Croatian Logistics Opportunities for Sustainable Competitiveness Public Disclosure Authorized Public Disclosure Authorized
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Croatian Logistics Opportunities for Sustainable Competitiveness Public Disclosure Authorized Public Disclosure Authorized Croatian Logistics Public Disclosure Authorized Opportunities for Sustainable Competitiveness Luis C. Blancas Public Disclosure Authorized Ana Božičević Kristijan Rogić Ivona Bajor Luka Novačko 1 Croatian Logistics Opportunities for Sustainable Competitiveness © 2021 The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved This work is a product of the staff of The World Bank. The findings, interpretations, and con- clusions expressed in this work do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. Because The World Bank encourages dissem- ination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Attribution—Please cite the work as follows: “World Bank (2021). Croatian Logistics: Oppor- tunities for Sustainable Competitiveness. © World Bank.” All queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: [email protected]. Cover photo: Port of Rijeka, by Luis C. Blancas. 2 Croatian Logistics Opportunities for Sustainable Competitiveness Contents Acknowledgements 10 About the Authors 11 Abbreviations 13 Executive Summary 14 Introduction 17 CHAPTER 1 The Composition of Croatia’s Logistics System 24 Overview 25 Freight Transport Sector Emissions 28 Croatian Trucking Services: Sectoral Profile 30 Croatian Rail Freight Transport: Sectoral Profile 33 Croatian Inland Waterway Freight Transport: Sectoral Profile 40 Croatian Maritime Transport: Sectoral Profile 43 Opportunities to Strengthen Supply Chain Resilience and Better Adapt to Climate Change 48 Geographic and Gravitational Potential of Major Logistics Hubs in Croatia 48 Croatia’s Public Sector Administration for Logistics and Freight Transport 51 CHAPTER 2 Croatian Freight Flows: Evidence from Croatia’s National Transport Model 52 Analysis of Model Output 54 Port of Rijeka Transit Flows 59 Road Traffic 59 Railway Traffic 59 Freight Flows to and from Eastern Croatia 63 Freight Demand Forecast 65 Key Opportunities for Policy Makers Regarding the NTM 65 CHAPTER 3 Croatia’s Competitiveness as a Maritime Gateway in European Intercontinental Logistics 66 Key Roles in the Container Shipping Ecosystem 68 The ‘Best Route’ Concept 71 The Central European Inland Haulage Market for Containerized Shipments 73 Market Sizing of the Central European Hinterland 76 Westbound (Headhaul) Market Sizing: Asia to Central Europe 77 Eastbound (Backhaul) Market Sizing: Central Europe to Asia 79 European Ports and their Maritime Connectivity with Shanghai 81 Liner Services and Vessel Draught Requirements 81 Port Sample and Relative Sizes by Throughput 82 Port of Rotterdam: Infrastructure and Investment Plans 83 Port of Antwerp: Infrastructure and Investment Plans 83 Port of Hamburg: Infrastructure and Investment Plans 84 Port of Piraeus: Infrastructure and Investment Plans 84 Port of Gdansk: Infrastructure and Investment Plans 85 Port of Koper: Infrastructure and Investment Plans 85 3 Croatian Logistics Opportunities for Sustainable Competitiveness Port of Trieste: Infrastructure and Investment Plans 86 Port of Rijeka: Infrastructure and Investment Plans 86 Maritime Connectivity: Service Frequency 87 Maritime Connectivity: Transit Time 88 Maritime Connectivity: Ocean Freight Rates 89 European Ports and their Rail Intermodal Connectivity with Central Europe 90 Identification of Best Routes per Destination Region 93 Munich 96 Katowice 97 Prague 98 Bratislava 99 Vienna 100 Budapest 101 Conclusions 102 CHAPTER 4 Profile of Croatia-based Freight Logistics Actors 104 General characteristics of Croatia-based LSPs 106 Characteristics of Transport Service Providers 108 Characteristics of Warehousing Services and Warehousing Service Providers 112 Customs Clearance and Freight Forwarding Services 118 Environmentally Sustainable Logistics Systems and Processes 120 CHAPTER 5 Policy Recommendations 122 ANNEX 1 Croatia’s Subnational Logistics Markets 127 Flow of Goods in the Zagreb Hub Area 128 Flows of Goods in the Rijeka Hub Area 130 Flow of Goods in the Osijek-Vinkovci Hub Area 132 Flows of Goods at the Port of Ploče 134 Flows of Goods in the Varaždin-Čakovec Hub Area 134 ANNEX 2 Technical Features of Croatia’s National Transport Model 135 Building Blocks of the National Transport Model 136 NTM Input Data 137 Development of the Freight Model 138 ANNEX 3 Origin-Destination-Commodity Freight Flows in Croatia 139 Other Construction Materials 141 Other Consumer Goods 144 Other Goods 147 Oil Products 148 Raw Wood 150 Chemical Products 151 Cereals 155 Food Products 158 4 Croatian Logistics Opportunities for Sustainable Competitiveness List of Figures Figure 1.1. Freight Tonnage Transported in Croatia by Mode, 2010–2019 25 Figure 1.2. Freight Ton-km Transported in Croatia by Mode, 2010-2019 26 Figure 1.3. Freight Transport Modal Split in Selected European Countries: 2019 27 Figure 1.4. Croatia’s Scores in the 2019 Global Competitiveness Index Values for the Infrastructure Pillar Sub-components 27 Figure 1.5. Croatia’s Energy-related CO₂ Emissions by Sector and Disaggregation by Freight Transport Activity Type, 1990-2018 (selected years) 28-29 Figure 1.6. Croatia’s Trucking Volumes by Service Provider Type, 2010-2019 31 Figure 1.7. Croatia’s For-Hire Trucking Segment Incidence of Empty Miles Driven, 2010-2019 In % of total miles driven 32 Figure 1.8. Share of Kilometers Driven by Trucks over 10 Years Old in Croatia’s Trucking Industry: 2010 vs. 2019 32 Figure B1.1. Elevation on the Zagreb-Rijeka Railway Line 36 Figure 1.9. Tonnage Throughput at Croatia’s Main Inland Waterway Ports, 2019 41 Figure 1.10. Croatia’s Waterways by Navigational Class 42 Figure 1.11. Throughput Fluctuation at Croatia’s Inland Waterway Ports, 2010-2019 42 Figure 1.12. Port of Rijeka: Adriatic Gate Container Terminal Containerized Throughput by Hinterland Mode, 2011-2020 44 Figure 1.13. North Adriatic Ports Containerized Throughput Share, 2011-2019 47 Figure 1.14. Croatia’s Major Industrial Region 49 Figure 1.15. County Shares in Total Entrepreneurial Income: 2014 50 Figure 2.1. Overall Freight Transport in Croatia, 2013 55 Figure 2.2. Overall Freight Transport in Croatian Regions by Directionality of Flow, 2013 55 Figure 2.3. Total Domestic Tonnage Flows Between Croatian Regions 56 Figure 2.4. Total Tonnage Flows Between Croatian Regions and Neighboring Countries 57 Figure 2.5. Origin Flows of Stratified Goods in Croatian Regions, 2013 58 Figure 2.6. Destination Flows of Stratified Goods in Croatian Regions, 2013 58 Figure 2.7. Port of Rijeka: Total Freight Flows, 2013 60 Figure 2.8. Total Tonnage Flows on the Road Network, 2013 60 Figure 2.9. Utilization of Croatia’s Road Network for Base Year 2013 61 Figure 2.10. Total Tonnage Flows on the Rail Network, 2013 62 Figure 2.11. Capacity Utilization (trains/day) on the Botovo–Zagreb–Rijeka Railway Line, 2019 63 Figure 2.12. Largest OD Pairs to/from Eastern Croatia, 2013 64 Figure 2.13. National Transport Model Base Year and Freight Demand Forecast vs. Historical Data 65 Figure 3.1. The Container Shipping Ecosystem 69 Figure 3.2. Representative Operational Setup of an Intercontinental Containerized Supply Chain 70 Figure 3.3. Representative Operational Setup of an Intercontinental Containerized Supply Chain 72 Figure 3.4. Containerized Flows from the Far East to Six Central European Countries: 2008-18 Millions of laden TEU 77 Figure 3.5. Shares of Commodity Groups in Each Country’s Far East Import Commodity Baskets, and Relative Intensity Compared to Each Country’s Average Share 78 5 Croatian Logistics Opportunities for Sustainable Competitiveness Figure 3.6. Containerized Flows from Six Central European Countries to the Far East: 2008-18 Millions of laden TEU 79 Figure 3.7. Shares of Commodity Groups in Each Country’s Far East Export Commodity Baskets, and Relative Intensity Compared to Each Country’s Average Share 80 Figure 3.8. Port Throughput in our Sample Ports: 2018 Millions of TEU 82 Figure 3.9. Annual Import Rail Volumes and Rail Share in Imports’ Modal Split by Port: 2018 90 Figure 3.10. Total Logistics Costs and Average Transit Time for Routing Options Shanghaià Munich 96 Figure 3.11. Total Logistics Costs and Average Transit Time for Routing Options Shanghaià Katowice 97 Figure 3.12. Total Logistics Costs and Average Transit Time for Routing Options Shanghaià Prague 98 Figure 3.13. Total Logistics Costs and Average Transit Time for Routing Options Shanghaià Bratislava 99 Figure 3.14. Total Logistics Costs and Average Transit Time for Routing Options Shanghaià Vienna 100 Figure 3.15. Total Logistics Costs and Average Transit Time for Routing Options Shanghaià Budapest 101 Figure 4.1. Salary Ratio Among Logistics Sector Employees by Role 107 Figure 4.2. Croatia-based Shippers: Logistics Cost Structure by Category 108 Figure 4.3. Profit Margins of Croatia-based Logistics Service Providers by Business Activity 108 Figure 4.4. Impact of Transport Market Liberalization on Transport Company Operations 109 Figure 4.5. Level of IT System Application in Daily Business Operations 110 Figure 4.6. Breakdown of Transport Costs by Category 111 Figure 4.7. Storage Capacity Breakdown by Ownership 112 Figure 4.8. Utilization of Storage Capacity Among Survey Respondents 113 Figure 4.9. Warehouse Equipment Available at the Surveyed Companies 114 Figure 4.10. Warehouse Automation Level – Distribution Warehouses 114 Figure 4.11.