European Shortsea Network: Contributions

and Competition Concerns

Alkis John CorresSPC GREECE

Shortsea shipping we call the maritime activity in and around the EU..

....from which cross-ocean transportaion is excluded.

Short sea Shipping is therefore the domestic shipping activity of the

EU, the equivalent of the Jone’s Act in the US.

Shortsea Shipping therefore holds the EU together, although the EU keeps it disparate.

There are eighteen active shortsea promotion centres in the EU at the moment

These centres have formed an informal Network presided by a rolling presidency which changes every six

months.

Despite separate territorial waters – an anachronism which still persists – SSS still manages to hold its own. Internal cargo movements by sea still represent no less than using no less than 10,000 vessels in the process.

The EU, just like every other regional economic power needs a dedicated fleet for the internal transport and distribution of cargoes. The split by sub-region is shown in the following slide.

27%

It is worth noticing the prportion of traffic represented by the Special Areas.

13.0%

21.2%

6.6%

27.6%

26.5%

5.1%

Atlantic OceanBaltic SeaBlack SeaMediterranean SeaNorth SeaOthers

Baltic Sea

North Sea

Back to the Network now which has managed to raise itself to a privileged advisor to the Commission.

.Immediate priorities of the Network are the establishment of direct links with the European Shippers’ Council, ECSA, ECASBA and other EU associations operating in the sphere of transportation.

In parallel there is awareness and promotion activity at national and EU level via jointly organized events involving members of the European Parliament.

...through which the Network is coordinated under the guidance of its Presidency.

Since last March there is an ESN Permanent Secretariat in Piraeus, Greece..

We have decided that each SPC should retain its independence regarding its own local activities..

Common undertakings are jointly planned though.

Deloitte has already been commissioned to look into EU member state legislations in order to select the most appropriate seat for the legal identity of the Network...

…and soon there will be permanent ESN representation in Brussels looking after its contacts with the various departmentsof the EU.

The ESN is therefore charging ahead after a series of successful presidencies.

The Greek SPC has been following closely the progress of discussions on a 650 km river link between the Med and the Danube.

From the port of Thessaloniki in Northern Greece, into Vardar river....

..cargo on river ships..

...and on to Morava river and up north to join the Danube. EU networks

at their best.

Its regulatory framework has hardly changed over the last two decades. The number of important failures includes continuous failures in port services regulation, a failure to instigate a European flag, an unsuccessful Regulation on cabotage and a surprising denial on the part of the Council of Ministers to create a Single Market in maritime transport as obliged by the EU Treaties.

European shipbuilding in a bad shape as a result of a long series of shipbuilding Directives. Now most new shortsea ship orders are placed abroad.

A large proportion of the EU shortsea fleet is aged which means longer down times, more expensive repairs, higher fuel bills and more atmospheric pollution from old engines.

Old ships means no chance to convert to scrubber or LNG due to high cost and short life to amortize the investment..

However, European SSS will soon be faced with a number of important

challenges..

In the meantime Europe is in desperate need of new ships as 50% of the shortsea traffic takes place in

Special Areas. Why hide it however,

EU policies develop too slowly. Europe often finds itself in a role of spectator without any chance to :

..be a player in global politics ..defend its own territory, ..find common positions in its own istitutions. ..stop continuous separatist requests in member states, and to..

..convince new member states such as Poland, Romania and Bulgaria to join the euro.

Europe can do better without so much cliffhanging.

The ESN has answers to some of these problems..

..and a proposal for the replacement of the shortsea fleet which uses..

...production platforms for the

creation of shortsea vessels in series.

The conceptual basis is quite simple.

The platforms have horizontal and vertical application

Horizontally: Different types of shortsea merchant ships (freighter, tanker, gas carrier, containership etc) in each platform, and

Vertically: Different size ranges featuring common bow, stern and accommodation. 3,000 dwt

2,200-4,000 dwt 6,000 dwt (5,000-7,500) 9,000 dwt ( απο 8,000- 11,000)

Our proposal was further checked by the research laboratory ICEPRONAV..and these checks were culminated with a tank test of a ship model designed to our specifications with excellent results...

...reconfirming that our proposal with flexibility in length and – less so – in draft can cover he entire range from 2,000 – 11,000 dwt. The addition of further platforms can add sizes accordingly.

Now allow me to pre-empt an expected question from your side, if that is the proposed method can bring significant cost reductions to yards.

The answer is ‘’yes’’ in view of significant savings in design, plan approval, speed of assembly and cost of ship equipment e.g. Engines, ontop of an up to 30%

reduction in manhours.

Our proposal assumes longterm committment from all sides, i.e.

Availability of loans from banks and owners’ participation. (This is the easier part.)

EU funds’ participation in view of the Innovative/Green design of the ships in the spirit of the Athens Declaration (2014) and the subsequent Decision of the Council of Ministers.The entire EU Shortsea fleet can run on LNG in under 25 years with less than 200 billion euro investment.

The EU must realize that capitalist systems need incentive policies in order to be controllable. Its present hybrid approach is leading nowhere.

Minor changes in the Shipbuilding Directive.

We need to move in this direction, Ladies and Gentlemen, as we are presently losing money.

Under Regulation 3577/92 on cabotage a significant part of intra-EU shipping is carried by third flag vessels.

Most of these vessels, unlike EU flag ships, are paying crew salaries, social security contributions, insurance cost and ship repairsin softer currencies while receiving freight income in euro. EU flag operators are at disadvantage as

they are paying all the above in euro.

This anomaly only happens in the EU as all other trading blocks (Russia, US, India, Australia and China) reserve all domestic transportation to their own flag ships. I am asking therefore:

Does the current regime offer to third flag operators free market access blatantly against the principle of reciprocity?

Should we look into this matter ? Is the good quality and environmentally friendly European short sea ship operating under unfair competition?We all believe in open seas, free competition and in European

Shortsea Shipping on condition however that competition is fair.

So, dear Russian, American, Chinese, Indian and Australian friends who have been working

for many years in EU coasts for free..

..so that we will not have to close ours to your tonnage.

Open your national waters to EU flagged

ships..

Ladies and Gentlemen,

Thank you very much for your attention.