The challenges of the Mediterranean: economic scenario and forecasts Alessandro PANARO Head of Mediterranean & Maritime Dept. SRM The International Propeller Clubs meeting Barcelona, April 25 th, 2016
SRM Maritime Observatory www.srm-maritimeconomy.com 2
The growing role of Mediterranean The Mediterranean Economic Scenario and competitiveness indicators The main phenomena that will shape the future of the maritime sector Conclusions 3
The most important data on the shipping in the Med Source: SRM on Port Authorities 4
Italy and Spain s maritime indicators: LSCI The Liner Shipping Connectivity Index (LSCI) of UNCTAD measures competitiveness in the maritime system based on the network and the quality of the container liner services offered by ports. Spain in 2015 reached the 11 th position (out of 157 countries) Italy is in the 17 th position and fell 3 places in comparison with 2014 Leader UE LSCI 2015 Germany 6 (+2) China 2004=100 97.79 Spain 11 (+2) 84.89 MED UE France Italy 12 (=) 17 (-3) 77.06 67.43 UAE 14 (+1) 70.4 MED GULF Morocco Saudi Arabia Egypt 16 (=) 18 (+1) 19 (-1) 68.28 64.83 61.45 Source: UNCTAD 5
The Maritime Indicators LSCI This slide shows a comparison between Italy, Spain and some of its main competitors in the Mediterranean and Northern range area. Italy s LSCI growth has been slower (+10 b.p. on 2004). Spain has grown by 30 b.p. on 2004. 120 LSCI Trend 2004-2015 Germany Spain France Italy UAE Morocco Saudi Arabia Egypt 100 80 60 40 Spain 20 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Italy Fonte: SRM su UNCTAD 6
Italy and Spain s logistics indicators: LPI The LPI is a World Bank index that measures the logistics competitiveness of 160 countries in the world. 4.12 LPI 3.85 3.72 3.69 3.54 3.15 3.03 1 13 18 20 27 49 62 Germany France Spain Italy UAE Saudi Arabia Egypt Italy and Spain s competitiveness have increased in the global scenario and therefore they are now in the top 20. Between 2007 and 2014 Spain went up 8 places in the LPI ranking, reaching the 18th position and Italy gained 2 places reaching the 20th position. 7 Source: World Bank
Global container port traffic 2000-2014 The market is growing but at a much slower pace. There is a huge difference between pre-crisis and post-crisis eras. After the 2009 crisis, the growth of rate decreased by half approximately. Source: SRM on Drewry 8
New Centrality of the Mediterranean: The Emergence of the Europe-Far East Route Within the three main deep sea East-West shipping services the Europe-Far East progressively gained traffic raising its share from 27% in 1995 to 44% in 2014. In 2014, the Europe-Far East and the Transpacific were by far the two biggest trade routes, accounting both to 22 mln. TEUs of traffic. As a result of this growth, the Mediterranean basin and its ports recovered their own centrality, thanks to the transit of (almost) all mother vessels via the Suez route. The Europe-Far East route is the way for Chinese products to enter in Europe. Estimated containerized cargo flows on major East West container trade routes, 1995 2014 (percentage TEU) 20% 13% 53% 27% 42% 44% Transatlantic Transpacific Europe-Far East 1995 2014 Source: SRM on Unctad, 2015 9
Ranking of container hub ports in the Mediterranean Basin: the Market Share 2015 Malta 12% Cagliari 3% Valencia 18% 19% Pireo 13% 2% 2% 5% 12% 7% 2008 18% Damietta 3% Tanger Med 11% 18% 17% Gioia Tauro 10% Algeciras 17% Port Said 14% Source: SRM on Port Authorities During the period 2008 2015 the Market Share of Southern Hub Ports (Tanger Med; Port Said; Damietta) was stable at 29%. Tanger Med and Piraeus have had a dramatic growth.. 10
Traffic in the Suez Canal: ships and cargo Transit goods account for 8-10% of the entire globe. In 2015, 823 million tonnes of goods passed through the Canal. More than 17,000 ships passed through the Canal. Between 2001 and 2015 the Canal s traffic trends recorded a 120% increase in transit goods. 25 20 Ships Number of which containerships Cargo 900 800 700 N. of ships (thousands) 15 10-5 2007 2008 2009 2010 2011 2012 2013 2014 2015 600 500 400 300 200 100 0 Cargo ton (millions) Source: SRM on Suez Port Authority, 2016 11
The new Panama Canal Source: Openstreetmap data 12
Ships become increasingly larger SHARE OF FLEET CAPACITY 2012 2015 88% 78% New Panama Canal s Limit 13,200 TEU 12% 22% What will this share be by 2020? New Suez Canal Source: Alphaliner, Panama Canal Authority 13
The impact of megaships on intermodality in shipping Source: Nooteboom Group 14
The new drivers of maritime economy: the alliances 15
The big alliances among carriers The big alliances create economies of scale by reducing costs, improving profitability, services and environment. The interest of big alliances for routes through the Suez Canal is becoming more marked. The alliance CKYHE is reorganising its services on the Asia-North Europe and Asia- Mediterranean networks. In particular it will provide five Asia-North Europe services and four Asia-Med from the end of March 2016. MARKET CONCENTRATION IN TWO ROUTES THAT INVOLVE SUEZ The big alliances «2M» and «Ocean Three» are mostly active on the route Asia- Med Asia - North Europe Asia - Med G6 23% CKYHE 26% O3 19% 2M 32% G6 8% CKYHE 20% Others 5% O3 27% 2M 39% Source: Drewry, 2015 16
The Short Sea Shipping map 537 444 256 130 581 17
The Development of Short Sea Shipping in Europe: A Dynamic Alternative in a Sustainable Transport Chain Italy ranked 3rd with a volume that came close to 262 million tonnes of cargo in 2014. Italy accounted for 14.6% of the total EU-28. In the period 2005-14, Italy decreased in Total, in the Mediterranean and in the Black Sea. Italy was followed by Spain (in 4 th position) with a share of 10.9% of the total EU28 short sea shipping. In the period 2005-2014, Spain increased in total an in the Mediterranean while it decreased in the Black Sea. Short Sea Shipping 2005-2014 (mln. tonnes) Black Sea Mediterranean Sea Total var % var % var % % on total Countries 2014 2005-2014 2014 2005-2014 2014 2005-2014 EU 28 United Kingdom 2.8 133.6% 28.1 21.3% 315.7-11.1% 17.6% Netherlands 11.8 303.7% 29.7-33.0% 272.1 7.3% 15.1% Italy 36.2-36.1% 203.0-7.8% 262.5-18.7% 14.6% Spain 15.4-2.6% 98.1 4,2% 196.3 1.9% 10.9% Germany 1.6 604.4% 11.8-25.1% 177.0-0.9% 9.8% France 13.1-23.2% 50.6-5.0% 175.6-18.4% 9.8% Greece 16.5 21.3% 70.3 2.5% 96.8 8.7% 5.4% EU (28 countries) 130.5-1.8% 581.8 2.8% 1,798-0.5% 100.0% 18 Source: SRM on Eurostat 2016
The cruise market (source: Medcruise) 19
The new Italian Ports - Light bureaucracy system in the public works for more competitive infrastructures - Compulsory key skills for port chairmen - More efficient use of EU Structural Funds 2014-2020 - New configuration of Port Authorities - Development of Customs technology systems 20
Conclusions The new Suez Canal (and then, the new Panama Canal) will have a major impact on shipping and trade, representing an opportunity to be seized by trade business and shipping companies. All this will increase the centrality of the Mediterranean. This is why major port investments are being implemented in various Mediterranean ports. The circulating fleet is also likely to increase with the growing presence of megaships and big players; an increasing number of goods transported by ship are expected to pass through the Suez Canal. At the moment 20,000 TEU ships are sailing on many routes of interest for Italy and Spain as the Asia-Med, the Asia-Northern Europe and the Gulf-Med. Megaships, the promising prospects of SSS and cruise market, and investments of competitor ports must lead Italian and Spanish ports to invest in infrastructure, technology and logistics to avoid losing market shares, and above all to miss the new opportunities that will arise from the new disruptive phenomena illustrated in this presentation. 21
Thanks for your attention Email: a.panaro@sr-m.it Website: srm-maritimeconomy.com