A review of the European Union shipping policy

It is the aim of the European Union to develop a transport policy that supports its economic and sustainable growth and where the concept of sustainable mobility is a driver in the development of such policy. To achieve this goal, the European Union (EU) is promoting the shift of goods to unused existing capacity in rail and sea modes. As such, it is the objective of this paper to carry out a review of the European shipping policy at a time when the EU Member-States are suffering from high levels of congestion, noise and pollution that not only affect the environment but also the quality of life of all citizens. This paper considers the development of EU shipping policy in three stages.     

Some notes on structure and stability in liner shipping

Almost six years have elapsed since the passage of the Ocean Shipping Reform Act (OSRA), legislation that has led to significant changes in the structure of the US liner shipping industry. The European Union (EU) is poised to follow suit with the impending elimination of rule 4056/86, the block exemption from EU competition rules for liner shipping companies operating on European trades routes. The EU reform, however, is likely to go further than OSRA by prohibiting both conferences and discussion agreements on European trade routes. The outcome of such a policy is uncertain and the current review of it is several years old already. This paper is intended to provide some insight into the potential impact of regulatory reform in Europe, using the US experience as a benchmark. Specifically, the impact of OSRA with respect to industry structure, including its profitability, efficiency and what may be in store for the future is examined.     

The competitiveness of short sea shipping in multimodal logistics supply chains: service attributes

Much has been written and spoken about short sea shipping within the European Union (EU) as a means of shifting goods from road to sea and of achieving a sustainable economic development. However, this shift is far from being a general reality, despite the few individual, and success stories that have taken place and the EUROSTAT data suggest that the overall effort has contributed very little towards attaining this desired shift. In the light of this, research was conducted to discover how to put short sea shipping on a more competitive level within European multimodal logistics supply chains. This paper aims at identifying service attributes of short sea shipping operations within multimodal transport chains by means of a questionnaire and, for that, examines the short sea shipping environment and contemporary European logistics trends. The analysis is based on empirical research, involving logistics operators, shippers' associations and intermodal rail operators, and allows an evaluation (based on statistical techniques) of the short sea shipping industry and its competitors. It extends previous work by considering these short sea shipping attributes within a multimodal transport context.     

Some notes on structure and stability in liner shipping

Almost six years have elapsed since the passage of the Ocean Shipping Reform Act (OSRA), legislation that has led to significant changes in the structure of the US liner shipping industry. The European Union (EU) is poised to follow suit with the impending elimination of rule 4056/86, the block exemption from EU competition rules for liner shipping companies operating on European trades routes. The EU reform, however, is likely to go further than OSRA by prohibiting both conferences and discussion agreements on European trade routes. The outcome of such a policy is uncertain and the current review of it is several years old already. This paper is intended to provide some insight into the potential impact of regulatory reform in Europe, using the US experience as a benchmark. Specifically, the impact of OSRA with respect to industry structure, including its profitability, efficiency and what may be in store for the future is examined.     

Recent aspects of the EU maritime transport policy

Since the 1980s the EU merchant fleet has suffered a dramatic decline mainly due to sharp competition from the Far East and developing countries and the operation of foreign registers ('flags of convenience'). At present the EU aims to complete the single market in shipping and improve the competitive ability of a viable European-flag fleet. It has therefore developed a policy for a European register (EUROS) to run parallel to national registers. This paper argues that the EU policy would prove to be ineffective unless it can differentiate between kinds of shipping.     

Current publications

Despite the European Union (EU) efforts promoting policies that encourage short sea shipping (SSS) based on its advantages in terms of intermodality and environment, this mode has not yet reached a significant market share compared to land transport. In this paper, we establish a thesis that suggests that funding programs (such as Marco Polo I and II) have not properly offered the right incentives to promote SSS, and aspects such as the key role of port infrastructure and its characteristics, have not been taken into consideration. In a departure from traditional transport cost models, to prove our thesis, we use a theoretical intermodal competition model to compare alternative modes—road transport vs. SSS. We reach the conclusion that the EU needs to focus on ports and transport system efficiency as a whole in order to compete effectively in the freight transport market.     

Short sea shipping

This paper quantifies the potential environmental benefit of short sea shipping. Critical strategic issues relevant to formulating public policy are developed. Coastal shipping has traditionally been a major sector of the maritime industry. This continues to be the case in the European Union, but the sector has diminished in relative importance in North America as the transport industry has become increasingly dominated by less environmentally-friendly interstate trucking and railroads. Congestion threatens to overwhelm overland carriage and limit economic growth. An alternative strategy is to revitalize coastal shipping as short sea shipping to alleviate traffic congestion and enhance economic development by maintaining freight flow efficiency. Because ship transport offers higher fuel economy and lower emission of harmful pollutants, the environmental benefits of short sea shipping over land transportation can be quantified and used to inform public policy.     

Swedish ports’ attitudes towards regulations of the shipping sector's emissions of CO2

Shipping is increasing today along with the sector's emissions of greenhouse gases. The awareness of the emissions has increased the pressure for regulations of the shipping industry. Regulating the sector is far from simple due to the complexity of the market and the evasive characteristics of the industry. We know from studies of road pricing that attitudes among stakeholders are important for a successive policy implementation. The objective of this paper is to capture the Swedish ports’ attitudes towards regulations of the shipping sector's emissions of CO₂ . This has been done by conducting a survey among commercial ports in Sweden. To our knowledge, this is the first study of this kind. Our analysis indicates that ports in Sweden are generally positive towards an implementation of regulations to reduce carbon dioxide (CO₂) emissions from the shipping industry. The ports where most positive towards CO₂ differentiated port due (97%), followed by a technical standard (92%), CO₂ taxation (84%) and EU ETS (The European Union Emissions Trading Scheme; 74%).     

EU maritime transport

The purpose of this paper is to summarize the European maritime transport policy within the context of maritime politics at large. At the outset the legal framework conditions and supportive instruments for the shipping and port industries are presented. Against the background of recent accidents at sea, such as the sinking of ERIKA and PRESTIGE, the EU legislation on maritime safety is of particular interest as it is both complex and rapid in reaction to environmental needs and political pressure. Finally, the sensible relationship between the EU as a regional organization and the IMO as “the competent international organization” is discussed with a view to reconcile possible rivalry and to suggest a complementary cooperation between the two organizations.     

An analysis of the pricing system in the Greek–Italian coastal routes

Price discrimination is practiced by oligopolistic coastal shipping companies in the ‘unregulated’ Greece–Italy routes in the year 2002. Investigation has been carried out ‘per route’—in a doctoral thesis—instead of ‘per market’ which was the so-far erroneous approach of shipping economists. This is so for a host of differentiating factors play a considerable and non-negligible role (like geography, distance, demand, seasonality and others). Service—and price-discrimination—in coastal shipping is affected also by the predetermined ship design which thus is a special feature—but not exclusively—in coastal shipping. Companies in the Adriatic Sea try to extract the greater possible value of the user's willingness to pay, peak and off-peak, group and ungrouped, for social groups (clubs, families and students). Marketing and economics interfere in a complicated—far from the nice world of theory—situation, where maximization of revenue and profit, capacity utilization, intense seasonality and high fixed cost (common and joint costs as well) are a few of the factors that interplay. This paper can be considered as a case study for applied pricing. Excess capacity is also a strategic factor affecting pricing. It is our opinion that the analysis here gives for the first time a complete theoretical and practical account—based on the price lists of the companies—of the pricing policy of the ferry boats running in the Adriatic Sea belonging to coastal shipping companies connecting Italy with Greece and Greece with the European Union (EU). We believe this work to be useful for maritime Europe.     

An analysis of the pricing system in the Greek-Italian coastal routes

Price discrimination is practiced by oligopolistic coastal shipping companies in the 'unregulated' Greece-Italy routes in the year 2002. Investigation has been carried out 'per route'—in a doctoral thesis—instead of 'per market' which was the so-far erroneous approach of shipping economists. This is so for a host of differentiating factors play a considerable and non-negligible role (like geography, distance, demand, seasonality and others). Service—and price-discrimination—in coastal shipping is affected also by the predetermined ship design which thus is a special feature—but not exclusively—in coastal shipping. Companies in the Adriatic Sea try to extract the greater possible value of the user's willingness to pay, peak and off-peak, group and ungrouped, for social groups (clubs, families and students). Marketing and economics interfere in a complicated—far from the nice world of theory—situation, where maximization of revenue and profit, capacity utilization, intense seasonality and high fixed cost (common and joint costs as well) are a few of the factors that interplay. This paper can be considered as a case study for applied pricing. Excess capacity is also a strategic factor affecting pricing. It is our opinion that the analysis here gives for the first time a complete theoretical and practical account—based on the price lists of the companies—of the pricing policy of the ferry boats running in the Adriatic Sea belonging to coastal shipping companies connecting Italy with Greece and Greece with the European Union (EU). We believe this work to be useful for maritime Europe.     

Incentives to reduce port inefficiency: a theoretical approach

Over the last decades, the European Union (EU) has devoted a large amount of effort and money to projects aimed at boosting some of its maritime corridors as a modal alternative to road or rail freight transport. However, the overall design of most of these programmes has ex post revealed as very ineffective. This paper suggests that promoting port efficiency might be a more suitable target to increase the modal split of Short Sea Shipping (SSS) than subsidizing firms to transfer cargo from road to sea. But defining ‘port efficiency’ is a complex task and, therefore, granting money directly to port authorities could also generate perverse moral hazard effects, particularly when the improvements are difficult to monitor and many investments are non-refundable. The European Court of Auditors points out that millions of EU public port finance was wasted on empty terminal and other unused infrastructure. The objective of this paper is to design a proper subsidy to promote SSS by encouraging port improvements through a proper system of incentives. As a policy recommendation, in this paper we propose the development of a subsidy per inefficiency-reduction unit.     

Market structures in coastal shipping: what to expect in Canada following the Comprehensive and Economic Trade Agreement with the European Union?

After several years of negotiation between Canada and the European Union, the Comprehensive and Economic Trade Agreement (CETA) was ratified in early 2017. The regime set out by the Canadian Coasting Trade Act that reserves shipments of cargo between Canadian ports to Canadian vessels remains mostly untouched under CETA. Minor, yet potentially significant, changes to the regime are introduced by the trade agreement. Provisions are made to liberalize the repositioning of empty containers within Canada. The liberalization of public markets now allows European firms to compete in the Canadian dredging market. Finally, EU vessels can undertake some transshipment activity in Canada but this is limited to international cargo on the specific Montreal-Halifax route. The paper attempts to highlight some possible CETA’s consequences for domestic Canadian shipping markets. It uses industrial economics analytical tools drawn from a Structure-Conduct-Performance (SCP) paradigm. From a literature review, it reconstructs different cases of deregulation that occurred internationally. The observed transformations are then characterized in terms of the SCP model. The paper identifies some common impacts which occurred in different transportation industries after a deregulation process. Using these findings, it concludes by discussing potential impacts for domestic shipping markets in Canada.     

Maritime interests in the EU policy-making: Structures,practices, and governability of collective action

Throughout Europe, a number of maritime interests have re-targeted their lobbying structures and strategies aiming to influence the development of the maritime related European Union (EU) policies. The paper examines these maritime interests’ mobilisation in the making of the Common EU Maritime Transport Policy (CMTP). First, it provides a review of the role of these interest groups and the implications of the observed collective interests’ representation. Then, with the contribution a data-set of replies to a questionnaire distributed to all the interest groups that are involved in EU maritime affairs, the paper analyses the variety of interest groups representing the maritime sector in EU affairs. The focus is on the structures (i.e. membership numbers and types, location, internal structures, budget) and the lobbying practices of the 37 identified EU level maritime related organisations. The paper also presents an evaluation of the most positive and most negative parameters of the ‘EU environment’ and the ‘economic environment’ that assist, or undermine, the governability cohesiveness of this collective action. This study provides information on whether and under what conditions maritime interests are able to form comprehensive EU-level organisations capable of representing their members and their interests in the EU policy making process     

EDITORIAL: FINANCIAL CREATIVITY

This paper sets out the developments in world shipbuilding policy that have occurred in the past decade. It reviews and outlines the situation that existed in the late 1990s, when an Organization for Economic Co-operation and Development (OECD) agreement on the elimination of shipyard operating subsidies was tantalisingly close. After the Introduction, the second section provides a brief review of the development of the industry over the past three decades, setting the context for developments since 1997. The third section discusses the complaint of the European Union (EU) to the World Trade Organization (WTO) concerning the Republic of Korea's support for its shipbuilding sector, and its counterclaim over the EU's temporary defence mechanism (TDM). It is argued that the core of the EU's case at the WTO was flawed, and that the reintroduction of an operating subsidy via the TDM was a mistake. The only prospect for regularizing competition in this area lies in the negotiation of the OECD agreement that was completed, but not ratified, in 1994. Given the souring of relations between two of the main players in this area, the prospects for such a settlement seem remote. The fourth section uses Olson's theory of groups to argue that the European Commission's actions were driven primarily by industry pressure groups, and failed to consider the potential views of other European stakeholders, in particular the taxpayers. Given the failure of the EU's action at the WTO, the future direction of European shipbuilding policy will have to focus on strategies for internal development and improved industrial competitiveness.     

Shipbuilding disputes: the WTO panel rulings and the elimination of operating subsidy from shipbuilding

This paper sets out the developments in world shipbuilding policy that have occurred in the past decade. It reviews and outlines the situation that existed in the late 1990s, when an Organization for Economic Co-operation and Development (OECD) agreement on the elimination of shipyard operating subsidies was tantalisingly close. After the Introduction, the second section provides a brief review of the development of the industry over the past three decades, setting the context for developments since 1997. The third section discusses the complaint of the European Union (EU) to the World Trade Organization (WTO) concerning the Republic of Korea's support for its shipbuilding sector, and its counterclaim over the EU's temporary defence mechanism (TDM). It is argued that the core of the EU's case at the WTO was flawed, and that the reintroduction of an operating subsidy via the TDM was a mistake. The only prospect for regularizing competition in this area lies in the negotiation of the OECD agreement that was completed, but not ratified, in 1994. Given the souring of relations between two of the main players in this area, the prospects for such a settlement seem remote. The fourth section uses Olson's theory of groups to argue that the European Commission's actions were driven primarily by industry pressure groups, and failed to consider the potential views of other European stakeholders, in particular the taxpayers. Given the failure of the EU's action at the WTO, the future direction of European shipbuilding policy will have to focus on strategies for internal development and improved industrial competitiveness.     

Safety, security, the environment and shipping: The problem of making effective policies

This paper examines where problems of shipping policy jurisdiction between international, supra-national and national levels have occurred. These range across the issues of public goods — safety, security and environment— and show up inadequacies in the current shipping policy-making processes. New frameworks — commonly termed “polycentric governance” and “multi-level governance”— sensitive to the complexities of the maritime industry and its associated political structure urgently need to be adopted. The paper is based upon research work recently carried out across the European Union supported by a number of publications and will include examples from Greece, the United Kingdom, Spain, France and also the new member states. Suggestions for improvements in policy-making structures will be made and recommendations put forward for consideration by policy-makers in the maritime sector at all jurisdictional levels     

Towards a common ports policy? EU-proposals and the ports industry's perceptions

This paper discusses the European Union's (EU) proposals to improve the efficiency and infrastructure of European ports, and investigates the extent to which these proposals are welcomed by the ports industry. On the one hand, the analysis of the recent EU policy developments makes apparent that the EU is increasingly impinging upon the port industry's life. On the other hand, the findings of the semi-structured interviews with the industry's representatives suggest that although port authorities and port operators remain in principle against a coherent common EU ports policy, the industry believes that certain EU initiatives can enhance the competitiveness of the maritime transport system.     

Challenges to implementing motorways of the sea concept—lessons from the past

Establishing a European wide high-quality shipping links and integrating them with the trans-European Transport networks has been the vision of the European Commission (EC) to reduce land transport congestion under the Motorways of the Sea (MoS) concept. However, in spite of strong political backing and favourable policy initiatives, MoS projects have met with limited success. Establishing MoS is complex because of its international scope and involvement of a number of public and private stakeholders with conflicting objectives and goals. The paper attempts to identify critical factors for establishing viable MoS projects. The paper reviews the development of the MoS concept to understand the expectations of the EC and the concerns of the important stakeholders. The present status of these policy actions is reviewed and their possible effect on the performance of MoS projects is estimated. Case studies of short sea shipping initiatives in different parts of Europe and the world are reviewed to learn from their successes and failures. This knowledge is applied to find critical factors for the success of MoS projects in the European context.     

Towards a common ports policy? EU-proposals and the ports industry's perceptions

This paper discusses the European Union's (EU) proposals to improve the efficiency and infrastructure of European ports, and investigates the extent to which these proposals are welcomed by the ports industry. On the one hand, the analysis of the recent EU policy developments makes apparent that the EU is increasingly impinging upon the port industry's life. On the other hand, the findings of the semi-structured interviews with the industry's representatives suggest that although port authorities and port operators remain in principle against a coherent common EU ports policy, the industry believes that certain EU initiatives can enhance the competitiveness of the maritime transport system.