TrainMoS II Project – Module 2.1.1: “Maritime sustainability and MoS”

MTO and Terminal Operator: organization and challenges in the last four an a half decades

14° September 2015

Daniele Testi – Marketing Director Contship Italia Group DANIELE TESTI

• 45 years old • Marketing Director • Industrial engineering degree • Married • 2 children, age 3 an 7 • Born in • Grew up in La Spezia • living in since 1989

Hobby: • Music and home recording Sports: • Running and skiing

Fan of Ferrari F1 and Juventus Marketing & Corporate Communication director of Contship Italia Group since January 2006.

President of SOS Log (association) since September 2014

Part of Contship Italia holding company since May 2002 as Marketing and Planning Manager

Previous professional experiences: KPMG consulting (senior consultant) Tarros Group (Container Control Manager).

About Contship Italia

Contship is the larger operator in Italy for maritime container terminals and intermodal services. It employs 3,000 people with over €300 million turnover. Contship is the South European subsidiary of Eurokai (), a private company listed on the stock exchange and the largest independent Container Terminal operator in Europe with 14.8 million TEU handled end 2014. Contacts [email protected]

@danieletesti

www.facebook.com/daniele.testi.1

it.linkedin.com/pub/daniele-testi/0/63b/92

On line: www.sos-logistica.org 1. 1969 – 1978 containerisation revolution 2. 1979 – 1988 modern terminal operations 3. 1989 – 1998 Transhipment & intermodal transport 4. 1999 – 2015 big ships and future challenges SINCE 1969 PIONEER IN

6 45 YEARS OF EXPERIENCE

Sogemar is merged with North Africa start up of Intermodale Italia. operations at Tangier

Contship establishes the first Contship Containerlines is Contship establishes ever container line service acquired by CP Ships. Oceanogate Italia, as a Group from Europe to Eurokai becomes the main rail traction company shareholders of Contship Angelo Ravano establishes Contship. 1997 1969 1977 1990 2012 The first liner service is 1999 2008 operated from Fos Sur Mer to Casablanca for FIAT .

In Melzo, Contship establishes RAIL 2001 HUB MILANO 1971 1982 1995 2011 2015 2003

In Australia with Eagle Containerlines

Contship operates the first Operations commence Terminal Container Ravenna La Spezia is the first gateway La Spezia is the first Italian private container terminal in at Medcenter Container and Cagliari International in Italy to operate ULCC gateway to deploy 23 rows Italy (La Spezia). Terminal (MCT) in Gioia Tauro. Container Terminal join the 14,000 TEUs class. cranes . Gioia Tauro and La terminals network. Spezia, welcome the 16,600 TEUs containership.

7 CONTSHIP TODAY

We bring the ship to your factory

8 ONE FLAG! ONE TEAM! ONE SOUL!

INTERMODAL&LOGISTICS

50% 66.6% 33.4%

MARITIME TERMINALS

9 CONTSHIP AT A GLANCE

MARITIME TERMINALS INTERMODAL&LOGISTICS

6 state of the art MARITIME TERMINALS LOGISTIC SERVICE PROVIDER 6.4 million TEU HANDLED in 2014 240,000 TRANSPORTED TEU/YEAR 52% MARKET SHARE in ITALY 1.1 MILLION TRAIN-KM OPERATED

TOTAL INVESTMENTS to date: EURO 800 MILLION

3,000 EMPLOYEES, 3% female. 8% managers

10 CONTSHIP UNIQUE SELLING PROPOSITION

Intermodal SUPPLY CHAIN VERTICAL INTEGRATION

Gateway DIRECT ACCESS TO MULTIPLE MARKETS

Transhipment MINIMAL DEVIATION FROM MAIN EAST-WEST ROUTE INTERMODAL SOLUTIONS TRANSHIPMENT & GATEWAY

11 VERTICAL INTEGRATION

FASTER SEAMLESS TRANSFER TO YOUR FACTORY

12 LOGISTIC SERVICE PROVIDER

13 INTEGRATED SOLUTIONS

14 SOUTHERN GATEWAY, A NEW BEGINNING RAILability

FULL CONTROL FROM PORT TO DOOR

PRECLEARING FOR FASTER UNLOADING AND FINAL DELIVERY OF YOUR CARGO

REDUCING TRANSIT TIME AND CO2 EMISSIONS

ITALIAN CARGO via ITALIAN PORTS

EXTENDED TO REACH TO SOUTHERN EUROPE

15 THE RIGHT PRODUCTS IN THE RIGHT PLACE

16 1. 1969 – 1978 Containerization revolution 2. 1979 – 1988 modern terminal operations 3. 1989 – 1998 Transhipment & intermodal transport 4. 1999 – 2015 big ship and future challenges The Birth of "Intermodalism“

Intermodalism is a system that is based on the theory that efficiency will be vastly improved when the same container, with the same cargo, can be transported with minimum interruption via different transport modes from an initial place of receipt to a final delivery point many kilometers or miles away. That means the containers would move seamlessly between ships, trucks and trains. CONTAINERISATION CONTAINERISATION Assumptions: changes in the socio-economic factors • Decrease of the manorial work model • Increase of the per capita income • Reduction of protectionist barriers

EXPONENTIAL INCREASE OF TRADES BETWEEN 30s and 50s

• 1929: Seatrain load a few rail wagons on deck of one of its ships deployed in the New Orleans – Havana route

• 1937: Malcom Mc Lean has to wait a full day in the port of Jersey City to unload his truck. He is convinced that if he could leave there only the trailer he might do another trip with its tractor.

• 1950: Malcom Mc Lean order to General Motors 600 tractors separated from trailers

• 27 April 1956: 58 trailers, 35 feet long of Mc Lean, separated from the wheels and platforms are loaded on board of M/v Ideal X, a ship deployed on the Newark – Houston route

On 23 April 1966, ten years after the first converted container ship sailed, Sea- Land’s Fairland sailed from Port Elizabeth in the USA to in the Netherlands with 236 containers. This was the first international voyage of a container ship. Meanwhile, during the rapid build-up to the Vietnam War, the US military was faced with the logistical problem of getting supplies to troops. It had somehow to transport mass supplies to a war zone in south-east Asia through a single under-developed port on the Saigon River and a partially-functioning railway. The government turned to container shipping as the most efficient option.

Container shipping began to prove its worth at an international level. From this point on the industry began to grow to the point where it would quickly become the backbone of global trade, even though few at the time would have made such bold predictions.

1968 and 1969 were the Baby Boomer years for container shipping. In 1968 alone, 18 container vessels were built, ten of them with a capacity of 1,000 TEUs which was large for the time. In 1969, 25 ships were built and the size of the largest ships increased to approaching 2,000 TEU. In 1972, the first container ships with a capacity of more than 3,000 TEU were completed by the Howaldtwerke Shipyard in Germany.

Now an entire industry had emerged, demanding unprecedented investment in vessels, containers, terminals, offices and information technology to manage the complex logistics. FOS SUR MER (), 1969

82 TEU, of ship capacity

23 LA SPEZIA, 1971

The first PRIVATE Container terminal in ITALY

24 MIDDLE EAST, 1974

The closing of SUEZ did not stop the TRADES

25 TARTOUS (SIRIA) , 1975

Difficult situations are swiftly met with good practical SOLUTIONS

26 INDIA 1977

First ever container service between EUROPE and INDIA

27 BEIRUT, 1978

Supporting MIDDLE EAST recover and development

28 29 1. 1969 – 1978 Containerization revolution 2. 1979 – 1988 modern terminal operations 3. 1989 – 1998 Transhipment & intermodal transport 4. 1999 – 2015 big ship and future challenges IPSWICH, 1979

A new LIFE in the UK

31 AUSTRALIA, 1982

The first ever INDIPENDENT liner service operator in AUSTRALIA

32 BAGHDAD (IRAQ), 1983

CONTINAER BOOM the word within reach

33 LA SPEZIA, 1987

A new STEP FORWARD The modern container terminal era

34

BASIC MARITIME CONTAINER TERMINAL LAYOUT

The container terminal can be roughly distinguished into four areas: • The quayside of the terminal • The stacking area • The landside of the terminal • Areas for supporting activities Quayside At the quayside, a quay wall with water depths well over 14,5 meters at all tides should provide for berthing of the container vessels. The largest deepsea container vessels require a berth of up to 450 - 500 meters. Where simultaneous handling of more than one deepsea vessel and also feeder and barge vessels is required, the total quay wall length of a container terminal unit will be between one and three and a half kilometres.

Stacking area In the stacking area the containers are stored, received from the landside or from feeders, and waiting for loading on the deepsea vessel or discharging from the deepsea vessel for delivering. Non-standard containers and refrigerated containers, so-called reefers, are stacked in special areas. Reefers or temperature-controlled containers have to be powered at special stacking areas. Special segregation provisions are taken for containers with dangerous goods.

Landside At the landside of the terminal the direct import and export containers are handled, originating from or destined for the terminal’s hinterland. Areas for supporting activities At a designated breakbulk area the special cargo is handled. This cargo is too large or heavy for a container, such as yachts, agricultural machines, industrial machinery or parts of an entire factory.

EVOLUZIONE DEI TERMINAL PORTUALI APM Terminals' Maasvlakte2 in Rotterdam The world's first fully automated container

TERMINAL OF THE FUTURE?

+ 5.6%

2014/ 2013

53%

Marketing of container terminals

The decision-making units (DMUs), especially at shipping lines, are complex, with various organisational levels, functions and locations involved and various roles performed.

• There are local, regional and global DMU members, all taking part in the influencing and decision-making processes,with varying interests.

• There are also functional interests to be identified. Whether a shipping line decides to call at a port or not is dependent on strategic, political, operational, commercial, nautical and financial parameters, to be evaluated in their interrelationship.

• People can play various roles in a decision-making process, which can vary, dependent on the decision at hand. They can be: - a decision-maker, - a decision influencer, - an information-provider, - an advisor and so on. Marketing of container terminals therefore requires building and maintaining a network of relations within the customer organisation. In Italy

Transhipment 2014 total Italy Gioia Tauro, Cagliari, Taranto 10.1 mio TEUs

North Tyrrhenian Genoa, La Spezia, Savona, Livorno

Gioia Tauro Genoa La Spezia Cagliari North Adriatic Trieste, Venice, Ravenna 7.1 mio TEUs 70% of total Total AREA of Italian and Foreign PORTS (mio sqm)

Source: Iniziativa di studio sulla portualità Italiana (DIPE) Max WATER DEPTH in the main European and Med ports

Source: Iniziativa di studio sulla portualità Italiana (DIPE)

* Taranto holds also facilities with 25 m water depth but they are not used for cargo Port Authorities (PA) Projects

2014-2016 estimated total investment by Port Authorities 5.7 billion € 20% Tyrrhenian - 66% Adriatic - 14 Others

80% Percentage of Investment 70%

60%

50%

40%

30%

20%

10%

0

New infrastructure Refurbishment Maintenance Recovery Restoration Demolition 2014 2015 2016 Total 2014 - 2016 Overview of the main Container Terminal Projects in Italy

GENOA TRIESTE New, Calata Bettolo ( 400 k TEUs), December 2015 Upgrade. Molo VII, (1.2 mio TEUs), 2017 Upgrade, Messina (400 k TEUs), 2016 New, Molo Canepa, 2019

SAVONA – VADO VENICE New, APMT (800 k TEUs), 2017 New, OFF Shore Terminal, (3 mio TEUs) New, former Montefibre area (1.4 mio TEUs) LA SPEZIA RAVENNA Upgrade, LSCT (1.8 mio TEUs), 2018 Upgrade, channel Candiano /14.5 m water depth), 2015 Upgrade, Tarros/Arkas, tbd New, TCR, (500 k TEUs), 2020

CIVITAVECCHIA New, CTR, (700 k TEUs), 2016 LEGHORN Upgrade, Port Entrance, 2015 New, Europa Platform, 5 KM of new Quay, tbd SALERNO Upgrade, Port Entrance, tbd

NAPLES TARANTO Upgrade, water depth, 2015 Upgrade, TCT, (+ 1.200 m Quays), tbd Upgrade, Conateco, suspended

CAGLIARI Upgrade, CICT, (3.6 MIO TEUs), tbd

GIOIA TAURO Upgrade, Water Depth, 2015 Upgrade, Energy Plant, Cold Ironing LA SPEZIA

READY FOR THE FUTURE, NOW

61 LA SPEZIA SYSTEM

YOUR DOOR TO ITALY AND SOUTH EUROPE

62 LSCT, TODAY

1.4 million TEUs CAPACITY

63 LSCT, TOMORROW

ULCC

ULCC ULCC

10 x 23 rows across 6 x 20 rows across

2 million TEUs CAPACITY

64 LSCT, TOMORROW

200 million EUROS of planned investments

2 million TEUs CAPACITY

65 RAIL TRANSPORT IN LA SPEZIA = 30% of total throughput

OVERALL SUPPLY CHAIN COSTS

TO IMPROVE SPEED AND AVERAGE QUANTITY OF CONTAINERS FROM PORT TO DOOR

66 1. 1969 – 1978 Containerization revolution 2. 1979 – 1988 modern terminal operations 3. 1989 – 1998 Transhipment & intermodal transport 4. 1999 – 2015 big ship and future challenges 1989

68 LA SPEZIA, 1989

The largest INTERMODAL network in ITALY takes shape

69 MELZO (MILAN), 1990

INVESTING in MILAN

70 HAMBURG, 1990

Think PINK

71 HONG KONG, 1990

Globalization EFFECTS

72 SINGAPORE, 1991

New PARTNERSHIP

73 NOUMEA, (NEW CALEDONIA), 1991

74 LA SPEZIA, 1991

75 NHAVA SHEVA (INDIA), 1991

76 SIDNEY, 1992

EXPO 92 Australian pavilion official logistic provider

77 CONTSHIP SINGAPORE, 1994

The FLEET CAPACITY continues to increase

78 CONTSHIP MANAGEMENT TEAM , 1995

CONTSHIP international TEAM WORK

79 CONTSHIP OFFICES, 1996

80 GIOIA TAURO, 1995

Contship MEGA HUB

81 Contents TRANSHIPMENT HUBs future MED market (TEUs/000,000)

17,7

13,4 12,6 12,2 10,8 Morocco/Gibraltar 9,9 West Med 8,2 8,4 Central Med 7,7 East Med 6,3 Black Sea 5,1 4

2015 2020 2025

Source: Contship on Ocean Shipping Consultants data TRANSHIPMENT IN ITALY: because of

MARKET factors • Shipping development model (larger tonnage, concentration, economy of scale, geopolitics) • Global supply chain (global markets, global hubs) ECONOMIC factors • 50% of Italian port handling • Investments (1 billion public, 1 billion private) • Local (south) economic impact (9,000 employees) STRATEGIC factors • Italy as logistic platform in the Med (hubs=largest container terminals, water depth, quay length, yard extension, equipment, linked with growing emerging market GDPs) • European maritime cargo flows (marginalization to North Africa hubs) TEN T / CORE Ports Network 1 mio TEUs

exchanged by Switzerland, Austria and South Germany with MED/east of SUEZ countries Congestion of North European PORTS Transit time from CONTSHIP INTERMODAL OFFER

24 TRAINS WEEK dominating the MILAN RAIL CORRIDOR MARKET PLUS 29 INTERNATIONAL ROUND TRIP CONNECTIONS every WEEK

INTERMODAL & LOGISTICS

86 SOUTHERN GATEWAY, A NEW BEGINNING RAILability

FULL CONTROL FROM PORT TO DOOR

PRECLEARING FOR FASTER UNLOADING AND FINAL DELIVERY OF YOUR CARGO

REDUCING TRANSIT TIME AND CO2 EMISSIONS

ITALIAN CARGO via ITALIAN PORTS

EXTENDED TO REACH TO SOUTHERN EUROPE

87 RAIL HUB MILANO

260,000 m2 SURFACE

4x 750 3x550 12 up to 600m RAIL TRACKS

4,400 m2 BONDED & NATIONALWAREHOUSES

1,540 m2 for EQUIPMENT M&R 300,000 TEUs HANDLING CAPACITY

6,000 TRAINS/YEAR IN/OUT YOUR LINK TO EU

88 STRATEGIC CROSSROAD

22% of ITALIAN GDP

5 KM FROM A35 (BRESCIA-MILAN) HIGHWAY GATE 19 KM FROM A1 (MILAN-ROME) HIGHWAY GATE 13 KM FROM A4 (TURIN-VENICE) HIGHWAY GATE

89 HANNIBAL

90 NETWORK (including third party company trains*)

INTERNATIONAL RAIL LINKS Round Trips/week MELZO ROTTERDAM 17 80

MELZO VENLO* 10 trains/week

MELZO LUDWIGSHAFEN 3 connecting south, central MELZO FRENKENDORF (Basel) 3 and north MELZO DUISBURG 3 Europe MELZO ZEEBRUGGE* 1

MELZO COLOGNE 3

DOMESTIC RAIL LINKS Trains/week LA SPEZIA MELZO 28 GENOA MELZO 12 BARI MELZO 6 PADUA MELZO 18 FROSINONE MELZO 6 111 RAVENNA MELZO 6 trains/week LA SPEZIA REGGIO EMILA 13 from/to Italian LA SPEZIA PARMA 4 ports LA SPEZIA PADUA 18

91 OCEANOGATE

1.5 million TONS CO2 saved every year

THE SMARTER TRANSPORT FOR A BETTER FUTURE

92 Train Kms in ITALY

80 5% 70

60 6%

50

40 33% 89% 30 3% 20

10 64%

0 2008 2009 2010 2011 2012 2013 2014 Trenitalia Others Fercargo 94

Intermodal cost of production

Average cost could increase/decrease up to 15- 30% if scheduled time for the • Intermodal transport(one way); train load/unload do not Assumptions guarantee the optimal round • 300-400 km (es. Genova or Spezia – Padua); trip based on train • 30 containers 40’ each train composition costs and optimal use of the locomotors and rail wagons.

Shunting Shunting Terminal operations at Total operations at Rail traction handling inland cost sea port charge terminal Container terminal EFFICIENCY, where to find it

DRY INTERMODAL PORT TRANSPORT PORT

OPERATIONS PRECLEARING H24 – 7/7 CUSTOMS FORMALITIES PRECLEARING

CUSTOM DISCHARGE LIST RELOAD CONTAINER GATE-OUT TO CLEARANCE + PROSECUTION ORDER AVAILABLE FOR (PRECLEARING) LIST by RAIL FROM MTO DELIVERY/INSPECTION UPON DISCHARGE WITH PRECLEARING

LA SPEZIA TIME SAVINGS DUE TO GENOA PRECLEARING: UP TO 48/60h (UP TO 72/90 IN CASE OF WEEK END OR HOLIDAY)

-24h +24h +60h +90h

-48h -00h +48h +72h

SHIP SHIP SHIP ARRIVAL OPERATIONS DEPARTURE

WITHOUT PRECLEARING

CONTAINER CUSTOM RELOAD GATE-OUT TO CLEARANCE ORDER AVAILABLE FROM MTO FOR DELIVERY/ INSPECTION

98

11,000 km

16 / 20 days vs 30 days (ship)

1. 1969 – 1978 Containerization revolution 2. 1979 – 1988 modern terminal operations 3. 1989 – 1998 Trnashipment & intermodal transport 4. 1999 – 2015 big ship and future challenges LEGHORN, 2001

Improving the TERMINALS OFFER

104 RAVENNA, 2002

Adding new PRODUCT

105 CAGLIARI, 2003

The era of TRANSHIPMENT

106 TANGIER, 2008

North Africa DEVELOPMENTS

107 LA SPEZIA, 2011

The first ULCC call in ITALY

108 MILAN, 2012

A new PRIVATE RAIL operator

109 LA SPEZIA, 2015

16,600 TEU, the largest ship ever calling an Italian port

110 MELZO (MILAN), 2015

Improving the SOUTH CORRIDOR

111 LA SPEZIA, 2015

2 brand new 23 ROWS quay cranes

112 Source: A. Penfold Source: A. Penfold Source: Drwery 2° Container Forecast 2015 Source: A. Penfold Source: A. Penfold Source: A. Penfold Source: A. Penfold IMPACT ON FREIGHT RATES

120 Alphaliner - TOP 20 Operated fleets as per 13 September 2015

Today, there are 6,070 ships active on liner trades, for 20,010,806 TEU

THE LARGEST SHIPS TODAY

124

Infographic: Drewry, Global Container Terminal Operators Annual Report 2014 IMPACT OF MEGA SHIPS ON PORTS

143

+

= SUPPLY/DEMAN FREIGHT RATES PRESSURE ON INFRASTRUCTURE

145 146 IMPACT OF MEGASHIPS ++ INSURANCE COSTS

147

IMPACT ON PORT PRODUCTIVITY

149