» PUBLICATION 04-2 MOTORWAYS OF THE SEA:CONSULTATION PAPER INTRODUCTION ECSA is the trade Association representing the shipping industry from the European Union and Norway. European shipowners control about 40 % of the world merchant fleet and are active both in intra European transport and international transport as well as in global cross trades between the different countries. As mentioned in the comments to the White Paper, ECSA very much appreciates the philosophy of shifting transport from congested road transport to alternative modes such as rail, inland waterways and short sea shipping. ECSA has over the years been very active in the promotion of short sea shipping in an intermodal supply chain, which started in 1992 in the context of the Maritime Industries Forum. ECSA is pleased to note that the practical work done in this respect has resulted in an increase of short sea shipping at the same pace as road transport with a share versus other modes of more than 40 % of intra European transport. This progress is mainly due to: • High investments by shipowners in vessels, equipment and intermodal logistic systems • Improvements in efficiency taking into account the overall supply chain. • The ongoing work on bottlenecks particularly on documentary procedures and port services. • The establishment and the practical work of short sea promotion centres all over Europe. • The co-operation between industry and the EU Institutions particularly with the National Focal Points on short sea shipping and the Commission services. The practical work on the promotion of short sea shipping is going on based on a practical cooperation between the industry and the EU Institutions. COMMENTS ON THE PAPER AND ITS GENERAL APPROACH A commercial and practical approach essential When the term “Motorways of the Sea” was presented there was quite some confusion on what it actually meant. This became clear during the Workshop organised by the Commission in January 2003 where there were clearly different schools of thought. Most participants at the workshop felt that Motorways of the Sea should develop on a commercial basis by giving short sea shipping an attractive place in the supply chain. It was also stressed that many efficient multimodal short sea services are already available today that can be considered as Motorways of the Sea. Concern was expressed on artificial Government intervention such as drawing lines on a map outlining different port links and consequently excluding others. It is important to take into account that a Motorway of the Sea cannot be compared with motorways on the land. These are fixed routes which cannot be moved and are at the disposal of transport users. In maritime transport, including short sea shipping, the infrastructure is a variety of competing ports with modal and intermodal links covering in most cases the same markets. The route followed for sea transport is related to a variety of factors allowing a competitive service using the most efficient links in the logistic chain. Service patterns, including ports served, may change and are doing so regularly, in a process towards more efficiency and are also driven by competitive elements. Artificial creation of links and artificial concentration of cargoes would lead to inefficiency, congestion in handover points and more importantly on roads that the programme is supposed to relieve. Moreover, it is the experience of the shipping industry that in some cases a number of operators between specific markets can be more efficient than concentration on a single route. Therefore the focus on concentration should be reconsidered. In other words “Motorways of the Sea” are not the same “fixed links” as motorways on the land. We have a feel that this flexibility in shipping, giving it an advantageous edge in efficiency and competitiveness, is often overlooked. It is essential that these different characteristics of motorways of the sea compared to motorways on the land are taken into account in the further considerations on the concept. Caution with public service concepts Approaching Motorways of the Sea on the basis of a philosophy of public service concepts would be counterproductive for the promotion of short sea services. Indeed, public service concepts have in many industries resulted in inefficiency to the detriment of the transport user. Moreover taking this retrograde step would be in contradiction with the Lisbon 2000 policy to make of the EU the most efficient economy of the world. This would be unacceptable particularly taking into account that the New Commission has made of this economic target a priority. Intermodal Shipping services to remain a liberal business with free access ECSA appreciates that the EU Institutions actively support the efforts of the industry to maintain and enhance a free trading environment for intermodal shipping services on a global basis. This is fully in line with the Common Principles of Shipping Policy as agreed in OECD (principle 15). It should be avoided by all means that the EU itself endangers these principles by allocating markets, introducing restrictions to free access through state intervention and/or by distorting competition of services. Transparency essential Initiatives such as Marco Polo and Motorways of the Sea can contribute to the joint aim of the EU Institutions and the industry to promote alternative transport modes and intermodal transport. ECSA appreciates that the Commission recognised that there needs to be a clear position on aid granted under different schemes such as: TEN-T, Marco Polo, National aid, Regional aid, Cohesion funding, etc. Whereas cumulative funding on the same eligible costs is not allowed, one should also avoid that cumulative aid for different elements should not result in extreme funding taking the commercial risk element away together with aims to be efficient and cost effective. It is therefore essential that there is full transparency in respect of all aid schemes that are applicable on a specific project. Openness of information should make this possible. Taking into account the past experience with funding of operational costs of shipping services as well as the existing problems and bottlenecks in the maritime chain, the industry would prefer that funding would be focussed in the first instance on land based infrastructure and facilities only. As expressed in the replies to the under mentioned questions ECSA appreciates that the Commission has indicated the proper elements for project evaluation. We hope that the comments given to the individual questions will contribute to a smooth working procedure. REPLIES TO INDIVIDUAL QUESTIONS 1. Views on a tendering procedure mentioned in art. 12a(4), and suggestions on practical implications. Tendering procedures are part of a public service concept. As mentioned in the introduction public service concepts in a short sea logistic service should be the exception and be subject to extreme caution. If a public service concept would be necessary and have added value then the two options could be valid depending on the specificities of the project and the specific circumstances. In previous comments on TEN-T and in particular on Motorways of the Sea we stressed that a mapping of selected ports, excluding others, under the concept of Motorways of the Sea would have a counterproductive effect on efficiency, competition and on the promotion of short sea and intermodal transport. Therefore if there would be a tender after all, a call open to all ports in the area would be most appropriate. 2. Views on the assessment and selection criteria proposed in the paper. Point 23 ECSA appreciates that the Commission refers to recital 16 of the TEN-T Guidelines stating that support for the development of the motorways of the sea should be based on the same criteria as mentioned in the current Marco Polo programme under Regulation 1382/2003 (articles 5/6/7). The criteria mentioned therein should be strictly applied and transparency to arrive at this aim should be guaranteed. ECSA welcomes the philosophy of the Commission that viability and credibility of projects is a key factor in the selection procedure. However, there is a danger that this criterium will often be dealt with on a subjective basis. Transparency in the selection process could reduce the risks in this respect. In the context of viability it is also essential that sufficient private risk capital is involved in all projects. This to avoid that one ends up with inefficient public service concepts which are the opposite of what the EU is after in the context of the Lisbon 2000 policy. It is appreciated that a competition analysis will be made in order to avoid that cargoes are taken away from markets already served by existing private operators, by motorways of the sea benefiting from financial support. We have to reiterate again that transparency and communication for and communication with such existing operators is essential. It would also be helpful to have a proper description on criteria which determine the “Common Interest” factor. Point 26 We take it that what is meant is that the shipping services proposed, frequent and reliable, will use modern safety and security systems and environmentally friendly engines meeting all relevant EU legislation and international Conventions in force. The framework of the “Authorised Regular Shipping Service” of course refers to the use of the simplified customs procedures. Existing bottlenecks as brought forward by the industry (MIF) should also be dealt with in this context. Point 27 The views of the industry on the EILU are well known to the Commission by now. The industry fully supports the promotion of the use of pallet wide intermodal units which are stackable and exchangeable between different transport modes. The unit proposed by the Commission does not fulfil this aim. To arrive at this aim it is essential that such units are conform with internationally used norms notably ISO footprints. The promotion of existing equipment such as the 40 ft pallet wide container is appropriate in this respect. Such units should not be imposed but the market should develop the use of existing units. Point 32 It is appreciated that the Commission takes the dangers of a possible distortion of competition into account. In this context extreme caution is essential when considering support in depreciation of ships. We would rather prefer to stick to the principle to limit support to “duly justified capital costs” to land based infrastructure and facilities only which are to the benefit of all users and modes on a neutral basis. 3. Comments on the list of possible quality features of motorways of the sea. a) State Responsibility The use of the simplified procedure is fully supported. However solutions have to be found to the still existing bottlenecks as repeatedly brought forward by the industry e.g. maintaining the status when changing vessels (i.e. link the status to the company) and the problem of so called “infected vessels”. Allowing PECs (Pilot exemption Certificates) is a long standing request from the industry. Procedures to get such PECs should be relevant and proportional. The use of English as basic language should be accepted all over. We are missing a reference to the liberalisation of port services which remains a key element for the promotion of short sea services. We take it that the reference to the use of low sulphur marine fuel is taking into account the relevant existing legislation. b) Port Authorities and terminal operators As mentioned above, the liberalisation of port services is essential particularly for short sea shipping. The local conditions in the case of self-handling should of course be in line with EU legislation. c) Maritime service operators This will need further discussion within the industry, nevertheless we can give the following initial comments: - The 60/75 % requirement could be useful in order to assist in the efforts to have viable projects. However the forward estimates must specifically exclude traffic already being carried by sea between the markets concerned by other carriers. - Benchmarking systems: Question is which criteria will be followed and who will determine them, are we in se talking about a kind of ISO process? Moreover we feel that it is up to the market to decide and choose on quality services. - As far as low sulphur fuel is concerned same comments as mentioned above under point 26. 4. Concrete suggestions on the legal framework of Motorways of the Sea We would leave it to the market to find the most appropriate framework for Motorways of the Sea. On the basis of the framework as developed, the legal structure is to be assessed taking into account the specific service structure involved. Possibly clarification has to be sought versus existing EU legislation such as Competition Rules. 5.Comments on the paper and its general approach Would refer to the comments given in the introduction of this submission. Brussels, 29 september 2004