"There is no doubt that given a level playing field, pan-European short sea container services would always be more cost competitive and flexible than the overland alternative by truck," claims Geoff Smith, managing director of MacAndrews & Co.
Mr Smith made his comments at this year's Intermodal exhibition and conference in Bilbao where he was asked to address the competitive challenges that the trucking industry pose on the short sea shipping industry and whether the latter can compete from the perspective of cost and flexibility.
Added Mr Smith: "Whilst there can be little doubt that the evolution of the intra-European trucking industry has had a significant impact on the development of consumer spending patterns and regional economies over the last 30 years, congestion and other factors is increasingly limiting its effectiveness.
"I believe that the time is ripe for a change in focus and I'm certain that short sea container shipping operators are more than capable of embracing the trucker challenge, on cost, flexibility and almost any other parameter for that matter.
"For me, the art of changing focus to beat congestion means that we need to identify ways of transporting goods by sea for reasons such as environmental cost and safety, and the alternative trucking solution should be forced to pay its true cost, or be penalised.
"Shippers have come to rely on long distance truck services, rather than short-sea shipping for various reasons.
"Those active in our industry have failed to promote the fact that they have a fully functioning intermodal door-to-door business operating today, which is alive and kicking and a mature product.
"Short sea still has an old-fashioned port-to-port image that needs changing into a dynamic element within the supply chain.
"Negative comments have been made about facilitation measures and port efficiency in regards to the short sea solution.
"Certainly, facilitation measures are needed to streamline certain documentation and administration procedures, but these are not real impediments to the ongoing development of short sea shipping.
"Furthermore, port efficiency needs to be addressed so that ports can match the logistics requirement of the 21st Century. Production levels of 40-50 lifts per hour are essential to support vessel turnaround requirements in order to maintain schedule integrity and keep pace with growth.
"But the main issue is that we, and more importantly, the governments of Europe, have allowed the operators of truck services to develop a dominant position whilst operating under an economic model that is fundamentally flawed and does not fully address all cost implications.
"This has produced a general perception that road haulage is the cheaper option. But the actual costs in the economic model that underpins short sea services are more visible than those in the trucking alternative.
"There needs to be more concentration on the real costs of inter-European truck transport taking into account congestion, air pollution, noise, safety and the impact on human health, let alone the cost of road maintenance.
"There should be a greater recognition that if the private sector provided funding for road infrastructure, rather than the public sector, international hauliers would have had a much less easy ride in establishing road haulage as the preferred means of transport for freight in the EU.
"The political stakes are very high in broaching this discussion because the road haulage lobby is so powerful. The sensitivity of the various stakeholders at national level is such that compromises will no doubt be made, but we should not be afraid to be innovative in our thinking.
"Short sea operators must demonstrate that they fully understand the demands of their customers' supply chain management if they are to address the issue of flexibility. This is, of course, particularly important in the case of just in time management. Customers want pre-set delivery times and to know they will be met; something that is increasingly difficult for inter-European truck movements because of traffic congestion.
"In many ways, 'just in time' and other similar management philosophies present huge opportunities to short sea shipping because it can provide precisely the sort of delivery accuracy that is not available through other transportation services and facilitates true partnership opportunities with customers.
"There are numerous flexibilities inherent to the short sea solution that gave it distinct advantages over the trucking option, including:
- constant availability of loading capacities according to suppliers demands.
- fixed transport prices without peaks due to seasonal influences.
- the ability to use containers as moving stock.
- deliveries within a maximum of 24 hours from port of discharge.
- delivery dates that can be changed according to the updated demands of the consignee.
- the ability to keep low stock in receiving warehouses due to good time window performances.
"Hence, I believe that the short sea solution is able to embrace the challenges that we face from the providers of trucking services in regards to cost and flexibility of service and can help alleviate some of the problems caused by the increasingly ineffective trucking alternative.
"But, we would be in an even better position with a level playing field.
"To achieve that requires real institutional and political will. But Europe must recover some of the social and environmental damage inflicted by inter-European trucks and so it should, in my view, introduce a tax levied on trucks crossing national borders and not just as a contribution to road maintenance.
"Furthermore, in order to combat the unscrupulous operators, trucks should be weighed at all national borders. This would help ensure that the operators aren't overloading their trailers and carrying excess weight which is not only a danger to other road users but also gives them an unfair advantage over short sea services. And if this is not enough, whilst the relevant authorities are weighing the vehicle, they should check the driver's tachograph and licence records. We must also ensure that the working time directive has an impact.
"Debates about the issue of cost and flexibility cannot be addressed satisfactorily when the model that underpins the trucking industry is, for the reasons that I have outlined, so fundamentally flawed.
"We can and do embrace the trucker challenge, can compete on cost and flexibility, but would really appreciate a level playing field on which to play!"
