hc10 inland shipping
TRANSCRIPT
-
7/27/2019 HC10 Inland Shipping
1/38
Piet Rietveld
Olaf Jonkeren
Transport Economics and ManagementInland Waterway Transport
-
7/27/2019 HC10 Inland Shipping
2/38
This lecture
The sector
Current issues
Article Konings (2007)
TEM2
-
7/27/2019 HC10 Inland Shipping
3/38
The sector
Policy document EU, PINE: Prospects of Inland
Navigation within the Enlarged Europe. A study that gives an overview of the inland
waterway transport
sector in four corridors (next slide):
Rhine & tributaries East-West corridor
Danube corridor
North-South corridor
TEM3
-
7/27/2019 HC10 Inland Shipping
4/38
The sector source: PINE (2004)
TEM4
-
7/27/2019 HC10 Inland Shipping
5/38
The sector
Infrastructure
Rhine and Danube form backbone system.Waterway network quite dense in Netherlands and
parts of Belgium, Germany.
Load capacity on a certain route determined by
draught and bridge clearance. Weakest stretchdetermines load capacity for the whole route!
TEM5
-
7/27/2019 HC10 Inland Shipping
6/38
The sector
Characteristics and performance:
In the former European Union (EU-15) inland
waterway transport accounted for:
440 million tons per year, 3,5% market share
125 billion ton-kilometres, 6,5% market share
Gravity lies in countries Netherlands, Belgium,
Germany: 113 billion ton-kilometres, 90%.
Modal share (ton-kms) in The Netherlands, 40%,
Germany, 14%, Belgium, 12%.
TEM6
-
7/27/2019 HC10 Inland Shipping
7/38
The sector
Employment and training
In recent years a decline of national personnel. In
West Europe a wave of East European staff.
Problems: language/ communication, knowledge
of foreign waterways unsafe situations.
Also: nowadays not only nautical skills required.
Additional qualifications like financial/
management/ ICT skills.
TEM7
-
7/27/2019 HC10 Inland Shipping
8/38
The sector
Fleet
Two main types of vessels:
Self propelled vessels: dry bulk, wet bulk
Push barges: dry bulk
Vessels have a very long lifetime (+- 45 years).
Advantage: long pay back period for the
investment.
Disadvantage: hinders fleet innovation behind
of rail and road.
TEM8
-
7/27/2019 HC10 Inland Shipping
9/38
The sector
Information and communication
Currently integration of ICT within IWT sector by
means of RIS e.g.
RIS = River Information Services:
Obstructions in waterway, water levels.
Estimation arrival time: for ports terminals
Route planning, calculation time schedules, document
exchange with waterway authority.
TEM9
-
7/27/2019 HC10 Inland Shipping
10/38
The sector
3 segments:
Dry bulk
Wet bulk
Containers
TEM10
-
7/27/2019 HC10 Inland Shipping
11/38
The sector
Dry bulk
Ore and coal: thick flows (on Rhine), large ships (push
barges), Dutch seaports German hinterland (Ruhrarea).
Sand & gravel: strong relation with construction sector
(and construction locations), on smaller waterways,
domestic oriented + upper and lower Rhine area.
Many suppliers, for some segments many customers,
free entrance, leaving market difficult, some
heterogeneity (ship size), transparency in spot market,
in contract market less transparency.
Market form:
TEM11
-
7/27/2019 HC10 Inland Shipping
12/38
The sector
Wet bulk
Chemical industry + refineries, crude oil, oil products,
sea port oriented.
Relatively few suppliers, few customers, free entrance,
leaving market difficult, some heterogeneity, mainly long
term contracts
> not transparent.
Market form:
TEM12
-
7/27/2019 HC10 Inland Shipping
13/38
The sector
Containers
Sea port oriented, often pre-and-end-haul by road,
clients mainly deep-sea liners who organize total chain,mainly on Rhine and between Rotterdam - Antwerp.
Many suppliers and customers, free entrance, leaving
market difficult, relatively homogenous, mainly long term
contracts (year).
Market form:
TEM13
-
7/27/2019 HC10 Inland Shipping
14/38
Current issues
Port competition
Climate change
Increase in ship size
Double hull obligation
TEM14
-
7/27/2019 HC10 Inland Shipping
15/38
Port competition, hinterland
connections
Hamburg-Le Havre range: connections via road,
rail and inland shipping
Antwerp: strong position via road
Rotterdam: strong position via inland shipping
Hamburg: strong position via rail
Improvements mainly via rail Betuweroute
Iron Rhine
TEM15
-
7/27/2019 HC10 Inland Shipping
16/38
Bottlenecks in hinterland connections
Road congestion
Lack of rail capacity
Maasvlakte II
Stimulation of inland water transport
40% of containers should be transported to hinterland
by inland shipping (government regulation)
TEM16
-
7/27/2019 HC10 Inland Shipping
17/38
Climate change
Global:
In 20th century average temperature worldwide + 0,7oC
Cause: use of carbon fuel
River Rhine basin, climate change for this area:
Winters: warmer and wetter
Summers: warmer and dryer
TEM17
-
7/27/2019 HC10 Inland Shipping
18/38
Rhine river basin
TEM18
-
7/27/2019 HC10 Inland Shipping
19/38
Large fluctuations of water levels:change in monthly discharge of Rhine river at
different climate scenarios.
TEM19
-
7/27/2019 HC10 Inland Shipping
20/38
Example: low water levels in 2003
TEM20
Low water levels during a very long time
-
7/27/2019 HC10 Inland Shipping
21/38
Problems
One-way traffic
Alternative routes
Delays
Lower load factors
Other transport modes
What does this mean for the competitive position
of inland waterways?
TEM21
-
7/27/2019 HC10 Inland Shipping
22/38
Lower load factor
As a result of low water levels, a ship can
transport less cargo, so for transporting the same
amount of cargo more ships are needed.
TEM22
-
7/27/2019 HC10 Inland Shipping
23/38
Extra costs
Inland waterway transport enterprises have to
leave tonnes behind so they want a higher tariff
per ton transported.
Result: costs for transporting of one ton of cargo
by barge increase:
Normal water: 1000 ton * 5 = 5000
Low water: 333 ton * 15 * 3 ships = 15000
For transporting the same number of tonnes a
shipper pays 3 times the price in case of low
water levels.
TEM23
-
7/27/2019 HC10 Inland Shipping
24/38
Extra costs
Relation between water levels and gas oil freight rate in
Rhine shipping
Source: EU, CCR (2011)
TEM24
-
7/27/2019 HC10 Inland Shipping
25/38
Economic theory
Equilibrium
at normal
and lowwater
levels.
Change in
economicsurplus?
TEM25
-
7/27/2019 HC10 Inland Shipping
26/38
How to increase supply
Short term
Increase load factor (when possible)
Use capacity more hours per day
Use capacity more days per year
Increase speed
Increase speed of loading/unloading
Long term
New ships
Larger ships (when possible)
TEM26
-
7/27/2019 HC10 Inland Shipping
27/38
Speed choice, working hours
Optimal speed depends on fuel prices
Decrease in speed with 30%: decrease in fuel use of 50%
Working hours depend on extra crew costTEM27
Speed inknots
Fuel usein tons
Fuel savings (in $000) if fuel price is:
$200/ton $100/ton
14 10176 - -
13 8184 398 199
12 6546 726 363
11 5156 1004 502
Source: Stopford (1993)
-
7/27/2019 HC10 Inland Shipping
28/38
Concluding
Supply in de market is reduced.
Higher transport prices: P by 20% for example.
Demand is quite inelastic: Qby 3% for example.
About same quantity transported at higher prices
extra costs for the economy.
Binnenvaart vaart wel bij lage waterstand (CBS)
Inland shipping fares well with low water levels
Turnover in 2nd quarter of 2011 20% compared to 2010
due to low water levels.
TEM28
-
7/27/2019 HC10 Inland Shipping
29/38
Increase in ship size
Current trend: new ships are all big (> 1500 ton).
Inland ships < 1500 tons are becoming scarce.
Reasons:
Economies of scale.
Larger living area.
New small ships have capital costs, existing small ships
are relatively (compared to new ships) old, no capitalcosts hard to compete.
TEM29
-
7/27/2019 HC10 Inland Shipping
30/38
Increase in ship size
Consequences:
Less navigation on small waterways: in future less
maintenance? IWT dependent firms leave? Low water levels vs. large ship.
Case: building material sector
Large ships cannot reach firms transshipment
on small ships necessary extra transport costs.
TEM30
-
7/27/2019 HC10 Inland Shipping
31/38
Optimal ship size
Haulage costs (on the move):
decrease with size (economies of scale/density)
Handling costs (in port)
Increase with size (diseconomies of size)
TEM31
-
7/27/2019 HC10 Inland Shipping
32/38
Optimal ship size
Haulage costs
2/3 Power law
Capacity: Volume of ship
Costs: proportional to surface area
Cube or ball:
volume=a*radius3
surface=b*radius2
volume=c*surface3/2
surface=d*volume2/3
Cost proportional to capacity2/3
Costs increase with an elasticity of 2/3 with respect to its size
10% increase in ship size leads to a 6.7% increase in costsTEM32
-
7/27/2019 HC10 Inland Shipping
33/38
Optimal ship size
Handling costs (Jansson and Shneerson, 1981)
Handling capacity (tons/day) as function of ship size
1/3 power law: H=h*S*1/3
Time costs
Fuel cost, operating cost, capital cost
Cost of factor i per day: Ci=pi*qi*Sei
where ei is the elasticity of factor cost with respect to size
Total cost per ton in port:iCi/H= 2*ipi*qi*Sei/(h*S*1/3) = ipi*qi*S
(ei-1/3)/h
(dis)economies of ship size S if (e i-1/3) (>)
-
7/27/2019 HC10 Inland Shipping
34/38
Optimal ship size
TEM34
ship size
handling costper ton
haulage costper ton
total cost per ton =(transport cost per ton
-
7/27/2019 HC10 Inland Shipping
35/38
Optimal ship size
TEM35 distance
Given shipsize, transportcosts are linearwith distance
Handling cost/tonincreases withship size
transport cost/tonsmall ship
transport cost/tonlarge ship
distance
transport cost/ton taperswith distance: envelope ofship specific cost lines
freight curve:freight rate perton tapers withdistance
-
7/27/2019 HC10 Inland Shipping
36/38
Optimal ship size, short distance
TEM36
ship size
handling costper ton haulage cost per
ton, short distance
total cost perton
smaller optimalship size
-
7/27/2019 HC10 Inland Shipping
37/38
Optimal ship size
Optimal size low for short distance and high for large
distance
Reason: Weight of haulage costs are low for short distance Explanation: haulage costs are product of haulage costs
per ton and kilometers
When trips get longer larger ships are necessary
E.g. feeder services vs. trunk services
Low frequency on long distance routes
Low demand
High vehicle (ship) capacity
TEM37
-
7/27/2019 HC10 Inland Shipping
38/38
More on the freight curve
Prices may taper even if transport cost do not
Quantity discounts: 2nd-degree price discrimination
More possibilities for high mark-up in short trips
38
haulage cost perton, short distance
haulage cost perton, short distance
positive mark up onshort distance