Freight and Logistics Advancement in Central/South-East Europe - Validation of trade and
transport processes,
Implementation of improvement actions,
Application of co-coordinated structures
WP 5 Capacity building and pre-feasibility studies
Action 5.3.2 Pre-feasibility study waterway line AT-RO and Danube Logistics
Date:
Version:
22.10.2012
[approved]
Public Document
Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
Involved FLAVIA partners:
PP8, Upper Austria University of Applied Sciences Logistikum Steyr, Stefan Rotter, Gerald Aschauer, Austria
The information in this document is provided as is, and no guarantee or warranty is given
that the information is fit for any particular purpose. The user thereof uses the information
at its own risk and is solely liable for its usage.
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Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
Table of Content
1 Executive Summary ........................................................................................................... 4 2 Project Background ........................................................................................................... 6 3 Introduction......................................................................................................................... 8 3.1 The Pan-European Corridor 7 – Danube Corridor ................................................... 8 3.2 Market Analysis along the Danube Waterway ......................................................... 9 3.3 System of Inland Waterway Transportation ........................................................... 13 Danube Waterway ................................................................................................................ 14 Danube Ports and Terminals ................................................................................................ 15 Logistics Service Provider and Shipping Companies ........................................................... 16 Shipbuilder ............................................................................................................................ 17 External Stakeholders ........................................................................................................... 18 3.3.1 3.3.2 3.3.3 3.3.4 3.3.5 4 The Process Industry in Austria – Identification of Needs for Inland Waterway
Transport ......................................................................................................................... 21 4.1 Structure of the Survey ............................................................................................ 21 4.1.1 Section I: Current Challenges ............................................................................................... 21 4.1.2 Section II: Improvement Measures for the Future ................................................................ 22 4.2 Structure of Interviewees ......................................................................................... 22 4.3 Results of the Survey ............................................................................................... 22 4.3.1 Results on Section I: Current Challenges............................................................................. 22 4.3.2 Results on Section II: Improvement Measures for the Future .............................................. 26 5 Liner Services on the Danube waterway ........................................................................ 27 5.1 General Concept of an Inland Waterway Liner Service ........................................ 27 5.2 Existing Liner Services on the Danube Waterway ................................................ 28 Overview ............................................................................................................................... 29 Experiences from the Container Liner Service by Helogistics – HELO1 .............................. 29 5.2.1 5.2.2 5.3 Existing Research Studies on Liner Services on the Danube.............................. 30 Container liner services between Austria and Black Sea – the COLD study ....................... 30 Ro/Ro liner service between Central and Eastern Europe ................................................... 33 The KoLEG study – Combined Liner Service between Austria and Romania ..................... 35 5.3.1 5.3.2 5.3.3 -2-
Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
6 Minimal Requirements to Implement a Regular Liner Service on the Danube
Waterway ......................................................................................................................... 39 6.1 Market und Competition Situation .......................................................................... 39 6.1.1 Market Boundaries ................................................................................................................ 39 6.1.2 Requirements of the industry ................................................................................................ 40 6.1.3 Connection Specification ...................................................................................................... 41 6.1.4 Qualitative aspects ............................................................................................................... 42 6.2 General Business Model .......................................................................................... 43 6.2.1 Organisational aspects ......................................................................................................... 43 6.2.2 Technical solution ................................................................................................................. 43 6.2.3 Target groups........................................................................................................................ 44 6.2.4 Financial needs and investments ......................................................................................... 44 6.3 Service Launch Plan ................................................................................................ 46 6.4 Business Outlook ..................................................................................................... 48 7 Conclusions ...................................................................................................................... 49 8 Lessons Learned during the Implementation of the Pre-feasibility Study ................. 51 9 List of References ............................................................................................................ 52 -3-
Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
1 Executive Summary
Facing both increasing freight transport volumes and reinforced climate protection targets in the
near future, transport modes associated with excess capacity and competitive prices as well as
being environmentally-friendly in its operations are supposed to have a good starting position in
order to handle these prospective challenges. One of these alternative transport modes is
represented by inland waterway navigation. The Danube waterway represents not only a natural
transport axis connecting Central with Easter Europe but also the most international inland waterway worldwide. The Danube waterway crosses 10 European countries. Accordingly, the system of
inland waterway transportation is rather extensive, ranging from port authorities via shippers to
logistics service providers. This circumstance makes an international cooperation indispensable.
Despite this good initial position of the Danube waterway as being an alternative transport
mode, there are also considerable challenges to be resolved. Questioning some important
stakeholders involved in the system of inland waterway transportation about current challenges
in terms of transporting on the Danube waterway resulted in a list of improvement measures.
With nautical bottlenecks and missing liner services leading the way, the author put the focus on
the latter. In doing so, the general concept of a liner service on inland waterways is introduced,
followed by brief insights into existing liner services on the Danube waterway.
In order to introduce new services on the Danube waterway, several studies regarding liner services have been conducted in recent years. In this context, a container liner service operating
between Budapest and Constanta, which has been terminated recently, is examined. A major
obstacle in this example has been given by an inability to stick to departure plans owing to nautical bottlenecks as well as decreasing transport volumes. In 2011 the ports of Enns (AT) and
Galati (RO) started a project that deals with combined liner services, too.
Basically, the main idea is to launch a reliable transport service which serves certain Danube
ports according to a fixed schedule. Most of to-day’s inland waterway shipments are organized
via contractual charter transports that are dedicated to a certain company with high transport
volumes. Due to both nautical bottlenecks and the diminishing willingness to transport containers on the Danube by companies leads to this situation. In order to circumvent the destiny of the
previously mentioned liner service, project coordinators focus on railway transportation as a
back-up system to increase reliability, sufficient transport volumes to ensure regular transports.
The pre-feasibility study finally set up a business case for a liner service between Austria and
Romania serving the port of Enns, Budapest, Belgrade and Constanta. The business case identified biomass and fertilizers as suitable cargo for the liner service. The results indicate that the
transport costs for pure inland waterway navigation are competitive. In case of combining IWW
and railway transportation, the costs are still lower compared to truck transport. Therefore, the
before-mentioned challenges can be circumvented by using railway transportation as a back-up
system and still achieve a competitive freight price for this service.
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Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
The business case also incorporates investments into several areas. The most important areas
are given by nautical conditions, shipping equipment and information and marketing activities.
These investments constitute key issues for a positive development in the future. Furthermore,
the estimations regarding investments also address major actors that are involved in introducing
a liner service. The business case for introducing a liner service between Austria and Romania
further encompasses organizational issues e.g. transport schedule, technical solution, e.g.
process chain, as well as a final, detailed service launch plan. This plan gives an overview
about actions within the implementation phase, responsibilities as well as the time horizon for
the launch.
The reasons for a lack of competition can be concluded by the chicken-and-egg problem. As
long as no liner service will be implemented, there will not be enough transport volume provided
by the shippers that will be shifted. As long as there will not be enough transport volume available, no liner service will be implemented or successful. Additionally, still more efforts have to be
taken to communicate about transport possibilities and potential on the Danube. It strongly depends on the acceptance of all needed participators. As experience shows, especially nautical
problems have to be overcome and efficient backup systems have to be developed. The realization in general is in terms of capacity, equipment and monetary investment (excluding nautical
work) not a huge obstacle or hindering problem.
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Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
2 Project Background
Based on preceding INTERREG projects, e.g. ECO4LOG or INTERIM, the project FLAVIA also
focuses on difficulties encountered in freight transport in context of intermodal terminals, market
players and cross border business. Moreover, FLAVIA’s goal is to develop the logistic corridor
from Central to South-East Europe. More specifically, the FLAVIA project addresses the following problems in intermodal freight transport:
•
Modal split of rail and inland waterway dropped down despite of increased volumes
•
Increasing road congestions
•
Big delays of freight trains at border crossings
•
Obsolete terminal technique
•
Mental barriers of market players against intermodal transport
The Central Europe project intends not to develop a new “spatial planning corridor” or a specific
road or rail connection. The approach of the project is logistic process oriented with the aim to
improve intermodal cargo flows instead of the building of new infrastructure. This can avoid or
concentrate investment funds. Through the logistical approach and instruments being used (like
e.g. benchmarking, accessibility analyses, running time and bottleneck analyses, implementation of quality standards) new and innovative measures for a better interconnectivity of the regions will be developed and implemented. Also the exchange of knowledge and the promotion
of best-practice are elements of the project1. More information can be retrieved from www.flaviaonline.de.
The study at hand aims at providing insights into the field of inland waterway transportation with
respect to the Danube waterway. More specifically, liner services on the waterway line between
Austria and Romania are investigated. However, this pre-feasibility study is based on four main
pillars: (i) provision of general information regarding Danube waterway transportation based on
a desktop study, (ii) provision of detailed information on the identification of needs for Danube
waterway shipping through conducting a small empirical study and (iii) provision of specific information on liner services on the Danube waterway, especially between Austria and Romania,
through expert interviews and (iv) elaboration of a pre-feasibility study for a new liner services
on the Danube river.
The general motivation to dedicate a pre-feasibility study to the topic of inland waterway navigation is reasoned by the overall marginal share of inland waterway transportation manifested
within Europe’s modal split. Despite steadily growing freight transport volumes in the future, the
inland waterway navigation is currently not able to attract significant shares of these prospective
volumes beside the Rhine-River-System2.
1
2
Cf. FLAVIA, 2010.
Cf. EUROSTAT, 2011a.
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Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
Therefore, this study should give an overview about the current system and its performance of
transporting on the Danube waterway on the one hand and provide the reader with insights into
a potential approach to increase the commercial attractiveness of using the Danube as an alternative transport mode on the other hand. This strategy implies a more detailed overview:
•
Providing an overview about the system of inland waterway navigation, markets and target groups
•
Specifying current challenges that companies faces with transports on the Danube waterway as well as identifying needs for improvement in order to increase commercial attractiveness of the Danube waterway
•
Introducing the reader to the field of liner services on the Danube waterway and providing brief insights into former studies set up for combined liner services along the Danube
corridor.
•
Setting up a meta-analysis based on existing studies related to liner services
To start with, some initial information is given by presenting the Danube corridor and markets of
interest for a liner service between Austria and Romania. Thereafter, a clear picture about the
system of inland waterway transportation is shown by means of introducing all relevant stakeholders. Based on that, an empirical study gives insights into the actual performance as well as
fields for improvements. One major improvement measure indicated by the interviewed companies represents liner services which are analyzed in the final part of the study. As a conclusion,
key findings are summarized and future developments are outlined.
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Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
3 Introduction
This chapter represents a starting point for the reader. First of all, the Danube Corridor as PanEuropean Corridor 7 and respective markets are shortly described. Thereafter, the system of
inland waterway transportation is presented.
3.1 The Pan-European Corridor 7 – Danube Corridor
The Pan-European Corridor 7, the Danube Corridor, is one of the three European-wide EastWest-Connections. After the revision of the Pan-European Networks, the Danube axis is regarded as Railway Corridor No. 17, leading from Paris, Strasbourg, Karlsruhe, Stuttgart, Munich, Salzburg, Linz, and Vienna to Budapest. The axis connects the existing infrastructure between four national states (France, Germany, Austria and Hungary). The magisterial area between Paris and Budapest covers about 35 million inhabitants and about 16 millions of employees, whereas within the direct zone of attraction of the railway terminals about 9 millions of
people are living. Regarding the traffic infrastructure, the corridor is continuous bi-modal (road
and railway) and in Bavaria, Austria and Hungary tri-modal (road, railway and inland waterway).
The East-West Danube Corridor is connected to the Baltic-Adriatic corridor near Vienna and
Bratislava. By means of this connection the Danube Corridor contributes considerably to the
European integration.3
Danube Corridor
Figure 1: Pan-European Corridor 7 - Danube Corridor4
Being the second longest river in Europe, the Danube is able to link Western and Eastern Europe through the Rhine, the Main and the Rhine-Main-Danube canal. More precisely, it connects the North Sea with the Black Sea crossing the following European countries: Germany,
Austria, Slovakia, Hungary, Croatia, Serbia, Romania, Bulgaria, Moldova and the Ukraine.
3
4
Logistikum Steyr, 2010a, p. 13.
viadonau, 2008, adapted illustration.
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Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
Furthermore, this corridor encompasses facilities, necessary for developing combined transportation, i.e. generating intermodal chains of inland waterways with other modes of transports.5
3.2 Market Analysis along the Danube Waterway
As mentioned before, the Danube crosses 10 European countries, where six of them constitute
member states of the European Union, Croatia and Serbia represent potential candidate countries and Moldova and Ukraine are not within the EU. In the following, Austria’s business activities with the other markets located within the Danube Corridor are analyzed.
In 2010, Austria’s most important trading partner within the Danube Corridor represented Germany. Approximately, 45 billion Euro had been imported from Germany to Austria, whereas
products and services amounting to 34.5 billion Euro had been exported from companies located in Austria. Far behind Germany, Hungary had been the second most important trading
partner to Austria having 3.1 billion Euro of imports and 3.3 billion Euro of exports. Subsequent
major markets for Austria are represented by Slovakia (2.6 and 2.2 billion Euro) and Romania
(941 million Euro and 1.7 billion Euro). In general, there had been an average improvement of
import trading activities of 35 % and of export trading activities of 12 % in comparison to the
year 2009.6
Due to the Danube’s geographical characteristics, Austria has the ability to penetrate eight
Eastern European countries through using the Danube waterway as a transport mode. In total,
those markets represented a trading volume of about 19 billion Euro (import: 8.6 billion Euro;
export: 10.2 billion Euro) for Austria in 2010.7 Furthermore, the following economic indicators for
those countries for 2010 could be identified (without considering Moldova):
Austria
Inhabitants
(in millions)
8.4
GDP8
(in EUR 1,000 million)
286
GDP per capita
(in EUR)
34,100
GDP growth
(real, in %)
2.3
Slovakia
Hungary
Croatia
Serbia
Romania
Bulgaria
Ukraine9
5.4
10
4.4
7.4
21.5
7.6
45.8
66
97
46
N/A
124
36
248
12,100
9,700
N/A
N/A
5,800
4,800
3,100
4.2
1.3
N/A
N/A
-1.6
0.2
4.2
Country
Table 1: Economic indicators of markets within Danube Corridor10
5
Cf. Corridor 7, 2012.
Cf. Statistik Austria, 2012.
7
Cf. Statistik Austria, 2012.
8
Cf. EUROSTAT, 2011b.
9
Cf. ÖIR, 2012, p. 28.
6
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Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
With respect to the most eastern Danube countries, Romania and Ukraine, economic growth
rates – despite the negative growth rate for Romania in 2010 – are considered to increase considerably. For instance, the following growth rates can be identified:11
Figure 2: Economic growth rates for Romania and Ukraine
Taking these economic growth rates and the population of about 67 million inhabitants into account, Romania and Ukraine constitute emerging markets within the Danube corridor. However,
there are also other markets which could be penetrated using the Danube waterway as a transport mode. In this context, the Black Sea region (including Ukraine, Turkey, South-Russia,
Georgia, Armenia, and Azerbaijan) plays an extraordinary market. With about 140 million inhabitants, a BIP of 9,500 USD per capita and an annually economic growth rate of 6 % (2001-2007),
this region is highly attractive for Austria as an export-oriented country. Nevertheless, currently
Austria’s imports are higher than its exports.12
Going back to Austria’s most important trading partners in Eastern Europe, the Austrian Institute
for Regional Studies and Spatial Planning (ÖIR) analyzed pre-selected countries within the Danube corridor (except Germany) and the Black Sea region according to Austria’s import and
export volumes. For Austria’s import activities the following picture could be sketched.
10
Cf. IWS, 2012.
Cf. ÖIR, 2012, p. 30.
12
Cf. ÖIR, 2012, p. 5.
11
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Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
BSC – other Black Sea countries
Figure 3: Austria's imports from respective markets (1995-2010; in 1,000 tons)13
As can be seen in figure 3, Slovakia, Hungary and Ukraine represents the most important markets for Austria within the Danube corridor concerning tons of cargo transported to Austria. This
situation also reflects the above quoted major trading partners of Austria on a monetary value
basis. Ukraine represents a major source for iron ore for the Austrian steel producer voestalpine, located in Linz. The basic mean of transporting this type of commodity is the inland waterway navigation on the Danube waterway. Other products that are imported from these markets
are agricultural products and life animals, crude and manufactured minerals and petroleum
products. Further upcoming markets represent Romania and Russia.
On the opposite side, Austria’s outgoing cargo is transported to the following countries with the
respective distribution.
13
ÖIR, 2012, p. 11.
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Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
BSC – other Black Sea countries
Figure 4: Austria's exports to respective markets (1995-2010; in 1,000 tons)14
At the export side, again Hungary and Slovakia are identified as major markets for Austria regarding transport volumes. Austria ships mainly petroleum products, machinery, transport
equipment and chemicals to these markets.
In Austria, Bavaria and Hungary, the three transportation modes road, railway and inland waterway provide advantageous infrastructural prerequisites.15 Despite this supposed advantageous infrastructural prerequisites in Austria, the Danube waterway plays only a minor role within the national modal split. In Austria, the freight transport volumes including road, rail and inland (Danube) waterway transports accounted for 449.8 million tons in 2010. As can be seen
from figure 5, road transportation clearly outperforms the other transport modes. On average
road transportation amounts up to 74 % of the overall freight transport volume, whereas inland
waterway navigation only accounted only for 2.3 %.16
This unfavorable performance of inland (Danube) waterway transportation within Austria’s modal split might be influenced by several factors introduced within the subsequent chapter.
14
ÖIR, 2012, p. 12.
Logistikum Steyr, 2010a, p. 13.
16
Cf. Statistik Austria, 2012.
15
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Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
Figure 5: Development of Austria's modal split (2008- 2010, in million tonnes)17
3.3 System of Inland Waterway Transportation18
This section deals with all stakeholders that are involved in the system of inland waterway
transportation. Firstly, a graphical overview about the system is provided. Secondly, each
stakeholder influencing this system is described in detail. The individual elements within this
system are represented by facilities, stakeholder, natural factors of influence, other transport
modes and external stakeholders and forces e.g. legislation, information systems and logistics
management. A first overview of the system inland waterway is shown by the figure 6:
Figure 6: System of inland waterway transport19
17
Own illustration based on Statistik Austria, 2012.
Cf. Logistikum Steyr, 2010a.
19
Logistikum Steyr, 2010a, p. 17.
18
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Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
3.3.1
Danube Waterway
The international Danube waterway has a length of 2,415 km – measured from Kelheim (DE)
until Sulina (RO) (Sulina represents river kilometer 0) which represents the navigable section of
the Danube. On the way from Germany to Romania, the Danube flows through 10 neighboring
European member states, hence, it represents not only the second largest river in Europe but
also the most international river on earth.
As can be seen above, not only the Danube waterway, but all other inland waterways in Europe
are classified by the United Nations Economic Commission for Europe (UN/ECE) and the European Conference of Ministers of Transport (ECMT), which became valid in 1992. The basic
technical dimensions (length, width, draft and tonnage and clearance of bridges) are essential
of the classification of the different types of ships. Basically, there are 7 classes, but only
classes IV to VII are relevant for economical transportation. The Danube waterway is divided
into three navigable sections, which can be characterized as follows:
SECTIONS
Upper Danube
Middle Danube
Lower Danube
Start point
Kehlheim (DE)
Gönyü (HU)
Eiserne Tor (RO)
End point
Gönyü (HU)
Eiserne Tor
(RO)
Sulina (RO)
Length
621 km
860 km
930 km
Altitude
~ 250 m
~ 70 m
~ 35 m
Table 2: Navigable sections on the Danube waterway
Since 1992, when the Rhine-Main-Danube waterway was opened through building the RhineMain-Danube Canal (Length: 171 km) the length of this waterway increases up to 3,504 km;
connecting henceforth 14 European states. Simultaneously, the Rhine-Main-Danube Canal
enabled an end-to-end navigable connection from the North Sea to the Black Sea, therefore,
the importance of this transport route also increased in economic terms. Shipping companies
need to pay fees for passing through the Rhine-Main-Danube Canal and the Danube-Black-Sea
Canal in Romania.
The Austrian part of the Danube waterway encompasses 350 km, which counts up to 50% of
the above-described Upper Danube section and is demarcated by an eastern border (Hainburg
– river kilometer 1,880.2) and western border (Passau – river kilometer 2,201.7). The ships
passing through this section of the Danube have to hurdle an altitude of 150 meters. Referring
to the above-mentioned classification by UN/ECE, the Austrian part of the Danube corresponds
to class VIb.
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Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
3.3.2
Danube Ports and Terminals
According to the website www.donauports.info there are more than 70 ports along the Danube
waterway located in the 10 Danube countries. Some of those Danube ports or terminals
represent major logistical hubs, i.e. Linz and Enns in Austria or Contanta and Galati in Romania.
These infrastructural nodes capture a highly important role within transport networks and influence the competitiveness of the Danube waterway as a transport mode considerably. Therefore, nowadays some policy makers pay special attention to develop strategically infra- and suprastructure respectively at certain nodes. Reasons for developing Danube ports and terminals
are manifold and diverse. Making use of the multiplier effect due to multi-modality or positioning
production plants strategically by companies in order to ship big quantities along the Danube
waterway are just two examples for development work. The following two examples should provide practical insights into the importance of Danube ports and terminals. These ports could
serve as starting and end points of a possible transport chain of new liner services.
Port of Enns
The origin of the port of Enns, Upper Austria, traces back to the 1970s. Today this port operator
links all three transport modes ,road, railway and inland waterway transportation. By means of
its location the port of Enns represents an advantageous site for many companies. In the year
2011, this port handled approximately 280,000 TEU (compared to 2004: 45,000 TEU). In terms
of development work, the port of Enns is engaged in several international projects. In the year
2008, the port of Enns signed a cooperation contract with the port of Galati, Romania. The contract implies a project dealing with the launch of a new liner services between Austria and Romania, which will be presented later on.
Figure 7: Port of Enns
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Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
Port of Galati
This Romanian Danube port has the ability of handling penta-modal transports, i.e. beside road
and Danube waterway transport, this logistical hub is able to handle both types of railway transports: normal gauge (1,435 mm) and broad gauge (1,520 mm). The port is operated by Metaltrade International and is equipped with adequate infra- and suprastructure.
Figure 8: Port of Galati
The Ennshafen provides intermodal logistics services between North, South and East of Europe
and Austria, whereas the port of Galati acts as a pentamodal hub for servicing the Black Sea
Region as well as the South of Russia.
3.3.3
Logistics Service Provider and Shipping Companies
The market for Danube waterway shipping business consists of many companies offering different services. Basically, the market consists of two types: inland navigation companies and independent ship owners. Beside these two main types, specialized logistics service providers as
well as agencies which are responsible for linking consignor’s demand and shipping companies’
supply plays an important role in this market. Inland navigation companies perform the management and execution of transports on inland waterways either with their own or with external
ships. In any case, this type of market player takes responsibility for scheduling multiple ships
and manages and prepares the transports onshore. Whereas the independent ship owners
have no management onshore and are the ship’s masters of their own ships. Recently, both
inland navigation companies and independent ship owners have cooperated more intensively.
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Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
An overview about the actors in this market can be obtained from the “Blue Pages” which
represents a register with all inland navigation companies, forwarding companies and agencies.
Moreover, one is able to define his requirements more precisely by selecting the kind of transported goods, additional services and so on. The following table should give an overview about
some market participants:
Company (Country)
Operating alongside the Danube in
Company
Panta Rhei Befrachtungs- und Speditions GmbH (AT)
Ukraine, Moldova, Romania, Bulgaria, Serbia, Croatia, Hungary,
Slovakia, Austria, Germany
SC Accord Ltd. (UA)
Company
Ukraine, Moldova, Romania, Bulgaria, Serbia, Croatia, Hungary,
Slovakia, Austria, Germany
Donau Star Schiffahrts- und Spedition GmbH (DE)
Operating alongside the Danube in
Company
Romania, Bulgaria, Serbia, Hungary, Slovakia, Austria, Germany
Gebr. Vaeth GmbH & Co. KG (DE)
Operating alongside the Danube in
Operating alongside the Danube in
Company
Operating alongside the Danube in
Company
Operating alongside the Danube in
Liner Service
Ukraine, Romania, Bulgaria, Serbia, Croatia, Hungary, Slovakia,
Austria, Germany
MSG EG (DE)
Ukraine, Moldova, Romania, Bulgaria, Serbia, Croatia, Hungary,
Slovakia, Austria, Germany
Erste Donau-Dampfschifffahrts GmbH (AT)
Ukraine, Romania, Bulgaria, Serbia, Croatia, Hungary, Slovakia,
Austria, Germany
Yes, Weekly service from Budapest to Constanta
Table 3: LSP and shipping companies
3.3.4
Shipbuilder
The shipbuilding business as an element of the system inland waterway has a further impact on
the performance of the considered transport mode. From a technical point of view, there are two
types of ships that are operating on the Danube waterway: (1) self-propelled ships and (2) not
self-propelled ships that are pushed by towboats. Moreover, these two types can be combined
additionally with so-called lighters that are also not self-propelled shipping units. Due to the
nautical conditions in Austria, a towboat is able to push up to four lighters which correspond to a
total loading capacity of 7,000 tons. Both of the before-mentioned types are able to transport
bulk goods, liquids, containers or general cargo. In more detail, the ships can be distinguished
between the following types regarding the goods shipped:
•
•
•
•
Tanker for liquids (e.g. chemical liquids, fuel oil, acids, but also nutritional oil or wine)
Ro-Ro-Ship (charging without any handling facilities, e.g. car carrier or transport of
heavy goods vehicles)
Bulk shipping (e.g. gravel, coal, ore, etc)
General cargo freighter
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In 2009 there were approximately 96,000 – in comparison to 2007: about 74,000 (+27%) –
shipping units locked in Austria. The average age of the Austrian shipping fleet is about 30
years. Due to this continuing obsolescence of the fleet, demand for new, especially for Ro-Roand container ships with new drive systems arises.
3.3.5
External Stakeholders
Beside the direct influencing parties, there are as well external actors, that influences the system indirectly and often in a long run.
National and International Transport Policy
The national and international transport policies have a considerable impact of the total inland
waterway system. As per definition transport policy deals with the management of processes of
mobility within passenger and freight transport on a national or international level. On an international level, especially multilateral and bilateral treaties on inland waterway play a decisive
role.
For the Danube waterway the Danube Convention is of high importance, which was signed in
1948. Main objective of this convention is to guarantee frictionless inland waterway transportation on the Danube waterway, so to enable navigation free of charges, contingents and authorizations. Another important aspect is the commitment of the Danube countries to maintain their
Danube sections in a navigable condition, to remain and improve the inland waterway transportation as well as to avoid obstacles or breakdowns on the shipping channel. The Danube Commission is responsible for monitoring the compliance with the posed regulations.
Due to the economic and political integration of Europe, the European traffic and transportation
policy gains in importance. With respect to Danube shipping the main objective of the European
Union is to create a common market for inland waterway transportation. This shall be achieved
through harmonization of competition laws on the one hand, on the other hand the traffic and
transportation policy aims at strengthening the cooperate inland waterway market by expansion
of the inland waterway infrastructure.
European projects, which aspire to an improvement of the European inland navigation market,
are the “European Action and Development Program for the European Inland Navigation” as
well as the project about “Trans-European Networks”. NAIADES includes recommendations for
community measures, for the member states and other participants, which summarize five
fields: market, fleet, workplaces and skills, image and infrastructure. Among others, it is recommended to advance investments by fiscal advantages and thereby to encourage entrepreneurial
initiative and market development or to improve the image of inland navigation by formation and
expansion of development networks.
TEN aims at the realization of a homogenous waterway network in Europe. In order to achieve
this objective, it is essential to optimize the efficiency of the existing infrastructure, to recover
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missing connection between waterways and to remove constraints through extension, enlargement or deepening as well as to provide the needed lock capacity. In April 2004, a new list of
priorities for TEN was approved, which focuses among other measures the expansion of the
Rhine/Maas-Main-Danube channel as well as the Seine/Schelde waterway.
Objective of the national traffic policy is to contribute to economic aims as well as to strengthen
the competitiveness of inland navigation. The two main areas of the national traffic policy are
infrastructure and traffic regulations. Main task of the traffic infrastructure policy is the creation
of a general framework for planning, construction, financing and maintenance of inland waterways. Other measures concern flood control, waterside as well as the construction and maintenance of ports. Traffic regulations of inland waterway concentrate on the regulations of inland
waterway market. Objectives are the liberalization and harmonization of the traffic market.
Information Management
A world without exchanging digital information is not imaginable anymore. The quality or function of every single process depends considerably on its precedent, accompanying and subsequent information. However, in terms of inland waterway transportation high-performance infrastructure and development of telematic systems determine the future and success of the transport mode regarded. In order to take account of these demands information and management
systems, so-called River Information Services (RIS), have been established within Europe.
The main goals of this initiative are to increase the traffic safety on the water and to increase
efficiency. River Information Services (RIS) are information services designed and customized
for inland waterway transportation. It enables the supporting of transport and traffic related issues and, of course, the coordination of logistics processes. Furthermore RIS is embedded
within the European as well as the Austrian transport policy (Austria’s “National Action Plan Danube Navigation”). In Austria the realization of RIS started in 2000 as the project called “Donau
River Information Services - DoRIS” by via donau which coordinates the implementation and
acts as the RIS operator since implementation of this system in 2006.
DoRis provides both shipping companies as well as external user on land information services
based on Automatic Identification System (AIS) transponder technology and electronic navigation charts:
• Display of the actual traffic situation (position of the own vessel and of other equipped
ones) by connecting the transponder to the Electronic Chart Display and Information
System (ECDIS) chart
• Free of charge exchange of safety-relevant AIS messages via the AIS transponder within equipped ships and locks in order to facilitate navigation
• Possibility of underlying the current radar image with the ECDIS chart image for improvement of safety
• Access to current ship data via an Internet web portal with the possibility to automatically
transfer the data to existing IT systems
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As can be derived above, the system of inland waterway transportation is complex and includes
many different stakeholders. The actors described in this system influence the competitiveness
as well as the commercial attractiveness of the Danube as a transport mode essentially. Due to
this fact, it would be interesting to know which one of the above-stated protagonists poses currently a challenge and what improvement measures are necessary for the future.
Therefore, the next chapter is dedicated to both conducting challenges and improvement measures in order to reason the current performance gap of the Danube waterway. In doing so, an
empirical study that includes major companies in the Austrian process industry as well as other
stakeholders had been conducted.
The Danube corridor VII represents an emerging market associated with high growth rates. In
addition this corridor could serve as a gate to integrate markets within the Black Sea and TRACECA regions. Expecting higher trade volumes between those markets as well as prospective
higher (road) transport operations, the Danube waterway represents an alternative, environmentally friendly transport mode.
Yet, the inland waterway system still suffers low commercial attractiveness due to its high complexity. In this context, high number of involved stakeholders, infrastructural as well as nautical
bottlenecks, and the lack of fulfilling requirements for logistics services (reliability, flexibility, service level, transport lead time, etc.).
Therefore, the following chapter aims at providing detailed insights into these challenges and
identifies initial needs for improving commercial attractiveness and competitiveness of the Danube waterway.
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4 The Process Industry in Austria – Identification of Needs
for Inland Waterway Transport
This chapter aims at identifying the basic needs for a specific industry in Austria in order to increase the commercial attractiveness of inland waterway transportation on the Danube waterway. The subsequent information is based on an empirical study conducted by the project partner LOGISTIKUM within another Central Europe project, namely ChemLog – Chemical Logistics
Cooperation in Central and Eastern Europe.20
Based on the before-presented system of inland waterway transport the basic questions that
need to be answered are as follows:
• What are major challenges that a company faces with transporting goods on the Danube
waterway?
• Which improvement measures are necessary in order to increase the attractiveness of
transporting on the Danube waterway?
Pertaining to receive answers to these questions, a survey guideline had been developed and
was distributed among 24 companies, experts and other institutions. The following subchapters
give insights into the methodology, the structure of interviewees and, of course, into the results
obtained.
4.1 Structure of the Survey
Basically, the interviewees introduced later on are asked about current challenges encountered
with transporting on the Danube waterway on the one hand and improvement measures needed
to increase the commercial attractiveness on the other hand.
4.1.1
Section I: Current Challenges
This qualitative section analyses the major root causes, that provoke challenges faced with
transporting on Danube waterway, to set the basis for deriving the measures for improvement
which are being collected in the second section. The current challenges are prioritized according to five categories:
•
Danube ports
•
Logistics service providers
•
Shipping companies
•
Characteristics of commodities
•
Characteristics of the transport mode Danube waterway
20
Cf. Logistikum, 2011.
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Furthermore, it has been decided that these categories represent the major players within the
system of inland waterway transport identified in the preceding desktop study. At the same time
they implicate areas of challenges in transporting on the Danube waterway and, therefore, constrain the attractiveness and performance of the transport mode.
4.1.2
Section II: Improvement Measures for the Future
Based on the facts of the preceding section, this section’s objective is to derive actions necessary in order to debilitate the root causes identified within the previous section, to furthermore
increase the overall commercial attractiveness of Danube waterway. Again, improvement
measures need to quote for the same actors in the system of inland waterway transportation
has been asked as mentioned before.
4.2 Structure of Interviewees
Basically, the protagonists within this empirical study were subdivided into four major classes:
•
Associations and chambers (4)
•
Port and infrastructure operators (3)
•
Process industry (11)
•
Logistics service providers (6)
In total, 24 interviews using a survey guideline were conducted.
4.3 Results of the Survey
In the following, the results regarding the above-stated sections are presented consecutively.
First of all, current challenges faced by the 24 interviewees in terms of transporting on the Danube waterway.
4.3.1
Results on Section I: Current Challenges
The company’s representative was asked to make a weighting among the above-quoted five
categories, using the following scheme: the notation 1 represents a minor challenge and notation 5 represents a severe challenge to be overcome. The following results are obtained (the
mean value across all assessments is calculated):
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Assessment
Danube ports
1.8
Logistics service providers
1.8
Shipping companies
2.3
Characteristics of cargo transported
3.1
Characteristics of the Danube waterway as an transport mode
4.2
n = 16 companies; 1…minor challenge, 5 severe challenge
Table 4: Initial assessment of challenges
As can be seen, the category Characteristics of the Danube waterway as a transport mode
clearly dominates the assessments concerning actual challenges harming the commercial attractiveness and performance of the Danube waterway. The second most important challenge is
represented through Characteristics of goods transported. The question that arises at this point
is: Why are those two categories perceived as actual challenges? By providing some subcategories derived from the preceding desktop study for each of the five higher-ranked categories, the interviewees were able to give comments on that or even made some own supplementations. The results are as follows:
Specification
Rel. weight
Danube ports
Information management
Infra- and suprastruktur
Inadequate track & trace services functions for shipper (no
common plattform that provide shippers with data from
river information system)
Lack of investments in multi-modality and, generally,in the port
infrastructure of Eastern European countries
33.3%
25.0%
Handling and stroage processes
Low safety standards and process quality for handling and storing
in Easter Europe
25.0%
Port locations
Transport distance and lead time of pre- and on-haulage (from/to
Danube ports) are disadvantegous
8.3%
Services offered
Missing information on services offered from the Danube ports
8.3%
Table 5: Challenges concerning Danube ports
According to the interviewed stakeholders in Austria, the Danube ports do not represent a key
challenge. Nevertheless, the interviewees mentioned an insufficient communication, e.g. track &
trace services, by the Danube ports towards companies. In addition to this, investments in multimodal ports, especially in Eastern European markets do not correspond to shippers requirements. Furthermore, low safety standards as well as process quality in terms of handling and
storing activities pose an obstacle for many interviewees.
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Specification
Rel. weight
Logistics service providers
Services offered
Problem solving competence
Education and training
Overall lack of information on services offered; more
specifically, no liner services are offered
No initiatives that focus on promoting inland waterway
transportation, overcoming existing obstacles and providing
customer specific solutions
Stronger focus on implementing inland waterway transportation in
adolescent's education, on boosting apprenticeship in this context
53.3%
13.3%
13.3%
Information management
Inadequate track & trace services functions for shipper
13.3%
Market situation
Decreasing supply and competition due to Mergers & Aquisitions;
missing investments
6.7%
Table 6: Challenges concerning logistics service providers
Similar to the Danube ports, the logistics service providers lack in communicating with potential
customers concerning services offered. More specifically, liner services had been mentioned
several times as a highly required improvement measure. In this context, a dilemma between
demanding side (shippers) and supplying side (logistics service providers and Danube ports
was identified: on the one side shippers are willing to shift transport volumes as long as there
are fully functional, well-established and competitive liner services, on the other side logistics
service providers and Danube ports are willing to offer respective services unless there are
adequate transport volumes to be shifted.
Specification
Rel. weight
Shipping companies
Services / Equipment offered
Missing liner services for shipper; no revitalization of the
equipment used
33.3%
Innovation
No progress in terms of innovation, e.g. unit loads, shipbuilding,
engines, etc.
26.7%
Image and cultural impact
Diverging business mentality in Eastern Europe, thus, resulting in
negative images of inland waterway transportation
20.0%
Education and training
Stronger focus on implementing inland waterway transportation in
adolescent's education, on boosting apprenticeship in this context
13.3%
Market situation
Decreasing supply and competition due to Mergers & Aquisitions;
missing investments
6.7%
Table 7: Challenges concerning shipping companies
Concerning the shipping companies, the interviewees would like to receive more information on
services offered, especially on liner services within the inland waterway market. Additionally,
shippers claim about the quality of equipment (barges, unit loads, etc.) used as well as about
missing innovations. Another key challenge represents the image and impact of diverging cultural mentalities.
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Specification
Rel. weight
Characteristics of cargo transported
Transport process
Transport volume
Disadvantegous transport lead time competes with shorter
product life cycle; insufficient quality of equipment that
does not fit cargo's requirements
Inland waterway transportation requires bulk cargo in huge
quanitities; inadequate for break bulk
40.9%
27.3%
Handling and stroage processes
Considerable risk of shrinkage
27.3%
Cargo's value
Bulk cargo is highly price sensitive concerning transport costs
due to low value of the cargo
4.5%
Table 8: Challenges concerning characteristics of cargo transported
This second most cited challenge is represented by the characteristics of cargo to be transported on the Danube waterway. Here, the transport lead time is disadvantageous in face of the
requirements of the goods (real-time demand and short product life cycle was often mentioned).
Moreover lots of the respective cargo does not fit to the actual service range of shipping companies and logistics service providers shipping on the Danube, respectively. This means that
rather bulk goods in huge quantities than small break bulk batches suites actual performances
of Danube shipping. This situation also implies the need for liner services that is capable to ship
small break bulk batches.
Specification
Rel. weight
Characteristics of the Danube waterway as an transport mode
Nautical bottlenecks
Highly unattractive for shippers due to nautical bottlenecks,
e.g. lower water, floods or ice formation
47.4%
Transport costs
Intrasparent transport freight rates, not competitive with other
transport modes
26.3%
Forcasting accuracy
Highly uncertain estimated times of arrival or departure (ETA and
ETD); implies higher inventory levels (safety stocks)
21.1%
Prospective exogenous developments
No foreseeable internalization of external costs within road
transportation
5.3%
Velocity
Transport speed of Danube waterway does not fit customer's
requirements
5.3%
Table 9: Challenges concerning characteristics of the Danube waterway as a transport
mode
The last and most important challenge is based on the Characteristics of the Danube waterway
as a transport mode. The most frequent cited challenge results from nautical bottlenecks derived mainly from low water, floods and ice formation. Especially, the nautical bottlenecks in
Straubing-Vilshofen, Strudengau as well as the Danube section to the east of Vienna pose considerable challenges for the Danube waterway. The companies interviewed perceive further the
factors transport freight rates and forecasting accuracy as disadvantageous.
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4.3.2
Results on Section II: Improvement Measures for the Future
Based on these findings regarding actual challenges, the improvement measures can be derived. Again, the companies interviewed faced the above-mentioned five categories and identified priority measures, accordingly.
Improvement measures
Danube ports
Intensification of the exchange of information on services offered by the
Danube ports or, even, implement new services required by the
shippers
Logistics service providers
Introduction of liner services and promote the same; better integration of
the Danube waterway in existing transport chains (main haulage)
Shipping companies
Introduction of liner services that are reliable and, simultaeously, induce
shipping companies to apply innovative systems (e.g. unit loads, freight
capacity, etc.)
Characteristics of cargo transported
Acceleration of transport lead times and increase of flexibility that do fit
the requirements of more cargo types
Characteristics of the Danube waterway as an transport mode
Elimination of nautical bottlenecks in order to increase reliability and
forecasting accuracy
Table 10: Improvement measures
The last named improvement measure in table 9, namely the elimination of nautical bottlenecks,
constitutes a highly political issue as the example of the integrated river engineering project on
the Danube East of Vienna shows. This specific Danube section with a total length of about 48
km is currently characterised by a continued bed erosion rate of 2 to 3.5 cm per year. Therefore
this project implies a stabilization of the bed as well as a low water regulation. The Danube
shipping demands a loaded draft of about 2.7 m (currently smaller than 2.5 m)21. Due to the fact
that each missing centimetre of loaded draft implies a loss of about 100 tons of transport capacity, this challenge poses a considerable obstacle and harms the commercial attractiveness.22
However, the other categories target at measures that could be introduced mainly by the actual
market participants. More precisely, the supplying side, e.g. Danube ports, logistics service providers or shipping companies, may pursue the request of the customers by introducing a fixedscheduled liner services along the Danube waterway. This measure may also impact the characteristics of cargo transported by enabling new cargo types that could be transported on the
Danube, e.g. small-sized break bulk batches as mentioned above. Needless to say, a liner services will increase forecasting accuracy and reliability considerably. Furthermore, transparent
and competitive transport freight rates for liner services represent a key issue. The subsequent
chapter aims therefore at investigating the field of liner services on the Danube waterway. More
specifically, insights into the overall concept, requirements, costs figures as well as information
on existing liner services are given. Finally, a recent business case of implementing a combined
liner service between Austria (port of Enns) and Romania (port of Galati) is presented.
21
22
Cf. Nachtnebel, 2010.
Cf. APA-OTS, 2005.
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5 Liner Services on the Danube waterway
In general, a differentiation between contractual transport business and liner service business is
made. Traditionally, a contract for several journeys over a particular period of time is signed
between a demanding company (shipper) and a logistics service provider or a shipping company, respectively. Beyond that, short-term business between demand and supply side is organized via the spot market. These contractual relationships seem not to be applicable for certain
type of cargo (high value goods or small quantities) or cargo that demands high reliability.23
Thus, the traditional contract transport business limits the commercial attractiveness of Danube
shipping for many companies (see above). For this reason, liner services offer a possible alternative to the prevalent contractual business and may attract more and more companies to shift
transport volumes towards Danube shipping.
5.1 General Concept of an Inland Waterway Liner Service
Liner services demand a great deal of reliability and punctuality. Regular departure and arrival
times are an initial primary requirement for such services. However, facing nautical bottlenecks
as described above pose a major challenge for liner services. Therefore, back-up systems e.g.
railway transportation and handling and storing capabilities are required. Furthermore, liner services needs an optimal setting as part of an intermodal transport chain in order to achieve efficient pre- and on-carriage as well as handling and storing processes. Another key issue
represents the accompanying information flow along the transport chain. Tracking and tracing
information are essential for improving the commercial attractiveness as has been proven by the
interviewees above, too. Finally, liner services should fulfill a certain degree of flexibility in terms
of transporting several types of cargo. Generally, not only traditional bulk cargo, but also high &
heavy cargo and break bulk cargo on pallets, in big bags or in containers should be capable to
be transported by liner service.24
As mentioned before, general inland waterway transportation highly depends on pre- and oncarriage processes. Due to the fact that not every company has own premises/storages at ports,
the cargo need to be shipped via truck or rail to the port of loading or from the port of unloading.
Therefore, a well-designed business process for multimodal transport chain is required. The
fundamental concept can be displayed as follows:
23
24
Cf. Donauschifffahrt, 2012a.
Cf. KoLEG, 2011, p. 4p.
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Figure 9: Basic concept of liner services25
More precisely, the concept of inland waterway liner services features the following characteristics:26
•
•
•
•
•
Regular departure and arrival times according to a fixed schedule
Perpetuation of these schedules despite facing nautical bottlenecks using back-up systems and capacity for storage and handling
Regular service of defined ports
Year-round service in both directions
Public offered services
After providing information about the concept behind liner services, existing liner services on the
Danube waterway will be presented. Thereof, a specific liner services from the company Helogistics is investigated.
5.2 Existing Liner Services on the Danube Waterway
There are already some existing liner services on the Danube waterway, although none of them
includes any Austrian Danube port. Many liner services operate at most until the port of Budapest. This might correlate with the high uncertainty of transportability due to the nautical bottleneck to the East of Vienna (see above). The following overview should provide initial information
about those existing liner services.
25
26
Own illustration based on Donauschifffahrt, 2012b.
Cf. viadonau 2006, p 36.
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5.2.1
Overview
RoRo Liner services
Container liner service
Existing liner services on the Danube waterway mainly focus on container transportation and on
roll on/roll of services. The following should provide brief insights into existing liner services.27
BRP Bulgarian River
Shipping Company
MainRom Line Logistics Ltd. (MRL)
Internationale Spedition Willi Betz GmbH
& Co. KG
BLG Logistics
Since 2005 the Bulgarian River Shipping Company (BRP) has been
providing a regular container liner service between the Black Sea port
of Constanta and the inland port of Belgrade. Depending on a minimum load of 5-10 containers, there is also the possibility to serve the
ports of Giurgiu, Rousse as well as various other ports on the Danube.
Since 2006 the company MainRom Line Logistics Ltd. (MRL) has been
providing a weekly service between the Romanian port of Constanta
and Giurgiu. MRL’s container service includes, in addition to the loading and unloading of the ship, the further transportation of containers
by truck to the metropolitan area of Bucharest. Departure frequency is
once a week but when necessary 2 departures per week can be facilitated. Other ports such as Galati or Svishtov can also be served depending on a minimum load of 5-10 containers.
The company Internationale Spedition Willi Betz GmbH & Co. KG
based in Reutlingen operates a scheduled service between Passau in
Germany and Vidin in Bulgaria with four catamarans and two ro/ro
barges and accommodates self-loading cargoes such as articulated
trailers, tractor units and other vehicles. Stops at ports can be arranged according to cargo loads and departures take place several
times each week according to demand.
BLG LOGISTICS has been operating a scheduled service on the
Rhine and Danube since 1997. Five ships operate on the Rhine and
two on the Danube and serve the car terminals in Kelheim as well as
the Hungarian port of Csepel in Budapest. This liner service offers
weekly departures with an intermediate stop at the Port of Vienna if
required. The special ships ‘Heilbronn’ and ‘Kelheim’ have a capacity
of 260 cars on three decks.
Table 11: Existing liner services
5.2.2
Experiences from the Container Liner Service by Helogistics – HELO1
The Austrian-Hungarian company Helogistics Holding launched a container liner service, called
“HELO1” between the Danube ports in Constanta and Budapest in August 2010. Additionally,
the ports of Belgrade and Smederevo were serviced.
Basically, this liner service operated on the basis of a pre-defined departure and arrival schedule which approached the above-mentioned ports once a week. The shipping equipment possessed a capacity of a maximum of 144 TEUs. Furthermore, empty as well as loaded containers
were transported. The transport lead time from Constanta to Budapest (upstream) amounted to
11.5 days, whereas the downstream transports accounted for 8 days. In addition this service
27
Donauschifffahrt, 2012c.
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was supported by a tracking & tracing system, which enabled the shipper to receive real-time
information about the current status of his shipment.
After operating this liner service for more than one year, Helogistics registered about 100 departures (up- and downstream) with a transport volume of 6,600 TEU. Thereof, about 16 percent
were loaded containers. Generally, the utilization of scheduled transports accounted for 50 percent. Within the first six months, the transport volume tripled and the turnover doubled. Especially in Serbia, HELO1 prospered for both empty and loaded containers. According to the CEO
of Helogistics, Mr. Herfried Leitner, this situation might be reasoned by the shipper’s wellestablished acceptance of this service.28
In spring 2012, Helogistics Holding announced the termination of the container liner service on
the Danube waterway. The main reasons for this decision are based in the following:
• Periodical inability to transport cargo and stick to departures and arrivals scheduled due
to nautical bottlenecks (particularly due to low water)
• Continuously minor fraction of transporting loaded containers, partly owing to a lack of
support from logistics service providers in order to shift container transport towards HELO1
Helogistics has decided to continue to focus on the contractual transport business and keep the
possibility to re-launch such a container liner service as HELO1 in future open.29
5.3 Existing Research Studies on Liner Services on the Danube
Beside the practical experience gained recently as portrayed above, some institutions have already dedicated their attention to the theme of implementing liner services on the Danube waterway in order to increase commercial attractiveness. In the following, three studies are presented.
5.3.1
Container liner services between Austria and Black Sea – the COLD study30
In 2006, the Austrian waterway maintenance and supervision agency, viadonau, authored a
study focusing on container liner services on the Danube waterway between Austria and the
Black Sea. The starting point for this study was reasoned by a well-established world economy
associated with double-digit growth rates. In 2005, approximately 350 m TEU had been handled
and a forecast for 2015 of transporting between 600 and 700 m TEU was set up. According to
statistics by the International Transport Forum the world container traffic in 2009 was on the
28
Cf. Helogistics, 2011.
Cf. Helogistics, 2012.
30
Cf. viadonau, 2006.
29
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level of 2005.31 Facing the challenges of today’s world economy, the before-mentioned forecast
for the year 2015 will be hard to achieve.
However, the main idea of the study was to evaluate the risks and chances of introducing a container liner service in order to shift transport volumes towards the Danube waterway. In this context, the transport relation Austria and Black Sea region is of particular interest. According to the
authors of this study about 95 percent of all imported and exported containers in Austria had
been handled through North Sea ports.
Figure 10: Comparison of geographical and economical distances32
Especially ports located at the Black Sea, e.g. Constanta, may profit from an alternative transport route depicted above. The route via the Aegean Sea may increase the performance in
terms of both spatial distance and lead time. More specifically, a distance reduction of around
4,500 kilometer and a lead time reduction of between 3 and 4 days may be achievable. However, the reason for transporting a considerable share of all imported and exported containers in
Austria via North Sea ports is justified by a better range of services and well-established infrastructure. These key properties impact considerably the commercial attractiveness.
31
32
Cf. International Transport Forum, 2012.
Illustration based on viadonau, 2006.
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In context of COLD, the authors have further examined a freight rate for road transportation
from Vienna/Budapest to Constanta and vice versa in 2006.
From
To
Distance
Vienna
Constanta
Budapest
Constanta
Constanta
Vienna
Constanta
Budapest
1,300 km
1,300 km
1,050 km
1,050 km
Freight rate
per truck
2006
1,800 EUR
1,600 EUR
1,400 EUR
1,100 EUR
Freight rate
per truck
2012
1,550 EUR
N/A
1,350 EUR
N/A
Rel. change
-14 %
-4 %
Table 12: Freight rates for road transportation Vienna/Budapest – Constanta in 2006 and
2012
Compared to actual (2012) freight rates (Source logistics service provider located in Upper Austria) from Vienna/Budapest to Constanta and vice there is a decrease observable.
The COLD study further provides a scheme to calculate total transport cost for inland waterway
navigation. The following cost elements have to be considered: (i) fixed operating cost, e.g. labor, depreciation, insurance, etc., (ii) variable operating cost, e.g. fuel, lubricants, etc., (iii) port
handling cost, and (iv) miscellaneous cost, e.g. charges for use of a canal. Based on this, a cost
calculation for a transport from Austria (port of Krems) to Romania (port of Constanta) was conducted. In doing so, the total operation and transport costs, respectively, have been calculated
for different levels of utilization: (i) 100 %, (ii) 75 % and (iii) 50 %. The average transport travel
time was assumed to amount to 16 days with a daily cost factor of 1,954 EUR. With respect to
variable operating costs, fuel costs of 46 EUR per 100 liter and a required amount of fuel of
70,000 liters for this transport route have been assumed. Due to lower fuel consumption at decreasing utilization, the total operating costs also decrease. The charges for the Black Sea
Canal are paid by ton of payload.
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Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
Utilization
TEU / Tonnage
100%
75%
50%
444/6,216 333 / 4,662 222 /3,108
Fixed operating costs (in EUR)
Daily cost EUR 1,954 x 16
days travel time
31,261
31,261
31,261
Variable operationg costs (in EUR)
diesel; required: 70,000 liter
diesel
32,533
28,467
24,400
63,794
59,728
55,661
3,793
3,793
3,793
131,381
123,249
115,115
Total operating costs (in EUR)
Miscellaneous costs (in EUR)
Black Sea Canal
Total transport costs (in EUR)
Table 13: Calculation of total transport costs from Austria to Romania
The authors stipulated that the 75-%-utilization scenario is a reasonable starting point for calculating freight rates (per TEU) for a container liner service. The reason for this assumption is given by nautical bottlenecks that do not allow for year-round transportation. In the final calculation,
the freight rates for a TEU and FEU between Krems and Constanta are presented. Thereby, a
motorized cargo vessel and a lighter set the fundament for the calculation below (a detailed description of these calculations can be retrieved by the annex of the COLD-study).
Utilization
Total operating costs (in EUR)
Capacity (in TEUs)
Operating costs per TEU (in EUR)
Charges for Black Sea Canal per TEU (in EUR)
Handling per TEU (in EUR)
Charges for port per TEU (in EUR)
Total transport costs per TEU (in EUR)
Total transport costs per FEU (in EUR)
75%
59,728.00
333
179.36
11.39
35.00
5.00
230.75
426.51
Table 14: Calculation of total transport costs per TEU/FEU from Austria to Romania
By means of the COLD study, the reader should get an idea about major cost factors for container transport between Austria and Romania. The next study which will be introduced had
been conducted by the Logistikum Steyr with respect to analyzing roll-on and roll-off liner services on inland waterway between Central and Eastern Europe.
5.3.2
Ro/Ro liner service between Central and Eastern Europe33
The overall goal of this study was defined as examining the market potential for roll-on/ roll-off
(RoRo) liner services on the Danube waterway between target markets I including Germany,
Netherlands, France, Denmark and Austria, and target markets II, encompassing Romania,
33
Cf. Logistikum Steyr, 2010b.
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Bulgaria, Turkey and Russia. More specifically, the cargo to be transported had been divided
into two classes: (i) semi-trailer, construction machinery, wind turbines and farming machinery
as well as (ii) other machinery, package freight and automobiles. A bottom-up analysis was
chosen as a methodical approach. In this context, both an evaluation of transport demand as
well as determining factors were questioned in order to define the market potential. The following provides a brief insight into the study results. In terms of defining the market potential for the
first target market, 373 companies had been contacted (226 in Austria). However, due to specific criteria only 22 companies received a questionnaire, where 12 companies had sent back this
questionnaire. These criteria are:
• Inacceptable lead time
• Insufficient transport volume
• No transport flows between these target markets
• Simply no interest, etc.
On the opposite side, target market II, 107 companies had been contacted, where 10 companies received a questionnaire and one company replied. The reasons for this rate of return are
reasoned by similar factors as stated before. Especially, the low transport volumes between
these target markets pose a considerable cause. Additionally, by contacting companies from the
second target market, major challenges pose the lack of identifying a proper contact person
within the company and language barriers. With respect to the identified market potential for
target market I, the following situation can be portrayed. Unfortunately, there was no data available to determine the potential for target market II – at least due to the above-mentioned obstacles.
Companies in
Cargo type
Quantity Measurement
target market I
Farming machinery
3 pieces per month
Company 1
Machinery
3 pieces per month
Packaged freigt
10 pieces per month
Construction machinery
100 tons per year
Company 2
Machinery
200 tons per year
Misc. high and heavy
150 tons per year
Company 3
Paper roles
50,000 tons per year
Table 15: Market potential for RoRo liner services between Central and Eastern Europe
The last section of this chapter deals with a recent study focusing on combined liner services
between Austria and Romania conducted primary by the Austrian Institute for Regional Studies
and Spatial Planning (ÖIR) and NAVROMSA AG, which represents an expert for Danube shipping and ports.
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5.3.3
The KoLEG study – Combined Liner Service between Austria and Romania
5.3.3.1 Background and Motivation
In 2008, the port of Enns (Austria) and the port of Galati (Romania) signed a cooperation
agreement. Three years later, the partners started their first project, called KoLEG – Combined
liner service from the port of Enns to the port of Galati. The respective project consortium, consisting of ÖIR, the Austrian Institute for Regional Studies and Spatial Planning and NAVROMSA
AG, an expert for Danube shipping and ports started with analyzing the target markets as well
as transport modes. Furthermore, two workshops in both ports Enns and Galati were organized
in order to receive information from involved stakeholders. Finally, a business plan for a combined liner service between these ports was developed. The main findings of the KoLEG study
are presented in the following.
The starting point for this project was given by the development of the modal split within the
Danube corridor. Although transport volumes strive to increase – even within the aftermath of
the economic crisis – the Danube waterway as a transport mode was not able to attract additional transport volumes. As already identified in the forefront of this pre-feasibility study, this
development is partly due to the lack of liner services. According to the empirical study presented in chapter 4, the interviewed companies and institutions share this view and perceive a
liner service as an important need to increase the commercial attractiveness of the Danube waterway.
However, as already indicated in the previous chapter, there are already existing studies and
experience gained in practice in terms of liner services on the Danube waterway. These preceding studies, especially the COLD study, represented a well-founded basis for the KoLEG study.
The main objective of the KoLEG study is to set up a combined liner service for the transport
route between Austria and Romania and other accessible markets, respectively (see figure 13).
In doing so, preliminary investigations regarding market potential and logistics requirements
(railway transportation as backup-system) are made. In a final step, the key findings are consolidated by setting up a business plan.
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Figure 11: Transport route between Enns and Galati and accessible markets
Insights into the market analysis conducted for the KoLEG study have already been presented
within chapter 3.2. Therefore, the focus is put on key specifications of the final business plan
generated by the project consortium.
5.3.3.2 Business Plan
The prerequisites for starting a liner service on the Danube waterway are given by an analysis
of the market as well as means of transport and logistical requirements, respectively, within the
geographic area under consideration. More specifically, a concrete evaluation of transport volumes, type of cargo to be transported, competing means of transport is required. Additionally, a
major key success factor poses the support of shippers and logistics service providers in order
to offer a liner service continuously. Referring back to the experience made by HELO 1, this
represented a major cause for terminating this liner service.
The KoLEG study introduces the following concept for operating a combined liner service on the
Danube waterway between the port of Enns (Austria) and Galati (Romania).
Regularity of transport service
offered
Focused types of cargo
Specified transport mean
•
Weekly departures from the respective ports
•
•
•
•
•
•
Bulk goods and commodities
Container
High & heavy goods
Type: multi-purpose barge
Number: 4 pushed barge trains for each direction
Transport frequency of
each transport mean: 13 transport trips per year
Table 16: Operation specifications of combined liner services
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Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
Basically, two diverging scenarios for applied transport means are investigated: (i) push boat +
1 barge and (ii) push boat + 4 barges. Considering the transport potential mobilisable in the
sort-term (2015), scenario (i) is sufficiently dimensioned. Thus subsequently provided information focuses on this scenario.
Specification of
transport mean
Transport route
Push boat (800 PS) + 1 barge
(Navrom)
Price in
EUR
Enns - Galati
Galati - Enns
Enns - Galati - Enns
16,000
30,000
46,000
Total transport
capacity per year**
Transit time Max.
in days
payload*
10
1,740 tons or
15
60 TEU
25
181,000 tons
or 6,240
TEU
* for each transport route
** 4 pushed barge trains for each direction and 13 transport trips per year
Table 17: Specification of transport means applied
Based on this specification, the following transport costs calculation (see table 20) was conducted for both container and bulk cargo transports and for the transport route Enns-GalatiEnns (round trip).
Container
Measurement
Transit time
Total transport costs
Capacity
Utilization
Total transport costs per TEU
days
EUR
TEU / trip
%
EUR / TEU
Bulk cargo
Measurement
Transit time
Total transport costs
Capacity
Utilization
Total transport costs per ton
days
EUR
tons / trip
%
EUR / ton
Push boat (800 PS) + 1
barge
(Navrom)
25
46,000
120
80
50
100
67
42
383
575
920
Push boat (800 PS) + 1
barge
(Navrom)
25
46,000
3,480
2,500
1,740
100
72
42
13.2
18.4
26.4
Table 18: Transport costs calculation for container and bulk cargo transportation (round
trip)
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Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
Taking the total transport costs per TEU (transport route: port of Enns to port of Galati) of scenario 1 (at 67 percent utilization) as a reference value for shipping containers on the Danube
waterway, a comparison with pure road, railway (plus road end-haulage) as well as intermodal
transport (IWW + rail + road end-haulage) is drawn in the following (see table 19). In doing so,
the routing tool provided by the Central Europe Project SoNorA (www.sonoraproject.eu) has
been applied.
Measurement
Transit time
days
Transport costs EUR / TEU
KoLEG combined
liner service*
Road
Railway** Intermodal
25
1,15
1,6
7,4
575
1,495
859
779
* round trip
** including pre- or/and oncarriage by road
Table 19: Transport costs calculation for container and bulk cargo transportation (round
trip)
As can be seen, the transport costs calculated for the KoLEG combined liner service is competitive compared with other transport modes. The basic trade-off is given by transit time and costs.
Although road transportation yields the highest costs (1,495 EUR) the duration is minimal. The
transport costs for the KoLEG combined liner service amounts up to 575 EUR per TEU and
therefore represents the lowest costs. However, the empirical study introduced in chapter 4 implies the fact that transport costs are only one component impacting the competitiveness of a
transport mode. Further factors of designing a liner service on the Danube waterway are provided at the end of this chapter.
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6 Minimal Requirements to Implement a Regular Liner Service on the Danube Waterway
The final chapter aims at deriving implications based on the information provided above. More
specifically, minimal requirements for establishing a regular liner service on the Danube waterway are identified. Future decisions related to liner services should be supported by this information.
6.1 Market und Competition Situation
The following key findings can be summarized based on the findings within the above quoted
chapters as well as on the FLAVIA reports “Trade exchange in the FLAVIA corridor (3.2.2)” and
“Trade situation within TRACECA (3.2.3):
6.1.1
Market Boundaries
Market Profiles
Austria’ import activities with Ukraine and Romania play an essential role, whereas Austria’s
export activities focus primarily on Hungary (short distance transports are excluded), Romania,
Russia as well as Turkey. All these markets are either located directly along the Danube waterway or can be served via the Danube waterway.
Suitable Products
Referring to the potential product groups suitable for transportation on inland waterway, the following products have high potential to be transported on the Danube waterway: (i) biomass, e.g.
crops, corn, (ii) fertilizer, (iii) chemical products, (iv) steel products, (v) mechanical equipment,
(vi) metal products, and (vii) raw materials.
These product groups are suitable to be transported on the Danube waterway because of their
product characteristics and the respective market potential observed in the Danube markets.
Primarily, bulky, high, heavy and non-time critical products are predestined for Danube shipping.
Reasons for Lack of Competition
Although the above mentioned product types are suitable for Danube navigation only a minor
share of these products is transported on the Danube waterway. As evaluated above, this circumstance could be reasoned by the following issues:
•
Nautical bottlenecks render punctual and reliable transports impossible,
•
Ineligibility of products for inland waterway transports due to product characteristics (value, short life-cycle, degradation),
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Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
•
Disparity of transport volumes poses a major obstacle for operating a liner service on the
Danube waterway,
•
Missing investments in infrastructure (e.g. ports, nautical bottlenecks, etc.) to increase
the attractiveness of this transport mode,
•
The overall reputation of Danube transport possibilities is not well-established within responsible logistics managers and
•
Information management systems regarding transport on the Danube waterway are still
not fully implemented.
Essential Market Players
In order to circumvent these challenges, a set of stakeholders are required for implementing a
liner service on the Danube waterway successfully.
i.
The logistics service provider (LSP) is responsible for fulfilling logistics requirements: (i)
organizing transport, storage and handling operations, (ii) providing a back-up system in
case of unexpected events, e.g. low water level, unavailability of equipment, etc. (iii)
management of the information flow, and (iv) pre- and on-carriage operations.
ii.
The consignor is in charge of providing sufficient transport volumes in order to ensure
high utilization of transport equipment.
iii.
The port operator has to provide proper infrastructure to enable efficient logistics operations (tri-modal transport connection, warehouses, handling equipment, etc.)
iv.
Governmental authorities are responsible to support the Danube waterway by ensuring
an all year round navigability. This clearly implies the elimination of nautical bottlenecks
as depicted above.
Possible operators for the proposed new liner service could be:
• Erste Donau-Dampfschifffahrts GmbH (AT) – extension of the weekly service from Budapest to Constanta
• MainRom – extension of the weekly service between the ports Constanta and Giurgiu
6.1.2
Requirements of the industry
Recalling the results of the empirical study quoted in chapter 4, the following requirements can
be specified. An intensive communication of existing services offered between consignors and
Danube ports as well as logistics service providers is required. Furthermore, there is need for
developing new services (liner services with back-up system) that integrate the Danube waterway in existing transport chains. In this context, the industry requires competitive (i.e. reliability
and freight rates) liner services. A further requirement concerns the setup of unit loads and
transport capacities that fit the requirements of more cargo types. Moreover, industry requires
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Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
the acceleration of transport lead times and an increased flexibility. Finally, the elimination of
nautical bottlenecks in order to increase forecasting accuracy is inevitable. These insights are
approved by the KoLEG-study that has yielded the following requirements. A very starting point
for setting up a liner service on the Danube waterway constitutes regular departures on a fixed
and predefined weekday in order to achieve high punctuality and reliability. This is supported by
a back-up system that uses railway transportation. Logistics services should include door-todoor transports, sufficient storage capacities, and tracking and tracing services. The freight
rates for liner services should be stable and competitive to road and railway transportation. Besides, investments in nautical bottlenecks and port infrastructure should be pushed.
6.1.3
Connection Specification
Based on the economic potential identified above, a liner service between the following Danube
ports is set up:
• Enns (AT)
• Budapest (HU)
• Belgrad (SRB)
• Constanta (RO)
These locations are selected for transhipment where goods can be loaded and unloaded. For
this handling process one day is computed. The vessel type is defined as a barge associated
with a capacity of 2000 tons of payload. The following table displays a rough schedule between
the different ports and several specifications, like transit time and distance, number of locks
passed. The transit times are calculated by a calculator provided by viadonau.34 As can be seen
a total transit time of 18 days is calculated.
Vessel type:
MGS 2000 tons
Waiting time for
1 day
transshipment:
Port of departure
Departure
date
Port of
Arrival
Enns
Budapest
Belgrad
Constanta
Belgrad
Budapest
Day 1
Day 3
Day 5
Day 9
Day 13
Day 16
Budapest
Belgrad
Constanta
Belgrad
Budapest
Enns
Transit
Arrival date distance
(km)
Day 2
472
Day 4
487
Day 7
931
Day 12
913
Day 15
487
Day 18
472
Total
3762
Transit time
Locks
(h)
35
28
38
66
42
49
258
7
0
4
4
0
7
22
Capacity (t)
2000
2000
2000
2000
2000
2000
Table 20: Schedule of liner service
34
Cf. viadonau, 2012.
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Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
A more detailed view on the schedule planned for the liner service is given by the following table, which indicates possible departure and arrival times. Here, the transit times from table 20
are used.
Day Weekday Enns
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
Mon
Tue
Wed
Thu
Fr
Sa
Sun
Mon
Tue
Wed
Thu
Fr
Sa
Sun
Mon
Tue
Wed
Thu
Budapest
Belgrad
Constanta
08:00
19:00
19:00
23:00
23:00
13:00
08:00
02:00
20:00
14:00
18:00
19:00
Table 21: Detailed time table for liner service
6.1.4
Qualitative aspects
For a successful realization also quality aspects have to be covered. Focusing on the investigated service, there is a high level of flexibility needed as high volumes for operating a liner service, small, medium and high volumes from different companies and different locations must be
consolidated to assure the highest possible utilization. Moreover from a company point of view
the aspect of a clear defined time schedule has the advantage that the planning and calculation
of delivery dates and the transport in general is easier and has a higher quality concerning
guaranteed delivery dates. A further essential qualitative aspect is the development of a
backup-system for the liner service on the Danube waterway. Due to the problematic faced by
current Danube navigation (see above), railway transportation should ensure punctual and reliable transport connections in case of nautical bottlenecks. Simultaneously, this back-up system
should strengthen the image and acceptance among consignors.
An attractive back-up system for the investigated transport connection could be specified by the
railway connection established in pre-feasibility study 5.2.4 from Wels (AT) towards Constanta
(RO) via Budapest (HU)
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Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
6.2 General Business Model
6.2.1
Organisational aspects
For the launch of the liner service, only one barge should be planned in the first time. Therefore,
the shipper need to provide a barge associated with a capacity of approximately 2,000 tons.
The calculated journey time of the transportation (without un-/loading) is 117 hours. The time for
transhipment (un-/loading) is calculated/assumed with 1 day for each port.
The liner service should be operated on an annual basis. With respect to the suitable products
stated above, the seasonality of products should be encountered. For instance, in case of
transporting biomass, there should be substitutes within the off-season (e.g. fertilizers).
In order to guarantee profitability and substantial transport volume, the liner service should operate on a contractual basis dedicated to a certain capacity of the vessel in the first run. Therefore, framework contracts between consignors and shipping companies and logistics service
providers, respectively should be arranged.
6.2.2
Technical solution
Figure 11 indicates essential parts of the technical solution of implementing a liner service. Basically, a tri-modal connection at the Danube ports are recommended in order to ensure efficient
pre- and on-carriage. This property is also important for the back-up system as mentioned
above. In addition to transport connection, proper handling equipment like gantry cranes, forklift
trucks, etc. is needed. In order to ensure efficient information flows, tracking and tracing services are required. Here, the river information system (RIS) represents a key technical asset.
Figure 11: Overview about technical solutions for the liner service
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Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
6.2.3
Target groups
Referring to the product groups which are suitable for Danube navigation as well as the empirical study conducted within this pre-feasibility study, companies dedicated to the process industry in Austria are the most important target group that should be addressed. Major companies in
the fields of chemical, steel and biomass industry are located in the central area of Upper and
Lower Austria. These companies have attractive transport connections to the port of Enns.
Moreover, the companies import bulky raw materials from and export (semi-) final products to
the relevant destinations of the liner service. Both the import flows as well as the export flows
are suitable for Danube waterway navigation.
6.2.4
Financial needs and investments
Based on the findings of the KoLeg study as well as on calculations using the FLAVIA tool, the
following financial figures regarding the liner service depicted above have been calculated. As
indicated in table 22, the FLAVIA tool yields the following freight rates:
From
To
Transport
Mode
Truck
Enns
Budapest
Beograd
Budapest
Beograd
Constanta
Enns
Budapest
Beograd
Budapest Rail
Beograd
Constanta
Enns
Budapest
Beograd
Budapest IWW
Beograd
Constanta
Constanta Beograd
Beograd
Budapest
Budapest Enns
Truck
Constanta Beograd
Beograd
Budapest
Budapest Enns
Rail
Constanta Beograd
Beograd
Budapest
Budapest Enns
IWW
Price/ton
(11 tons/TEU)*
€ 45,82
€ 45,82
€ 89,45
€ 181,09
€ 24,00
€ 21,82
€ 45,82
€ 91,64
€ 15,27
€ 15,27
€ 26,18
€ 56,73
€ 89,45
€ 41,45
€ 45,82
€ 176,73
€ 45,82
€ 21,82
€ 24,00
€ 91,64
€ 26,18
€ 15,27
€ 15,27
€ 56,73
Total cost
(roundtrip, EUR/ton)
Truck
€ 358
Rail
€ 183
IWW
€ 113
* Due to operational reasons a gross weight of 14 tons per TEU
is assumed, which incorporates empty lightweight containers
or voluminous goods
Table 22: Transport costs derived from FLAVIA tool
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For the round trip starting and ending in the port of Enns inland waterway navigation yield the
lowest costs compared to railway and truck transport. Referring to the purposed back-up system, additional costs due to railway transports will still be lower compared to truck transports.
The derived costs are contrasted with calculations made within the KoLeg study as follows.
Bulk cargo
Measurement
Transit time
Total transport costs
Capacity
Utilization
Total transport costs per ton
days
EUR
tons / trip
%
EUR / ton
Push boat (800 PS) + 1
barge
(Navrom)
25
46,000
3,480
2,500
1,740
100
72
42
13.2
18.4
26.4
Table 23: Transport costs derived from KoLeg study
The KoLeg study calculated the freight costs for each ton based on the degree of utilization. In a
best case scenario (100 % utilization) the transport costs amount to 13.20 EUR/ton. If the utilization decreases to 50 % costs double. As can be seen in Table 23, the calculated transport
costs per ton are in the same range as depicted in Table 22. The partly higher costs calculated
by the FLAVIA tool can be reasoned by two additional ports served by the purposed liner service. The KoLeg liner service encompass only two ports, i.e. port of Enns and Galati, whereas
the FLAVIA liner service serves four ports in total. These two additional transhipment points
causes extra charges, e.g. handling, demurrage, etc. Nevertheless, due to the integration of two
additional ports (economic regions) more markets can be penetrated and, thus, the utilization of
the liner service can be increased. Furthermore, the risk of empty runs can be lowered accordingly. Regarding the investments needed to implement the liner service, the following qualitative
estimations for the liner service can be set.
Degree of investment
volumes
Terminal infrastructure
Low
Nautical conditions
High
Port operators
Medium
Shipping companies
High
Logistics service provide
Low
Transport equipment
Low
Education
Medium
Marketing
High
Table 24: Investments needed
The terminal infrastructure has been well developed within the last years. All four ports feature
appropriate infrastructure, e.g. handling facilities and devices, storage capacities, etc. Nevertheless still minor investments need to be realized in the future. As already summarized within the
empirical study quoted above, the nautical conditions play a significant role within the current
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Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
positive development of inland waterway navigation on the Danube. For instance the Integrated
River Engineering Project for the Danube east of Vienna represents a good example for this
investment area. The investments of the port operators will be increased due to the adaptions of
service times (24 hours) as can be extracted from the detailed time table defined in Table 21.
The shipping companies operation on the Danube need to invest into the propulsion technology
and other equipment due to the mostly archaic assets. Logistics service providers are meant to
adapt their services on the Danube waterway and to offer intermodal transports including inland
waterway navigation. Compared to the investment areas so far, transport equipment, e.g. containers, plays a minor role due to the low asset costs. As education is a key success factor for
the positive development of IWW, recent investments have already been made. For example,
the port of Enns set up an education center for inland waterway navigation. In future, such institutions are also required in other Danube countries. Finally, the image of Danube waterway
transports is low as well as the potential of transport capacity is still unknown, high investments
need to be realized in terms of marketing and information campaigns.
6.3 Service Launch Plan
Table 25 demonstrates how a service launch plan for the proposed service could look like. It includes several aspects, like budgeting or product performance evaluation and testing of the
quality of the service provided, as well as involved parties and the time horizon needed. The
time horizon depends on the size of the team and the hours per week the employees are working on it. The information concerning the product / service launch plan is based on expert interviews.
No.
1
2
3
4
5
Action
Involved parties
Time Horizon
Detailed definition of the project/service
(goals, target group, milestone plan, work packages,
etc.)
Definition of the project partners/stakeholders
(this includes the definition and fist contact with the
internal (project team) and external stakeholders, like
e.g. the terminal operators)
Budgeting
(calculation of the budget needed for the whole project; cost-benefits analysis; considering of investment
and operational costs)
Service provider
~8 weeks
All stakeholders
~12-24 weeks
Service provider
Setting up communication standards and select
tools
(it is important not to underestimate the possibility of
problems occurring form communication mainly for
border-crossing activities)
Detailed research on the infrastructure capacities
and identification of bottlenecks
(it is important to achieve an overview about the actual status shortly before the implementation)
Mainly by the service provider in
collaboration with
the other partners
Eventual
adoptions
could be done
during the
process
~2 weeks
All stakeholders
~18-24 weeks
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No.
6
7
8
9
10
Action
Detailed and explicit research on demand
(using the data of this research and the data about the
capacity for detailed planning of the time tables and
the periodicity at the point of time of implementation)
Product performance evaluation and testing of the
quality of the service provided
(the provider verifies the service and identifies problems that need to be eliminated before the official
implementation of the service)
Rework of the product/service
(adopt service according to the outcomes of the verify
phase)
Implementation of the service
(Implementation of the reworked and optimized service)
Marketing and Sales
(developing of a marketing plan for promoting the new
service and for transparency on the market; offering a
one-face-to-the-customer service; implementation of
product support for possible questions/requests)
Involved parties
Time Horizon
All stakeholders –
mainly the Logistic
Service Provider
~12 weeks
All stakeholders –
organizational aspects should be
done by the service
provider
Service provider
~4 weeks
~2-4 weeks
Service provider
~2 weeks
Service provider
~20 weeks
Table 25: Launch Plan
Some actions can be done simultaneously and can start at once or at different points of time.
The overall time span of the launch plan cannot be stated as it depends strongly on the basic
conditions like the size of the project group and how much working hours can be made available
for installing this project by each member etc.
The following figure shows how the Launch Plan could look like when visualizing the time spans
scaled in weeks:
Figure 12: Launch Plan
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6.4 Business Outlook
Besides the already mentioned prerequisites and needs to overcome the existing bottlenecks
on inland waterway, a successful sustainable development of such a liner service strongly depends on the economic development between the destinations.
A study conducted by Grosso analysed the link between economic development between 1982
and 2006 and of transported product groups on inland waterway and GDP development. The
authors found out, that generally only diverse products (including containers) as well as minerals and building material showed a clear link between economic activity development and
transport by inland navigation.
Other NST product groups like food, fertilizers or chemical products suggest a low direct relation
between economic activity and transport on inland waterway35. Therefore the success of the
service is also dependable on the economic development. As the Black Sea and TRACECA
regions tend to have higher economic growth rates in future than the European Union countries,
it also depends on these countries to support transport by inland waterway.
35
Cf. Grosso et. al, 2011
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7 Conclusions
The pre-feasibility study in hand aims at investigating inland waterway navigation and developing basic requirements for implementing a liner service. More precisely, the focus is put on (i)
the Danube waterway as a transport route connecting Central with Eastern Europe, (ii) characteristics and needs of markets located along the waterway, (iii) combined liner services that represent a way to boost transports on Danube waterways and (iv) basic requirements for the successful implementation of a liner service.
With respect to Austria’s foreign trade balance, the Eastern European markets located along the
Danube still represents major import as well as export markets associated with recent positive
growth rates. Particularly, Ukraine and Romania pose promising markets in the future. As the
modal split in Austria as well as in Europe indicates, most of today’s transports are organized by
road. This situation is mainly affected by low freight prices, short lead times, high flexibility and
especially reliability of road transportation. These properties are also quoted within an empirical
study conducted as key challenges for transports on the Danube waterway. Additionally, this
study further defined nautical bottlenecks, the subjectively perceived inappropriateness of
transporting products on the Danube and missing services as major obstacles for using inland
waterway navigation.
In order to introduce new services on the Danube waterway, several studies regarding liner services have been conducted in recent years. Basically, the main idea is to launch a reliable
transport service which serves certain Danube ports according to a fixed schedule. Most of today’s inland waterway shipments are organized via contractual charter transports that are dedicated to a certain company with high transport volumes.
Organizations with lower transport volumes are automatically barred from or, at least, reluctant
to make transports on the Danube waterway.
In 2010 a logistics service provider launched a container liner service between Budapest and
Constanta, additionally serving the ports in Belgrade and Smederevo. Two years later, this service was terminated.
Due to both nautical bottlenecks and the diminishing willingness to transport containers on the
Danube by companies leads to this situation. In 2011 the ports of Enns (AT) and Galati (RO)
started a project that deals with combined liner services. In order to circumvent the destiny of
the previously mentioned liner service, project coordinators focus on railway transportation as a
back-up system to increase reliability, sufficient transport volumes to ensure regular transports
and the match of inbound and outbound transports to guarantee profitability.
Using this study as a starting point, the pre-feasibility study finally set up a business case for a
liner service between Austria and Romania serving the port of Enns, Budapest, Belgrade and
Constanta. The business case identified biomass and fertilizers as suitable cargo for the liner
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service. Based on a fixed transport schedule, the transport costs not only for IWW but also for
road and railway transports are calculated using the FLAVIA tool. The results indicate that the
transport costs for inland waterway navigation are considerably lower for the round trip than for
truck transportation. In case of combining IWW and railway transportation, the costs are still
lower compared to truck transportation. Therefore, the before-mentioned challenges can be
circumvented by using railway transportation as a back-up system and still achieve a competitive freight price for this service.
The business case also incorporates investments into several areas. The most important areas
are given by nautical conditions, shipping equipment and information and marketing activities.
These investments constitute key issues for a positive development in the future. Furthermore,
the estimations regarding investments also address major actors that are involved in introducing
a liner service. The business case for introducing a liner service between Austria and Romania
further encompasses organizational issues e.g. transport schedule, technical solution, e.g.
process chain, as well as a final, detailed service launch plan. This plan gives an overview
about actions within the implementation phase, responsibilities as well as the time horizon for
the launch.
Finally, there are still some issues that are still not answered in detail. For instance, the availability and costs of railway equipment in case of transferring cargo from IWW to railway are important issues that determine profitability of the liner service considerably. Moreover, the removal of nautical bottlenecks represents a highly political and thus, long term issue as can be
seen by the River Engineering Project for the Danube east of Vienna. The prospective inland
waterway navigation refers to a dilemma: Companies will not transfer transport volumes towards
the Danube waterway if there are no services offered, and vice versa, logistics service providers
have no incentive to provide such services, if companies are not willing to transfer cargo.
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8 Lessons Learned during the Implementation of the Prefeasibility Study
The reasons for a lack of competition can be concluded by the chicken-and-egg problem. As
long as no liner service will be implemented, there will not be enough transport volume provided
by the shippers that will be shifted. As long as there will not be enough transport volume available, no liner service will be implemented or successful. Additionally, still more efforts have to
be taken to communicate about transport possibilities and potential on the Danube. There is still
a lack of know how regarding the positive potentials of inland waterway transport. The negative
ones are already well known within industry.
The suitability of the approach is generally given. Nevertheless it strongly depends on the acceptance of all needed participators. As experience shows, especially nautical problems have to
be overcome and efficient backup systems have to be developed. The realization in general is
in terms of capacity, equipment and monetary investment (excluding nautical work) not a huge
obstacle or hindering problem.
Gathering data and information is only a problem when talking about costs. Especially including
backup systems, needed investments etc. Other information like port information, nautical issues etc. can be found easily and in quite good quality. This has to be considered also by other
regions. In the opinion of the authors, the implementation of such a study is up to the point of
costs very similar. Therefore, the chosen approach can also be considered by other interested
stakeholders.
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9 List of References
APA-OTS, 2005, Kukacka: Flussbauliches Gesamtprojekt bringt erhebliche Vorteile für die Ökologie und die Schifffahrt,
http://www.ots.at/presseaussendung/OTS_20051021_OTS0175/kukacka-flussbaulichesgesamtprojekt-bringt-erhebliche-vorteile-fuer-die-oekologie-und-die-schifffahrt (April 23th, 2012).
BMVIT, 2012: Integrated River Engineering Project for the Danube east of Vienna,
http://www.donau.bmvit.gv.at/en/ (June 25th, 2012).
Corridor 7, 2012: Pan-European Corridor, http://www.corridor7.org/about-corridor-vii/ (April 05th,
2012).
Donauschifffahrt, 2012a: Types of services,
http://www.donauschifffahrt.info/en/transport/angebotsseite_der_donauschifffahrt/angebotsform
en/klassische_vertragsverhaeltnisse/ (April 12th, 2012).
Donauschifffahrt, 2012b, Multimodal Transport – Combination Possibilities,
http://www.donauschifffahrt.info/en/transport/transport/multimodale_transporte_kombinationsmo
eglichkeiten/ (May 2nd, 2012).
Donauschifffahrt, 2012c: Existing liner services,
http://www.donauschifffahrt.info/en/transport/angebotsseite_der_donauschifffahrt/angebotsform
en/existierende_liniendienste/ (March 02nd, 2012).
Ennshafen, 2011: KoLEG Workshop Enns – Ergebnisse von WP1 und WP2 und Diskussionsbeiträge der Teilnehmer.
EUROSTAT, 2011a: Freight transport statistics, http://epp.eurostat.ec.europa.eu/statistics_
explained/index.php/Freight_transport_statistics, (March 08th, 2012).
EUROSTAT, 2011b: National accounts – GDP,
http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/National_accounts_%E2%80%9
3_GDP, (May 07th, 2012).
FLAVIA, 2010: Background and aims of the project, http://www.flavia-online.de/, (March 01st,
2012).
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GROSSO, M., et. al (2011); Reaction Patterns of Inland Waterway Transport. In: SYS, C. and
VANELSLANDER, T. (eds): Future Challenges for Inland Navigation, University Press Antwerp,
Antwerp.
Helogistics, 2011: Containerdienst HELO1 feiert einjähriges Bestehen, http://www.ddsgcargo.at/index.php?pid=13&lang=1&nid=15 (May 08th, 2012).
Helogistics, 2012: Regelmäßiger Containerdienst HELO1 wird Ende März 2012 eingestellt,
http://www.ddsg-cargo.at/index.php?pid=4&lang=1 (May 08th, 2012).
Institut für Wirtschaftswachstum (IWS), 2012: EU-Mitgliedstaaten (mit Schweiz und Norwegen):
2010, http://www.economic-growth.eu/Seiten/AktuelleDaten/Daten2010.html (April 04th, 2012).
International Transport Forum, 2012: Freight - World container traffic,
http://www.internationaltransportforum.org/statistics/GlobalTrends/Freight.pdf (June 12th, 2012).
Logistikum Steyr, 2010a: Feasibility Study – Strengthening the Danube waterway in Austria as
part of corridor VII for the chemical industry, ChemLog Project.
Logistikum Steyr, 2010b: RoRo Service – Marktpotentialanalyse unter Berücksichtigung von
Machbarkeitsaspekten.
Logistikum Steyr, 2011: Strengthening the Danube waterway as an alternative transport mode.
Nachtnebel, H.P., 2010: Gutachten zur UVE Flussbauliches Gesamtprojekt östlich von Wien.
ÖIR - Österreichisches Institut für Raumplanung, Navromsa, 2012: Kombinierter Linienverkehr
zwischen Ennshafen und Galati – Marktanalyse.
Statistik Austria, 2011: Außenhandel: Tabellen zum Schnellbericht Gesamtjahr 2010.
Statistik Austria, 2012: Statistik/Verkehr Übersicht für 2008 bis 2010.
viadonau 2006: COLD – Container Liniendienst Donau.
Viadonau 2012 : Fahrzeitkalkulator, http://www.viadonau.org/wirtschaft/online_services/fahrzeitkalkulator/ (October 09th, 20120).
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Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
List of Tables
Table 1: Economic indicators of markets within Danube Corridor ................................................ 9 Table 2: Navigable sections on the Danube waterway .............................................................. 14 Table 3: LSP and shipping companies ....................................................................................... 17 Table 4: Initial assessment of challenges................................................................................... 23 Table 5: Challenges concerning Danube ports .......................................................................... 23 Table 6: Challenges concerning logistics service providers ....................................................... 24 Table 7: Challenges concerning shipping companies ................................................................ 24 Table 8: Challenges concerning characteristics of cargo transported ........................................ 25 Table 9: Challenges concerning characteristics of the Danube waterway as a transport mode 25 Table 10: Improvement measures.............................................................................................. 26 Table 11: Existing liner services ................................................................................................. 29 Table 12: Freight rates for road transportation Vienna/Budapest – Constanta in 2006 and 2012
........................................................................................................................................... 32 Table 13: Calculation of total transport costs from Austria to Romania ..................................... 33 Table 14: Calculation of total transport costs per TEU/FEU from Austria to Romania ............... 33 Table 15: Market potential for RoRo liner services between Central and Eastern Europe ........ 34 Table 16: Operation specifications of combined liner services .................................................. 36 Table 17: Specification of transport means applied ................................................................... 37 Table 18: Transport costs calculation for container and bulk cargo transportation (round trip) . 37 Table 19: Transport costs calculation for container and bulk cargo transportation (round trip) . 38 Table 20: Schedule of liner service ............................................................................................ 41 Table 21: Detailed time table for liner service ............................................................................ 42 Table 22: Transport costs derived from FLAVIA tool ................................................................. 44 Table 23: Transport costs derived from KoLeg study................................................................. 45 Table 24: Investments needed ................................................................................................... 45 Table 25: Launch Plan ............................................................................................................... 47 - 54 -
Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
List of Figures
Figure 1: Pan-European Corridor 7 - Danube Corridor ................................................................ 8 Figure 2: Economic growth rates for Romania and Ukraine ....................................................... 10 Figure 3: Austria's imports from respective markets (1995-2010; in 1,000 tons) ....................... 11 Figure 4: Austria's exports to respective markets (1995-2010; in 1,000 tons) ........................... 12 Figure 5: Development of Austria's modal split (2008- 2010, in million tonnes) ......................... 13 Figure 6: System of inland waterway transport .......................................................................... 13 Figure 7: Port of Enns ................................................................................................................ 15 Figure 8: Port of Galati ............................................................................................................... 16 Figure 9: Basic concept of liner services .................................................................................... 28 Figure 10: Comparison of geographical and economical distances ........................................... 31 Figure 11: Overview about technical solutions for the liner service ........................................... 43 Figure 12: Launch Plan .............................................................................................................. 47 - 55 -
Freight and Logistics Advancement in Central/SouthEast Europe - Validation of trade and transport processes, Implementation of improvement actions, Application of co-coordinated structures
Appendix
In the following, the evaluations regarding transport costs for road, railway and intermodal
transportation between Enns (Austria) and Galati (Romania) are displayed. The SoNorA tool
has been applied (further information can be retrieved from www.sonoraproject.eu.
Evaluation of road transportation
Evaluation of railway transportation (including on-carriage by road)
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Evaluation of intermodal transportation (including IWW, railway and road transportation)
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