Bulletin of the Maritime Institute Gdansk, 1996, 23, 1

Olga Dt:tbicka, M.Sc.Econ.

Department of Foreign Cooperation Maritime Institute, Gdansk,

FERRY SHIPPING ON THE - POLISH CASE

Abstract The Baltic Sea is characterized by a high activity of ferry and ro-ro shipping, although density offeny connections is different in separate region of that aquen. Economic, social and political changes in Central and East Europe, aspiration for countries' integration within the Baltic sub-region are the features which create new development possibilities for ferry shipping linking Scandinavian countries with Central and East Europe. The above processes are followed by growing competition, either be­ tween ferry lines and with alternative transport routes. Central localization of Poland in Europe, especially its location on the European North-South route, along with comparatively small distance 'from Scandinavian countries are the features which predispose Polish p01ts and feny operators to serve either container (ro-ro streams and passenger) cargo feny traffic. The presented factors forces new outlook on the operation of feny corridors passing through Polish ports.

The Baltic Sea is proved to be interesting water area while regar­ ding transport services. Despite its rather small size, the volume of total cargo turnover on the Baltic amounts up to 8% of the world seaborne trade. Recently, almost 300 million tonnes of cargo is ship­ ved on the Baltic, including 40% of cargo transportation in Baltic 46 0 . Dc;bicka relations and 60% of shipments in external relations. Internal Baltic trade, amounting 120 million tonnes, is divided into international transportation (75 million tonnes) and cabotage (45 million tonnes). A share of sea route in the transportation of internal Baltic trade defers depending on the countries. The biggest one is observed in Scandinavian trade- with sea route amounting 61 % in export and 86% in import. A high concentration of the short sea and ro-ro lines is proved to be a characteristic feature of the Baltic transportation market, how­ ever separate regions of that aquen noted different density of ferry connections. There are about 40 ferry operators on the Baltic Sea operating about 130 ferries. The volume of Baltic ferry transportation has been steady increasing recently. The growth is observed either in passenger and in cargo transportation. At the same time, essential structural changes took place in the Baltic ferry shipping. Beside passenger-car ferries serving most of all passenger movements, more and more ro-ro units have been entered into operation. The construc­ ted ferries are bigger and modern, offering higher standard of services. The ports and harbours are being modernized and developed, beco­ ming large passenger ports and transhipment centres. All these factors make the competition in ferry shipping become more sharp. 1 Baltic ferry traffic is concentrated on four main transport routes : • western route: linking Scandinavia, Germany and Poland- embra­ cing ca. 75% of passengers' ferry transportation on the Baltic; • central-eastern route: linking with Finland, Russia and Estonia- embracing over 20% of passengers' ferry transportation; • eastern-western route: linking Finland with Germany and Poland­ serving only 0.12% of Baltic traffic; • central route: linking Sweden with Gdansk agglomeration and Ryga, which serves 3.5% of passengers' ferry traffic.

1 Szwankowski S. and others, 1995, Polish Transport System in the Network of Baltic Connections, WW IM 5041. (In Polish). Ferry shipping on th e Baltic Sea - Po lish case 47

The Baltic ferry market is a segment of the European transit market in the North-South direction. The market constitutes a perfect trans­ port network linking Scandinavia with West and Central Europe - used to serve majority of passenger and cargo transportation in that region. Up to now, central Baltic with ports of Gdansk and Gdynia are the area of small intensity of ferry traffic. However, economic and political changes in Central and Eastern Europe have resulted in completely new economic situation in the Baltic Sea region. That factor, along with integration of the Baltic Europe, creates new possibilities for ferry shipping linking Scandinavian countries with Central and East Europe. New attitude towards maritime shipping, agreed on conference of Ministers of Trans­ port of Baltic countries, provides for further development and promotion of ferry services, coastal and short sea shipping. Central localization of Poland in Europe, on the European North­ South Transport Corridors, undoubtedly favour Polish ports to serve as base ports for ro-ro and ferry lines on the Baltic, and create new possibilities for Polish ferry operators for serving cargo and passenger movements on that route. Polish ferry operators have served Baltic cargo and passenger mo­ vements for 30 years, going through many reorganization, in that through the state's allocation offerries by their types. At present, their share in the Baltic ferry transportation is rather small - amounting ca 1% in total passenger transportation, 5% in cargo shipment. Nowadays there are three Polish ferry armators who operate on the Baltic routes. The Polish Baltic Shipping Co. (with head quarter in Kolobrzeg) is the leading one, followed by the Euroafrica (co-owned by the Polish Shipping Line) and by newly established company Unity Line -a joint venture of the Polish Steamship Company and Euroafrica. In 1994 total number of Polish ferries being engaged in serving connections between Poland and Scandinavia amounts 9 of 80,493 BRT, in that 2 rail ferries of 17,315 BRT and 7 passenger-car ferries of 63,178 BRT. Detailed description of the tonnage operated by Polish ferry operators is presented in the Table 1 and Table 2 . ""'00 Table 1. Ferries operated by the Polish Baltic Shipping Companies

m/fWilANOW m/f ROGALIN m/f NIEBOROW m/f SILESIA m/f POMERANIA m/f PARSE;TA

Type car-passenger car-passenger car-passenger car-passenger car-passenger ro-ro ferry

Built 1966 1972 1973 1979 1978 1970

Shipyard Randsburg-Germany Dub, Nantes-France Randsburg-Germany A.Warskiego- A.Warskiego- Bremen- Germany Szczecin

Vehicle access Bow/stern ramps Bow/stern ramps Stern ramps Bow/stern ramps Bow/stern ramps Bow/stern ramps

No of crew 82 90 105 110 110 21

No of passengers 600 880 870 984 894 21

Cargo: -cars 130 146 225 277 277 9 - 0 -trucks 24 17 25 26 26 18 .t1> ~ (") Speed: - max 18 Knots 20.4 Knots 22 Knots 19.5 Knots 19.5 Knots 14 Knots ""0> - service 15 Knots 16 Knots 17 Knots 15 Knots 15 Knots 13,5 Knots

Flag Polish Polish Polish Polish Polish Polish

Lenght 110.17 m 115.33 m 118.83 m 124.25 m 127,50 m 96.61 m

Breadth 17.63 m 19.54 m 18.54 m 19.45 m 19,40 m 15.83 m

Depth moulded 11.20 m 12.25 m N/A 7.31 m N/A N/A

Draught 4.90 m 5.17 m 5.2 m 5.06/5.42 m N/A N/A '

DWT 1' 118 t 1,250 t N/A N/A 1'146 t N/A ------Ferry shipping on th e Balt ic Sea - Polish case 49

Table 2. Fe rries operated by Euroafrica and Unity Line

Euroafrica Unity Line

m/f Mikotaj Kopernik m/f Jan Sniadecki m/f Polonia

Type car-rail ferry car-rail ferry passenger-car-rail ferry

Built 1974 1988 1995

Shipyard Trosvik Verksted Falkenberg Varv Langsten Shipyerd- Brevik - Norway AB- Sweden Norway

Vehicle access Stern ramp Stern ramp N/A

No of crew 27 29 82

No of 63 59 1000 passengers

Cargo -cars - - N/A -trucks 42 60 N/A -train cars 40 60 N/A

The above ferries serve the following lines: • Swinoujscie- -operated by Euroafrica (2 car-railway ferries) and Unity Line (1 car-passenger-rail ferry); • Swinoujscie-Copenhagen - operated by Polish Baltic Shipping Co. ( 1 car-passenger ferry); • Swinoujscie-Malmo- operated by Polish Baltic Shipping Co. (2 car­ -passenger ferries, 1 ro-ro vessel); • Gdatisk-Oxelosund - operated by Polish Baltic Shipping Co. (1 car­ passenger ferry) • Swinoujscie-Ronne (Bornholm) -a seasonal line operated by Po­ lish Baltic Shipping Co.

The above ferry lines are illustrated on the Fig. 1. Swinoujscie-Malmo is a new route opened in May 1995 by the Polish Baltic Shipping Company which withdraw two ferries from Swinbujscie-Ystad line and opened new connection served with the 50 0 . Dt;bicka

Fig.l.· Ferry connections of Polish sea ports in the Baltic region Ferry shipping on the Baltic Sea -Polish ca se 51 two mentioned units. Moreover, a new Polish company has been established in Malmo port which rent part of port's territory in order to serve, among others, Polish ferries. The line Gdynia-Karlskrone, operated by Corona Line till April 1995, was cancelled. That line - the youngest one in Poland - after three years of activities, operating only one ferry was able to take over 25% of Polish-Scandinavian passenger traffic and over 10% of cargo movements. Despite the capital weakness of the three follo­ wing operators, the number of calls at Gdynia ferry terminals incre­ ased from 133 in 1991 to 217 in 1994, passenger shipments increased by fourth times and cargoes by 6 times. Of course, as it was already mentioned, Polish operators handles slight part of Baltic trade. Such situation results, among others, from the fact that majority of ferry transportation is connected with very intensive "cross" trade between Scandinavian countries- that market's segment is practically not available for Polish operators. However, nowadays one can observe serious possibilities of reviving "length­ ways" and "diagonal" connections- what should work up an interest in Polish ferry operators. That tendency is foreboded by association of Sweden and Finland with the European Union. The number of passengers shipped by Polish operators between Poland and Scandinavia is expected to rise. While regarding only one line Swinoujscie-Ystad and the new ferry m/f Polonia which has been entered into operation in June 1995, it appeared that during seven months of operation (VI-XII) the ferry shipped over 80,410 passen­ gers. Approximately 45-50% of passengers transported by Polish fer­ ries were people visiting their relatives, 20%- tourists, 5-20% -young people looking for seasonal work and 10% - business trips. While regarding cargo transportation, one should indicate two main sectors: one embraces transport of commodities in Polish - Scandina­ vian trade, the second one embracing cargo in transit between Scan­ dinavia and Central-Southern Europe. In 1994 our operators noticed an increase in cargo transportation as compared to the figures of 1993. The following circumstances had their contribution to substantial 52 0 . Dt;bicka

improvement in terms of cargo volume carried: relative weakness of Swedish crone against other currencies enhancing in effect Swedish exports, restrictive policy adapted by the Federal Republic of Germa­ ny in respect to road haulage, substantial improvement noted in economic position of such countries as Poland, Hungary, Czech and Slovakia. Cargo supply in Sweden, both inbound and outbound direc­ tions is continued to be high. The boom is expected to last.

Table 3. The number of passengers shipped by car-passengers ferries between Poland and Scandinavia in 1990-1995

Line 1990 1991 1992 1993 1994 1995 *

Swinoujscie- Ystad 354,002 350,411 335,669 307,843 293,314 325,48 ** Swinoujscie • - Copenhagen 86,699 93,566 81,391 74,264 76,001 77,428 Gdansk -Helsinki 34,568 41,473 29,050 26,341 32,316 24,712 Gdansk- Oxelosund 49,993 67,949 67,666 76,336 74,793 76,056 *** Gdynia- Karlskrone - - 128,378 128,263 124,530 N/A Seasonal lines 38,194 10,084 24,025 6,825 6,608 5,895

Tot a I 563,456 563,483 666,179 619,872 607,562 509,572

The data do not include Corona Line transportation.

•• From May 1995 the Polish Baltic Shipping Co. has changed the destination port to Malmo.

• • • Data for 9 months.

Table 4. The total number of passenger cars shipped between Poland and Scandinavia in the years 1990-1995

Line 1990 1991 1992 1993 1994 1995 *

Swinoujscie- Ystad 101,730 105,600 81,870 80,400 77,107 83,608** Swinoujscie - - Copenhagen 9,932 12,486 10,255 10,794 8,229 8,944 Gdansk - Helsinki 5,064 6,988 6,263 5,789 5,728 3,981 Gdansk - Oxelosund 9,069 13,201 12,744 15,863 19,867 15,398 *** Gdynia- Karlskrone - - 24,558 18,810 15,977 N/A Seasonal lines 7,953 2,311 2,406 338 341 459

Tot a I 133,748 140,548 138,096 131,994 127,249 112,390

The data do not include Corona Line transportation.

•• From May 1995 the Polish Baltic Shipping Co. has changed the destination port to Malmo.

• • • Data for 9 months. Ferry sh ipping on th e Baltic Sea -Polish case 53

Table 5. The total number of trucks shipped between Poland and Scandinavia in the years 1990-1995

Line 1990 1991 1992 1993 1994 1995 *

Swinoujscie - Ystad 52,602 57,487 57,432 52,274 58,711 56,353 ** Swinoujscie - - Copenhagen 5,277 6,415 7,233 6,972 7,513 7,861 Gdansk - Helsinki 3 ,214 3,361 3,992 3,930 4,421 3,952 Gdansk - Oxelosund 349 702 577 975 1,089 1,213 ** Gdynia- Karlskrone - - 5,667 4,832 5,892 N/A Seasonal lines 64 - - - 13 6

Tot a I 61 ,506 67,965 74,901 68,983 77,639 69,385

The data do not include Corona Line transporta tion.

•• From May 1995 the Polish Baltic Shipping Co. bas ch an ged the destination port to Malmo. ••• Data for 9 months.

A transformation process of Polish economy, followed by existing economic and financial systems make situation in Polish shipping enterprises very hard. No capital investment was being taken in re­ spect to rebuilding and modernization of tonnage which become slightly competitive. The recession in the world economy which began in 1990 overlapped this process. Difficult situation in respect to ton­ nage is observed in the Polish Baltic Steamship Co. operating old units either while concern ferries and tramp ships engaged in short sea shipping. Average ship's age exceed 22 years so the tonnage is hardly competitive - requiring soon modernization. The Polish Baltic Steam­ ship Company should modernized its potential as the competition in respect to ferry transportation on the Baltic Sea market is sharp. At the moment, the PZB ferries' standard is maintained due to regular repairs and technical surveys. The essential element strictly connected with future of Polish maritime shipping, in that ferry shipping, consists in urgent need of accelerating restructuralization processes and ownership transformation. With a view to fasten privatization processes and establishing in that way more favourable terms for effective utilisation of productive 54 0. Dttbicka

factors in state enterprises- the specified conditions have been legally created. Privatization process in Polish state enterprises is regulated by the Act on state enterprises' privatization of July 13, 1990, with concurrent executory decrees. According to that Act, the state enterprises are to be privatized under two basic methods: capital and liquidation ones. According to that Law, the enterprise become a company acting in virtue of commercial code, being a joint-stock company or a limited liability company. Decision about transformation are taken by Minis­ try of Ownership Transformation. Commercialization of state enter­ prise is treated in privatization programme as transition stage which will be followed by real privatization - connected with reselling com­ pany's shares or stocks by the State Treasury to the third party- either domestic and foreign ones. That privatization method, according to the Law, is being know as capital privatization. Capital privatization is the only recommended privatization me­ thod which can be applied in respect to maritime shipping companies. This is the way which was taken by the Polish Baltic Steamship Co. which operates nowadays as a joint-stock company own by the Natio­ nal Treasury. Separate company's divisions are being privatized so as the firm will be able to establish a state holding. The other ferries operator - Euroafrica, has been already acting as a joint-stock company with shares belonging to state enterprises (35,53% ), 2 private companies (55,96%) and private persons (8.51% ) . Very important factor for development of ferry connections is development of ferry terminals. The ports of Gdansk, Gdynia and Szczecin-Swinoujscie are proved to be one of the biggest ports' com­ plex of essential value for ferry shipping. Unfortunately, up to now those ports posses rather limited technical capacity for handling pas­ senger-car ferries. Ferry terminal in Gdansk has only one berth for

2 Annual report 1994- Euroafrica Shipping Lines. Ferry shipping on the Baltic Sea -Polish case 55 passenger-car ferry of 4,000 BRT capacity (with very favourable loca­ lization - 300 meters away from the ports gate what is a major advan­ tage of ferry terminal). The port in Gdynia provides for ferries two ro-ro berths in container terminal - the berth is adapted to handling passenger-car ferries of 150 meters length and 5.4 m draught. It has 190m length, rather limited hinterland for passenger cars and passen­ 2 ger station of 800m . However, the latest changes in the Baltic Region, followed by political and economic situation in Central/East Europe, made the ports of Gdansk and Gdynia to prepare special capacity for ferry terminals- thus being able to enter the system of Baltic ferry shipping. The forecast predicts a 5-7% annual growth in passenger-car traffic. On the ferry connections passing from the ports of Gdansk and Gdynia - the growth is expected to reach the higher level than the average ones. According to the forecasts, traffic by ferries will reach about 700,000 tonnes on the Gdynia -South Sweden ports lines and about 150 - 200,000 tonnes on the line between Gdansk agglomeration ports 3 and Finland . The above factors make the port of Gdynia considers some possibilities of ferry berths' localization. As a result, a container terminal on the Helskie Quay was equipped with a new temporary ferry terminal. Construction of a multi-berth ferry terminal in the VIII Basin is already planned by the ~ommercial Sea Port of Gdynia SA - and it is directly connected with completion of E.Kwiatkowski route and its linking with the peripheral motorway of the Gdansk agglome­ ration. The other localization possibilities were also being discussed. Nevertheless, both ports, Gdansk and Gdynia, have advisable locali­ zation possibilities for modern ferry terminals - with attractive value in respect either to their localization against sea and both ports towns, and to the road connections with direct and further hinterland.

3 Tubielewicz A, Forecast of turnover, directions of investment, sources and methods of financing priority infrastructural investments in Polish ports until 2010. Gdansk, February 1995. 56 0 . D~bicka

But at present, it is the port in Swinoujscie to be best prepared for handling ferry traffic. Swinoujscie ferry terminal and its extensive modernization is a subject of special interest and importance. The modernization works started in 1988, embracing improvement of two already existed berths, construction of the three additional ones, con­ struction of modern passenger terminal, and a new passport and customs clearance facilities for cars. The car terminal will offer 11 gates (in that one for dangerous goods). Mter modernization Ferry Terminal will be able to handle 15 vessels daily (in that car-rail ferries), offering a yearly capacity amounting: 850,000 passengers, 150,000 passenger cars, 100,000 trucks and 60,000 railway cars. The ports prepare themselves to new situation on Baltic shipping market. They are aware of the latest tendency for steady concentration of oceanic trade in several base ports - while the other Baltic ports become the regional ones, adapting themselves to the new role by con­ structing specialized ro-ro berths, terminals for feeder services and regu­ lar Baltic lines. A chance of attracting cargo/passengers to Polish ports is strictly connected with construction of the European North-South trans­ port corridors, running from Scandinavia, via Gdansk and Szczecin agglo­ merations, to the Southern Europe and further to the Near East (TEM and TER projects, construction of A-:1 Motorway in Poland). A favourable localization of Poland in that system may be conducive to the develop­ ment of sea-land transit along the North-South route. The POLLINK system, providing the shortest ferry-rail and ferry-road connection be­ tween Finland, south-east Sweden, through Poland, with Southern Euro­ pe, deserves a great attention. It embraces a ferry connection between ports of Stockholm and Gdansk agglomeration, thus creating new chances for Polish ports and ferry operators. A foreseen growth in ferry transpor­ tation and in ro-ro turnover make Polish ports face new tasks with respect of quality and quantity. Hence, beside the modernization of ferry terminal in Swinoujscie, new ferry and ro-ro terminals are planned to be construc­ ted in Gdansk and Gdynia. Nevertheless, one fact should be remembered. Competition in ferry shipping will be much more intense in future, with operators incre- Ferry shipping on the Baltic Sea -Polish case 57

asing their efforts to obtain cargo and passengers. Already nowadays Polish ports and ferry operators must be aware of growing competition with modern ferry terminals in Rostock, Warnemiinde, Sassnitz, Tra­ vemiinde and Kiel. Tending to increasing competitiveness of the offered services, Polish ferry operators should lay stress, in particular, on improving these quality proprieties of their services, which enable enhancement the value of Poland's geographical localization- as a transit country on the European transport map. The growth of such quality aspect as direct transportation, combined with further development of combine transportation- thus with growing position of ferry operators in intermodal transport chains, make serious chance for more intense ferry transportation, both passenger and cargo, passing through Polish ports.

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Ports and counlly's Transport Policy in market economy". Wyzsza Szkola Morska, Szczecin. (In Polish). 12. Szwankowski S., Tubielewicz A, 1991, Baltic Ports and Shipping under the Eco­ nomic and Political Transformations in the Central and East Europe, Gdansk. (In Polish). 13. Szwankowski S. and others, 1995, Polish Transport System in the Network ofBaltic Connections, WW IM 5041. (In Polish).