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The Effects of Fixed Links – Case Studies from the Great Belt And

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The Effects of Fixed Links – Case Studies from the Great Belt And May 2013 The effects of fixed links – case studies from the Great Belt and Øresund Andresen Analyse Side 1 May 2013 Introduction The fixed links across the Great Belt and Øresund have significantly improved mobility and accessibility between eastern and western Denmark and between Denmark and Sweden and hence have given businesses and citizens new opportunities. Fixed links create a number of other benefits in addition to the very real reduction in travel time and the resulting travel costs. The capacity of the transport corridor increases substantially and the uncertainty in commercial supply chains diminishes as the fixed links increase punctuality. Short lead times and just-in- time deliveries play an increasingly important role in today's society. The certainty that goods will arrive quickly and on time, increases with the fixed links. The box below shows the specific effect of fixed links: This paper looks at practical examples of how the fixed links across the Great Belt and Øresund have created growth and jobs from a larger regional and national perspective. Andresen Analyse Side 2 May 2013 Facts about the fixed links Great Belt Øresund Fehmarnbelt Year of opening 1997 (rail), 1998 (road) 2000 Planned 2021 Length Approx 18 km Approx 16 km Approx 19 km Context Domestic Cross-border Cross-border Local catchment area Korsør (14,500 Copenhagen city Rødby/Rødbyhavn inhabitants) (700,000 inhabitants), (3,900 inhabitants) Nyborg (31,500 Malmø (303,000 Puttgarden (Fehmarn: inhabitants) inhabitants) 13,000 inhabitants) Regional catchment area Copenhagen-Triangle Øresund region Fehmarnbelt region area - Århus Traffic before opening, 8,330 (1997) 960 (1998) 5,331 (2012) vehicles Traffic 2012, vehicles 29,745 18,485 5,331 Dominant travel Leisure Commuting Leisure purpose, vehicles Source: statistikbanken.dk, Shippax, sundogbaelt.dk, oresundsbron.com, Great Belt link’s traffic effects, Sund & Bælt (2008) 1. Effects of the Great Belt fixed link The Danes quickly took to the fixed link across the Great Belt. It is now taken for granted and a necessity, which Danes and Danish companies cannot do without in their daily lives. The need to travel across the Great Belt already existed before the fixed link was built – most had family or friends on the other side, and the major Danish companies were already established or had clients on both sides of the Great Belt. The Great Belt fixed link brought Danish companies into an era where travel over water need not be planned well in advance, and where it became possible to go to a meeting in western Denmark in the morning and in eastern Denmark in the afternoon. The Great Belt fixed link has brought both Denmark’s and companies' internal structures closer together. A study conducted by the research institute, Sonar, for Sund & Bælt a year after the opening of the fixed link across the Great Belt showed that 18 per cent of the companies surveyed had increased their transport volumes across the Great Belt after the opening of the fixed link.1 Reduced travel time, flexibility and new customers are the main reasons why companies have increased their activities on the opposite sides of the Great Belt. The opening of the Great Belt fixed link has benefited businesses across Denmark, as the examples from different parts of the country in the next section illustrate. 1 Erhvervslivet og Storebælt – tilpasning i to hastigheder, Sund & Bælt (1999) Andresen Analyse Side 3 May 2013 Over the first ten years following the opening of Great Belt fixed link, Denmark had high economic growth. The Great Belt Bridge made it possible to handle the rising transport volumes as a result of the economic growth. On the tenth anniversary of the Great Belt Bridge in 2008, Sund & Bælt A/S produced the publication, Great Belt and Business Life, in which Peter B. Jepsen, Communications Director at Danske Fragtmænd says: "Danske Fragtmænd wouldn’t have been able to handle the increasing amount of freight, if the Great Belt Bridge hadn’t been there," 1.1 Effects of the Great Belt fixed link – case studies In the years following the opening of the fixed link across the Great Belt, a number of large companies restructured their logistics and improved their competitive edge by centralising production, storage, and distribution.2 The following are some examples of companies that have increased their competitiveness as a result of the fixed link across Great Belt. The Carlsberg brewery – streamlined production In 2001, Carlsberg moved a beer production line from the brewery in Valby in Copenhagen to Fredericia in East Jutland. Also, the Carlsberg-owned bottling plant, Coca-Cola Tapperierne A/S, now bottles Coca-Cola in Fredericia and distributes the drink to the whole country. The bottling was previously carried out in both Glostrup and Fredericia.3 Some years later, Carlsberg decided to consolidate all production at the brewery in Fredericia, where it had built ultramodern production facilities. In December 2008, the last beer was bottled at the legendary brewery in Valby.4 The beers are now shipped by train across the Great Belt to eastern Danish consumers. The fixed link across the Great Belt has thus made possible a high capacity, environmentally friendly and efficient transport for Carlsberg and streamlined its production. The TDC telecommunications company – better use of resources In 1999, TDC opened a central warehouse in Odense on Fyn, from where it distributes equipment and spare parts to the whole country. TDC previously had three main warehouses at Århus in Jutland, Copenhagen on Zealand and Odense on Fyn.5 With the fixed link across the Great Belt, TDC has been able to streamline the distribution of equipment and spare parts, and the company's competitiveness has been strengthened as a result of this. 2 Storebælt fører til centrallagre for store virksomheder, Ingeniøren, 13. september 2002 3 Storebælt fører til centrallagre for store virksomheder, Ingeniøren, 13. september 2002 4 Carlsbergdanmark.dk 5 Storebælt fører til centrallagre for store virksomheder, Ingeniøren, 13. september 2002 Andresen Analyse Side 4 May 2013 René Skjøde Andersen, Vice President of TDC, Installation Central and North Jutland, Fastnet Norden, states in the publication, Great Belt and Business Life that the Great Belt Bridge gives TDC the ability to optimise resources – especially when there were emergency requirements as a result of the torrential rain that hit eastern Denmark and the Copenhagen area in particular during the summer of 2007 and which caused major water damage. "The goods are delivered quickly, and that's a huge advantage for TDC," says René Skjøde Andersen, TDC. The dairy company, Arla, experienced logistical benefits Arla is a farmer-owned cooperative that has owners in Denmark, Sweden and Germany. In 2011, Arla had a turnover of EUR 7.4 billion and 17,417 employees.6 For companies such as Arla, producing goods with a short shelf life, there are major logistical benefits associated with the Great Belt Bridge.7 By providing fast and flexible transportation, the Great Belt Bridge has been a basis for Arla being able to develop efficient and competitive production facilities and logistics in Denmark. Every day Arla transports large quantities of milk across the Great Belt – in both directions! The organic movement is strongest in large cities, therefore large amounts of organic milk produced on farms in South Jutland are transported to the Slagelse Dairy on Zealand, where it is processed and finally ends up on Copenhagen's dining tables. Slagelse Dairy supplies the whole of Eastern Denmark with milk and fermented milk products as a result. Conventional milk is shipped from Zealand to Jutland. In total, around 50 tankers drive from Jutland to Zealand and 14 tankers from Zealand to Jutland every week. This means that 293,000 litres of milk are shipped across the Great Belt Bridge every day of the week.8 When too much milk is produced, it can be driven to dairies in Sweden, mainly Kalmar. Whey is transported in the opposite direction, from Sweden to Denmark – all the way to Jutland – as that is the one place in Denmark where whey is processed.9 Post Danmark Leasing A/S – better organisation of the company Post Danmark Leasing A/S handles the purchase of vehicles, service, repair, maintenance and claims administration of Post Danmark's fleet. The company is owned by Post Danmark A/S, which leases about 5,000 vehicles from the subsidiary and has more than 35,000 crossings over the Great Belt fixed link each year.10 In 2008, the Managing Director of Post Denmark Leasing A/S, Per Henrik Brask, told Sund & Bælt of the way that the Great Belt Bridge had had an impact on how the company had organised itself. More than half of the company's employees now work from home offices around the country, while the management 6 Annual report 2011, Arla, http://www.arla.com/Images/arla.com/PDF/annual-report/2011/DK_2011.pdf 7 Interview with Torben Hansen, Category Manager, Arla, 1 February 2013 8 There are 32,000 litres of milk in a tanker. 9 Interview with Torben Hansen, Category Manager, Arla, 1 February 2013 10 Great Belt and Business Life, Sund & Bælt A/S, (2008) Andresen Analyse Side 5 May 2013 is physically located in Hvidovre, near Copenhagen. With the Great Belt Bridge, management can simply devote just a few hours to their meetings with employees west of the Great Belt.11 "The fixed link provides such flexibility that it’s no longer necessary to plan the trip. It just works," Per Henrik Brask, Post Denmark Leasing A/S. The east coast of Jutland experienced growth Municipalities along the east coast of Jutland, between Århus and Lillebæltsbroen, experienced economic growth and a rising number of jobs during the years following the opening of the fixed link across the Great Belt.
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