LOGISTICS: Sector Strategic Paper

Marseille, le 26 mai 2014

Marseille, le 26 mai 2014

Introduction

Transport and Logistics is a strategic sector for the development of the Euro-Mediterranean region due to the key role it plays in a country’s general economy, contributing significantly to regional development and integration (Integral part of modern production).

The competitiveness of industry, whether in the service or manufacturing sectors, is increasingly dependent on transport infrastructure and logistics.

Due to the pressure on company costs brought about by the financial and economic crisis, companies will more and more be working with logistics operators to realize the potential savings of 10 to 30% that optimizing logistics can offer

This can be achieved by optimizing supply chains and the energy balance of all logistics activities as well as restructuring processes with the aid of the numerous digital technologies now available

Context and objectives

Strategy paper aims:

The purpose of the paper is to focus and determine the strategic lines of action within the Transport and Logistics sector.

Compiling the main existing literature about the Euro- Mediterranean Transport and Logistics sector and provide the crucial and more relevant information.

Consulting with experts on state of the art, current trends and tendencies.

Seeking and classifying the most relevant stakeholders involved in the Euro- Mediterranean Transport and Logistics sector.

Compiling the major EU projects and programs about the Euro-Mediterranean Transport and Logistics sector.

Researching influential EU policies and strategies related to the Euro- Mediterranean Transport and Logistics sector.

Context and objectives

“All activities related to physical distribution, i.e. all modes of transport and their intermodality, as well as various operations carried out in warehouses and logistics hubs: storage, stock

management, order preparation and shipment”

Centre for Transportation Studies for the Western Mediterranean (CETMO)

Sector definition:

Marseille, le 26 mai 2014

State of the art of the Logistics sector in the UE

European market profile progression towards a European Community Single Market.

Efficient logistic networks Mediterranean Corridor, North Sea-Mediterrean Corridor, Orient-East Med,

Baltic-Adriatic Corridor, and Scandinavian-Mediterranean Corridor

Strategy and orientation

http://ec.europa.eu/transport/themes/infrastructure/news/ten-t-corridors_en.htm

• Elimination of commercial barriers securing global and fair competition and trade

• Establishment of efficient infrastructures and transport networks Higher integration and interoperability among modes Minimization of congestion Investment in intermodal corridors

• Usage of Global information Systems Optimise flow of goods Rationalising processes and costs Leveraging cascade effect in efficiency throughout supply chain

• “Green procedures” (regarding transport and logistical operations) to reduce the environmental footprint of transport technological progress (e.g. cleaner vehicles) operational measures (e.g. eco-driving) infrastructure improvements (e.g. rail freight dedicated framework, intermodal hubs and

efficient traffic management systems).

Main challenges:

Priority niches:

1. Green technologies

Efficient management and sustainable transport Uptake of clean technologies

2. ICT

Digitisation of the sector (paperless) Radio Frequency Identification (RFID)

Commercial and regulatory barriers for the MED businesscompanies in the EU logistics market

Complexity of EU internal market requirements necessitate higher management and admin efforts

Duplicated cross-border controls Lack of harmonised documents

Lack of integrated channels Need for efficient multimodal networks

Limited financial means for advanced solutions Specialised equipment, technologies, systems etc.

Regulatory Barriers Differences among national technical standards Professional recognition Lack of transparency of legal/fiscal/regulatory enviroments

Marseille, le 26 mai 2014

State of the art of the Transport & Logistics sector in the

Mediterranean

Strategy and orientationSignificant development of transport infrastructure (in particular airports, ports, motorways)

Moving towards an integrated Mediterranean free-trade area/single market

Commendable efforts being undertaken, but not all MPCs evolving at the same pace Underdevelopment of efficient logistic networks and

good practices Ongoing reform/liberalization

Investments in linear infrastructure (Rail, Road)

Development of logistics hubs

Integration of regional intermodal infrastructure and its link with the Trans-European network.

Rail: The railway freight transport monopolized by public

enterprise. Continuous reforms impeding the flow. Need the construction of rail access to more nodes and

logistics facilities like logistics platforms (which need to be multimodal) and to the harbours LZA (Logistics Zone Area.

Main challenges:

Maritime: Minimizing the time of stocks spent in ports and customs

clearance. Fleet privatisation. Predominance of Bulk-freight shipping, containers are not used

widely enough. Improvement of operators. Alternatives to current distribution models.

Main challenges:

Demain

Une plus grande part du trafic s’arrêtera en Méditerranée

Conséquences

Développement du trafic feeder entre hubs du Sud et ports d’hinterland du Nord de la Méditerranée

Solutions landbridge vers l’Europe du Nord

Moins de congestion dans le range Nord

Croissance des échanges maritimes intraméditerranéens

Croissance économique au Sud

Rééquilibrage du réseau de transport européen

L’alternative méditerranéenne

Road:

Usage of atomized road transport with a predominance of the informal sector with a significant role still played by own account transport (Southern Mediterranean countries ).

International transport dominated by European transport agents.

Dearth of logistics multimodal platform network.

Main challenges:

Infrastructure:

Lack of multimodal logistics platforms. Lack of warehousing infrastructure.

Weak supply of services with little diversification of the logistics/transport offer…

Main challenges:

Priority niches/fields of action:

Niches:

Express parcel delivery Third-Party logistics (3PL)

Fields of action:

Trade Facilitation Infrastructures financing Multimodality Road Safety Training for ensuring professionalism and good practices

Geographic location.

Proximity to EU market.

Lower costs in relation to its northern counterparts.

Ongoing Integration with European value chains.

Developing market.

In what way is the Mediterranean region attractive for EU companies?

Institutional/regulatory burdens.

Enforcing contracts/Protecting investors.

Elevated logistics cost (20% of average GDP).

Atomised road transport.

Underdeveloped storage facilities, lack of integrated logistics

platforms, absence of real national logistics suppliers.

Railway freight monopolised by public enterprise.

Ongoing restructuration of maritime and port transport.

Identification of the main commercial / regulatory barriers for EU companies

Focus on foreign direct investments in the sector

Number of FDI projects (2003 - 2013)

Source: ANIMA-MIPO observatory.

Number of FDI projects (2003-2013)

0

20

40

60

80

100

120

Europe Gulf MED-11 Other countries

USA-Canada

Transport, logistics

Focus on foreign direct investments in the sector

Amounts of FDI by region and country of origin (€m)

Source: ANIMA-MIPO observatory.

0

500

1 000

1 500

2 000

2 500

Europe Gulf MED-11 Other countries

USA-Canada

Transport, logistics

Main programmes in support of the sector in the Mediterranean

Connecting Europe Facility – TEN-T 9 intermodal corridors 30 priority projects

Trans-Mediterranean Transport Network – TMN-T Feasibility studies currently underway on identified projects Criteria of complete interoperability and interconnection with TEN-T

EuroMed Transport Project Regional Transport Action Plan for the Mediterranean Region (RTAP) Identification of priority TMN-T initiatives High level dialogue

LOGISMED Euro-Mediterranean network of Logistics platforms (EMLP) Telecommunications infrastructure Training activities (LOGISMED-TA)

European Neighbourhood Instrument Regional and bilateral programmes and projects relating to the Mediterranean basin

Conclusions & recommendations Promote the internationalization of promising SMEs, facilitating investment

partnerships between regional agents Capitalize on progress in Mediterranean cooperation, the increasingly

important role played by the Mediterranean basin and its different regional programmes

Consult and dialogue with the key institutions, research centres, industry bodies and businesses

Support policy which fosters the growth of the Transport and Logistics industry in a sustainable and inclusive manner

Encourage innovation in the Transport and Logistics industries, through facilitation of dialogue and promotion of joint initiatives

Identify local practices of high added value and disseminate on a regional level Integrate and coordinate with relevant initiatives which could create added

value for the capitalisation of EUROMED Invest initiatives

Thank you for your attention

Fearghus Roche

Project CoordinatorASCAME General Secretariat

froche@ascame.org