The development of Short Sea Shipping in the Mediterranean basin and the role of and Southern ITaly

2014 This text is extracted from the Annual Report “Italian Maritime Economy. New routes for growth” published by SRM in 2014

For more information please visit the website www.srm-maritimeconomy.com

This report was carried out by Ennio FORTE, Department of Economics and Statistics, University of Naples Federico II.

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Cover design and publication development: Marina RIPOLI TABLE OF CONTENTS

The new scenario of maritime flow 4

The change in the EU transport policy in relation to the role of the SSS has been from a Eurocentric model to a Euro-Mediterranean one 13

Framework of flows and trends 20

Conclusions 31

Bibliography 32 The new scenario of maritime flow

www.srm-maritimeconomy.com 4 As a result of the global crisis that has mainly affected Western Europe and in parti- cular Italy, there seems to be a change in the overall picture of how goods used by Europeans flow. These changes include the choice of multimodal routes, maritime transport on the routes of the Mediterranean and their connection through ports and the ground extension that go towards the coastal and inland areas of European countries and the rest of the world. This scenario is a profoundly Eurocentric model that focuses on north-to-north routes and especially in the origin and destination of northern European ports (Antwerp, Rotterdam, Hamburg, etc.) extends to the Mediterranean Sea that tends to take a more strategic role in choice of alternative routes to the whole way through the use of the SSS (Short Sea Shipping).

Intermediterranean flows affecting Italy and represent the centrality of Gioia Tauro

GENOA TRIESTE

GIOIA TAURO

Figure 1 - Source: Elaborations of the author

Figure 1 shows the geography of transversal and longitudinal flows that may be of interest to Italy and are part of Mediterranean network that supports transport mar- kets affecting the European, African and Asian markets. These corridors use these sea routes when designing itineraries and as part of a geography of flows that are increa-

www.srm-maritimeconomy.com 5 singly oriented towards reducing the distances between origins and destinations. The productivity of these transport processes are a constant in the historical evolution of transport systems. The potential of these sea routes are also noteworthy for the construction of routes which are connected sequences for other means of transport. Currently, these sea routes are important paths that begin from the southern Meditteranean and submit guidelines that shift the overall focus of these flows from a Eurocentric model to an Intermediterranean one. In intercontinental travel there are more and more full container mother ships (a nut- shell with the deck at the stern or the bow) that take the route of a “pendulum” and over time become larger and larger reaching up to 18/20.000 TEU in recent orders that constitute standard loading units for general cargo, i.e. for various goods as fini- shed products ,semi-finished and intermediate products. These are common goods and have both personal and domestic usages. They are protected by packaging in the early stages of travel and are stored until delivery. Unlike liquid and solid bulk, which during transport have specialized ships and port terminals, the products are not packed in the same way like in the ship’s hold which ascts as a protective cover. The path to naval gigantism began in with supertankers during the 1960’ and was due to the temporary closure of the Suez Canal. As soon as the ships began to return to smaller dimensions which were compatible to the depths of the terminal seabeds, soon returned to smaller dimensions compatible with the depth of the seabed of the terminals. This also seems to be the case in the history of full mega container ships. It is well known that the cargo travelling on services within markets in which there is unfair competition ,sometimes by real oligopolies, and bulk travels on services which are freely competitive and whose charters are formed and are in the proper balance of the freight markets. In both sectors of the maritime transport agreements you may encounter horizontal and vertical operators for travel management and terminal ope- rations. Through the Suez Canal containers and bulk flows are related to the Far East and the geography of flows strongly emerges. The role of “Hub Container” of the port transhipment in Gioia Tauro, together with the large port terminals of the so-called southern range is dedicated to movement and handling of containers with its own supply chain process technology “Traslog”, which is the transport and logistics which affect the type of ship and is related to the specialized activities terminals. You can see below the different, but functionally linked, chain technology of the SSS that is

www.srm-maritimeconomy.com 6 integrated well into the euros Mediterranean modal that are increasingly making use of the “Motorways of the Sea” as you can see from the following figure. The Ro-Ro are composed of medium and large sized ferries that are used to cover wheeled vehicles (lorries, articulated buses, trucks, swap bodies, trailers, tractors, excavators, trucks, cars, buses, etc.).

Motorways of the Sea and itineraries modal TEN-T priority

High Level Group Motorways of the Sea Axis

Figure 2 - Source: EC DG Move

This particular context show signs of vitality in the flows which interest the countries of North Eastern Europe with bi-directional projections towards the northern Adria- tic and through the ports of Ravenna, Venice and Trieste along with the countries of South-East quadrant Eurasian, mostly Turkey, but also in Northern Africa, particularly in Port Said, Egypt and Tanger Med in Morocco. The new protagonism of the SSS, which includes, among other things, various bulk and in small quantities (see the traffic of olive oil from to Italy), types such as Ro-Ro goods, accompanied and unaccompanied (with or without engines), Ro-Pax with passengers and accompanying vehicles, multipurpose vessels with containers and rolling stock, and a highly differentiated and specialized ships of both small and

www.srm-maritimeconomy.com 7 medium sizes. You can think of feeder vessels for containers that sail short to medium routes and support the ships ‘pendulum’ “hub and spoke” model. This type of ship, which belongs to the SSS, is used to connect, sea routes in various combinations with the overland routes such as road, rail and waterway (rivers and canals) which are joined through routes chosen that by the operators (Multi Modal Transport Operators) and contribute to the changing global flows. These reports will detect, for full containers ships passing through the Suez Canal, an increase in traffic in Gioia Tauro, the Calabrian port of transhipment (over 3 million TEUs in 2013) as well as an increase in bulk which originates from Suez to the port of Trieste. There is also a greater number of Ro-Ro lines, particularly from the Grimaldi Group which is the world’s first operator in the industry. The port of the Gioia Tauro transhipment hub has had an increase of +15.2% in the first six months of 2013 compared to 2012. This perhaps depends on the movement of traffic from Port Said and in 2013 it reached 3,100,000 TEUs (+13.9% compared to 2012). From the data of the Port Authority of Trieste, which is the hub port of the nor- th east, there is an increase of +11.5% of TEUs handled compared to 2012, an increase of +16.6% compared to 2011. In this port also Ro-Ro traffic has increased significantly thanks to the new terminal of the Palmer Group, but even the Ro-Ro reached a +91% increase in the Port of Ravenna. The foregoing data confirms the rapid development of the SSS in Italy and in the Mediterranean. In October of 2013 the port of Tanger Med has registered an increase of 42% of TEU compared to 21012 with 2,500,000 containers. Also, new work in the port began in 2009 for the construction of new container termi- nal that will lead to an increase in capacity up to 5,200,000 TEUs. Therefore, the new scenario of flows, in particular that of the containers and transport of various goods, is due to the huge increase in traffic Ro-Ro which is complementary to that of the container registered in the Mediterranean Sea, even compared to the new lines for North Africa and the countries of South East Europe as well as on the . The Caspian Sea and Red Seas, like the Persian Gulf, at the moment only seem to potential users of the mode Ro-Ro. With reference to Italy and to domestic traffic, in these same years where there was a substantial inaction of cargo train in the governance policies of the Ferrovie dello Stato Group. Therefore, in the absence of a significant development of the motorways of the sea, which happened also thanks Ecological incentives, Italy would have experienced a significant increase in heavy traf- fic on roads and highways with consequent impacts on the entire chain of external diseconomies, including traffic accidents and pollution.

www.srm-maritimeconomy.com 8 It’s intuitive that the growth rates of Ro-Ro and Ro-Pax also correspond to the subtraction of vehicles from the road system which should be used for short and me- dium distances by passengers and to transport goods and, particularly for last mile delivery. The following tables illustrates the scenarios of the loads of rolling stock in the number of vehicles and tons transported from 2009 and including forecasts up to 2020 for the four intermediterranean corridors who see the use of the section on the sea which is dominant in the two-way journey, along the following lines of traffic: • North-South Europe (Scenario IA); • South west-northwest Med Med (scenario IB); • South east-northeast Med Med (scenario II); • Southwest Med Med-southeast (scenario III). The results of European research Western Europe Transport & Sea Motorways of the Sea (WEST-MOS) are expressed by the dynamics of high and low compared to the baseline scenario in 2009. These dynamics depend on the development of the Italian GDP as shown in the following Table 1 shows a scenario base, a top and a comparative in relation to GDP as in Chart 1. The data confirms the role of the SSS and the Italian peninsula for the layout of routes that become optimal when compared to the trans-European corridors and will be able integrate more and more with the maritime routes which will allow transport systems to have a unified and integrated network that support intercontinental and European flows as shown in Figure 3.

www.srm-maritimeconomy.com 9 Compare the scenario of vehicular flows and tons of goods using the SSS interesting ltaly: Forecasts to 2020 with base and high cases and comparisons

BASE SCENARIO

INCREASE ROLLING INCREASE ROLLING ROLLING CARGO ROLLING STOCK INCREASE CORRIDORS DEPARTURES CARGO VEHICLES STOCK VEHICLES 2009 TON 2009 DEPARTURES 2020 TON 2020

CORRIDOR IA 1,424,845 25,647,216 10,426 820,223 14,764,006 6,002

CORRIDOR IB 166,462 2,996,317 2,171 95,825 1,724,852 1,242

CORRIDOR III 195,047 3,510,854 2,158 112,280 2,021,049 1,250

CORRIDOR III 133,146 2,396,631 1,482 76,647 1,379,638 853

TOTAL 1,919,501 34,551,019 16,237 1,104,975 19,889,545 9,347

HIGH SCENARIO

INCREASE ROLLING ROLLING CARGO ROLLING STOCK DEPARTURES INCREASE ROLLING INCREASE CARGO VEHICLES VEHICLES 2009 TON 2009 2009 STOCK TON 2020 DEPARTURES 2020 2020

CORRIDOR IA 1,424,845 25,647,216 10,426 1,732,055 31,176,985 12,674

CORRIDOR IB 166,462 2,996,317 2,171 202,353 3,642,350 2,623

CORRIDOR II 195,047 3,510,854 2,158 237,101 4,267,826 2,639

CORRIDOR III 133,146 2,396,631 1,482 161,854 2,913,366 1,802

TOTAL 1,919,501 34,551,019 16,237 2,333,363 42,000,528 19,738

COMPARISONS

2009 2020 base scenario 2020 high scenario

INCREASE ROLLING CARGO ROLLING INCREASE INCREASE ROLLING INCREASE DEPARTURES VEHICLES CARGO DEPARTURES CARGO VEHICLES DEPARTURES VEHICLES

CORRIDOR IA 1,424,845 10,426 820,223 6,002 1,732,055 12,674

CORRIDOR IB 166,462 2,171 95,825 1,242 202,353 2,623

CORRIDOR II 195,047 2,158 112,280 1,250 237,101 2,639

CORRIDOR III 133,146 1,482 76,647 853 161,854 1,802

TOTAL 1,919,501 16,237 1,104,975 9,347 2,333,363 19,738

Table 1 - Source: West Med Mos Master Plan, 2010

www.srm-maritimeconomy.com 10 Dynamic evolution of traffic flows in the rolling mode Ro-Ro and GDP

Millions of tonnes HISTORICAL TRENDS FORECAST RELATED TO THE GROWTH IN GDP HIGH SCENARIO BASE SCENARIO

Chart 1 - Source: West Med Mos Master Plan, 2010

Motorways of the Sea (MOS): support of the Corridors Trans European affecting Italy

Figure 3 - Source: West Med Mos Master Plan, 2010

www.srm-maritimeconomy.com 11 The framework of Italian import-export shows some interesting trends which will re- sult in the reduction of flows in central and northern Europe and a striking increase in flows to countries of South-Eastern Europe, South-East Eurasian and North Africa. In particular the economy of Southern Italy, which is currently in a deeper crisis than in the Centre-North of Italy, owes many of its exports to North Africa and the countries of the South-East quadrant with Turkey in particular (+11% increase in Italian exports from Italy in 2013). In 2011, the total SSS flows, in millions of tonnes, has Great Britain in first place with 320.1 tonnes, followed by Italy in second place with 298.7. Holland is in third place with 221.2, while is in fourth with 194.3 and finally Spain in fifth with 185. In total traffic in the EU SDS has reached 1.7 billion tonnes which constitutes 60% of ma- ritime traffic and is distributed as follows: Mediterranean 27.6%, 26.5% in the , the Atlantic coastal 13%, 21.2 and Black Sea 6.6% (Eurostat, 2013). The data confirms that the result reached by the SSS is increasingly crucial as a com- ponent of the traslog markets (transport and logistics) also when compared with other means of land transport who are not as important on those same lines. This trend corresponds to the change in the framework of flows which is using sea routes more and more frequently.

www.srm-maritimeconomy.com 12 The change in the EU transport policy in relation to the role of the SSS has been from a Eurocentric model to a Euro-Mediterranean one

www.srm-maritimeconomy.com 13 Maritime transport plays an important role in the transport of goods in Italy with a value of 30.6% value of 192 billion euros) after the transport of goods by road (35.5% worth about 222 billion), followed by transport air (7.9% with 49.4 billion) and the cargo train that does not exceed the value of 12.5 billion equivalent to only 2% of the total. The market of the SSS recorded in the Mediterranean, an increase of 25% tonnes of goods transported from 2008 to 2012 (Ro-Ro) that uses the Motorways of the Sea. In the Mediterranean you can reach about 74 million tons in the Ro-Ro in 2012, com- pared to the North Sea, the Baltic Sea and the Atlantic that are down 9% during the same period. In 2012 the Mediterranean basin remains the main area of exchange for the SSS in Europe with a total of 572 million tonnes, compared to 421 of Baltic Sea, 506 of North Sea, 240 of Atlantic sea and 124 million tonnes of Black Sea (Eurostat, 2013). This shows interest in activating the services of Ro-Ro and Ro-Pax in the countries on the Caribbean as well as the Pacific which is gravitating towards the Panama Canal and countries bordering the Persian Gulf. There is also obvious potential for develop- ment of the SSS and the Far East with the presence of ferries which deal with local navigation. In 2011, Short Sea Shipping in Italy, with about 300 million tons in total, is second only to the United Kingdom with 320 million tonnes (Eurostat, 2013). Histori- cally, the North and South America have never shown a great interest in the SSS which is substantially absent both on the coast of the Atlantic that Pacific. For Italy, the success in the shipping industry is because of the activation of selected routes in itineraries which are operating along different lines with a structure of strict time, relative to the journey (round trip) and frequencies (arrivals and departures). The optimal activity for the geographic range of the “Motorways of the Sea”, for fun- ctional purposes, should not exceed the threshold of 500 nautical miles (900 km) with a maximum duration of 24/36 hours in travel time. In the traditional scenario which interests Italy and the Mediterranean flows were seen by the EU as north-to-north Eurocentric and only included regions of northern Italy in the bi-directional flows that affected central and northern Europe and pene- tration in the ports of Northern Europe towards Germany, France and Italy and, ac- cording to recent estimates, only 9% of the traffic is from Southern Italy to Northern Europe. In this perspective, the European framework of flows, until the financial crisis, has produced a substantial part of the EU design effort in the planning of transportation infrastructure which has increased since the beginning of the ‘90s. The TEN-T networ- ks have included multi-modal corridors and establishing general infrastructural sup- port flows which involve all of Europe.

www.srm-maritimeconomy.com 14 After, having to face the entity of the resources which are necessary to build the cor- ridors, we have passed to a more realistic network of Core Network Corridors where ports and maritime transport finally have greater importance as well as in strategic transport processes and the choice of routes along the corridors.

TEN-T Core Network Corridors (2013)

Figure 4 - Source: EC DG Move

With the approach of clusters, the various geo-spatial scales there is the increasing need to make a comparison between the cluster band south of the Mediterranean, the so-called Southern Range, which composed of ports in Northern Africa to those of Southern Italy, Southern Spain, South-East Greece and Turkey in respect to the cluster in the traditional dominant ports of northern Europe like the Netherlands, Germany, Belgium and France whose commercial ports are in the Northern range. Port clusters are a set of ports on a coastal arc and that have different geopolitical scales on both an international and national level (ex. the cluster of coastal states of northern Europe and the one in the Campania and Lazio regions of Italy), or other local areas, in order to better connect ports with other transportation infrastructure, including road and rail connections, and the logistics (distripark, freight, inland termi-

www.srm-maritimeconomy.com 15 nals, platforms, industry, etc.). There is a clear advantage in the use of port capacity as compared to that of docking even with the use of a computer system which are not available in Italy. Using a port system of clusters allows you to maximize the full potential of clusters with obvious economic and environmental benefits. Figures 4 and 5 show the comparison between the core network and the previous TEN-T network whose architecture has taken a marginal role in maritime economy and in port networks which are not clusters.

TEN-T priority axes and projects (2005)

Figure 5 - Source: EC DG Move

Therefore, the EU has recently promoted policies of “modality” for the design and realization of multimodal routes, where the distances in sea routes has become do- minant. It is now preferable that, compared to the new framework of the Mediterra- nean flows, that road and rail infrastructure can be built in Italy so that they can be connected to the ports of the Tyrrhenian and Adriatic Seas or at least that these road and rail connections to ports can allow the activation of modal itineraries that the Eu- ropean Union desire but at the present time have not been easily activated because of “bottlenecks” that were detected close to the ports for access and outflows.

www.srm-maritimeconomy.com 16 In Italy there are few ports equipped for Ro-Ro/Ro-Pax (eg. the project of terminal Ro- Ro in Venice Mestre). In general, an economic theory teaches us that the infrastructure of transport of ter- restrial line, or “network value” architecture, should draw itself in relation to the large terminal nodes of sea and air navigation. This is currently not present in Italy where they are scarce when compared to longitudinal cross connections. This makes the use of modal routes difficult, for example from Barcelona in Spain to Bar in Montenegro with two sea routes and a land route which saves around 7,000 km. However, in respect to the infrastructure deficit, the construction of the terminal Ro- Ro road-rail at the port of Trieste (Parisi Group) seem like an interesting investment for both the private and public sectors where the tracks reach the dock and container ter- minal of Contship in La Spezia. In both cases, these investments support the strategy of an integrated mobility in the routes where goods are transiting the Mediterranean. The sub-fund of the SSS is therefore one of the strategic levers for the development of the Italian economy, and particularly in the South, where there is the Gioia Tauro and Trieste hubs which are the two reference points of the new flow scenario. However, in the transhipment hub (sea-sea) of Gioia Tauro, along with greater use of co-modality (see the container block trains that are directed to the inter-port Nola and continue to the north), and through sea routes, you can reach the ports of Venice and Trieste on the Adriatic or Tyrrhenian corridors and in the ports of Liguria that continue overland to the Adriatic ports of the arc. This also highlights the role they can take in the west of the Mediterranean ports of Cagliari and Olbia in flows with Spain and North Africa to Greece and Turkey. Under this scheme you are able to better organize, in a system of integrated logistics, new itineraries that use the seas in the best possible way along with the integration with railways and roads through the development of cross-Tyrrhenian-Adriatic ports whose “sub-hubs” are Ravenna, Venice (especially for the Ro-Ro), Trieste and, further south and in the Adriatic corridor, the ports of Ancona, Pescara, Bari, Brindisi and Ta- ranto, who are in correspondence with the maritime ports who are on the other side of the Adriatic (Fiume, Bar, Tirana and Greek and Turkish ports). On the Tyrrhenian coast, Catania, Salerno, Naples, Civitavecchia, Livorno, Piombino are considered to be “sub hubs” along with the ports of the Ligurian arc like Genoa and La Spezia. From ports in the Ligurian arc to the Northern Adriatic ports there are efficient corridors for goods that pass through Liguria, Piedmont, Lombardy, Friuli Venezia Giulia Triveneto up to the ports of the Adriatic arch. This is a reflection Tu- rin-Lyon line that provides a 57 km gallery whose real costs will be much higher than expected given the decrease in the exchanging of goods between Italy and France and

www.srm-maritimeconomy.com 17 in the context of the shifting of flows from a Eurocentric model to a euro-mediterra- nean one which supports intercontinental and inter-oceanic flows. In this sense, the transhipment hub of Gioia Tauro, which is in the middle of the Me- diterranean, should deserve more attention from Italian and EU policies in the area of infrastructure along with investments that are similar to the Gioia Tauro distripark, that were advocated for by local institutions, which allows the port to enable Ro-Ro services which have multiple purposes and have had a positive impact on the eco- nomy of Calabria and within the context Inter-mediterranean flows. The centrality of the above global network in Gioia Tauro has been confirmed in se- veral studies, international research centers, and through two major indices of cen- trality and connectivity that has resulted in a classification of world hubs. The first parameter is the role of a port hub which has short distance routes, in the direction of network -graph and feeder services support. Gioia Tauro is among the 25 major ports on a global scale index and has an index of 47.9 compared to Rotterdam that has an index of 146.4 and Antwerp whose index is 53.7. In addition, according to the connectivity index that shows the number of connections between the hub and the other ports of the network, is equal to 120 for the Gioia Tauro and 137 and 167 for Antwerp and Rotterdam respectively. The aforementioned duality between the indices further confirms the need to sup- port the Gioia Tauro hub with an appropriate investment in order to adapt the seabed for mega full containers from both the EU and national governance in order to make it more attractive to shipping companies in relation to the centrality of the maritime networks and subsequent land connections (Ducruet, Notteboom, 2012). Gioia Tauro is therefore is the gravitational center of the Mediterranean in relation to the geo- graphy of flows. The excessive demand of financial resources provided for the creation of corridors and TEN-T networks, has meant that the EU transport policy cannot be realized in a certain period of time due to the level of funding that must be paid in co-financing by individual states. Resources are estimated to be hundreds of billions of euros so many of these states, driven by the growing demand for passenger transport in high-speed rail and provide operators with high profits, invested quickly in railway lines, with the exception of Germany, which can only be used for the transport of people. It seems rather strange that the TAV high-speed rail lines does not use the high capaci- ty of these same lines and the fact that goods are not able to be transported while the funding and public investment did not see the potential. It is well known that at night these high speed lines remain unused while the other lines of the existing network work at night for freight traffic which accounts for only 9% of the transported goods in

www.srm-maritimeconomy.com 18 Italy compared with 21.5% of Germany and 12.5% in France (source: Eurostat, 2012). In fact, the new high-speed lines in the governance of the Italian railway system have taken attention away from railway cargo in terms of investment and, more important- ly, they didn’t promote the reuse of railway sidings that could be used in the main trading ports of the peninsula. It seems that in every rail siding with major commercial ports have become abandoned while others are in good operating condition like the port of Torre Annunziata in Campania. The cluster Lazio and Campania (Civitavecchia, Naples and Salerno), which is first in Italy for flows Ro-Ro, only have junctions (Chart 2). The State lacks regional rail service to commuters and tourists delegated by regio- nal service contracts.

Traffic Ro-Ro port cluster (2009)

Thousands of Vehicles

Cluster Cluster Cluster Cluster Cluster Cluster Liguria Tuscany Lazio - East Sicily - West Sicily Sardinia Campania Calabria

Chart 2 - Source: Data Port Authorities of Europe TLS

In regard to infrastructural facilities, the “old” one corridor Berlin – Palermo in Southern Italy is “pure utopia” when you look at the incomplete “Highway of the Sun”, the ob- solete Tyrrhenian railway line and the lack of an efficient road link to the port of Gioia Tauro. On the contrary, in the design phase, the “Highway of the Sea” was more highly considered and, in the broader context of the SSS, through eco-bonuses that have had a decisive role in the adoption by truck drivers of a new mobility model based on MoS. Italy has been “saved”, at least until now, only because of the impetuous deve- lopment of MoS domestic costal trade and Inter-mediterranean. Otherwise we would have had more accidents on the road network, in addition to more pollution and the eventual damage of infrastructure.

www.srm-maritimeconomy.com 19 Framework of flows and trends

www.srm-maritimeconomy.com 20 The overall picture north-north flows, despite being very relevant for the economy for exchanges between Italy and with Germany and France. In the choice of routes sees the gravitational center of flows has moved from a Eurocentric model to an Intermedi- terra-nean model. In this context, the SSS assumes a decisive role in the types Ro-Ro, Ro-Pax, Cruise Ferry and feeder services with multipurpose full container ships where the dominate route is by sea and land routes are terminal operators and penetration. In this context the Italian commercial port is fundamental, with an emphasis on Southern Italy in particular, along with the dedicated infrastructure, logistics and sto- rage space for access to and the outflow to and from the port (road and rail). On these local connections and logistics the infrastructure dedicated to ports (distripark, hin- terlands, urban zones, special areas, etc.). The EU must be more involved which is also valid for Italy. By encouraging the use of co-modal routes in terms of the total distance of the journey has a lesser cost in terms of negative externalities. The changes of the flows are supported by the data traffic of goods relating to: • Import-export of the North-East quadrant (Austria, Hungary, Poland, Romania, Ukraine, etc.) that rests on the cluster arc of the Northern Adriatic with the main ports of Ravenna, Venice and Trieste that register many SSS lines with each line ha- ving a growing number supply routes. The flow projections with the northeastern European quadrant which affects, like observed, the crossing into the Po corridor in origin and destination by land to the main ports of the Ligurian arch (Genoa, Sa- vona, Vado) and sometimes with relations to the port transhipment of Gioia Tauro for bidirectional connections with the Far East and for container traffic along the Tyrrhenian corridor; • Import-export of the Eastern quadrant (Greece, Turkey, Lebanon, Egypt, Syria, Sau- di in the cluster and sees some of the southern ports of the core flows (Brindisi, Bari, Catania); • The import-export business between Italy and Southern Italy with the countries and ports in North Africa and the Eurasian southeast quadrant through the ports of the lower-middle Tyrrhenian Sea. In particular, with reference to the trade between the north-east of Italy and Europe and the Northern Africa, it is noted that Italian exports increased by 30%, rising € 91- 119 million during 2009-2012. During the same period, from the northwest to the same destinations, exports increased by 31.5%, from about 118 billion to 155 billion euros (40.3% of national exports). If we include the rest of Italy, including the South, you will pass 268-385 million euros in which Italian import-export make use of the numerous sea routes and ports from Southern Italy to Northern Africa.

www.srm-maritimeconomy.com 21 It should be noted that Italy is a country where there is a surplus, in the sense that it is totally or partially unused due to an excessive number of interports that totals 22. There are only 3 that are considered to be important while major trading ports are 25. Only a new policy of European and Italian transport and logistics, based on clusters, can lead to an increased reliance on the sea and in order to synergistically harmonize the substantial network of ports and freight. It is necessary to put in place a system of port infrastructure, logistics terminals and customs procedures (see the Dutch experience) in order to achieve the productivity gains of the individual Italian clusters that are in constant competition with other inter-mediterranean clusters. The EU should promote the harmonization of customs in order to avoid improper compe- tition between European clusters. It is important to stress the absolute absence in Italy of policies which are aimed at enhancing dry ports which are now in industrial disuse and in all the port areas where there are old plants that show high potential for logistics; even though we know that Italian industries need to produce more and more valuable logistics services, where assembly is the largest business and the proximity to the port logistic areas that are equipped to facilitate import-export flows, we import raw materials and semi-finished goods by sea to process (or simply inward) and exporting finished goods, or goods intermediates, with benefits in income and employment. Exports can find strong con- venience in such a system simply by the fact of having a common factor in a dry port platform in relation to the many companies from different sectors that are present in such a large area and the common logistical functions which can weigh heavily on the costs of individual companies, such as quality control, packaging, labeling, order management, contract logistics, warehousing, etc. Alongside the single-product model of the industrial district composed by SMEs, a multi-sectoral model in a wide area connected to a port was proposed in relation to the SSS. This lead to the creation of the Supply Chain Territorial Logistics that was recently proposed to the economy of Southern Italy by SVIMEZ, which was not ai- med at the transfer of individual industrial companies, but only those with a logistical function platform in the rear port which is dedicated to increasing the competitive advantage of Made in Italy export activities, especially in the areas of agribusiness in Southern Italy. Another sector on which to intervene with appropriate incentives is exceeded, im- port-export activities is the FOB (free on board) model, cultural pattern, all Italian, of behaviour is difficult to change, which sees the Italian economy waive the delivered prices called CIF (cost, insurance and freight), inclusive of the activities of transpor- tation and logistics, and the estimation of such removal and the Italian economy is about 8 billion euros, as evidenced by the deficit of the Balance of Transport which, in

www.srm-maritimeconomy.com 22 the balance of the individual modes of transport, shows a heavy negative balance as shown by the Balance of Payments under the heading Transport drawn up by Bank of Italy. In reality, the figure seems somewhat underestimated due to rumors inclusive of traslog, but other aggregate services, and do not understand why that document the accounting officer of State should not developed with ISTAT that the competition has always been a wealth of statistic on the carriage. Ultimately, traslog activities (transport and logistics) and the ports of Southern Italy could play a strategic role with positive impacts on employment and exports (Table 2).

Balance of payments by way of Transportation (millions of euros)

Voice 2007 2008 2009 2010 2011 2012 Credits Sea 5,074 5,158 3,752 4,782 4,116 4,176 Air 5,044 3,995 2,961 3,275 3,796 3,974 Road 2,869 2,975 2,328 2,848 2,805 2,615 Rail 171 167 149 148 156 146 Total 13,159 12,295 9,190 11,053 10,874 10,912 Debits Sea 8,283 7,620 4,667 6,905 6,057 5,662 Air 6,527 7,139 6,819 7,036 7,513 7,708 Road 4,307 4,509 3,800 4,795 5,080 4,821 Rail 608 379 339 414 381 322 Total 19,725 19,647 15,624 19,150 19,030 18,513 Sail Sea -3,209 -2,462 -916 -2123 -1,940 -1,486 Air -1,482 -3,143 -3,858 -3,761 -3,717 -3,734 Road -1,438 -1,534 -1,471 -1,947 -2,274 -2,206 Rail -437 -213 -190 -266 -225 -176 Total -6,566 -7,352 -6,435 -8,097 -8,156 -7,602

Table 2 - Source: Banca d’Italia

It is argued that the EU projects on the TEN-T corridors were created to further unite Europe. However, since the 1992 White Paper on European transport policy, you can understand why the scenario of international flows (and European) have changed due to the development of SSS. Before the crisis every economic indicator was posi- tive but after five years since the beginning of the crisis, the solutions for a recovery still seem very distant. We must now understand why Maghreb countries and those in South-East Eurasia constitute a unique opportunity for the countries of southern Europe, especially Italy and in particular Southern Italy. EU transport policies are still dominated by the countries whose ports are in the Nor- thern Range that have a cluster that is attractive to container flows in relation to trade

www.srm-maritimeconomy.com 23 with the Far East. However, there is an insufficient sustainable infrastructure corridors which is able to meet the growing demand for transport in the cargo flows from the north-south and vice versa until 2020. Demand will be better satisfied by the SSS and will support strategic competition and will sustain the functionality of the corridor operation, even if only in part, in which roads and railways will begin to reduce their weight thanks to the SSS.

Maritime flows between continental areas (TEU 2012)

TRANS-PACIFIC TRANS-ATLANTIC 2012: 20.2 MTEU 2012: 7.5 MTEU ASIA-EUROPE 2012: 20.3 MTEU

INTRA-ASIA 2012: 20.9 MTEU

NORTH-SOUTH AMERICA EAST-COAST 2012: 0.9 MTEU ELABORATED BY V.P.A. ON MOS TRANSMODAL DATA CONTAINERIZATION INTERNATIONAL 2013

Figure 6 - Source: Containerization International, 2014

The geography of intercontinental traffic is going through a period of change. The route that has become prevalent is the one from the Far East and is a new frontier of world trade. The route reaches the Mediterranean through the Suez Canal and is powered by the economies of the Far East. For these flows, Europe is mainly reached from the ports of the Northern Range, which moves 60% of goods with destinations to northern, central and southern Europe. Compared to this, the appears to be a natural corridor of alternative penetration to the central areas of Europe di- rectly linked to the Suez Canal. The port system of the northern Adriatic arc may be convenient for the bi-directio- nal flow with central and northern Europe, but it can become even more privileged access point for goods from the Far East that are directed to the markets of central and eastern Europe. The advantages, compared to the routes of the Northern Range, are that there are five days less of sailing distance (a ship full container ‘pendulum’ 15,000 TEU costs about $ 100,000 a day) and also saves energy. For example, for each container moved from Monaco via Venice, there is a reduction of 135 kg of CO2 in

www.srm-maritimeconomy.com 24 comparison to the movement via Hamburg. The following table no 3 shows the role of direct flows to the North East quadrant of Europe, through the Adriatic ports of the arc (NAPA, North Adriatic Ports Association).

Estimated traffic through the ports of the arc South Adriatic 2030 2010 2015 2020 2030 Increase 2010-30 NAPA 1.3 1.7 4 6 348% Northern Range 20.4 24.9 25.7 31.5 52% Tyrrhenian 3.6 4.2 4.9 6 68% Black Sea 0.3 0.4 0.5 0.7 112% Other 5.3 6.5 7.7 9.5 81% Total 31 37.6 42.8 53.5 73%

Table 3 - Source: North Adriatic Ports Association, 2014

In this context there are fundamental sea-sea hub transhipment and land-sea transhi- pments, with the dominant sea routes chosen co-modal itineraries, as well as the cor- responding reduction of traffic on the Trans-European road and rail networks which is shown in Table 4 which shows the container quote in the main port regions of the Mediterranean in Europe.

Amounts of traffic containers in the main port regions of Europe and the Mediterranean 2005 2006 2007 2008 2009 2010 Northern Range 37.7 37.6 37.7 37.6 36.2 36.6 Western Mediterranean 10.8 10.9 10.8 11.6 12.8 12.7 Eastern Mediterranean 12.5 13.2 13.2 13.4 15.0 15.0 Northern Mediterranean 6.5 6.2 6.1 6.0 6.1 6.2 Central Mediterranean 9.1 8.4 8.2 8.0 9.0 7.9 Atlantic 4.6 4.6 4.2 4.1 4.0 4.0 Baltic and Scandinavia 6.5 6.9 7.3 7.2 6.2 7.1 GB and Ireland 10.2 9.8 9.5 9.0 8.7 8.6 Black Sea 2.1 2.5 3.0 3.2 2.0 2.0 Total 100.0 100.0 100.0 100.0 100.0 100.0 Table 4 - Source: European Sea Ports Organisation, 2012

The economic relations between Italy and the Mediterranean generate significant op- portunities for Italy and in particular Southern Italy. In fact, the foreign trade (import and export) between Italy and the Med Area increased by 76.8% between 2001 and 2013 (58.3 billion €). According to estimates of the SRM in 2013 there was 58.3 billion euros in international trade where Italy comes after Germany (61.2 billion) and the United States (68.9 billion), that is the main trading partner of the Med. In order to confirm the growing importance of the Mediterranean area, the impact on total in- terchange between Italy and foreign countries has grown from 6.2% in 2001 to 7.7%

www.srm-maritimeconomy.com 25 in 2013 (in recovery after the downturn recorded in 2011). France follows which ac- counts for 5.2% of the total foreign trade in the Mediterranean area.

Total trade (import + export) with the Med Area The main international partners, 2001-2013 and projections to 2015

€ bn Expected values 80 77,4 71,4 66,0 70 71,0 61,0 60 55,2 62,7 50,6 50 54,4 41,0 47,8 46,6 40 33,0 30 36,8 29,5 20

10 6,6

0 5,0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 ITALY FRANCE CHINA UNITED STATES GERMANY GCC**

* Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates.

Chart 3 - Source: SRM elaborations on Eurostat, ISTAT and UNCTAD data

On the other hand, the pace of growth in these economies (on average around 3% in 2012 to 9 countries of the Mediterranean area, with the exception of Lebanon), is expected to increase in the near future, and will reach an average of 4% in Tunisia and Morocco. Between 2001 and 2013, trade between the Southern Italy and the Med Area grew by 32.5% and in the Med Area, in terms of trade, shows that Southern Italy is almost three times higher than the remaining macro-regions of the country (15.5% compared to 5.5% of the Centre; 6.2% of the North-West; 5.4% of the North-East). Equally important are the economic relations between Europe and North Africa. In fact, the amount of trade between the (EU 27) and North Africa (NA) has more than doubled in the last ten years, from 57 billion euros in 1999 to 136 in 2010. Italy is the first country among those in the EU in the amount of trade with NA (which was worth 37.8 billion euros in 2010) and the second for export (13.4 billion euros). We have seen very noticeable growth dynamics in just five years and export to North Africa from Southern Italy has almost doubled as shown by the following table.

www.srm-maritimeconomy.com 26 Weight of Italian exports to North African countries and total exports to the area (percentages)

2007 2008 2009 2010 2011 January-June

Algeria 18,5 22,8 22,4 21,5 27,6

Egypt 21,5 22,0 22,6 22,0 23,0

Lybia 16,3 20,0 21,1 20,2 7,6

Morocco 14,5 12,8 11,9 10,7 13,9

Tunisia 29,2 22,4 22,0 25,6 27,9

Table 4 - Source: Elaborations on ISTAT data DGSP-I

Therefore, the growth of Maghreb countries, after the fall of 2011, recorded increases in Libya (+104.5% in 2013) and Tunisia (+3.6% in 2012) with a recovery in trade. The growth prospects for 2013 and 2014 are positive for both countries affected directly or indirectly by political upheavals.

Growth (%) Real GDP

2009 2010 2011 2012 2013E 2014E

Countries directly concerned

Egypt 4,5 5,6 -0,8 3,2 2 3

Lybia -0,7 5 -62,1 104,5 -5,1 25,5

Tunisia 3,1 2,9 -1,9 3,6 3 3,7

Countries indirectly affected

Algeria 1,7 3,6 2,6 3,3 3,1 3,7

Morocco 4,8 3,6 5 2,7 5,1 3,8

Table 5 - Source: Elaborations of the author on data from ICE

At the same time, there has been growth of trade flows towards the southeast qua- drant as shown by the Eurasian dynamics represented in Chart 4 and Figure 9. Chart 4 shows the dynamics of the growth of trade imports and exports from 2000 to 2010. For each year, the individual histograms, represent, respectively, Eastern Euro- pe, the Southern Mediterranean and the entire EU. It’s easy to see the dominance of trade of the Southern Mediterranean. Figure 7 confirms the strategic importance of the export flows from Europe to the markets of the countries bordering the Mediterranean south which grew by 4% per year from 1999 to 2010 and to the countries of the North-East, which grew by 7% per year the same period.

www.srm-maritimeconomy.com 27 Growth of commercial exchange (Exports + Settings) areas (Numbers Indexes, 2000 = 100)

600 500 400 300 200 100 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Eastern Europe Mediterranean South EU

Chart 4 - Source: WTO

Average annual growth of exports from Europe to the Mediterranean markets of Southern and Eastern Europe (tonnes)

EXPORT +7% MEDIUM 1999 – 2010

EXPORT +4% MEDIUM 1999 – 2010

Figure 7 - Source: Eurostat

Ultimately Italy, despite being a peninsula, can almost be compared to being an island due to the fact that three quarters of the country is surrounded by the sea. It is not by chance that Italy has been called the natural geographical logistics platform and center of the Mediterranean and its support, in general, to the framework of flows and its effect on different continents. Still, little or nothing has been done so far by the Italian government and European Union. By looking at the data of the of flows intercontinental containers two dominant clu- ster ports clearly emerge. These clusters provide important investments, among other things, to the countries involved including the clusters in the southern range with a

www.srm-maritimeconomy.com 28 chain of major ports such as Algeciras, Tanger Med, Port Said, Gioia Tauro, Taranto, Piraeus, Mersin, etc... and the clusters in the Northern Range with the main ports of Rotterdam, Bremhaven, Hamburg, Antwerp, Le Havre, etc. The Southern Range in recent years has grown more in relative terms in recent years when compared to the Northern Range, even though the Northern Range has a hi- gher value. In Italy, it seems paradoxical that some containers transiting, after Suez, via Gibraltar to the ports the Northern Range in order to reach Naples by land from northern Europe, even though the ship’s full container transits at a distance that is much shorter than when compared to Rotterdam. We only need a simple transfer from Gioia Tauro in order to reduce the distances. We can confirm that the trend that the of the SSS, is transforming the pattern of flows from a Eurocentric model to one that is intermediterranean with projections into North/South, South/East and North Africa quadrants. Figure 10 shows the comparison of intermediterranean intercontai- ner flows between 2011-2012 in the main Terminal Container Shipping Port, which confirms the end of the global financial crisis.

Flows and container ports increases in the intermediterranean (TEUs 2011-2012)

Figure 8 - Source: Containerization International, 2014

It is possible to represent the following figure with a “C” shape trend intermediterra- nean flow model that, thanks to the development of SSS, has been transformed from a “Eurocentric” into a “euromeditarranean” one (Figure 9).

www.srm-maritimeconomy.com 29 Model of intermediterranean flows

Figure 9 - Source: Elaborations of the author

www.srm-maritimeconomy.com 30 Conclusions

The conclusions can be summarized as follows:

• The scenario for flow has shifted its center from a northern European based model to one that is Intermediterranean. • Within the framework of flows that effect the Mediterranean, the SSS are more influential in the choice of a dominant co-modal maritime routes in the modal land-sea exchange in order to achieve lower logistics cost. • The model of Italian import-export, for the lack of a logistics culture, it is almost always ex factory and will almost never have the delivery duty paid. You must also renounce the final price at the destination of the government transport and logi- stics sector which increasingly depends on innovative industrial projects and the supply chain of goods. Overall, you give up logistics value in the innovative concep- ts of value networks and corridor values in a cultural model of behaviour which is difficult to change and affects the deficit of thetransport budget with a negative balance on the payment balance. • Use large abandoned industrial dry port areas and dedicate them to logistics areas and to create value in the import-export by having a tax-free zone in order to in- crease employment and to exporting high quality Italian products.especially in the agro-industrial sector using the Dutch distripark as an example. • To promote foreign investor interest, such as sovereign wealth funds, and to the management Of dry port areas which achieve high profitability and productivity around the world (Netherlands, Spain, China, France, etc.) and creates employ- ment.

www.srm-maritimeconomy.com 31 Bibliography

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