Operational Challenges to Port Interfaces in the Multi-modal Transport Chain (Maritime and Hinterland Connections)

2013

Table of contest

Introduction ...... 4 PART I EVALUATION OF THE EXISTING SITUATION ...... 5 1. Research methodology ...... 5 1.2 Setting the Criteria ...... 5 1.3 Selection of indicators ...... 11 2. Latvian ports ...... 21 2.1 Freeport of Riga ...... 22 2.2 Port of Liepaja ...... 33 2.3 Port of Ventspils ...... 38 3. Lithuanian ports ...... 43 3.2 Port of Klaip ėda ...... 44 4. Polish ports ...... 58 4.2 Port of Gdansk ...... 59 4.3 Port of Gdynia ...... 75 4.4 Port of Elbl ąg ...... 91 5. German ports ...... 94 5.2 Port of Sassnitz ...... 95 6. Danish ports ...... 104 6.2 Port of Køge ...... 105 7. Estonian ports ...... 109 7.2 Port of Tallinn ...... 110 8. Russian ports ...... 121 8.1 Port of St. Petersburg ...... 124 8.2 Port of Kaliningrad ...... 142 9. Overview of port performance ...... 151 9.1 Market trends and market structure indicators ...... 152 9.2 Socio-economic impact indicators ...... 157 9.3 Environmental performance indicators ...... 161 9.4 Logistic chain and operational performance indicators ...... 165 9.5 Governance indicators ...... 170 9.6 Summary ...... 173 10. SWOT analysis of AC ports ...... 176

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References ...... 181 PART II EXAMINATION OF GOOD PRACTICE EXAMPLES RELATED TO THE INTERMODAL CARGO TRANSPORTATION ...... 184 Methodology ...... 184 1. IT-system KIPIS ...... 186 2. Shuttle Train Viking ...... 189 3. Container block-train ZUBR ...... 195 4. Railport Scandinavia ...... 197 5. Baltic Rail in Port of Gdynia ...... 202 6. Muuga Industrial Park ...... 207 7. Container Transferium Rotterdam...... 211 8. Dry port Athus ...... 216 References ...... 219 Annexes ...... 221 PART III RECOMMENDATIONS FOR FURTHER DEVELOPMENT IN AMBER COAST PORTS ...... 229 Introduction ...... 229 Hub ports ...... 230 1. Recommendations based on analysis of the existing situation and investigation of the “good examples” ...... 231 1.1 First group ...... 233 1.2 Second group ...... 235 1.3 Third group ...... 238 1.4 Fourth group ...... 241 1.5 Recommendations for implementing good practice examples ...... 243 2. Recommendations based on intermodal cargo handling forecast for the period up to 2020 ...... 245 References ...... 248

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Introduction

The subject of the current study is “Operational Challenges to Port Interfaces in the Multi- modal Transport Chain (Maritime and Hinterland Connections)” which consists of analysis of the operational aspects in the ports in the field of intermodal cargo transportation by:

1. evaluation of the existing situation; 2. examination of good practice examples related to the intermodal cargo transportation; 3. recommendations for further development in Amber Coast ports to become powerful hubs for intermodal cargo handling.

The current study is concentrating on intermodal cargo transportation via Amber Coast ports. Intermodal cargo transportation is a multimodal transport of goods transported in one and the same intermodal transport unit by successive modes of transport without handling of the goods themselves when changing modes. Thus in general the subject of this study is operational aspects of transportation of containers, Ro-Ro units, swap-bodies etc. The study is focusing on all operations within the port that are directly related to maritime – land interface and intermodal cargo handling in transportation chain: vessel - terminal - mode of transportation.

The study is examining the Amber Coast ports – Ferryport Sassnitz, Elblag, Klaipeda, Riga, Ventspils, Køge, associated ACL Project partner port of Kaliningrad and other ports connected to the Amber Coast such as Tallinn, Liepaja, Gdansk, Gdynia, and St. Petersburg.

Figure 1. Amber Coast ports. 4

PART I EVALUATION OF THE EXISTING SITUATION

1. Research methodology

The current study analyses of operational aspects in the ports in the field of intermodal cargo transportation. In order to evaluate the existing situation in Amber Coast ports, several research methods were used. The first step in evaluating of the existing situation was setting the criteria and creating indicators for assessing the ports operations concerning intermodal connections. The main method for gathering the information about the Amber Coast ports was developing WEB based questionnaires to the ports and terminals to get up to date information. In addition, web-based materials and previously compiled studies were used.

1.2 Setting the Criteria

The aim of aforementioned process was to select a set of criteria for the assessment of port services offered for intermodal cargo transportation, as well as its effectiveness. There are several different approaches and criteria that are used for the assessment of port and terminal operations concerning intermodal connections. Most of the information about port performance indicator is based on the study of ESPO in 2010.

1.2.1 Performance Indicators 1

Port performance measurement is today of great importance for the whole port community, i.e. decision-makers, port authorities, users, service providers, port-cities and linked communities. Performance indicators quantify and simplify information for decision-makers and other stakeholders to assess how activities and operations affect the direction and magnitude of change in terms of social economic, governance and environmental conditions.

There are three types of performance measures:

1. Key Result Indicators (KRIs) that inform about how something has been done in a perspective; 2. Performance indicators (PIs) that tell what to do; 3. Key Performance Indicators (KPIs) that inform what to do to increase performance.

KRIs provide a clear picture of whether something is working in the right direction but do not tell what to do to improve the results of the organization. KRIs cover a longer period of time than KPIs. KPIs represent a set of measures focusing on those aspects of organizational performance that are the most critical for the current and future success of the organization. KPIs are providing information about the necessary actions that need to take place and they should be monitored constantly on short period of times.

1 ESPO 2010 5

The KPI indicators can be divided into five categories:

1. Market trends and market structure indicators; 2. Socio-economic indicators; 3. Environmental performance indicators; 4. Logistic chain and operational performance indicators; 5. Governance indicators.

The following describes each indicator in terms of port performance in intermodal cargo transportation, as well as its effectiveness. Not all existing indicators are selected, we use limited selected indicator set to carry out the current study.

1.2.2 Market trends and market structure indicators 2

Ports are confronted with changing economic and logistics systems, extensive business networks and complex logistics systems. The logistics environment creates a high degree of uncertainty and thus a need for indicators that depict market situations and trends. The identification and evaluation of indicators related to the market trends in the port environment and market structures in the port industry contributes to a better understanding of the dynamics in port industry.

Market trends and structure indicators are categorized by the nature of market segments in port industry:

• Containers: this includes all containerized cargo in ports; • Roll-on roll-off traffic: this includes seaborne vehicle trade, short sea/ferries, short sea/unaccompanied freight transport (trailers without truck) and deep-sea/liner trades with RoRo-facilities; • Dry bulk: this cargo segment can be further sub-divided in major bulks (iron ore, coal, grains, bauxite/alumina and rock phosphate) and minor bulks (minerals, fertilizers, etc.); • Liquid bulk: this includes crude oil, but also oil products and other liquid products; • Conventional general cargo: this refers to cargo that is normally packed, bundled or unitized but which is not stowed in containers. Examples of break bulk packaging techniques include (big) bags, bales, cardboard boxes, cases, casks, crates, drums or barrels which can be stowed on pallets or skids.

The current study focuses on intermodal cargo transportation, which means that from aforementioned categorization the study is examining containers and Ro-Ro traffic.

The indicators on market structure in ports would allow quantifying the integration dynamics (both vertical and horizontal) in the port industry and related industries. Given the increased network focus of port-related companies, such insights add to insights on port-centric market trends. In addition, the categorization the market trends and structure indicators at different geographical scales or geographical markets:

• The European port system as a whole; • Regional port systems;

2 ESPO 2010 6

• Multi-port gateway regions; • Individual ports.

The current study is dealing with regional port system in the Amber Coast. Also, individual ports in the Amber Coast are studied in order to find the overall effectiveness of the region.

1.2.3 Socio-economic indicators 3

Socio-economic indicators are very important to justify and show the economic contribution of port development to local communities as well as different levels of government. Port performance in terms of creation of employment and value added are important indicators to convince stakeholders of the necessity of port development and operations in their region or country.

There exists a great diversity in definitions of socio-economic developments, terminology as well applied methodology to calculate impacts. Indicators used for assessing ports socio- economic situation can be distinguished in two categories: expressed in absolute figures and expressed in relative terms.

The following are the basic socio-economic indicators, expressed in absolute figures:

• Gross value added; • Employment; • Fiscal Revenue; • Investment; • Trade volumes (in euro).

Socio-economic indicators, expressed in relative terms:

• Value added per tonne; • Value added per FTE; • Value added per unit of land; • Employment per unit of land; • Value added per invested euro by the public sector.

Technological (e.g., containerization and intermodal solutions) and spatial evolutions have changed the way port activities are organized on a regional level. More recently, new insights and concepts have been developed showing the importance of the regional and hinterland perspective in terms of socio-economic development.

1.2.4 Environmental performance indicators 4

Port operations and activities may impact on air, water, soil and sediment of the terrestrial and marine environment. As environmental awareness is increasing throughout the society, effective environmental management is essential. The growth and impact of environmental directives and associated legislation is increasing while renewable energy and carbon footprint are becoming issues of priority for ports.

3 ESPO 2010 4 Ibid. 7

Environmental performance indicators are fundamental to tracking performance of an organization’s progress in attaining objectives and targets. An environmental objective is an overall environmental goal, arising from the environmental policy, that an organization sets itself to achieve, and which is quantified where practicable.

The most appropriate environmental performance indicators in terms of:

• Environmental Performance Indicators (EPIs) both in operational and management level resulting into: o Operational Performance Indicators (OPIs) – e.g. in the case of ‘waste’, quantity of waste per year, total waste for disposal, etc. o Management Performance Indicators (MPIs) – e.g. number of targets achieved, number of employees trained, etc • Environmental Conditional Indicators (ECIs) – (e.g. dissolved oxygen, concentration of specific contaminant).

Each port is unique in terms of its geographical setting, activity profile and socio-economic setting and yet that the environmental issues are ubiquitous though they may impact to varying degrees of significance and effect.

1.2.5 Logistic chain and operational performance indicators 5

Ports operational performance is traditionally placed at the core of ports competitiveness. Largely determining operations duration and quality, the entire port community is highly interested on operations efficiency and effectiveness.

At the EU port level, there is no standard system of indicators related to logistic chain and operational performance. The main logistic chain and operational performance indicators are presented in the following and they are divided into four groups:

• Logistics Performance Index o Efficiency of the clearance process o Quality of trade and transport related infrastructure o Ease of arranging competitively priced shipments o Competence and quality of logistics services o Ability to track and trace consignments o Timeliness of shipments in reaching destination within the scheduled or expected delivery time. • Liner Shipping Connectivity o Deployment of container ships o Deployment of container carrying capacity (TEU) o Deployment of container ships per capita o Deployment of container carrying capacity per capita o Number of liner shipping companies o Average vessel sizes o Maximum vessel sizes o Vessels per liner shipping company • Global Competitiveness

5 ESPO 2010 8

o Overall quality of infrastructure o Quality of roads o Quality of railroad infrastructure o Quality of port infrastructure o Available seat kilometres • Business o Documents required to export and import o Time required to export and import o Cost required to export and import

In addition, there are three groups of indicators which show the different possibilities to evaluate ports. The first one is the connectivity indicator, which is defined as the quality of a connection for moving freight between two or more points, is a valuable measure both for internal use and competitive use. It is possible to measure the quality of connections of ports that are located in same country and/or foreign countries. The connectivity indicator can be used as a measure of accessibility of ports, their infrastructure development, the hinterland connections, thus the quality of service provided to customers. The connectivity in port operational performance indicators is comprised by the following variables:

• Number of carriers that provide direct services between two countries. • Total capacity of vessels deployed on direct services between two countries • Number of vessels deployed on direct services between two countries • Size of the largest vessel that is deployed on direct services between two countries • Total number of shipping possibilities between the ports in country and the ports in country • Number of direct services between two countries • Number of liner shipping companies • Overall quality of infrastructure • Quality of port infrastructure • Quality of railroad infrastructure • Quality of trade and transport related infrastructure • Ease of arranging competitively priced shipments • Deployment of container carrying capacity (TEU) • Maximum and average vessel sizes

The second one is the on-time performance indicator will help to measure the deviations from known average shipping time between nodes. This characteristic will help to assess the operational performance of ports and trace the internal operational processes. At the same time it can be used as comparative measure. Under the on-time performance category in the logistic chain and operational performance, the following indicators may be found:

• Timeliness of shipments in reaching destination within the scheduled or expected delivery time. • Available seat kilometres • Competence and quality of logistics services • Quality of trade and transport related infrastructure • Maximum and average vessel sizes • Deployment of container ships • Ability to track and trace consignments 9

Third one is the ease of transactions is a measure of how easy it is to complete administrative procedures at ports to be able to proceed with cargo shipment. This set of indexes is important for policy-making purposes, as they can reflect the complexity of current administrative procedures. The “easiness” of getting customs clearance for cargo is a relevant characteristic of port operations efficiency. Under the ease of transactions category in the logistic chain and operational performance, the following indicators may be found:

• Documents required to export and import • Time and cost required to export and import • Efficiency of the clearance process • Competence and quality of logistics services • License to operate indicators for cargo transfer product • Ability to track and trace consignments

The port productivity can be evaluated by using the following indicators:

• Quay productivity: Containers or cargo tones /meter / year • Terminal Area productivity: Containers or cargo tones / m 2 / year • Storage Area productivity: Containers or cargo tones / m 2 / year • Crane utilization: Containers or cargo tones / year (and Percentage of the nominal output)

Ships visiting the ports can be evaluated by using ships outputs:

• Tons per ship per productive hours • Tons per ship per berth hours • Tons per ship per port hours

1.2.6 Governance indicators 6

Port governance issues have become central to the seaports. The changing economic environment produced by the globalization of production and distribution, changing forms of cargo transportation, technological breakthroughs, and many more issues, ended a long period of stable port governance models in most countries.

Governance indicators are regularly used in a number of other transactions such as: civil society, corruption, democracy, e-governance, human rights, justice, public administration and many more. The development of port governance related performance indicators is an innovative task characterized by complexity and difficulty. There can be at least five different ways to judge the efficacy of governance indicators: relation with particular institutions, relation with outcomes, replicability and transparency, quality and accuracy of indicators and data coverage.

The governance indicators are mostly the following:

• Number of services providers: Applied for different types of services and involving an understanding of the extent that public and private entities are involved.

6 ESPO 2010 10

• Employees: involving a monitoring of the levels that these refer to the management and non-management related employees. • Ownership/management status of the port: identification of the legal bodies, (operating and non-operating) functions and jurisdictions of the PA. • PAs investments and relations with other seaports/dry ports/inland ports. • Strategic objectives of the port authority. • Corporate structures and accountability issues.

These governance indicators also include broader issues, like

• Information systems indicators: aiming to recognise the extent and level of efficient exchange and coordination of information between the members of the port community. • Customs related indicators: duration of customs clearance, options for customs clearance etc. • Safety and security related indicators. • Infrastructure and superstructure indicators: which recognize core aspects of the port, navigational related infrastructures and superstructure equipment provided.

1.3 Selection of indicators

The current study does not use all of the above mentioned indicators. In order to select the appropriate indicators several different aspects should take into account. The number of indicators used should be limited and has to be highly correlated with the aim of the study. Indicators should also be highly and naturally linked with critical success factors and they have to be empirically tested that they causally relate with actual industry results.

The selection process of appropriate indicators for the current study comprises several steps. Figure 1 present the different stages for selecting indicators for the study. The first stage was identifying theoretical indicators which are usually up to 200. The theoretical indicators are defined as all indicators that could help to evaluate the effectiveness of the ports but for which the necessary information can be not available or incomplete. The second stage of the selection process was selecting practical indicator from the theoretical ones. The practical indicators are defined as indicators that could help to evaluate the effectiveness of the ports and for which the necessary information is available and accessible and they are usually approximately 100. The third step in selecting appropriate indicators was selecting indicators that are suitable for the research. The final step in selecting indicators was selecting the indicators that could fulfil the objectives of the current study.

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Limited set of indicators used in this study (26)

Figure 2. Selection process. All selected indicators per category are presented in table 1. The table shows the main five categories and a number of subcategories which together constitute together to indexes which can be used to assess the effectiveness of the ports. These indicators can generate a clear picture of the operational logistic performance of the ports.

Table 1. List of indicators that will be used in the current study.

1. Maritime traffic 2. Vessel Traffic

I Market trends and market 3. Port traffic indicators structure indicators 4. Container dependency 5. Market shares 6. Turnover trend

II Socio-economic impact 7. Investments indicators 8. Port handling automated systems and technology

III Environmental performance 9. Existence of environmental programme indicators 10. Readiness for coming EU regulations 11. Maritime connectivity 12. Liner shipping connectivity 13. Road connectivity IV Logistic chain and 14. Rail connectivity operational performance indicators 15. Inland waterways connectivity 16. Port internal connectivity 17. Mean-time of clearance 18. Availability of Port Community Systems 12

19. Time effectiveness 20. Cost effectiveness 21. Logistics Performance Index 22. Productivity - Utilization Measures 23. Infrastructure 24. Equipment and technology 25. Specific problems and bottlenecks 26. Port authority investments V Governance indicators 27. Port developments

The following describes briefly every group of indicator and aims to give justification why these particular indicators were selected to the current study.

1.3.1 Selection of market trends and market structure indicators 7

Market trends and market structure indicators consist of six different sub indicators- maritime traffic, vessel traffic, port traffic indicators, container dependency, modal split, market shares. All these indicators provide an overview of the current situation in ports concerning the market trends and market structure. The aim of these indicators is to analyse the ports position in the Baltic Sea region and Amber Coast region.

The indicator ‘maritime traffic’ analyzes the seaborne traffic of the port by calculating the volume of the containers that is handled at the sea interface area of the port over a stated period of time. ‘Liner shipping connectivity’ indicates how well a port is connected to global shipping networks. ‘Vessel traffic’ analyzes the vessels at the port over a stated period of time. ‘Port traffic indicators’ are related to port throughput figures. A point of special attention relates to the comparability of traffic figures among ports. The possibilities of presenting indicators for port traffic distribution over the foreland and hinterland will also be evaluated.

The indicator ‘container dependency’ aims at studying how strongly a port has embraced containerization and how this is evolving in time by showing the share of containers in the maritime related import and export flows of total port cargo. ‘Modal split’ measures the balance between different transport modes in total transport in the hinterland port interface. Its aim is to examine the volume of cargo transported per transport mode to/from the port. ‘Market shares’ indicator shows the proportion of the total available market or market segment that is being served by a particular port over a stated period of time. This indicator can be expressed as the ratio of the freight tonnage of one commodity handled in a small region to the freight tonnage of one commodity handled in a bigger region.

7 ESPO 2010 13

1.3.2 Selection of socio-economic indicators 8

The socio-economic indicators are not directly related to the main of the research and the selection brought out two basic indicators that show socio-economic situation of the ports and also can help to evaluate the efficiency of the ports.

The first socio-economic indicator is ‘investments’, which describes the total investments by the port within the port area. Can be unbundled on a sector level (e.g. maritime versus non- maritime; cargo handling, shipping, logistics). This indicator is mainly measured per year. This parameter does not measure the port’s present socio-economic importance. It acts mainly as a driver of the port’s future socio-economic situation. The second indicator in this group is ‘port handling automated systems and technology’. The aim of this indicator is to analyze the extent of processes that are automated in port.

Both these indicators help to evaluate the efficiency of the ports from the socio-economic point of view.

1.3.3 Selection of environmental performance indicators 9

The environmental performance indicators are also not directly related to the main of the research, but as the environmental issues have emerged and became more relevant in recent years, the current study is also focusing briefly in environmental subject. The selection brought out two main environmental indicators- the existence of environmental programme in the port and the readiness for coming regulations.

The ‘existence of environmental programme’ describes the processes and activities that need to take place to characterize and monitor the quality of the environment. Carrying out an environmental programmes will allow to the port authority establish the current status of an environment and establish trends in environmental parameters. The ‘readiness for coming EU regulations’ describes the port development plans and investments in order to face EU directives concerning SO X, NO X and CO 2. These two environmental performance indicators are sufficient in terms of the current study.

1.3.4 Selection of logistic chain and operational performance indicators 10

The logistic chain and operational performance indicators are the most important indicators in this study. These indicators show the port overall operational performance and evaluate the port efficiency in logistic chain. Logistic chain and operational performance indicators consist of fourteen sub indicators which evaluate the efficiency of the ports.

The indicator ‘connectivity’ is divided into five parts- maritime, road, rail, inland waterways and port internal connectivity. All ‘connectivity’ indicators express the quantity of different connections (maritime, road, rail, inland waterways and internal). The general purpose of these indicators is to provide an overview of the current situation of different connectivity to port.

8 ESPO 2010 9 Ibid. 10 Ibid. 14

The indicator ‘mean-time of clearance’ general purpose is to analyze the impact of procedures (mainly customs) on the performance of the logistics chain and it can be evaluated by time required for the clearance. ‘Availability of port community systems’ defines as availability of a system to exchange data to enhance the efficiency of port processes. The purpose of this is to assess whether or not the ´port product´, including PA, pilots, towage, terminal, etc. becomes more efficient. The general purpose of indicators ‘time and cost effectiveness’ is to assess the time and cost effectiveness in port. The time effectiveness consist of turnaround time, dwell time for containers, dwell time for Ro-Ro and dwell time for ships.

All indicators of logistic chain and operational performance are very important in order to achieve the main aim of the study.

1.3.5 Selection of governance indicators 11

The governance indicators consist of two sub indicators- port authority investment and port developments. The indicator ‘port authority investment’ measures the rate of increase of a Port Authority’s investments over time. ‘Port developments’ indicator shows the major developments within the port in superstructure, in investments, in IT solutions, in organisational and administrative solutions. It also uses the port plans for further expansion. The general purpose of this indicator is to assess the port developments and evaluate port plans for further expansion.

These indicators help to evaluate the efficiency of the ports while the investments and development determine a major part of the effectiveness of the port.

1.3.6 Calculation of indicators

Each indicator requires different calculations formulas. These formulas contain different calculations methods. All calculations are made with data received from questionnaires, interviews and publically available sources.

Following are example of calculations for some indicators.

Container dependency (CD):

CD= Maritime Traffic (MT):

where,

• xi(t) = volume of intermodal cargo i handled per commodity at the seaside in period t • n=number of different categories of intermodal cargo handled at the port

11 ESPO 2010 15

All results are scaled to be in the range between 0-5 levels.

Following is presented a table that describes all indicators and shows the main data that are included to calculations.

Table 2. Detailed overview of indicators 12 .

I MARKET TRENDS AND MARKET STRUCTURE INDICATORS

Name Maritime Traffic

Definition Intermodal cargo handled at the sea interface area of the port over a stated period of time

Short description Analyzes the seaborne traffic of the port by calculating the volume of the containers and Ro-Ro cargo that is handled at the sea interface area of the port over a stated period of time.

Name Vessel Traffic

Definition Number of ships visited the port.

Short description Analyzes vessel traffic at the port over a stated period of time.

Name Port traffic

Definition Indicators relates to port throughput figures.

Short description A point of special attention relates to the comparability of traffic figures among ports. The possibilities of presenting indicators for port traffic distribution over the foreland and hinterland will also be evaluated, both in absolute figures and using measures such as orientation indices.

Name Container dependency

Definition The ratio between the containerized and total maritime traffic of the port

Short description Aims at studying how strongly a port has embraced containerization and how this is evolving in time by showing the share of containers in the maritime related import and export flows of total port cargo.

Name Market shares

Definition The proportion of the total available market or market segment that is being served by a particular port (or range of ports) over a stated period of time.

Short description This indicator can be expressed as the ratio of the freight tonnage of one commodity handled in a small region to the freight tonnage of one commodity handled in a bigger region.

Name Turnover trend

12 ESPO 2010 16

Definition Growth in total cargo turnover. Short description Analysis of growth in total cargo turnover of port.

II SOCIO-ECONOMIC INDICATORS

Name Investments

Definition The annual amount of obtained tangible fixed assets (including produced fixed assets) in a given period.

Short description Describes the total investments by the port within the port area. It acts mainly as a driver of the port’s future socio-economic development.

Name Port handling automated systems and technology

Definition The extent of processes that are automated in port.

Short description The general purpose is to assess the extent of automated processes in the port.

III ENVIRONMENTAL PERFORMANCE INDICATORS

Name Existence of environmental programme

Definition Environmental monitoring system monitors the quality of the port environment, assess the situation and assist to take necessary measures.

Short description Carrying out an environmental monitoring will allow to the port authority establish the current status of an environment and establish trends in environmental parameters.

Name Readiness for coming regulations

Definition Elaborates development plans and investments in order to face EU directives SO X, NO X, CO 2.

Short description Shore electricity, scrubbers sludge, diesel oil supply, plans of investments.

IV LOGISTIC CHAIN AND OPERATIONAL PERFORMANCE INDICATORS

Name Maritime connectivity

Definition The connectivity of a port with container services to overseas destinations, based on frequency, transit time and competing liner shipping companies.

Short description This indicator expresses how well port connects shippers to markets overseas. The general purpose is to provide an overview of the current situation of maritime connectivity to port.

Name Liner Shipping Connectivity

Definition The connectivity of a port which analyses the port shipping lines.

17

Short description This indicator indicates how well a port is connected to global shipping networks.

Name Road connectivity

Definition The connectivity of a port with road container services to hinterland destinations based on competing terminal operating companies.

Short description This indicator expresses the quantity of road connections. The general purpose is to provide an overview of the current situation of road connectivity to port.

Name Rail connectivity

Definition The connectivity of a port with rail container services to hinterland destinations based on competing terminal operating companies.

Short description This indicator expresses the quantity of rail connections. The general purpose is to provide an overview of the current situation of rail connectivity to port.

Name Inland waterways connectivity

Definition The connectivity of a port with inland waterways container services to hinterland destinations based on competing terminal operating companies.

Short description This indicator expresses the quantity of inland waterways connections. The general purpose is to provide an overview of the current situation of inland waterways connectivity to port.

Name Port internal connectivity

Definition The connectivity of a port with internal container services to hinterland destinations based on competing terminal operating companies.

Short description This indicator expresses the quantity of internal connections. The general purpose is to provide an overview of the current situation of internal connectivity to port.

Name Mean-time of clearance

Definition The time required for clearance

Short description The general purpose is to analyze the impact of procedures on the performance of the logistics chain.

Name Availability of Port Community Systems

Definition The availability of a system to exchange data to enhance the efficiency of port processes.

Short description The general purpose is to assess whether or not the ´port product´, including PA, pilots, towage, terminal, etc. becomes more efficient.

Name Time effectiveness

18

Definition Turnaround time, Dwell time for containers, Dwell time for Ro-Ro, Dwell time for ships

Short description The general purpose is to assess the time effectiveness in port.

Name Cost effectiveness

Definition Cost of transported container for all transportation modes (average transport cost of unit per mile). Fuel costs share in transport cost of container per mile and basic fuel price.

Short description The general purpose is to assess the cost effectiveness in port.

Name Logistics Performance Index

Definition Efficiency of the clearance process. Quality of trade and transport related infrastructure. Ability to track and trace consignments. Timeliness of shipments in reaching destination within the scheduled or expected delivery time.

Short description The general purpose is to assess the overall logistic performance of the port.

Name Productivity - Utilization Measures

Definition Quay productivity: Containers or cargo tones /meter / year. Terminal Area productivity: Containers or cargo tones / m 2 / year. Storage Area productivity: Containers or cargo tones / m2 / year. Crane utilization: Containers or cargo tones / year (and Percentage of the nominal output). Vehicle utilization time (road and rail)

Short description The general purpose is to evaluate the port’s productivity and utilization measures.

Name Infrastructure

Definition Open storage area (m 2), warehouses (m 2). Efficiency of using terminal infrastructure.

Short description The general purpose is to assess the overall efficiency of the usage of port infrastructure.

Name Equipment and technology

Definition Number and type of handling equipment. Efficiency of using handling equipment. Technology used in terminal (ships, trucks, railway).

Short description The general purpose is to assess the equipment and technology used in port and terminals.

Name Specific problems and bottlenecks

Definition Identification of specific problems or bottlenecks. Restrictions which are causing unnecessary problems.

Short description The general purpose is to assess the main specific problems or bottlenecks 19

which are influencing the operational work of the port.

V GOVERNANCE INDICATORS

Name Port authority investment

Definition The indicator measures the increase of a Port Authority’s investments over time.

Short description The level of investments is relative – and is measured in relation to the annual turnover of the Port Authority.

Name Port developments

Definition Major developments within the port in superstructure, in investments, in IT solutions, in organisational and administrative solutions. Plans for further expansion.

Short description The general purpose is to assess the port developments and evaluate port plans for further expansion.

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2. Latvian ports

The ports in Latvia operate pursuant to the port act of 1994 that makes them public institutions. Port management boards are non-profit institutions that have the land-lord status: they manage infrastructure while private companies deal with operations. Moreover, the activities of the Port of Riga are provided for by the Act on the Free Port of Riga of 2001, while of the Port of Ventspils, by the Act on the Free Port of Ventspils of 1997 13 .

The Free Port of Riga Authority was formed by the Municipal Council of Riga and it is supervised by the government of Latvia. The Supervisory Board of the Free Port of Riga Authority is composed of city representatives (4 members) and the representatives of the ministries of transport, finance, environment and economy (4 members as well) 14 .

Figure 3. LPI of Latvia according to International Scorecard 15 .

13 TransBaltic 2012. 14 Ibid. 15 World Bank Group 2013. 21

Figure 4. Changes in LPI of Latvia in 2007-2012 according to International Scorecard 16 .

2.1 Freeport of Riga

2.1.1 General information 17

Freeport of Riga is a significant part of global and regional cargo supply chains and passenger traffic network in the Baltic Sea region. An integral part of the city, the Port recognises its social and environmental responsibilities and makes a strong contribution to the growth of Latvia’s economy. The Port is driven by high performance standards and continuously strives to improve both the quality and breadth of services to clients.

Freeport of Riga is located in the southern part of the Gulf of Riga of the Baltic Sea and on the adjacent land that geo-morphologically is situated on Piej ūras plain. The terrain of the overland territory of the Freeport is rather flat, with the slope to the Daugava bank side, land surface absolute marks vary from 0.1 – 0.3 m up to 2.6 m above sea level. The territory of the Freeport of Riga covers 6,348 ha, that consists of 4,386 ha of water area and outer roads and of 1,962 ha of land area on both side of the river Daugava near its estuary.

Freeport of Riga lies on both banks of the River Daugava covering 15 kilometres in length. Up to 80% of the Freeport of Riga cargo turnover is made up of transit cargoes forwarded to or received from the CIS. 32 stevedore companies and 35 shipping agents successfully operate at the Freeport of Riga. Main types of cargo handled at the Freeport of Riga are containers, various metals, timber, coal, mineral fertilizers, chemical cargoes, oil and food products.

The Freeport of Riga is a multifunctional port; it can handle all types of cargo from various regions. The Port of Riga is an important hub of freight transportation corridor that

16 World Bank Group 2013. 17 Freeport of Riga 2013. 22

links goods’ production and consumption markets in the EU and the CIS countries. The Port of Riga is strategically connected to the TEN-T road and rail network, as well as to the European Motorways of the Sea, providing efficient use of different modes of freight within transport chain as well as cost optimization. Shorter distance advantages of Riga compared to the neighbouring ports ensure the best conditions for development of economic relations. Latvian border with Russia and Belarus is a major factor for development of sustainable and mutually beneficial business relations.

Figure 5. Map of Port of Riga.

Table 3. Port characteristics of Port of Riga 18 .

Characteristic Total territory of the port 6 348 ha Land of the port 1 962 ha Port water area 4 386 ha Total length of berths 13.8 km Maximum permissible vessel 14.7 m draft by the berth Warehouses 180 000 m 2 Open storage 1 797 000 m 2 Refrigerated cargo 31 750 t In 2012, the total turnover of the Freeport of Riga was 36.05 million tons. The total turnover has been increasing throughout the period (2007-2012) and the share of intermodal cargo has grown within. In 2012, the intermodal cargo formed 12% of total cargo. The Freeport of Riga handled 362 297 TEU of containers and 586 000 tons of Ro-Ro cargo in 2012. The containers

18 Freeport of Riga 2013. 23

handled by the port have increased every year. Compared to 2007, the numbers of containers have grown by 1.7 times. Figure 6 presents the total cargo turnover of Freeport of Riga in 2007-2012.

Figure 6. Freeport of Riga total cargo turnover in 2007-2012 19 .

2.1.2 Connections 20

Sea connections

The regular shipping line status at the port of Riga is granted to container, Ro-Ro and passenger carriers to attract cargo and passenger flows to the port. In 2011 seven regular container shipping lines operated at the Freeport of Riga, ensuring 452 vessel calls and the freight volume of more than 304 273 TEU. In 2011 a regular passenger line – Tallink – started its operation at the Freeport. Freeport of Riga has no direct calls from ocean lines.

Table 4. Sea connections in Freeport of Riga.

Name Route Line representative Container-ships Riga – Teesport – Rotterdam – Aarhus – Helsinki „Containerships” Ltd – St.Petersburg – Klaipeda – Sodertalje – Sheerness –Gent – Hamburg French Baltic Line Hamburg – Bremerhaven– Riga– Klaipeda – „Nurminen Maritime (CMA-CGM) Hamburg Latvia” Ltd UniFeeder Hamburg – Bremerhaven – Riga – Klaipeda „Arijus Logistics” Ltd Container Service Mann Lines Riga – Rotterdam – Bremerhaven – Kaliningrad – „CF&S” Ltd Multimodal Gdynia – Riga Mediterranean Antwerpen – Bremerhaven – Riga – Tallinn „MSC Latvia” Ltd Shipping Company

19 Freeport of Riga 2013. 20 Ibid. 24

(MSC) Team Lines Hamburg – Klaipeda – Riga – Hamburg „Nurminen Maritime Latvia” Ltd AP Moller- Bremerhaven - Klaipeda - Riga - Aarhus - „Maersk Latvija” Ltd Maersk/Seago Line Bremerhaven; Gdynia - Tallin - Riga - Klaipeda - Gdynia Tallink Riga – Stockholm JSC Tallink Latvija

Figure 7. Main container connections of Freeport of Riga 21 .

Figure 8. Main Ro-Ro and ferry connections of Freeport of Riga 22 .

21 Baltic Transport Maps. 22 Ibid. 25

Road and railway connections

In compliance with the new geopolitical situation in the EU, 5 trans-national directions of transport corridor development are adopted in Europe: Motorways of the Sea (connecting the Baltic Sea, the Atlantic Ocean, the Mediterranean and the Black Sea, as well as the countries of those seas and through the Suez Canal going further to the Red Sea and the Pacific Ocean), Nordic Axis (linking northern part of the EU with Norway in the North and with Belarus and Russia in the east), Central Axis (connecting the central part of the EU with Ukraine and going further to the Black Sea), South-eastern Axis (linking the EU with the Balkans and Turkey and going further on to the Southern Caucasus and the Caspian Sea, as well as to the Middle East up to Egypt and the Red Sea), and South-western Axis (linking the south-western part of the EU with Morocco and going to Egypt and other African states in further perspective).

The Port of Riga is directly connected to development of the Motorways of the Sea as it operates as a transport hub providing multi-modality in cargo transportation chains with the aim to ensure efficient use of resources in sustainable perspective. In the framework of the Motorways of the Sea the link to the Motorways of the Baltic Sea is extremely important for the port – both to the main South-northern axis, from which the subordinate motorways of sea derive to the western and eastern shores of the Baltic Sea and to its Eastern branch to the Gulf of Finland. The A category ports included into TEN-T network (including Riga) create land transport and sea motorways connection hubs.

Using the Port of Riga for cargo transportation to/from Kazakhstan, China and other (Central) Asian countries is feasible through European-Asian transport corridors. Even though the main axes of the TEN-T network do not directly cross Latvia, all the major national motorways (E22, E67, E77, E262), railway lines (Eastern-Western corridor – railway branches from Latvian border to the major ports, Rail Baltica Project – providing connection Helsinki- Tallinn-Riga-Kaunas-Warsaw), airports in Riga, Liepaja, Ventspils and Daugavpils and A category seaports – Liepaja, Ventspils and Riga are included in the network policy.

Thus the Port of Riga connection to the TEN-T motorway network, TEN-T railway network and the Motorways of the Baltic Sea enables cargo transportation from Russia, the CIS and Central Asian countries to the EU and back. Taking into account the growing road traffic and environmental pollution, as well as the fact that Eastern European railway network consists of Russian gauge and thus a direct connection to Western European railway is only possible through changing the gauge, the Port of Riga is a feasible alternative to re-direct cargo flows from land to sea. The Port of Riga as a port of the East-Western corridor is successfully connected to the Trans-Siberian Railway (TSR) that has important role in trans-continental transit freight (especially containerized cargo) flows.

Motorways of the Sea connect Riga with all TEN-T network ports. Distances by sea from the biggest ports of the Central Europe - Rotterdam, Antwerp, Hamburg – to the ports of the eastern part of the Baltic Sea coastline are the shortest, providing advantage with regards to transportation costs and transit time.

Cargo transportation to/from the Freeport of Riga is carried out by rail and by road, using existing Riga city transport system. Liquid cargo and dry bulk cargo terminals mainly use railway network, while cargoes to the container terminal, general cargo and multipurpose terminals are transported by road.

26

Street network of the city in the framework of present boundaries ensures access to the port terminals. Still, cargo traffic by road to the north-eastern and north-western parts of the city, where the terminals of the Freeport of Riga are located, is rather complicated due to high traffic intensity and low throughput capacity of the streets. In the north-eastern part the traffic flows are impeded at railway crossings and at bridges over the River Daugava.

2.1.3 Investments and developments 23

On 19 May 2009, the Freeport of Riga Board approved the new Freeport of Riga development program for the period until 2018. On 15 September 2011, the Freeport of Riga Board approved amendment to the Freeport of Riga development program. Within the frameworks of the Freeport of Riga development program new infrastructure projects are being implemented that promote performance of business activities. In 2009, a temporary berth was built in Žurku Sala, which allows the Panamax ships to be loaded up to the desired volume – 75 000 tons.

Development of Krievu Sala is the largest infrastructure object in the Freeport of Riga and its total costs can be estimated in the amount of more than 111 million lats. In total, 65 ha will be uptaken, a 1780 m long quay will be built envisaged for the needs of 7 berths. Krievu Sala is mainly envisaged for development of bulk cargo and general cargo terminals.

Development of access infrastructure of the port comprises also improvements of mutual connection of railway, motorways and waterways. In order to solve accessibility in Kundzi ņsala, a project for construction of a new railway bridge and improvement of connected infrastructure has been elaborated, planned to be implemented from 2009 until 2013. This project is in context with the terminals developed in the Kundzinsala territory, such as Riga Fertilizer Terminal, Riga Bulk Terminal, Baltic Container Terminal, etc.

The project envisages deepening of the fairway up to 17 meters in section until R īnūži, which will ensure entrance of Aframax class ships. Costs in the amount of 49 million lats have been planned. Reconstruction of East and West breakwaters is also planned. Currently, technical project of renewal has been elaborated, but the actual works are planned to take place in time period from 2012 until 2015.

2.1.4 Intermodal terminals

Freeport of Riga has three terminals for containers: "Baltic Container Terminal, Ltd" is a specialized container terminal with direct connection to the railway network and handling capacity - 450 000 TEU/annum. "Riga Universal Terminal" is a multifunctional terminal with container handling capacity 50 000 TEU/annum. Additionally containerized cargo could be handled via "Riga Container Terminal, Ltd" with container handling capacity 80 000 TEU/annum.

For Ro-Ro cargo, Freeport of Riga has two terminals: "Riga passenger terminal, Ltd." (mostly serves Tallink Ro-Pax vessels) and "Terminals Vecmilgravis, Ltd" which has infrastructure for Ro-Ro cargo handling, but no Ro-Ro cargoes during some last years. Additionally, there is "ManTess Tranzit, Ltd" which started Ro-Ro handling in 2012, but has stopped working.

23 Freeport of Riga 2013. 27

2.1.4.1 Baltic Container Terminal 24

Baltic Container Terminal (BCT) is a privately-owned container terminal located at the mouth of the river Daugava within the Freeport of Riga. The terminal has become the fastest- growing container handling facility in the Baltic States and enjoys a proven track-record with its clients through the quality of its work, high standards, productivity, safety and efficiency.

Spread over an area of 57 hectares on the island of Kundzinsala, BCT is currently capable of handling some 450,000 TEUs per annum and has a total yard capacity of 5,000 ground slots. Over 500 reefer plugs are also available and are monitored 24 hours a day, 7 days a week.

BCT has a 450 metre quay with an alongside depth of 12.5 metres which it intends to extend by another 200 metres in the near future. A 25 metre Ro-Ro ramp is also available at the west end of the quay making Ro-Ro and lo-lo operations possible simultaneously.

The terminal’s principal activities include:

• the berthing allocation of vessels along its quays; • the loading and discharge of containers; • storage and warehousing of cargo; • other ancillary activities such as stuffing and stripping of cargo from containers to rail wagons or trucks and vice versa; • container repair and reefer facilities.

In addition BCT has developed well integrated logistics networks and can handle a wide range of value-added services and cargo mixes for the region.

The terminal’s extensive facilities and equipment permits the following activities:

• Container Freight Station for the stuffing and stripping of containers with operations carried out to and from warehouses, trucks and rail wagons; • Engineering workshop to cater for container repair.

All BCT’s operations are manned by knowledgeable and skilled workforce, complementing the terminal’s generous facilities, reliable equipment and logistically efficient transport network. BCT has its own warehousing facilities covering 15,000 square metres of covered space with road and rail access for the storage of different cargoes. Distribution to Latvia and its neighbouring countries is easily provided from these warehouses.

A Container Freight Station is also available with extensive facilities and equipment for the stuffing and stripping of containers with operations carried out to and from warehouses, trucks or rail wagons. Further, the terminal also has its own engineering set-up to cater for minor repairs on damaged containers.

Along with BCT’s strategic geographic location, the terminal has good, direct access to road and rail networks to its market hinterland, thus making it ideal for the development of logistics networks to its market hinterland which includes Moscow, Kaluga, Novgorod, St Petersburg, Minsk, Kiev, Vilnius, Tallinn, Almaty and Tashkent.

24 Baltic Container Terminal 2013. 28

Amongst the shipping lines calling at BCT are CMA-CGM, MSC and Maersk. Other lines using the Terminal’s services, via the use of common feeders such as Team Lines and Unifeeder, include OOCL, NYK, China Shipping and Evergreen. In 2012 the quay module of the Automatic Container Operations System (ACOS) was implemented such that the vessel loading and discharge procedure is highly automated and productive with records of all containers moving at this interface being recorded photographically. BCT services MSC, CMA/CGM, Team Lines, SEAGO, Maersk and Unifeeder vessels. Other lines such as OOCL, China Shipping, Hamburg Sud, Evergreen and NYK use the services of common feeders.

The terminal has its own rail-handling facility with good rail connection to Moscow. Additionally the terminal is equipped with rail–mounted gantry cranes dedicated to the loading and unloading of rail platforms. BCT recently doubled its railway infrastructure and is now able to serve 64 rail (80 foot) platforms simultaneously. The new capacity allows the direct proximity of container storage to the rail access zones and more efficient shunting of block trains, giving BCT a comparative advantage over other terminals in the region. Both gate and rail operations have recently been equipped with their respective ACOS modules which have allowed all containers entering or exiting the terminal by road and rail to be imaged and operational productivity to be optimised.

The quay is currently equipped with three ship-to-shore gantry cranes which will soon be joined by an additional one. Quay operations are supported by a variety of yard and interface equipment which includes reach stackers, rail mounted-gantries as well as various tractors, trailers and forklifts.

Table 5. Intermodal cargo equipment in Baltic Container Terminal.

Equipment QTY 1 x 30t Quayside cranes 3 2 x 35t 2 x 30.5t Yard rail-mounted gantries 4 2 x 35t Yard rail-mounted gantries for rail 2 2 x 30t operations Reach stackers 6 6 x 45t Yard tractors 15

Roll trailers 4 4 x 50t 10 x 50t Axel trailers 14 4 x 32t Double trailers 2 2 x 60t 29 x 1.5t-7t Forklifts 30 1 x 25t

BCT has initiated construction works of a new insulated and heated general cargo warehouse with a storage area of 5,400 square meters that will increase an efficiency of rail mode dispatch and provide quicker cargo distribution. In 2012 BCT has implemented an „in house”

29

developed general cargo management informational system that will allow significantly decrease a paper document amount and optimize a real warehouse operational process.

BCT have implemented an Automated Container Operation System, which is a next step in terminal automation concept. This system allows automating vessel and rail operations process. It utilizes a modern OCR technologies as well as image capturing and processing algorithms.

BCT is a pioneer in the field of information technology in the Baltic Region. It has heavily invested in the sophisticated terminal operating system (TOS) -NAVIS Sparcs to ensure the efficient real-time management of the entire container handling cycle. The system includes yard planning, vessel planning and equipment control modules. Through this system it is possible to anticipate in detail a vessel’s arrival and plan the entire operational process from unloading to the re-loading of containers.

In 2009 BCT started developing the Automated Container Operations System (ACOS) which is based on the integration of modern IT systems into the container operational process. The system allows BCT to automatically process all incoming and outgoing container without human error. The ACOS is based on three key components – gate, rail and quay modules – produced by Visy OY and integrated with tailor-made modules and interfacing with the TOS.

This system allows automation of vessel, gate and rail operational processes through the utilisation of Optical Character Recognition (OCR) technologies as well as image capturing and processing algorithms. As a result all containers processed are photographed at high resolution and damage inspection is automated. In addition the container acceptance and delivery process is optimised, human error rate is decreased, interface performance and quality of service is improved and, long-term operations planning are made possible.

2.1.4.2 Riga Container Terminal 25

Riga Container Terminal LLC (RIGACT), a daughter company of Riga Commercial Port LLC, was founded on the 17th of August 2009. The company specialises in Sea-Rail transhipment logistics solutions and provides container, general, heavy weight and out of gauge cargo handling services. The company’s vision is to become a distribution hub in the port of Riga that provides integrated transportation and logistics solutions to European, CIS and Central Asian states.

The main services of the terminal:

• container handling • container storage • container ship processing • REF and IMO container handling • container repairs • container weighing

25 Riga Commercial Port Community 2013. 30

Table 6. Terminal characteristics of Riga Container Terminal.

Characteristic Length of berths 190 m Depth at berths 9.50 m Container storage area 68,000 m² Terminal capacity 100,000 TEU/year Simultaneous storage 4,000 TEU Warehouse area 8,310 m 2 Open-air storage area 67,800 m 2

Table 7. Intermodal cargo equipment in Riga Container Terminal.

Equipment Portal Container cranes 2 units (42-45t) Mobile cranes 1 unit (104t) Reach stackers 4 units (up to 45t) Terminal tractors 3 units (up to 60t) Forklifttrucks 3 units (42-45t) Terminal trailers 5 units General cargo loaders 10 units The development programme for the next few years is targeted at developing the existing infrastructure and increasing the terminal’s capacity, which will allow the company to take an important part on the transit and logistics market.

Long-term development programme 2014–2020:

• Acquire specialised berth equipment for handling vessels with loading capacities of up to 4,000 TEU • Build railway access track infrastructure for rail cargo handling (2000 metres, two container trains) • Set up a new container (handling) area • Build a warehousing complex

2.1.4.3 Termin āls Vecm īlgr āvis 26

Public Company „Termin āls Vecm īlgr āvis" is an enterprise that offers an opportunity of transhipment and storage of various kinds of goods, construction and repairs of vessels, fabrication of metal constructions and woodworking. „Termin āls Vecm īlgr āvis" rents 9 berths and a land plot under contracts with Administration of Freeport of Riga. Total area of rented territory makes up 136 000 m 2 and 65 000 m 2 of internal aquatorium. The terminal disposes 19 buildings with total area of 28 124 m 2 (including 15 624 m2 of production space and 6034 m2 of office premises). Total area of open-air storage grounds makes up 87687 m 2. The

26 Termin āls Vecm īlgr āvis 2008. 31

enterprise also has internal and external utility systems which satisfy all the terminal's needs in cargo handling, maintenance and provision of vessels and other business activities.

Main services of the terminal:

• cargo-and-passenger terminal • customs warehouse • stevedore and shipping services • shipbuilding and ship repairs • metal-working • woodworking

In 2000 a modern cargo ramp for berthing of vessels (ferries) of RORO type with a stern or fore access ramp, draught down to 9.5 meters and length up to 210 meters was built on the first berth of „Termin āls Vecm īlgr āvis". The ramp is suitable for all types of rolling equipment with a maximum weight of up to 60 tonnes.

2.1.4.4 Riga Universal Terminal 27

Riga Universal Terminal was founded in year 2001. Terminal is specializing in general cargo and bulk cargo handling, including containers, wood products, such us sawn wood, wood pellets and chips, pulpwood, as well as frozen food cargoes and bulk foodstuffs.

Cargo turnover in year 2010 reached 2.5 million tonnes. Riga Universal Terminal provides reliable high quality services. Terminal has certified quality management system and complies with ISPS code regulations.

Figure 9. Map of the Riga Universal Terminal.

27 Riga Universal Terminal 2013. 32

Main intermodal cargo services of the terminal:

• container loading/discharging on/from vessels, trucks and railway; • storage (incl. IMO and temperature-controlled units) • stuffing/stripping operations • OOG and non-standard unit handling (flatrack, opentop etc.) • container repair

Table 8. Terminal characteristics of Riga Universal Terminal.

Characteristic Length of berths 930 m Depth at berths 9.30 m Total area 38 ha Warehouses 20,000 m 2 Open storage areas 22 ha Cold storage warehouse 7,000 m 2 Number of plugs for reefer 50 containers Railway- total track length 16 km

Table 9. Intermodal cargo equipment in Riga Container Terminal.

Equipment Portal cranes 6 units (6-20t) Mobile cranes 2 unit (84-104t) Reach stackers 2 units (42-45t) Terminal tractors 4 units (up to 80t) Forklift 7 units (1.6-8t) Terminal trailers 4 units (80t)

2.2 Port of Liepaja

2.2.1 General information 28

The Port of Liepaja provides a solid base for logistics connections with the rest of Europe. Latvia’s third largest port in terms of cargo throughput, Liepaja is truly multifunctional, as a port service provider, dealing with most types of cargo. The port infrastructure – access canals, berths and cargo-handling equipment – allows for vessels with a maximum draught of 10.8 meters and length of 235 meters to call at the port. In total, there are 16 cargo handling terminals for various types of cargo, equipped with appropriate cargo handling and storage facilities – open-air and warehouses, silos, tanks and refrigerated space.

28 Port of Liepaja 2013. 33

Figure 10. Map of Port of Liepaja 29 . Liepaja is one of the few non-freezing ports in the region, providing continuous navigation at any weather conditions. The Port is open and provides cargo handling and other port services 24 hours a day. State of the art technologies combined with highly qualified labour force ensure efficient performance of works at a high quality level.

Since the beginning of 1990 – ties Liepaja has rapidly developed as multifunctional port, reaching fastest increase of cargo turnover among the Eastern Baltic’s ports. Today Liepaja is important international transportation hub, which provides cargo exchange between Eastern and Western European markets. Port companies depending on their specialization provide handling of dry bulk, liquid bulk and general cargoes.

Structure of cargoes which are handled in the Liepaja port is different if it is compared with other Eastern Baltic’s ports as Liepaja is not oriented to the servicing transit of big volume bulk cargoes. Liepaja port’s cargo turnover consists of such a cargoes as biological fuel – wooden chips and pallets, timber - pulp and sawn woods, reinforcement bars and other metal products, cement, grain and CIS origin animal feed stuff, Lithuanian origin crude oil, which is used in petrochemical production and oil products, etc. I addition to the short sea shipping tramp traffic Liepaja port serves regular RO – PAX ferry line to Traveminde (Germany). According to the Liepaja port development plans, in order to serve increasing volume of container shipment between EU and CIS, as well as Far East countries, there is planned development of two specialized container handling facilities in the port’s Greenfield territories until 2017.

The Liepaja Special Economic Zone Authority is a non - profit management institution established by the state and the local government for performing the duties, envisaged by the respective Law. The SEZ Authority is a legal entity which has its own budget, and is registered as a taxpayer.

Main functions of the Liepaja SEZ Authority:

29 Google Maps 2013. 34

• elaboration and implementation of the development plan of the Liepaja SEZ; • research and evaluation of the Liepaja Special Economic Zone activities, distribution of information and market research to attract investments; • infrastructure development and; • provision of services for the Liepaja SEZ companies.

Figure 11. Port of Liepaja total cargo turnover in 2007-2012 30 .

2.2.2 Investments and developments 31

Liepaja Special Economic Zone authority has started realization of a number of priority development projects with the aim to accelerate Liepaja port development.

Deepening of the port basin and fairway

Currently the port of Liepaja development opportunities are limited to the water depth of 10.5 meters at the ports deep – water berths. Thereof Liepaja Special Economic Zone authority has started realization of the project of deepening fairway and port’s basin. According to development strategy fairway and part of the port’s basin is going to be dredged to the depth of 12.5 and 12.0 meters.

Development of the port railway infrastructure

In order to coupe with increasing cargo volume, which is transported to and from the port by railway, Liepaja Special Economic Zone authority has realized complex development of the port’s railway transport infrastructure. Project envisaged building of new railway main road and marshalling yard that will provide full utilization of railway’s capacity and ground for further development activities. As the result of the completion of the project, port railway cargo handling capacity has doubled and reached 8 million tons per annum. Project was financed by EU Cohesion Fund, State Budget and Liepaja SEZ authority budget means as a part of EU Cohesion Fund co-financed project “Liepaja port entrance roads”.

30 Port of Liepaja 2013. 31 Port of Liepaja 2013. 35

Construction of port entrance road

The port entrance road is a part of Liepaja city transport infrastructure and is used by public transport. Although the access to the port is made as effective as possible with minimum impact to public transport, there is still a negative impact of heavy vehicle transport arriving or departing from the port. Thereof Liepaja Special Economic Zone authority has started realization of the project “Construction of the 2nd phase of the port entrance road”, in order to transfer heavy transport directly to the main road Liepaja – Riga without utilizing transport infrastructure within city’s boundaries. Project is financed by EU Cohesion Fund, State Budget, Liepaja city and Liepaja SEZ authority budget means as a part of EU Cohesion Fund co-financed project “Liepaja port entrance roads”.

Reconstruction of breakwaters

The project was performed in two phases:

1. Phase - The investigation of wave breakers in the Port of Liepaja started on October of 2008 and was concluded on the 29th of December 2008. The investigation phase was done by subcontractors.

Based on results of technical inspection the conclusion was made that wave breakers cannot fully secure port’s inner basin from influence of main Western winds even in small storms, making waves overflowing them and taking silt into the inner basin as well as heads of wave breakers are treating the maritime security at port’s gates. Therefore is required reconstruction of wave breakers.

2. Phase - During the preparation of technical designs three constructive solutions for covering layer of wave breakers were assessed - graded stone (boulders), concrete cubes and concrete tetrapodes. Technical structure of sub-layers (foundation layer, second sub-layers and first sub-layer) was constructed equal for all constructive solutions. It was difficult to justify which of constructive solutions would be most appropriate, because all solutions are rather equal by technical parameters. Finally the solution of concrete cubes was accepted, because concrete cubes are possible to produce in Liepaja and it will considerably reduce the costs of material and cubes transportation from production site to construction site of wave breakers.The project was concluded on the 4th of June 2009 and was accepted by Liepaja City Constructions Board on the 7th of July 2009.

36

Figure 12. Main Ro-Ro and ferry connections of Port of Liepaja 32 .

2.2.3 Intermodal terminals

Port of Liepaja has one terminal that deals with intermodal cargo. Port focuses more other groups of goods, e.g. general cargo, liquid cargo, etc.

2.2.3.1 LSEZ “TERRABALT” SIA 33

The company LSEZ "TERRABALT" SIA was established on 15th of November 1991 and became the first Agency Company in port of Liepaja. LSEZ “Terrabalt” SIA is a convenient transport link between Eastern and Western Europe. The terminal provides sea transportations, charters vessels upon clients’ request, specialises in cargo handling and forwarding, brokerage of vessels and warehousing. Terminal is able to operate with vessels in length up to 190 meters.

LSEZ "TERRABALT" SIA in co-operation with other well-known European companies provides Ro-Pax, Ro-Ro, Lo-Lo and general cargo services, forwarding of cargoes by railway and trucks through the territory of Latvia, the Baltic region and to the CIS. Since the company was established it has successfully been providing full agency service in the port of Liepaja (Latvia) including all the complex aspects of export/import operations, ferry lines, booking department services, customs clearance, and telecommunications at the same place.

The berth of the terminal is one of its kinds in the Port of Liepaja. It is 210 meters long and 50 meters wide, allowing us to service two vessels simultaneously. The berth allows handling vessels with draft up to 8.6 meters and length up to 190 meters.

Stevedore services offered by the terminal include ferry line and container line services and handling of a large range of general cargoes. To ensure a qualitative solution of any

32 Baltic Transport Maps. 33 Liep ājas SEZ "TERRABALT" SIA 2006. 37

assignment, the company is equipped with all necessary equipment and technics. Loading- discharging of large-size and heavy cargoes is guaranteed by the portal crane.

In addition, the terminal has its own special cargo-lifting mechanisms and equipment to provide service for container lines. The company is able to service up to 300 trailers daily. This is facilitated by the terminal, which is located next to the berth. The administrations of the company, customs brokers, ships agents, transport department and currency exchange, all located in the same terminal building and provide round the clock services.

For more than 19 years there have been three sea cargo-passenger ferry lines linking Liepaja with the port of Rostock (Germany) – 2 times per week, port of Travemunde (Germany) – 2 times per week, and the port of Karlshamn (Sweden) – 3 times per week. During the period of 3 years there were Container vessel lines connecting Liepaja with Rotterdam (Holland), Ipswich and Teesport (UK), Hamburg (Germany), Helsinki (FIN), Gdansk (PL) and Klaip ėda (LT).

2.3 Port of Ventspils

2.3.1 General information 34

Freeport of Ventspils is a significant transit and industrial centre, located on the Eastern shore of the Baltic Sea. Advantages of being ice-free the whole year, the possibility to accommodate the largest vessels that can enter the Baltic Sea together with timely and precise cargo handling operations at its terminals makes it an effective and lucrative gateway for cargo deliveries to and from Russia and other neighbouring countries. Freeport has a special economic zone of more than 700ha for development of industrial projects, with „ready to go” provided infrastructure and special tax incentives.

34 Free port of Ventspils Authority 2013. 38

Figure 13. Map of Port of Ventspils 35 . Ventspils has convenient road connections, i.e. main road to the capital of the country Riga, which is located 189 km from Ventspils, as well as European significance two-tract road E22 (Great Britain – the Netherlands – Germany – Sweden (Norkoping) – Ventspils – Moscow), which allows further distribution from Ventspils to Russia and CIS.

The East – West railway corridor through Ventspils is one of the most utilized in Europe. Each year around 20 million tons of various cargoes are transported via the route. With co- financing of EIB and EBRD, SJSC Latvijas dzelzcels has implemented an important development project - East-West railway corridor throughput capacity was increased from 20 mln. tons up to 34 mln. tons. Within the development plans of the terminal it is foreseen to lengthen the berth No.15 up to 570 m.

35 Google Maps 2013. 39

Figure 14. Port of Ventspils total cargo turnover in 2007-2012 36 .

Figure 15. Main Ro-Ro and ferry connections of Port of Ventspils 37 .

36 Free port of Ventspils Authority 2013. 37 Baltic Transport Maps. 40

2.3.2 Intermodal terminals

2.3.2.1 Noord Natie Ventspils Terminals LTD 38

Noord Natie Ventspils Terminals (NNVT) is a multi-purpose cargo handling centre; one of the most modern terminal for handling of general cargoes, containers and Ro-Ro cargoes in the Baltic region. NNVT provides fast, reliable and high level productivity services; stevedoring and storage/distribution operations are performed at very attractive cargo handling contract tariffs and conditions, which are tailor-cut individually.

NNVT provides fast, reliable and high-level productivity services. Stevedoring, storage and distribution operations are performed at attractive cargo handling contract tariffs and conditions, which are tailor-cut individually. At the moment the area of the terminal is 16.9 ha. In the nearest future it is planned to expand to 31.5 ha. The infrastructure of Noord Natie Ventspils Terminals allows it to handle wide spectrum of cargoes - containers, Ro-Ro, trailers, reefer containers, tanks, heavy lift cargoes, etc.

The terminal provides following services for any kind of containerized and unitized general cargo, including heavy-lifts.

• All stevedoring operations • Open storage – 120 000 square meters • Covered storage - 5200 square meters (with further expansion up to 7200 square meters) • Containers’ handling • Cargo distribution • Intermodal solutions • Reefer containers’ handling - 36 plugs, which amount can be increased in case of necessity

Railroads and access roads have a strategic location within transport system of Ventspils, and that insures terminal's function as a logistics element in the overall transport network of Latvia and neighbouring countries - Russia, Baltic and CIS states. The terminal has a well- developed railway system: on the territory of loading/unloading simultaneously can be placed 110 rail wagons (2 rail trains), and it has the possibility of wagons loading simultaneously on several railway roads.

Noord Natie Ventspils terminal has 5 berths with total length of 1200m and maximum depth 14.2m. Terminal is equipped with modern mobile loading equipment, e.g. forklifts with 1.75- 25 t lifting capacity, reach stackers, terminal tractors, roll trailers, train tractors, etc.

Technical equipment:

• Rail-mounted crane with 35t lifting capacity and maximum outreach 45m; • Mobile crane Gottwald with 100t lifting capacity and maximum outreach 44m; • Container crane with 60t lifting capacity and maximum outreach 37m.

38 Noord Natie Ventspils Terminals 2006. 41

In addition, custom proceeding institutions located nearby the terminal, including food and veterinary surveillance and customs office, etc.

42

3. Lithuanian ports

Klaipeda is a strategic port for the economy of Lithuania. The Klaipeda State Seaport Authority operates under a special law governing the port activities of 1996. The Port of Klaipeda operates according to the land-lord model. Furthermore, the Ministry of Transport and Communications accepted a regulation governing the operations and rules of port navigation in the Port of Klaipeda. The Minister of Transport and Communications appoints and recalls a port director and approves financial statements. The Port Council (there are no supervisory functions) that prepares development plans for the port is composed of representatives of the Ministry of Transport and Communications, the Ministry of Finance, the region and the city of Klaipeda, port management board and users 39 .

Also, the port structure includes the Port Development Council that prepares the development strategy of the port and coordinates the relations among the management entity, municipal administration in Klaipeda and governmental institutions. The Port Development Council is composed of representatives of the Ministry of Transport and Communications, the Ministry of Finance and other ministries, the region and the city of Klaipeda, academic representatives, port management board and users 40 .

Figure 16. LPI of Lithuania according to International Scorecard 41 .

39 TransBaltic 2012. 40 Ibid. 41 World Bank Group 2013. 43

Figure 17. Changes in LPI of Lithuania in 2007-2012 according to International Scorecard 42 .

3.2 Port of Klaip ėda

3.2.1 General information 43

Klaip ėda State Seaport is the most important and biggest Lithuanian transport hub, connecting sea, land and railway routes from East to West. Klaip ėda is a multipurpose, universal, deep- water port, providing high quality services. 17 big stevedoring companies, ship repair and ship building yards operate within the port as well as all types of marine business and cargo handling services. Its well-coordinated operations of sea and hinterland transport, the Free Economic Zone (FEZ), the EU short-sea shipping network, and the wide-range operation of logistic and industrial enterprises ensure the operations of intermodal transport.

42 World Bank Group 2013. 43 Klaip ėda State Seaport Authority 2013. 44

Figure 18. Map of Port of Klaip ėda.

Table 10. Characteristics of the Port Of Klaip ėda.

Characteristics of the Port Of Klaip ėda Port territory area 519 ha Port waters area 897 ha The length of port quays 26 923 m Port railway length 79 000 m The length of the Northern breakwater 733 m The length of the Southern breakwater 1374 m

Area of covered warehousing facilities for general 89 013 m² cargo

Area of warehousing facilities for bulk cargo 143 700 m²

Area of warehousing facilities for refrigerated cargo 47 550 m²

Area of open storage sites 934 677 m²

Capacity of liquid cargo tanks 738 300 m 3

Ro-Ro cargoes

In 2011 the increase of the throughput of Ro-Ro cargoes calculating in units was 14.0 pct. or +32 101 units, the overall turnover totalled 326 196 units (in 2010 it was 229 095 units). Calculating in tons the throughput increased by 14.1 pct. year-on-year or by +608.6 thou. tons to 4 913,6 thou. tons (in 2010 this number was 4 305,0 thou. tons). All cargoes belonging to this group are transported by 4 Ro-Ro lines, i.e. Klaip ėda – Karlshamn (Sweden), Klaip ėda – Kiel (Germany), Klaipėda – Sassnitz (Germany) and Klaip ėda – Aarhus - Copenhagen – Fredericia (Denmark). Only very few Ro-Ro cargoes were transhipped via Klaip ėda Port not by these ferry lines. The maximum cargo turnover is reported between the ports of Germany, 45

Sweden and Denmark. 53.9 pct. of Ro-Ro cargoes arrive to Klaip ėda Port and 46.1 pct. account for transportation from the Port (export). This cargo group comprises 4 categories of freight: 1) auto trailers, trucks; 2) trailers; 3) roll trailers; 4) light vehicles. In 2011 the turnover of auto trailers and trucks amounted to 105 652 units, the year-on-year change was +18.3 pct. or more by 16 343 units. The turnover of trailers increased by 16.1 pct. or by 8 626 units year-on-year to 62 301 units. During 2011 transportation of roll trailers increased by +8.7 pct. or by +1 260 units year-on –year to 15 712 units, transportation of light vehicles increased by 8,9 pct. or by +5 895 units year-on-year to 72 371 units. The operator of all Ro- Ro lines is the company „DFDS Seaways“ basically oriented towards freight shipment and not transportation of passengers, therefore calculating in units the freight volumes are relatively low, but in terms of tonnage the share of Ro-Ro cargoes cuts out even 13,4 pct. of the overall Port turnover. The reasons of such increase may be related to the increased demand for consumption goods; such types of goods are usually transported by auto trailers. The market that has stabilized during 2011 promoted the flows of vehicles used in industry and agriculture sector.

The handling of road transport modes in Klaip ėda Port as a rule makes the greatest impact on Ro–Ro cargo flows as the road transport modes constituted even 98.0 percent of shipped units wheels (or freight transported by units on wheels). Within the period of one year these flows usually change rather slightly, but evaluation of separate annual results shows the apparent constant growth of cargo volumes.

Railcars are shipped by the single Ro-Ro line Klaipėda – Szczecin when rail cars are brought directly to a special ferry “Vilnius” with rail tracks on deck therefore it is accommodated to carry railcars hereby avoiding the freight transhipment to other transport modes

Containers

In 2011 the container turnover in Klaip ėda Port calculating in TEU was 382 185 TEU, the year-on-year change was +29.5 pct. or 86 964 TEU. Calculating in tons the turnover totalled 4 269.5 thou. tons, i.e. more by 20,4 pct. or by 722,0 thou. tons yoy. Like Ro-Ro cargo this category of freight is particularly influenced by changes emerging in consumption market.

In May of 2011 the absolute record of containerised cargo turnover per month (calculating both in TEU and tons) was set. In May 46 627 TEU were handled (more by even +75.6 pct. or by 20 076 TEU yoy) and in terms of tonnage the handling rate amounted to 459.5 thou. tn (+50.5 pct. or +154.1 thou. tn yoy). This impressive and robust growth became possible due to reasons that were absolutely unrelated with naturally developing market. Since July of 2011 dramatically increased import dues imposed on used cars imported to Belarus, Russia and Kazakhstan triggered the import of used cars transported by containers from the USA. After this impressive increase the market has stabilized within the following several months. However as traditionally happens during every period before holidays (December) the container handling rates jumped up again.

The bigger share of transported containers is attributed to container transportation between Klaip ėda Port and top ports of Eastern Europe as they accommodate the largest container carriers when containers are later transhipped to smaller ships and distributed within the region of the Baltic countries. In 2011 the container turnover between Klaip ėda Port and ports of Germany was 202 863 TEU (+50.7 pct. or +99 934 TEU if to compare with 2010).

46

Figure 19. Port of Klaip ėda total cargo turnover in 2007-2012 44 .

3.2.2 Connections 45

The shortest distances connect the port with the most important industrial regions of the Eastern hinterland (Russia, Belarus, Ukraine etc.). The main shipping lines to the ports of Western Europe, South-East Asia and the continent of America pass through Klaip ėda port. An ice-free port that does not freeze even during very cold winters guarantees smooth traffic and uninterrupted stevedoring operations. As the port of Klaip ėda is situated at the junction of international transport corridors, it is a bridge between the Commonwealth of Independent States and the countries of Asia, the European Union and other markets. Three port exit motorways – the Southern, Northern and Central Port Exit Roads – represent lifelines for cargo transportation.

Table 11. The main intermodal shipping lines in Port of Klaip ėda.

Name of authorized agent Shipping Line Remarks of the organization Bremerhaven - Hamburg - Klaip ėda - Sankt Petersburg - Hamburg - Sankt Petersburg - Kotka - UAB "BG Shipping" container lines Rauma - Gävle - Hamburg Bremerhaven - Klaip ėda - Riga - Aarhus - UAB "Limarko j ūrų container lines Bremerhaven agent ūra" UAB "Limarko j ūrų Bremerhaven - Riga - Tallinn - Klaip ėda - agent ūra" ("Team Lines container lines Hamburg - Bremerhaven GmbH & Co") UAB "Limarko j ūrų Gda ńsk - Klaip ėda - Riga - Tallinn - Gda ńsk agent ūra" ("AP MOLLER - container lines MAERSK A/S") Hamburg - Gdynia - Gda ńsk - Klaip ėda - Hamburg - UAB "CMA CGM container lines

44 Klaip ėda State Seaport Authority 2013. 45 Ibid. 47

Lietuva" (CMA CGM Marseille) UAB "Limarko j ūrų Hamburg - Klaip ėda - Sankt Petersburg - Kotka - agent ūra" ("Team Lines container lines Hamburg - Klaip ėda GmbH & Co") Hamburg - Szczecin - Klaip ėda - Hamburg UAB "CMA CGM Lietuva" container lines UAB "Klaip ėdos Immingham - Rotterdam - Muuga - Helsinki - Translit" (UAB "Tschudi container lines Klaip ėda - Esbjerg Logistics") UAB "Arijus" (Unifeeder Klaip ėda - Bremerhaven - Hamburg container lines A/S) Klaip ėda - Fredericia - Copenhagen - Aarhus AB "DFDS Seaways" Ro-Ro lines Klaip ėda - Karlshamn - Klaip ėda AB "DFDS Seaways" Ro-Ro lines Klaip ėda - Kiel - Klaip ėda AB "DFDS Seaways" Ro-Ro line UAB "Arijus" ("Unifeeder Klaip ėda - Riga - Rotterdam - Szczecin container lines A/S") Klaip ėda - Sassnitz - Klaip ėda AB "DFDS Seaways Ro-Ro lines Klaip ėda - Teesport - Rotterdam - Helsinki - Sankt Petersburg - Sheerness - Hamburg - Riga - Ghent - UAB "Containership" container lines Aarhus - Södertälje - Pori - Klaip ėda Rotterdam - Bremerhaven - Gdynia - Klaip ėda - UAB "MSC Vilnius" (MSC Riga - Sankt Petersburg - Gävle - Södertälje - Mediterranean Shipping container lines Norrköping - Bremerhaven Company)

There are four main transport corridors crossing the territory of Lithuania. North-South direction has Corridor I- Helsinki- Tallinn- Riga- Kaunas- Warsaw (Via Baltica motorway and Rail Baltica railway line). The length of the Lithuanian section of the motorway is 274 km and the railway is 334km. Corridor IA is Riga-Šiauliai- Tauragi- Kaliningrad. East-West direction has Corridor IXB: Kiev- Minsk- Vilnius- Klaip ėda. The length of the Lithuanian section of the motorway is 339 km and railway is 418km. The port of Klaip ėda is linked to Western Europe by railway and vehicle (Ro-Ro) ferry lines and land roads. Corridor IXD is Kaunas- Kaliningrad. The length of the Lithuanian section of the railway is 120.6km.

48

Figure 20. Main container connections of Port of Klaip ėda 46 .

Figure 21. Main Ro-Ro and ferry connections of Port of Klaip ėda 47 .

3.2.3 Investments and developments 48

Having proven its competitive advantages and having gained the leading position among the major Eastern Baltic ports, Klaip ėda port sets ambitious plans for further development and

46 Baltic Transport Maps. 47 Ibid. 48 Klaip ėda State Seaport Authority 2013. 49

boldly meets challenges of the new century. Well-developed port access railway and motorway systems, which provide for rapid and smooth delivery of cargo to the port terminals, are extremely important for the successful functioning of the port. Figure 5 presents the Klaipeda State Seaport Authority Investments in 2000-2012.

Figure 22. Klaipeda State Seaport Authority Investments in 2000-2012 49 .

The following is a table that presents top 10 of the investments in 2013 according to the Port of Klaip ėda.

Table 12. Top 10 of the investments in 2013 (Data by the 1st January 2013) 50 .

Investments in The total price of OBJECT 2013 (mln. Lt Net the project (mln. off Vat) Lt Net off Vat) 1. Construction of infrastructure of Liquefied Gas 83 170 Terminal and capital dredging of Port waters 2. Capital dredging and widening of Port navigation 63 109 channel *** 3. Construction of infrastructure of Passenger and 39 97 Cargo Ferry Terminal *** 4. Reconstruction of quays No. 7, 8, 9 (the I stage of 18 22 construction) 5. Construction of access roads from Baltijos avenue to the Seaport quays (JSC „Klaip ėda Passenger 12.5 14 and Cargo Ferry Terminal “) 6. Reconstruction of Kairiu street *** 11 34 7. Design and construction of contaminated soil 10 21

49 Klaip ėda State Seaport Authority 2013. 50 Ibid. 50

disposal site 8. Construction of quays No. 90-96 9 71 9. Construction of additional railway tracks in the shunting yard and construction of new railway 7 7 tracks in JSC „Malku Bay Terminal“ 10. Project LUVIS *** 4.5 4.5 *** project is co-financed from EU funds

Railways

In Klaip ėda Port, over 75 per cent of the total volume of cargo is transported by rail; therefore, it is important to develop the port railway network because rail transportation, compared to the road, is more environmentally friendly, faster, and cheaper. The construction of port railways provides not only a fast delivery of cargo, but also solves traffic-related congestion, pollution, and noise problems.

Klaip ėda Port is served by two railway stations: Klaip ėda and Draugyst ė, and five railway shunting yards: Klaip ėda Station, Perk ėlos, Pauos čio, Rimkai and Anglin ė.

Throughout 2011–2012, the two latter shunting yards will be completely reconstructed by developing a supplementary access to the port and installing a centralized control system. Such reconstruction is of utmost importance as it will enable the port to shorten the time required for transferring railcars to the port terminals. Draugyst ė railway station is also under reconstruction: new access railway to the port terminals is being built and carrying capacities of the present port railways are being increased.

Motorways

Three port exit motorways – the Southern, Northern and Central Port Exit Roads – represent lifelines for cargo transportation.

Harmonious existence of the port and the city requires the construction of the Southern Port Exit Road which will have four lines and increased payloads. The flows of transport will bypass the city and ensure safest and fastest transportation of cargo from the port. Moreover, by 2014 Kairiu Street leading to International Ferry Terminal will be reconstructed.

The reconstruction of the Central Port Exit Road demands a meticulous approach because the port is historically situated in the residential areas of the city. In order to reduce the traffic load, two-level crossroads and a partial tunnel will be constructed on Baltijos Avenue.

Public Logistics Centre

Logistics centres, rendering additional warehousing, packaging, sorting, and other cargo- related services in Klaip ėda, expand the range of their services ensuring constant increase of cargo volumes in the port. Therefore, seeking to provide the clients with a broader range of logistic services, the Public Logistics Centre is constructed in Klaip ėda. The development of its infrastructure – sites, motorways and railways – will be financed by the state and the EU cohesion funds. The Center, to be completed in 2014, will secure long-term guarantees for businesses and will increase the competitiveness of the port in the Baltic region.

51

The modern and large Public Logistics Centre will be situated in the southern Klaip ėda, in close proximity to the port. The operations of the Centre will ensure full range of services and competitive rates for the port clients, and offer new investment opportunities for businesses.

3.2.4 Intermodal terminals

Port of Klaipeda has three terminals that deal with intermodal cargo- SC Klaip ėda Stevedoring Company (KLASCO), Klaipedos Smelte (LKAB) and Klaipeda Container Terminal (KCT).

3.2.4.1 SC Klaip ėda Stevedoring Company (KLASCO) 51

SC Klaip ėda Stevedoring Company (KLASCO) is a port enterprise operating at a high technological level. In terms of renewal and business dynamics, the largest stevedoring company in the port of Klaip ėda is a recognized business leader. The share of KLASCO in the market of port services makes up more than one third of the total market. Its production efficiency, social responsibility and flexible business make significant influence on the economy and results of the port of Klaip ėda.

In line with its investment programme, during the first five-year period following the privatization of KLASCO in 1999, the investments into the construction of specialized terminals and warehouses, as well as environmental projects, amounted to more than 150 million Lt, whereas over the recent period the allotments to technological improvements and renewal of cargo-handling equipment have amounted to 10–20 million Lt annually. In the course of adaptation to ever changing competition conditions, large amounts are allotted to the restructuring of the Company’s operation in line with international ISO standards and the requirements of the ISPS (port safety) Code.

According to a cooperation agreement between KLASCO and Klaip ėda University, KLASCO finances works related to application of science in production, promotes initiatives in the areas of cargo logistics and maritime business, as well as employs students during their production practice or permanently. Wide career-making prospects motivate the Company’s specialists to learn, improve their qualification and carry out Company’s tasks successfully. The personnel training project funded by the European Social Fund and KLASCO in 2006– 2008 involved several hundred persons and helped them improve their skills in the areas of management, the English language, economy and IT system management.

Engineering communications and ship’s fire-fighting equipment have been installed at the reconstructed or renewed quays; there is a railway line running along the quays. A railway wagon distribution station and truck parking lots have been equipped, too. Ships are supplied with electric power and fresh water. In the territory of the Company, there is a canteen and a medical station; customs services are rendered at Vit ės and Malk ų įlankos seaport control posts.

The ferry (Ro-Ro) terminal is a junction point of routes of land transport (railway, trucks) and sea-going vessels that connect the European Union with the countries of the Commonwealth of Independent States. The terminal deals with transport of cargo in wagons, by trucks, platforms and trailers, as well as carriage of passengers by ferries of "DFDS Seaways", an operator of the Danish transport company DFDS.

51 KLASCO 2013. 52

Table 13. Terminal characteristics of SC Klaip ėda Stevedoring Company.

Characteristic Number of berths 5 Length of berths 900 m Number of canopies 1 Total area of canopy 1.600 m 2 Number of warehouses 2 Total area of warehouses 2.050 m 2 Open storage area 95.000 m 2

Main services of the terminal:

• All services required by Ro-Ro ferries • Loading/discharging of railway wagons onto/from ferries • Ferry (Ro-Ro) terminal can serve up to 150,000 passengers annually • Cargo warehousing and storage in open and sheltered warehouses.

The Ro-Ro shipping lines served in the terminal:

• Klaipeda - Kiel (Germany) • Klaipeda - Karlshamn (Sweden) • Klaipeda - Copenhagen – Aarhus – Fredericia (Denmark) • Klaipeda - Sassnitz (Germany)

3.2.4.2 Klaipedos Smelte (LKAB) 52

Joint-stock stevedoring company Klaipedos Smelte is a modern and thrusting enterprise based in Klaipeda port. The company provides handling and storage of containers, heavy-lift and project cargo, frozen fish and meat products, as well as various dry-bulk, break-bulk and packed cargoes. Annual throughput capability of Klaipedos Smelte currently exceeds 3.5 million tons. Internal shunting of rail wagons with own locomotives as well as other services related to cargo handling are part of company’s service pack provided to clients.

Klaipedos Smelte is part of the worldwide container terminal network controlled by company Terminal Investment Limited (TIL). With a portfolio of more than 27 terminals located in various continents, TIL closely cooperates with Mediterranean Shipping Company (MSC), a global container shipping line that holds the second position in container volumes moved by sea. Klaipedos Smelte is a member of Lithuanian Stevedoring Companies Association, Lithuanian Logistics Association and Lithuanian Confederation of Industrialists.

52 Klaipedos Smelte 2013. 53

Table 14. Terminal characteristics of Klaipedos Smelte.

Characteristic Number of berths 8 Length of berths 554 m Depth at berths 12.50 m Max containerships’ draught at 11.50 m berths and the channel Max length of containerships 260 m Storage capacity at the area 10,000 TEU Number of plugs for reefer 144 containers

Klaipedos Smelte container terminal (KSCT) was launched in July, 2006. Since the beginning of operation container volume handled by the terminal is constantly growing: 38.000 TEU in 2007, 115.000 TEU in 2010 and 130.000 TEU in 2012. Today KSCT is capable to handle more than 200.000 TEU annually. The terminal already accommodates containerships of 3.000-5.762 TEU capacity.

Main services of the terminal:

• Discharging/loading and storage of all container types. • Servicing of containers transported by shuttle trains Viking, Mercury, Sun and TransBaltica. • Weighing, washing, repairing of containers and other related services. • Handling of heavy lift and project cargo. • Container Freight Station (CFS) services.

Table 15. Intermodal cargo equipment in Klaipedos Smelte.

Equipment Mobile cranes 3 units (104t) Reach stackers 6 units Terminal tractors 4 units

Developments

Expansion of the container terminal lies in company’s development program for the period of 2010-2015. Klaipedos Smelte plans to extend storage areas and introduce operation with modern Ship-to-Shore container cranes. RTG cranes and other terminal equipment will be purchased for yard operations at the terminal.

Construction of the second stage of deep-water berths was planned to be completed in the middle of 2011. Since that moment the length of operational berth at the container terminal is 1045 meters. Further dredging of company’s berths and the navigation channel of Klaipeda port to 14.0-14.5 meters will enable Klaipedos Smelte to accommodate containerships of 54

6.500-7.000 TEU capacity. Implementation of company’s development program would result in annual throughput capacity above 700.000 TEU. More than 90 per cent of the volume is expected to be moved in and out by sea.

3.2.4.3 Klaipeda Container Terminal (KCT) 53

Klaipeda Container Terminal (KCT) was founded in 1994. KCT was the pioneer of container handling in Klaipeda Port and still maintains the leading position in the market. Today KCT handles 66.7% of all containers shipped through the Port of Klaipeda and holds about 26% share in the Baltic States container market. KCT container terminal is second largest among similar terminals in the Baltic States in terms of throughput.

Apart from discharging and loading, KCT offers a number of additional services on its terminals:

• stripping and stuffing • packing and weighing • consolidation of goods • storage and warehousing • transhipment to other modes of transport, etc.

Regular shipping lines link the terminals with major European seaports; KCT offers convenient hinterland connection and multimodal transhipments to destinations in Belarus, Russia, Kazakhstan, and Ukraine.

The terminal dispatches containers by container trains:

• VIKING (Klaipeda – Minsk – Odessa) • MERCURY (Klaipeda – Moscow) • VILNIUS SHUTTLE (Klaipeda – Vilnius) • SAULE (Klaipeda - Kazakhstan)

KCT operates 2 terminals in Klaipeda port:

• Container Terminal • Ro-Ro and General Cargo Terminal

Container Terminal

Terminal capacity is 450 000 TEU per year and it serves 40 – 50 container vessels per month. The terminal handles 65% of all containers shipped through the Port of Klaipeda (2012).

Table 16. Terminal characteristics of Container Terminal in Klaipeda Container Terminal (KCT).

Characteristic Length of berths 540 m Depth at berths 9.9 m

53 Klaipeda Container Terminal 2010. 55

Max length of ships 215 m Total terminal area 32 ha Container yard 12,000 TEU Warehouses 12,000 m 2 Number of plugs for reefer 250 containers 4 lines (88 Railway wagons/platforms) The main services of the container terminal:

• handling and storage of all container types • transhipment of cargo from containers to other modes of transport • reefer maintenance, monitoring and PTI • heating tank-containers • reloading liquid cargo from rail tanks to containers with flexi-tanks • weighing, cleaning and repairs of containers • storage of goods in warehouses and open yards

Table 17. Intermodal cargo equipment in Klaipeda Container Terminal (KCT).

Equipment STS crane 2 unit (40t) Mobile crane 1 unit (104t) RTG crane 5 unit (40t)

The port authority continues extension of the terminal quay with commissioning planned in Q3 2011. A new stage of dredging the water territory in Malku Bay will start in the nearest future. Utilization of the terminal reserve territory is in its final stage, the new storage areas will be used for handling project cargo and vehicles. After completion of these works the quay length at the container terminal will be 850 m, draft - 11.5 m. Realisation of these development plans will increase terminal capacity up to 600 000 TEU per year.

Ro-Ro and General Cargo Terminal

Since 2009 KCT has been providing services to car carriers transporting various vehicles: tractors, trucks etc. Consignments of transit cargo are accumulated on a dedicated area at the container terminal and loaded on specialized Ro-Ro vessels. In April 2010 a new Ro-Ro line started operations at the container terminal. It is dedicated to transporting export vehicles. Car carriers of the Norwegian shipping company HÖEGH AUTOLINERS call KCT terminal periodically to collect shipments of transit freight vehicles and busses. In 2010 a new Ro-Ro service was opened also at the Ro-Ro terminal. It is operated by the German shipping company "K" Line European Sea Highway Services (KESS) specialising in transporting vehicles and cargo on roll-trailers to various destinations on the Baltic and the North seas.

Ro-Ro and general cargo terminal also accommodates RIX BALTIC LINE service operating between England and the Baltic States. Vessels of the line call the terminal once per week 56

delivering vehicles and other cargo from Hull (England). The terminal capacity is 50,000 Ro- Ro units and 1 million tonnes of general cargo per year.

Table 18. Terminal characteristics of Ro-Ro and General Cargo Terminal in Klaipeda Container Terminal (KCT).

Characteristic Length of berths 2 x 200 m Depth at berths 8.5 m Max length of ships 200 m Ramps 2 Ro-Ro Storage capacity 200 trailers Warehouses 10,000 m 2 Number of plugs for reefer 100 containers Railway 2 lines to the berth The main services in Ro-Ro and general cargo terminal:

• handling Ro-Ro ferries and general cargo vessels • transhipment of cargo to other means of transport • services to reefer trailers • handling bulk cargo to/from vessels • packing bulk cargo into bags and big bags, stuffing into containers • storage of goods in warehouses and open yards • weighing, marking, consolidation of goods

Technical equipment in Ro-Ro and general cargo terminal:

• 2 cranes (10t, 32t) • Bulk cargo facility, capacity – 50,000 t per month

Rapid growth of bulk volumes (67% in the first half-year) urges KCT to add new capacities to this terminal. In 2011 the bulk cargo facility was reconstructed to increase its productivity. A new warehousing segment for storage of bulk cargo is under construction.

57

4. Polish ports

In Poland, the Act on Seaports and Marinas of 1996 provides for the framework of port activities. The Act was used to establish port authorities for major ports accelerating state economy such as Ports of Gda ńsk, Gdynia and Szczecin-Świnouj ście. Since its promulgation, the act was amended a few times 54 .

Under the Act, the ownership of small ports had to be transferred to the city, but only in a few cases (Kołobrzeg, Darłowo, Hel and Elbl ąg) the process turned to be successful. The other small ports are under administrative control of the maritime office or still included in the state-owned enterprise (Władysławowo) 55 .

Figure 23. LPI of Poland according to International Scorecard 56 .

54 TransBaltic 2012. 55 Ibid. 56 World Bank Group 2013. 58

Figure 24. Changes in LPI of Poland in 2007-2012 according to International Scorecard 57 .

4.2 Port of Gdansk

4.2.1 General information 58

The Gdansk port is a major international transportation hub situated in the central part of the southern Baltic coast, which ranks among Europe's fastest growing regions. According to the strategy of European Union the Port of Gdansk plays a significant role as a key link in the Trans-European Transport Corridor No. 6 connecting the Nordic countries with Southern and Eastern Europe.

The Port of Gdansk is comprised of two principal sections with naturally diverse operational parameters: the inner port stretched along the Dead Vistula and the port canal, and the outer port affording direct access to the Gulf of Gdansk. The inner port offers a comprehensive range of terminals and facilities designed to handling containerised cargo, passenger ferries and Ro-Ro vessels, passenger cars and citrus fruit, sulphur, phosphorites and other bulk. The other quays fitted with versatile equipment and infrastructure are universal in use and enable the handling of conventional general as well as bulk cargo such as rolled steel products, oversize and heavy lifts, grain, artificial fertilizers, ore and coal.

The outer port performs its operations on piers, quays and cargo handling jetties situated immediately on the waters of the Gulf of Gdansk. This section of the port offers state-of-the- art facilities suited to handling energy raw materials such as liquid fuels, coal and liquefied gas. The outer port also accommodates modern Deepwater Container Terminal. Gdansk port is a major international transportation hub situated in the central part of the southern Baltic coast, which ranks among Europe's fastest growing regions. According to the strategy of

57 World Bank Group 2013. 58 Port of Gdansk 2013. 59

European Union the Port of Gdansk plays a significant role as a key link in the Trans- European Transport Corridor No. 6 connecting the Nordic countries with Southern and Eastern Europe.

Table 19. Port characteristics of Port of Gdansk.

Characteristic o Latitude 54 25'N Longitude 18 o39'E

Total land area 652 ha Total water area 412.56 ha Total length of quays 23.7 km Warehousing area 107,022 m 2

Open store area 549,525 m 2 Maximal draught of vessels: Inner port 10.2 m Outer port 15.0 m

Cargo handling capacity:

Inner port 11.5 million t Outer port 48.5 million t

Work 24 hours a day 23:00-07:00 in three shifts: 07:00-15:00 15:00-23:00

Time zone CET(GMT+1h) Ice-free all year long

60

Figure 25. Map of Port of Gdansk 59 .

59 Port of Gdansk 2013. 61

Figure 26. Port of Gdansk total cargo turnover in 2007-2012 60 .

4.2.2 Connections 61

Drawn upon Transport Infrastructure Needs Assessment (TINA), the EU binding strategy provides for the Port of Gdansk to be one of the key links of the Trans-European Transport Corridor No 6. Overlapping, to a great extent, the course of the ancient Ambe r Route, the corridor is, on the one hand, the evidence of the historical role that the Port of Gdansk has played up to the present time in Europe's transportation system, and, on the other hand, a consequence of the recent forecasts concerning the future transportation development trends.

Owing to its geographical and market-related location the Port of Gdansk is well-suited for playing the role of a distribution centre oriented towards the Baltic Sea Region, as well as the Central and Eastern European states. At the same time, it comprises a vital link in a transportation chain providing a connection between the Nordic States and the South European States, in particular those in the Adriatic and the Black Sea regions.

The trends that can be observed on the European transportation market such as a rapid increase in transportation of freight units (containers), expansion of the Ro-Ro transport, the necessity to develop combined transportation systems and short sea shipping, as well as a constantly growing traffic congestion on the European roads that calls for the implementation of the idea called "from road to sea" - naturally affect the development of transport corridors.

Due to its statutory and legal scope of business activity, the Port of Gdansk Authority SA is directly involved in providing suitable conditions in terms of infrastructure in the area under its management. With a view to the development of Corridor 6 new shipping services operating in the Baltic Sea Region have been launched. The major significance, however, lies with the investment plans accompanied by the infrastructure development providing the port with a direct connection to its hinterland. The planned investment projects aim at the best possible level of cohesion in the Port of Gdansk on the one hand and the infrastructure of Corridor 6 and the entire EU transportation network on the other hand.

60 Port of Gdansk 2013. 61 Ibid. 62

Figure 27. Trans-European Transport Corridor No 6.

63

Figure 28. Polish railroads. The Port of Gdansk has a very good network of rail connections with the hinterland. In Gdansk there are railway connections with all strategic directions, i.e.: south, west and east. Two rail trunk lines connect Gdansk with the south of Poland through Lodz/ Warsaw to Katowice/ Cracow. Gdansk also has two electrified rail connections with Poznan and Wroclaw, as well as electrified one - track rail connection with Szczecin and district of Kaliningrad.

The suspension bridge of John Paul II, opened on 9 th of November 2001, is an important transport link to the port and the domestic and international road network. It helps to avoid directing heavy traffic streams through the city centre. The unique structure of the bridge is a symbol of this modern port. The project was financed by the state budget with the support of a loan granted by the World Bank.

Table 20. Characteristics of bridge of John Paul II.

Characteristics Principle bridge span 230 m Number of traffic lanes 2/2 Width 20.31 m Pylon 99.8 m Road length 1,200 m Capacity 50 tonnes Cost ca. 150 million PLN

64

Table 21. Port of Gdansk regular connections to European ports 62 .

Country Destination Carrier Frequency Cargo type Agent

DENMARK Aarhus Maersk Line (AE10) Weekly Containers Maersk Polska

ESTONIA Tallinn Seago Line Weekly Containers Seago Line

Hanko Euro Marine Weekly Ro/Ro: cars MAG Logistics NV FINLAND

Helsinki Seago Line Weekly Containers Seago Line

Kotka Seago Line Weekly Containers Seago Line

Bremerhaven Maersk Line (AE10) Weekly Containers Maersk Polska

Bremerhaven Seago Line Weekly Containers Seago Line

Bremerhaven Seago Line Weekly Containers Seago Line

Bremerhaven Unifeeder A/S Weekly Containers Unifeeder GERMANY Hamburg Seago Line Weekly Containers Seago Line

Hamburg Team Lines Weekly Containers Team Lines

Hamburg Team Lines / CMA Weekly Containers PUBC CGM

Hamburg Unifeeder A/S Weekly Containers Unifeeder

Hull Seaway Logistics 1-2 times a Breakbulk Baltic month cargo Shipping GREAT Agency BRITAIN Newcastle Euro Marine Weekly Ro/Ro: cars MAG Logistics NV

Rotterdam Maersk Line (AE10) Weekly Containers Maersk Polska HOLLAND

Rotterdam Unifeeder A/S Weekly Containers Unifeeder

LATVIA Riga Seago Line Weekly Containers Seago Line

LITHUANIA Klaipeda Seago Line Weekly Containers Seago Line

Kaliningrad Seago Line Weekly Containers Seago Line

RUSSIA Kaliningrad Seago Line Weekly Containers Seago Line

St. Petersburg Seago Line Weekly Containers Seago Line

SPAIN Algeciras Maersk Line (AE10) Weekly Containers Maersk Polska

Gothenburg Maersk Line (AE10) Weekly Containers Maersk Polska

SWEDEN Nynäshamn Polish Baltic 2-3 times a Ro/Ro & Polish Baltic Shipping Co. week / Passengers Shipping Polferries

62 Port of Gdansk 2013. 65

Figure 29. Main container connections of Port of Gdansk 63 .

Figure 30. Main Ro-Ro and ferry connections of Port of Gdansk 64 .

63 Baltic Transport Maps. 64 Ibid. 66

4.2.3 Investments and developments 65

Access infrastructure to the area of Przemyslowe Quay

The project is focused on improving the capacity of a transport system linking Przemyslowe Quay and the port development land with the main transportation thoroughfare of the eastern part of the port i.e. the Sucharski Route, as well as on an increased cargo throughput of Przemyslowe Quay. The project provided for the redevelopment of the quay, construction of a new flyover with a load capacity of 50 tonnes and modernisation of Ku Ujsciu Street.

As a result, a direct road approach to the quay area was provided for heavy duty traffic, which eliminated the burden from residential districts. Furthermore, conditions were laid down to ensure the effective use of some 120 ha of port development land. In a long-term perspective, the completion of the project will enable the expansion of cargo handling terminals, logistics and distribution, as well as industrial activity.

Construction of Deepwater Container Terminal Gdansk

The largest and most significant investment project strongly affecting the future of the Port of Gdansk is the construction of a container terminal. A suitable long-term tenancy contract between the investor and the Port of Gdansk Authority SA was signed in 2004. The investor - DCT Gdansk SA - is a company incorporated in Poland, with major control held by the Global Infrastructure Fund (GIF) managed by the Macquaire Bank Group having its main office in Australia. The British company, which was set up especially for the purpose of initiating the project and developing the terminal, remains a minority shareholder.

Phase one of the terminal construction was completed and as a result, the terminal reached an annual throughput capacity of 500 thou. TEUs. The terminal's targeted capacity rate will reach ca. 4 million TEUs. Construction of the container terminal gives rise to a natural demand for the provision of a logistics and distribution centre in its immediate vicinity. Stretching across the vast development lands, the Centre will constitute a facility of vital importance, complementary to the terminal infrastructure and focused on the traffic of goods between the western states of the European Union and Russia, Belarus and Ukraine. Favoured with its conducive location, the Centre will be linked to the road network, include A-1 Motorway, and to the railway network. The Centre will play the role of a hub providing a wide range of value added services such as forwarding, distribution, warehousing, storage, packing and unpacking containers, as well as agency, customs and banking services etc.

GTK - development

GTK - a forerunner of container handling in the Gdansk port - assures its loyal clients that it is still needed and has its position within Baltic container shipping. On 25th of November, Gdansk Container Terminal (GTK) launched another container line. On this day, m/v BR VICTORIA of "Team Lines" is calling there. The POL2 service is to cover a weekly connection Hamburg (Tuesday) - Szczecin (Thursday) - Gdansk (Friday). With the new agreement, GTK - a forerunner of container handling in the Gdansk port - assures its loyal clients that it is still needed and has its position within Baltic container shipping.

65 Port of Gdansk 2013. 67

GTK is currently running the "Unifeeder", "Team Lines" and "CMA CGM" regular registered shipping lines. It employs the Szczecinskie Quay for receiving and loading of containers shipped between Gdansk and Rotterdam, Imminngham, South Shields, Grangemouth, Hamburg, Bremerhaven, Kaliningrad, Kotka and, of course, Gdynia and Szczecin. The terminal, with an annual handling capacity of 90-100 thousand TEU, is dealing with the crisis quite well. In the difficult 2010, it applied 60% of its capacity. 2011 is likely to bring slightly worse results - up till mid-November; GTK has handled just under 40,000 TEU. Against all odds, there are still ship owners standing by the terminal and trusting in the envisaged increase in Baltic container turnovers.

Analyses released by "Maersk Line" recently show that accessibility and reliability of services as well as their simplicity and timely deliveries are qualities that clients value most. This attribute is a synthesis of all the vital elements of the container tycoon's latest proposal - the "Daily Maersk" service, which Maersk line offers within the package of connections between Asia and Europe. Oceangoing giant ships, operating between four Asian and three European ports, are to ensure such a comfort of service as that guaranteed by feeder ships operating between Gdansk Container Terminal and all major Baltic ports.

Logistics Centre

Pomeranian Logistics Centre is the largest investment of its kind in Northern Poland. A large, multifunctional logistics centre will be developed in the vicinity of DCT Gdansk terminal. Agreement for the investment implementation between the City of Gdansk, InvestGda and Goodman Group was signed in December 2010.The logistics centre will be financed and built by the Goodman Group. The concept envisages construction up to 500.000 m 2 of warehouse space and up to 40.000 m 2 of office space. The area of 10 hectares will be developed at the first stage.

Opportunities:

• possibility for built-to-suit warehouse, production and office space • total development area of 110 ha • directly connected to DCT Gdansk container terminal – the largest container terminal in Poland • growing consumer market of Tri-City (Gdansk, Sopot, Gdynia) of over 1 million inhabitants • the project is a multimodal logistics hub, combining international rail, road and sea transportation routes linking Poland with all major European cities

DCT Gdansk and Goodman Logistics Centre will form the largest container logistics cluster in this part of Europe.

4.2.4 Intermodal terminals

Container terminals

Container handling at the Port of Gdansk is concentrated in the inner port at the Szczecinskie Quay operated by the Gdansk Container Terminal (GTK) and at the Deepwater Container Terminal (DCT) situated in the outer port. These terminals operate mainly feeder and short

68

sea shipping services. The Deepwater Container Terminal is designed to accommodate the largest vessels that can enter the Baltic Sea i.e. Postpanamax vessels.

Both GTK and DCT offer a variety of integrated terminal and holder depot operations: a full range of container handling and services, stuffing and stripping, repairs and cleaning, reefer plugs for refrigerated containers.

4.2.4.1 Deepwater Container Terminal (DCT) 66

DCT Gdansk is strategically located in the North of Poland (Pomerania Region) within the vicinity of the Port of Gdansk community which is situated along the Gulf of Gdansk and the Motlawa River. The Port of Gdansk is situated on the sea and land transportation corridor linking Northern and Central Europe and subsequently linking to both Southern and Eastern regions: the Balkans and Turkey. An important advantage of DCT Gdansk’s location is the large space available for the planned development out to sea and on the hinterland. The development will significantly increase the transportation capabilities of DCT Gdansk between the Baltic Sea and inland, for Poland and Central Eastern Europe. DCT Gdansk’s favourable location means there is optimum connectivity seawards to the Baltic region and inland to the continent.

DCT Gdansk is implementing its first phase of development and currently providing customers with modern facilities:

• 44 hectares (108 acres) of total area • 650m total quay length of which 265m has 13.5m depth and 385m has 16.5m depth (“Baltimax” draft alongside) • 40m wide Ro-Ro ramp • main container stacks over 18,000 TEU capacity • Empty container area with 5,000 container capacity • 336 reefer plugs • 5 hectares of heavy-duty paving to facilitate the storage of Ro-Ro traffic and non- containerised cargo • CFS warehouse (7,200m²) with truck ramp. Possibility to be double the size of the warehouse • Rail siding: 2×1,000m tracks, railway handover point. Additional two tracks to be constructed and rail crane installed • Truck park for up to 100 truck/trailer combinations • Gate lanes manned 24/7 by security staff, CCTV monitored, RF tag identification and radiological sensors • 756m² fully equipped engineering workshop and stores • Administration building with 3,000m² of office space and amenities for staff, Customs and the Border Guard

DCT Gdansk is equipped to cover all container operations on the quay, yard and warehouse (including LCL cargo operations)

66 DCT Gdansk SA 2013. 69

Table 22. Handling equipment in DCT Gdansk.

Equipment Quantity STS “Post-Panamax” 5 Ship-to-Shore Gantry Crane RTG 16 Rubber-Tyred Gantry Crane RS SMV 4531 TB5 3 Reach stacker SMV 7/8 ECB 90 2 Empty Container Handler IMV RT222 25 Yard truck Container semitrailer 28 Ro-Ro Semitrailer 4 Ro-Ro Fork Lift 1 Fork Lift 9 ACTIW LoadPlate unit 1

Deepwater Container Terminal Gdansk became operational on 1 June 2007 with the arrival of the first commercial container ship. Phase one of the terminal construction was completed in October 2007. The terminal's targeted capacity rate will reach ca. 4 million TEUs. Additionally, one of the berths has been equipped with a Ro/Ro ramp. Handling is provided by means of state-of-the-art IT system supporting EDI. As of January 2010, in addition to feeder container services, the DCT also handles the AE10 regular deep sea service operated by Maersk Line. As a result, from September 2010, the Port of Gdansk claims the top spot among Polish container ports in terms of Polish import/export handling.

DCT Gdansk is an ideal gateway to Poland as well as the transhipment hub for St. Petersburg and the rest of the Baltic region. Unlike other terminals in Poland and in the vicinity, DCT Gdansk has unlimited potential for expansion, up to 4 million TEU capacity in future planned development phases. With its infrastructure developed specifically to suit the deep-sea container market, up to 16.5metre of depth, full RFID, GPS coverage of the facility managed by Jade Master Terminal (one of the most advanced TOS currently available) and as the only terminal with the ability to handle full block trains, DCT Gdansk is the ideal platform to allow shipping lines and forwarders to efficiently serve Poland and a wider Central and Eastern Europe. Thanks to its 60 Ton super Post-Panamax cranes, extensive yard area, all year round ice-free and tide-free deep sea direct access, DCT Gdansk is also the perfect hub for any line’s transhipment needs.

The terminal offers the following regular services:

• Maersk Line on the route :

70

o Gdansk - Aarhus - Gothenburg - Bremerhaven - Rotterdam - Algeciras - Suez Canal - Singapore - Yantian - Hong Kong - Kwangyang - Ningbo - Shanghai - Hong Kong - Yantian - Tanjung Pelepas - Suez Canal - Rotterdam - Bremerhaven - Gdansk calling once a week (AE10 service) • Seago Line on the routes: o Gdansk - St. Petersburg - Gdansk calling once a week (L20 service)

o Gdansk - Kotka - Helsinki - Bremerhaven - Kaliningrad - Gdansk calling once a week (L46 service)

o Gdansk -Tallinn - Riga - Klaipeda - Gdansk calling once a week (L48 service)

o Gdansk - Hamburg - (Bremerhaven) - Kaliningrad - Gdansk calling once a week (L50 service)

4.2.4.2 Gdansk Container Terminal (GTK)67

In November 1998, the Gdansk Container Terminal (GTK) became operational at the Szczecinskie Quay. Owing to the consistently implemented policy that favours the client's interests and comfort, as well as the efforts to maintain high quality standards of services, Gdansk Container Terminal established its reputation as a friendly port. Major advantages of the Gdansk Container Terminal include: services that ensure client's quick and efficient contacts with administration offices and institutions, comprehensive terminal and depot holder services, a free zone facilities at the Port of Gdansk.

The terminal can service ships of a maximum capacity of 20,000 DWT. This quay can service ships operated in Lo/Lo and Ro/Ro systems. The terminal handled 31,729 TEU sea-borne in 2012.

Table 23. Terminal characteristics of Gdansk Container Terminal.

Characteristics Ship length up to 225 m Operating quay length 365 m Max. draft 9.8 m Open stores 67,417 m 2 Ship-to-shore gantry crane 40/60t Shore cranes 40t Gantry cranes 32/40t Straddle carrier 40t Reach-stackers 10t Mobile harbour crane 100t Refrigerated containers 95 stations

67 Gdanski Terminal Kontenerowy S.A. 2010. 71

The terminal offers the following regular feeder services:

• Team Lines on the route: o Gdansk - Hamburg - Gdansk calling once a week • Team Lines / CMA CGM on the route: o Gdansk - Hamburg - Gdansk calling once a week • Unifeeder A/S on the routes: o Gdansk - Rotterdam - Gdansk calling once a week o Gdansk - Bremerhaven - Hamburg - Gdansk calling once a week

The terminal is managed by the Gdansk Container Terminal Co., whereas services are rendered by the Port of Gdansk Cargo Logistics SA.

Gdansk Container Terminal Co. (GTK) has launched cooperation with a new rail operator PCC Intermodal SA. The freight train arrived at the Szczecinskie Quay on 2 April 2009 and the first load supplied by this operator was handled by the company Nautiqus Ltd. The service operated by PCC Intermodal SA will guarantee regular container shipment between GTK and the terminals in Slawkow and Brzeg Dolny in the south of Poland. At the same time, PCC is already providing services to the both container terminals situated in the Gdansk port.

Ro-Ro terminals

The Port of Gdansk provides services to Ro/Ro vessels at the quays of the Duty Free Zone, furthermore, it is possible at the state-of-the-art Westerplatte Ferry Terminal. A Ro/Ro ramp is also available at the Polferries Terminal operated by the Polish Baltic Shipping Co. offering regular ferry connections to Sweden, and additionally at the Deepwater Container Terminal.

Situated within a short distance of the entrance to the inner port, the Duty Free Zone operates the handling of motor vehicles from manufacturers from the Far East and European countries. The Duty Free Zone facilitates the storage of imported goods free of customs duty and guarantees, quota and tax for an unlimited period of time. Picking up and customs clearance of goods in batches is also available. Registration of goods supplied to and picked up from the Duty Free Zone is implemented by means of an IT system.

The Westerplatte Ferry Terminal is located on the eastern bank of the Port Canal and provides docking berths fitted with Ro-Ro ramps as well as extensive storage and manoeuvring yards. Ro-Ro vessels services are located at the quays of the Duty Free Zone and state-of-the-art Westerplatte Ferry Terminal. A ro-ro ramp is also available at the Polferries Terminal operated by the Polish Baltic Shipping Co. offering regular ferry connections to Sweden, and additionally at the Deepwater Container Terminal.

4.2.4.3 Westerplatte Ferry Terminal 68

New cargo and passenger ferry terminal is located at Obroncow Westerplatte Quay near the entrance to the port and, at the same time, within a short distance from the centre of Gdansk. The suspension bridge provides the terminal with an excellent transportation link to national and international road network, in particular the Gdansk-Warsaw express road (the distance to Warsaw is 345 km).

68 Port of Gdansk 2013. 72

The terminal's infrastructure is dedicated to the handling of:

• vessels carrying cargo in Ro/Ro technology • ferries • passenger ships

The Westerplatte Ferry terminal is open for business - the Port of Gdansk Authority SA invites business partners interested in the launch of new regular shipping services. The Westerplatte Ferry Terminal guarantees the simultaneous handling of vessels at three berths - each fitted with a Ro/Ro ramp.

Terminal's capacity:

• 3 berths: - berth no 1 with a maximum draught of 8.1 metres - berth no 2 with a maximum draught of 8.1 metres - berth no 3 with a maximum draught of 9.3 metres • accommodation of vessels with a length of up to 225 metres • two floating Ro/Ro ramps, with the maximum allowable carrying capacity of 80 tonnes each, on 35-metrelong and 21-metre wide pontoons and one stationary swinging ramp with the maximum allowable carrying capacity of 40.7 tonnes 2 • total area of the Terminal - 72,000 m 2 • parking yards with an area of 10,700 m , which at one time can accommodate: - 375 passenger cars / 125 heavy-duty tracks - 12 busses - 20 road trains 2 • manoeuvring and storage yards with an area of 19,900 m , which at one time can accommodate: - 500-1100 passenger cars or - 140-360 trailers 2 • warehouse with an area of 8,000 m • rail track system leading to the storage facility and to the adjacent railway ramp - max. length of a set of train cars - 170 metres • six customs and border clearance stands for vehicles 2 • passenger terminal with a total area of 2,050 m , with a pedestrian passage and administration back-up facilities ensuring full-range passenger traffic services (six passenger check-in stands) • escalator and a lift to passenger passage • car parks in front of the terminal building for 52 passenger cars and 8 busses • Terminal's annual throughput capacity: - 600 th.-1 million passengers - 180 th.-400 th. passenger cars - 150 th.-350 th. heavy-duty tracks • procedures compliant with the requirements of the Schengen Treaty

73

Subsequent investment projects aimed at improving the connection between the terminal and the transport network which is currently undergoing expansion and modernisation, incl. the A-1 motorway, provide for:

• the construction of the Sucharski Route together with a tunnel under the Dead Vistula River the construction of a new, double-track railway bridge across the Dead Vistula River.

4.2.4.4 "Polferries" Ferry Terminal 69

The terminal is managed by the Polish Baltic Shipping Co. Polferries. Passenger and vehicle traffic is serviced by a ferry which provides connection to Nynäshamn in Sweden. "Scandinavia" ferry is able to take aboard up to 1,800 passengers and 515 passenger cars or 175 passenger cars and 38 lorries. The ferry is 146.1 m long and 25.5 m wide. As a sole company with the entirely Polish capital, Polish Baltic Shipping Co. operates ferry services to Scandinavia. Drawing on years of experience in the field of tourists’ transportation, Polish Baltic Shipping Co. - Polferries established itself as a leading provider of services to the Nordic States. At present, Polish Baltic Shipping Co. is managed in compliance with the most advanced standards applied in the ferry services operating. Based on the recently developed strategies, activities have been intensified with a view to the improved quality standards of rendered services. Operating quay length is 175m and max draft is 6.6m.

Duty Free Zone

The Duty Free Zone (DFZ) was opened in Gdansk in 1996. The management of the Duty Free Zone lies with the Port of Gdansk Authority SA. Major benefits to the business partners co- operating with the Duty Free Zone include storage of imported goods without customs guarantees, levy, duty and tax for an unlimited period of time, the removing and customs clearance of goods in batches, and also, providing advantages to embark on value-added manufacturing and assembly activities.

Situated at the entrance to the port at quays WOC I and WOC II in the Wladyslaw IV Basin, the Duty Free Zone operates 24 hours a day and its area totals 31 ha. Registration of goods that are supplied to and removed from the Duty Free Zone is implemented by means of the IT system. The main operator is Port of Gdansk Cargo Logistics SA. Major forwarding agents, numerous customs agencies and inspection offices as well as many importers are all present at the DFZ. The convenient transport junction provides good conditions for developing trade.

Table 24. Terminal characteristics of "Polferries" Ferry Terminal DFZ.

Characteristics Area 31 ha Ship length up to 170 m Operating quay length: WOC I 566 m

69 Port of Gdansk 2013. 74

WOC II 600 m Max. draft: 8.4 m Warehouses area 38,553 m 2 Warehouses capacity 32,000t Open stores 113,400 m 2 Cranes from 6 to 16t

4.3 Port of Gdynia

4.3.1 General information 70

Port of Gdynia Authority SA (PGA SA) is a public service company established on 30 November 1999 by the representatives of the Municipality of Gdynia and the State Treasury and has been serving as a managing body of the port since that moment. It directly manages the areas where the operating companies in which a PGA SA holds shares and other independent entities carry out handling and storage operations. The company carries out the objectives set out in the Act on ports and harbours, such as, inter alia, management of the property and port infrastructure, forecasting and planning the port development and the maintenance and expansion of the port infrastructure, while ensuring adequate standards of safety of persons and cargo handling as well as keeping the environmental standards. Carrying out the privatization processes under the Act on ports and harbours the PGA SA sells shares of the subsidiaries (while keeping the property used by the companies) in order to completely separate the spheres of management and operation, as well as for the increase of the capital strength and the competitiveness of the port operating sector. The aim of these actions is to maintain a stable and strong position of the Port of Gdynia in the Baltic region and within the European North-South transport corridor.

The Port of Gdynia has very favourable navigation conditions. Roadstead - protected by the Hel Peninsula, which is a natural year-round shield for the anchored vessels, the 2.5 km long outer breakwater and a 150 m wide and 14 meters deep entrance to the port make the port easily accessible from the sea. The Port of Gdynia is a warm water port, where there are no tides. The water level may rise by 60 cm during the strong westerly winds, or fall by about 60 cm during strong easterly winds.

The quays at the Port of Gdynia are 17,700 meters long, of which over 11,000 are used for handling operations. The total area of the port: 755.4 hectares, including the land area of 508 hectares.

The Port of Gdynia is an universal modern port specializing in handling general cargo, mainly unitized cargo transported in containers and in a Ro-Ro system, based on the well-developed network of multimodal connections including hinterland, regular Short Sea Shipping Lines as well as ferry connections (ferry terminal). The Port of Gdynia is an important link in the Corridor VI of the Trans-European Transport Network (TEN-T).

70 Port Gdynia Authority 2013. 75

Handling of the containerized cargo at the Port of Gdynia is the domain of two modern container terminals located in the Western Port: Baltic Container Terminal Ltd. and Gdynia Container Terminal S.A. There are also - equipped with modern cargo handling equipment - bulk terminals: Baltic Grain Terminal Ltd., Maritime Bulk Terminal Gdynia Ltd., Baltic Bulk Terminal Ltd., Westway Terminal Poland Ltd. and Petrolinvest.

Baltic General Cargo Terminal Gdynia Ltd. is specialized in handling general cargo. It consists of two terminals - part of BTDG is dedicated to handling Ro-Ro cargo (within Basin V of the port of Gdynia) and the other part to handling conventional general cargo.

Figure 31. Main port operators and companies 71 .

71 Port Gdynia Authority 2013. 76

Figure 32. Port of Gdynia total cargo turnover in 2007-2012 72 .

4.3.2 Connections 73

Table 25. Main intermodal cargo connections in Port of Gdynia.

Country Port Operator Type Belgium Antwerp Mediterranean Shipping Company Containers Belgium Antwerp OOCL Containers Belgium Antwerp Transfennica Ro-Ro Denmark Aarhus UNIFEEDER Containers Finland Kotka UPM-Kymmene Seaways Ro-Ro Finland Rauma Transfennica Ro-Ro Finland Hanko Transfennica Ro-Ro Finland Rauma UPM-Kymmene Seaways Ro-Ro Finland Helsinki Finnlines Ro-Ro Finland Hamina Transfennica Ro-Ro Finland Halla UPM-Kymmene Seaways Ro-Ro Netherland Rotterdam Mann&Son Ltd Containers Netherland Rotterdam UNIFEEDER Containers Netherland Rotterdam OOCL Containers Lithuania Kłaipeda UNIFEEDER Containers Lithuania Kłaipeda MSC Containers Germany Hamburg UNIFEEDER Containers

72 Port Gdynia Authority 2013. 73 Ibid. 77

Germany Hamburg OOCL Containers Germany Bremerhaven UECC Ro-Ro Germany Bremerhaven UNIFEEDER Containers Germany ROSTOCK Finnlines Ro-Ro Russia St Petersburg OOCL Containers Russia St. Petersburg MSC Containers Russia Kaliningrad Mann & Son Limited Containers Sweden Trelleborg UECC Ro-Ro Sweden Karlskrona Stena Line Polska Ferry UK Grangemouth UNIFEEDER Containers UK Hull MacAndrews Containers UK Tilbury Transfennica Ro-Ro UK Immingham UNIFEEDER Containers UK South Shields UNIFEEDER Containers Russia St. Petersburg Delta Shipping Lines Containers Germany Hamburg Delta Shipping Lines Containers Netherland Rotterdam Delta Shipping Lines Containers Dania Aarhus Delta Shipping Lines Containers Germany Hamburg/Bremerhaven Team Lines/CMA-CGM/APL Containers Russia St. Petersburg Hapag-Lloyd Containers Finland Helsinki Hapag-Lloyd Containers Germany Bremerhaven Hapag-Lloyd Containers Germany Hamburg Hapag-Lloyd Containers

78

Figure 33. Main container connections of Port of Gdynia 74 .

Figure 34. Main Ro-Ro and ferry connections of Port of Gdynia 75 .

4.3.3 Investments and developments 76

The development of the Port of Gdynia is inseparably linked to the fortunes and development of the City of Gdynia. Different companies, whose activities range from stevedoring,

74 Baltic Transport Maps. 75 Ibid. 76 Port Gdynia Authority 2013. 79

shipbuilding and repair works, tourist and transport service providers operate and are located within the administrative land boundaries of the port, which is about 492.7 hectares.

The entire port is administered by the Port of Gdynia Authority S.A., which has the statutory obligation to manage all port land and infrastructure. The grounds used by stevedoring and auxiliary service companies with 100% shares owned by the Port and other private ones are directly managed by the Authority. The Port is proceeding with the successive sale of shares in port-owned companies as a result of obligations imposed by Parliamentary legislation on it to restructure and privatise these companies in order to separate operations from administration duties. At the same time, strategic investment projects are being undertaken in the port.

The General Assembly of Shareholders approved the "Port of Gdynia Strategic Development Plan to 2015" on 28th August 2003. It is an extensive document that sets strategic vision and mission of the company as well as investment targets, which the Port Authority plans to execute in the port area taking into account also co-financing from EU Structural Funds. The primary aim of the strategic plan is to create conditions for long-term success on the market. As a result, this plan is very elastic and will be continually revised and will adapt port to new market conditions.

To maintain a sustainable strong position of the port in the Baltic Sea Region as a leading in general cargo handling particularly in containerised and Ro-Ro cargoes, acting on a base of wide multimodal hinterland network and numerous short sea shipping and ferry lines as well as cruise shipping. The strong position of port will result from providing adequate personal al and cargo safety and security standards, best practises in the field of environmental protection and high quality and effective port activity. Port Authority mission is to create conditions that ensure long-term, stable and sustainable development of the Port of Gdynia by consistent and continuous improving, infrastructure development, supporting for best market practises as well as care of social environment goodness.

Development Priorities:

I. Planning and implementation of projects that improve accessibility to the port from its hinterland, optimal exploitation of port land, infrastructure and other resources of the port through regular maintenance, modernisation, investments and other activities in accordance with market demands and development plans of the city.

II. Maintaining a strong position as a leading Polish port in the Baltic Sea Region that functions in a safe, reliable, efficient and effective way to support our clients in the Trans- European Transport North -South Corridor. We want to maintain our position as a universal port with specialised terminals to handle unitised general cargo and provide feeder services to container, Ro-Ro and ferry lines visiting the port.

III. To continue with the privatisation and restructuring processes of our service companies in order to separate management activities entirely from operations as well as for growth of capital strength and competitiveness of operation sector in the port and for continuity of organisational and personal restructuration of Port Authority.

IV. To guarantee high service quality standards in port operations at the highest international level for creation of favourable climate for investment and operations as well as for development of port labour market. 80

Expected directions for investment development in the Port of Gdynia:

• In the western part of the port - creation of conditions to develop new port services, such as a logistics distribution centre to provide value-added services on containerised general cargo and ferry traffic. New investment projects in the western Port will be executed in the vicinity of the existing Container and Ferry Terminal, taking into account the functional characteristics of this part of the port. • In eastern part of the port - maintaining the current activities of the Terminals operating in the area but efforts will be made to introduce new port-related activities so as to make intensive use of the land. Conventional general cargoes, Ro-Ro, tropical fruits, coal, chemical products and other bulk cargoes will be mainly handled in this part of the port. Additional intention for the area is the relocation and development of a dedicated Ferry Terminal here.

The above spatial development directives will be achieved through following efforts to revitalise and invest:

• Improving of road accessibility to the port; - Reorganisation of the rail network in the port; - Relocation and development of a dedicated Ferry Terminal - there are two options: Basin VIII or IV; - Development of the Ro-Ro Terminal in Basin V and its surroundings; - Revitalisation of Basin IV through the development of specialist terminals on Indyjskie (Indian), Rotterdamskie (Rotterdam) and Polskie (Polish) Quays; - Improving of service quality of operations in Basin III and revitalisation of facilities in its surroundings; - Developments of the Greenfield areas near the Container Terminal (including the provision of value-added, logistics services and production activities).

Development strategy - Strategic Port Investments

Reconstruction of the Ro-Ro Terminal (Phase II).

Phase I of the works was completed in July 2001 and handling activities commenced in the V Basin on the 1st of August the same year. The investment has enabled and ensured the revitalisation of the conventional general cargo handling area, which was rarely utilised during the close of the 90's of 20th century. Ro-Ro technology improves service quality and speed and the investment facilitated the creation of a unified and larger storage area.

Consideration is given to building the third and fourth Ro-Ro ramps during the second stage of reconstruction works. Building of new warehouses and sheds, extension of the storage yards, construction of access roads and gates, repair of quay walls and strengthening of sea bed along the quays are the planned tasks to be performed in the 2nd Phase. There are possibilities to liquidate old warehouses (Nos. 20, P, and R) that have lost functional capabilities.

The scale of these developments will largely depend on the growth in Ro-Ro traffic through the port. The scope of the works will be revised yearly taking into account the level of turnover, technological trends and new building programmes will be prepared accordingly. Investment projects are currently being prepared and their implementation took place 2004- 2006, using the Port Authority's own resources to finance. EU funds to finance investments to the tune of 50% will be source between the period of 2007 and 2015. Alternative plans are also being considered to develop a road network in the area along Polska Street by 81

constructing a viaduct to connect the Ro-Ro Terminal. Successive improving the effectiveness of the Terminal will lead to upgrading of service quality. This in turn will allow for proper preparation of the restructuring and privatisation process in the port.

Modernisation and Extension of the Holenderskie (Dutch) Quay is aimed at improving maritime access to the port and to meet the ever-growing demand from ship-owners. Design works was completed and implementation was 2003-2007. The investment is initially being financed from the Port Authority's own resources. 50% funding from the European Union will be used to finance the later parts of the project. The investment is that there will be an expansion of 290 m-section quay length by 4 m (into the water) in the direction of Basin III and increasing the draught to a maximal depth of 13.5 m.

The investment will be divided into three phases:

1. repair and modernisation of 178 m length in the mid-section of the quay, 2. modernisation of the remaining section of 112 m, with the possibility of deepening the both sections; 3. modernisation of the top plate of the quay.

Dredging works will be simultaneously carried out, possibly to a depth of 13.5 metres. Modernisation of the Holenderskie Quay is accompanied by the construction and reinforcing of surfaces on the Belgijskie (Belgian) Quay. The reconstruction works will create a deep- water berth, where ships of 80.000 DWT can be handled. Owing to these investments, it will also be possible to attract import cargo (coal, ores, aggregates etc.) that are carried on Baltimax vessels as well as scrap metal in the export direction.

Construction of handling yards on along Basin VIII has the aim to offer alternative handling opportunities for the Ferry Terminal (for current needs and eventually for the future dedicated terminal) or for container operations. The final decisions will depend on developments in the container and ferry markets, as well as investments in competitor ports.

Spatial exploitation of the Authority's land along Basin VIII includes the regulation of the Chylonka Stream together with construction of a mooring berth, construction of the Bulgarskie (Bulgarian) Quay. Construction of handling yards will be successively carried out together with the reinforcement of the terrain for media and communication systems. Further preparation and reinforcement works of the extended areas along the Bulgarskie Quay will be carried out.

Extension of the Bulgarskie (Bulgarian) Quay is to offer possibilities for handling an increased volume of containers or alternatively ferry traffic (in the event of expansion of the Ferry Terminal at its current location on Basin VIII as its final location). Analyses and design works to be carried out in the years 2005-2006 and investment implementation 2007-2010 with 50 % financial support from EU Funds. This investment will consist of the construction of a new quay 250-m long and the preparation and appropriate reinforcement of manoeuvring yards. The final shape and length of the quay will depend on the requirements of the future operator.

The Port of Gdynia Authority S.A. recently modernised the current Ferry Terminal in order to improve the quality of service offered to passengers and to increase the handling capacity to meet the growing passenger and cargo traffic. This modernisation work has offered the chance to service two big ferry operators for the next few years. However, the current growth 82

in ferry traffic demands the construction of a new and dedicated Ferry Terminal. There are variant location possibilities for this new terminal: Basin IV in the Eastern Port or Basin VIII in the Western Port (current location). Location decision will depend on development needs of container operations or growth volume of ferry traffic and the decision will also inseparably depend on development of road access to the port.

The Ferry Terminal could well be located on Polskie (Polish) and Fi ńskie (Finnish) Quays in the eastern part of the Port of Gdynia. There are two warehouses (Nos. 23 and 2) situated on these quays and depending on the needs arising from the location of the Terminal will have to be either renovated or demolished. The monumental and legendary Passenger Terminal is located just in the close vicinity of the Finnish Quay. It can be suitable to be used to service maritime tourism due to the proximity of the area to the city centre. It will comfortable for the passengers to visit the City centre as well as other parts of the Tri-city Agglomeration. Total area of the proposed Terminal is 92,000 m 2 and it is three times larger than the current ferry Terminal on Basin VIII.

Maintaining the current location in the western part of the port will require less input in terms of office space, service of passengers and manoeuvring yard, since there will only be a need to reconstruct the existing. However, higher hydro-technical infrastructure inputs will be needed, e.g. new quay and ferry ramps. Total space will then amount to about 70,000 m 2. Those new elements would be constructed on the Authority's land alongside Bulgarskie Quay.

Construction of a main station in the new ferry and passenger terminal is a separate task within the establishment of the ferry terminal in Basin IV. This building will fulfil one of the main target of Gdynia City Development Strategy i.e. locations of universal, complex Ferry- Passenger Station in the Eastern Port and activation of transport in VI TINA Corridor.

Preparation of land for the construction of Logistics Distribution Centre is the basic element of creation a Logistics Platform in Port of Gdynia. Its aim is to offer a full range of logistics services related to international transport of cargoes (Polish and transit sea trade) and additionally to the domestic trade. It is expected the framework of various commercial entities i.e. warehousing, forwarding or logistics companies in the platform.

Analysis and designs were planned for 2003-2004, implementation on 2004-2011 and financing from port's own resources with about 25% support from EU funds from 2007-2011. Location of Logistics Distribution Centre is planned in two areas:

• Western Port behind the Kwiatkowski Flyover (about 35-40 ha), • Eastern Port - part of "Mi ędzytorze" railway area (about 20-30 ha).

Additionally there is planned transformation and revitalisation of currently exploited areas located near existing terminals.

The basic virtue of the localisation of LDC in Western Port nearby Baltic Container Terminal is lack of old long-term investment and good road and railway access. It gives possibilities to build the LDC from the beginning. The localisation of LDC in Eastern Port needs to get permission to take possession of land and work out value analyses and perspectives for using existing infrastructure and development.

Reconstruction of Janka Wisniewskiego Street

83

Reconstruction of Janka Wisniewskiego Street will allow effective transfer of traffic from the Eastern Port to the Kwiatkowski Flyover. This is of major importance to the development of the Ro-Ro Terminal and consequently other future investments in the Eastern Port e.g. the Ferry Terminal. The Municipality submitted this investment project to the Strategic Operational Programme in the framework of ERDF for financial support. The port is expected to contribute 50% co-financing of the project. The scope of works in the project include the following: modernisation of the existing street from the Constitution Square through Solidarity - Polska Streets Junction to Kwiatkowski Flyover, reconstruction of junctions along the road and construction of a second double-lane road together with two new bridges.

The road network at the Wendy - Wisniewski Axis is a very important investment project considering the future development of various terminals in the Eastern Port. The investment will consist of modernisation and reconstruction of the road axis: Wendy, Chrzanowskiego and Polska Streets with the option of construction of a New W ęglowa and New Polska Streets. A new concept for a New Polska was recently approved and architectural design works are underway. Analysis will be conducted and prepared by both the Port Authority and the Municipality of Gdynia. Costs of the investment will be shared between the two organs according to their transport communications need with the hope of securing a 50% co- financing from the EU Cohesion Funds. Analysis and projects will be prepared in the years 2003-2006 (e.g. results from the Interreg IIIB funded SEBTrans-Link Project) and implementations took place in the period of 2007-2012.

Implementation of these tasks is indispensable in the upgrading the quality of the internal port road network, which in turn will enable the conduct of new investments in modern logistics activities e.g. ferry terminal or logistics distribution centres. The aims of these investments are:

• To prepare the road network in the area in order to fully restructure the Eastern Port; • To enable the development of functions associated with road transport services, • To Improve the road/ rail communication system in the Eastern Port; • To limit collision points in the road/rail network.

Investments in railway infrastructure will enable efficient handling of railway wagons on the quays. It will also help to reclaim land that could be used to develop port-related activities. Analyses and designs will be made within the framework of the Sebtrans-Link Project. Realisation of the above will be carried out in the years between 2004- 2006 and conducted in stages:

• Phase 1 - 2004-2006: main works within the administrative borders of the Port Authority. Estimated cost about 1 million Euro from own sources. • Phase 2 - 2007-2015: works in the so-called "Mi ędzytorze" area after conducting necessary analyses and obtaining the road construction permissions, with co-finance of EU funds.

84

Figure 35. Development vision of the Western Port to 2015.

4.3.4 Intermodal terminals

Port of Gdynia has two main container terminals- BCT - Baltic Container Terminal and Gdynia Container Terminal, and one Ro-Ro terminal- STDG - Sattyck ī Term īnal Drobn īcowy.

85

Figure 36. Main terminals in Port of Gdynia 77 .

4.3.4.1 Baltic Container Terminal (BCT) 78

BCT is one of the largest maritime terminals in Poland specialized in handling containers in a different transportation modes.

BCT offers:

• loading and discharging of containers, general cargo and vehicles • handling of containers, general cargo and vehicles • storage of containers, general cargo and vehicles • stuffing and stripping of containers • bonded warehousing (general cargo and vehicles) • handling and manipulations of Project Cargo

In 2012 Baltic Container Terminal handled 408 722 TEU, which means a 13% increase in comparison with the year 2011. Last year also was remarkable due to the record railway share of handling operations, which reached 42 per cent. The last year brought a 13 per cent increase in the number of handling operations. Terminal turnover, which has been increasing since 2010 as well as attractive perspectives for the container market, form a solid basis of the ambitious strategy for decades to come.

77 Port Gdynia Authority 2013. 78 BCT Gdynia 2011. 86

Today Baltic Container Terminal services over 40 trains a week. In the coming years the intermodal potential of the terminal will be increased thanks to the implementation of the greatest investment plan in BCT history. The investment worth PLN 153 million shall include, among others, the purchase of new container, yard and railway gantry cranes, surface replacement as well as the preparation of new stations for refrigerated containers. As much as 35% of this amount will be provided from EU funds.

The first handling equipment purchased under the project was commissioned for BCT already in October 2012. The efficiency of operations of container gantry cranes has reached a stable level, exceeding 30, and even 32 containers per hour.

The share of railway handling in the total number of operations kept increasing: it amounted to almost 42% p.a. BCT railway terminal is in co-operation with new operators and opening new connections. In May 2012, BCT signed the agreement with Baltic Rail Company, an international operator whose connection between Gdynia and Sławkowo is serviced by BCT twice a week. The connection is an element of implementation of the concept of the European Transport Corridor between the Baltic Sea and the Adriatic Sea. Also Polzug Company joined the group of the Company’s customers in 2012 and it opened a regular line between Pozna ń and Gdynia. In September the Company also started to handle wind farm elements, which are transported to Poland by sea from China.

The transport route on the north-south axis play an increasingly greater role in the foreign trade of Polish companies in the first place and in time also in the foreign trade of the Scandinavian countries and the Central European ones. The position of the Gdynia Seaport on the transport map shall increase during the implementation of the project and it shall be significantly supported by the initiation of services offered by BCT to ocean vessels next year.

Continuous efforts have been made towards the decision on further deepening of Gdynia Seaport, which will allow to service ocean vessels which are even three times as big as the presently serviced ones. Such colossal vessels are becoming a standard in the maritime transport of today.

Further extension of the terminal is planned to be executed in 2013, with the view to increasing the share of railway operations. Thus BCT shall implement the assumptions of the UE White Paper on Transport Policy from now to 2050, which provides that in 2030. Over 30% of goods shall be transported by rail.

Table 26. The main connections in BCT.

Name Route Rating MSC Rotterdam- Bremerhaven- Gdynia- Klaipeda- Rotterdam 1 x week Team Lines Gdynia- Gdansk- Bremerhaven- Hamburg 1 x week APL Bremerhaven- Hamburg- Gdynia- Bremerhaven 1 x week Gdynia- Gdansk- Szczecin- Klaipeda- Bremerhaven- Hamburg- Baltijsk- Helsinki- Kotka Gdynia- Gdansk- Szczecin- Klaipeda- Riga- Rotterdam- Unifeeder 4-6 x week Zeebrugge Gdynia- Rotterdam- Immingham- South Shields- Grangemouth 87

Antwerp- Rotterdam- St. Petersburg- Gdynia- Hamburg- OOCL 2 x week Gdynia- St. Petersburg- Antwerp Southampton- Zeebrugge- Wallhamn- Gdynia- Hanko- UECC/Burger 1 x week Kotka- Cuxhaven- Southhampton Wallenus/MAG Bremerhaven- Gdynia- Kotka 1 x week Rotterdam- Bremerhaven/Hamburg- Kaliningrad- Riga- Mann Lines Gdynia- Rotterdam

4.3.4.2 Gdynia Container Terminal 79

Gdynia Container Terminal (GCT) is located at Bułgarskie Wharf in the Port of Gdynia and covers a total land area of 19.1 hectares with 620 meters of shoreline. GCT owns Bułgarskie Wharf with a length of 450 meters, including 366 meters for container load-on/load-off operations.

GCT offers the following services:

• Handling of containers and general cargo (sea, road and rail transportation modes), • Container storage, • Container stuffing and stripping, • Handling of heavy-lifts up to 100 T with own equipment, • Warehousing of goods, • Mooring services, • Rental of office space.

GCT is undergoing phased development. In March 2009, stage 1 and 2 development comprised:

• 366 m container wharf currently with an 11.0 m depth alongside, • 6.9 ha container yards, enabling the storage of reefers (192 plugs) and containers with hazardous cargoes, • rail terminal with 4 rail tracks 475 m in length, • gatehouse with 4 entrance and 4 exit lanes, • container freight station, • marshalling yards for inspection and clearance of containerized cargoes.

Stage 2 development was completed in March 2009, doubling the capacity of the terminal.

Since 2005, Hutchison Port Holdings (HPH) has carried out a number of investment programs at the Port of Gdynia which transformed the former shipyard company into a modern container handling facility. These developments are part of an on-going process to continuously enhance the capabilities of GCT and its transition toward becoming the region's port of choice.

GCT strives to achieve the following goals:

• To further develop the terminal to increase capacity in line with market growth.

79 Gdynia Container Terminal 2013. 88

• To consistently enhance service quality and productivity. • To continuously invest in staff development. • To always conduct business in a responsible manner to safeguard the natural environment.

Gdynia Container Terminal is a member of Hutchison Port Holdings (HPH), a subsidiary of the multinational conglomerate Hutchison Whampoa Limited (HWL), the world's leading port investor, developer and operator. The HPH network of port operations comprises 308 berths in 51 ports, spanning 25 countries throughout Asia, the Middle East, Africa, Europe, the Americas and Australasia. Over the years, HPH has expanded internationally into other logistics and transportation-related businesses. These include cruise ship terminals, airport operations, distribution centres, rail services, and ship repair facilities.

In 2010, the HPH port network handled a combined throughput of 75 million TEU worldwide.

Figure 37. HPH Group operates the network of European container terminals. Apart from Poland, the HPH Group operates the following network of European container terminals:

• Belgium: Trimodal Container Terminal Belgium in Willebroek - TCT Belgium. • Germany: Duisburger Container Terminal in Duisburg - DeCeTe. • Italy: Port of Taranto - Taranto Container Terminal. • The Netherlands: Port of Rotterdam - Europe Container Terminals: Delta, Euromax and City, Port of Amsterdam - Amsterdam Container Terminals and inland terminals: TCT Venlo and MCT Moerdijk Container Terminals. • Spain: Port of Barcelona - Terminal Catalunya. • Sweden: Port of Stockholm - Container Terminal Frihamnen. • United Kingdom: Ports of Felixstowe, Thamesport and Harwich.

Main feeder services of GCT:

• Bremerhaven - Hamburg - Gdynia (1 x week) • Bremerhaven - Hamburg - Gdynia (1 x week) 89

• Bremerhaven - Hamburg - Gdynia - St. Petersburg - Helsinki - Gdynia - Bremerhaven (2 x week) • Bremerhaven - Hamburg - Gdynia (1 x week) • Rotterdam - Gdynia, Bremerhaven - Hamburg - Gdynia (3-4 x week) • Gdynia - Hull (1 x week), • Bilbao - Tilbury - Gothenburg - Gdynia - Tilbury (1 x week)

Table 27. Intermodal cargo equipment in GCT.

Equipment STS crane 3 units (40-50t) Mobile crane 1 unit (100t) Jib crane 1 unit (50t) RTG crane 7 units (40t) Reach stackers 3 units (45t) Terminal tractors 14 units Empty handler 1 unit Terminal trailers 14 Forklifts 14 (2-8t)

The award-winning Next Generation Terminal Management System (nGen) developed in- house at HPH flagship operation Hongkong International Terminals (HIT) was successfully rolled out at GCT in July 2006. Back then it was the first system in Poland enabling web- based remote access for terminal customers through the Internet.

90

4.4 Port of Elbl ąg

4.4.1 General information 80

The Harbour of Elbl ąg is the biggest Polish harbour on the Vistula Bay. It is located on the river Elbl ąg, 6 km from its estuary to the Vistula Bay (latitude: 54° 10'5" N; longitude: 19°23'S"). The Vistula Bay is connected with the Gulf of Gda ńsk by inland navigation along the river Szkarpawa and by Pilawa Strait near Baltiysk.

Port Elbl ąg is a local harbour, designed for inshore goods, passenger and tourist navigation at the Vistula Bay and the Gulf of Gda ńsk. Annually over 30 thousand passengers are shipped.

Figure 38. Location of Port of Elbl ąg.

Table 28. Port characteristics of Port of Elbl ąg.

Characteristics Number of berths for intermodal cargo terminals 1 Total length of berths for intermodal cargo 196 m terminals Max. depth 2.30 m Max. length of a vessel 85 m Max. width of a vessel 15.0 m Overall territory for intermodal cargo 3.1 ha 1,440 m 2 Warehouses for intermodal cargo The warehouse capacity is equal to 3,300 tons. Open area for intermodal cargo 100 items

80 Port Elblag 2013. 91

Figure 39. Port of Elblag total cargo turnover in 2007-2011 81 .

Harbour’s merits:

• Favourable geographic position in the context of potential economic relations and co- operation with Kaliningrad District , Baltic Republics and countries of Scandinavia • Creating circumstances to enlarge trade (border crossing point, Commodity Exchange) • Good condition of technical infrastructure (strengthened quays, open store areas, sidings, cereal elevators) • Possibility of repairing vessels in Repair Shipyard. • Presence of all institutions necessary for service of passenger traffic and goods traffic ( Border Guard, Customs House, Port Authority, Management Board of the Harbour, Point of Fitosanitary Control) • convenient conditions for sailing and other water sports

Equipment:

• a siding • an overhead crane (150 tonnes of tonnage) • a cereal elevator ( capacity 14 thou. m3 ) • a turntable for ships ( length: 120 m ) • 5 docks

Connections

Directions of a water transport: ports of the Kaliningrad District (Kaliningrad, Bałtijsk, Swietłyj), Polish ports, Lithuania, Latvia, Estonia, Scandinavia and Western Europe. Terminal is supervised and monitored 24 hours a day.

The Harbour has road and railway connections with:

• Kaliningrad District (Russia) • Warszawa

81 Port Elblag 2013. 92

• Gda ńsk • Olsztyn • Malbork • Braniewo

4.4.2 Investments and developments 82

Development plans of Port of Elbl ąg assumes: strengthening of cooperation with Kaliningrad Region, especially in the area of cargo increase, reactivation of passenger and tourism traffic, creation of new cargo terminals and depots, adaptation of water transportation means to container and oil freight, organization of common sailing races and yacht camps, organization of educational cruises and youth exchange.

One of the factors that may influence further development of the Port of Elbl ąg is the planned construction of canal across the Vistula Spit which connects Vistula Lagoon with the Baltic Sea. Pilawa Strait which belongs to Russia is the only one sea connection between Elbl ąg Sea Port and the Gulf of Gda ńsk. The canal across the Vistula Spit will give the port of Elbl ąg direct access to the sea. Canal is planned to be 1200 meters long, 50 -60 meters wide and 5 meters deep. The lock is going to be 200 meters long, 25 wide and 5 meters deep. The entrance to the canal will be sheltered by the breakwaters. The realization of the project is planned for 2013-2019.

After finishing the investment Port of Elbl ąg will be capable of receiving cargo ships up to 3.5-4 thousand; DWT and passenger ships up to 120 meters long and 22 meters wide. It is assumed that after the year 2020 the total annual throughput of the port will reach 3.5 million tonnes. Among the other factors that may have impact on further developments of Port of Elbl ąg are: obtaining a permit for unrestricted freight by Russian Federation ( including third flags), Common development policy on both bay sides, EU decisions regarding small border traffic (zone widening , visa abolition), cooperation of Elbl ąg council with port in relation to gaining new land for building new terminals, dry cargos, and getting EU financial support, development of cooperation with neighbouring ports in Gdansk and Gdynia (Port of Elbl ąg as satellite port), establishment of border veterinary station.

82 Port Elblag 2013. 93

5. German ports

In Germany, there are many ownership forms relating to port management entities, from private ports to ports managed by states and cities, and mixed forms. Below we present a few examples of port management entities in Germany. Bremenports GmbH &Co. KG is a company formed in 2001 where the 100% owner is the Free Hanseatic City of Bremen. The city of Bremen has a status of a state. Bremenports GmbH & Co. KG manages ports in Bremen and Bremenhaven 83 .

In 2005, the state of Lower Saxony formed a company, Niedersachsen Ports GmbH & Co. KG to manage ports located along the coast of the state. Lower Saxony holds 100% of shares in the company. In 2005, a city and a state of Hamburg separated all administrative functions managing the port from the municipal structures and formed the Port Hamburg Authority to manage the Port of Hamburg. As opposed to the other port managing authorities presented above, the Port Hamburg Authority is not a company under commercial law but it is a public entity (it was formed under public law), although it has some features of a commercial entity, e.g. it collects fees for land lease 84 .

The ports in Rostock, Wismar, Sassnitz and Mukran located in Mecklenburg-Vorpommern are managed by commercial law companies with shareholders being the state of MecklenburgVorpommern and the cities. For instance, the city of Rostock holds 74.9% shares and MecklenburgVorpommern 25.1% in the entity managing the Port of Rostock, Hafen- Entwicklungsgesellschaft Rostock mbH. Small German ports are predominantly supervised by cities 85 .

Figure 40. LPI of Germany according to International Scorecard 86 .

83 TransBaltic 2012. 84 Ibid. 85 Ibid. 86 World Bank Group 2013. 94

Figure 41. Changes in LPI of Germany in 2007-2012 according to International Scorecard 87 .

5.2 Port of Sassnitz

5.2.1 General information 88

The Port of Sassnitz is located on the northern side of the island of Rügen and is Germany’s largest railway ferry port. Fährhafen Sassnitz GmbH is the port company at this Baltic Sea facility, which is also Germany’s most easterly deep-water port.

The Sassnitz-Mukran site is one of the five major ports on the German Baltic Sea coast and handles approx. 5 million tonnes of goods per annum. It is therefore one of the most important large business centres in the German state of Mecklenburg-Vorpommern. Fährhafen Sassnitz GmbH is responsible for managing and expanding the port infrastructure and superstructure in a forward-looking way in order to meet needs. It therefore represents the interests of its shareholders – the town of Sassnitz and the German state of Mecklenburg-Vorpommern. Fährhafen Sassnitz GmbH currently employs approx. 60 people, who work in the “Ferry traffic”, “Offshore”, “Industry” and “Cruise” business divisions.

The Port of Sassnitz can make available to its customers adequate berth space for transhipping various types of loads. The facilities have been constantly expanded during the last few years as a result of extensive expansion work to the port infrastructure. There are now 12 berths with a navigation depth of up to 10.5 m and a combined length of up to 365 m.

87 World Bank Group 2013. 88 Fährhafen Sassnitz GmbH 2011. 95

Figure 42. Map of Port of Sassnitz. The company’s most important goal is continuing to develop the Sassnitz-Mukran site to turn a pure ferry port into a multi-functional facility. This will then satisfy the growing demand from customers in the shipping industry for more services. Fährhafen Sassnitz GmbH is actively working to attract companies to the area and closely cooperates with all the firms based in the area in terms of local marketing, operations, technology, security and protecting the environment.

Figure 43. Port of Sassnitz total cargo turnover in 2007-2012 89 .

89 Fährhafen Sassnitz GmbH 2011. 96

The port company’s services can be subdivided into the following areas:

• Managing, developing and maintaining its own infrastructure and superstructure to meet needs: o breakwaters, quay facilities and mooring berths o ferry and RoRo ramps o railway facilities (track, points, signal box) o roads, transport and interim storage space o warehouses, open-area storage areas and development space o passenger terminal, office and service facilities • Operating the ferry, RoRo and cruise ship terminal: o handling all the ferries, RoRo and cruise ships o transhipping moving vehicles and breakbulk cargo on ferry and RoRo traffic o safeguarding the transfer of ferry traffic and cruise liner passengers o special services (e.g. handling combined traffic) • Local marketing – marketing that does not distort competition at the site Sassnitz- Mukran for all the products and services on offer • Renting property and leasing land in line with the strategy of positively developing the whole port area • Mooring services for all arriving vessels and handling official tasks as the “Sassnitz Traffic” port control centre • Project-related logistics services for industries associated with ports • Responsibly integrating environmental protection as an important component in corporate management • Guaranteeing port security in line with the ISPS Code • Operating its own energy supply network in line with the stipulations in the German Energy Industry Act

The efficient infrastructure and superstructure that is available and the efficient port industry with a broad range of different seaport services round the clock make the Port of Sassnitz the ideal transhipment centre. The port is also ideally suited to handle moving vehicle traffic and conventional breakbulk and bulk commodity loads or provide complete handling for plant and projects.

Sassnitz-Mukran is one of the few ports in the Baltic Sea region that has the benefit of having more than 170 hectares of space available to attract industrial and commercial companies closely linked to port business activities. The port functioned from 2009 to 2012 as a base port for the construction of the Baltic Sea gas pipeline between Vyborg (Russia) and Lubmin (Germany). The company syndicate Nord Stream considers possibility of enlargement of the Baltic Sea pipeline with a third or even fourth line section.

The expansion of the southern port area is currently creating a new offshore terminal, which will establish the port as a reliable and strong partner for completing future offshore wind power projects.

Port railway

The port and station area has 30 km of broad gauge and 60 km of normal gauge track in all. 36 km belong to Fährhafen Sassnitz GmbH (9 km of normal gauge and 27 km of broad 97

gauge). The ferry port and its partners operate five terminals, which have a direct link to the Russian broad gauge.

In addition to the extensive reloading facilities for goods, it is also possible at Sassnitz- Mukran to switch whole wagons from broad to normal gauge and vice versa using a gauge changing facility. The reloading and gauge changing equipment is directly linked to two ferry berths and therefore enables the company to load block trains within a very short time.

Fährhafen Sassnitz GmbH has been operating its own railway transport company together with TME-Torsten Meincke Eisenbahn GmbH since April 2011 – what is known as the “Baltic Port Rail Mukran” port railway.

The launch of its own shunting operations dovetails the port and rail transhipment services to a far better degree and also increases the flexibility of all the broad gauge railway activities. There are five terminals for transhipping the goods: DB Schenker with a changing facility to normal gauge, the Buss Rail Terminal Sassnitz for breakbulk and heavy cargo, Rail Marketing for all kinds of breakbulk goods and liquid substances (hazardous goods), VIELA Export GmbH, which specialises in handling agricultural products, and the ferry port terminal for all kinds of road and rail vehicles.

Logistics and storage

The site has five covered warehouses with space for transhipping from the Russian to standard gauge. This infrastructure also includes a gauge changing facility, a pumping unit for liquid (hazardous) goods and four overhead cranes; this enables the port to handle all types of conventional and bulk commodities and liquid goods. Logistics services providers like Sea Terminal Sassnitz GmbH & Co. KG (STS), a company within the Buss Group Hamburg, and VIELA Export GmbH operate the port transhipment operations for containers, breakbulk cargo and bulk commodities.

5.2.2 Connections 90

The port provides regular and well-used ferry links to Trelleborg (Sweden), Rønne (Denmark), Klaipeda (Lithuania), Ventspils (Latvia), and Baltiysk, Ust Luga and Saint Petersburg (Russia). Other ferry routes to different destinations are in the development phase and will turn the location into a significant transport hub in the enlarged European Union.

The Port of Sassnitz is Germany’s largest railway ferry port and has established itself as a special port for transporting project loads in the mechanical engineering and plant construction sector. Sassnitz-Mukran is unique in Europe in having track and transhipment equipment for the Russian broad gauge.

Road transport links:

• A20, A11, A14, A19 and A24 motorways for regional links to the south, west and east • Direct link to the island of Rügen over the new Rügen bridge near Stralsund

Rail transport links:

90 Fährhafen Sassnitz GmbH 2011. 98

• Broad and normal gauge links as far as the loading ramps • Switch from normal to broad gauge and vice versa • Own railway network in the port and station area • Ideal national rail links through the hubs at Seddin and Maschen • Two-track, fully electrified rail lines up to ferry port • Open track capacity inland from the port

Sea transport links:

• Regular ferry links to Sweden, Denmark, Lithuania and Russia • Adequate capacity for additional ferry routes and tramp traffic

The connection from the Port of Sassnitz to the European railway network is ideal with a fully electrified, double-track line. It also has capacity reserves to cope with forecast increases in traffic.

Road links to the port have improved as a result of the construction of the A20 motorway, the Rügen link road and the four-lane Stralsund bypass. The new Rügen Bridge means that traffic no longer comes to a halt as in the past when the old flap bridge was opened on the Rügen causeway; as a result, flows of traffic to and from the ferry port have improved significantly.

Figure 44. Main connections of Port of Sassnitz. With the completion of motorway A20 the location Sassnitz possesses fast hinterland connections to any direction. In October 2007 the new bridge for crossing the Strelasund was officially opened.

99

Figure 45. Main hinterland connections of Port of Sassnitz. Port of Sassnitz is connected through a highly developed rail network with the European and Russian railway traffic.

• Handling of cargo from Russian railway wagon onto truck/German railway wagon or vice versa, directly or via warehouse. • Single wagon and full train traffic from/to Sassnitz-Mukran • Full train transit traffic from/to Scandinavia.

Figure 46. Main railway connections of Port of Sassnitz.

100

Figure 47. Main Ro-Ro and ferry connections of Port of Sassnitz 91 .

5.2.3 Investments and developments 92

Mukran site was expanded in the 1980s and the major emphasis was placed on goods traffic. Important passenger and cargo lines already operated to Sweden, Denmark and Lithuania at that time. In order to cope with the increasing traffic volumes that experts have been forecasting for the Baltic Sea region, the ferry port has been gradually expanding its infrastructure and providing a strategic orientation for its traffic. The ferry services to Russia and the Baltic States have been boosted with continual developments.

The company’s most important goal is to further develop the Sassnitz-Mukran site to turn a pure ferry port into a multi-functional facility. This is to meet the growing demand from the shipping industry for greater services. Sassnitz-Mukran has also developed into a significant industrial site – and Fährhafen Sassnitz GmbH is actively seeking to attract new companies. As a result, it has been possible to complete the production site for components for the Metro City Ring in Copenhagen.

The development of the railway infrastructure at the Port of Sassnitz goes back to the start of building work in 1982. The first railway ferry link was launched in 1986 with a scheduled service to Klaipeda after only a short building phase. Following German reunification, the Port of Sassnitz took over the track infrastructure in the port area and Deutsche Bahn became the track infrastructure operator in the station area in 1994. The track facilities in the port area were significantly expanded in 1998 as a result of the major extension work to handle the railway ferry traffic between Sassnitz and Trelleborg.

The broad gauge activities were finally privatised in 2011 with the “Columbus Project”: this meant that Fährhafen Sassnitz GmbH took over the complete broad gauge facilities with the

91 Baltic Transport Maps. 92 Fährhafen Sassnitz GmbH 2011. 101

exception of the link railway terminal. Fährhafen Sassnitz GmbH also set up the port railway called “Baltic Port Rail Mukran” in conjunction with TME-Torsten Meincke Eisenbahn GmbH in 2011.

5.2.4 Intermodal terminals 93

Ferry / RoRo / Cruise Liner Terminal

The ferry, RoRo and cruise liner terminal at Fährhafen Sassnitz GmbH is used to handle combined ferry traffic to Scandinavia, Russia and the Baltic States. With its generous layout, it has enough capacity to handle the forecast doubling of freight volumes by 2025. The central area in the terminal is located right next to ferry berths 4, 5, 6 and 7.

Berths 4 and 5 are designed to handle combined railway ferry traffic and have ramps with Russian broad gauge track. The associated traffic and interim storage areas are located at terminal 3. Berth 5 can also be used as a multi-purpose Ro-Ro quay. This is where the railway ferry traffic to Russia and the Baltic States is usually handled. Berth 6 and the adjacent terminal 2 are designed to handle RoRo traffic to Russia and Denmark and as a quay for cruise liners. Berth 7 is equipped with standard gauge railway tracks and is mainly used to handle combined railway ferry traffic on the traditional Sassnitz-Trelleborg “King’s Line”. The interim storage space for this berth is located at terminal 1.

Rail Terminal

The rail terminal covering approximately 55 hectares is directly connected to the Fährhafen Sassnitz GmbH port facilities. Extensive track and transhipment facilities for Russian broad gauge railway wagons are available to handle flows of goods at the “most westerly cargo station on the Trans-Siberian railway”.

This unique selling point in Western Europe enables smooth and efficient transhipment operations without any interruption to the logistics chain to and from the CIS countries, the Baltic States and Russia. The catchment area includes customers shipping goods from Central and South-Eastern Europe and they use the regular ferry services to Sweden, Denmark, Lithuania, Russia and the Baltic States thanks to the port’s favourable geographical location.

The Rail Terminal Sassnitz has the following track and transhipment facilities:

• Handling and storage: o 80 km of track for broad and normal gauge operations in all o Transhipment terminal and gauge changing facility for broad gauge traffic o Marshalling yard for broad and normal gauge traffic, including ferry services to Trelleborg and Klaipeda o Space totalling 55 ha. in all o Storage and transhipping bulk commodities, breakbulk cargo and hazardous goods in addition to vehicles and project loads • Transhipment facilities: o 5 transhipment buildings (200 m long, 3 tracks) o 1 building with a crane o 3 overhead cranes (200 m long, payload 100 t)

93 Fährhafen Sassnitz GmbH 2011. 102

o 1 hazardous goods ramp o 1 road to rail loading ramp o 1 gauge changing facility o various storage options

103

6. Danish ports

Denmark has mainly municipal ports which operate as un-separated or separate entities in the organisational structure of a city, or as companies with cities as their shareholders. In addition, there are companies managing ports in place with shareholders being both private entities and municipalities (mixed ownership) and private ports. In each of these cases, port management entities have to carry out separate bookkeeping and financial reporting 94 .

Pursuant to the Danish law that governs port activities (the Port Act of 2000), municipal ports are controlled by local municipal councils. Ports are responsible for the extension and maintenance of port infrastructure while private entities carry out operations. The central government in Denmark does not supervise sea ports. However, in 2010 the Danish Government initiated the discussion on reforms that focused on the competitiveness and efficiency of the ports in Denmark. The discussion should end up with recommendations to modify the Port Act. The Danish legislation framework does not distinguish between small and large ports, so the majority of the small ports are owned by municipalities 95 .

Figure 48. LPI of Denmark according to International Scorecard 96 .

94 TransBaltic 2012. 95 Ibid. 96 World Bank Group 2013. 104

Figure 49. Changes in LPI of Denmark in 2007-2012 according to International Scorecard 97 .

6.2 Port of Køge

6.2.1 General information 98

Port of Køge is part of the Scandinavian Transport Centre in Køge, which is the largest combined business park and transport centre on Zealand. Port of Køge is one of Denmark’s largest harbours in terms of goods turnover and calls, with annual goods turnover of approx. two million tonnes. The planned expansion will make it possible to double this goods turnover during the next 10 years.

Port of Køge has a well-protected location at the bottom of Køge Bay, at 55° 27' N, 12° 12' E. Port of Køge has a central location in relation to a number of destinations throughout the Baltic region, and is just 40 km from Copenhagen Airport and 35 km from the Copenhagen city centre.

Port of Køge became a ferry port in 2002 with the establishment of a goods ferry between Køge and Bornholm. This route was changed to a combined passenger and goods ferry two years later, replacing the passenger ferry from Copenhagen to Bornholm. The modern new terminal for the Bornholm ferry is situated approx. 500 metres from Køge Railway Station, with buses connecting the two. The station has direct links to Copenhagen via the metropolitan rail network. Almost 100,000 passengers pass through the ferry port each year.

Port of Køge and Køge Municipality are currently expanding the port by adding 1,200 metres of new wharves, with a water depth of 8.5 metres, as well as 40 hectares of extra land. The expansion is being directed by a 2006 town plan, and will eventually cover extra port companies and business park sites.

97 World Bank Group 2013. 98 Port of Køge 2013. 105

Port of Køge is Denmark’s eighth largest port in terms of goods turnover by weight. Port of Køge covers an area of 35 hectares and has over 2,000 m of port wharves.

Figure 50. Map of Port of Køge.

Figure 51. Port of Køge total cargo turnover in 2007-2011 99 . Port of Køge has terminals for bulk goods, tankers, general cargo, Ro-Ro and ferry traffic. Køge Harbour’s ferry and Ro-Ro terminal has three fixed ramps designed in accordance with international standards and one moveable ramp. The ramps are up to 25 m wide, and the two berths have a wharf length of 180 m and 140m. There is also a holding area for trailers, trucks, cars and busses. The ferry terminal covers a total area of 25,000 square metres, and is primarily intended to handle ferry traffic to and from Bornholm. The ferry terminal has a connection to the motorway network via exit 32 and a 2.8 km long ring road.

99 Port of Køge 2013. 106

The terminal building was constructed in 2004 as a combined ferry terminal and office for the Scandinavian Transport Centre and Køge Harbour. It was designed by Arkitekterne i Køge A/S. It has a glossy aluminium and glass exterior. Inside, the floors are made of ash wood planks, and the walls are made of wood, aluminium and glass. From the offices, and the viewing platform on the roof, there is a lovely view of the harbour, Køge Bay and the Øresund Bridge.

Figure 52. Main Ro-Ro and ferry connections of Port of Køge 100 .

6.2.2 Investments and developments 101

Port of Køge has seen steady growth for many years, and especially during the last 10 years. Collaboration with the Scandinavian Transport Centre and the large new construction projects at the port have led to strong growth in the harbour’s activities. Køge has also become a ferry harbour, and can therefore expect to see major passenger and goods activity. The next 10 years will see development of the existing harbour, and extensive expansion of the port via establishment of a landfill site and new port areas.

There are also plans for extensive urban develop at Søndre Harbour, and the first steps have already been taken around the innermost and oldest part of the harbour. Over time, the plan is for the whole area to change character from an industrial port to a mixed residential, business and cultural area. The entire region around Køge and the Scandinavian Transport Centre and the new port areas has undergone a number of improvements.

In terms of goods turnover, Port of Køge is one of Denmark's largest harbours. However, Køge has greater aspirations, and plans to double the size of Port of Køge between 2007 and 2017, which will be the largest construction project Køge has ever seen. The project involves expanding Port of Køge by adding 1,200 metres of new wharf space, with a water depth of 8.5 m, and a new 40 hectare site for commercial activities. However, 10 hectares and 600 wharf

100 Baltic Transport Maps, 101 Port of Køge 2013. 107

metres will simultaneously disappear from Søndre Harbour. New recreational areas are to be established near Køge Marina and Søndre Beach, and a major urban renewal will be carried out at Søndre Harbour. DKK 950 million has been allocated. The project is being carried out as a partnering project. The expansion will allow Port of Køge to receive ships up to 200 m LOA and 30 m wide. This is double the existing ship size capacity – and will allow Port of Køge to double its goods turnover.

The expansion of the Port of Køge will be a partnering project involving Køge Municipality and Port of Køge as the project owners, Grontmij Carl Bro a/s as consultants, and Aarsleff a/s as the construction contractor. DKK 950 million have been set aside for the expansion. Income of approximately DKK 440 million is expected from receiving soil from the Greater Copenhagen region, and turnover at Port of Køge is also expected to rise dramatically.

108

7. Estonian ports

Pursuant to the laws of Estonia, public, municipal and private ports alike can operate in the country. Port management entities function as commercial law companies in accordance with commonly applicable regulations. Under the Estonian law that governs port activities, a port management board has land within its borders and organizes as well as manages port activities; in particular it maintains port infrastructure, port canals and navigational markings, and supervises safety and environmental protection in the port 102 .

The largest port in Estonia, the Port of Tallinn, manages several ports in the country such as the port in Tallinn, the port in Muuga and the port in Paldiski. The 100% owner of the Port of Tallinn is the central government, while direct supervision is carried out by the Ministry of Economy and Communications. The port management board can be a shareholder or can establish affiliates both in the country and abroad. An example of a private port is Port of Sillamäe (a commercial name of Silport). It is located very close to the border with Russia. It has several terminals for handling general cargo and bulk cargo 103 .

Figure 53. LPI of Estonia according to International Scorecard 104 .

102 TransBaltic 2012. 103 Ibid. 104 World Bank Group 2013. 109

Figure 54. Changes in LPI of Estonia in 2007-2012 according to International Scorecard 105 .

7.2 Port of Tallinn

7.2.1 General information 106

Port of Tallinn is the biggest port authority in Estonia and as far as both cargo and passenger traffic are taken into account, the biggest port on the shores of the Baltic Sea.

In order to fit effectively into the competitive environment, port of Tallinn underwent a complete restructuring process in the mid-1990s by developing from a service port into a landlord port. In 1999, the last cargo handling operations were finally given into the hands of private companies.

Today, port of Tallinn operates as a landlord type of port with no cargo handling operations of its own. It is maintaining and developing the infrastructure of the port and leasing territories to terminal operators through building titles giving the operators an incentive to invest into superstructure and technology.

Port of Tallinn consists of five constituent harbours (Old City Marina in addition, being a part of Old City Harbour):

- Old City Harbour - Old City Marina - Muuga Harbour - Paldiski South Harbour - Paljassaare Harbour

105 World Bank Group 2013. 106 Port of Tallinn 2013. 110

- Saaremaa Harbour

Port of Tallinn also owns Muuga and Paldiski South Harbour Industrial Parks.

Intermodal cargo is handled in three of those ports: Muuga (containers and Ro-Ro), Old City (Ro-Ro) and Paldiski South (Ro-Ro). Port of Tallinn’s has invested with the objective to diversify port cargo volume in order to decrease dependence on the largest group of cargo – liquid cargo. The total cargo turnover of port of Tallinn in 2007-2012 is presented in figure below.

Figure 55. Port of Tallinn total cargo turnover in 2007-2012 107 .

Figure 56. Port of Tallinn’s investment in 2007-2011, mln EUR 108 . Port of Tallinn has invested with the objective to diversify port cargo volume in order to decrease dependence on the largest group of cargo – liquid cargo. The figure above presents the investments of port of Tallinn in 2007-2011.

107 Port of Tallinn 2013. 108 Ibid. 111

Major investments and developments by the port of Tallinn are and will be:

• the extension to the eastern part of Muuga Harbour (including new container terminal); • a viaduct connecting the eastern part and the industrial park of Muuga harbour; • providing rail access to the Industrial Park of Muuga Harbour; • extension to the Free Zone at the Eastern part of Muuga Harbour; • breakwater in the Muuga Harbour and Paldiski South; • Paldiski South Harbour Industrial Park and zoning the Paldiski South Harbour; • new entrance gate in Paldiski; • new berth in Paldiski in the case of new passenger vehicles will exceed 300 th and/or Ro-Ro volumes exceed 1.6 mln tons; • acquiring ice breaker ‘Botnia’.

Muuga Harbour

Muuga Harbour is the biggest cargo harbour in Estonia and specialized on handling transit origin goods. It is the main cargo harbour for Port of Tallinn and locates ca 17 km east of Tallinn.

The cargo volume handled accounts for around 80% of the total cargo volume of Port of Tallinn and approximately 90% of the transit cargo volume passing through Estonia. Nearly 3/4 of cargo loaded in Muuga Harbour includes crude oil and oil products, but the harbour also serves dry bulk (mostly fertilizers, grain and coal) and other types of cargo. Muuga Harbour is among the deepest (up to 18 m) and most modern ports in the Baltic Sea region.

An extensive free zone in Muuga Harbour grants more flexible customs procedures for companies rendering transit and distribution services. Simplified customs procedures, easy transfer of ownership rights and value-added operations allowed in the zone are designed to foster the development of distribution centres. No import VAT is applied to goods imported temporarily to be processed and exported in due time from Estonia. In terms of land availability for extension, Muuga Harbour possesses the greatest development potential in the whole region.

One terminal in Muuga harbour handles intermodal cargo – Transiidikeskuse AS.

112

Figure 57. Map of Muuga Harbour. Terminals in Muuga Harbour:

• 6 liquid bulk terminals • 2 multipurpose terminals (one of them with a reefer complex) • container terminal and Ro-Ro terminal • dry bulk terminal • grain terminal • steel terminal • coal terminal

Table 29. Port characteristics of Muuga Harbour.

Characteristic Territory 524.2 ha Aquatory 752 ha Number of berths 29 Length of berths 6,400 m Depth at berths 18.0 m Max. length of a vessel 300 m Max. width of a vessel 48 m Warehouse area 151,000 m 2 Open storage areas 670,000 m 2

113

Reefer warehouse area 11,500 m 2

There are 9 regular container lines visiting Muuga Harbour/Container terminal:

• APL – German Tallinn Shuttle; • CMA CGM – St Petersburg Shuttle Service C; • MSC – Loop 10; • Team Lines – Bal1; • Hapag Lloyd – Baltic Feeder; • Tschudi Lines Baltic Sea Finbest – Baltic Services; • Unifeeder Container Service – Baltic States-Germany loop1; • Sea Connect – Rotterdam-Baltics-St Petersburg • Maersk Line / Seago Line – Gdansk Baltic Services.

Muuga Industrial Park

Muuga Industrial Park is located in Muuga Harbour. The total area of the industrial park is 75 ha. The port has prepared approximately 55 ha of plots with the size of 0.3-21 ha for its potential clients. Plot borders can be changed according to need and a plot of a necessary size can be formed in the limits of the cadastral unit. Plot formation expenses shall be borne by Port of Tallinn. Some plots can be joined and a registered immovable complying with the needs can be rented. To lease the industrial park areas to its clients the Port Authority concludes a long term (up to 99 years) building title agreements.

Muuga Industrial park can offer the following:

• good location, immediate closeness of the harbour; • good access to berths and terminals; • good access from main roads (Peterburi road, Tallinna circuit); • great connection with other countries by sea, rail, as well as mainland; • long-term land use contracts and reliable partner – state enterprise AS Tallinna Sadam. • location within the free-zone

The industrial park has all necessary communications up to plot borders:

• Water supply and sewerage – pipage has been constructed to the border of the plot. • Gas supply – gas pipage has been constructed to the plot border by AS Eesti Gaas Võrguteenus and the owner of the plot shall in accordance with the necessary capacity compensate the connection fee paid to AS Eesti Gaas by AS Tallinna Sadam. • Power supply – connection with the power network in accordance with the capacity installed to the plot shall be constructed for a connection fee. • Telecommunications – communication canalization constructed to the border of the plot (specific communication connections shall be constructed by AS Elion Ettevõtted in accordance with the specific needs of the plot at the expense of the plot owner).

114

Muuga Industrial Park is an ideal location for warehousing and distribution services providers and commodities producers whose target market is the Eastern Baltic region, including Russian Federation. The Industrial Park is also suitable for businesses producing EU commodities from Russian raw materials.

The location in the port area next to the container, general cargo and other modern terminals enables the businesses to significantly reduce transport costs. Additional value can be created by using the commodities handled in the harbour as an input to the production (metals, galvanizing plant, fertilizers, chemicals, etc).

Paldiski South Harbour

Paldiski South Harbour, the Port of Tallinn´s second cargo harbour, is located 45 km west of Tallinn. The core activity of the harbour is focused on the handling of Estonian export and import cargo and transit cargo. Mainly Ro-Ro cargo, scrap metal, timber, peat and oil products are handled there. Developing fields of activity include transit of new cars for neighbouring markets and pre-sale service.

Due to the harbour’s development potential, remarkable proportion of the port’s investments goes to Paldiski. The currently on-going developments include construction of new quays and enlargement of car terminal areas. Also there is an industrial park area close to the harbour, which plots are ideal for companies whose operations assume direct closeness of a port.

Figure 58. Map of Paldiski South Harbour.

115

Terminals in Paldiski South Harbour:

• Passenger Terminal • Petroleum Terminal • 2 Car Terminals • Ro-Ro Terminal • General Cargo Terminal • Timber Terminal • 3 Metal Terminals • Wood Pellets Terminal • Peat Terminal • Biodiesel Terminal

Table 30. Port characteristics of Paldiski South Harbour.

Characteristic Territory 138.6 ha Aquatory 137.2 ha Number of berths 8 Length of berths 1,400 m Depth at berths 13.5 m Max. length of a vessel 230 m Max. width of a vessel 35 m Warehouse area 15,000 m 2 Open storage areas 270,000 m 2 Reefer warehouse area 11,500 m 2

Paldiski South Harbour Industrial Park

Paldiski South Harbour Industrial Park is an ideal location for warehousing and distribution services providers and commodities producers whose target market is the Eastern Baltic region, including Russian Federation. The Industrial Park is also suitable for businesses producing EU commodities from Russian raw materials. The location in the port area next to the car and other Ro-Ro terminals enables the businesses to significantly reduce transport costs. The plots of Paldiski South Harbour Industrial Park are ideal for companies whose operations assume direct closeness of a port. The total area of the industrial park is 21 ha.

Development plans in Paldiski. In the recent years, the Port of Tallinn has acquired new land units adjacent to the port in the area between the road and the railway leading to Tallinn, in the purpose of employing these as a distribution terminal for the cargo passing through the harbour and/or for the processing-production (industrial park) of such goods. The area will be developed, building public roads and utilities e.g. connection to the utility networks will be provided.

116

Connections

Port of Tallinn has several intermodal cargo connections to other ports in EU and outside. The following figures presents the main container connections of port of Tallinn and the main Ro- Ro and ferry connections of port of Tallinn.

Figure 59. Main container connections of Port of Tallinn 109 .

Figure 60. Main Ro-Ro and ferry connections of Port of Tallinn 110 .

109 Baltic Transport Maps. 110 Ibid. 117

Muuga harbour has connections with hinterland by road and by rail. By road the harbour is connected with highway E20 (Peterburi road) by which is possible to get to other highways (E263 Tartu direction and E67 Pärnu direction/Via Baltica) using Tallinn circuit (E265). With the national rail network the port is connected through railway station Muuga.

Muuga harbour has 9 regular rail connections:

1. Moscow Express, operator EVR; 2. Tallinn-Perm, operator EVR; 3. Tallinn-Yekaterinburg, operator EVR; 4. Tallinn-Togliatti, operator EVR; 5. Baltic Transit I (destination Tashkent), operator EVR; 6. Baltic Transit II (destination Alma-Ata), operator EVR; 7. ZUBR (destinations Kiev and Odessa), operator EVR; 8. Tallinn-Kaluga, operators EVR / Logoper / MTF Logistics; 9. Moscow-Tallinn, operator TransContainer.

7.2.2 Intermodal terminals

7.2.2.1 Transiidikeskuse AS 111

In 2012 Transiidikeskus AS united its Group companies (incl Muuga CT and Refetra) into one single company. Muuga container terminal (formerly known as Muuga CT) is the only specialized container terminal in Estonia and handles vast majority of Estonia’s container turnover. The company consist of two terminals: container terminal and general and refrigerated goods terminal. Container terminal of Transiidikeskus AS annual technological capacity of the terminal is 450 000 TEU.

Transiidikeskus AS offers following services:

• loading/unloading of goods (containers, general goods, refrigerated goods, scrap metal); • free zone storage services; • picking of goods and re-loading; • forwarding services; • changing ownership in free zone; • purchase and sales of goods; • value-added services; • renting, maintenance and repair of loading equipment.

111 Transiidikeskus AS 2013. 118

Table 31. Characteristics of Transiidikeskus AS.

Characteristics Terminal area 28 ha Closed warehouse 8,000 m 2 Quays 3 Length of quays 719m Depth of quays 12.5-14.5m Refrigerated containers 404 58 container Railway platforms

Table 32. Intermodal cargo equipment in Transiidikeskus AS.

Equipment STS crane 3 units RTG crane 4 units Mobile crane 1 unit Rail-mounted gantry crane 1 unit Reach stackers 7 units Shuttle carriers 9 units Trucks 9 units

By using the technological and computerised systems terminal can guarantee continued handling of vessels with a capacity of 55-60 units per hour, also handling of road transport in average within 30 minutes starting from arrival in the terminal until leaving. Well elaborated technological schemes for handling railway platforms and well organised mutual work relations between railway and forwarding companies allow us to depart container trains from our container terminals 24 h if needed. These container trains (such as “Baltica Transit” and “Zubr” for instance) travel without any failures and according to the schedules to Moscow or as route trains to the Central Asian countries.

7.2.2.2 ESTEVE 112

Esteve is stevedoring company which operates in Port of Tallinn’s harbours Old City and Paldiski South. Stevedoring operations include handling Ro-Ro cargo and containers. ESTEVE Terminal AS is a stevedore and ship agency company founded in 1997. ESTEVE provides shipagency services in all Tallinn area ports and operates as stevedore in Paldiski South Harbour, a part of Port of Tallinn.

112 Esteve 2012. 119

In Paldiski ESTEVE:

• provides the following services: o Stevedore services, i.e. transhipment of various goods from ships to storage, railroad cars, trucks, containers, and mafi-trailers, and vice versa; o Storing of goods; o Customs warehouse and terminal services; o Ship's agency services; o Customs clearance services; o Freight forwarding, both by sea and land; o Draft survey; o Goods weighing (Trucks & railway waggons); o Tallyman services; o Goods radioactivity measurement and purity control. • technical parameters: o berths (4 with ramps); o Total length of quays 1392 m; o Total area of warehouses 14731 m2; o Total area of open storage areas 239605 m2; o Railways 9 extensions; o 3 portal cranes; o 1 harbour mobile crane; o 5 mobile cranes.

There are 12 regular Ro-Ro lines visting Paldiski South Harbour:

• KESS: Paldiski - Hanko - Uusikaupunki - Emden - Grimsby - Zeebrugge - Malmö - Paldiski • Mann Lines: Paldiski - Turku - Bremerhaven - Harwich - Cuxhaven - Paldiski • Mann Lines: Paldiski - Haraholmen-Terneuzen - Vlissingen (Flushing) - Paldiski • Spliethoff: Baltimore (USA) – Jacksonville (USA) – Paldiski – Hamina • Tallink: Paldiski - Kappelskär - Paldiski • Transfennica: Paldiski - Hanko - Lübeck • Transfennica: Paldiski - Hanko - Antwerpen • Transfennica: Paldiski - Hanko – Antwerpen – Zeebrügge - Bilbao • Transfennica: Paldiski - Hanko – Tilbury • Transfennica: Paldiski - Hanko – Lübeck – St. Petersburg • Transfennica: Paldiski – Gdynia - Lübeck • Baltic Line: Paldiski – Lyngdal – Haugesund – Sandnes - Bergen – Grena – Turku – Paldiski

In Old City Harbour Esteve is carrying out stevedoring services for shipping lines. Their present customers are Viking Line (Tallinn-Helsinki), Eckerö Line (Tallinn-Helsinki), St. Peter Line (St. Petersburg - Helsinki - Stockholm - Tallinn (Old City Harbour) - St. Petersburg).

120

8. Russian ports

Russian ports at the Baltic basin are end points from Russian part of the transport corridors “East-West” and “North-South”. In case the international transit cargo flows (mainly containerized cargo) through those corridors will be guaranteed in long perspective, total cargo turnover of those ports will rise significantly. Even in short perspective main cargo flows are going through ports of Ust-Luga (mainly dry cargo and partly liquid bulk) and Primorsk (liquid bulk).

At the mean time biggest port at Baltic basin, St Petersburg is surrounded by the city and roads and doesn’t have the possibility to enlarge it is land area. Because of that the development of the port of St-Petersburg are realized with the help of avant-ports Bronka, Lomonossov, island Kotlin.

One of the particularities of Baltic basin is the enclave of Kalningrad oblast, which connections with main land is realized through rail link Ust-Luga – Baltiysk – ports of Germany.

FSUE “Rosmorport” 113

All Russian ports are acting under governance of federal state unitary enterprise “Rosmorport”. FSUE “Rosmorport” has been created (in 2003) for providing use, maintenance and development of the assigned federal property, including the facilities for the navigation safety, for construction and reconstruction of the port facilities at the commercial and specialized seaports and for providing the realization of the federal target programs of the sea transport development.

FSUE “Rosmorport” is a unitary enterprise which consists of a headquarters and 16 branches, located in 17 regions of the Russian Federation. Over 5,8 thousand employees are employed at the enterprise.

113 FSUE "Rosmorport" 2013. 121

Figure 61. Structure of FSUE “Rosmorport”. Russian ports in the Baltic Sea, including seaports of Greater Port of Saint-Petersburg, Vyborg, Vysotsk, Kaliningrad, Passenger Port of Saint-Petersburg, Primorsk and Ust-Luga, belong to the FSUE “Rosmorport” North-West Basin Branch. Major activities of the branch in aforementioned ports and their approaches are:

• Creation, maintenance, operation and development of federal property assigned to the FSUE “Rosmorport” North-West Basin Branch; • Executing of works (rendering services) in the seaports of Greater Port of Saint- Petersburg, Vyborg, Vysotsk, Kaliningrad, Passenger Port of Saint-Petersburg, Primorsk and Ust-Luga and their approaches; • Implementation of federal target programs of marine transport development in Kaliningrad and Leningrad regions, and also in the city of Saint-Petersburg.

The most important statutory activities of the FSUE “Rosmorport” North-West Basin Branch in the seaports of Greater Port of Saint-Petersburg, Vyborg, Vysotsk, Kaliningrad, Passenger Port of Saint-Petersburg, Primorsk and Ust-Luga and their approaches, connected to rendering services (conducting works) are the following:

• VTS services; • pilotage services; • icebreaking services; • ice advisory services; • ecological services; • berth provision services; • freight handling services; • mooring services; • cartographic and geodesic services; 122

• communication services; • IT services; • pilot training services; • leasing out the property secured to the FSUE “Rosmorport” North-West Basin Branch, according to the established procedure.

Figure 62. LPI of Russia according to International Scorecard 114 .

Figure 63. Changes in LPI of Russia in 2007-2012 according to International Scorecard 115 .

114 World Bank Group 2013. 115 Ibid. 123

8.1 Port of St. Petersburg

8.1.1 General information 116

Port of St Petersburg is the main port handling containerized cargo of the Baltic basin. The port is administered by administration of seaport the big port St. Petersburg which manages road steads, terminals, warehouses, quays which are leased out to private stevedoring companies.

Water area of “Big port St Petersburg” is 628.6 km2. There are around 200 quays, with total length 31 km. Max dimensions of a ship which can enter the port are 320 m length, 42 m width and draft up to 11 m. Majority of quays can serve ships with the draft of 9.5 m.

Port is connected with the Gulf of Finland by channels which are 80-150 m wide and with the depth of 12.5-14,8 m with perspective to dredge the channels min depth up to 13 m. Main approaches to port are Kronshtadtskiy Korabelniy Fairway, St.Petersburgskiy Morskoy Kanal with total length of 33 miles. Water level in the port can vary in big margin -1 … +4 m. Port is opened all year around, with the help of ice breakers in the winter.

Big port St Petersburg consist of 1,2,3, 4 cargo handling zones, sea passenger terminal, cargo handling zone of Vasilyevsky island, cargo handling zone in Litke (Kronshtadt) and cargo handling zone in Lomonosov.

116 JSC. Sea Port of Saint-Petersburg 2006. 124

Figure 64. Seaport of “Big Port St. Petersburg”. Around 28 stevedoring companies are licensed to act in the port. Port is handling big variety of cargoes – containers, cars, metal, heavy and oversized cargo, timber, coal, grain etc.

Figure 65. Port of St. Petersburg total cargo turnover in 2007-2012 117 .

117 JSC. Sea Port of Saint-Petersburg 2006. 125

8.1.2 Connections

Figure 66. Main container connections of Port of St. Petersburg 118 .

Figure 67. Main Ro-Ro and ferry connections of Port of St. Petersburg 119 .

118 Baltic Transport Maps. 119 Baltic Transport Maps. 126

8.1.3 Investments and developments 120

The historical part of Big Port St. Petersburg has reached the limits of its physical expansion. The main limiting factor is the capacity of access roads leading to the port. According to St. Petersburg Transport and Transit Policy Committee, the projected throughput volumes announced by investors do not meet even the potential capacity of the city.

Some stevedoring companies in the port have announced their ambitious development plans, primarily about container terminals. Global Port’s Petrolesport plans to boost its annual container volume by nearly threefold to 2.3 million TEUs until 2023. Box throughput of Container Terminal of Saint Petersburg is projected to jump to 1.2 mln TEUs. First Container Terminal also plans some growth figures; however the investor, National Container Company, focuses on the priority development of a new terminal in the nearby port of Ust-Luga.

Some throughput growth at the areas of the port is quite possible. But this would be possible thanks to the development of sea approach channels, which is an objective of Rosmorport, as well as the port’s connection to the Western Express Ring Road (ZSD).

Rosmorport plans to partly dismantle the artificial island of Krivaya Damba to enable accommodation of large-tonnage vessels in the waters of Vostochny and Barochny basins, dredging of canal loop for sailing at inner anchorage of Big Port St. Petersburg, construction of offshore mooring facilities. Currently, the engineering surveys and the layout of Lesnoi Mall anchorage have been completed.

As to the port access roads, the bypass highway has been under construction, designed for transporting cargo from the port - ZSD. So far, only part of the South section of ZSD. Upon completion of this phase and construction of the Central section, the historic port areas will be connected to the highway, which will increase the capacity of access roads. However, ZSD is the toll highway and there are not free roads projected. The ZSD construction also suggests raising the 52-m-tall bridge across the sea channel. But this creates certain difficulties, for sailboats, such as "Peace" and "Sedov", which have 52 meters in height, making it impossible to visit the Neva River. The passenger port "Marine Façade" will also get access to the road ring, making it the cargo port as well.

However, even if these projects are successful the city will not be able to move the projected loads from the port. Currently the near-dock railyards capacity is 35 million tons of cargo a year, while other loads are hauled by trucks. Cargo throughput at the port has stabilized at around 60 million tons a year and the construction and operation of ZSD, dredging, etc. will increase traffic volume, but not significantly.

The construction of outer harbours outside the city limits might help boost stevedoring activities at the Big Port. One example is the construction of Bronka port (see below). Bronka port, which has direct access to ZSD, would not create a significant burden on the Ring Road, even with the maximum cargo throughput at the port. The plan is to move majority of the containers by rail.

Yet it has become clear that the city and the port begin to hinder the development of each other, that further expansion of the port in the historic districts of the city is almost impossible. Moreover, the lion's share of taxes from the port operations goes to Moscow

120 JSC. Sea Port of Saint-Petersburg 2006. 127

where major companies, owners of the port terminals, are headquartered. Meanwhile, St. Petersburg has to bear the infrastructure and the environmental burden.

According to Portnews.ru the success of stevedoring activities in St. Petersburg, largely depends on the merger of the city and the Leningrad region in a single subject of the Federation and the redistribution of tax revenues from the federal government in favor of the budget of the combined entity. Then the region will be more interested in the development of stevedoring business, there will be more room for manoeuvre, and city residents will better understand for what it's all done.

Marine multifunctional complex Bronka

Marine multifunctional complex Bronka will comprise three specialized facilities: a container terminal encompassing 107 hectares, Ro-Ro terminal of 57 ha and logistics centre of 42 ha. Container terminal will feature the 1.175 m-long waterfront (including 5 berths). The waterfront of rolling cargo terminal will be 630 meters (3 berths).

Bronka first phase capacity is projected at 1.45 million TEUs and 260,000 units of Ro-Ro cargoes. The facility’s container throughput is planned to be increased to 1.9 million TEUs. The Bronka Multipurpose Complex will be able to handle Panamax containerships and the ferries of Finnstar class. The first ship call is expected in 2014.

Private investors are expected to inject nearly RUB 43.7 billion in the project with the Russian Government investment at some RUB 15.2 billion.

The Bronka project will help create over 2,300 new jobs. Upon completion of the outer harbor facilities annual direct tax payments to the budget of St. Petersburg will be at RUB 1.7 billion (plus indirect tax – RUB 5.1 bn), the federal budget will get RUB 2.0 billion a year (RUB 5.9bn).

A fully-owned subsidiary of JSC Holding Company "Forum" Phoenix Ltd. was founded in 2007 specifically for the construction of Bronka multifunctional marine cargo handling complex to be located in the new Cargo Area of the Big Port St. Petersburg. The project is supported by the Russian Ministry of Transport and the St. Petersburg City Administration.

“Development strategy for marine port infrastructure of Russia until 2030”

The FSUE “Rosmorport” has completed the elaboration of the “Development strategy for marine port infrastructure of Russia until 2030”. According to base scenario in that document cargo transhipment volume through the ports of Russia will rise by 84% up to 985 million tonnes per year. However, as follows from the document, the expert estimates are higher: 1.29 billion tones. The main centres of transhipment will remain the ports of the Baltic and the Azov and Black basins: the stevedore cargo turnover of the first one will increase (according to the base scenario) by 69% up to 313 million tones and the stevedore cargo turnover of the second one will increase by 74% up to 301.1 million tonnes. The drivers of transhipment development on the Baltics will become hydrocarbons and fertilizers.

The handling capacity of ports in the Baltic basin will rise from current 292,3 mln tonnes up to 488,9 mln t (base scenario) or even up to 536,3 mln t (experts scenario).

In short-medium perspective main growth in handling capacity will be in 128

• Ust-Luga (incl container terminal with annual throughput 10 mln t); • St Petersburg (marine multifunctional complex Bronka with annual throughput 27,6 mln t; construction of container terminal with annual throughput 13,2 mln t); • Primorsk (incl construction of container terminal).

“Transport Strategy of St. Petersburg until 2025”

From the city of St Petersburg perspective the future port developments have been stated in the “Transport Strategy of St. Petersburg until 2025”. Main aspects about port developments are:

• Headings towards high-tech, more profitable and environmentally friendly cargoes; • For stabilizing and limiting the growth on road infrastructure in St Petersburg due to cargo traffic through development of cargo terminals situated outside of historic part of St Petersburg – development of avant-ports of Big Port St Petersburg; • remove existing storage facilities to peripheral parts of St Petersburg which have good connections with federal highway networks; • increasing the share of rail transport in carriage of goods on the territory of St. Petersburg.

According to city transport strategy the share of containers carried by rail in/from the Big Port St Petersburg should be on:

• 2011 – 23,2% of weight, 16,4 % of TEU-s; • 2015 – 30% of weight, 22% of TEU-s; • 2025 – 35% of weight, 30% of TEU-s.

In recent years the functioning and development of transport system has taken 15-16 % of city’s budget, except year 2009 which had 11,6%. In the future it should be 20-25% from the budget, which is normal share when the development of transport infrastructure is in active phase.

8.1.4 Intermodal terminals

Eight terminals are dealing with maritime intermodal cargo:

• First Container Terminal; • Container Terminal St-Petersburg; • Petrolesport; • ZAO Neva-Metall; • Rusmarine Forwarding Terminal; • Teesport Container Terminal; • Uniport Multipurpose Terminals; • First Stevedoring Company; • Moby Dick LLC in Kronshtadt.

There are also dry port intermodal terminal:

129

• Logistika-Terminal (Shushary, St.Petersburg).

8.1.4.1 First Container Terminal 121

First Container Terminal is part of National Container Company Group. In addition to First Container Terminal to the NCC Group belongs:

• Logistika-Terminal (Shushary), off-dock container terminal and logistics center; • Ust-Luga Container Terminal (Leningrad region); • Container Terminal Ilyichevsk (Ukraine); • National Container Terminal (Riga, Latvia), container terminal and logistics center (under construction); • NCC Logistics, rail operator; • Baltcontainer, truck operator.

The first dedicated container terminal in the Leningrad Trading Seaport was established in December, 1973. In October, 1998 ZAO "First Container Terminal" (FCT) was founded as a stevedoring company specialized in container handling to operate and develop the container terminal in the 3rd cargo district of the Sea Port of Saint-Petersburg.

FCT is the leader of container handling among the terminals in Russia and the Baltic Sea Region. FCT is linked to the largest European ports by means of an extensive feeder network - Rotterdam, Hamburg, Bremerhaven and Antwerp. FCT’s reefer plug capacity is one of the largest in Europe. The terminal has an EDI connection.

Table 33. Terminal characteristics of First Container Terminal.

Characteristics Total area 74 ha No of berths 4 Quay length 780m Max. draft 11m Yard storage capacity 28,800 TEU Reefer storage capacity 3,500 plugs Throughput capacity 1,350,000 TEU

Table 34. Handling equipment in First Container Terminal.

Equipment Quantity STS “Panamax” Crane 8 RTG Crane 19

121 National Container Company 2011. 130

RMG Crane 3 Mobile crane 1 Straddle Carriers 37 The fleet of reach stackers, empty-handlers, terminal tractors

Shipping lines call at FCT on a regular weekly basis: Maersk Line, MSC, CMA CGM, OOCL, APL, Unifeeder, Team Lines, FESCO ESF, and Swan CL.

Availability of an extensive common feeder network linking FCT with major European ports of transshipment allows for presence of other deep sea carriers who do not have their own feeder connection with St. Petersburg: APL, China Shipping, CSAV, Hapag Lloyd, Hamburg Sud, Hanjin, Evergreen, Cosco, HMM UASC, SCI, PIL, Yang Ming, K-Line, NYK Line, MOL, ZIM, and MISC. Currently the throughput capacity of the terminal is 1.35 mln TEU, throughput in 2012 was 1,058 mln TEU forming 42 % share of the ports container throughput.

Table 35. Regular container liner services to FCT.

Connections APL Russia Express CMA CGM St. Petersburg Shuttle Service A, B, C, D Delta Shipping Lines Loop1 and 2 Hapag-Lloyd Russia Express Service MSC Loop1 OOCL Scan Baltic Express1, 2, 3 SCA Transforest N. Sweden-Rotterdam Seago Line Russia Express Service Seago Line Baltics and Finnish Gulfservice Swan Container Line Rotterdam- St. Petersburg Unifeeder Russia Service 1, 2, 4 Team Lines RUS 2, 3

FCT has regular block train destinations:

• FCT – Moscow, Oktyabrskaya station; • FCT – Logistika-Terminal, Shushary; • Logistika-Terminal, Shushary – FCT; • FCT – Tolyatti.

FCT’s Investment Program envisages further growth of throughput capacity up to 1.6M by 2015. The capacity increase will be achieved by means of partial replacement of straddle carrier based handling system with an RTG/TT technology which will eventually pay off in

131

higher density of storage per ground slot. Another key element of the terminal’s expansion program is continual procurement of more productive and modern STS cranes, aimed to enhance berth productivity.

8.1.4.2 Container Terminal Saint-Petersburg – CTSP 122

CJSC "Container Terminal Saint-Petersburg" is a part of the international transport holding UCL Holding B.V. which also includes stevedoring company JSC "Sea Port of Saint- Petersburg". Company specializes in handling of all types of containers at the territory of the fourth cargo area of the Big Port Saint-Petersburg. It is located on the Turukhtannie Isles in the Coal Harbour of the Gulf of Finland.

The new complex, built instead of outdated general cargo handling facilities, aims to satisfy the promptly growing demand for container handling services in the Northwestern region of Russia.

Designing of the Container terminal was completed in 2008. In 2009-2010 container handling equipment were acquired and put into service, storage area and infrastructure retrofitted. At the end of 2010 the system of automated accounting of stevedoring operations, terminal processes and warehousing of containers was brought into operation. In the end of 2010 the first stage of container terminal was put into operation and at the moment the main cargoes handled by the company are containers. These cargoes are gradually pushing out less cost- efficient and less environmentally friendly cargoes such as mineral fertilizers, pig iron and metals from the structure of company’s turnover. Reducing the amount of time the commission works on a vessel help cargo owners reduce berthing charges. In January 2011 the Container terminal started operation on a regular basis.

The new container processing scheme simplifying the passing of border control procedures was launched on 24 October 2011. In 2011 CJSC “Fourth Stevedoring Company” (4SC) changes its title for JSC “Container Terminal Saint-Petersburg”. Changing name was logical step reflecting strategy of company’s development at the territory of the fourth cargo area of the Big Port of Saint-Petersburg and respective changes in the structure of the handled cargoes. In first half of 2012 UCL Port B.V., a holding company of the stevedoring division of UCL Holding Group, completed the sale of 20% of the shares of SP Container Terminal Limited, a company registered in Cyprus, which is the sole shareholder of JSC Container Terminal Saint Petersburg, to the MSC-affiliate company Terminal Investment Limited (TIL). Annual capacity of the container terminal amounts to 500 000 TEUs.

Table 36. Terminal characteristics of CTSP.

Characteristic Terminal area 32 ha Quays 2 units Quay length 478 m Depth at berths 11.50 m Container storage area 14,364 TEU

122 Container Terminal Saint-Petersburg. 132

Reefer plugs 1,150 units Length of rail loading area 1,870 m

Table 37. Intermodal cargo equipment in CTSP.

Equipment STS crane 4 units RTG crane 10 units Forklift truck 1 unit Reach stackers 3 units Terminal tractor-trailer 25 units

The terminal is equipped with the complex terminal operation system Solvo. TOS that provides for optimal management of production opportunities and electronic data interchange with the clients. The system’s core modules cover the container acceptance, storage, handling and loading processes at the terminal, as well as the document flow of the container terminal on a real-time basis.

The following additional modules are introduced:

• time slotting system; • release order electronic processing system; • electronic document flow system using EDS.

There are 21 regular container lines/services visiting CTSP.

Table 38. Regular container liner services to CTS.

Connections Delta Shipping Lines Loop1 and 2 MSC Loop 7 SCA Transforest N. Sweden-Rotterdam Sea Connect Rotterdam-Baltics-St. Petersburg Sea Connect Rotterdam-Hamburg-St. Petersburg Sea Connect Rotterdam-Ust-Luga -St. Petersburg Unifeeder Russia Service 1, 2, 4

The terminal can be accessed via the recently reconstructed road to the Coal Harbor and the Morskoi Pekhoty Street free from the city transport, with the capacity of 250 trucks per hour in each direction. Access to the Southern section of the Western High-Speed Diameter and further on, to the ring road is located 5.5 km away from the gates of the Container Terminal. The Terminal provides for container delivery by rail transport through the rail station “Avtovo”.

133

Further development within the second phase of construction includes extension of the quay and the storage area as well as acquisition of the new container handling equipment. After completion of the second phase in 2014 the terminal will have the throughput capacity of 1.2 million TEU per annum.

8.1.4.3 Petrolesport 123

Petrolesport OJSC is a member of the Global Ports Group (which includes shareholders like APM Terminals, N-Trans). The main freight traffic of Petrolesport, OJSC includes containers, ferry cargo, refrigerated cargo and timber and general cargo. The terminal handles all types of containers (including refrigerated, hazardous cargo and out-of-gauge cargo).

Today Petrolesport OJSC is a modern port complex providing loading/unloading, storage, forwarding services, handling of various kinds of cargo; placement of cargo in the customs warehouse; rendering of services for customs registration and tracking (customs brokerage services) et cetera. Several modern specialized terminals - container, ferry, refrigerated facilities with all necessary infrastructure, up-to-date equipment and highly skilled personnel are functioning at the port.

Since 2002 the company has implemented a long-term investment program targeted at the development of port's infrastructure, increasing the capacity of cargo handling facilities and the improvement of customer service. The modernization process includes the improvement of berthing capacities, expansion of platforms for warehousing container and RO-RO cargoes, installation of modern handling equipment, advanced technological systems for cargo processing in the terminals, etc.

In the second half of 2009 Petrolesport OJSC accomplished the next stage of the ferry terminal complex development program, as a result of which capacity for warehousing and transfer of light vehicles has increased considerably and the re-equipment of the areas for traditional Ro-Ro cargo has been achieved.

Petrolesport OJSC's container terminal has the capacity to handle over 1 000 000 TEU per year. The development programme includes container terminal expansion with the increase of terminal annual capacity up to 2,5 mln TEUs. In 2011-2012 over $160 mln will be spent under the Petrolesport's investment program. Other aspects in the development programme include:

• further investment in PLP infrastructure to lay the groundwork for the next phase of capacity expansion. This includes reconstruction and expansion of PLP’s internal railway infrastructure and road system (including the inter-terminal access road to the Western High Speed Diameter), the addition of further electricity capacity, and engineering work on infrastructure, parking and the repairs area for the port’s machinery; • further upgrading of the existing heavy Ro-Ro and car handling terminal at PLP. The terminal is experiencing strong client demand, with the utilisation rate for the heavy Ro-Ro facilities at 73% during the first half of 2012. By continuing to upgrade the terminal, the Group will increase the level of service for its clients, enhance flexibility in Ro-Ro and cars handling as well as improve the safety of the operations;

123 Petrolesport OJSC 2013. 134

• other projects aimed at facilitating further bulk cargo turnover growth and container throughput as well as increasing the bulk containerisation level

Table 39. Terminal characteristics of Petrolesport.

Characteristic Container yard 34,5 ha Container terminal operating capacity: loaded containers 10,500 TEU loaded refrigerated containers 5,500 TEU empty containers 10,200 TEU empty container depot 750 TEU Depth at berths 11 m Railway track length 6874 m 50 extended- Railway frontage length platforms

Table 40. Intermodal cargo equipment in Petrolesport.

Equipment STS crane 7 units Mobile cranes n/a Reach stackers 10 units Shuttle container lorries 2 units Specialized vehicle gates 2 units IT- systems:

• Outdoor cargo area video surveillance system • COSMOS terminal operating system, which supports information exchange with client information systems via EDI messages using a Web interface and digital e- signatures. • Vehicle dispatch control information system with Web interface and digital e- signature to ensure equipment optimization in the port • Modern maritime security system (the port is certified under the International Code for the Security of Ships and Port Facilities) • Permanent customs control zone • All-weather inspection facility for simultaneous inspection of 120 containers • Mobile Baltic customs inspection facility

Table 41. Regular container liner services to Petrolesport.

Connections CMA CGM St. Petersburg Shuttle Service A, C, D

135

Delta Shipping Lines Loop1 and 2 Hapag-Lloyd Russia Express Service Maersk Line ECUBEX Sea Connect Rotterdam- Baltics- St. Petersburg Sea Connect Rotterdam- Hamburg- St. Petersburg Sea Connect Rotterdam- Ust-Luga- St. Petersburg OOCL Scan Baltic Express 2 SCA Transforest N. Sweden-Rotterdam Seago Line ECUBEX Eastbound, Westbound St. Petersburg Rauma Service, Baltic Seago Line Service Swan Container Line Rotterdam- St. Petersburg Unifeeder Russia Service 1, 2, 3, 4

Petrolesport OJSC's Ro-Ro terminal has the capacity to handle up to 190000 light vehicles and up to 20000 units of other cargo per year. The light vehicle storage area has been significantly expanded; areas for traditional Ro-Ro cargo have been refurbished and rebuilt under the terminal modernization program.

Infrastructure:

• Ferry terminal area - 14.5 ha, including: o light vehicles - 12.5 ha o traditional Ro-Ro cargo - 7 ha, including coverage warehouse for Ro-Ro cargo - 3500 m 2 • Storage areas for all types of vehicles, wheeled equipment and other cargo: o outdoor storage areas for light vehicles - 12 ha, capacity: 6950 units o outdoor storage areas for self-powered equipment and other Ro-Ro cargo - 6 ha • Ferry cargo distribution area (outbound zone) • Lorry loading area for light vehicles and Ro-Ro equipment • Railway frontage with area for handling self-powered equipment

Equipment, processing capabilities, services:

• Intraport handling equipment • Electric loaders, manipulators, special excavators • Outdoor cargo area video surveillance system • CARGOPRIME handling facility process information system, which supports electronic document exchange with client's outside information systems using a Web interface and digital e-signature • Vehicle dispatch control information system with Web-interface and digital e- signature to ensure even vehicle feed to the port

136

• Round-the-clock services by a surveyor company performing independent inspection of incoming vehicles when a ship arrives and releasing them to the overland carrier • Permanent customs control zone • Inspection facility • Mobile Baltic customs inspection facility

There are 7 regular Ro-Ro liner services visiting CTSP.

Table 42. Regular Ro-Ro liner services to Petrolesport.

Connections DFDS Seaways St. Petersburg- Karlshamn-Kiel Mann Lines Service 2 Transfennica St. Petersburg-Lübeck Transfennica Finland-Russia UECC Baltic 2, 3 UPM Seaways United Service

At the moment Petrolesport OJSC is implementing a comprehensive programme of modernization which is a part of the federal special-purpose program «Modernization of the Russian transport system», targeted at the development and competitive recovery of the Russian transport infrastructure. The investment strategy of the company envisages further increases in berthing and warehouse capacities, and expansion on the railway and automobile front. Its advantageous location, developed infrastructure, modern equipment and effective management provide Petrolesport with high potential for future development and a leading position in the export-import market of the North-west region of Russia.

8.1.4.4 ZAO Neva-Metall 124

Neva-Metall is a stevedoring company specializing in transhipment and storage of ferrous metals and containerized cargo. In 2008, it began developing a new activity, transhipment of containerized and hazardous cargo, and has licenses for handling quarantineable and hazardous commodities. Company was acquired by Severstal in 2007.

The company's four quays with the total length of 738 metres allow working vessels with water draft up to 11 metres and are located on the territory of the third area of St. Petersburg sea port. 60,560 sq. metres of ground storage and covered storehouses are used to store cargo (of which covered storehouses account for 11,440 sq. metres). The storage facilities are capable of housing up to 120,000 metric tonnes of metal products and 2,000 TEU at a time. The terminal's total area is 93,500 sq. metres. Branch railway lines allow for accommodation of up to 200 carriages. Operation is assisted with handling equipment consisting of four 40- tonne cranes and seven 20-tonne cranes. Rail length for serving containers is 1.2 km (for 60 platforms).

Terminal is equipped with 1 STS crane, 1 RTG, 35 reach stackers and forklift trucks, roll trailers and a palletizer to handle containerized cargo, and well as a diesel generator to handle

124 ЗАО . Нева -Металл . 137

refrigerator containers. Both ground storage and covered storehouses are used to store cargo. Container throughput in 2011 43 th. TEU, in 2012 49 th. TEU.

Table 43. Regular container liner services to Neva-Metall.

Connections Sea Connect Rotterdam- Baltics- St. Petersburg Sea Connect Rotterdam- Hamburg- St. Petersburg Sea Connect Rotterdam- Ust Luga- St. Petersburg

8.1.4.5 Moby Dik LLC in Kronshtadt 125

Terminal is owned by Global Ports and Container Finance Ltd Oy. The terminal is situated on Kotlin (Kronshtadt) island close to Saint-Petersburg (30 km). Moby Dik DIK is a dedicated container cargo terminal, only in Kronshtadt. All necessary border control functions including an official check point at the state border at “Base Litke, island Kotlin” and Baltic customs “Kronshtadt” operate on the terminal.

Moby Dik Co. Ltd operates two cargo quays able to accept container vessels and Ro-Ro vessels with side and stern ramp. Total quay length is 321 m (150 m and 171 m). Maximum vessel draft is 8.9 m. Terminal facilities allow handling up to 400 000 TEU. Terminal container storage capacity is currently 7 500 TEU. The container yard is equipped with reefer stands for the simultaneous plug- in of 504 reefer containers.

Terminal operation control is based on specially developed sophisticated software called CargoPrime “Container terminal control”. Container terminal uses a Time-slot system in order to organize effective and proper service to trucks entering the terminal. This system allows clients to choose convenient time slots for picking up cargo by truck.

Table 44. Intermodal cargo equipment in Moby-Dik terminal.

Equipment STS crane 2 units Mobile harbour crane 3 units RTG crane 5 units Reach stackers 7 units Empty container handler 2 units Port truck/terminal tractor 5 units

125 MOBY DIK Co. 138

Table 45. Regular container liner services to Moby-Dik terminal.

Connections Containerships Loop 1, 2, 3, 4, 5, 6 Delta Shipping Lines Loop 2

The development strategy of the company is directed at the enlargement of container terminal capacity up to 500 000 TEU in accordance with the growth of demand for container handling. Terminal has a program of development which is aimed at enlarging storage area capacity; purchasing new equipment, and the reconstruction of available storage areas.

8.1.4.6 Sea Port of Saint-Petersburg (former First Stevedoring Company)126

JSC “Sea Port of Saint-Petersburg” is the largest operator providing dry cargo handling in the Big Port of Saint-Petersburg, founded on the base of Leningrad Sea Commercial Port. JSC "Sea Port of Saint-Petersburg" is included in UCL Port, stevedoring division of the International transportation group UCL Holding, which also includes CJSC "Container Terminal Saint-Petersburg", LLC "Multipurpose Reloading Complex" at the North-West of Russia and Tuapse and Taganrog Sea Ports at the South of the country. Development strategy of the UCL Port envisages the modernization of the existing terminals and construction of new terminals for handling of general, bulk and container cargoes.

“Sea Port of Saint-Petersburg” renders full spectrum of stevedoring services round the clock 365 days a year. All types of cargoes, including heavy-lifts and out-of-gauge cargoes are accepted for operations. Handling of project cargoes at the terminals of the company is carried out in cooperation with the logistic company “Universal Forwarder” (part of UCL Holding).

The port can accommodate vessels with the deadweight up to 60 thousand tons and draft up to 11 m. The Port has a well-developed infrastructure, which includes railway lines and crane rails, automobile roads, engineering communications, repair workshops, fueling stations, water treatment facilities. Specialists of the company have many years' experience in development of process sheets and in manufacturing of special devices for handling of non- standard cargoes.

At its disposal “Sea Port of Saint-Petersburg” has 34 berths with the total length of 5.8 km, roofed storage areas of 46 thousand sq. m, outdoor storage grounds of 412 thousand sq. m, 57 gantry cranes up to 40 tons hoisting capacity, a floating crane of 300 tons capacity, 2 Liebherr mobile rubber-tyred cranes LHM 600 with the lifting capacity up to 140 tons, 1 truck- mounted crane with the lifting capacity of 55 tons, 222 different specialized loading mechanisms. Storage capacities are located at the territory of Permanent Customs Control (PCCT).

In 2012 the company handled over 8.7 mln. tons of cargoes. The share of the company in the total turnover of the Greater Port of Saint-Petersburg came to approximately 15%. In its work

126 JSC. Sea Port of Saint-Petersburg 2006. 139

JSC “Sea Port of Saint-Petersburg” is governed by the best business traditions, developed during long history of its existence. Terminals of the company are serviced by railway station “New Port”. Railway transportation at the fourth cargo area is performed from station Avtovo. The company manages the Ro-Ro terminal at the territory of the second cargo area of the Greater Port of Saint-Petersburg and the specialized car terminal at the third cargo area. In 2012 turnover of JSC “Sea Port of Saint-Petersburg” amounted to 8.7 mln tons.

Ro-Ro terminal

Productive capacity of Ro-Ro terminal for handling of all types of Ro-Ro cargoes amounts to 1 mln. tons per year. Outdoor and covered storage capacities with the total area of 160 thousand sq. m. allow storing simultaneously about 3 thousand units of various equipment. Terminal is equipped by everything which is required for the work of Border and Customs Services. In 2012 handling volumes of Ro-Ro cargoes at the terminal amounted to 918 thousand tons.

Car terminal

The annual throughput of the specialized car terminal is 80 000 cars. Car terminal with the total area of 5 ha allows storing simultaneously 1900 cars on its territory. This terminal is equipped with the state-of-art information system which provides monitoring and planning of acceptance procedures, shipping and yard shifting operations. The discharge of the vessel with the shipment lot of 1800 units aboard takes approximately 12 hours. Cars are loaded onto trucks for the further transportation. In 2012 52 543 cars were handled at the car terminal.

Table 46. Regular Ro-Ro liner services to FSC terminal.

Connections Finnlines TransRussiaExpress 1,2 Finnlines North Sea Service, Iberia Service

8.1.4.7 Logistika-Terminal (Shushary, St.Petersburg)

Logistika-Terminal (Shushary) is part of National Container Company Group which also owns First Container Terminal. Logistika-Terminal (LT) is an off-dock container facility of St. Petersburg port. LT infrastructure includes container terminal, empty container depot, container freight station (CFS), vast warehousing and distribution facilities, convenient motor/railroad approach. Terminal started its operations in 2010.

LT was the first Russia’s terminal to start operating as “dry port”. Dry port technology gives possibility to transport containers from the sea terminal (abovementioned First Container Terminal – FCT) to the off-dock facility in Shushary (LT) in bond under the simplified scheme of customs control for further customs clearance, storage and distribution. This technology increases FCT’s yard capacity and gives our customers the possibility of taking full advantage of high-quality logistic services at the off-dock terminal. Terminal is located 17 km from FCT and is connected by road and rail. Currently the throughput capacity of the terminal is 200 000 TEU, throughput in 2012 was 113 328 TEU.

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Table 47. Terminal characteristics of Logistika-Terminal.

Characteristic Terminal area 92 ha Annual cargo handling capacity 200,000 TEU First stage development 59 ha Storage capacity 10,000 TEU Empty containers 4,500 TEU Rail facilities: 2 rail tracks container block trains 1,757 m 1 rail track container cars 422 m

Terminal has regular block train destinations:

• FCT – Logistika-Terminal, Shushary; • Logistika-Terminal, Shushary – FCT; • Ust-Luga Container Terminal – Logistika-Terminal, Shushary;

Yanino Logistics Park

Yanino is the first terminal in the Global Ports Group's inland terminal business and is one of the few multi-purpose container logistics complexes in Russia providing a comprehensive range of container and logistics services at a single location. Yanino is located approximately 70 kilometres from the Moby Dik terminal in Kronstadt and approximately 50 kilometres from PLP.

Terminal is co-owned with Container Finance Ltd Oy. Yanino provides access to containerisation for small- and medium-sized producers of export goods. This helps to increase container volumes at the Group's other terminals because smaller lots of goods can be handled at Yanino, without having to transport the goods first to a port terminal for container stuffing.

Table 48. Terminal characteristics of Yanino Logistics Park.

Characteristic Terminal area 51.3 ha Annual cargo handling capacity 400,000 TEU Container stacking area 12 ha Storage capacity 10,000 TEU Rail length 613 m

141

Table 49. Intermodal cargo equipment in Yanino Logistics Park.

Equipment RTG crane 2 units Reach stackers 6 units Terminal tractors 2 units

Terminal is connected with Big Port St Petersburg by road and rail and by road with Moby Dik in Kronshtadt. Railway connection with hinterland railway system is realized through “Заневский пост ”. Terminal is about 2 km away from interstate highway. Container turnover of the terminal in 2012 was 63 000 TEU (-3% compared to 2011)

8.2 Port of Kaliningrad

8.2.1 General information 127

Kaliningrad Sea Commercial Port JSC is the largest enterprise of regional port complex, both on volume of carried out works and technical support and a complex of services granted to the cargo owners. The port has a high value in guaranteeing a vital activity of Kaliningrad region, as practically all means of transport and the basic part of the export-import freight traffic passing through the territory of region, close in the port.

Kaliningrad Sea Commercial Port:

• the only Russian port on Baltic Sea in free economic zone; • 36 hours to Hamburg by sea; • 48 hours to Moscow by special container rail train; • 1 hour by road to European Union; • the largest container terminal in region.

The Kaliningrad Sea Commercial Port is located in the south-eastern part of the Baltic Sea in the mouth of the Pregolya River. The length of the sea canal and the waterways connecting the port with the sea is 43 kilometres. Geographic coordinates of the port are 054 42’ N and 020 32’ E.

Kaliningrad Sea Commercial port is the only ice-free Russian port on the Baltic Sea. The port is accessible all year; no ice-breakers are needed in winter. However, when unusually low temperatures are faced during long periods, some ice appears in the canal and the Port Authority has to employ strong tugboat for clearing fairway whenever convoy includes only smaller vessels. Surcharges for such tugboat are shared by vessels participating in the convoy. With such ice smaller vessels which normally do not employ tugboats for berthing might need to employ small tugboat. Latest when such circumstances were faced is 1997.

The berthing places of the port with overall length 17 km are situated both at the northern part of the Kaliningrad Seaway Canal and at the mouth part of the Pregolj river with the joined havens.

127 Kaliningrad Sea Commercial Port 2013. 142

Port of Kaliningrad is divided geographically into four cargo handling regions: Kaliningrad, Svetliy, Baltiysk and distant cargo region Pionerskiy. Kaliningrad Seaway Canal is a hydro technical construction, which was built 100 years ago in order to pass vessels from the roadstead up to the cargo berths situated within the city. Seaway Canal is 43 km long, with breadth ranged from 5.0m till 10.5m.

There are 19 berths at the Kaliningrad Sea Commercial port, which are equipped with handling machinery, including for acceptance of Ro-Ro vessels – 2 (berths 3, 19). The total length of the berthage at the port is 3170 meters. Approaching vessels must be submitted to the following restrictions: cargo vessels & tankers: LOA 170 - 200m, beam 25 - 28.4m and draught 8.0 - 9.4m. Maximum allowed air draught is 54m.

Figure 68. Map of the Port of Kaliningrad. The Kaliningrad Sea Commercial Port together with forwarding, agent, freight and other companies, operating with the port, carries out full range of services connected with transportation of any cargoes from the Consignor to the Consignee and anchorage of the vessels at the port.

The basic services are the following:

• loading-unloading operations; • cargo storage; • forwarding of cargoes by railway and motor transport, including calculations for transportation of cargoes by railway directly with the administration of the railway; • logistics; • towage/convoy of vessels for performance of manoeuvres in the cannel and at the port; • mooring service; • transportation of any types of cargoes by motor vehicles both around the region and to the other countries;

143

• construction and repairing of berths, cargo platforms, buildings, engineering communication systems, repair and maintenance of railways and crane tracks, manufacturing of ferro-concrete products; • power supply for the outside organizations.

Figure 69. Port of Kaliningrad total cargo turnover in 2007-2012 128 . The port has a direct Agreement with “Russian Railway” JSC on cargoes’ forwarding by rail as well as the Agreement on cooperation with the administration of Lithuanian and Byelorussian Railway. All services at the port are carried out on the basis of direct contracts applying flexible system of tariffs and an individual approach to the client. Moreover, clients and investors of the port are granted some tax and customs privileges in accordance with the Law of the Russian Federation «On the Special Economic Zone in Kaliningrad region». The system of automated accounting of cargoes, including containers, is applied in the port. Customs offices are located at the territories of Sea Commercial and Fishery Ports, as well as at Baltiysk and Svetly near respective Terminals.

Kaliningrad Sea Commercial port disposes the wide range of handling equipment with lifting capacity from 1.5 till 50 tons for handling of various types of cargo, which include:

• gantry cranes with lifting capacity from 5 up to 50 tons; • hydraulic self-propelled cranes with dipper shovels for timber, bulk cargoes, scrap metals; • forklift trucks which have an opportunity to work with various grabs depending on type of cargo with load capacity from 1.5 up to 37 tons; • container loaders produced by group of companies “KALMAR” and “FANTUZZI” (load capacity from 41 up to 45 tons); • port tractors and grab loaders with grabs for heavy and light materials; • electric loaders with load capacity up to 2 tons.

There are 13 cargo warehouses on the port’s territory, three of them are refrigerators. The total area of warehouses is 51,026 thousand sq. m. Total open (guarded) storage area with

128 Kaliningrad Sea Commercial Port 2013. 144

asphalt, concrete surfacing as well as covered with concrete panels is 211.6 thousand sq., namely:

• Cargo terminal 1 – 40.162 thousand sq. m with loading capacity of 4.0-6.0 tons /sq. m; • Cargo terminal 2 – 111.5 thousand sq. m with loading capacity of 4.0-8.0 tons /sq. m; • Cargo terminal 3 – 60.05 thousand sq. m with loading capacity of 6.0 tons/ sq. m.

Figure 70. Kaliningrad sea port.

Figure 71. Kaliningrad cargo handling region.

Figure 72. Svetlov cargo handling region.

145

Figure 73. Baltiyskii cargo handling region. In long perspective huge growth will be realized due to building of seaport Balga which will handle mainly containers, Ro-Ro and liquid bulk with annual throughout capacity of 131.5 mln t.

8.2.2 Connections 129

The port is located at crossing of the basic intermodal transport corridors (I, IX) in the Special Economic Zone of Russian Federation – Kaliningrad region, fully separated from the rest territory of Russia by land frontier of foreign countries (Poland and Lithuania) as well as international sea waters. The port has the existence in the region of three points of joining the European and Russian track lines and the shortest distances relatively other ports of the Baltic Sea to the basic West-European ports.

Port is connected by rail- and motor ways with the transport network of Russia and other countries. The Ports play a key role in the economy of the region. It is also the sea gate to the Western Europe and the shortest transport route to the Russian interior regions. Railway tracks and motorways connect the berths of the port directly with the entire transport network of Russia and other countries and regular shipping lines - with the ports of Germany, Denmark, Netherlands, the Great Britain, Poland and Belgium.

Kaliningrad Sea Commercial Port (KSCP) is connected by regular shipping lines with foreign ports (table 49).

Table 50. Regular shipping lines in Port of Kaliningrad.

Frequency of Name of line Ports of call Type of line calling Rotterdam (Netherlands), The container Mann Lines Hamburg, Bremerhaven 2 times a week feeder service for Multimodal (Germany), Gdynia (Poland), Riga various ocean (Latvia) carriers The container MAERSK Bremerhaven (Germany) Subqect to call feeder service for MAERSK ocean

129 Kaliningrad Sea Commercial Port 2013. 146

carriers The container feeder service for CMA-CGM Zeebrugge (Belgium) Once a week CMA-CGM ocean carriers Transportation of cargoes for UNIFEEDER Gdynia (Poland) Once a week company AVTOTOR Transportation of Kiel (Germany), Kolding Transmarine Line Once a week various cargoes by (Denmark) «River-Sea» vessel North-Western Rotterdam/Antwerp Once a week Container service Shipping Lines Klaipeda/Rotterdam/Bremerhaven/ Kursiu Linija Hamburg/ 5 times a week Feeder service Felixstowe/Rotterdam/Antwerp from Baltiysk to/from Luebeck Transrussia/Finnlines Ferry service (Germany)/St. Petersburg (Russia)

Figure 74. Main container connections of Port of Kaliningrad 130 .

130 Baltic Transport Maps. 147

Figure 75. Main Ro-Ro and ferry connections of Port of Kaliningrad 131 .

8.2.3 Intermodal terminals 132

All loading-unloading operations at the Kaliningrad Sea Commercial Port are performed on terminals and areas specialized by cargo type.

The cargo Terminal No.1

Cargo terminal № 1 is located on the right side of Volnaya harbour (berths 1, 2, 3, 15, 16). It is specialized on handling of reefer cargoes, timber and general cargoes of covered and open storage in bags, boxes, packets, big-bags.

It disposes the following:

• 3 reefer warehouses (refrigerators); • warehouses for storage of saw timber and plywood; • 3 warehouses for cargoes in bags; • 40,162 thousand sq. m of open guarded storage area; • area for handling of fuel oil (berth 16), equipped with 3 tanks of 3000 cb. m each for storage of fuel oil; • a complex on manufacturing of fodder additives for cattle breeding.

131 Baltic Transport Maps. 132 Kaliningrad Sea Commercial Port 2013. 148

The cargo Terminal No.2 (Container terminal)

Terminal is located on the territory between Volnaya and Industrialnaya harbours (berths 18, 19). It is specialized on handling of universal and special 20 and 40 –feet containers as well as ferrous and non-ferrous metals.

The main technical characteristics of Container terminal:

• Total area of terminal 250 thousand sq. m • Number of berths 2 • Berth line 420 m • Open (guarded) storage area with concrete panels and asphalt surfacing 111.5 thousand sq. m • Area of warehouse of container’s completion 9 thousand sq. m

Nowadays the terminal has capability to handle up to 200 thousand containers (in TEU) per year and is the largest container terminal in the region. The terminal carries out full range of services connected with handling, storage and transportation of containers from the Consignor to the Consignee, including stuffing-unstuffy of containers, their transportation from terminal and back for any distance by means of own tractors and trailers. The terminal also gives the client possibility to use services of container train “Mercuriy” for containers’ delivery on the rout Kaliningrad – Moscow (1288 km) – for the period of 50 hours.

The terminal disposes the fleet of modern highly efficient handling equipment:

• gantry cranes (5 units) with lifting capacity from 32 up to 50 tn, including highly productive whirly crane “Fenix” with articulated boom system provided horizontal shift of cargo during boom’s shifting with lifting capacity of 50 tn. The crane is equipped with telescopic spreader. • container loader (8 units) produced by group of companies “KALMAR” and “FANTUZZI” with load capacity from 41 up to 45 tons. • modern grab devices.

Baltiysk Container Terminal, at 2010 started the first stage of building with turnover capability of 200 thousand TEU to serve the needs of Kaliningrad and continuation the project up to end of 2013 with the perspective to increase the capacity up to 400 t TEU. Total cost of project is 87.5 M$.

149

100 87,5

80

60 44,8 Planned assets 40,8 42,7 40 Summary assets Millions $ Millions 20

0 1,9 0 Until 2012 2012 2013

Figure 76. Planned and summary assets of building project of Baltiysk Container Terminal. The cargo Terminal No.3

The cargo Terminal No.3 is located on the left side of Volnaya harbour (berths 4,5,6) and right side of Industrialnaya harbour (berths 10, 11, 12, 13, 14). It is specialized on handling of ferro alloys, coke, pig-iron, ore, and scrap metals.

The terminal has two warehouses for storage of ferro alloys; 60.05 thousand m2 of open guarded storage areas for storing of bulk cargoes (pig-iron, coke, scrap metal, etc); three buildings of port elevator with total capacity of simultaneous storage of grain cargo – 46 thous.tn. Moreover on the territory of Kaliningrad Sea commercial port there is a special terminal on handling of mineral fertilizers in bulk. The terminal works with different type of fertilizers: nitric, potassium, complex.

In addition, the terminal disposes a covered warehouse with capacity of 16 thousand m3, capable to store safety two types of fertilizers and a railway approach, contained up to 100 special wagons simultaneously.

The terminal disposes the equipment, which allows to mix fertilizers, as well as to pack them in to “big-bags” (500 and 1000 kg) with productivity of 60 ton per hour. The real speed of loading is more than 10 thousand ton per day (the guaranteed commercial speed is 4 thousand ton per day).

150

9. Overview of port performance

The study analysed the exsisting situations in Amber Coast ports. The current chapter describes the results of the analysis. The chapter is divided into six sub-chapters according to the port performance indicators. Each sub-chapter gives an overview of the spesific indicator and presents the results for each Amber Coast port. The final sub-chapter of this chapter gives a summary about the results of port performance indicators in Amber Coast ports.

The overall exsisting situations in Amber Coast ports are descibed below. The following figure presents the total cargo turnover in Amber Coast ports in 2011. In addition, the figure shows the proportion of intermodal cargo (containers and Ro-Ro) in ports‘ total cargo turnover.

Figure 77. Amber Coast ports total cargo turnover in 2011. Total turnover trend shows how turnovers in Amber Coast ports have changed between years 2007 and 2012. Ports that have total turnover trend over zero have increased its turnover over the years. Ports that have total turnover trend below zero have decreased its turnover over the years. The total turnover trend in Amber Coast ports in 2007-2012 is presented in figure below.

151

Figure 78. Amber Coast ports total turnover trend in 2007-2012. Total container turnover shows the number of containers that have been handled by the port. The following figure presents the number of containers (in TEU) in Amber Coast ports in 2007-2012. The figure excludes those Amber Coast ports that do not deal with containers.

Figure 79. Amber Coast ports total container turnover in 2007-2012.

9.1 Market trends and market structure indicators

Market trends and market structure indicators show the dynamics in port industry. The current study analysis six different indicators related to market trends and market structure: maritime traffic, vessel traffic, port traffic, container dependency, market shares and market trend. Maritime traffic indicator analyzes the seaborne traffic of the port by calculating the volume of the containers and Ro-Ro cargo that is handled at the sea interface area of the port over a 152

stated period of time. Vessel traffic indicator analyzes vessel traffic at the port over a stated period of time. Port traffic indicator relates to port throughput figures. Container dependency indicator aims at studying how strongly a port has embraced containerization and analysis ratio between the containerized and total maritime traffic of the port. Market share indicator shows the proportion of the total available market or market segment that is being served by a port over a stated period of time and market trend indicator analysis of growth in intermodal cargo turnover in port.

Following figures present market trends and market structure indicators of all twelve Amber Coast ports. Each port is described by all six indicators.

Freeport of Riga

Maritime traffic

Vessel Traffic

Port traffic

Container dependency

Market share

Turnover trend

0 1 2 3 4 5 Figure 80. Freeport of Riga market trends and market structure indicators.

Port of Ventspils

Maritime traffic

Vessel Traffic

Port traffic

Container dependency

Market share

Turnover trend

0 1 2 3 4 5 Figure 81. Port of Ventspils market trends and market structure indicators.

153

Port of Liepaja

Maritime traffic

Vessel Traffic

Port traffic

Container dependency

Market share

Turnover trend

0 1 2 3 4 5 Figure 82. Port of Liepaja market trends and market structure indicators.

Port of Klaipeda

Maritime traffic

Vessel Traffic

Port traffic

Container dependency

Market share

Turnover trend

0 1 2 3 4 5 Figure 83. Port of Klaipeda market trends and market structure indicators.

Port of Gdansk

Maritime traffic

Vessel Traffic

Port traffic

Container dependency

Market share

Turnover trend

0 1 2 3 4 5 Figure 84. Port of Gdansk market trends and market structure indicators.

154

Port of Gdynia

Maritime traffic

Vessel Traffic

Port traffic

Container dependency

Market share

Turnover trend

0 1 2 3 4 5 Figure 85. Port of Gdynia market trends and market structure indicators.

Port of Elblag

Maritime traffic

Vessel Traffic

Port traffic

Container dependency

Market share

Turnover trend

0 1 2 3 4 5 Figure 86. Port of Elblag market trends and market structure indicators.

Port of Køge

Maritime traffic

Vessel Traffic

Port traffic

Container dependency

Market share

Turnover trend

0 1 2 3 4 5 Figure 87. Port of Køge market trends and market structure indicators.

155

Port of Sassnitz

Maritime traffic

Vessel Traffic

Port traffic

Container dependency

Market share

Turnover trend

0 1 2 3 4 5 Figure 88. Port of Sassnitz market trends and market structure indicators.

Port of Tallinn

Maritime traffic

Vessel Traffic

Port traffic

Container dependency

Market share

Turnover trend

0 1 2 3 4 5 Figure 89. Port of Tallinn market trends and market structure indicators.

Port of St.Petersburg

Maritime traffic

Vessel Traffic

Port traffic

Container dependency

Market share

Turnover trend

0 1 2 3 4 5 Figure 90. Port of St. Petersburg market trends and market structure indicators.

156

Port of Kaliningrad

Maritime traffic

Vessel Traffic

Port traffic

Container dependency

Market share

Turnover trend

0 1 2 3 4 5 Figure 91. Port of Kaliningrad market trends and market structure indicators.

AC Ports total market trends and market structure indicators

Port of St.Petersburg

Port of Klaipeda

Freeport of Riga

Port of Gdansk

Port of Tallinn

Port of Ventspils

Port of Gdynia

Port of Kaliningrad

Port of Liepaja

Port of Sassnitz

Port of Elblag

Port of Koge

0 1 2 3 4 5

Figure 92. AC Ports- Total market trends and market structure indicators.

9.2 Socio-economic impact indicators

Socio-economic impact indicators show the economic contribution for port development. The indicator analyses the technological (containerization and intermodal solutions) and spatial evolutions impact to port activities. Socio-economic impact indicators include two sub- indicators- investments and port handling automated systems and technology. An indicator investment describes the total investments by the port within the port area. It acts mainly as a 157

driver of the port’s future socio-economic development. Port handling automated systems and technology indicator assesses the extent of automated processes in the port.

Following figures present socio-economic impact indicators of all twelve Amber Coast ports compared to other indicators analyzed in this study.

Freeport of Riga Port of Ventspils I I 5 5 4 4 3 3 II Socio- II Socio- 2 economic 2 economic V V impact impact 1 1 indicator indicator 0 0

IV III IV III

Figure 93. Freeport of Riga socio-economic Figure 94. Port of Ventspils socio-economic impact indicator compared to other indicators. impact indicator compared to other indicators.

Port of Liepaja Port of Klaipeda I I 5 5 4 4 3 3 II Socio- II Socio- 2 economic 2 economic V V 1 impact 1 impact indicator indicator 0 0

IV III IV III

Figure 95. Port of Liepaja socio-economic Figure 96. Port of Klaipeda socio-economic impact indicator compared to other indicators. impact indicator compared to other indicators.

158

Port of Gdansk Port of Gdynia I I 5 5 4 4 3 3 II Socio- II Socio- 2 economic 2 economic V V 1 impact 1 impact indicator indicator 0 0

IV III IV III

Figure 97. Port of Gdansk socio-economic Figure 98. Port of Gdynia socio-economic impact indicator compared to other indicators. impact indicator compared to other indicators.

Port of Elblag Port of Køge I I 5 5 4 4 3 3 II Socio- II Socio- 2 economic 2 economic V V 1 impact 1 impact indicator indicator 0 0

IV III IV III

Figure 99. Port of Elblag socio-economic impact Figure 100. Port of Køge socio-economic impact indicator compared to other indicators. indicator compared to other indicators.

159

Port of Sassnitz Port of Tallinn I I 5 5 4 4 3 3 II Socio- II Socio- 2 economic 2 economic V V 1 impact 1 impact indicator indicator 0 0

IV III IV III

Figure 101. Port of Sassnitz socio-economic Figure 102. Port of Tallinn socio-economic impact indicator compared to other indicators. impact indicator compared to other indicators.

Port of St.Petersburg Port of Kaliningrad I I 5 5 4 4 3 3 II Socio- II Socio- 2 economic 2 economic V V impact impact 1 1 indicator indicator 0 0

IV III IV III

Figure 103. Port of St. Petersburg socio- Figure 104. Port of Kaliningrad socio-economic economic impact indicator compared to other impact indicator compared to other indicators. indicators.

160

AC Ports socio-economic impact indicators

Port of Klaipeda

Port of St.Petersburg

Port of Kaliningrad

Port of Gdynia

Port of Tallinn

Port of Gdansk

Freeport of Riga

Port of Sassnitz

Port of Koge

Port of Liepaja

Port of Ventspils

Port of Elblag

0 1 2 3 4 5

Figure 105. AC Ports socio-economic impact indicators.

9.3 Environmental performance indicators

Port operations and activities have impact on air, water, soil and sediment of the terrestrial and marine environment. Environmental performance indicator shows the environmental awareness and effectiveness environmental management. Environmental performance indicator includes two sub-indicators- existence of environmental programme and readiness for coming regulations. Existence of environmental programme indicator analysis the environmental monitoring system which monitors the quality of the port environment, assess the situation and assist to take necessary measures. Readiness for coming regulations indicator elaborates the port development plans and investments in order to face EU directives SO X, NO X, CO 2.

Following figures present environmental performance indicators of all twelve Amber Coast ports compared to other indicators analyzed in this study.

161

Freeport of Riga Port of Ventspils

I I 5 5 4 4 3 3 2 2 V II V II 1 1 0 0

III III Environme Environme ntal ntal IV IV performan performan ce ce indicator indicator

Figure 106. Freeport of Riga environmental Figure 107. Port of Ventspils environmental performance indicator compared to other performance indicator compared to other indicators. indicators.

Port of Liepaja Port of Klaipeda

I I 5 5 4 4 3 3 2 2 V II V II 1 1 0 0

III III Environme Environme ntal ntal IV IV performan performan ce ce indicator indicator

Figure 108. Port of Liepaja environmental Figure 109. Port of Klaipeda environmental performance indicator compared to other performance indicator compared to other indicators. indicators.

162

Port of Gdansk Port of Gdynia

I I 5 5 4 4 3 3 2 2 V II V II 1 1 0 0

III III Environme Environme ntal ntal IV IV performan performan ce ce indicator indicator

Figure 110. Port of Gdansk environmental Figure 111. Port of Gdynia environmental performance indicator compared to other performance indicator compared to other indicators. indicators.

Port of Elblag Port of Køge

I I 5 5 4 4 3 3 2 2 V II V II 1 1 0 0

III III Environme Environme ntal ntal IV IV performan performan ce ce indicator indicator

Figure 112. Port of Elblag environmental Figure 113. Port of Køge environmental performance indicator compared to other performance indicator compared to other indicators. indicators.

163

Port of Sassnitz Port of Tallinn

I I 5 5 4 4 3 3 2 2 V II V II 1 1 0 0

III III Environme Environme ntal ntal IV IV performan performan ce ce indicator indicator

Figure 114. Port of Sassnitz environmental Figure 115. Port of Tallinn environmental performance indicator compared to other performance indicator compared to other indicators. indicators.

Port of St.Petersburg Port of Kaliningrad

I I 5 5 4 4 3 3 2 2 V II V II 1 1 0 0

III III Environme Environme ntal ntal IV IV performan performan ce ce indicator indicator

Figure 116. Port of St. Petersburg Figure 117. Port of Kaliningrad environmental environmental performance indicator performance indicator compared to other compared to other indicators. indicators.

164

AC Ports environmental performance indicators

Port of Klaipeda

Freeport of Riga

Port of Gdynia

Port of Kaliningrad

Port of Tallinn

Port of Gdansk

Port of Sassnitz

Port of Elblag

Port of St.Petersburg

Port of Koge

Port of Ventspils

Port of Liepaja

0 1 2 3 4 5

Figure 118. AC Ports environmental performance indicators.

9.4 Logistic chain and operational performance indicators

Ports operational performance is traditionally placed at the core of ports competitiveness. Logistic chain and operational performance indicators have the highest weight compared to other indicators in the study. The indicator includes seven sub-indicators- connectivity, mean- time of clearance, time effectiveness, cost effectiveness, Logistics Performance Index, infrastructure and equipment and technology. Connectivity indicator analyses the quality of a connection for moving freight between two or more points, including maritime connectivity, road connectivity, rail connectivity and port internal connectivity. Mean-time of clearance indicator analyses the impact of procedures on the performance of logistics chain. Time effectiveness assesses the time effectiveness in port. Cost effectiveness assesses the cost effectiveness in port. Logistics Performance Index shows the overall logistic performance of the port. Infrastructure indicator assesses the overall efficiency of the usage of port infrastructure.

Following figures present logistic chain and operational performance indicators of all twelve Amber Coast ports. Each port is described by all seven indicators.

165

Freeport of Riga

Connectivity

Mean-time of clearance

Time effectiveness

Cost effectiveness

Logistics Performance Index

Infrastructure

Equipment and technology 0 1 2 3 4 5

Figure 119. Freeport of Riga logistic chain and operational performance indicators.

Port of Ventspils

Connectivity

Mean-time of clearance

Time effectiveness

Cost effectiveness

Logistics Performance Index

Infrastructure

Equipment and technology 0 1 2 3 4 5

Figure 120. Port of Ventspils logistic chain and operational performance indicators.

Port of Liepaja

Connectivity

Mean-time of clearance

Time effectiveness

Cost effectiveness

Logistics Performance Index

Infrastructure

Equipment and technology 0 1 2 3 4 5

Figure 121. Port of Liepaja logistic chain and operational performance indicators. 166

Port of Klaipeda

Connectivity

Mean-time of clearance

Time effectiveness

Cost effectiveness

Logistics Performance Index

Infrastructure

Equipment and technology 0 1 2 3 4 5

Figure 122. Port of Klaipeda logistic chain and operational performance indicators.

Port of Gdansk

Connectivity

Mean-time of clearance

Time effectiveness

Cost effectiveness

Logistics Performance Index

Infrastructure

Equipment and technology 0 1 2 3 4 5

Figure 123. Port of Gdansk logistic chain and operational performance indicators.

Port of Gdynia

Connectivity

Mean-time of clearance

Time effectiveness

Cost effectiveness

Logistics Performance Index

Infrastructure

Equipment and technology 0 1 2 3 4 5

Figure 124. Port of Gdynia logistic chain and operational performance indicators. 167

Port of Elblag

Connectivity

Mean-time of clearance

Time effectiveness

Cost effectiveness

Logistics Performance Index

Infrastructure

Equipment and technology 0 1 2 3 4 5

Figure 125. Port of Elblag logistic chain and operational performance indicators.

Port of Køge

Connectivity

Mean-time of clearance

Time effectiveness

Cost effectiveness

Logistics Performance Index

Infrastructure

Equipment and technology 0 1 2 3 4 5

Figure 126. Port of Køge logistic chain and operational performance indicators.

Port of Sassnitz

Connectivity

Mean-time of clearance

Time effectiveness

Cost effectiveness

Logistics Performance Index

Infrastructure

Equipment and technology 0 1 2 3 4 5

Figure 127. Port of Sassnitz logistic chain and operational performance indicators. 168

Port of Tallinn

Connectivity

Mean-time of clearance

Time effectiveness

Cost effectiveness

Logistics Performance Index

Infrastructure

Equipment and technology 0 1 2 3 4 5

Figure 128. Port of Tallinn logistic chain and operational performance indicators.

Port of St.Petersburg

Connectivity

Mean-time of clearance

Time effectiveness

Cost effectiveness

Logistics Performance Index

Infrastructure

Equipment and technology 0 1 2 3 4 5

Figure 129. Port of St. Petersburg logistic chain and operational performance indicators.

Port of Kaliningrad

Connectivity

Mean-time of clearance

Time effectiveness

Cost effectiveness

Logistics Performance Index

Infrastructure

Equipment and technology 0 1 2 3 4 5

Figure 130. Port of Kaliningrad logistic chain and operational performance indicators. 169

AC Ports logistic chain and operational performance indicators

Port of Koge

Port of Klaipeda

Port of Sassnitz

Port of Gdynia

Port of Gdansk

Freeport of Riga

Port of Tallinn

Port of Liepaja

Port of Ventspils

Port of Elblag

Port of St.Petersburg

Port of Kaliningrad

0 1 2 3 4 5

Figure 131. AC Ports logistic chain and operational performance indicators.

9.5 Governance indicators

Port governance issues have become central to the seaports. The changing economic environment ended a long period of stable port governance models in ports. Governance indicator includes two sub-indicator- port authority investment and port development. Port authority investment indicator measures the increase of a Port Authority’s investments over time. Port developments indicator analysis major developments within the port in superstructure, in investments, in IT solutions, in organisational and administrative solutions, additionally plans for further expansion.

Following figures present governance indicatoof all twelve Amber Coast ports compared to other indicators analyzed in this study.

170

Freeport of Riga Port of Ventspils

I I 5 5 4 4 3 3 V V 2 2 Governanc II Governanc II e indicators 1 e indicators 1 0 0

IV III IV III

Figure 132. Freeport of Riga governance Figure 133. Port of Ventspils governance indicator compared to other indicators. indicator compared to other indicators.

Port of Liepaja Port of Klaipeda

I I 5 5 4 4 3 3 V V 2 2 Governanc II Governanc II e indicators 1 e indicators 1 0 0

IV III IV III

Figure 134. Port of Liepaja governance Figure 135. Port of Klaipeda governance indicator compared to other indicators. indicator compared to other indicators.

171

Port of Gdansk Port of Gdynia

I I 5 5 4 4 3 3 V V 2 2 Governanc II Governanc II e indicators 1 e indicators 1 0 0

IV III IV III

Figure 136. Port of Gdansk governance Figure 137. Port of Gdynia governance indicator compared to other indicators. indicator compared to other indicators.

Port of Elblag Port of Køge

I I 5 5 4 4 3 3 V V 2 2 Governanc II Governanc II e indicators 1 e indicators 1 0 0

IV III IV III

Figure 138. Port of Elblag governance indicator Figure 139. Port of Køge governance indicator compared to other indicators. compared to other indicators.

172

Port of Sassnitz Port of Tallinn

I I 5 5 4 4 3 3 V V 2 2 Governanc II Governanc II e indicators 1 e indicators 1 0 0

IV III IV III

Figure 140. Port of Sassnitz governance Figure 141. Port of Tallinn governance indicator compared to other indicators. indicator compared to other indicators.

Port of St.Petersburg Port of Kaliningrad

I I 5 5 4 4 3 3 V V 2 2 Governanc II Governanc II e indicators 1 e indicators 1 0 0

IV III IV III

Figure 142. Port of St. Petersburg governance Figure 143. Port of Kaliningrad governance indicator compared to other indicators. indicator compared to other indicators.

9.6 Summary

Total port performance indicators show the overall port performance according to the indicators analysed in the current study. All total port performance indicators are calculated taken into account different weight coefficients. The highest weight coefficients have market trends and market structure indicators and logistic chain and operational performance indicators.

The following figure presents the total port performance indicators in Amber Coast ports. The total port performance indicators include all previously mentioned indicators.

173

3,9

3,7

3,5

3,3

3,1

2,9 Total port performance indicator performance port Total 2,7

2,5

Figure 144. Total port performance indicators of Amber Coast ports. The current study concentrated on intermodal cargo transportation. The following figure presents the comparison between total port performance indicators and the quantity of intermodal cargo handled by the Amber Coast ports in 2011. The quantity of intermodal cargo handled by the port is calculated in logarithmic scale. The intermodal cargo handled by the ports is shown on the horizontal axis using logarithmic scale where x=log(N(thousand tons)).

Figure 145. Amber Coast ports total port performance indicator compared to the quantity of intermodal cargo handled by the port in 2011. 174

Container dependency is the ratio between the containerized and total maritime traffic of the port and shows how strongly a port has embraced containerization. The following figure presents the comparison between container dependency of Amber Coast port in 2011 and the quantity of intermodal cargo handled by the Amber Coast port in 2011. The quantity of intermodal cargo handled by the port is calculated in logarithmic scale.

Figure 146. Amber Coast ports container dependency compared to the quantity of intermodal cargo handled by the port in 2011.

175

10. SWOT analysis of AC ports

In SWOT analysis the strengths and weaknesses represent present time and opportunities and threats show within a time frame up to the year 2020 for the Amber Coast ports as a whole. Amber Coast region is the gateway for Russia and at the same time for Belarus and Ukraine which is important function for world trade. To overcome the existing weaknesses, integrated logistics concepts and IT networks are necessary to adapt smooth intermodal cargo flow between the Amber Coast ports. To achieve effective infrastructure networks and efficient transport operations in Amber Coast region, joint infrastructure planning and harmonised compatible transport sector policies are necessary. The findings of the SWOT analyses and the assessment of port performance indicators are steps towards the final recommendations for further development in Amber Coast ports. In addition to current analysis, previously complied analysis are also used to comply the SWOT analysis 133 .

133 Baltic Transport Outlook 2030, 2011. 176

Table 51. SWOT analysis of AC Ports.

INTERNAL FACTORS EXTERNAL FACTORS STRENGTHS WEAKNESSES OPPORTUNITIES THREATS

(present) (present) (horizon 2020) (horizon 2020) Market trends and market structure • Overall geographical location • Ice conditions in some of the ports • Implementation of Rail Baltica • The implementation of Sulphur • Strategic location for the trade • Maritime connections slower but project directive in SECA in 2015 between Europe and Russia shorter distances than land • Increase of intermodal cargo flow to • Construction of fixed links crossing Geography • AC region as gateway linking transport Russia through AC ports the Baltic Sea (Tallinn-Helsinki) North American East Coast and • Many remote areas, bays and NW Europe with NE Europe islands • AC region links to Asia

• Strong and competitive • Baltic countries dependency on • Stable economic and export growth • Vulnerable to EU and world economies Russian transit trade in EU economic developments • Export orientation • Uncertainty of EU economic • Closer cooperation • Economic crisis • Competitive ports developments based on € zone • Integration to the Russian market • Arising competition Economy • AC region is natural trade • Political relations between Russia • Increasing container transport flows • Share in global trade decreasing platform for the large Russian and Baltic states economy • Open and adaptable economies

• Strong demand for maritime • Low port efficiency, especially • Implementation the plans to improve • The implementation of Sulphur shipping affecting SSS operations port efficiency and hinterland directive in SECA in 2015 • Dense port network • No ocean connections in most of connections to boost SSS • Road and rail networks competing Maritime • Strong maritime network by the ports • Improved co-modality of transport with the maritime links. traffic ferries modes • Competition to other ports in BSR and North Sea

177

Logistic chain and operational performance • Easier movement of intermodal • Low accessibility to low-density • Regional co-operation programmes • New infrastructural bottlenecks cargo in most of the AC area areas • Improved road network because of rising demand • Dense networks • Inadequate hinterland connections, • Reconstruction of some main routes • Road and rail transport grow faster • Good accessibility between ports either insufficient capacity or missing than sea transport links • Development of inland transport Connectivity and consumption centres centres that facilitate intermodality • Modal shift and decrease of cargo • Connections to most EU areas • Complicated connections to Russia flows by sea in AC caused by EU • New logistic connections Sulphur directive • Strong tradition for rail and road • Motor roads structure and quality in Russia • Development of rail links through freight in the whole AC Russia to and from East and South- East Asia • Existing infrastructure in ports is in • Ports are situated close to the urban • Modernisation plans of infrastructure • Growing demand, especially from good condition areas in some of the ports Russia, may lead to further capacity • Sufficient storage capacity • Insufficient port infrastructure in • Possibilities of increasing capacity bottlenecks • Developed port internal rail and some of the ports for container sector • Insufficient financing of road connections to terminals • Sometimes no space to increase port • Develop network of terminals as infrastructural facilities development Port capacity well as hinterland connections • Lack of funds for necessary port infrastructure • Draught in ports is enough to serve ocean lines • Draught limitations in some of the • Adaptation of infrastructure investments • Enough area for port future ports capacities to transport demands • The implementation of Sulphur developments • Increasing container transport flows directive in SECA in 2015 causes additional investment needs for port • New port development projects, adaptation to new situations especially in container terminals • Modern equipment is used in most • High technology is not used in some • New technologies supporting the • Vessel size increasing due to of the ports for intermodal cargo of the ports intermodal transport chains economies of scale Equipment handling • ICT technology is not used in some • New technical solutions for • Insufficient technical level to meet and • Use of high technologies in of the ports horizontal transhipment of different increasing intermodal cargo flows technology intermodal cargo handling • Lack of unified logistic service of types of units • ICT technology is used for driving multi ‐modal transportation junction • Increasing vessel size demands new the technological processes in ports in Russia technologies • Introduction of vessel traffic • Different port management systems • New ICT technologies for • Different EU and non-EU solutions Time management and information and procedures intermodal cargo transport effectiveness • Development of incompatible system in most of the ports and in • Custom procedures in some of the • Successful EU initiative "Maritime national ICT technologies 178

the Gulf of Finland countries Transport without Barriers" • Customs procedures in Russia are • Effective border crossing between • Significant delays at the borders with • Expansion of successful co- time consuming Schengen countries non-Schengen countries operation between AC countries • Customs and inspections procedures • Starting ICT use in most of the • Inefficient customs regime in some • EU "e-Maritime initiative" are not synchronized and lead to time delays ports countries • Bottleneck removal, esp. customs • Complicated and slow custom • Introduction of common ICT and procedures on the borders to Russia logistics management procedures • Insufficient harmonisation of legal • Realization of Blue Belt project requirements and procedures with results leading to simplifying Russia customs procedures • Work of customs and inspections are not synchronized Socio-economic impact • Ports have future investments plans • Lack of finances for modernization • Possibility to apply for EU finances • Development of the terminals to meet growing intermodal cargo of terminal and their technologies for modernisation of the terminal depends of the stakeholders, national flows • Some of the ports are not planning to infrastructure governments and EU supporting • Several of the ports are in the increase the share of intermodal • Improved cooperation and common policies

processes of tendering of port cargo standards could open new markets equipment • ICT technology is used for driving the technological processes in ports Governance • New port development projects, • Ports are close to the urban areas • Investments to eliminate bottlenecks • High financial funding requirements especially in container terminals • Road and rail connections passes and increase capacity • Lack of funds for necessary port • Most of the ports have enough urban areas and therefore the • High potential for investors if legal investments territory for port developments hinterland connections could be issues are solved • Hinterland connections could be limited • Financial assistance of EU in the limited infrastructure development (e.g. hinterland TEN-T links, Rail Baltica , Structural and Cohesion Founds)

179

Environmental performance • Ports have environmental • Uncertainty for shipping lines • Implementation of tiers and • The implementation of Sulphur programmes (RoRo-/ferry and container) regulation that will promote new directive in SECA in 2015 • Ports have knowledge about EU concerning the planned and decided technologies • Environmental requirements environmental requirements reduction of the sulphur content to • AC states will be environmentally becoming very costly 0.1% 2015 • Ports are ready for EU Sulphur extra clean maritime areaˇ • Restrictions causing modal shift to directive • Lack of EU finance support for • Some of the national governments road and rail maritime sector to implement EU plan to support maritime sector to Sulphur directive • An increasingly expensive maritime implement EU Sulphur directive transport could lead to the strengthening of the Asian-Europe land bridge • Toughening of the EU technical regulations and environmental standards

180

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183

PART II EXAMINATION OF GOOD PRACTICE EXAMPLES RELATED TO THE INTERMODAL CARGO TRANSPORTATION

Methodology

A number of intermodal projects have occurred in the ports of the EU during the last years to facilitate the smooth and continuous intermodal cargo transportation. There are several good examples to be transferred to the operations of other ports. The collection of good practice solutions in intermodal transport aims to identify, disseminate and promote most promising innovative concepts in order to stimulate their further improvement.

The main objective of this part of the study is to introduce good practice examples related to efficient organization of intermodal cargo transportation via port towards hinterland which could be used as paradigm for the AC ports. Intermodal cargo transportation via port towards hinterland is organized not only by the port authority but by the entire port community and therefore the study deals with communities of ports. In addition to the port authority, port’ community is also formed from the companies which are usually operating in the ports territories, such as shipping companies, shipping agencies, freight forwarders, customs, etc, and whose activities are related to the ports.

The main methodology of examination of good practice examples includes organizing the information from different sources, creating an overview of the good examples in intermodal transport and giving recommendations to the Amber Coast ports. The current study introduces mainly internationally acknowledged best practices which are related to efficient organization of intermodal cargo transportation via ports towards hinterland. The good practice examples have been chosen based on European Intermodal Association and experts’ opinion.

Good practice is a technique, method, process, activity, incentive or reward that is believed to be more effective at delivering a particular outcome than any other technique, method, process, etc. when applied to a particular condition or circumstance. Good practices can also be defined as the most efficient and effective way of accomplishing a task, based on repeatable procedures that have proven themselves over time for large numbers of people.

The current part describes selected good practice examples, which reveal the best solutions, concepts and approaches in order to facilitate the intermodal cargo transport via ports toward hinterland. Most of the good practise examples include different type of projects at the same time. Good practise examples represent different type of projects:

• new infrastructure development, • effective institutional approach, • innovative IT solutions, • organisational and administrative solutions. 184

This part of the study is based on publically available data and do not include confidential information. Eight annexes are included at the end of this part of the study. Each of these annexes presents the publically available information of the good practice examples in a short version. These tables also contain contact web-addresses to contact and ask for more detailed information of particular good practice example.

185

1. IT-system KIPIS

General information

KIPIS is a port community system for port companies and state bodies, involved in cargo transportation via port of Klaipeda. The system is available to present by more than 150 companies operating in the Port and state enterprises.

The KIPIS has been elaborated and installed in Klaipeda seaport. It was developed in close cooperation with the companies and associations operating in the port and the state authorities responsible for inspecting freight and ships. The system is available for a wide range of users, e.g. freight forwarding and shipping companies, stevedoring companies, JSC Lithuanian Railways, Customs Department, Klaipeda Public Health Centre etc. KIPIS is one of the two innovative IT-systems that were created to provide high quality service along the Viking route 134 .

Stimulus for investment

The purpose of the project was to develop and implement a freight and goods movement information system, which would enable companies and agencies operating within the port to share electronic data while conducting freight transportation via the port. Essentially, the aim was to replace huge amounts of paperwork related to freight processing and handling and to streamline freight transportation. It was expected that KIPIS will strongly accelerate freight movement via the seaport of Klaipeda and enhance its attractiveness and competitiveness 135 .

There were a number of different problems in data exchange that the project was developed to solve, such as >40 different paper document forms, same data repeats in different documents, different authorities have to be provided with the copies of the same documents, different methods of data exch. between partners, manual input of the same data into different IS, information delays affecting delays in cargo handling, human factor and human mistakes, lack of statistics 136 .

Type of investment

The KIPIS project was mostly IT investment which also turned into organisational and administrative solution that changed working methods in the port.

Sources of financing

The implementation of KIPIS was financed by the Klaipeda State Seaport Authority and by the European Regional Development Fund 137 .

134 Port of Klaipeda. 135 Ibid. 136 Ibid. 137 Ibid. 186

Organisational and administrative solutions

Main functions of KIPIS are the provision of information required by customs and other state authorities via internet connection; data exchange amongst the system users to conduct procedures such as temporary storage of goods, import, export and transit, or any other customs formalities; electronic data exchange with the stevedoring companies for the purpose of placing and executing orders for handling operations. The use of information and communication technologies will provide for the means to facilitate, improve, and accelerate the process of freight traffic moving through the port. Use of the system will ensure a “single window” principle in the seaport of Klaipeda. Businessmen will be able to simultaneously produce all the information and documents required for the procedures of import, export and transit of goods to all the authorities involved in verification and inspection, while the state authorities responsible for verification and inspection will be able to manage the risks in an integrated manner 138 .

KIPIS links with outer information systems 139 :

• PTMS (Port Traffic Management System) • Gates syst. (System for the vehicle and pedestrian gates control) • KROVINYS (Cargo accounting system of JSC “Lithuanian Railways” ) • NCTS (New Computerized Transit System of Customs)

KIPIS user groups 140 :

• Freight forwarders • Ship agencies • Stevedoring companies (port terminals) • Customs • State Veterinary Service • State Plant Protection Service • Klaipeda Public Health Centre • State Border Guard Service • Fishery Department • Klaipeda State Seaport Authority

Direct and indirect benefits gained from investments

The KIPIS system accelerates exchange of data and information between various participants in the logistics chain, and provides for the conditions to enhance the competitive capacity of the port of Klaipeda. The Port Authority obtains statistical information, which it is obliged to provide to the Statistical Office of the European Commission (EUROSTAT) pursuant to the European Council Directive 95/64/EC on statistical returns in respect to carrying goods and passengers by sea. KIPIS also generates other reports and accounts needed for the Port Authority to make decisions related to strategic port management 141 .

138 Port of Klaipeda. 139 Ibid. 140 Ibid. 141 Ibid. 187

The system’s benefits for the port companies consist of facilitation and acceleration of freight/goods movement through the port by way of exchanging electronic data. The system allows eliminate about 30 various paper documents going between the ship agency, forwarding, stevedoring companies, customs offices and other state authorities controlling freight and goods traffic. This paperwork includes a variety of permits to import, export, handle and reload goods, handling operations reports, quality certificates and so on. Forwarders, agents, and stevedoring companies are able to submit and receive electronic documents through a single access point to each other and to the state authorities and institutions without wasting time like the old method 142 .

KIPIS provided the possibility the customs services and other inspection authorities both to receive preliminary information and documents for risk assessment and operative, real-time and statistical information on the freights and goods at the port. The features provided by the system help control the port operations in a simpler and easier manner and render better quality public services 143 .

142 Port of Klaipeda. 143 Ibid. 188

2. Shuttle Train Viking

Shuttle Train Viking has been chosen as good practice example based on the European Intermodal Association who selected it as one of the Intermodal Freight Transport & Logistics Best Practice. The Viking project was announced the best Transport Solution at the ASEM Forum. European Transport Commission recognized the Viking Train as the Best European Project in 2009.

General information

The joint railway project “VIKING” was initiated by Lithuania, Belarus and Ukraine, port companies, Klaipeda, Odessa and Illichevsk port. Regular operation of combined transport train Viking started in 6th of February, 2003. The train connects port Klaipeda on the Baltic Sea with port Illichevsk on the Black Sea as well as three capitals – Vilnius, Minsk and Kiev. The Viking train as a sea-rail-(road)-sea intermodal connection was designed as a Ro-Ro (Roll-on/Roll-off) and a Lo-Lo (Lift-on/Lift-off) transport solution. The train carries 20, 40 and 45-feet universal and special containers, trailers, trucks and semi-trailers. On the Baltic Sea they are sent to Klaipeda port by sea transport from Scandinavia and Western Europe as well as via Mukran–Klaipeda ferry-line, and then carry on by Viking train to Belarus, Ukraine, the Near East, and Caucasus via Illichevsk and Odessa sea ports. The railcars with containers bound for Georgia and Armenia can travel via two different ferry lines: Illichevsk (Ukraine) – Poti or Batumi (Georgia). The ones going to Turkey can be transported via the Illichevsk (Ukraine) – Derince (Turkey) ferry line 144 .

From the beginning of the operation of the Viking train on 6th of February 2003 up to 2007 the freight volume was rising sharply each year. In 2007 the train transported 40,066 TEU which is about 70% more than in 2006. In 2008 the trade was affected by the world crisis and the transportation rates reduced by 17%. In 2009 the railway administrations of Lithuania, Belarus and Ukraine decided to cut the Viking tariffs by 15% and bringing them down to last year’s level. This has enabled the Viking project to retain its competitiveness in the period of crisis. The result of this decision was a rising freight volume nearly to the level of 2007. The year 2010 confirmed the positive trend 145 . In 2011, there was also increase in container turnover, but in 2012 the numbers decreased.

Figure 1 presents the route and transport corridor of shuttle train Viking. Figure 2 gives overview of transportation of containers by Viking train in 2003-2012 (the most up to date information publicly available).

144 Kusch, et. al. 145 Ibid. 189

Figure 147. Route and transport corridor of shuttle train Viking 146 .

Figure 148. Transportation of Containers by Viking train in 2003-2012 147 .

146 Ponomariovas. 147 Ibid. 190

Stimulus for investment

One of the current tendencies in case of railway container transport between Europe and Asia is the powerful comeback of short and medium-distance transport. It is find that this traffic between neighbouring countries, which usually have a long standing tradition in cross-border exchanges and that prefer to develop their local networks to investing in the construction of multi-national corridors. One important goal is to attract goods to rail in Europe-Caucasus- Asia directions and freight from Turkey and Middle East to North Europe and return 148 .

Globalization of the world economy has caused tremendous challenges for transnational transport services. A new look on construction of new transport routes in the Baltic Sea Region (BSR) and neighbouring countries could be one of the important factors and tools for the establishment of more efficient transport link which could better serve for rapid growth of international trade 149 .

Idea of a direct intermodal train during organization of container transportation came in 1999, when the ministers of transport of Lithuania and Ukraine signed memorandum of mutual consent. Cargo transportation in containers becomes the main direction of expanding cargo transportation due to its universal nature 150 .

Type of investment

Shuttle Train Viking contains several different types of investment. First of all, it was an organisational investment that changed the way of transporting intermodal cargo in all included countries and ports. Train Viking was also a technology and equipment investment as it added new equipment to the ports. It was also an infrastructure investment as most of the related parties are required to invest in their railway infrastructure. In addition, it was IT investment as two innovative IT-systems were created to provide high quality service along the entire Viking route.

Sources of financing

Public-Private partnership was used to launch the project. In addition, the project was supported by the government institutions of Lithuania, Ukraine and Belarus. The governments of these countries signed an agreement of project “Viking” development, which helped to solve problems that depend on the government institutions.

Organisational and administrative solutions Two innovative IT-systems were created to provide high quality service along the entire Viking route- the KIPIS-system in Klaipeda seaport and the IT-system KROVINYS developed by Lithuanian Railways. From Klaipeda seaport 80% of the total cargo volume is brought and carried away by railway transport. This assumes a good communication and data exchange between the railway company (Lithuanian Railways) and the companies operating in the seaport.

The project participants of the Viking project created train traffic schedule according to which the carriage time from Klaipeda to Illichevsk (distance 1734km) takes 56.5 hours. For

148 Kusch, et. al. 149 Kaminskas, et. al. 150 Ponomariovas. 191

example, the train covers the territory of Lithuania (distance 434 km) in 13.75 hours. The fixed train schedule enables to ensure the delivery of goods to clients on time.

For the efficient service of the train to carry trailer and semi-trailer, the ports Klaipeda and Illichevsk created a special technology for loading. A metal prefabricated rear ramp was built for the loading and unloading of the trailer. In Paneriai Station (Vilnius) the same technology is used. To guarantee a quick container handling in the port, new technologies were developed. In the multi modal terminals of the ports new railway platforms are operated with pneumo wheeled auto cranes with the ability to lift 50 tons or container auto loaders like reach stacker which can lift up to 37 tons.

Kena border station is the link between the EU (Lithuania) and CIS (Belarus) countries, because of successful cooperation with customs and frontier authorities, and implementation of information systems the border crossing procedure could be improved. Now, the Viking train needs 30 min for the crossing procedure in Kena border station. But not only has the communication between the various parties been improved in order to obtain this result. The modernisation of Kena border station has also contributed to it.

Kena border station was modernised in three stages. The first one was completed in 2004 (value of the investment 17 million Euro) and the second stage was completed in 2005 (value 20 million Euro). At the end of 2008 the third stage of reconstruction was completed and 20 million Euros have been invested. During the day 68 trains pass Kena. Up to 2020 the number will increase to 76 trains per day and up to 2030 approximately 80 trains pass the border station.

To accelerate the customs clearance of trains a wide railway network and special measuring techniques have been installed. Besides two main railroads, eleven railroads are constructed for entering and exiting the border station. A dynamic scale is installed, which measures the weight of cargo without stopping the train. On both sides of the railway line new X-ray gates are installed which screens the cargo in order to be sure that the content corresponds to the declarations. Due to special sensing elements fixed on the train even the speed of the train is measured and is observed in Kena 151 .

Challenges

At the beginning the shuttle train VIKING faced many problems. There were many technical problems, e.g. lack of platform-cars. Since the project was international, several issues came up- variety of standards and ITC systems and documentation caused problems. In addition, organizational (variety of interests, instructions) and legal (different legislation in separate countries) problems rose during the implementation. Economic problems included different economic and transport policies in various countries and the main political problem was lack of international agreements. Most of these problems were resolved by common endeavour of the agreement participants.

Direct and indirect benefits gained from investments

One of the most important benefits for the related ports was increased flow of containers and cargo. In port of Klaipeda the intermodal cargo transportation started to increase after launching the project. Figure 3 presents the intermodal cargo in port of Klaipeda in 2007-

151 Ibid. 192

2012. Another benefit is that the advantages of Viking train attract new customers to the port. Port of Klaipeda has now state of art IT system.

For the ports, also cooperation is very important factor. Project Viking is turned to be very successful in promoting cooperation between different parties. For example, the number of countries taking interest in the railway project “Viking” is increasing – it has been joined by Moldova and Georgia, Turkey joined 4 April 2013, negotiations are underway with Azerbaijan and Syria .

Figure 149. Intermodal turnover in Port of Klaipeda in 2007-2012 152 .

Success

The Viking train is an international intermodal freight logistics project covering the railway, sea and autotransport. The main success elements of the Viking project are safety, environmental friendliness, fast delivery of cargo from departure station to the destination station, easy crossing of state borders and execution of customs formalities and an attractive tariff.

Main advantages of shuttle train Viking:

• attractive tariff • prompt delivery of goods from the original station to the destination station • safety • easy border crossing and customs procedures • environment–friendly transportation • high level communication system

The main strength of the Viking concept is the border crossing one-stop-shop solution. The price for transportation is one of the biggest advantages of the train. The tariffs for containers and trailer-trains are lower than those of truck companies. The border crossing time was reduced by successful cooperation with customs and border authorities and development of

152 Port of Klaipeda. 193

progressive IT-Systems. Freight carriage management system KROVINYS allows to perform custom and border crossing procedures easily and quickly due to preloaded electronic invoice.

Success of the shuttle train Viking depended on the performance of agreement obligations by all parties and flexible correction conditions if factors change or problems rose. Very important factor of success is strong political promotion of the Viking project.

194

3. Container block-train ZUBR

General information

ZUBR is the name of the container block-train operated on the north-south direction between the Baltic and Black Sea. The operational principles were agreed between Estonian, Latvian, Belorussian and Ukrainian railways administrations on year 2009, but the regular traffic was started in the cooperation of EVR Cargo and Citodat Invest in the beginning of 2012. The train is running on the route Muuga – Kiev (or Dnepropetrovsk) – Muuga, however, it is possible to deliver containers to/from several other stations in Belorussia and Ukraine. The container train connects Ukrainian ports of Illichivsk, Odessa and Yuzhnyi with Riga (Latvia) and Muuga (Estonia). In addition to previously mentioned railways, during the year 2012 also Railway of Moldavia and Polish railway company PKP LHS joined the project, increasing the selection of stations even more. 153 .

Figure 150. Route of container block-train ZUBR. Stimulus for investment

Stimulus for the investment was to connect ports in Baltic Sea region with port in Black Sea region with container train that could offer a direct connection to customers and thereby attract new clients and increase cargo transportation between these regions. The hope was that ZUBR would become the main railway link between the Baltic and Black Sea and it could draw interest from northern Europe and in Asia.

153 EVR Cargo. 195

Type of investment

The project of ZUBR contained several different types of investment. It was an organisational investment in technology and equipment. It was also an administrative investment.

Sources of financing

The project started with the cooperation of EVR Cargo and Citodat Invest, but overall, it is a joint project of the railway state administrations of Ukraine, Belarus, Latvia and Estonia. Sources of finance included public-private partnerships.

Organisational and administrative solutions

The departure of the train is 1-2 times a week, transit time is 5 days, up to 41 rail-cars in one train. In 2012 it made 50 trips and shipped about 8 000 TEUs. The average payload of 1 trip was 160 TEU or 1600 tons. The train is able to carry 20-feet, 40-feet and 45-feet containers both standard and high cube. The technology foresee a minimum of one departure per week, however the real current schedule provide three departures from Black Sea ports per week - every Monday, Wednesday and Friday. It is planned to increase the volumes of cargo transportation by container train ZUBR by 20-30% in 2013 154 .

In order to boost the volume of rail cargo transportation via Belarus and Ukraine the sides will step up efforts to establish competitive tariffs on transit cargos. In 2013 Belarus and Ukraine have introduced tariffs taking into consideration preferences on basic rates of the tariff policy in dollars per tonne 155 .

Direct and indirect benefits gained from investments

After launching the ZUBR project in the beginning of 2012, container turnover in Muuga harbour started to rise. In June 2013 the container turnover in Muuga harbour raised 10% in half a year compared to the same time in previous year. Overall, the ZUBR, has increased the port volumes by 1,500-2,000 twenty-foot equivalent units a month 156 .

The volume of Belarus-Ukraine railway transportation of cargos went up 32.4% in January- February 2013 over the same period last year to reach about 1.5 million tonnes 157 .

In addition, for the train special tariffs are applied, also accelerated the operational and customs procedures.

154 Ukrainian State Center of Transport Service. 155 RZD-PARTNER. 156 ERR. 157 RZD-PARTNER. 196

4. Railport Scandinavia

General information

Railport Scandinavia is the name given to the rail shuttles operating to and from the Port of Gothenburg. It is an extensive system involving a large number of freight terminals in Sweden and Norway. These rail shuttles allow large volumes of goods to reach the port's customers quickly and efficiently. Railport Scandinavia has been chosen as good practice example based on the European Intermodal Association who selected it as one of the Intermodal Freight Transport & Logistics Best Practice.

At present, there are 28 daily rail shuttles between the Port of Gothenburg and 24 towns and cities throughout Sweden and Norway. The development of the rail shuttles is focused initiative taken by the Port of Gothenburg and got underway properly in 2002. Since then, the volume of goods has almost trebled and the number of containers is now heading towards the 400,000 mark. This is around half of all the containers that are transported to and from the port each year. At present, it is mainly containers that are carried on the trains, although work is in progress to increase the number of trailers moved by rail 158 .

The terminals that form part of the rail shuttle system are to be found from Sundsvall in the north to Helsingborg in the south. There are also rail shuttles to Oslo. In order to provide a joint, overall picture of the services each terminal can offer, the Port of Gothenburg has commenced work on classifying the terminals. The classification is based on four criteria: geographical location, range of services, safety and security, and the condition of the area/buildings.

The range of services assessed includes whether cleaning and inspection of the containers is offered, whether refrigerated containers can be connected up, if there is potential to handle hazardous goods, whether there is an empty container depot and if the terminal is ISO classified 159 .

The Railport-project, launched in 2000, aimed at increasing the number of containers transported by rail to and from the Port of Gothenburg, instead of truck transportation. The share of railway transportation to and from the port should reach 50 % by 2020. The key is in the innovative system of rail shuttles for inland transportation 160 .

158 Port of Gothenburg. 159 Ibid. 160 City of Gothenburg. 197

Figure 151. The Port of Gothenburg rail shuttle system as of May 2010 161 . Numbers refer to dedicated port shuttles and squares to other destinations with daily rail service (the most up to date information publicly available).

Stimulus for investment

One of the most important stimulus for investment was the increasing demand for rail shuttles. Also the existing limitations of infrastructure posed a threat to expansion in the long term. The aim was that Railport Scandinavia would facilitate logistics, reduce costs and increase capacity.

The overall objective was to bring the shuttles centres' inland terminals closer to the port by allowing them to handle customs clearance, storage, documentation and other services.

Type of investment

The project of Railport Scandinavia contained several different types of investment. It was an organisational investment in technology and equipment. It was also an important infrastructure investment as participants had to invest in railway infrastructure.

161 Port of Gothenburg. 198

Sources of financing

The port of Gothenburg is municipally-owned which means that one of the sources of financing was municipality. It also included Public-Private partnership as it was cooperation between the Port of Gothenburg, the Railport terminals, several rail operators, goods owners and The Swedish Transport Administration. Also the Port of Gothenburg had worked together with shipping lines and the Swedish import and export industry to build up a system of rail shuttles.

In 2012, the Swedish Transport Administration was invested 390 million euro in the Railport Scandinavia project. The programme included new rail tracks and a new railway bridge across the Göta Älv River 162 .

Organisational and administrative solutions

Railport Scandinavia is a business concept that encompasses intermodal rail shuttles between the Port of Gothenburg and inland terminals and feeder ports. It is initiative for increased reliability, productivity, services and marketing. Railport Scandinavia is based on cooperation between the Port of Gothenburg, inland terminals and feederports, rail operators and haulers and infrastructure holder “Banverket”. Railport moves the port interface to the inland and consolidates volumes to one hub which mean increased services.

Railport Scandinavia connects inland destinations with the Port of Gothenburg and daily departures to/from export- and import regions. It facilitates a rational and reliable handling of goods flows and secures the flow, lead times and access to containers etc. Railport also has cost efficient storage of goods close to the end customer. Custom facilities at Railport terminals enable decreased administration and delayed payment of VAT and custom fees 163 .

The Swedish port of Gothenburg plans to further expand its rail shuttle system. During 2012, five new routes were added and the proportion of freight transported by rail rose by 10%. In total, 411,000 containers were moved by rail, thereby reducing carbon emissions by over 61,000 t, compared to road transport. The aim for 2013 is to establish a shuttle service to Umea in the Norrland region of Sweden. Today, Railport Scandinavia operates 26 daily rail shuttle services, which run between Gothenburg and 24 locations throughout Sweden and Norway.

Challenges

The project of Railport Scandinavia faced several challenges before achieving the goals. The first challenge was to convince the market about the need and advantages of such project. Another issue that came up was the adaption to local preconditions. The project had to take into account the existing local conditions. Very important was also the cooperation along the transport chain. In order to gain success, different stakeholders and institutions had to work together.

162 WorldCargo news 2012. 163 Port of Gothenburg. 199

Direct and indirect benefits gained from investments

In the Port of Gothenburg the investment has proved to be a success. In six years the volumes have more than trebled and each month new records are set. Figure 5 presents the rail volumes TEU Port of Gothenburg in 2002-2011. Direct benefit for the port was increased cargo volumes in the port.

The customers to the port benefit since they are offered a sustainable and efficient alternative to road transport. Also road congestion was also reduced with a subsequent fall in the number of accidents on the roads.

One of the indirect benefiter was the environment, locally as well as globally, with lowered emissions of greenhouse gases and other air pollutants. In one year, rail shuttles save around 61,000 tonnes of carbon emissions, equivalent to emissions from 17,000 cars for a whole year. Each day, the rail shuttles replace about 800 trucks.

Railport Scandinavia presents an extensive railway link network to and from the Port of Gothenburg that offers an attractive alternative to transporting goods by road. The port is now able to provide sustainable logistics solutions from Gothenburg to a large part of Scandinavia. Development of the system is taking place in close cooperation with railway operators, terminal operators and the relevant municipalities.

Figure 152. Rail volumes TEU Port of Gothenburg in 2002-2011 164 .

Success

A number of the terminals also offer customs clearance for goods. This means that the goods do not need to be cleared in and out at the Port of Gothenburg and instead this can be done on site at each terminal. This offers considerable benefits to the customer as handling is brought much closer and can take place much quicker. This also benefits the work at the terminals, where the through flow can be speeded up. The port terminals want a through flow that is as

164 Port of Gothenburg. 200

fast as possible in order to be able to handle large volumes of freight. It is therefore an advantage if the containers are stored outside the port area. Thanks to the rail shuttles, storage can take place at terminals throughout the country.

To satisfy the customers' differing transport requirements, a number of special solutions have been developed for rail shuttles to and from the port. There are tanker trucks for oil, as well as systems for carrying paper rolls, which arrive on adapted rail trucks in specially built boxes. From the Car Terminal, there are trains adapted for the transport of imported cars to various parts of the country. There are also specially adapted solutions for exceptionally heavy steel bars.

Rail transport is also part of the integrated, intermodal transport system that is vital if such complex and extensive operations that take place at a major port are to work. The trains travel directly into the goods terminals at the port where they are unloaded. They are then loaded with new goods and set off for the terminals and central warehouses at various destinations throughout the country. On arrival, the goods are unloaded from the train and onto trucks for the final, local leg of the journey.

201

5. Baltic Rail in Port of Gdynia

Baltic Rail has been chosen as good practice example based on the experts opinion. In May 2012, Baltic Container Terminal (BCT) in Gdynia signed the agreement with Baltic Rail Company, an international operator whose connection between Gdynia and Sławkowo is serviced by BCT twice a week. The connection is an element of implementation of the concept of the European Transport Corridor between the Baltic Sea and the Adriatic Sea. Also Polzug Company joined the group of the Company’s customers in 2012 and it opened a regular line between Pozna ń and Gdynia.

General information

Baltic Rail is a container-train operating and container forwarding company inside Rail World Group, active in both European railway gauge 1435 mm and Russian railway gauge 1520 mm. Rail World Group develops rail services in the Baltic-Adriatic railway corridor between North and South Europe via Poland and Baltic States. Being both wholly-owned subsidiaries of Rail World, Baltic Rail works very closely with Rail Polska – private railway operator in Poland. Rail World Group serves markets from 4 railway operating offices in three countries of Estonia, Poland, Ukraine, and 3 sales and agent offices in Germany, Slovenia and Israel 165 .

From November 2011 Baltic Rail runs a regular container train service between Port of Koper and Southern Poland called "Adriatic train". Transit time Koper – Vienna 20 hours, Vienna – Katowice 18 hours.

• Koper (SI) - Graz (AT) - Vienna (AT) - Katowice (PL) and v.v.

From May 2012 Baltic Rail runs a regular container train service between Southern Poland and Port of Gdynia called "Baltic train". Transit time Katowice - Gdynia/Gdansk 20 hours

• Brzesko (PL) - Katowice (PL) - Gdynia/Gdansk (PL) and v.v.

From March 2013 Baltic Rail started to call terminal in Wroclaw and terminal in Lodz. For the present time the Adriatic train service is being run up to two times per week and the Baltic train service up to three times per week 166 .

Terminals 167 :

• Koper – container terminal in the Port of Koper • Vienna - intermodal container terminal WienCont Freudenau Hafen CCT terminal 1 • Katowice – intermodal container Euroterminal Slawkow or terminal Dabrowa Gornicza

165 Baltic Rail. 166 Ibid. 167 Ibid. 202

• Brzesko - Container Terminal Brzesko • Gdynia - 6 major container terminals BCT, GCT, Radunia Terminal, Ref-Con service, Balticon and BTDG • Gdansk - Deepwater Container terminal Gdansk (DCT)

Figure 6 presents the route of Baltic Rail. Baltic Rail is actively working on the next regular container shuttle block-train and other regular container train services:

• Katowice (Slawkow) – Šeštokai and v.v. • Slawkow – Italy – Slawkow • Šeštokai – Tallinn – Šeštokai • Šeštokai – St.Peterburg – Šeštokai • Šeštokai – Moscow – Šeštokai • Šeštokai – Central Asia

Figure 153. Route of Baltic Rail 168 .

168 Baltic Rail. 203

Figure 154. TEU per quarter transported by Adriatic trains and Baltic Trains 169 . Stimulus for investment

Stimuli for investment were the increased cargo flows and the need to create new connections to the railway transport. Also, the need to establish more efficient transport link which could help to improve the intermodal cargo transportation via port of Gdynia.

Type of investment

Baltic Rail in Gdynia contains several different types of investment. It was an organisational investment and technology and equipment investment. It was also an infrastructure investment.

Sources of financing

Public-Private partnership was used to launch the project.

In the coming years the intermodal potential of the terminal will be increased thanks to the implementation of the greatest investment plan in BCT history. The investment worth PLN 153 million shall include, among others, the purchase of new container yard and railway gantry cranes, surface replacement as well as the preparation of new stations for refrigerated containers. As much as 35% of this amount will be provided from EU funds 170 .

Organisational and administrative solutions

The Baltic Rail North regular container service connects the intermodal terminal in D ąbrowa Górnicza (south of Poland) with Port of Gdynia, where trains are handled by Gdynia Container Terminal as well as Baltic Container Terminal Gdynia (BCT). The service runs two times per week (in some cases – three times) and its transit time amounts to 20 hr in one direction.

169 Baltic Rail. 170 BCT Gdynia. 204

The whole Baltic Rail route goes from the Adriatic Port of Koper in Slovenia, then to the intermodal container terminal Cargo Center Graz (Werndorf), intermodal container terminal WienCont Freudenau Hafen CCT terminal 1 (Vienna), POLZUG’s Intermodal container terminal in D ąbrowa Górnicza and finally to Gdynia. Transit time from Koper to Gdynia totals 58 hr. The service is a part of the Baltic-Adriatic corridor, which in turn is a section of the EU TEN-T core network.

Direct and indirect benefits gained from investments

Port of Gdynia gained several benefits from the project. First of all, good, efficient and multiple rail connections are one of the most important competitive advantages of every port. Since 2007 BCT Gdynia has increased the share of intermodal transportation in its overall container traffic – from 5% five years earlier, to 15% in 2010, 37% in 2011 and finally to ca. 40% in 2012. Figure 8 presents the intermodal cargo turnover in Port of Gdynia in 2007-2012.

In 2012 Baltic Container Terminal handled 408 722 TEU, which means a 13% increase in comparison with the year 2011. Last year also was remarkable due to the record railway share of handling operations, which reached 42 per cent. Consequent modernization of the terminal and meeting market expectations resulted, among others, in ‘Innovation in Transport’ prizes, which were awarded to BCT. Today Baltic Container Terminal services over 40 trains a week. Figure 9 presents the rail connections of Port of Gdynia.

Figure 155. Intermodal cargo turnover in Port of Gdynia in 2007-2012 171 .

171 Port of Gdynia. 205

Figure 156. Rail connections of Port of Gdynia 172 .

Success

The service of Adriatic trains allows industries in Southern Poland, North of Czech Republic and North of Slovakia to also benefit from the shorter transit times from Suez Channel and from Mediterrania. The service of Baltic trains allows industries to transport via ports of Gdynia and Gdansk.

Baltic Rail has number of advantages. One of the most important advantages is regular scheduled train services with fast transit times: Koper – Katowice 38 hours, Katowice - Gdynia 20 hours. Baltic Rail has its own fleet of 80ft and 60ft container-wagons and fleet of road container chassis. It makes available door deliveries by truck inside of competitive catchment area around each served railway terminal. Furthermore, dedicated and exclusive block trains are possible for use.

Baltic Rail is connected with Rail Polska, which is a private railway company in Poland with own modern locomotive and wagon fleet. In addition, company is connected with private and flexible rail operators in Austria, Czech Republic and Slovenia. The organization itself is private, very open and very flexible and there is an ability to invest into specific and specialised equipment for longer-term and regular movements 173 .

172 Baltic Transport Maps. 173 Baltic Rail. 206

6. Muuga Industrial Park

General information

Muuga Industrial Park has been chosen as good practice example based on experts opinion. Muuga Industrial Park is located in Muuga Harbour in the port of Tallinn, the largest cargo port in Estonia. The total area of the industrial park is 75 ha. The port has prepared approximately 50 ha of plots with the size of 0.3-21 ha for its potential clients. Plot borders can be changed according to need and a plot of a necessary size can be formed in the limits of the cadastral unit.

Muuga Industrial Park started its work in May 2013 and the aim is to facilitate the future cargo operations and cargo throughput of the port 174 .

Stimulus for investment

The stimulus for the investment was the need to expand the port operations and thereby facilitate the cargo transportation via port. One of the stimuli was that KC Grupp through subsidiaries owned more than 40 ha land plots close to Muuga port and it made possible to develop the area.

Type of investment

Muuga Industrial Park contains several different types of investment. It was an infrastructure investment, organisational investment and technology and equipment investment.

Sources of financing

The Port of Tallinn is a state-owned company which mean that one of the sources of financing was state. Also it included private finances and Public-Private partnership. Port of Tallinn extended the free zone established in Muuga Harbour to the eastern part of Muuga Harbour, comprising Muuga railway station, Muuga Industrial Park areas, and the coal terminal. The construction of the free zone was co-financed by the European Union from the Cohesion Fund resources within the framework of Muuga Harbour eastern part and Industrial Park unification project.

Organisational and administrative solutions

The industrial park has all necessary communications up to plot borders. Water supply and sewerage pipage has been constructed to the border of the plot. For gas supply, gas pipage has been constructed to the plot border by AS Eesti Gaas Võrguteenus and the owner of the plot shall in accordance with the necessary capacity compensate the connection fee paid to AS Eesti Gaas by AS Port of Tallinn. The connection with the power network in accordance with the capacity installed to the plot is constructed for a connection fee. Telecommunications canalization has been constructed to the border of the plot (specific communication

174 Port of Tallinn 207

connections shall be constructed by AS Elion Ettevõtted in accordance with the specific needs of the plot at the expense of the plot owner).

Katoen Natie, a Belgian company and one of the largest logistics firms in the world, opened a 25,000 m 2 warehouse complex for the management of goods to be directed to Russia and the CIS in Muuga. One of the aims is that Muuga logistics centre will become a gateway for goods exchange between Europe, Russia and the CIS. This is a completely environmentally safe and friendly warehouse that will not generate noise or smells when goods are processed. The processing and storage of various goods will be performed in various warehouses and special warehouse sections. Additional investments have been made in numerous alarm and fire safety devices and construction materials.

The development plans include expansion of the Muuga logistics centre gradually: the warehouse area should double and is to reach 66,000 m 2 by the end of 2015. For Muuga Harbour, the opening of the Katoen Natie’s logistics centre means a huge step towards becoming a distribution hub on the Baltic Sea. The total cost of the project reaches 30 million euros 175 .

Direct and indirect benefits gained from investments Muuga Industrial Park is an ideal location for warehousing and distribution services providers and commodities producers whose target market is the Eastern Baltic region, including Russian Federation. The Industrial Park is also suitable for businesses producing EU commodities from Russian raw materials. Muuga Industrial Park is isolated from the Eastern part of Muuga Harbour by Muuga railway station and the rail tracks thereof. A 450 m viaduct spanning across 15 rail sidings makes a connection between the Eastern part and the industrial park of Muuga Harbour and the road leading from the harbour to the main highway 176 .

The Muuga Industrial Park was opened in 2013 and therefore the statistical information about the direct benefits (e.g. increased cargo flows) cannot assess. Figure 10 presents the intermodal cargo turnover in Port of Tallinn in 2007-2012. Additional value can be created by using the commodities handled in the harbour as an input to the production. Also an attractive solution is created to new investors.

175 Port of Tallinn. 176 Ibid. 208

Figure 157. Intermodal cargo turnover in Port of Tallinn in 2007-2012 177 .

Figure 158. Muuga Harbour western part plots 178 .

177 Port of Tallinn. 178 Ibid. 209

Figure 159. Muuga Harbour eastern part plots 179 . The location in the port area next to the container, general cargo and other modern terminals enables the businesses to significantly reduce transport costs.

Muuga Industrial park has a number of success factors. Muuga Industrial park can offer a good overall location and the immediate closeness of the harbour. It also has good access to berths and terminals and from main roads (Petersburg’s road, Tallinn’s circuit). Muuga Industrial park has great connection with other countries by sea, rail, as well as mainland. It can offer long-term land use contracts and reliable partner – state enterprise Port of Tallinn.

In addition, location of the industrial park is within the free-zone. Muuga Industrial Park’s location within the port’s free zone enables a swift movement of cargo between industrial park and terminals, substantial cost effect by limiting customs procedures and avoiding customs securities and synergy between different add value centres located in the harbour.

179 Port of Tallinn. 210

7. Container Transferium Rotterdam

General information

Container Transferium Rotterdam has been chosen as good practice example based on experts opinion. The basic idea behind the Container Transferium is to bundle the container flows which currently are transported to/from the hinterland by road, so they can be transported congestion-free by inland shipping between the sea terminals at the Maasvlakte and a hub terminal in Rotterdam’s immediate hinterland. Empty depots and customs facilities form a part of the Container Transferium concept. Moreover, the terminal can be favourable for establishment of distribution centres in the immediate surroundings. The Transferium also aims at a faster handling of the trucks with a shorter waiting time as compared to the sea terminals.

A Container Transferium situated in the direct hinterland of the PoR is a new logistic concept which allows for large numbers of containers to be transferred by inland vessels in a single movement from the sea terminals at the Maasvlakte (port and industrial area situated in the west of the port of Rotterdam) to the Transferium and vice versa. The Transferium can lead to an improved reliability thanks to a better planning of the inland ships or barges, and a better handling of the trucks, which have no longer to deal with traffic-jams en route to sea terminals and waiting times on the sea terminals. By choosing location close to Rotterdam, the dispersal of containers remains limited, thereby maximising the market for the Container Transferium 180 .

Figure 160. Location of the Container transferium.

180 Schuylenburg, et. al. 211

Stimulus for investment

The expected increase of good flows means that accessibility by road will increasingly become a weak link. The A15 is the only available major road giving access to the port area, which not only endangers future accessibility, but also makes it very vulnerable. Safety and environment around this road are coming under strain. Because of this problem, the idea of a Container Transferium has germinated.

The sea terminals at the Maasvlakte, the most western part of the Port of Rotterdam, have become increasingly difficult to access by road in the past few years. The number of traffic jams and accidents on the A15 motorway has trebled. Due to the expected growth in container throughput (Figure 14), road transport will also continue to increase in the future in absolute figures.

Figure 161. Growth in landside container throughput181 . The main reasons for the new innovative logistic concept, in the form of a Container Transferium, are summarized below.

• Continuous growth in the container flows via the Port of Rotterdam. • The autonomous increase in road traffic has resulted in the Maasvlakte becoming less accessible by road. As a consequence, the supply chain for shippers, (network) forwarders and shipping lines (carrier haulage) has become less reliable. • An increase in fine dust, caused partly by the exhaust of road traffic. This problem of fine dust is having an increasing impact on the environmental space available for the further development of port activity. • Attractive logistics concept which improves control of container logistics.

Type of investment

Container Transferium Rotterdam contains several different types of investment. It was an infrastructure investment, organisational investment and technology and equipment investment.

181 Schuylenburg, et. al. 212

Sources of financing The Port of Rotterdam Authority took the initiative for the Container Transferium. Total costs for acquiring the land, a special berthing area and the superstructure are estimated €38 million. The sources of finance include municipality, state and also private finances.

BCTN (Barge Container Terminals Netherlands), the biggest Inland Barge Terminal operator in The Netherlands, also invested in Container Transferium and become the independent operator. In terms of financing the Container Transferium, the starting point is that the company is fully dependent for capital investment on project finance. After all, the Container Transferium will operate as a neutral entity, independent of corporate balance sheets. Besides that the port authority and APL, APM Terminals, ECT, Evergreen, Hapag-Lloyd, Maersk Line, MOL and Rotterdam World Gateway signed a ‘Letter of Support’ to endorse the principle of the CT and to support the concept 182 .

Organisational and administrative solutions

The services offered by the Container Transferium can be distinguished into four types, namely truck-barge, barge-barge, empty depot and long stays. The main service of the Container Transferium is the truck - barge service and the other services are aimed at optimizing this service. The barge - barge service offers an opportunity to generate extra volume. An empty depot is of strategic importance since it enables the marketing of the truck - barge service competitively. A road haulier is only prepared to charge a one-way tariff to and from the Container Transferium if he can get a return load. This often involves picking up or dropping off an empty container. By storing long-stay containers the Container Transferium also relieves the seaport by storing long-stay containers. Furthermore, the storage at the Container Transferium will be cheaper.

The productivity requirements make daily departures to all separate sea terminals on the Maasvlakte necessary, and the estimated turnaround time of a barge for one return journey (including loading and unloading) is 16 hours. Given a capacity of 200,000 TEU for the Container Transferium and an estimated load factor of 80% for a barge, the average call size of a barge will be larger than 100 TEU 183 .

The operational design of the Container Transferium is relatively labour intensive. The cranes, reach stackers and empty handlers need to be manned (virtually) all the time. Combined with the generous opening hours, it results in a round-the-clock shift system. In addition to these operational staff, management personnel will also be needed (terminal manager, secretary, etc).

Direct and indirect benefits gained from investments

Benefits gained from the investment:

• shorter dwell times for containers on sea terminals • staggered flow of containers on sea terminals leveling of peaks • less congestion and efficient flow on sea terminals • better accessibility for the hinterland • parties can make better use of their equipment

182 Port of Rotterdam. 183 Schuylenburg, et. al. 213

• supply chain becomes much more reliable • cost advantage • strategic locations • stricter environmental regulation makes CT concept more attractive • reduced congestion and a better image for the port attracts workers in the port • efficient supply chain leads to lower total costs and attracts more clients

In addition, trucks load and unload at the Transferium instead of at the sea terminals which improves the accessibility of PoR and the quality of life in the region reducing congestion there.

The public agreement with the local authorities has set the capacity of the Container Transferium at a maximum of 200,000 TEU on the waterside, with a view to quality of life and the environment. It has also been agreed that the Container Transferium will be developed in accordance with a so-called sustainable plus variant, i.e., the necessary modifications will go further than legally necessary. Sustainability will be put first and the Transferium must cause the least possible hindrance in terms of noise, light, and visually through the choice of layout. Also, from the perspective of safety and accessibility, modifications will have to be made to local roads and junctions. Figure 15 presents the intermodal cargo turnover in Port of Rotterdam in 2007-2012.

Figure 162. Intermodal cargo turnover in Port of Rotterdam in 2007-2012 184 . Success The Container Transferium has the potential for reaching maximum capacity quickly. The key growth drivers for this are: • Following the current recession, the global economy is expected to start expanding again. Added to this, the intertwining of economies and trade blocs - thanks partly to the container - means an even faster increase in world trade. As a result, the container throughput in the PoR will continue to develop strongly.

184 Port of Rotterdam. 214

• Road transport is affected by rising fuel and labour costs, resulting in a decrease in the maximum driving times and declining interest in driving as a profession • Increasing congestion on the A15 motorway will work in favour of the Container Transferium. • Improvements to the handling of barges at the sea terminals on the Maasvlakte in the event of bigger call sizes will also encourage use of Container Transferium. • Growing numbers of containers forcing sea terminals to reduce dwell times, so that the Container Transferium serves as a ‘valve’’. The competitive position of the Port of Rotterdam (PoR) not only depends on its location and ability to service the largest sea going vessels, but more and more on its connections with the hinterland. However the accessibility of the port by road is endangered by the ever increasing congestion. Although most of the congestion is caused by commuters in the rush hours, the continuing growth in container traffic in the PoR is also contributing to the traffic jams on the port highway. Congestion on the main access road A15 to the port and at the sea terminals result in longer transport times and more important, an unreliable delivery of the cargo.

The improved reliability and time-saving for trucks is very important and helps to justify the costs of the extra handling at the Container Transferium. The Container Transferium is operational as of 1 January 2012. The Port of Rotterdam Authority plans to continue to be pro-active in supervising the process for its realization. However, it will ultimately be run by the business community, with the Port Authority serving as landlord, investing in land and infrastructure, in exchange for a competitive rent.

215

8. Dry port Athus

Good practice example in dry port concept (Athus) has been chosen as good practice example based on expert opinion. Dry port concept is an inland intermodal terminal directly connected to seaport(s) by rail and road where customers can leave/pick up their units as if directly at a seaport. A dry port can be regarded as a part of a seaport moved some 30-200 km into the hinterland in order to satisfy the customers demand and at the same time to ease operational constraints, for example traffic bottlenecks in the main port area.

General information

The container terminal of Athus (TCA) is the first dry port in Belgium with a daily link to Antwerp, Rotterdam and Zeebrugge. TCA is an optimal port infrastructure that adds to the strong road, rail and air link and telecommunication networks of Luxemburg province. The job of the Athus Container Terminal consists of managing the entire logistics process connected to the land transport of sea containers using the road-rail combination, between the ports of the North Sea and its hinterland (Belgian Lorraine; France: Alsace and Lorraine; the Grand Duchy of Luxembourg; Germany: the Saar and the Rhineland Palatinate) 185 .

Figure 163. the location of the container terminal of Athus (TCA). Stimulus for investment

The stimulus for the implementation of dry port was that this could lead to operational cost savings, open new markets, improve economic activities and reduce CO 2 emissions. The most environmental friendly, cost efficient and reliable transport solution between a dry port and a seaport can be achieved by letting the rail and road transport modes supplement each other.

185 Ardenne Logistics. 216

Type of investment

Athus Container Terminal contains several different types of investment. It was an infrastructure investment, organisational investment and technology and equipment investment.

Sources of financing

The main source of finance was private investors and companies. Also most likely a public- private partnership was used.

Organisational and administrative solutions

TCA is managing large transport flows, approximately 300 containers per day. Dry ports are used much more consciously than conventional inland terminals, with the aim of improving the situation resulting from increased container flows, and a focus on security and control by the use of information and communication systems. Scheduled and reliable high-capacity transportation to and from the seaport is essential and determines the dry port’s performance and its environmental role 186 .

Direct and indirect benefits gained from investments

This ideal location and the development of its site make it possible for the dry port to offer numerous advantages. All large maritime charterers are customers of the TCA: P&O, MCS, Maersk, Sealand Cosco, China Shipping, OOCL, Evergreen. Dry port has increased the cargo volumes in sea ports and improved overall logistics in the region.

The activities of the Athus Container Terminal bring many prospects and offer responses suited to:

• the demands of the market and the globalisation of trade: profitability, rapidity and efficiency in transport • the problems of mobility and of saturation of the road infrastructure: the multimodal rail-road solution, and ‘door-to-door’ • the issues of energy economy and sustainable development: for most journeys, the TCA uses rail, which consumes less energy per unit transported than road. The nuisance caused by a train carrying 50 containers is substantially inferior to that caused by 50 trucks carrying one container each.

Advantages of more cooperation with seaport and dry port include 187 :

• Increasing regional productivity by a more efficient connection with inland locations. • Stronger support for the cargo handling functions of the port because of better use of space and increased possibilities for a successful modal shift. • Stronger position to attract investment and subsidies because of an integrated hinterland product.

186 TransBaltic 2012. 187 United Nations. 217

• Expansion in the hinterland, and possibility to capture a market share of competitor ports. • Retention of customers in the hinterland. • Better insight and level of service in the local markets. • Increased potential for intermodal services, even on shorter distances. • More attractive hinterland services because of an increased flexibility, reliability and frequency. • Further strengthening of the geographic concentration of logistics companies, including advantages for both seaport and inland port. • Simplified customs procedures.

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References

1. Ardenne Logistics. Official website. [http://www.ardennelogistics.be/.]

2. Baltic Rail AS. Official website. [http://www.balticrail.com/].

3. Baltic Transport Maps. Official website. [www.baltictransportmaps.com/].

4. BCT Gdynia. Official website. [http://www.bct.gdynia.pl/].

5. City of Gothenburg. RailPort – Rail Freight Shuttles to the Port of Gothenburg.

6. Eesti Rahvusringhääling (ERR). [http://news.err.ee/]

7. European Intermodal Association. Intermodal Freight Transport & Logistics Best Practices.

8. EVR Cargo. Official website. [http://www.evrcargo.ee/].

9. Kaminskas, A. Z. (2008). Shuttle Train VIKING ─ Success Story of Intermodality . Amsterdam, 26-27 June 2008.

10. Kusch, T., Prause, G., Hunke, K. (2011). The East-West Transport Corridor and the shuttle train 'VIKING'. Wismarer Diskussionspapiere, No. 13/2011.

11. Ponomariovas, A. Hinterland Transportation – Shuttle Trains: Viking, Saule, Merkurijus. JSC “Lithuanian Railways”.

12. Port of Gdynia. Official website. [www.port.gdynia.pl].

13. Port of Gothenburg. Rail Services. [http://goteborgshamn.se/Documents/PDF- bank/Rail_services_120827.pdf]

14. Port of Klaipeda. Official website. [www.portofklaipeda.lt/]

15. Port of Rotterdam. Official website. [http://www.portofrotterdam.com/]

16. Port of Tallinn. Official website. [http://www.portoftallinn.com/].

17. PROMIT (2009). Promoting Innovative Intermodal Freight Transport. 8.1D 3.1-3.3 Best Practice Year 1, 2 and 3. April 2009.

18. RZD-PARTNER. [http://www.rzd-partner.com/news/]

19. Schuylenburg, M., Borsodi, L. Container Transferium Rotterdam: An innovative logistik concept.

20. TransBaltic (2012). Dry Port Development. Brochure-task-5.1

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21. Ukrainian State Center of Transport Service. Official website. [http://liski.ua/en/container_trains/19.html]

22. United Nations. Development of Dry Ports. No. 78. ESCAP.

23. Viking Train. Official website. [http://www.vikingtrain.com]

24. WorldCargo news. 21 April 2012. RailPort Scandinavia steps up.

25. Öfverman, P. Göteborgs Ham. Port of Scandinavia. [http://www.transbaltic.eu/wp- content/uploads/2010/08/Annex-4-Dryports-by-developing-Railports-The-Port-of- Gothenburg-case.pdf].

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Annexes

IT system KIPIS Type of investment • IT investment • Organisational and administrative solution Sources of financing • Klaipeda State Seaport Authority • European Regional Development Fund Organisational and administrative solutions • Provision of information required by customs and other state authorities via internet connection. Timeframe • Data exchange amongst the system users • 2005-2008 to conduct procedures such as temporary storage of goods, import, export and General information transit, or any other customs formalities. • KIPIS is a port community system for port companies and • Electronic data exchange with the state bodies, involved in cargo transportation via port of stevedoring companies for the purpose of Klaipeda. placing and executing orders for handling • System is available to present by more than 150 companies operations. operating in the Port and state enterprises. Direct and indirect benefits gained • The KIPIS has been elaborated and installed in Klaipeda from investments seaport. • Improvement of quality of services. • It was developed in close cooperation with the companies • More reliable risk analysis. and associations operating in the port and the state • Saving human resources. authorities responsible for inspecting freight and ships. • Increase of public safety. Stimulus for investment • Reduction of physical cargo inspections. • The replacement of huge amounts of paperwork related to • Saving time of port companies (simplified freight processing and handling. processes). • A number of existing problems which needed solving: • Increase of port throughput and competitive advantage. o >40 different paper document forms o Same data repeats in different documents Success o Different authorities have to be provided with the • Well-thought-out concept copies of the same documents • Excellent development and o Different methods of data exch. between partners implementation. o Manual input of the same data into different IS • A number of benefits. o Information delays affecting delays in cargo handling o Human factor and human mistakes o Lack of statistics More detailed information Klaip ėda State Seaport Authority www.portofklaipeda.lt

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Shuttle Train VIKING Type of investment • Organisational • Technology and equipment • Infrastructure • IT Sources of financing • Public-Private partnership. • Supported by the government institutions of Lithuania, Ukraine and Belarus.

Organisational and administrative solutions • Border crossing. • Customs clearance of trains. • Dynamic scale, which measures the weight of cargo without stopping the train. • X-ray gates which screens the cargo. • Special sensing elements. • Two innovative IT-systems.

• Special loading technology. Timeframe • Since 2003 General information • VIKING intermodal train is a joint project of the Direct and indirect benefits gained from railways of Lithuania, Belarus and Ukraine, port investments companies and Klaip ėda, Odessa and Ilyichevsk ports. • Increased flow of containers and cargo. • VIKING train as a sea-rail-(road)- sea intermodal • Enhancing cooperation. connection was designed as a Ro-Ro and a Lo-Lo transport solution. • Attracts new customers. • Transportation of 20, 40 and 45-feet universal and Success special containers, trailers, trucks and semi-trailers. • Attractive tariff. • Route Ilyichevsk (Odessa)-Kiev-Minsk-Klaip ėda • Prompt delivery of goods. (Ukraine-Belarus-Lithuania). • Safety. Stimulus for investment • Easy border crossing and customs procedures. • Challenges for transnational transport services. • Environment–friendly transportation. • New transport routes in the Baltic Sea Region and • High level communication system neighbouring countries. • Need to establish more efficient transport link. More detailed information VIKING TRAIN www.vikingtrain.com Klaip ėda State Seaport Authority www.portofklaipeda.lt/container-train-viking

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Container block-train ZUBR Type of investment • Organisational • Technology and equipment • Administrative Sources of financing • Private. • Public-Private partnerships.

Organisational and administrative solutions • The departure of the train is 1-2 times a week. • Transit time is 5 days. • Up to 41 rail-cars in one train. • The train is able to carry 20-feet, 40-feet and 45-feet containers both standard and high cube. • In 2013 Belarus and Ukraine have introduced tariffs taking into consideration preferences on Timeframe basic rates of the tariff policy in dollars per • Since 2012 tonne. General information • ZUBR is a container block-train operated on the north- Direct and indirect benefits gained from south direction between the Baltic and Black Sea. investments • The operational principles were agreed between • Increased flow of containers. Estonian, Latvian, Belorussian and Ukrainian railways • Enhancing cooperation. administrations on year 2009, but the regular traffic was started in the cooperation of EVR Cargo and • Attracts new customers. Citodat Invest in the beginning of 2012. • Accelerated operational and customs • The container train connects Ukrainian ports of procedures. Illichivsk, Odessa and Yuzhnyi with Riga (Latvia) and Muuga (Estonia). Success • Attractive tariff. Stimulus for investment • Safety. • Connect ports in Baltic Sea region with port in Black • Easy border crossing and customs procedures. Sea region. • Environment–friendly transportation. • Implement container train that could offer a direct connection in the regions to customers and increase cargo transportation between these regions. • The hope was that ZUBR would become the main railway link between the Baltic and Black Sea and it could draw interest from northern Europe and in Asia. More detailed information CITODAT INVEST OU http://www.zubrtrain.net/ EVR Cargo http://www.evrcargo.ee/

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Railport Scandinavia Type of investment • Organisational • Technology and equipment • Infrastructure Sources of financing • Municipality. • Public-Private partnership. • Cooperation between the Port of Gothenburg, the Railport terminals, several rail operators, goods owners, the Swedish Transport Administration., shipping lines and the Swedish import and export industry. Organisational and administrative solutions • Railport Scandinavia is a business concept. • Cooperation between the Port of Gothenburg, inland terminals and feederports, rail operators and haulers and infrastructure holder “Banverket”. • Connects inland destinations with the Port of Gothenburg. • Currently new developments and solutions to Timeframe improve. • Since 2000 General information • Railport Scandinavia is the rail shuttles operating to Direct and indirect benefits gained from and from the Port of Gothenburg. investments • There are 26 daily rail shuttles between the Port of • Increased cargo volumes. Gothenburg and 24 towns and cities throughout • Customers to the port are offered a sustainable Sweden and Norway. and efficient alternative to road transport. • It is mainly containers that are carried on the trains, • Attracts new customers. although work is in progress to increase the number of trailers moved by rail. • Reduced road congestion. • Lowered emissions of greenhouse gases and Stimulus for investment other air pollutants. • Increasing demand for rail shuttles. Success • Existing limitations of infrastructure. • Improved environmental performance. • Facilitate logistics. • Local customs service. • Reduce costs. • Special trains. • Increase capacity. • Intermodal solutions. • Lowered costs of hinterland transit. • Improved overall logistic services. More detailed information Port of Gothenburg www.portofgothenburg.com

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Baltic Rail in Port of Gdynia Type of investment • Organisational • Technology and equipment • Infrastructure Sources of financing • Public-Private partnership.

Organisational and administrative solutions • The Baltic Rail North regular container service connects the intermodal terminal in Dąbrowa Górnicza with Port of Gdynia. • The service runs two times per week. • The service is a part of the Baltic-Adriatic corridor, which in turn is a section of the EU TEN-T core network. Direct and indirect benefits gained from investments • Good, efficient and multiple rail connections. • Increased the share of intermodal Timeframe transportation. • Since 2012 • Modernization of the terminal. • Meeting market expectations. General information • In 2012, Baltic Container Terminal (BCT) in Gdynia Success signed the agreement with Baltic Rail Company, an • Regular scheduled train services with fast international operator whose connection between transit times: Koper – Katowice 38 hours, Gdynia and Sławkowo is serviced by BCT twice a Katowice - Gdynia 20 hours. week. • Own fleet of 80ft and 60ft container-wagons. • The connection is an element of implementation of the concept of the European Transport Corridor between • Door deliveries by truck inside of the Baltic Sea and the Adriatic Sea. competitive catchment area around each served railway terminal. • Baltic Rail is a container-train operating and container forwarding company inside Rail World Group, active • Private, very open and very flexible in both European railway gauge 1435mm and Russian organization. railway gauge 1520 mm. • Dedicated and exclusive block trains are possible. Stimulus for investment • Ability to invest into specific and specialised • Increased cargo flow. equipment for longer-term and regular • Need to create new connections to the railway movements. transport. • Need to establish more efficient transport link which could help to improve the intermodal cargo transportation via port of Gdynia. More detailed information Baltic Rail AS www.balticrail.com

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Muuga Industrial Park Type of investment • Infrastructure • Organisational • Technology and equipment Sources of financing • State. • Public-Private partnership. Organisational and administrative solutions • The industrial park has all necessary communications up to plot borders. • Katoen Natie opened a 25,000 m 2 warehouse complex for the management Timeframe of goods to be directed to Russia and the CIS in Muuga. • Since 2013 • Additional investments have been made. General information • The development plans include expansion • Muuga Industrial Park is located in Muuga Harbour in port of the Muuga logistics centre gradually. of Tallinn. Direct and indirect benefits gained • The total area of the industrial park is 75 ha. The port has from investments prepared approximately 50 ha of plots with the size of 0.3- • Attract new customers. 21 ha for its potential clients. • Competitiveness advantage. • Muuga Industrial Park started its work in May 2013 and the aim is to facilitate the future cargo operations and cargo • Increase cargo flows in future. throughput of the port. Stimulus for investment • Need to expand the port operations. Success • Need to facilitate the cargo transportation via port. • Good location, immediate closeness of the • To increase cargo flows. harbour. • To attract new customers to the port. • Good access to berths and terminal and main roads. • Great connection with other countries by sea, rail, as well as mainland. • Can offer long-term land use contracts and reliable partner – state enterprise AS Port of Tallinn. More detailed information Port of Tallinn http://www.portoftallinn.com/muuga-industrial-park

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Container Transferium Rotterdam Type of investment • Infrastructure • Organisational • Technology and equipment Sources of financing • Municipality. • State. • Public-Private partnership. Organisational and administrative solutions Timeframe • The services can be distinguished into • Since 2012 four types, namely truck-barge, barge- barge, empty depot and long stays. General information • Capacity of 200,000 TEU and an • The basic idea behind the Container Transferium is to estimated load factor of 80% for a barge, bundle the container flows which currently are transported the average call size of a barge is larger to/from the hinterland by road, so they can be transported than 100 TEU. congestion-free by inland shipping between the sea • The cranes, reach stackers and empty terminals at the Maasvlakte and a hub terminal in handlers need to be manned (virtually) all Rotterdam’s immediate hinterland. the time. • Empty depots and customs facilities form a part of the Container Transferium concept. Direct and indirect benefits gained from investments • The terminal can be favourable for establishment of distribution centers in the immediate surroundings. • Shorter dwell times for containers. • The Transferium also aims at a faster handling of the trucks • Less congestion and efficient flow on sea with a shorter waiting time as compared to the sea terminals. terminals. • Better accessibility for the hinterland. Stimulus for investment • Supply chain becomes much more reliable. • Continuous growth in the container flows via the Port of Rotterdam. • Cost advantage. • The autonomous increase in road traffic has resulted in the Success Maasvlakte becoming less accessible by road. • Time saving for trucks. • An increase in fine dust, caused partly by the exhaust of road traffic. • Faster loading/unloading for inland shipping. • Attractive logistics concept which improves control of container logistics. • Parties can make better use of their equipment. • Supply chain becomes much more reliable. • Improved quality of life creates a better image. • Strategic locations. More detailed information Port of Rotterdam Authority http://www.portofrotterdam.com/

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Dry port Athus Type of investment • Infrastructure • Organisational • Technology and equipment Sources of financing • Private. • Public-Private partnership. Organisational and administrative solutions • TCA is managing large transport flows, approximately 300 containers per day.

• Dry ports are used much more Timeframe consciously than conventional inland • n/a. terminals to improve situation resulting from increased container flows, and a General information focus on security and control by the use of • A dry port is an inland intermodal terminal directly information and communication systems. connected to seaport(s) by rail where customers can • Scheduled and reliable high-capacity leave/pick up their units as if directly at a seaport. transportation to and from the seaport is • A dry port can be regarded as a part of a seaport moved essential and determines the dry port’s some 30-200 km into the hinterland in order to satisfy the performance and its environmental role. customers demand. • The container terminal of Athus (TCA) is the first dry port Direct and indirect benefits gained in Belgium with a daily link to Antwerp, Rotterdam and from investments Zeebrugge. • Increased the cargo volumes in sea ports • TCA is an optimal port infrastructure that adds to the strong and improved overall logistics in region. road, rail and air link and telecommunication networks of Luxemburg province. • Operational cost savings. • TCA consists of managing the entire logistics process • Improve economic activities. connected to the land transport of sea containers using the • Reduce CO 2 emissions. road-rail combination, between the ports of the North Sea • Increase the efficiency of road transport. and its hinterland (Belgian Lorraine; France: Alsace and Lorraine; the Grand Duchy of Luxembourg; Germany: the • Modal shift from road to rail. Saar and the Rhineland Palatinate). • Dry ports offer expansion areas for seaports with limited space. Stimulus for investment • Dry ports can generate jobs. • The implementation of dry port could lead to operational cost savings, open new markets, improve economic • Dry ports increase logistics activities and reduce CO2 emissions. competitiveness of the hinterland regions. • The most environmental friendly, cost efficient and reliable Success transport solution between a dry port and a seaport can be • Ideal location. achieved by letting the rail and road transport modes supplement each other. • All large maritime charterers are customers. • Increased the cargo volumes. More detailed information Ardenne Logistics. http://www.ardennelogistics.be/

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PART III RECOMMENDATIONS FOR FURTHER DEVELOPMENT IN AMBER COAST PORTS

Introduction

The current part of the study contains recommendations based on analysis of the existing situation (part I), investigation of the “good examples” (part II) and intermodal cargo handling forecast for the period up to 2020. The recommendations cover necessary actions for smooth (i.e. reliable, flexible and competitive) door-to-door transport chains and strategy for the Amber Coast (AC) port to become a powerful hub for intermodal cargo handling.

The first chapter of this part of the study describes the overall concept of a hub port. All following recommendations are given with the aim of including necessary actions strategy for the AC ports to become powerful hubs in intermodal cargo handling. Next chapters include recommendations based on above mentioned analysis. First recommendations are given based on the analysis of the existing situation in AC ports. The existing situation was evaluated by different indicators (port performance indicators). Also, recommendations are given with the focus on the investigation of the “good examples” which was carried out in the second part of the study. Good practice examples brought out several excellent solutions in order to improve the current situations and overall competiveness of the ports. Last chapter includes recommendations to the AC ports based on the forecasts of intermodal cargo handling for the period up to 2020.

Each AC port is different and therefore each port should find right ways to improve their existing situation taking into account future developments of cargo flows up to 2020; taking necessary actions for smooth intermodal cargo transportation via port toward hinterland and door to door transport chains and strategies and thereby become a powerful hub intermodal cargo handling.

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Hub ports

Hub ports are ports where the distribution of great volumes of cargo is concentrated, mostly intermodal cargo. Part of this cargo has its origin and/or destination out of port hinterland and the other part of the cargo is in transhipments from one ship to another.

Not all ports will be able to become a hub port. There are a number of different requirements and conditions for success as hub port:

• location (proximity to major world routes) • quick turnaround time • quality services with efficiencies and productivity • reasonable costs • ability to accommodate super larger ships – deep water • advanced equipment • excellent networks covering neighbouring feeder ports • existence of logistic cluster supporting value-added logistics activities • advanced information technology • intermodal infrastructures- access to rail, air and road distribution networks • local markets producing freight volume

There are several reasons why ports should implement the hub port initiative. The creation of efficient hubs would boost intermodal interconnections between port and hinterland. The integration of terminal network would improve co-operation and visibility of supply chain. The implementation of hub initiative would enhance co-modal transport links and help to remove bottlenecks that are hindering the efficient movement of intermodal cargo through the AC ports.

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1. Recommendations based on analysis of the existing situation and investigation of the “good examples”

The study analysed the existing situations in Amber Coast ports and investigated “good examples” and based on these analysis the current chapter gives recommendations to the AC ports.

The first part of this study analysed AC ports based on their existing situation. Each AC port has been assessed by the port performance indicators which content and methodology are described in detail in the first part of the study. The focus of the current study is in intermodal cargo transportation through AC ports. Based on the analysis of port performance indicators and intermodal cargo turnovers in ports, four groups of ports occurred. The first group consists of ports which have the highest value of port performance indicator and intermodal cargo turnovers. Next three groups are created based on the similarity on distribution of ports’ performance indicators and intermodal cargo turnovers. Formation of all four groups are presented in figure 1, which shows the comparison between total port performance indicators and the quantity of intermodal cargo handled by the Amber Coast ports in 2011. The quantity of intermodal cargo handled by the ports is calculated in logarithmic form. The intermodal cargo handled by the ports is shown on the horizontal axis using logarithmic scale where x=log(N(thousand tons)).

Figure 164. Amber Coast ports total port performance indicator compared to the quantity of intermodal cargo handled by the port in 2011 and four groups of ports that occurred from the analysis.

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The first group includes Port of Klaipeda and Port of St. Petersburg. The second group includes four ports which have similar results in the assessment of indicators of existing situations and the quantity of intermodal cargo in 2011. These ports are Port of Gdansk, Port of Gdynia, Freeport of Riga and Port of Tallinn. The third group includes Port of Sassnitz, Port of Kaliningrad and Port of Ventspils. The fourth group includes ports with the lowest value in port performance indicators and intermodal cargo turnover in 2011. These ports are Port of Køge, Port of Liepaja and Port of Elblag. The distribution of ports between different groups is presented in figure 2.

•Port of Klaipeda •Port of Gdansk •Port of St. •Port of Gdynia Petersburg •Freeport of Riga I II •Port of Tallinn group group

III IV group group •Port of Sassnitz •Port of Koge •Port of Kaliningrad •Port of Liepaja •Port of Ventspils •Port of Elblag

Figure 165. Four groups of ports according to the analysis of port performance indicators and intermodal cargo turnover in 2011. The current part of the study focuses AC ports based on the above mentioned four groups and does not give recommendations to one particular port. All recommendations are given to the groups based on the lowest mean values in port performance indicators which stood out from the analysis of the particular group of ports.

All groups are evaluated based to the mean value of port performance indicators in the group. Special attention is given to these indicators which stood out as the weakest within the group. All four groups have lowest values in market trends and market structure indicators and in logistic chain and operational performance indicators and therefore the recommendations given in the following sub-chapters are mostly focused on these indicators. The current study is oriented to the four groups of ports; however each port should analyse and assess individually their weakest port performance indicators that emerged during the analysis in the study to achieve competitive, efficient and sustainable AC port status.

Intermodal cargo handling conditions and equipment are one of the most important indicators in order to evaluate the existing situations in ports. The analysis of conditions and equipment was carried out in the first part of the study based on the results of questionnaire and Baltic Container Yearbook 2013. The next sub-chapters also include recommendations based on this analysis. In addition, at the end of each sub-chapter, recommendations with the focus on the investigation of “good examples” are presented.

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1.1 First group

The first group of AC ports have the highest values in port performance indicators and turnovers of intermodal cargo handling. These ports are Port of Klaipeda and Port of St. Petersburg. The ports in the first group have very high potential to become a hub port in the region. Port of Klaipeda has the highest value in port performance indicators. Port of St. Petersburg has the highest quantity of intermodal cargo in 2011. Figure 3 presents the first group’s total port performance indicators compared to the quantity of intermodal cargo handled by the ports in 2011.

5,0 4,5 4,0 3,5 3,0 2,5 KLAIPEDA 2,0 ST PETERSBURG 1,5 1,0

Total Port Performance Indicator Performance Port Total 0,5 0,0 0 5 10 15 20 25 Intermodal cargo 2011 (mln. t.)

Figure 166. First group’s total port performance indicators compared to the quantity of intermodal cargo handled by the ports in 2011. Infrastructure and equipment are very important factors in the effectiveness of intermodal cargo handling which were evaluated in the first part of the study based on the results of questionnaire and Baltic Container Yearbook 2013. The first group has good navigation conditions and equipment base. One of the weakest points of the first group is the long entrance channel, which in some cases might impede the flow of maritime traffic to the port. For example, the channel of the port of St. Petersburg is narrow and it causes traffic jams and not all quays can handle ships with maximum draft announced by the port. Therefore, increasing the turnover of containers in the port means receiving bigger ships and deepening of channels and quaysides to maximum draft will be necessary for these ships.

Market trends and market structure indicators show the dynamics in the port industry. This indicator included six different sub-indicators related to market trends and market structure. The lowest mean values in the first group’s market trends and market structure indicators occurred in container dependency and turnover trend. Figure 4 presents the market trends and market structure indicators of the first group. Container dependency sub-indicator aims at studying how strongly a port has embraced containerization and analyses ratio between the containerized and total maritime traffic of the port. This sub-indicator shows how strong part containers have in the total turnover of the port. If containers have sufficient part of the total turnover then the port has better chances to become a hub in intermodal cargo transportation. Increasing the containers turnover will also increase the sub-indicator of container dependency.

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Another low mean value in market trends and market structure indicators was in sub-indicator of turnover trend. Turnover trend analyses the growth in total cargo turnover of a port. Also an analysis of intermodal cargo turnover trend was carried out. The first group should find ways to increase the turnover trend by finding new international co-operation partners and projects in intermodal cargo transportation.

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Figure 167. Market trends and market structure indicators of the first group. Logistic chain and operational performance indicators have great importance in describing intermodal cargo transportation. The indicator analyses ports operational performance and it included seven sub-indicators. Ports operational performance is traditionally placed at the core of ports competitiveness. The weakest sub-indicators for the first group were mean-time of clearance and cost effectiveness. Figure 5 presents the logistic chain and operational performance indicators of the first group. Mean-time of clearance sub-indicator analyses the impact of procedures on the performance of logistics chain. This sub-indicator shows how well the procedures of cargo handling are organized by the port. Also, it assesses the overall performance of logistics chain in the port. Since quick turnaround time is one of the conditions for success as hub port, the first group ports should improve the impact of procedures on intermodal cargo transportation and thereby increase the level of this sub- indicator.

The sub-indicator of cost effectiveness assesses costs of intermodal cargo transportation through ports. It evaluates the costs of transportation from the customers’ point of view. Transportation costs in ports should be well balanced to achieve competitiveness of the port. According to the analysis of port performance indicators, the ports in the first group have quite low mean value in cost effectiveness. One of the conditions for success as hub port is reasonable costs and therefore the first group should decide how to achieve well balanced costs for the customer and thereby keep the ports’ competitiveness.

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Figure 168. Logistic chain and operational performance indicators of the first group. Good practice examples show innovative solutions for improving services in ports. The first group ports should consider implementing dry port concepts. Dry ports could help to improve service quality and accelerate the movement of goods. Dry port has several advantages which could help to eliminate bottlenecks in development of the ports and thereby increase the competitiveness. Dry ports are used much more consciously than conventional inland terminals, with the aim of improving the situation resulting from increased container flows, and a focus on security and control by the use of information and communication systems. Implementation of a dry port in a seaport’s immediate hinterland increases the seaport’s terminal capacity and with it comes the potential to increase productivity since bigger container ships will be able to call at the seaport. 188 This would increase the container dependency indicator of the ports. In addition, cooperation in international level is vital for the ports. These ports should extend the existing partnerships and create new cooperation projects.

According to the port performance indicators, both ports in the first group are relatively strong in the AC region. Most of the conditions for success as hub port are fulfilled by these ports. However, this group should consider improving the above mentioned indicators and individual sub-indicators to secure the necessary competitiveness which is vital in order to become a powerful hub in intermodal cargo transportation.

1.2 Second group

The second group of ports was formed based on the similar results on port performance indicators. The second group includes Freeport of Riga, Port of Tallinn, Port of Gdynia and Port of Gdansk. All these ports have very close results in the analysis of port performance indicators. Figure 6 presents the second group’s total port performance indicator compared to the quantity of intermodal cargo handled by the ports in 2011.

188 TransBaltic (2012). 235

5,0 4,5 4,0 3,5 RIGA 3,0 2,5 TALLINN 2,0 GDYNIA 1,5 GDANSK 1,0

Total Port Performance Indicator Performance Port Total 0,5 0,0 0 2 4 6 8 Intermodal cargo 2011 (mln. t.)

Figure 169. Second group’s total port performance indicator compared to the quantity of intermodal cargo handled by the ports in 2011. Navigation conditions and equipment of the ports were evaluated in the first part of the study based on the results of questionnaire and Baltic Container Yearbook 2013. All these ports have good navigations conditions and they have sufficient park of intermodal cargo handling equipment. The second group of ports should assess if the quantity of equipment will be enough to cover all possible future demands in intermodal cargo transportation in the ports.

Market trends and market structure indicator include different sub-indicators which high values are important when aiming becoming a hub port. Figure 7 presents the market trends and market structure indicators of the second group. The lowest mean value of market trends and market structure indicator of the second group was in turnover trend. Turnover trend analyses the growth of total cargo turnover and intermodal cargo turnover in the port. In order to increase the turnover trend, the second group should evaluate the ports’ needs to handle intermodal cargo according to the future demands and make necessary investments to increase the capacity. Marketing strategy plays also very important role in increasing the turnover trend.

Maritime traffic sub-indicator analyzes the seaborne traffic of the port by calculating the volume of the containers and Ro-Ro cargo that are handled at the sea interface area of the port over a stated period of time. In order to increase the maritime traffic the second group should attract more customers to the ports by improving hinterland connections which would make the movement of cargo faster. Also, the second group should improve service quality and administrative procedures.

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0,5

0,0 RIGA GDANSK TALLINN GDYNIA

Figure 170. Market trends and market structure indicators of the second group. In logistic chain and operational performance indicators, the second group had two lowest mean values in liner shipping connectivity and infrastructure. Logistic chain and operational performance indicators of the second group are presented in figure 8. Liner shipping indicates how well a port is connected to global shipping networks. These ports should attract new shipping companies in order to connect the port with new international destinations. This is necessary for the ports as one of the conditions for success as hub port is excellent networks covering in international cooperation neighbouring feeder ports. Also, all ports should try to find new ways to cooperate internationally with other ports, logistics companies, etc, to improve to connectivity of the port.

For the second group, another low mean value was in infrastructure sub-indicator. The aim of this sub-indicator was to assess the overall efficiency of the usage of port infrastructure. During the assessment of infrastructure sub-indicator several different factors were evaluated: number of intermodal terminals, total length of intermodal cargo berths, maximum depth in the berths, maximum length of vessel, overall territory for intermodal cargo, efficiency of using intermodal cargo infrastructure, etc. One of the key factors for success as hub port is intermodal infrastructures- access to rail, air and road distribution networks. The ports in the second group should improve the conditions of transportation of intermodal cargo.

237

5,0

4,5

4,0 Total port 3,5 performance 3,0 indicator

2,5 Liner shipping connectivity 2,0

1,5 Infrastructure

Port performance indicator performance Port 1,0

0,5

0,0 RIGA TALLINN GDYNIA GDANSK

Figure 171. Logistic chain and operational performance indicators of the second group. The investigation of good examples brought out that the second group should also consider the dry port concept. This could help to solve problems with the lack of space, queuing times, road access and low share of rail transport mode in cargo supply. Dry ports, located in the proximity to TEN-T links, could offer an additional capacity to the container ports. To increase the turnover trend the ports should improve their connectivity by finding partners and projects which would help to create new possibilities for transporting intermodal cargo via ports, for example developing industry complexes around ports (industrial parks).

For a port, it is important to have partnerships with cargo-owners, logistics companies and railway operators in order to make the port more attractive to new customers. Contracts with railway networks are vital to improve the port’s connectivity with hinterland (e.g. Shuttle Train Viking, Baltic Rail in Port of Gdynia, train ZUBR (Tallinn-Riga- Illichivsk- Odessa)). In addition, today’s highly competitive environment, quality ICT solutions are important for the ports to improve their performance. Correctly chosen ICT solutions harmonised with EU Single Window concept might help the port to improve its technology and therefore increase time effectiveness in port.

AC ports should take into account all EU Transport Policy developments. In order to increase the maritime traffic, the second group should improve the ports’ connections with hinterland. EU Transport Policies are focusing on improving infrastructure of roads and rails in EU and therefore it is necessary that the ports consider all EU policies and strategies in order to achieve success when implementing new innovative solutions oriented to improve hinterland connections.

The second group should take measures to improve all the above mentioned indicators and also analyze the individual sub-indicators which are weakest (results of analysis of port performance indicators are presented in the first part of this study).

1.3 Third group

The third group was formed from three ports which had similar values in port performance indicator and intermodal cargo handling. The three ports that belong to the third group are Port of Sassnitz, Port of Ventspils and Port of Kaliningrad. Figure 9 presents the third group’s 238

total port performance indicators compared to the quantity of intermodal cargo handled by the ports in 2011. These ports’ values in total port performance indicators were between 3.0 and 3.5. The ports should take a close look on the results of port performance indicator analysis and assess which are the lowest indicators on their side. Recommendations given in this chapter are based on the mean value of all three ports’ indicators.

5,0 4,5 4,0 3,5 3,0 SASSNITZ

2,5 VENTSPILS 2,0 KALININGRAD 1,5 1,0

Total Port Performance Indicator Performance Port Total 0,5 0,0 0 1 2 3 Intermodal cargo 2011 (mln. t.)

Figure 172. Third group’s total port performance indicators compared to the quantity of intermodal cargo handled by the ports in 2011. The ports’ navigational conditions and equipment were evaluated in the first part of the study based on the results of questionnaire and Baltic Container Yearbook 2013. The third group ports have less intermodal cargo handling equipment and therefore they should evaluate the need to increase these numbers to meet the possible demands in the future up to 2020.

From market trends and market structure indicators, the third group had two lowest values in vessel traffic sub-indicator and turnover trend. Market trends and market structure indicators of the third group are presented in figure 10. Vessel traffic sub-indicator analyses the numbers and types of vessels which have visited the ports over a stated period of time. The mean value of vessel traffic is relatively low in the third group. The ports in the third group should find new partners and attract customers to the ports. Another low value was in turnover trend, similar to all above mentioned groups. The ports should improve their turnover trend by finding new connections, co-operating more internationally and improving their marketing strategy.

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5,0

4,5

4,0 Total port 3,5 performance indicator 3,0 Vessel Traffic 2,5

2,0

1,5 Turnover trend

Port performance indicator performance Port 1,0

0,5

0,0 VENTSPILS KALININGRAD SASSNITZ

Figure 173. Market trends and market structure indicators of the third group. In logistic chain and operational performance indicators, the third group had the lowest mean values in time effectiveness and maritime connectivity sub-indicator. Logistic chain and operational performance indicators of the third group are presented in figure 11. Time effectiveness assesses the time of cargo transportation via port. It evaluates turnaround time, dwell time for containers, Ro-Ro and ships. Time effectiveness is one of the key sub- indicators as it is also a condition for success as hub port and today’s business, customers value saved time. In order to improve the port performance, the third group should modernize their information systems, which could help to decrease the time for administrative procedures. Also unnecessary delays are time consuming and unattractive to the customers, the processes in port should be smooth and efficient.

The third group had low mean value in maritime connectivity that expresses how well port connects shippers to markets overseas. It evaluates the connectivity of a port with container services to overseas destinations. The third group should find ways to cooperate more with international and local logistics companies and shipping companies. Maritime connections play an important role in business schemes.

5,0

4,5

4,0 Total port 3,5 performance indicator 3,0 Time 2,5 effectiveness 2,0

1,5 Maritime connectivity

Port performance indicator performance Port 1,0

0,5

0,0 SASSNITZ VENTSPILS KALININGRAD

Figure 174. Logistic chain and operational performance indicators of the third group. 240

The third group ports should increase the maritime traffic by creating excellent connections and cooperation with neighbouring ports. Also, connections with hinterlands are vital to increase the maritime traffic. The transportation of intermodal cargo is carried out via ports towards hinterland and vice versa and therefore one of the possibilities to increase the port’s competitiveness is to enhance the connections with hinterland. To improve rail and road connectivity, the ports should improve the connections with national and international railway systems, motorways and intensify cooperation between the actors along the logistics chain, networks and corridors (e.g. Shuttle Train Viking, Baltic Rail in Port of Gdynia, train ZUBR).

New innovative projects are important in improving and enhancing the situation in the ports. To implement new project, different sources are available in the region, e.g. national funds, regional funds, European Union’s funds, International Financial Institutions and also private investors. Ports should consider using Public-Private Partnership in their own financing schemes.

Each port in this group should improve the above mentioned indicators and also analyze the individual sub-indicators which are weak (results of analysis of port performance indicators are presented in the first part of this study).

1.4 Fourth group

The fourth group was formed from three ports which had the lowest values in port performance indicators and in intermodal cargo handling. The fourth group’s total port performance indicators compared to the quantity of intermodal cargo handled by the ports in 2011 are shown in figure 12. These ports have a number of values in port performance indicators which are relatively low and therefore each port should carefully look and analyse the individual situation. The following recommendations are based on the mean values of indicators in the group.

5,0 4,5 4,0 3,5 KOGE 3,0 2,5 LIEPAJA 2,0 1,5 ELBLAG 1,0

Total Port Performance Indicator Performance Port Total 0,5 0,0 0 0,1 0,2 0,3 0,4 0,5 Intermodal cargo 2011 (mln. t.)

Figure 175. Fourth group’s total port performance indicator compared to the quantity of intermodal cargo handled by the ports in 2011. The ports’ navigational conditions and equipment were evaluated in the first part of the study based on the results of questionnaire and Baltic Container Yearbook 2013. One of the conditions for success as hub port is the ability to accommodate larger ships which means that 241

the port should have deep channels and quaysides and also advanced equipment for container handling. The ports in fourth group have quite shallow maximum drafts. They should assess the possibilities to improve the navigation conditions and intermodal cargo handling equipment.

In market trends and market structure indicators, the lowest mean values were in market share and port traffic. Market trends and market structure indicators of the fourth group are presented in figure 13. Market share analyses total and intermodal cargo turnovers that are served by a particular port over a stated period of time and assesses the quantity of cargo handled by the port compared to the Amber Coast region’s total and EU’s total. The results of the market share indicator show that the ports in fourth group have very low values in this sub-indicator. These ports should increase the competitiveness in intermodal cargo transportation by implementing new marketing strategies and finding new partners in international cooperation.

Port traffic sub-indicator pays special attention to the comparability of traffic among the ports. This sub-indicator shows low results in port traffic. These ports should increase the quantity of intermodal cargo by creating new contacts and cooperation projects with neighbouring ports. Special attention should be paid in marketing strategy and overall port policy.

5,0

4,5

4,0

3,5 Total port performance 3,0 indicator 2,5 Market share 2,0

1,5 Port traffic Port performance indicator performance Port 1,0

0,5

0,0 LIEPAJA KOGE ELBLAG

Figure 176. Market trends and market structure indicators of the fourth group. Logistic chain and operational performance indicators of the fourth group are presented in figure 14. The lowest values were in equipment and technology and maritime connectivity. The fourth group ports have few intermodal cargos handling equipment and therefore the sub- indicator also shows weak results. Maritime connectivity is closely related to shipping lines and therefore it is necessary for the ports to increase the cooperation projects with different logistics companies and shipping companies.

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5,0

4,5

4,0 Total port 3,5 performance indicator 3,0

2,5 Equipment and technology 2,0

1,5 Maritime connectivity

Port performance indicator performance Port 1,0

0,5

0,0 KOGE LIEPAJA ELBLAG

Figure 177. Logistic chain and operational performance indicators of the fourth group. The fourth group ports should increase the attractiveness of the port. In order to improve the equipment and technology sub-indicator the use of opportunities in ICT to support intermodal chain management and increase the efficiency and quality of intermodal chains is necessary for the ports. Integration and interconnection of different ICT systems of supply chain actors in order to tackle the IT incompatibility would help the ports to attract more clients to their port. IT incompatibility hinders the dataflow along the supply chain and tracking and tracing. The use of web-based applications e.g. low cost and low barrier solutions allowing smaller actors to be included and have access to status information and the development of synergies among different functions, thus minimizing overhead of implementing them would also help the ports to facilitate intermodal cargo transportation. Also, the ports should build up integrated services between all modes (also integration between SSS and rail).

All above given recommendations are based on the mean values of the group. Each port in this group should analyze the individual sub-indicators which are weak (results of analysis of port performance indicators are sown in the first part of this study) and try to improve them.

1.5 Recommendations for implementing good practice examples

The analysis of good practice examples brought out a number of different new and innovative solutions for the intermodal cargo transportation via ports towards hinterland. The main aim of these the good practice examples were to introduce new solutions for port communities in order to facilitate the smooth and continuous intermodal cargo transportation through the Amber Coast ports. Intermodal cargo flows will increase in the future and the ports should find suitable solutions in order to facilitate the smooth and continuous intermodal cargo transportation through the Amber Coast ports towards hinterland.

Preconditions are normally dictated by today’s needs and opportunities of terminals and ports to innovate intermodal operations due to increasing or changing intermodal cargo flows. To choose right and innovative solution, all possible solutions should be assessed, risk analysis provided for each solution and business model and investment model should be chosen according to the local and international opportunities. Business model should be carefully modelled and best version should be chosen. 243

Step by step actions to implement the good practice intermodal cargo transportation solutions via ports towards hinterland:

1. Preconditions: 1.1 Increased intermodal cargo flows 1.2 Arise of necessity 1.3 Arise of bottlenecks 1.4 Emerge of innovative idea 2. Required actions: 2.1 Finding best practices or other innovate business schemes. 2.2 Assessment of needs and opportunities of terminals and port communities. 2.3 Assessment of solutions and different options. 2.4 Carrying out feasibility study. 2.5 Finding sufficient fund or programs from EU. 2.6 Involving national funds to the project. 2.7 Involvement of private investors to organize PPP. (Most PPP failures can be attributed to inadequate or non-existent feasibility studies, including unrealistic traffic forecasts and undefined public contribution of funds.) 2.8 Organizing the consortium and developing financial schemes. 2.9 Selection of business model. 2.10 Modelling of business scheme to find the best and profitable solution. 2.11 Selection of investment model. 2.12 Selection of the best solution for the port community. 3. Risks: 1.1 Compilation of risk analyses for each possible solution. 1.2 Compilation of risk analyses for each member of consortium and financial schemes. 1.3 Assessment of weaknesses which could cause failure of the project. Common reasons for failure could be: 1.3.1 Poor legal framework and enforcement 1.3.2 Weak institutional capacity and PPP strategy 1.3.3 Unrealistic revenue and cost estimations 1.3.4 Lack of thorough financial and economic analysis 1.3.5 Inappropriate sharing of risks 1.3.6 Lack of competitive procurement 1.3.7 Public resistance (willingness to pay not assessed) 2. Contractual base 2.1 Successful PPPs will be achieved by comprehensive planning, clear contractual rules and contingencies, competitive procurement and credible contract enforcement. Countries with strong public sector institutions have best performance.

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2. Recommendations based on intermodal cargo handling forecast for the period up to 2020

This chapter includes recommendations based on intermodal cargo handling forecast for the period up to 2020. Since this study did not contain making its own intermodal cargo handling forecast, all recommendations are based on Baltic Transport Outlook 2030, which is internationally acknowledged study on transport forecasts in Baltic Sea Region.

Forecasts for the Baltic Sea Region including Amber Coast ports see significant increases in transport within the region, especially in the eastern parts (Russia, Estonia, Latvia, Lithuania and Poland), as the economic development in these areas develops at far higher rates than in the western parts (Norway, Sweden, Finland, Denmark, Germany). The infrastructure also forms a vital part of the development for the transport flows. Looking into the plans for infrastructure development, a lot of funding is put into developing the infrastructure and removing infrastructure bottlenecks 189 . The total maritime cargo throughput of the ports in the Baltic Sea Region will increase by 228 million tonnes or by 30 percent from 2010 to 2030. The average annual growth rate is approximately 1.3 percent. In intermodal cargo transport a huge increase in container traffic is anticipated by the year 2030 (an increase of almost 140 percent) and in Ro-Ro traffic with an increase of almost 50 percent 190 .

By the year 2020, the increase of container traffic in AC region is expected to be almost 70 percent and in Ro-Ro traffic almost 25 percent (forecast is calculated in linear form from Baltic Transport Outlook 2030). In the following, four figures (figure 15-18) present the forecasts for containers (goods in container, thousand tons) and Ro-Ro cargo turnover (thousands tons) by year 2020 in all AC ports divided between four groups based on the analysis of the existing situation of the ports.

Based on the forecasts all AC ports should assess the existing capacities in handling intermodal cargo and if necessary make investments and improvements to meet the demands in the future. AC ports should analyze the possible future scenarios for their location. The ports should find ways to meet the future demands and possible changes. According to the forecast, some of the AC ports should invest in intermodal cargo handling technologies and find new solutions for growing demand in intermodal cargo transportation. At the same time, for other AC ports, the increase in intermodal cargo transportation might not be so high and those ports should improve their existing situation and thereby increase the competitiveness of the port.

189 Baltic Transport Outlook 2030. 190 Ibid. 245

40 000

35 000

30 000 Klaipeda (containers) 25 000 Klaipeda (ro-ro) 20 000 St. Petersburg 15 000 (containers)

10 000 St. Petersburg (ro-

Cargo turnover (th. tons) Cargo (th.turnover ro) 5 000

0 2011 2020 Figure 178. Forecasts for containers and Ro-Ro cargo turnover (th. tons) by year 2020 in ports of the first group.

12 000

10 000 Gdansk (containers)

8 000 Gdansk (ro-ro) Gdynia (containers) 6 000 Gdynia (ro-ro) Riga (containers) 4 000 Riga (ro-ro) Tallinn (containers) Cargo turnover (th. tons) Cargo (th.turnover 2 000 Tallinn (ro-ro)

0 2011 2020 Figure 179. Forecasts for containers and Ro-Ro cargo turnover (th. tons) by year 2020 in ports of the second group.

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2 500

2 000 Sassnitz (containers) Sassnitz (ro-ro) 1 500 Kaliningrad (containers) Kaliningrad (ro-ro) 1 000 Ventspils (containers) Ventspils (ro-ro)

Cargo turnover (th. tons) Cargo (th.turnover 500

0 2011 2020

Figure 180. Forecasts for containers and Ro-Ro cargo turnover (th. tons) by year 2020 in ports of the third group.

600

500 Koge (containers) 400 Koge (ro-ro) Liepaja (containers) 300 Liepaja (ro-ro)

200 Elblag (containers) Elblag (ro-ro)

Cargo turnover (th. tons) Cargo (th.turnover 100

0 2011 2020

Figure 181. Forecasts for containers and Ro-Ro cargo turnover (th. tons) by year 2020 in ports of the fourth group.

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References

1. Baltic Container Yearbook 2013. Baltic Transport.

2. Baltic Transport Outlook 2030. Executive Report - final version. December 2011

3. TransBaltic (2012). Dry Port Development. Brochure-task-5.1.

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