in the Top 10 in terms of ferry passenger traffic, lost 30% of its trav-ellers in two years. But, the global figures are stable thanks to a rise in the north where ferries also attract customers as cruisers.

Tab. 12. Top 10 ferry passenger ports in 2010

Country Port Passengers [mln]

Yoy change (%)

1 SE Stockholm* 11.4 0


3-4 SE Helsingborg 8.5 -10

3-4 DK Helsingor 8.5 -10

5 EE Tallinn 7.5 +3

6-7 DE Puttgarden 6.2 -2

6-7 DK Rodby 6.2 -2

8 FI Mariehamn 3.3 -3

9 FI Turku 3.0 0

10 DK Hirtshals 2.2 +6

Total – – 66.2 –

Remarks:*Including Nynashamn (1.4 mln pax) and Kappelskar (0.9 mln pax)

In the cruising sector the decrease was similar: -1.3% according to Cruise Baltic. Ports in the Top 15 listing (Table 13) include 99% of total passenger visits. It means that efforts made to include other ports in new cruising routes – like the Bothnia Cruise Ports market-ing initiative – failed. On the other hand, a comparison of the figures

of ferry and cruise vessel passengers shows that tourists arriving by sea from further destinations make up 3.5% (in Sweden) to 20% (in Lithuania) of all arrivals (to compare the figures properly one should double the number of cruise paxes as arriving and departing). The only exception is Russia with St. Petersburg; nevertheless a new local ferry company, St. Peter Line, will change the picture of the market. In 2010 the company introduced a service to Helsinki, and at present it also has two ships sailing round the Bay of Finland via Helsinki, Stockholm, and Tallinn, returning to St. Petersburg.

Tab. 13. Top 15 cruise passenger ports in 2010

Country Port Passengers [thou.]

Yoy change(%)

1 DK/SE CMP 662 -2

2 RU St. Petersburg 428 +0.5

3 SE Stockholm 415 -7

4 EE Tallinn 390 -6

5 DE Kiel 342 +17

6 FI Helsinki 342 -5

7 DE Rostock 177 +11

8 PL Gdynia 126 -7

9 LV Riga 58 -16

10 SE Visby 52 +58

11 SE Gothenburg 50 +39

12 LT Klaipėda 35 +5

13 DK Ronne 19 -32

14 SE Helsingborg 16 -38

15 PL Gdańsk 8 -50

Total – �,120 –

Remarks:Figures are derived from the statistics by the Cruise Baltic organi-

zation, national and ports’ statistics, as well as market reports.

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Force of shippingThe shipping side of the maritime transport system is highly re-

sistant to statistical analysis because the differences between sectors, regional markets, operators and their fleets are more significant than between seaports or sectors of inland transport. For example Scandlines, the leading Baltic ferry operator, carried about 0.8 mln freight units which was 25% of the ro-ro market in 2010. Finnlines, the second in the chart, carried 0.65 mln units (about 20%) but its ships worked on much longer routes which means large differences in transport performance measured in tonne-miles.

Even in the passenger transport sector, Scandlines carried off the palm – the company transported 12.4 mln people which allowed it to obtain a 25% share of the market. Tallink Silja came in second with ‘only’ 8.7 mln pax (17.5%) but they trav-elled on longer routes and were offered onboard services and entertainment. So, the pure figures are far from a fair assess-ment of the work and efforts of the ferry operators. But follow-ing this imperfect ranking, Stena Line has 10% of the freight market and 6% of the passenger market; Viking Line, respec-tively, 3.6% and 13%; Color Line – 5.5% and 8%.

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Tab. 14. Top 20 container ports in 2010

Country Port Turnover [thou. TEU]

Yoy change(%)

1 RU St. Petersburg 1,931 +44

2 SE Gothenburg 891* +8

3 PL Gdańsk 512 +113

4 PL Gdynia 485 +28

5 DK Aarhus 447 +16

6 FI Helsinki 400 +12

7 FI Kotka 397 +15

8 LT Klaipėda 295 +19

9 LV Riga 254 +39

10 RU Kaliningrad 231 +145

11 FI Rauma 165 +15

12 DK/SE CMP 153 +1

13 EE Tallinn 152 +16

14 SE Helsingborg 149* +33

15 DE Lübeck 126 +6

16 FI Hamina 115 +7

17 SE Gävle 100* -7

18 DK Aalborg 64 +6

19 PL Szczecin 57 +7

20 DK ADP (Fredericia) 56 +49

Total 6,620 +2�

Tab. 15. Largest container terminals in multi-terminal ports 2010

Port Terminal Turnover [thou. TEU]

Yoy change(%)

1 St. Petersburg First Container Terminal 1,160 +24

2 St. Petersburg Petrolesport 541 +176

3 Gdańsk Deepwater Container Terminal 452 +179

4 Gdynia Baltic Container Terminal 281 +24

5 Riga Baltic Container Terminal 218 +19

6 Gdynia Gdynia Container Terminal 199 +33

7 Klaipėda Klaipėda Container Terminal 181 +12

8 St. Petersburg Moby Dick 141 +34

9 Klaipėda Klaipėdos Smelte 114 +31

10 Gdańsk Gdańsk Container Terminal 62 -17

Source: “The Baltic Container Outlook 2011” by Actia Consulting (DCT Gdańsk adjusted).

Remarks: *Figures for Swedish ports include flats and casettes.. Ph

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Sources similar to those in Table 1

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Container operators are easier to compare, but data displaying their volumes are not readily available. Only Unifeeder, the largest feeder operator, informed about its growth in 2010; the company carried 1.75 mln TEU which makes up 23.6% of the whole volume handled in Baltic ports. The abovementioned figures almost reflect Unifeeder’s share in the Baltic feedering fleet (25-26% by capacity), however, it should be reminded that some containers are delivered to BSR ports by liner services without transhipment (not only by pure container ships but also by multipurpose vessels) and are car-ried onboard ro-ro ships and bulkers in tramping. To sum up, it seems that shares of other operators in total volume transported in the Baltic are proportional to their capacity in TEU.

Unifeeder also revealed data on its volumes in short-sea traffic – 215 thou. TEU (+80% year-on-year). Its involvement in intra-Eu-ropean trade shows the competiveness of the European transport

market – paper and wood products exported from the Baltic region to Western Europe could travel by trucks or on rail cars crossing only narrow straits by ferries; could employ a ro-pax (closed in a semi-trailer) or a ro-ro vessel of regular service (also as sto-ro cargo); could be loaded onto a traditional MPV which is also scheduled due to the demand in ‘just in time’ deliveries (UPM Seaways and Nordic Char-tering operate in this way); could be carried in 45’ containers on ves-sels combining feeder and short sea functions. Or, at the least, could sail in a hold of the simple bulk carrier. All this expresses the strength of shipping, hardly to be imitated by other modes of transport…�

Marek Błuś

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Towards an integrated transportsystem in the Baltic Sea region

TransBalticProject part-financedby the European Union(European Regional Development Fund)

Project part-financedby the European Union(European Regional Development Fund)

The future of small portsTransBaltic WP 4.1 Seminar in Elbląg, Poland

Seminar speakers, representing port authorities, scientific institutions and stakeholders from Denmark, Finland, Germany, Poland and Sweden focused

on the management of small and medium-sized ports, financing tools, good practices as well as discussed legal issues and platform cooperation.

Bogdan Ołdakowski, secretary general of Bal-tic Ports Organization, presented three dominant models of managing the European Union ports. The first is the Latin model, centralized and with the dominant role of the central government. The second is the Anglo-Saxon standard where private ownership prevails and the state keeps a hands-off policy. The last is the Hanseatic model, being a combination of the previous two, in most cases adopting a landlord model, where the mu-nicipality manages the port’s land and private companies undertake the operations (apart from

During 7th-8th June in Elbląg TransBaltic and the Baltic Ports Organiza-tion hosted a seminar entitled “Development perspectives for small and medium Baltic Sea ports”, gathering BSR stakeholders to share different points of view towards their possible development paths.

Sweden, where local governments do both). After his lecture, case studies concerning small ports were presented.

Markku Mylly, managing director of the Finnish Port Association, at the beginning pre-sented the background of Finnish port busi-ness. The majority of Finland’s ports are gov-erned by municipalities. But this state of matter is going to change by the end of 2013. A new law is coming into force at the beginning of 2012, enforcing the corporatization of every port in Finland. Markku Mylly presented the Port of Kalajoki as an example of the uncertain future of small Finnish ports.

Kalajoki is a port highly specialized in han-dling timber, serving 60 sawmills. This is both its strength and weakness. On the one hand, the specialization ensures high quality service and if it wasn’t for the port, many of the saw-mills wouldn’t be set up. But on the other hand, the lack of diversity means dependence on one industry; when the price of its commodity decreases rapidly, the economic sense of run-ning the business decreases and since the pro-file of a highly specialized port is a rigid one, the fear of non-profitability shows up. What’s more, small ports alone are yielding profits too small to make investments. Until now, the mu-nicipalities aided their ports, i.e. the local gov-ernment bought land for the Port of Kalajoki to build new warehouses and a new berth. Under the upcoming law such direct assistance will be prohibited. Markku Mylly emphasized that there are three solutions for small ports, which were cut off from municipal funding and alone are not able to make investments or even go on with their business. Ports can merge to di-versify their services, find private investors or finally go bankrupt. In the case of the Port of Kalajoki, the last option would mean a chain reaction – the liquidation of a sawmill-depend-ent port would result in the liquidation of port-dependent sawmills.

Anders Sjöblom, from the Port of Oskar-shamn, said that there is a similar state of affairs in Sweden. The country has 52 ports, 45 of which are medium and small ports, owned by municipalities. As opposed to the Finnish model, the Swedish lo-cal governments not only manage the port’s land

but also handle its operations. But the ownership is changing from public to private, first in big ports like the Port of Gothenburg, then in smaller ones. This is a prime chance for development because ports should be run by professional managers, not politicians. There are also other pros and cons for running a small port in Sweden and Anders Sjöblom pointed out the rationale behind small Swedish ports. To be profitable one must have the support of local industry, i.e. the forest indus-try like in Oskarshamn; 10 thou. TEU handlings, 10.5 thou. trucks going both directions, a good location, since the faster the cargo goes, the less money is spent on waiting. If there are many ports in close vicinity, a port may as well start specializ-ing, because the total volume of the region is split between many ports and none of them has the suitable throughput to survive on the market in the long run. However, if the industry has a bad patch, the specialized port may collapse (similar to what is happening in Finland). Anders Sjöblom commented that, “the port needs more legs to stand on,” which means investments in infrastruc-ture from cities to the ports (motor-, high-, and railways), since Sweden is European China, living mostly off export. Nevertheless, there are other opportunities to pursue, like opening the port up to ferries or handling small amounts of very profit-able cargo such as oil products.

The last difficulty to overcome is the mu-nicipalities’ policies towards their ports. As it was stated, presently a Swedish municipality has the duty to govern a port’s territory and its operations. But on the other hand, the local government has to provide new living space for citizens. The land close to the sea is very attractive, so a temptation to alter the port’s land into building plots appears. This action makes economic sense, since selling and raising buildings is more profitable to the municipality’s treasury than running a port. Ac-cording to Sjöblom, small ports are no match for the municipalities, so sooner or later they are eaten up. There are two ways to deal with this problem. The first is a faint one; the central government can decree that a port is strategic for the country and will block the municipality’s actions against the port. But yet the state policy may change and if the port can’t economically stand up it will be consumed. Anders Sjöblom persuades that the best way to resolve the problem is to corpo-ratize the port, diversify its services and attract in-vestments in infrastructure, which altogether will result in the port’s financial strengthening. �

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Key factors to its developmentPort of Elbląg and the Vistula Lagoon

The Port of Elbląg, Poland, is a typical inland river-sea port. It offers its services specifically to inland waterway passenger and cargo transport; pleasure boats as well as short-sea shipping and potential ferry serv-ices. Therefore, the development scenarios of the port depend on the outlook of each of these forms of navigation.

Freight inland transport in domestic rela-tions is now carried out between Port of Elbląg and the Tri-City agglomeration (a metropolitan area consisting of Gdańsk,

Gdynia and Sopot), vessels on this route most often carry oversized cargo. Any freight increase in other relations, e.g. through the Vistula river to Bydgoszcz/Warsaw and Vistula – Oder river route is in the current state of the waterways impossi-ble. In addition, the bridge recently built in Kępki on the Nogat river has a clearance of only 3.4 m, which prevents navigation on the inland route to any ships other than yachts which can fold their masts. Regardless of the latter and other local difficulties, there is a general problem regarding the state of waterways in Poland, which in fact excludes regular cargo freight with the existing tonnage. More positive prospects seem to be in line with inland passenger traffic in relation to de-mand for Elbląg port services. The development of passenger shipping is influenced by two major factors: increase in wealth of the society expressed in both revenue growth and more free time as well as activities of local governments focused on improving the tourist attractiveness of the ar-eas they govern. Both of the above work favours

revitalization of the Granary Island. Thanks to the existing conditions, inland passenger shipping in the Port of Elbląg may well develop its potential.

The second source of demand for the port’s services is maritime shipping. The port may po-tentially support two ranges of cargo and pas-senger shipping: shipping between ports of the Vistula Lagoon (Kaliningrad region and Polish ports) as well as short-sea shipping within the Baltic and North Seas and, in case of larger ves-sels, the Mediterranean as well.

Vistula Lagoon has the status of internal sea waters, not only in Poland but also in the Russian Federation. In terms of safety of navigation, the lagoon waters do not pose the same risk as com-pared to the open sea. Thus, the shipping of inland vessels is subject to numerous restrictions and re-quires new equipment (rescue equipment, com-munications, etc.). The lagoon basin is relatively shallow and its depth increases from the south-west to the northeast. Navigation here is possible only on the designated fairways. Depths of the fair-ways vary but generally are not below 2.5 m.

Freight between the Ports of Elbląg and Ka-liningrad, Baltiysk and Swietły grew very quickly after the opening of shipping in 1990 and in 1997 exceeded 600,000 tonnes. However, it decreased when the Polish government introduced quotas on coal imports and stopped completely from 2005 as a result of another closure of shipping between Elbląg and Russian ports. Passenger traffic developed similarly during this period. In the year 2010 after Russia lifted its ban on ship-ping, freight showed an increase and, more im-portantly, structural diversity. It is expected that in 2011 turnover will exceed 200,000 tonnes.

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inland shipping, moreover, this state of affairs will continue in the future. The increase in affluence of Polish society is a fact, and its level has already exceeded 50% of the European Union average. Regardless of the inevitable economic fluctua-tions, this long term trend will continue.

In the Port of Elbląg passenger shipping has always been present and a further growth in this area should be expected in the future. The port also provides a convenient location for winter-ing as well as technical facilities for inland ves-sels (shipyard). There is also a sufficient length in mooring berths for these crafts. The current situa-tion will be further improved in the coming years. The footbridges across the Elbląg river in the old town (currently 5.8 m over the water surface) will be modernised and turned into drawbridges. This will create an opportunity for all vessels to use the wharves located in the old city centre, whose height does not exceed 8.5 m (height of bridges on the European Union Route). Thus, port infrastructure in Elbląg does not limit inland navigation, yet the shore services – catering, hotels could be further expanded and a passen-ger terminal is missing. It is expected that these shortcomings will be obsolete after the proposed





The BSR is a hotspot for empty container flows. The share of empty boxes of all containers transported in the BSR (21%-26% between 2005 and 2009) is above global and European average (both around 20% between 2005 and 2009). The highest share of empty con-

tainers has been identified on transport routes to Russian Baltic ports (22%-29% between 2005 and 2009). Two major reasons for this have been recognized, namely: the rising trade volume of containerised goods as well as strong imbalances of containerised trade flows. Rising container volumes cause higher absolute numbers of empty containers. In the long run, container flows in the BSR grew above European average. Moreover, many countries and ports in the BSR show large imbalances between inbound and outbound empty container flows. In most cases, the outbound share is larger than the inbound share, i.e. those countries import more containerised goods than they export, hence ‘exporting’ excess empty containers. Figure 1 shows inbound and outbound empty flows in absolute and relative terms for the Top 15 container ports in the region (data for 2009). Especially Eastern European ports, such as St. Petersburg, Gdynia, Klaipėda and Tallinn report high shares of outbound empty containers. In the case of Russian Baltic ports and European ports handling containers from the Russian market, this is mainly due to the fact that Russian exports are almost exclusively energy resources, i.e. non-containerised goods.

Fig. 1. Top 15 ports in the BSR with loaded and empty container turnover (2009)

Source: author’s design based on Eurostat data

Empty container management in the BSR – insights from the industry

A hotspot for empty flows

The growth would be even greater if not for the refusal of relevant authorities to create a phytosan-itary check point at the port.

Passenger shipping currently takes place on the Vistula Lagoon, e.g. regular services between Frombork, Tolkmicko and Krynica Morska. For these services the Port of Elbląg is only a base and wintering harbour for ships. Passenger ship-ping between Elbląg and the harbours of Vistula Lagoon will be possible only after modernization of the fleet. Elbląg’s infrastructure is already pre-pared for launching a ferry service on the Vistula Spit, however, other ports like Kąty Rybackie and Krynica Morska lack adequate facilities.

Shipping to the ports of the Baltic and North Seas is now incidental and very little can be changed in this matter, even the acceptance by Russia of foreign flag vessels, since the conditions of entry into the Russian part of the lagoon are exceptionally restrictive. Regular shipping may develop only after a canal through the Vistula Spit has been constructed. Preparation for the imple-mentation of this project was initiated in 2008. The canal is to be 1,200 m in length, 50-60 m in width and 5 m in depth. Moreover, the length of the lock is 200 m and the width of the lock is 25 m.

Entrance to the canal will be protected by ad-equate breakwaters. Dimensions of the canal will allow cargo vessels with a capacity of 3,500-4,000 DWT to enter the port and passenger vessels with a length of 120 m and a width up to 22 m. The ca-nal will not only shorten the way to the ports out-side the lagoon, it will enable year-round shipping. The decision to break the ice in the fairways in win-ter will be taken freely by the Polish authorities at the request of commercial carriers and based on a profit and loss calculation. The channel will also al-low fuller use of the opportunities connected with the use of larger vessels to and from Russian ports situated in the lagoon area. Finally, existence of the channel is the main prerequisite for comprehen-sive use of all opportunities that the lagoon brings to Polish and Russian ports.

A promising source of demand for the services of the Port of Elbląg is sailing. Lakes surrounding the port are interesting, and their potential is far from being fully realised.

A direct canal leading to the Baltic Sea by the Vistula Spit will mean integration of the two attractive touristic areas – the Gdańsk Bay and the Vistula Lagoon. An increase in the interest of foreign sailors who have already visited all the ports and harbours at home and in the Bal-tic should be expected, since the lagoon waters still remain relatively unknown. Therefore, in each of the possible development scenarios of the Port of Elbląg, the needs related to sailing will grow and they should be included in spa-tial planning and investment programmes. �

Professor Krzysztof Luks, PhDElbląg School of Economics

The TransBaltic’s partner Hamburg University of Tech-nology (TUHH) contributes to the project’s ambitions by in-vestigating empty container management in the BSR. In 2010/2011 a survey was con-ducted aiming to create deep-er insight on the impact of empty flows on actors along the container transport chain as well as on potential meas-ures to mitigate its negative consequences.





Included managerial and organisational measures have been: “network design of empty depots”, “using spare capacities of own fleet”, “container pooling (grey boxes)”, “active search for return cargo” and “using spare capacities of other fleet operators”. Several managerial measures got a relatively good rating, whereof network design and usage of spare ship capacities of the own fleet were iden-tified as most promising.

Pricing measures comprise incentives for return trips of specific con-tainer types, freight rate surcharges on high demand transport legs and selling empties in surplus areas as well as buying in deficit areas. Most pricing measures got a positive rating except for the two latter. The foldable container was presented as a technological measure to reduce empty movements. Ratings were rather inconsistent, some players see potential for application, others do not (see Figure 3).

Fig. 3. Evaluation of measures

Source: author’s design based on the survey results

ConclusionsThe empty container business remains a multi-dimensional is-

sue. Negative impacts on the macro-level are apparent: high costs, negative environmental and socio-economic impacts, tied storage and transport capacities. On an individual firm-level, the situation becomes more complex and depends on a combination of factors including the individual situation of the company, its role in the transport chain and overall industry developments. The evaluation of empty container management strategies showed that no single measure is the panacea. Measures have to be chosen and adopted accordingly to the company’s individual situation and general indus-try and economic developments.

In times of low capacity utilization in the container transport system, problems resulting from empty movements seem to dimin-ish. However, when container turnover increases again and storage and transport capacities are exploited, these problems will be back on the companies’ agenda. The players of the container market should now prepare for the expected economic upturn. �

Prof. Dr.-Ing. Heike FlämigDipl.-Ing. Nico Herz

Dipl.-Logist. Jutta Wolff

Hamburg University of Technology, Institute for Transport Planning and Logistics

Who benefits and who doesn’tFrom a macro perspective, the repositioning of empty containers

causes high costs, environmental and socio-economic impacts and ties up transport and storage capacities. However, there are companies for which empty containers constitute a vital part of their business. The an-swer to the question whether there is a negative or positive impact on business is therefore actor-specific. The survey results concerning the im-pact of empty containers are presented for two major groups of actors: transport operating companies (TOC) and terminal operators (TOP).

A vast majority of terminal operators stated a positive impact of empty containers on storage capacity. The same applies to about 50% of the trans-port operators – mainly shipping lines. Around 30% of responding terminal operators in contrast see a negative connection. The overall rather positive picture seems surprising as in recent years particularly sea terminals have suffered from chronic capacity problems due to limited terminal space. A prominent example is the Port of Rotterdam, where in 2007 the ECT Delta Terminal refused to handle empty containers due to congestion problems in the terminal area. However, the survey was conducted when the trans-port industry still suffered from the world economic crisis, when ports, ves-sels and hinterland operators were far from operating at full capacity. Obvi-ously, the storage of empty containers was not perceived as distinctively negative during this period. The same argument explains the rather positive view of both groups of actors concerning transport capacities.

In terms of costs and revenues terminal operators stated a very positive influence: here, empties equal profit. For transport operators, the picture is different: around 50% of respondents (mainly shipping lines) stated that there is a negative or even harming impact on their business in terms of costs. Around 30% believe that there is a nega-tive impact of empty containers on revenues. To sum up, the impact of empty container flows is not only actor-specific, but is also highly dependent on the overall economic conditions.

Fig. 2. Impact of empty containers on respondents’ businesses

Source: author’s design based on the survey results

Optimization strategiesParticipants were asked to evaluate different measures to tackle

the negative impacts of empty movements. Measures have been clustered into four categories: information and communication technology (ICT), managerial and organisational measures, pricing measures and technological measures. Participants were also asked to indicate whether their evaluation was based on practical experi-ences (applied/not applied).

Among the ICT measures (online market places, virtual container yard – VCY, and RFID), VCY got the most positive rating. A VCY is an information platform used by consignees and shippers to facilitate direct exchange of empty containers between involved parties to reduce empty runs. By contrast, RFID for track and trace got a rather negative rating.

The article above summarizes the key findings of the TUHH survey and accompanying research. A detailed report can be downloaded from the TransBaltic homepage.


Twenty years later

It’s been twenty years since Baltic ports met for the first time under the aegis of the Baltic Ports Organization. Today, some members nostalgically recall the long disputes, always concluded with a consensus. Others focus on the future and the challenges laying ahead of the organization. What connects both attitudes is the Baltic – the sea of possibili-

ties and the natural area of cooperation as well as competition.

T wo decades ago enormous economic and societal differenc-es were cutting the Baltic Sea region in two, with Western countries on one side and post-Soviet states on the other. Today, the region is united as ever before, speaking with

one voice about the challenges and problems of sulphur emissions, the Baltic Sea Strategy and more.

To refresh your memory and discover all BPO members again, we cordially invite you to plank yourselves in the BPO anniversary publication – Batlic Ports Organization 1991-2011. Not only does it introduce the heart of the organisation – that is the vast majority of Baltic ports – but it also presents befriended with BPO companies

(Visy, E-dea, Konekranes) and B+R institutions (Centre for Mari-time Studies), the work of which is also of big importance to the organisation’s life. Moreover, the publication looks into the future of BPO as well as introduces its strategy for the next years.

Twenty years have passed, but, hopefully, at least twice as many lay ahead of the Baltic Ports Organisation. The main challenges and the fu-ture scheme of work will be discussed in Rostock, during BPO’s annual meeting. Certainly, there is still a lot to do. Let us hope that BPO will enter the next period of its activity with great energy and strength, able to face the future challenges and work for the sake of the whole region, to make the Baltic Sea, as Julian Skelnik has put it, amaze the world.

20th anniversary of BPO

Baltic Ports Organization 1��1-2011

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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

• BPO should sustain the networking and social role of the organization. BPO should further strengthen and develop relations within the shipping, rail and road sectors as well as with other business partners.

• BPO should represent the interest of Baltic ports and the Baltic transport sector towards EU institutions and other relevant organizations.

• BPO should contribute to the overall development of the Baltic Sea region.• BPO should focus on initiatives promoting a “Baltic maritime highway” as the way to

move cargo and passengers to/from the world through Baltic ports. BPO should support

Bogdan Ołdakowski

Preface“When building and sustaining the social network between

the ports themselves as well as within other industries (e.g. ship-ping, intermodal), BPO has always followed the development around the port business and addressed the key issues for the ports. At all times it was the transfer of know-how and port experiences between West and East.”

Julian Skelnik

The Baltic will amaze the world”Considering that the Baltic is a region of old democracies,

advanced economies and high potential for growth, a very high level of education and high ethical standards, all this provides remarkable opportunities for the future and gives our region an advantage over many others.”

Krzysztof Urbaś

Two centuries in twenty years“In 2010, the long-standing obstacle was conquered – the

first oceanic vessel of Maersk Line called at a Baltic port, Gdańsk, DCT. Nothing will be the same from now on; a race has just started”.

Anne E. Jensen

Ports at the centre of the Baltic Sea Strategy“There are great challenges ahead: the new strict rules on

emissions from ships, the development of transport infrastruc-ture, making the Baltic Sea Strategy work and the relations with Russia.”

entrepreneurs, ideas, visions, initiatives, that contribute to overall transport develop-ments in the Baltic Sea region.

• BPO should contribute to the clean environment of the Baltic Sea, promote environmen-tal management in the ports and take an active role in international dialogues where the environment is concerned.

• BPO should support and take initiatives in research and science that will lead to a better understanding of the transport sector in the region, to study future challenges.

BPO’s focusfrom BPO’s strategy for the years 2010-2013

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EWTC II newsletter


Green corridors aim at reducing en-vironmental and climate impacts while increasing safety and efficien-cy; green corridors deliver transport

solutions that are more economically, ecologi-cally, and socially viable than other (non-green) corridors – these phrases reflect what is more or less intuitionally known about the green cor-ridor concept. But when it comes to implemen-tation, i.e. doing it, some more specific instruc-tion will be needed. And this is what the Green Corridor Manual provides: guidance and iden-tification of the basic elements that make green transport corridors different from a traditional transport corridor. The purpose is to assist in improving the existing corridors and in build-ing new corridors.

In order to find a viable definition of the green corridor concept, the project team con-ducted a survey among EWTC II Task 3B-part-ners as well as experts and other green corridors projects. Based on the above methodology, the characteristics of the green corridor concept were described and a joint approval of the defi-nition created by the Swedish Logistics Forum obtained.

Green Corridors aim at reducing environ-mental and climate impacts while increasing safety and efficiency. Characteristics of a green corridor include:• Sustainable logistics solutions with docu-

mented reductions of environmental and climate impact, high safety, high quality and strong efficiency,

• Integrated logistics concepts with optimal utilisation of all transport modes, the so-called co-modality,

• Harmonised regulations with an openness to all actors,

The Draft Green Corridor definition and vision issued under EWTC II

The ultimate vision: more transport, less traffic

Research activities, analyses and debates carried out under the EWTC II project are yielding tangible results now. The task �B team delivered a summary of its work to form a part of the draft Green Corridor Manual. The complete draft, devised as a comprehensive study outlining recommendations, guidelines, as well as design and operation principles for green corridors, will be released late in 2011.

• A concentration of national and inter-national freight traffic on relatively long transport routes,

• Efficient and strategically placed transship-ment points, as well as adapted, supportive infrastructure, and

• A platform for development and demon-stration of innovative logistics solutions, including information systems, collabora-tive models and technology.

A vision for green transport corridorsThe survey initiated to work out the

green corridors definition tackled another important issue, namely the vision for green corridors towards 2020 and 2030. The re-sponses, together with the input from a pre-workshop held in Malmö on 9 March 2011 in connection with the SuperGreen Workshop, provided a basis for drawing up the vision for 2030, with an intermediary step in 2020.

Hence, in 2020 the green corridors will be an integral part of the TEN-T network in Europe, while a part of the core network of TEN-T will be upgraded to green corridors. Europe will be well on its way towards a sus-tainable transport system, with more open-ness and collaboration in the transport sector and many previous bottlenecks, missing links and barriers eliminated. The first eco-labelling schemes of transport solutions will be imple-mented, setting a new standard for long haul sustainable freight transport.

In 2030, Europe’s main trade flows will be concentrated within a network of green corridors, with the TEN-T as their basis. They will be the top of the line as regards in-novative technology, efficient and sustainable logistics solutions, high quality performance

and a sound economy. Eco-labelling of trans-port services will be a must-have. Standard-ized European regulations on the infra-structure, terminals and services of a green corridor will be established, while the solu-tions tried and tested in the green corridors will be commonly perceived as a standard for freight transport.

KPIs - facilitating corridor managementBeing a business case, green corridors

need proper management, best if based on re-liable, specific and measurable performance indicators, covering such issues as efficiency, service quality, environmental sustainability, infrastructural sufficiency and social issues. A set of generally recognized, practical KPIs would facilitate qualified interaction between the political and commercial actors related to a green corridor, while enabling compari-sons and development of new corridors into sustainable units with improved economic and environmental performance.

The way ahead for green corridorsThe vision for green corridors is that the

system should be interesting enough for the stakeholders to invest in. These corridors will be safe, secure and punctual, with the service level better than what the existing logistics opera-tions offer and possibly with lower rates offered to customers choosing namely this solution.

The complete manual will offer guidance on infrastructure, operations, management, marketing as well as continual improvement of green corridors, while providing informa-tion to potential customers at the same time. �

Małgorzata Nosorowska

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Baltic shipyards

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Where is the bottom line?

In 2010 Baltic shipyards delivered 37 seagoing vessels, of over GT 1,000 each, and four vessels below that limit. The total gross tonnage was 1,089,834 – 19%

less than in 2009; moreover, this number constituted only 47% of the tonnage deliv-ered in 2008 within the same geographic borders. Our share in world production fell from 3.8% in 2008 to 1.1% in 2010.

Such a decrease happened when the world production in 2010 reached a histor-ic record level of over GT 96 mln (+24.7% yoy!) and China overtook South Korea placing itself for the first time on the top of the ranking of shipbuilding nations. Its de-liveries amounted to GT 36.2 mln – an in-crease of 65% comparing to 2009! Since the Second World War and the famous Amer-ican emergency shipbuilding programme,

The Baltic region’s importance as a ship supplier to the world market keeps de-creasing. In 2010, probably for the last time in the history of shipbuilding, Bal-tic shipyards delivered units with a total gross tonnage (GT) over one million. In 2011 the annual drop in production will exceed 60% and it seems that in the fol-lowing years the BSR’s output will stabi-lize on the level of GT 0.� mln.

no country has reached such a large index of development. Furthermore, this result was GT 1 mln higher than the record of world deliveries in the 20th century which was reached in 1975 (GT 35 mln); the latter was repeated again only after 28 years (!) of a serious crisis, in 2003, when the global output crossed GT 35 mln once again. In 2010 China’s production alone surpassed the world’s 2003 result.

2010 saw growth of other Far East shipbuilding giants as well; South Korea delivered GT 31.5 mln (+9% yoy) and Ja-pan – GT 20.2 mln (+6.3%), which means that the big Asian trio together made up 91.6% of the world’s production. As for order books, these countries have a 90.1% share of the world’s contracts but at the end of 2010 China and South Korea had

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work scheduled ahead for three years and Japan only for two.

200� vs. 2010The number of Baltic shipyards which

delivered vessels over GT 1,000 dimin-ished from 18 in 2009 to 10 in 2010; a year ago in this column we were predicting the latter number to be 12. Our mistake is connected to two deliveries from the Finnish yards STX Rauma and Uki Work-boat, which were not on time.

The first yard, although it didn’t deliver any vessels in 2010 due to a one week delay (05.01.2011) in handover of the Pride of Brit-ain to P&O Ferries, is included in Table 1. Uki Workboat, on the other hand, built a multi-purpose pollution control vessel ordered by the Finnish Environment Institute, delivering


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it in May 2011, but the unit was handed over to the Finnish Navy. In our next census we will decide what to do with Uki Workboat and the Louhi (GT 2,400), pennant number 999, a vessel of an unclear legal status.

Four names are completely new on this year’s list, but all the new brands cover six old players – Nordic Yards means Wadan Yards under new ownership (previously Aker Yards in Rostock and Warnemünde); P+S Werften is the name of the company which joined former Volkswerft in Stralsund and Peene-Werft in Wolgast; Western Baltija Shipyard in Klaipėda unites the production branch of the repair yard WSY and Baltija, a former member of the Odense Steel Shipyard

conglomerate. Only Remontowa Shipbuild-ing, a new “suit” of Northern Shipyard from Gdańsk, changed nothing in its ownership and organization. Its owner, Remontowa Group, transformed its brand in the process of name unification within the group (actu-ally, the change just took place in May 2011, but we follow the new style).

Eight names present in our 2009 cen-sus disappeared for various reasons. Polish Gdynia and New Szczecin were closed in mid-2009 after a decision by the EU to refuse the state aid given to these shipyards. German Lindenau retreated because in 2010 it started only one bunkering tanker with GT 499 for delivery in 2011.

Table 1. Baltic shipyards building over GT 1,000 in 2010

Shipyard Country No. of ships in 2010 GT delivered in 2010 GT expected in 2011 Order book for 2012 Odense Steel Shipyard Denmark 6 431,873 87,000 –

STX Turku Finland 1 225,282 – 60,000

Nordic Yards1* Germany 2 128,078 40,000 –

Flensburger Germany 4 114,150 86,000 100,000

Admiralteyskiye Russia 2 99,732 – 13,000

Remontowa2* Poland 13 36,017 20,000 20,000

P+S Werften3* Germany 1 26,195 26,200 145,000

Onega Russia 4 13,173 10,000 10,000

Western Baltija4* Lithuania 1 7,962 300 300

Karstensens Denmark 3 6,400 6,300 5,000

STX Rauma Finland – – 95,000 14,000

Total 37 1,088,862 405,0005* 367,300

Remarks: 1*ex-Wadan Yards; 2*ex-Northern Shipyard; 3*united Peene-Werft and Volkswerft; 4*united WSY and Baltija; 5*including a containership by “Gryfia”

STX Helsinki’s business consisted of conversions of ferries only, Færgen’s Ham-merodde and Color Line’s Superspeed 1 were rebuilt there. At the end of 2010 the yard changed ownership and name – it will return to the production sector as Arctech Helsinki Shipyard, but its first deliveries are planned for 2013. Baltiysky Zavod also didn’t build any new vessels, although it commenced with the construction of a floating nuclear power plant to be delivered in 2012.

And, in the end, three small ship-building enterprises from Poland (Marine Projects, Partner and Wisła) appeared on the 2009 list as producers of turn-key ves-sels, but only for one-two contracts and in

Focus


2010 they all returned to the sector of ‘hull and block factories’.

On the other hand, two shipyards came back to the list after a one year break – Ad-miralteyskiye from St. Petersburg delivered two arctic crude carriers for Sovcomflot – one as a backlog from 2009 (Mikhail Ulyanov) and one according to schedule (Kirill Lavrov). The second yard, Danish Karstensens from Skagen, is the only mak-er of large fishing vessels in the BSR. In this case its retreat from our 2009 census was due to the delivery of only GT 912 – 88 be-low the limit of 1,000. It seems we were too harsh one year ago.

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End of the container ship eraIn 2010 Baltic shipyards handed over

only one container ship (P+S Werften), but against our prognosis it was not the last one – in 2011 three other orphaned hulls of the era of serial production met their last chance. Nordic Yards outfitted one ship for Hammonia Reederei, P+S built another for its Turkish customer Arkas and Ship Re-pair Yard “Gryfia” in Szczecin completed the third and actually last, for POL-Euro. Let us remind that in 2008 the BSR deliv-ered 42 containerships!

Only three shipyard names have re-mained untouched on our list since 2009

– Odense Steel Shipyard Lindø, STX Turku and Flensburger (FSG), but their fate is exceptionally different. The ceased Odense Steel Shipyard handed over four bulk carriers (a capacity of 182,000 dwt each) and two ro-ros in 2010. Three ro-ros left for delivery in 2011 but the last will be a frigate for the Danish Navy, scheduled for 2012. A sad finish for the great com-pany started in 1918…

STX Turku completed Allure of the Seas, the second vessel of the gigantic Genesis class. The yard was saved by an order for a cruise ferry won from Viking Line for deliv-ery in 2012, but its future is still uncertain.

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It seems that only Flensburger and Remontowa (ex-Northern) are on a stable course – in 2010 FSG continued a series of large, improved ro-ros for Cobelfret and U.N Ro-Ro. In 2011 it started with inno-vative ships called ‘RoFlex’ for Bore Line (they have three hoistable decks which fit converted ships to semi-car carriers). Re-montowa, the leader in terms of number of vessels, delivered nine offshore vessels (classed AHTS) for American and Italian owners and three double-ended ferries to Norway. The Polish yard also finished with cargo vessels delivering the last MPV BBC Polonia for BBC Chartering. FSG and Remontowa for many years have been building ships with high OECD workload factors, meaning also high added value and probably keeping them in good shape (see Table 2).

In 2010 production among ships with high added value were the two largest

ro-paxes for Stena Line contracted by Aker Yards, continued by Wadan and completed by Nordic Yards in Rostock. But this success is childless – it is not fol-lowed by any new contracts, like in other Baltic shipyards.

Three “delisted” shipyards should also be mentioned: Damen Shipyards Gdynia, because it delivered four tugboats in 2010 (GT 243 each), Neptun Werft from Ros-tock, which has supplied the river cruise fleet with one ship (A-Rosa Viva), and Søby Værft, situated on the Danish island of Ærø. The latter will return to the civil shipbuilding sector after 18 years of only making patrol vessels for the naval branch of the Danish Home Guard.

And, at the end of our 2010 review, we should underline the role of naval pro-duction, which includes ships for coast guards. Such production is a saving fac-tor for all Russian yards but recently for

Tab. 2. Baltic shipbuilding countries 2009-2011

Country GT 200� GT 2010 GT 20111*Denmark 449,431 438,273 93,300

Germany 312,015 268,423 152,200

Finland 303,665 225,282 95,000

Poland 256,588 36,9892* 54,200

Russia 19,666 112,905 10,000

Lithuania 2,285 7,962 300

Total 1,343,650 1,089,834 405,000

1*expected; 2*including GT 972 by Damen Gdynia

Tab. 3. Baltic shipbuilding by main types

Type Workload factor Number of ships GT in thousandsPassenger ships 49 1 225.3

Tankers 48 2 99.7

NCCV* 46 10 28.9

Ro-ro vessels 32 8 290.6

Bulk carriers 29 4 373.4

General cargo 27 5 19.3

Containerships 19 1 26.2

*Non Cargo Carrying Vessels

the German as well – all German-owned Baltic yards have military orders. P+S Werften and FSG cooperate with Lürsen in the production of two large replenish-ment supply vessels for the German Navy (P+S has made partly outfitted hulls, FSG – superstructures). P+S continues Peene-Wertf’s contract for multipurpose patrol vessels for the Swedish Coast Guard (the first vessel delivered in May 2011). More-over, Finnish Uki Workboat is building two patrol vessels for the Estonian Bor-der Guard. Taxpayers’ money, directly or indirectly, is also contained in the orders won by Turku (government support for Viking and a government charter for a Meriaura vessel) and by Rauma (two re-search vessels for the RSA and Namibia). But one should remember that state mon-ey is short-term medicine. �

Marek Błuś

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Logistics


Contract logistics in 2011

Chasing the pre-recession levels

According to Transport Intelli-gence (Ti), the global logistics in-dustry saw a strong bounce-back in 2010 as it emerged from the re-

cession, whilst the feared double-dip failed to materialize. The air, road and sea freight sectors recovered dramatically. Although this growth moderated as the year went on, many metrics suggested that the industry had recovered to pre-recession levels.

The industry was buoyed by economic expansion in China and South East Asia and if it had not been for concern about the ail-ing economies of the eurozone (in particu-lar Portugal, Italy, Spain and Greece) and the massive deficits of other Western pow-erhouses, such as the USA and UK, confi-dence would have been higher still.

In terms of mergers and acquisitions there were few mega-deals, although there were numerous smaller purchases. Perhaps the most notable acquisition was that of UK-based logistics company TDG by French ri-val Norbert Dentressangle which had earlier acquired Schneider’s forwarding business. DP-DHL and DB Schenker, for many years

The emergence of the contract logistics industry is driven by the level of development in an economy or, more specifically, the sophistication of its supply chains. As the world’s economy continues to evolve through the

development of global supply chains the spread of contract logistics is being accelerated.

the driving forces behind consolidation in the industry, were very quiet signalling a period of focus on profitability rather than growth.

All eyes on ChinaFor the year ahead, the health of the

Chinese economy continues to be a vital question. Although growth in both domes-tic demand and export activity is still very high, the signs of over-heating continue to emerge. The money supply is growing fast, driven in part by the effects of quantita-tive easing in the US, whilst the economy still seems hugely overbalanced in favour of investment. Wage rates are rising and the viability of the property market is in question. There is the risk that an unstable China could result in an acceleration of the shift of manufacturing export production away from southern China.

In fact 2011 could well be the year when many emerging markets come of age. Al-though many of these, such as Brazil, are influenced by Chinese investment and de-mand, they are also experiencing growth in domestic consumption as GDP per head

rises. Consequently, opportunities for do-mestic orientated logistics provision in these markets look good. Indeed, whilst top-line growth numbers may be weaker, the attractions of markets in say Turkey or Brazil may be greater due to stable and transparent markets. This aspect may coun-ter-balance possible instabilities in exports from these countries, such as agricultural products and mineral raw materials.

EuropeEurope presents a very mixed picture

but it is important to note that its prospects are brighter than is often supposed.

Certainly, the ‘peripheral’ euro states are distressed with some governments approach-ing insolvency. However, impact on the lo-gistics economy may be more nuanced. In small markets such as the Irish Republic lower wage costs are positively affecting export-led growth, whilst in Greece the logistics sector is being restructured significantly. As regards the larger countries, Spain is a concern although Italy has been stagnating for so long a crash here may be of only a gradual impact.

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Joker in the packThe US market is more difficult to assess.

Its debt and budget problems are depressing

demand and undermining confidence, yet there are clear signs that logistics demand is continu-ing to grow both in the domestic sector and for international traffic. Canada and Mexico are strong economic performers and are likely to expand across all logistics sectors in 2011.

Therefore, global trends suggest demand is capable of supporting the sort of growth seen in the global logistics market over the past six months. As ever the joker in the pack is oil prices. These are presently high despite moderate demand in western markets. Even if a restrained recovery in consumer spend-ing takes place in markets such as the US the oil price might increase to levels capable of suppressing demand for transport. There are a surprising number of good opportunities available for acquisitive companies not only in emerging markets such as the Middle East but also in the developed world.

There are still large targets which may come on to the market, such as private equity owned CEVA, and a number of aggressive Asia Pacific businesses with the cash and the will to buy them, such as Toll.

Emergence of a global sector‘Outsourcing’ was traditionally perceived

as the driver of the contract logistics sector. Large corporations, the theory went, wanted

to focus on ‘core competencies’ and that did not include logistics. This theory did have some truth in it. Certainly, a number of large companies sought to rid themselves of trans-port assets, although this was often more about return on those assets than a wish to dispose of the management of logistics. This outsourcing trend – the importance of which can be exaggerated – has been complemented by the need to manage global supply chains, resulting in a new structure to the logistics industry. Logistics service providers’ clients now look to them to provide management capabilities as well as transport and ware-housing assets. Another aspect of the market for contract logistics is its increasingly glo-balised nature. Supply chains for many prod-uct types now stretch across the world driven by the dynamic of different value-adding processes taking place in a diverse range of countries. This has had an enormous impact on logistics. Company logistics systems are not only now more important strategically, but the nature of activities has also changed. The geographic reach of supply chains de-mands logistics concerned as much with co-ordination as access to physical resources. Issues such as inventory management have become more complex with product spread across world trading routes.

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A crossroads for markets – A road map for the future

FIRST TRADE FAIR FOR INTERNATIONAL TRANSPORT AND LOGISTICS MANAGEMENT

12 - 14 June 2012Trade Fair Centre Hamburg, Germany

Organiser:

EUROEXPO Messe- und Kongress-GmbH Tel.: +49 89 32391-241Fax: +49 89 32391-246E-mail: [email protected]: www.transfairlog.com

Ask for exhibitor

information now!

www.transfairlog.com

One of the salient characteristics of the larg-er LSPs in the sector has been their attempt to integrate freight forwarding into their business model. This is not new with companies such as the former Exel combining the two types of business in the late 1990s in order to serve customers in emerging production locations. None the less, this trend has accelerated with most major contract logistics companies hav-ing a freight forwarding business as well.

Size of the marketThe global contract logistics sector

bounced back in 2010 as most economies experienced positive GDP growth and a rebound in world trade. The growth rate in 2010, at 8.36%, was not quite back to the levels of growth seen before the economic downturn and the overall size of the market is still below that of 2008. The beginning of the upturn was seen towards the end of 2009 as logistics companies started to benefit from a pickup in volumes and confidence in the industry returned. The contract logistics market was more resilient during the eco-nomic downturn than other logistics sectors due to the nature of the industry, and thus placed the market in a good position for growth as the global economy, and in par-ticular trade, recovered.

Tab. 1. World’s Top 20 largest contract logistics providers 2010 [mln EUR]

DHL Supply Chain 12,237

CEVA 3,433

Kuehne + Nagel 3,286

Wincanton 2,537

Hitachi Transport System Ltd 2,355

Norbert Dentressangle – Logistics 2,031

Penske Logistics 1,973

Sankyu Inc. 1,622

FIEGE Logistik 1,583

UPS SCS 1,562

CAT Logistics 1,552

Rhenus AG 1,424

Schneider National 1,394

DB Schenker 1,310

Unipart Group 1,230

Ryder 1,202

Menlo Worldwide Logistics 1,024

SNCF Geodis 985

Toll Global Logistics 971

Mitsubishi Logistics Corporation 969

Source: Transport IntelligenceNote: 2010 Figures are estimated by Transport In-

telligence except DHL Supply Chain, CEVA, Kuehne+Nagel, CAT Logistics, DB Schenker Lo-gistics, Unipart Group Ltd, Ryder, Menlo World-wide Logistics and SNCF Geodis. Exchange rates

as at April 2011.

In Europe, however, the contract logistics market saw slower recovery than any other region, after suffering a deeper and longer recession. The total amount which retail-ers and manufacturers spent on contract logistics in 2010 is still below the pre-reces-sion level recorded in 2008. The region saw mixed recovery. In Germany, manufacturing orders and exports rebounded driven by de-mand from outside Europe; this resulted in strong growth. Whilst other markets, such as Greece, Portugal and Slovenia contracted, holding back growth in the region.

GermanyContract logistics markets in Western

Europe are often highly competitive. Not only is there a wealth of global LSPs but there is also no shortage of medium to large national players with good contract logistics capabilities. Indeed so strong is the compe-tition that the market is consolidating, with considerable merger and acquisition activity.

Germany has a distinct contract logistics market, as an economy with a very large auto-motive sector and large chemical industry. Con-tract logistics is more skewed towards industrial logistics than other major European economies. The country has a strong supply of specialist


Logistics

contract logistics providers, particularly in areas such as chemicals. However, with strong grocery retailers such as Metro and Lidl, Ger-man LSPs are certainly exposed to large scale grocery retailing.

Production in sectors such as auto-motive and chemicals is also dominated by large corporations and their approach towards purchasing logistics services has a big impact on the sector. For example, VW, which is one of the largest purchas-ers of contract logistics in Germany, likes to do business with medium-sized Ger-man providers as well as larger LSPs. This has been beneficial for a company such as Schnellecke Logistics which not only has a substantial business across Germany but is expanding outside Europe. Similarly com-panies such as Rudolf, BLG Logistics and Rhenus have grown into contract logistics on the back of business from the likes of BMW and Daimler. This is all the more re-markable as two of the world’s largest con-tract logistics providers, DP-DHL and DB Schenker, are headquartered in Germany.

Central & Eastern Europe The CEE contract logistics mar-

ket saw stronger growth than Western Europe, at 9.1% to EUR 1,150 mln. Al-though growth is still below the double digit rates seen in pre-recession years, the size of the market in 2010 was greater than in 2008.

Central Europe has been a dynamic market for larger contract logistics com-panies. Although the region suffered from poor infrastructure and patchy services in the decade after the fall of the Berlin Wall, since 2000 it has grown enormously. Indeed contract logistics probably occupies a relatively more im-portant role in Central Europe than it does in Western Europe.

Key to the condition of this sector in Central Europe has been the nature of economic growth in the region. This has been driven in great part by external investment by manufacturing companies looking to exploit the region’s competi-tive strengths. The automotive sector has been the leader in this trend, with Ger-man vehicle manufacturers the largest investors. The vehicle assembly plants that have been built are generally ‘green field’ sites with large capacity and a high-level of productivity. Consequently, the vehicle manufacturers generally look to larger LSPs to provide the level of logis-tics services demanded by such plants. Equally this applies to the component suppliers who have located in the region

to support the assembly plants.Over recent years increasingly the

consumer sector has been building a sub-stantial logistics infrastructure in most of the countries of the CEE. The economies of the region do vary considerably, how-ever. Poland accounts for around half of the economy of the region, whilst certain countries, such as Slovenia, have a GDP per head approaching that of Western Eu-rope. Other countries have much smaller economies, such as Romania and Bul-garia. Although the automotive sector in Poland is not quite as large a proportion of its economy as in the Czech Republic and Slovakia, it still has significant plants notably a GM and a Ford assembly plant.

manufacturers both in terms of ‘Complete Knocked Down’ kits and ‘Fully Built-up’ operations. However, retail activities re-main fragmented and underdeveloped al-though consumer durables and FMCG have a strong presence.

The global LSPs have a presence in Russia but their structure is quite spe-cific to the country. Contract logistics is generally quite integrated with transport provision, be that rail, sea or air or for-warding operations. A core aspect of the big LSPs’ Russia operations is a ‘problem solving’ capability. Areas such as customs and supply chain security may have eased over the past few years, but they are still significant problems for shippers.

Consequently, contract logistics pro-viders often have a more integrated re-lationship with customers than in other markets. The automotive market reflects this trend. By far the largest cluster of automotive assembly plants is around St. Petersburg. The reason that the city is attractive is that it is located next to Fin-land, which has efficient ports that can reliably and cost-effectively handle im-ports of components. The role of logis-tics providers is to manage this process.

Many global VMs in Russia either op-erate CKD plants or do not operate on a ‘just-in-time’ basis. Therefore, the role of the LSP is different, with more emphasis on the management of inbound transpor-tation. This is also seen in other locations in Russia. For example VW’s CKD plant in Kaluga, south west of Moscow uses a mix of DB Schenker Rail and Schenker Contract Logistics to manage its inbound component feed. There is similar provi-sion at the neighbouring Peugeot-Cit-roën/Mitsubishi joint venture which is supported by GEFCO and the Volvo truck plant which is supported by Volvo Logistics. Both Schenker’s and GEFCO’s operations in Russia illustrate that gener-al transport activities are more important in Russia than contract logistics with both companies heavily engaged in their plans for rail freight in the country as much as their contract logistics operations. �

John Manners-BellTransport Intelligence

The article is based on the Ti’s “Global Contract Logistics 2011” report. Headquartered in the UK, Transport Intelligence is a well established provider of expert research and analysis dedicated to the global logistics industry. Utilizing the expertise of professionals with many years of 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 logistics suppliers, consultancies and banks as well as many users of logistics services.

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

Unsurprisingly, German companies are major investors in the country and are disproportionately represented in Po-land’s contract logistics market. Poland’s successful economy is now triggering growth in areas such as retail. Transport infrastructure remains a problem.

RussiaRussia has enormous potential in the

area of contract logistics, yet not being realized due to a peculiarly lop-sided structure to the country’s economy. Oil and gas are massive sectors yet they are dominated by quasi-state owned entities that make business difficult.

The automotive sector has boomed over the past decade both in terms of production and consumption. Prior to the recession, which hit the country hard, Russia was the largest ‘European’ market. Production has reflected this with substantial and continu-ing investment by the major global vehicle

Phot

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Collector’s corner

Naming ceremony of Stena Spirit

S tena Spirit, a comprehensively modernized unit, replaced Stena Baltica, which departed Gdynia for the last time on 26th June 2011. Two

days later, at 7:30 am Stena Spirit called at the port for the first time. It was officially renamed on 1st of July by the Polish actress Anna Przybylska, during a colourful cer-emony at the ferry terminal.

Stena Spirit was built in Gdańsk, Poland, in 1988, and entered the Kiel-Gothenburg serv-ice as Stena Scandinavica. She went through refits in 1999 and 2007, and the last major one in Gothenburg this year. July 1, during Stena Line’s Open Day and a ship naming ceremony, more than 26,000 people visited her decks. According to Marek Kiersnowski, managing director of Stena Line Poland, the number of guests surpassed expectations of the organizers, who predicted 3-5,000 visitors. As he further stated, in Q1 2011, a couple of months after Stena Vision (former Stena Ger-manica, which also underwent a thorough conversion) was introduced to the line, pas-senger traffic increased by 30% and transport of passenger cars increased by 20%. “Most of the evening cruises, in terms of freight, are already booked. Gdynia-Karlskrona

Sixteen years have passed since Stena Line set sail of the Lion Queen on its first round trip from Karlskrona to the Port of Gdynia. The latter in late June of this year saw the launch of Stena Line’s rebuilt ferry Stena Scandinavica, which is now plying on this very route as Stena Spirit.

is one of these services of Stena, which has the largest growth, confirming the accuracy of the decision to increase the tonnage. This step will surely stimulate the internal com-petition as well, as both vessels, one having a Swedish crew, the other – Polish, now have an equal chance to compare their performances both in terms of passenger satisfaction and fi-nances.” Asked about the route’s development direction, Kiersnowski answered, “I think we should first think about how to respond to the demand for freight transport. We are prepared in terms of passenger traffic, so mastering

Events

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the growing freight traffic will be our main task over the next several years”.

Introduction of Stena Spirit on the route was preceded by the replacement of Fin-narrow, a ferry chartered from Finnlines, with Spirit’s twin sister, Stena Vision. Both vessels have been overhauled and modern-ized at the expense of SEK 250 mln (EUR 26.8 mln). The first ship transfer took place at the beginning of November 2010, af-ter Stena Line’s charter agreement with Finnlines came to an end. As a result of this two-phased operation, the carrying capac-ity of passengers doubled and the loading capacity on the Gdynia-Karlskrona route increased by 20%. Moreover, the 10-hour voyage has been spiced up with a little bit of cruising style – a spa, four restaurants and bars, as well as a disco for 400 peo-ple and seven conference rooms. �

Tab. 1. Stena Spirit’s main particulars:

Length 175.37 m

Width 30 m

Tonnage GT 39,178; 4,000 DWT

Draught 6.75 m

Cars/trucks 460/120

Pax 1,700

Number of cabins 493

Speed 22 knots

Loading capacity 2,200 m

Lena LorencPh

oto:

Ste

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oto:

Sten

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Collector’s corner

Collectibles – large and minor

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Denmark is the only country in the BSR – and maybe in Europe – which takes the question raised by the EU’s Green and Blue books on European maritime policy seriously: how to make shipping more visible?

The answer is very simple – display ships and other mari-time motifs everywhere. The other, maybe more sophis-ticated, method suggests provoking people to have an interest or hobby connected with shipping. The Royal

Danish Mint achieves both aims in one practice, namely it has issued a series of 20-krone coins devoted to ships and boats. Until now 10 coins have been released and a total of 10.5 mln pieces minted for ordi-nary circulation. It means that eve-ry adult Dane could have three or four coins with ship motifs in their wallet, or each child could collect all issued ships. On the other side of the coin, all ship-coins make up only 0.44% of 2.4 bln 20 kroner in circulation (it is the most popular coin) and 0.2% of the whole Dan-ish coinage.

But another phenomenon is worth noting – the Royal Mint, Post Danmark and other postal offices of the kingdom sometimes com-memorate maritime events simulta-neously. The first case was the sci-entific Expedition Galathea 3 which circumnavigated the world in 2006-2007 on board of the Royal Danish Navy frigate Vædderen. The coin depicting HMS Vædderen (the ram) inaugurated the series of ship-coins. The Danish post issued two stamps and a block with motifs from the expedition, but Post Greenland was the first with a stamp featuring Væd-deren, namely during research work, probably in the process of collecting

a core from the seabed (presented). The Royal Mint also reminded us of the first Galathea expedition, by re-issuing a copy of the Royal Danish

Geographical Society’s medal intro-duced in 1916. The medal depicts the corvette Galathea which circumnavi-gated the world during 1845-1847; it was the first Danish overseas scientific expedition which inspired the follow-ing undertakings in the 20th century: Galathea 2 (1950-1952) and Galathea 3 (2006-2007). The medal was attached to the 2007 coin set.

Recently, Royal Mint and Post Danmark met again on the occasion of

the 150th anniversary of the sidewheeler Hjejlen from Silkeborg, the oldest steam vessel in the world, still in commercial operation on inland lakes about 40 km west of Aarhus. Additionally, its original engine is the oldest working engine of its kind (the boiler was re-placed three times but the newest model is also coal-burning). Royal Mint issued its 10th coin with Hjejlen as a motif and the post office followed with a stamp.

Sadly, the small collectible items cannot show people behind the veteran vessel. The Hjejlen company, which is the same age as its old-est vessel, is not a common business organization. It is rather similar to a charity, because since 1969 its shareholders haven’t received any dividends. 60 out of 300 shares are owned by the Municipality of Silke-borg, the rest are dispersed among roughly 200 persons, meaning that most of them hold only one share. Such shares are similar to a mem-bership card of an association, in that case, collectors of antiquaries,

because the average age of Hje-jlen company’s fleet is 88 years old. Only one vessel – Mågen (the seagull) – is new and modern, and equipped with a lift for disabled people (built in 1996). The youngest vessel in the rest of the seven-vessel fleet is 63 years old; the average age of the six veterans – includ-

ing Hjejlen – just passed 100 years.When talking about collecting,

we usually think of a solitary activ-ity, closed within four corners of one’s home and lots of small items hidden away in drawers. Such col-lectibles, unfortunately, are seldom shown to a wider public. The fleet owned by Hjejlen company should also be seen as a collection, working for its upkeep serving other people with fun, which is a socialized man-ner of its usage. Preserving old ships, planes, cars, etc., is also another form of collecting. Even if you have only one such artifact, or if you belong to

a group of owners of such an item, you are a collector as well. A big one.�

Marek Błuś

Transport miscellany


The art of passing by

Shipowners publish postcards with photos of their ships usu-ally taken from the air – airlines actually do the same. Austrian Airlines started operating in April 1958 with four Vickers Viscounts as their first planes. A success-ful Model 837 of this plane (445 of them have been built) was the first one depicted in the colour postcard published by AUA. Even though the picture might be a retouched photomontage, the di-mensions of the cabin windows are accurate – 482 mm wide and 660 mm high(!). Imagine such a panoramic view, the noise of four turboprops, one bottle of whiskey and 40 hours in a recliner between London and Sydney…

This postcard was published in the good old days before the Øresund Bridge. The busy Helsingborg ferry harbour of the 1960s is filled with fer-ries of Scandinavian Ferry Lines, Sund- busserne and Danish State Railways (DSB). Each bygone operator is repre-sented by two ships (one ferry of DSB is partly obscured by buildings on the right-hand side of the picture). Has anyone ever heard of a collision in the depicted area close to the breakwaters?

Airlines’ postcards

70 years of Liberty ships

Cargo on two wheels

Bicycles are still used in transport, and not only in underdeveloped countries. Rolling fleets of many post services in Europe also include bicycles – they are very useful in suburban areas of low-density housing. The Swedish example depicted carries a 60-kilo payload. The question appears – is the ‘mail carrier’ in the picture illustrating a reflection on the lack of equal rights for women or an expression of the right to be free of heavy duty?Ph

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The trio of unique Baco-Liners (1, 2 and 3) plying between Western Europe and West Africa can be counted among the most interesting cargo ships in many respects. They established a separate category for themselves: barge/container carriers. These units can carry the largest barges among all ships clas-sified as LASH (lighter aboard ship), even full-size inland ves-sels. They use well-known flo-flo technology (flow in – flow out), but in a unique way: by two gates in the bow. And their nickname seems unusual – ‘Bacardi and Cola’…

Last Mohicans of ‘lighterisation’

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icińs

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ion

The year 1941 was rich in various events (too rich one could say…). On 27 September the first Liberty ship ever built – Patrick Henry – was launched and delivered three months later. Almost all of the 2,710 vessels were named after prominent and heroic Americans (the only exceptions were ships ordered by the UK). Names originated from this class emerged only after the war ended, as second hand, commercial ownership, i.e.: Liberty Bell, Libertas, Liberator, National Liberty, Valiant Freedom and Wolna Polska (Free Poland). The latest was ‘free’ for one year only – less or more coincidentally – the year 1956. She was built in 1943 as one of 62 Liberty tankers and christened George W. Kendall.


Who is who

ANNA ANDERSSONNew environmental director at CMP

Anna Anderson, who obtained an M.Sc. in engineering with an environmental focus, is going to be Copenhagen Malmö Port’s new full-time environmental director. Be-fore joining CMP she worked as an environ-mental engineer at the recycling firm Sysav. Anna will be responsible for CMP’s environ-mental activities, concerning not only the port’s internal issues, but also those related to customers, business partners, govern-ment agencies and certification bodies.

HELMUT EDERNew member of Kombiverkehr’s administrative board

Helmut Eder from LKW Walter has been elected as a new member of the adminis-trative board at the intermodal transport operator Kombiverkehr. Helmut Eder is an experienced logistics specialist, who has been on the board of LKW Walter since 2002 and is responsible for the compa-ny’s combined transport activities.

TOM NYLUNDManaging director at Hans Langh

Tom Nylund has been appointed manag-ing director of Industrial and Ship Clean-ing Services Hans Langh. Tom obtained his master’s degree in business sciences at Åbo Akademi in Turku and bonded his career with the detergent and packaging industry. He held numerous managing posts at Huhtamaki and also worked for Suomen Unilever, Futurestep Finland, Eckes-Granini and most recently as man-aging director of Satatuote.

JUAN RIVANew ECSA president

Juan Riva has been chosen president of ECSA for two years. At the same time Juan Riva is CEO of the companies belonging to the Suardiaz Group, focused on air, sea and land transport; a member of the board of directors for Creuers del Port de Barcelona and a member of the Spanish Confedera-tion of Employers’ Organizations board of transport. Previously, Juan Riva served as president of the Spanish Shipowners’ As-sociation between 2003-2009.

HANNU SYRJÄNENChairman of the board of directors at VR Group

Hannu Syrjänen, former president and CEO of Sanoma Corporation, has been appointed new chairman of the board at the Finnish transport company VR Group. Hannu Syrjänen gained his chief experi-ence in the demanding consumer busi-ness. His burning questions will be stabi-lizing the company’s operations as well as launching a broad assessment of VR’s strategy and operations, among others.

MICHAEL TÖRNFELDTYstad Port Logistics’ new COO

Michael Törnfeldt is the new chief operating officer at Ystad Port Logistics. He started his career as a fisherman, gaining experience in relations between ports and vessels. He also worked for TT-Line and most recently as Finnlines’ master onboard M/S Finneagle. Michael Törnfeldt in his new position will run the port’s operational activities, essen-tially its ferry service, conventional vessel handling, security/ISPS and will take care of customer contacts.

MICHEL SIRATCMA CGM’s new CFO

Michel Sirat has been appointed new chief financial officer of CMA CGM. Michel graduated from the Institut d’études Poli-tiques of Paris, the École Centrale of Paris and the École Nationale d’Administration. He began his career at the French Treas-ury Department, followed by a posting at the International Monetary Fund in the USA. Before joining CMA CGM he held several key positions at Suez Group.

TIMO SUISTIOSTX Finland’s new executive vice president and COO

Timo Suistio has been appointed the new executive vice president and chief operating officer at STX Finland and at the same time the new shipyard director at STX Rauma Shipyard. Timo Suistio has been working for STX Finland for 30 years, including 4 years as head of STX Rauma Shipyard. At his new posts he will take up the duties of managing sales, purchasing, design and production.

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BTJ 4/2011