of the Maritime University of Szczecin
Akademii Morskiej w Szczecinie
2019, 58 (130), 74–83ISSN 1733-8670 (Printed) Received: 24.05.2019
ISSN 2392-0378 (Online) Accepted: 14.06.2019
DOI: 10.17402/339 Published: 25.06.2019
Assessment of the current state of the EU inland
shipping development and its perspectives from
the policy and transport market point of view
Andrzej S. Grzelakowski
Gdynia Maritime University, Faculty of Entrepreneurship and Quality Science 81–87 Morska St., 81-225 Gdynia, Poland
e-mail: a.grzelakowski@wpit.umg.edu.pl
Key words: inland waterways, EU inland shipping, EU transport policy, sustainable mobility, transport
mar-ket, modal split, transport demand forecast
Abstract
The main subject of this research was to identify recent basic trends in the development of inland waterway transport in the EU as well as to evaluate this from both EU transport policy objectives and logistics markets’ requirements. For this purpose, classical statistical and economic analysis methods as well as the documenta-tion research method were used. The basic threats and barriers to the development of inland waterway transport are indicated, as well as various actions necessary to limit or eliminate them. An attempt was also made to as-sess the opportunities and prospects for the development of this transport mode in the next decade in the context of the development of the broader EU transport market. The main objective of this research was to perform a market assessment of the development prospects of this mode of transport in the era of dynamic developing logistic customer service standards, as well as progressive globalization and the 4th industrial revolution (digi-talization). In this respect, political versus market-oriented scenarios of the development of EU inland shipping were analyzed and evaluated. The conclusions relate to the ongoing and upcoming modal shift on the EU trans-port market as well as regulatory measures undertaken by the EU.
Introduction
Since its inception, the EU has promoted the economy development model based on the assump-tions of a sustainable development strategy (EC, 1992; 1993). The model is focused in particular on the transport sector which emitted over 30% of CO2 in the early 1990s, and despite various actions
taken since then, the sector still emits over 20% of CO2. Statistics indicate that the transport sector
currently contributes 23% of all CO2 emissions in
the 27 EU Member States (EC, 2016a, p. 3). The transport sector is a major contributor to CO2
emis-sions because of its dependency on fossil fuels in all transport modes, and despite significant efforts to reduce emissions, it has not achieved its earlier decarbonizing targets. If this trend continues, it is
expected to contribute 50% of all CO2 emissions in
the EU by 2050, if not within the next two decades (EC, 2012, p. 9–12). An overview of historical development of CO2 emissions and estimates for
various sectors is shown in Figure 1, which clearly indicates the expected continuing growth of trans-port emissions.
Even with the progress made in reducing emis-sions during the last decade, the EU has called for a more drastic reduction in greenhouse gas emis-sions. To create a decarbonized energy system by 2050, the European growth strategy EUROPE 2020 has incorporated a flagship initiative: the 2050 Ener-gy Roadmap (EC, 2011a). This gives the highest priority to achieving energy efficiency, stimulating the use of renewable energy sources, and developing new infrastructure capacities. These improvements
will have a direct impact on reducing CO2 emissions
in the transport sector (EC, 2011b).
Despite efforts to reduce CO2 emissions from
transport, continuously growing traffic volumes have increased CO2 emissions over the past decade,
and reversing this trend has been a key challenge for the EU. The EC’s answer to this was to target a 60% reduction in transport CO2 emissions by 2050
(EC, 2011b). As shown in Figure 2, road transport was responsible for most greenhouse gas emissions (GHG), followed by international maritime trans-port, and international aviation (OECD, 2015, p. 7).
Road Domestic navigation International maritime Domestic aviation International aviation Rail Other
Figure 2. GHG emissions in the EU 27 by transport mode (EC, 2012)
Apart from railway transport, inland waterway shipping is one of the transport sectors which emits the lowest amounts of CO2 (Figure 2), and also has
a significant but modest performance level com-pared to other transport sectors within the European transport system. In such a situation, an open ques-tion is whether the ecological criterion set by the EU transport policy to strongly support the development of stable and sustainable transport systems may be used to promote inland waterway shipping in the EU. This is because it is de facto the case these days in Europe, and in particular in a situation when the
share of this transport sector in the transport market has gradually decreased. This is particularly import-ant due to globalization and implementing advanced logistics solutions during the current stage of 4th
industrial revolution, where the criterion of effi-ciency and effectiveness of transport determine the quality of the transport and logistics of each state, including the effectiveness of network service mar-kets (infrastructure) and transport service marmar-kets in Europe. This concurrently determines its competi-tiveness and ranks higher the standards formed by market regulation mechanisms than by public regu-lation mechanisms, i.e. transport policy (EC, 2011a; EP TRAN, 2018). Therefore, the aim of this study was to attempt to determine whether post-industrial EU, which is concurrently building the most efficient logistics area in the world, should follow a more market-oriented scenario for the development of the transport sector, including inland waterway shipping (pro-demand development model), or follow the existing trend towards a co-modal model based on the eco-standards of the EU transport policy. There-fore, this research involves defining whether the EU should strive to build the Common European Trans-port Area based on the formula of a market-oriented (real) modal split, or a normative modal split defined by its transport policy based on the principle of sus-tainable mobility.
Policy and market-oriented prerequisites and factors of the EU inland waterway transport development
In 1958, i.e. when the ECC was founded, inland waterway transport was included in the common transport policy of the European Community (art. 82–84 of the Treaty of Rome). However, freight
300 200 100 0 100 200 300 400 500 Mton Transport Industry Residential, services and agriculture Power generation Energy branch and district heating
2000–1990 2010–1990 2020–1990 2030–1990
transportation via inland waterways – both interna-tional and cabotage – was fully liberalized only since 01.01.2000, and already existed within the EU. The process of opening this segment of the EU transport market was relatively long due the significantly dif-ferent interests of member states, which have each had different opinions on the role of inland water-way shipping since 1992. Thus, the EU branch mod-al model was split based on sustainable mobility. Moreover, there were administrative, legal, tech-nical, social, and economic differences within this transport sector between member states, as well as differences between the scale of development needs. In particular, there was a difference between the infrastructure, which constituted a significant barrier preventing the integration of partial markets in this transport sector (EC, 2016a, p. 3; 2017b, p. 2–3).
The development preferences regarding this transport sector in the EU with its financial support were based to a greater extent on an ecological rath-er than an economic premise. Since the majority of program documents have indicated the advantages of this transport sector, especially compared with other sectors such as rail transport, they were for-mally included in the priority sectors of transport development in the EU (Figure 3).
The features specific to inland waterway ship-ping in this transport sector related to its operational, technical, and market-oriented advantages include (van den Bossche et al., 2017, p. 43; EC, 2018b): 1. A high level of safety – there are a relatively low
number of accidents, and moreover, the accidents have insignificant environmental consequences, generating a relatively low level of losses;
2. Reliability – if the transport provided by inland waterway meets the standards of the AGN con-vention (and in the case of dangerous goods trans-port, the requirements of ADN agreement), there are usually no disruptions. However, this excludes winter or extraordinary overdemand;
3. High one-off carrying capacity of inland water-way vessels. Vessels with a capacity of 2000 tons can carry a cargo weight of 50 railway carriages with a capacity of 40 tons each or 80 tracks with a capacity of 25 tons each;
4. Low carriage costs per unit and consequently low freight, which makes this transport sector very competitive – mainly via bulk cargo transport; 5. A large, free, and currently unused carrying
capacity – apart from congested times, inland waterways in the EU still have a significant avail-able capacity, and they always exist at particular sections within the network;
6. The capacity to transport heavy and oversized car-go, such as: turbines, silos, ship hulls, and equip-ment for wind farms;
7. The possibility to offer transport services for all types of cargo, i.e. dry bulk cargo as well as liq-uid cargo, containers, and other intermodal and freight units. Thanks to a proper and specialized transport fleet, the operators can satisfy the major-ity of shippers’ transport needs;
8. Relatively low charges to use the infrastructure since many transport units have their own han-dling equipment (e.g., cranes), and also use the infrastructure of public network managers.
Due to its perceived advantages, the qualities of inland waterway transport make it very attractive for many shippers in the transport service market and are more complementary than substitution-ary compared with other transport sectors, whose scope in terms of transportation and logistics (costs versus transit time) is presented in Figure 4. The figure indicates the development possibilities of inland waterway shipping within the existing structure of transport markets, and indicates the limits of its use in developing time- and cost-wise optimal division of transport tasks (Grzelakowski, 2011; EC, 2013).
One of the factors which determines whether it is possible to create a competitive advantage within particular transport sectors, is the energy efficiency of a typical means of transport (EC, 2013; 2017a, p. 5). This factor becomes particularly important within the implementation of sustainable devel-opment strategy, and we can observe a significant advantage of using of inland waterway transport versus rail and road transport (EC, 2017a, p. 3–4). The existing differences in this respect are presented in Figure 5. Cargo Capacity ONE BARGE 1,500 TON 52,500 BUSHELS 459,600 GALLONS
ONE 15 BARGE TOW 22,500 TON 747,500 BUSHELS 4,001,000 GALLONS
JUMBO HOPPER CAR 100 TON 3,500 BUSHELS 30,270 GALLONS
100 CAR TRAIN UNIT 10,500 TON 350,000 BUSHELS 9,028,000 GALLONS LARGE SEMI 24 TON 910 BUSHELS 7,049 GALLONS
When comparing and evaluating the market-ori-ented advantages and disadvantages of inland ship-ping relative to other competitive land transport sec-tors, the economic and financial, strictly operational, and ecological – or even environmental – criteria shall be considered. Taking into account the first group of factors we shall first indicate two basic mar-ket-related challenges posed by this transport sector in any economy. They include: the need to provide a sufficiently high volume of goods for transport (an aspect of market demand), and problems with generating a sufficient level of financial revenue for shipping operators to maintain financial liquidity (an aspect of the scale of production and existing car-rying potential). Whereas indisputable advantages in this respect capable of significantly reducing the potential market failures include: a relatively low level of unit costs of production, the ability to han-dle various types of cargo (significant adaptability to market needs), an insignificant investment needs in the area of infrastructure and low usage costs (Grzelakowski, 2010, p. 75–76; Van den Bossche et al, 2017, p. 44;). Whereas, in the operational aspect,
the potential challenges include extreme sensitivity to weather conditions and the lack of a delay buffer (Van den Bossche et al, 2017, p. 45).
The development-oriented opportunities and strengths include a low accident rate, a low rate of operational disruptions and congestion, and a low level of barriers within load availability regarding the volume and type of load unit (EC, 2013; Punt-er & Hofman, 2017; Van den Bossche et al, 2017, p. 45).
Whereas, within the ecological factors, key threats and challenges related to the use of inland waterway shipping include possible water contami-nation and possible disruptions or damage to aquat-ic ecosystems. The opportunities and advantages of inland waterway transport include low levels of exhaust emissions and energy consumption per per-formance unit (ton-kilometer), lack of direct emis-sion due to the use of electric drives, and a potential reduction of road congestion and emission by motor-ized transport (modal shift) (EC, 2018b).
All these factors co-define relatively high eco-nomic and ecological standards of inland waterway transport, and should determine its place and com-petitive standing in the transport service market. However, in practice, this does not always reflect the market reality, particularly from an international perspective.
Inland waterway transport on the EU transport market
In 2015, the EU-28 transport sector employed a total of 10.85 million people, with only 44.5 thou-sand people working in companies and institutions in inland waterway transport (over 3.66 million people worked in rail transport). This number includes 13.4 thousand people employed in the Netherlands, 10.1 thousand in Germany, 3.5 thousand in France, and 1.6 thousand in Poland. Among the 1,188,622 trans-port companies operating in 2015 in the EU, 9963 were directly involved in inland waterway shipping, but there were only 928 rail companies. The major-ity of companies were registered in the Netherlands (4264), Germany (1105), France (1047), and Italy (1016). In the same year, in the EU the transport sec-tor recorded a turnover of 1,490,902 million euros, with the inland waterway transport turnover amount-ing to only 7865 million euros (for comparison, the turnover for rail transport was 9.8 times higher). The workforce productivity, calculated as a turnover value per person employed in the EU transport sector in 2015 was an average of 137,537 euro/1 employed.
Low
Cost Level
High
Short Transit Time Long
Figure 4. Cost level versus transit time for freight airplane, train and barge (Grzelakowski, 2011, p. 63; Olsen, 2015, p. 4)
Number of Miles One TON can be Carried per Gallon of Fuel Truck 59 Miles
Rail 202 Miles Inland Barge 514 Miles
100 200 300 400 500 600
Figure 5. Comparing relative energy efficiency of barge, freight train, and truck (Sun & Craft, 2011)
In the rail transport, the rate was 149,300.97 euro/1 employed, whereas, in inland waterway transport the rate was higher and amounted to 176,741.57 euro/1 employed (EC & Eurostat, 2018).
In terms of the value of handling the EU inter-national trade, the dominant share belongs to mar-itime transport (49.1% in 2016). The share of inland waterway shipping in goods transport based on values from the trade between the EU and oth-er countries amounted only to 0.2%, whoth-ereas rail transport carried 6 times as many goods (1.2%) (EC & Eurostat, 2018). As for the volume of trans-ported goods between the EU and other countries, the share of inland waterway shipping amounted to 3.8% in 2016, rail transport 6.5%, and maritime transport 75.5%. These market relations reflect the technical and operational features of each of these two transport sectors and the resulting differences in their transport-related susceptibility and avail-ability in terms of handling the exchange of goods between the EU and international markets. Current relations of this kind also constitute – in the context of changes in type- and direction-related structures of the EU exchange of goods – grounds to assess future modal splits within the EU transport market (EC & Eurostat, 2018).
The volume of production in transport is mea-sured per units of performance, i.e. in ton-kilometers. Between 1995 and 2016, in the EU the volume of production increased from 2846 billion t-km to 3661 billion t-km, with an increase from 388 billion t-km to 412 billion t-km in rail transport and from 122 billion t-km to 147 billion t-km in inland waterway transport. This means that within the analyzed peri-od, the performance volume increased by 28.6%, at an average annual rate of 1.2%. However, between 2000 and 2016, the growth rate of transport produc-tion significantly slowed, only increasing by 12.8%, with an average annual increase of 0.8%. Between 1995 and 2016, inland waterway transport saw an increase in production measured by the volume of performance of 20.6%, which meant that the average annual increase amounted to 0.9%. In rail transport, the increase amounted to 6.1% and 0.3%, respective-ly. Between 2000 and 2016, in both transport sectors, as in the case of transport sector, there was a decrease in the production rate calculated in the same manner. It was particularly notable in rail transport where the total increase in this period totaled only 1.4%, with an average annual increase of 0.1%. The segment of inland waterway transport recorded an increase of 10.0%, where the average annual increase was 0.6%. These changes affected the branch structure of the
EU transport market, changing the modal split estab-lished in the late 1990s (EC, 2016b, p. 3–4).
In 1995, the share of road transport in the units of performance within the transport market amounted to 45.3%, rail transport 13.6%, and inland waterway transport 4.3%. In contrast, 20 years later, the share of road transport increased to 48.9%, and the share of rail transport decreased to 11.2%, while inland waterway transport accounted for 4.2% (in 2005, it amounted to 3.8%). The downward trend that can be observed in both transport areas seems to be per-sistent in the EU and particularly noticeable after 2010. In 2016, the EU28 recorded a decrease in per-formance in inland waterway transport by as much as 8.2 billion t-km compared to 2010. This mainly resulted from a significant decrease in the production volume in this transport sector in Germany by 8 bil-lion t-km and in France by 1.2 bilbil-lion t-km. A sim-ilar phenomenon can also be observed on the US transport market, where in 1990, the share of inland waterway shipping amounted to 8.5%, whereas in 2015, only 6.5%. This still represents an increase compared with 2010 (5.6%) (EC & Eurostat, 2018).
The situation is different between EU member states. For example, the Netherlands, where the share of inland waterway shipping in the transport service market totals as much as 42.3% (2016), has recorded a steady increase in the volume of per-formance since 1990, which amounted to as much as 33.54% of total performance achieved in 2016 in EU28 in inland waterway shipping. A very high share of this transport branch within the transport service market is recorded in Romania (28.7%) and Belgium (26.3%). A higher than average EU level (5.9% in 2016), regarding the share of inland water-way shipping in the transport market, is recorded in Germany (8.5%), and near average in Luxembourg and Hungary. In Poland, with a performance volume of 0.1 billion t-km, this share has been definitely less than 1% for several years (EC & Eurostat, 2018).
Performing a long-term analysis of the market of services in inland waterway transport in the EU, and comparing its trends and growth rate with the EU transport market, as well as partial rail transport market, one cannot neglect the issue related to infra-structure of this branch of transport, and the degree of its use. The infrastructure determines the current market standing of this branch of transport and its development prospects (EC, 2014; 2018a; 2018b; OECD, 2015). In order to analyze this issue, inter-national comparisons can be used, and the basic data providing the grounds for such an analysis is pre-sented in Table 1.
Table 1. Inland waterway infrastructure and freight trans-port in EU28, USA, China and Russian Federation in 2016 (EC & Eurostat, 2018; EC, 2014)
Country Inland waterway infrastructure Length in use (km) Freight transport in inland shipping (billion t-km) Transport infrastructure performance index (t-km/1 km) EU28 41,900 147.3 3,515,513 USA 40,200 486.5 12,101,990 China 127,100 – – Russian Federation 101,000 67.0 663,300
The table indicates that the length of infrastruc-ture used by inland waterway shipping (navigable canals, rivers, and lakes used for transport) in the EU is only slightly higher (by 1,700 km) than in the USA. However, the intensity of its use (trans-port infrastructure performance index) is 3.4 times lower than in the USA. Compared to Russia, with more than 2.4 times longer inland waterway infra-structure, the EU infrastructure performance index is 5.3 times higher. The comparisons indicate that the EU should take actions aimed at a more inten-sive use of the existing capacity of inland waterway infrastructure. The objectives of EU transport policy should focus more on modernizing and optimizing the existing network in this transport sector than on developing it further. This refers in particular to the network segments and countries with high amounts of capital-intensive investments.
It should be noted that between 1995 and 2016, in the EU the length of inland waterways increased only in the Netherlands (from 5046 km to 6257 km), Finland (from 6120 km to 8136 km), and in Ger-many (from 6663 km to 7675 km). Moreover, the network length of the latter has gradually decreased since 2010, and between 1995 and 2016, the length was reduced from 5962 km to 4733 km in France. This undoubtedly represents the rationalization within transport management observed in the major-ity of EU member states.
Inland waterway transport in the EU transport policy and CEF Program
To reduce greenhouse gas emissions, the EU has worked for nearly 30 years to support pro-ecologi-cal development of transport sectors which, include rail, short sea, and inland waterway shipping. This criterion is deeply rooted in transport policy, which is focused on lowering external transport costs, and
is more significantly exposed than the real criterion based on the category of market-oriented effective-ness of transport sectors. This is clearly indicated by promoting actions to further change the existing and regularly corrected modal split through these poli-cy instruments. This modal split should constitute grounds for the model of Single European Transport Area (EC, 2011a; EP TRAN, 2018).
The EC has recently undertaken several initia-tives to foster the development of the Single Europe-an TrEurope-ansport Area. Progress towards this goal, apart from the 4th Railway Package, the Blue Belt initia-tives for maritime transport, and the proposed Sin-gle European Sky II+package for aviation transport has been made, with the NAIADES II Program to promote inland waterways. The NAIADES II policy framework, adopted by the EC in September 2013, is regarded as an action program until 2020, which is also perceived as an overarching Action Program for the promotion of IWT from 2014–2025. It aims to create conditions for inland navigation transport to become a quality mode of transport. In the NAIA-DES II mid-term report published by EU in Septem-ber 2018, the EU presents progress achieved up to 2017, as well as the on-going actions for implement-ing NAIADES II. The NAIADES II report specif-ically focused on six key areas of intervention, i.e. 1. Quality infrastructure, 2. Quality through innova-tion, 3. Smooth functioning of the market, 4. Envi-ronmental quality through low emissions, 5. Skilled workforce and quality jobs, 6. Integration of inland navigation into a multimodal logistics chain (EC, 2018b).
Therefore, it can be concluded that NAIADES II focuses on making long-term structural changes in the inland navigation sector in the EU to make it more modern, innovative, and attractive. While the initiatives of this Action Program revolve around diverse topics such as innovation, the smooth oper-ation of the market, environmental performance, and providing quality jobs for skilled workers, it also calls for RIS (River Information Services) to be expanded and integrated with the information streams of other transport modes.
In addition to the mid-term progress report on the EU inland waterway action program NAIADES II, the EC published a report in September 2018 on digital inland navigation (DINA), which follows up on the ‘Digital Inland Waterway Area’ study from October 2017. The report helps frame the discussion on the digitalization of inland waterways transport sector to seek synergies and improve interoperabil-ity in logistics and freight transport across Europe.
It characterizes the existing initiatives and tools in the area in an integrated way. Examining the state of play regarding digitalization in the IWT sector, the DINA study concluded that the focus so far has mainly been on the provision of RIS by fairway authorities and their use by vessel operators. In fact, the main EU legislation on digitalization applica-ble to the IWT sector focused on the RIS Directive establishing a framework for the deployment and use of harmonized, interoperable, and open RIS. It also included a Directive on technical require-ments of inland waterway vessels (the Commission maintains the European Hull Database – EHDB). It also focused on a Directive to recognize profes-sional qualifications in inland navigation facilitates by developing an electronic exchange of information about crew members by using a system of national registers and database to be kept by the Commission (EC, 2018a; 2018b).
Using this as a starting point, the study called for further development to meet the needs of all stake-holders and identified three categories of actors with different needs and objectives related to digitaliza-tion. The first was IWT users, primarily shippers and logistics service providers. The second was the transport sector itself, including vessel operators, terminal operators, and their links to other modes of transport. The third was public authorities or agen-cies operating on their behalf with certain duties, e.g., collecting and publishing statistics.
The initiatives and actions undertaken by the EC, aimed at developing the EU inland waterways trans-port sector and enhancing its quality in the era of Industry 4.0, are financially supported by the CEF Program. Up until mid-2018, the CEF Transport has funded 641 grants worth €22.3 billion of the EU contribution. Support to inland waterway transport currently represents €1.7 billion (or 7% of the total CEF Transport funding allocated until now). A total of 103 proposals were received for inland water-ways requesting €3.7 billion in EU contributions (EC CEF, 2018b; INEA, 2018). This corresponds to a success rate of 54%, which is slightly higher than for the overall CEF Transport success rate of 45% (EC, 2017b; 2018b; EC CEF, 2018a).
Since the inception of the CEF Program in 2014, 52 inland waterway actions have been granted CEF funding to reinforce the contribution of inland water-ways and ports to the sustainable European freight transport network, and in particular to core network corridors, and to support NAIADES II. Studies, works, and mixed actions are supported to ensure the implementation of the TEN-T inland waterway
network and corridors and to promote inland water-way transport (EC CEF, 2018a; 2018b). These main objectives of the EU inland transport development are pursued through different approaches:
1. Upgrading the network of TEN-T waterways in-line with technical requirements and priorities of Regulations 1315 and 1316 of/2013. A particular focus is placed on the Core Network Corridors as well as some sections of the Core Network, includ-ing isolated waterways. The majority of fundinclud-ing has gone to actions such as studies and works to calibrate waterways, upgrade locks, increase under-bridge clearance, provide infrastructure for mooring and waterside operations (aimed at improving cross-bor-der sections), integrating inland ports within road and rail transport networks, connect waterway net-works, remove bottlenecks, improve navigation conditions, etc. (EC, 2017a; 2018b) These actions aim to improve navigation conditions such as safety, reliability, efficiency, and capacity. Actions located in the cohesion countries are focused on integrating the guiding principles of the International Conven-tion of the ProtecConven-tion of the Danube River (ICPDR), to maintain its good ecological status (GES).
2. Supporting the deployment of harmonized and interoperable RIS across Europe to improve safety, efficiency, and environmental friendliness and facili-tating interfaces with other transport modes.
3. Concentrating on the deployment of new tech-nologies and innovation in all transport modes, with a focus on decarburization, safety, and innovative technologies to promote the sustainability, opera-tion, management, accessibility, multimodality, and efficiency of the network (EC, 2013; 2016b; 2017a; 2017b).
The abovementioned actions and initiatives taken by the EC are focused on creating a suitable framework for EU inland navigation. They aim to establish an appropriate framework to optimize the internal market for inland waterway transport, and to remove barriers preventing its increased use. Other-wise, it stands to lose its comparative advantage as an efficient, low external cost transport mode
Perspectives for the development of EU inland waterway transport
By analyzing the official EC documents on trans-port policy from the last few years, it is evident that the EC is fully convinced that inland navigation has not operated sufficiently effectively until now com-pared with other transport modes. As a result, it is currently unable to fulfil the already set transport
and logistics standards within the EU transport and logistics system. Until these appropriate long-term structural changes are made to improve the quality of its operating conditions, inland navigation will gradually lose its competitive advantages over other modes of transport. This will likely manifest in the form of a systematic decline in its share in the EU transport market. Such a process is already clear-ly visible within the EU transport services market over the last decade (EC DG, 2018). The changing modal shift in the EU transport market between 1990 and 2030 is presented in Figure 6. According to the 2007 EC forecast, the share of inland navigation in the EU transport market will decrease to below 10% by 2030 (see Figure 6). This process will take place despite the fact that, as in the EU, it was estimated that the total size of the freight transport markets in volume terms (t-km) will increase within this time (Figure 7).
The rate of this growth, however, will not be as high as it was between 2005 and 2015. At that time, it was due to the EU enlargement in 2004 for coun-tries where the transport intensity was much higher than in the former EU15.
More optimistic forecasts developed by the EC and OECD in 2012 and 2014 respectively predicted that the share of inland navigation in the EU trans-port market will not change until 2025. They pre-dict that it will remain at the same average level it was at between 2005 and 2018 and then will slightly drop by 1–2% percent (EC, 2011b; Schade, Helfrich & Peters, 2011; OECD, 2015; Capros et al., 2016). This means that ambitious plans to modernize and develop this mode of transport will not provide it with greater opportunities to gain additional shares
in the very competitive and much more logistically oriented EU transport market.
This can be taken for granted, considering that Europe will transform already existing supply chains into intelligent supply chains (ISC) by designing and creating a higher quality of standard for its logistics system. Such an ISC, as a newly designed genera-tion of SC for the connected world, is based on the concept of leveraging artificial intelligence (AI), the Internet of Things (IoT), and blockchain (MWD, 2018). As a result, this should ensure that ISC will be at the heart of digital logistics ecosystems (Marr, 2017, p. 5). To achieve this goal and reach the ISCs designed full potential, it is necessary to transform them in such a way that they would be connected, collaborative, smart, and secure. When IoT, AI, and blockchain are when integrated with more tradition-al supply chain management systems used in the EU transport systems and business network prac-tices, new levels of innovation and efficiency can
Figure 6. The ongoing modal shift on the EU transport market between 1990 and 2030 (Schade, Helfrich & Peters, 2011, p. 19; EC DG, 2018; EP TRAN, 2018, p. 33) Freight transport Index (1990=100) Passenger transport 200 180 160 140 120 100 80 60 40 20 0 1990 1995 2000 2005 2010 2015 2020 2025 2030 Figure 7. Projected growth in the EU transport sector between 1990 and 2030 (EC, 2012)
be obtained (Abramovich, 2017). However, the EU inland waterway transport is far from this, which is already occurring in other transport modes processes of SCM transformation.
Conclusions
To build the Single European Transport Area based on the assumptions of sustainable mobili-ty strategy resulting from the concept of transport decarburization by 2050, the EU has strongly sup-ported the development of pro-ecological trans-port sectors, including inland waterway transtrans-port. However, in the era of globalization, the gradual opening of freight and transport markets, former-ly uncommon innovation development, as well as intelligent logistics chains and supply networks and digitalization, constituting a feature of the 4th
industrial revolution, due to low adaptability poten-tial, inland waterway shipping has gradually lost its competitive advantages. For several years, its share in the EU transport market has gradually decreased, and this trend is going to continue, according to the EC and OECD forecast. Only through significant investments from such funds like CEF and regula-tory actions will it be possible to maintain its share in the EU transport market at its current level until 2050 (EC DG, 2018; MWD, 2018). Within the first area, the EU well-grounded actions – removing sig-nificant bottlenecks in the EU transport network, providing better green infrastructure, and smooth-ly integrating it into intelligent logistics chains – include investment measures aimed at upgrading and modernizing infrastructure in inland waterway networks in Belgium, Germany, France, the Neth-erlands and Austria. It also includes investments aimed at rehabilitating the navigability of Bulgari-an, HungariBulgari-an, and Romanian inland waterways, in particular the Danube (EC, 2016b; 2017b). Making other capital-intensive infrastructure investments in this area in countries with their share of inland waterway shipping in the transport market lower than 4–5%, in the current situation is unreasonable. On the other hand, in countries where inland water-way shipping plays a significant role (more than 5% of the market share), the EC should take coordinated regulatory actions regarding the entire transport sec-tor in the EU. Therefore, for EU inland waterway shipping, the focus should mainly be on increasing its effectiveness, its energy efficiency, and applying alternative, low-emission fuels and drive systems (INEA, 2018; EC, 2011a). These two closely-coor-dinated and consistently implemented activities will
enable them to maintain a healthy balance between the real and the market-oriented, as well as the reg-ulatory and administrative mechanisms to shape its development. They will also facilitate the construc-tion of a new EU quality logistics area, based on the ISC regulatory standard.
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