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Doc. No.

14-1394-H1
Rev. 0 - MARCH 2015

Livorno Port Authority


Livorno, Italy
Financial Engineering Plan for the
Development of the Logistic Node
of Livorno through the
Implementation of the First Phase
of the Platform Europe
(CIG: 60079415C0)

Competitive Analysis
and Traffic Forecasts
for the Europe
Platform of Livorno

Doc. No. 14-1394-H1


Rev. 0 March 2015

QUADRO DI RACCORDO ATTIVIT CONTRATTUALI E CAPITOLI DEL REPORT

ATTIVIT DELLA PROPOSTA TECNICA


A1)
A2)

A3)

Analisi
dello
Scenario
Internazionale
dellIndustria dello Shipping
Analisi della Domanda e Previsioni dei Traffici
del Terminal

Analisi delle Caratteristiche Dimensionali e


Quantitative dellOfferta di Movimentazione
Contenitori nellArea di Influenza della
Piattaforma
Europa
e
Posizionamento
Competitivo del Futuro Terminal Contenitori
della PE

CAPITOLI DEL REPORT


Chapter 4 - Container shipping trends and
implications for Livorno
Capitolo 2 - Historical container traffic volumes
for the region
Capitolo 3 - Development of Livornos markets
to 2035
Capitolo 8 - Livorno forecast volumes to 2035
Capitolo 5 - Livornos competitive position
Capitolo 6 - Teminal location and hinterland
links

Pagina

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Attivit B)
Redazione di uno studio economico
logistico che evidenzi le peculiarit della posizione
geografica del porto di Livorno. Confronto con altre
possibili combinazioni logistiche mare terra che
raggiungano gli stessi interland o interporti

Capitolo 7 - Built-up cost analysis

Attivit aggiuntive)
Elaborazione del modello
simulazione delle previsioni di domanda nellipotesi che
il terminal contenitori della PE non fosse costruito, cio:
valutazione dello Scenario Zero

Capitolo 9 - Gap Analysis

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TABLE OF CONTENTS
Page
LIST OF TABLES
LIST OF FIGURES
1
EXECUTIVE SUMMARY LIVORNO EUROPE PLATFORM
1.1
INTRODUCTION
1.2
HISTORICAL CONTAINER TRAFFIC VOLUMES FOR THE REGION
1.3
DEVELOPMENT OF LIVORNOS CONTAINER TRAFFIC MARKETS TO 2035
1.4
CONTAINER SHIPPING TRENDS AND IMPLICATIONS FOR LIVORNO
1.5
LIVORNOS COMPETITIVE POSITION
1.6
ANALYSIS OF THE ITALIAN ROAD AND RAIL NETWORK
1.7
BUILT-UP COST ANALYSIS
1.8
LIVORNO FORECAST TO 2035
1.9
LIVORNO GAP ANALYSIS
2
HISTORICAL CONTAINER TRAFFIC VOLUMES FOR THE REGION
2.1
INTRODUCTION AND MARKET DEFINITION
2.2
ITALIAN REGIONAL DEMAND: GENERAL PERSPECTIVE
2.3
HISTORICAL DEMAND BY ROUTING
2.4
CONCLUSION
3
DEVELOPMENT OF LIVORNOS CONTAINER TRAFFIC MARKETS TO 2035
3.1
INTRODUCTION
3.2
RELATIONSHIP OF GDP GROWTH WITH TRADE GROWTH
3.3
GENERAL ECONOMIC SCENARIOS AND DRIVERS
3.4
ITALIAN REGIONAL ECONOMIC POSITION
3.5
REGIONAL (NORTHERN TYRRHENIAN) ITALIAN FORECAST TO 2035
3.6
TRANSIT FORECAST TO 2035
3.7
TRANSSHIPMENT FORECAST TO 2035
3.8
CONCLUSION
4
CONTAINER SHIPPING TRENDS AND IMPLICATIONS FOR LIVORNO
4.1
INTRODUCTION
4.2
THE INTERNATIONAL CONTAINER SHIP SIZE REVOLUTION
4.3
GLOBAL SUPPLY/DEMAND BALANCES & CASCADING
4.4
PORT CONCENTRATION
4.5
THE DEVELOPMENT OF LINER SHIPPING SERVICES IN ITALY
4.6
MEDITERRANEAN STRATEGIES OF MAJOR CONTAINER SHIPPING LINES
4.7
IMPACT OF ULTRA-LARGE SHIPPING LINE ALLIANCES
5
LIVORNOS COMPETITIVE POSITION
5.1
INTRODUCTION
5.2
CURRENT TERMINAL FACILITIES AND PLANNED TERMINAL DEVELOPMENTS
5.3
PRODUCTIVITY COMPARISON
5.4
CONTAINER HANDLING COSTS
5.5
REGIONAL CAPACITY DEVELOPMENTS, 2014-2025

Livorno Port Authority, Livorno, Italy


Financial Engineering Plan for the Development of the Platform Europe (CIG: 60079415C0)
Competitive Analysis and Traffic Forecasts for the Europe Platform of Livorno

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TABLE OF CONTENTS
(Continuation)
Page

5.6
SWOT ANALYSIS
5.7
CONCLUSION
ANALYSIS OF THE ITALIAN ROAD AND RAIL NETWORK
6.1
THE PORTS CONSIDERED
6.2
ANALYSIS OF THE ITALIAN ROAD AND RAILWAY NETWORK
6.3
THE ITALIAN RAIL NETWORK
6.4
PORT ROAD AND RAIL CONNECTIONS
6.5
ACCESSIBILITY TO PORTS
6.6
MAIN IMPROVEMENT WORKS TO THE ITALIAN ROAD NETWORK
6.7
MAIN IMPROVEMENT WORKS TO THE ITALIAN RAILWAY NETWORK
6.8
THE ITALIAN FREIGHT VILLAGE SYSTEM
6.9
THE ROLE OF FREIGHT VILLAGES IN THE ITALIAN LOGISTIC SYSTEM
6.10
CONCLUSIONS
BUILT-UP COST ANALYSES
7.1
INTRODUCTION
7.2
NORTH ITALIAN INLAND MARKETS
7.3
CONCLUSION
LIVORNO FORECAST TO 2035
8.1
INTRODUCTION
8.2
LIVORNO DEMAND TO 2035
8.3
SUPPLY/DEMAND BALANCE TO 2025
8.4
CONCLUSION
LIVORNO GAP ANALYSIS
9.1
INTRODUCTION
9.2
GAP ANALYSIS
9.3
CONCLUSION

Livorno Port Authority, Livorno, Italy


Financial Engineering Plan for the Development of the Platform Europe (CIG: 60079415C0)
Competitive Analysis and Traffic Forecasts for the Europe Platform of Livorno

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LIST OF TABLES
Table No.

Page

Table 1.1: Assumed Percentage GDP Growth and Multipliers for Italian Local Regional Forecast
Base Case
5
Table 1.2: Livorno Europa Platform SWOT Analysis
8
Table 1.3: Comparison of Maximum Size of Vessels Accomodatable at Various Ports
10
Table 1.4: Direct Cost Options ex Far East (000 ??)
10
Table 1.5: Direct Cost Options to US East Coast (000 ??)
11
Table 2.1: The Total Regional Hinterland Demand, 2000-2014
19
Table 2.2: Livorno Container Volumes, 2008-2014
22
Table 2.3: Total Imports and Exports for Selected North Italian Regions (bn kg)
24
Table 2.4: Port of Genoa Container Traffic Volumes by Terminal (TEU 000s)
28
Table 2.5: Regional Container Transshipment Market by Port, 2000-2014 (000 TEUs)
30
Table 3.1: Further Issues Determining Future Container Port Demand Growth
38
Table 3.2: Italian Economy Macroeconomic Indicators and Forecasting
40
Table 3.3: Comparison of GDP Growth Forecasts for Italy
42
Table 3.4: Italy GDP and Northern Tyrrhenian Import/Export Container Port Demand
Annual Real % Change
46
Table 3.5: Assumed Percentage GDP Growth and Multipliers for Italian Local Regional Forecast
Base Case
47
Table 3.6: Forecast Total Northern Tyrrhenian Import/Export Regional Container Demand to 2035 49
Table 3.7: Forecast Total Northern Tyrrhenian Regional Container Demand by Region to 2035
(000TEUs)
50
Table 3.8: Forecast Regional GDP Development for Potential Central European Transit Volumes
to 2035 Annual Percentage Change
52
Table 3.9: Forecast Regional GDP Import/Export Container Demand to 2035 - Ratio
53
Table 3.10: Forecast Regional Central European Container Demand to 2035 000TEUs
54
Table 3.11: Forecast Regional Feeder Demand to 2035 000TEUs
58
Table 3.12: Forecast Total Northern Tyrrhenian Port Demand to 2035 000TEUs
60
Table 4.1: Design Development of Large Containerships
66
Table 4.2: Ultra Large Container Ship Deliveries to 2015
70
Table 4.3: Estimated Container Fleet Supply/Demand Balances 20012-2016
71
Table 4.4: Fleet Status for Major Asia-North Europe Operators
72
Table 4.5: The Development of Average Vessel Sizes on Key Container Trades 2010-2014
position at start of year (TEUs)
73
Table 4.6: Far East/Middle East-Mediterranean Service Lines for 2005
77
Table 4.7: Far East/Middle East-Mediterranean Service Lines for 2010
78
Table 4.8: Far East/Middle East-Mediterranean Service Lines for 2015
79
Table 4.9: North America-Mediterranean Service Lines for 2005
80
Table 4.10: North America-Mediterranean Service Lines for 2010
81
Table 4.11: North America-Mediterranean Service Lines for 2015
82
Table 4.12: Major Lines Transshipment Hub Strategies
88
Table 5.1: Terminal Facilities of Livorno, Genoa, La Spezia and Marseille Ports
103

Livorno Port Authority, Livorno, Italy


Financial Engineering Plan for the Development of the Platform Europe (CIG: 60079415C0)
Competitive Analysis and Traffic Forecasts for the Europe Platform of Livorno

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LIST OF TABLES
(Continuation)
Table No.
Table 5.2: Terminal Facilities of Tyrrhenian Sea Ports
Table 5.3: Terminal Facilities of Adriatic Sea Ports
Table 5.4: Terminal Facilities of Transhipment Ports
Table 5.5: Terminal Facilities of Barcelona and Valencia Ports
Table 5.6: Total Berth Length (m) at Comparative Container Ports
Table 5.7: Annual Productivity TEUs per Berth Length (m)
Table 5.8: Total Number of STS Gantry Cranes at Comparative Container Ports
Table 5.9: Annual Productivity- 000s TEUs per STS Gantry Crane
Table 5.10: Stevedoring Costs 2014 US$ - per 40 Loaded Container
Table 5.11: Northern Tyrrhenian Sea Port Capacity Developments to 2025 Million TEUs
Table 5.12: Livorno Europa Platform SWOT Analysis
Table 6.1: Road and Rail Network Accessibility
Table 6.2: Impact of road network works on ports
Table 6.3: Impact of Railway Network Works on Ports
Table 6.4: Distance Matrix-Road
Table 6.5: Distance Matrix-Railway
Table 6.6: Distance Matrix-European Cities
Table 6.7: Railway Distance Matrix-European Cities/km
Table 7.1: Deep-Sea Containership Trading Costs 2014
Table 7.2: Deep-Sea Shipping Costs from Singapore to Trieste, La Spezia and Genoa
Table 7.3: Deep-Sea Shipping Costs from Singapore to Livorno, Salerno and Fos
Table 7.4: Deep-Sea Shipping Costs from New York to Trieste, La Spezia and Genoa
Table 7.5: Deep-Sea Shipping Costs from New York to Livorno, Salerno and Fos
Table 7.6: Comparison of Maximum Size of Vessels Accommodatable at Various Ports
Table 7.7: Stevedoring Costs- 2014 US$ - per 40 Loaded Container
Table 7.8: Distance (km) Matrix between Ports of Interest and Indicative Destinations
Table 7.9: Total Road Transport Cost ()
Table 7.10: Total Rail Transport Cost ()
Table 7.11: Cheapest Option Matrix (US $/FEU)
Table 7.12: Deep-Sea Shipping Costs from Singapore and New York to Gioia Tauro
Table 7.13: Total Built-up Costs for the Feeder Options Serving Major Markets ex Far East
(via Gioia Tauro)
Table 7.14: Total Built-up Costs for the Feeder Options Serving Major Markets to US East
(via Gioia Tauro)
Table 7.15: Direct Cost Options ex Far East
Table 7.16: Direct Cost Options to US East Coast
Table 8.1:Forecast Total Livorno Port Demand to 2035
Table 9.1: Forecast Total Livorno Port Demand to 2035 Do Nothing Approach 000TEUs
Table 9.2: Forecast Total Livorno Port Demand Variance to 2035 - 000TEUs

Livorno Port Authority, Livorno, Italy


Financial Engineering Plan for the Development of the Platform Europe (CIG: 60079415C0)
Competitive Analysis and Traffic Forecasts for the Europe Platform of Livorno

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LIST OF FIGURES
Figure No.

Page

Figure 1.1: Total Regional Container Port Demand 200-2014


3
Figure 1.2 : Italy : GDP and I/E Container Port Volumes 2000-2015
5
Figure 1.3: Forecast Total Northern Tyrrhenian Sea Port Demand (Base Case), 000 TEUs
6
Figure 1.4: World Container Fleet Development 1990-2016 (000TEUs)
7
Figure 1.5: Italian Freight Village System
9
Figure 1.6: Livorno Port Demand (000TEUs) Less Transshipment, 2014-2035
12
Figure 1.7: Livorno Port supply/Demand Balance (000TEUs), 2014-2025
13
Figure 1.8: Livorno Revised Demand Forecast Do Nothing Approach
14
Figure 2.1:Major Hub and Spoke Transshipment Hubs in West-Central and East Mediterranean
18
Figure 2.2: Total Regional Container Port Demand 200-2014
20
Figure 2.3:Main Italian Regions
21
Figure 2.4: Total Livorno Container Port Demand 2008-2014
22
Figure 2.5: Map of Northern Italy
23
Figure 2.6: Italian Import Cargo by Region, 2004-2013
25
Figure 2.7: Italian Export Cargo by Region, 2004-2013
26
Figure 2.8: Total Regional Container Port Demand 2000-2014, Italy-Northern Tyrrhenian Sea
26
Figure 2.9: Genoa Port Import/Export and T/S Container Traffic
27
Figure 2.10: Broad Region: Transshipment Volumes 2000-2014
32
Figure 2.11: Regional Transshipment Demand by Zone 2000-2014
33
Figure 3.1: N. Europe Economic & Trade Indicators 1992-2013
35
Figure 3.2: World GDP & Container Port Trade 1991-2013 (% Change)
36
Figure 3.3: Italian Economy Macroeconomic Indicators and Forecasting
40
Figure 3.4: Italy: GDP and I/E Container Port Volumes 1996-2015
41
Figure 3.5: Comparison of Northern Tyrrhenian Sea Container Trade Growth with Italian Local
Growth
41
Figure 3.6: GDP and Northern Tyrrhenian Import/Export Container Port Demand
47
Figure 3.7: Relevant Central European Transit Countries
51
Figure 3.8: Potential Central European Volumes via Northern Tyrrhenian Ports (Base Case)
55
Figure 3.9: Forecast Total Northern Tyrrhenian Sea Port Demand (Base Case), 000 TEUs
59
Figure 3.10: Northern Tyrrhenian Sea Port Supply/Demand Balance (000 TEUs), 2014-2025
61
Figure 3.11: Northern Tyrrhenian Sea Port Supply/Demand Balance Excluding Transshipment
(000 TEUs), 2014-2025
61
Figure 4.1: World Container Fleet Development 1990-2016 (000TEUs)
64
Figure 4.2: Evolution of Largest Container Ships to 2014
65
Figure 4.3: Maersks EEE-Class Vessel
65
Figure 4.4: Ship Size Increases 2013/15
67
Figure 4.5: Estimated Vessel LOA for Different Capacities and L/B Ratios (Source: Lloyds Register) 69
Figure 4.6: Forecast Container Fleet Productivity to 2016 (TEUs/Fleet TEU)
72
Figure 4.7: Average Vessel Sizes on europe Deepsea Container Trades since 2010
73
Figure 4.8: Percentage of Vessels Ordered by TEU: 2010-October 2014
74
Figure 4.9: USEC & Far East Trade Services Calling at all Ports of Interest
83

Livorno Port Authority, Livorno, Italy


Financial Engineering Plan for the Development of the Platform Europe (CIG: 60079415C0)
Competitive Analysis and Traffic Forecasts for the Europe Platform of Livorno

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LIST OF FIGURES
(Continuation)
Figure No.
Figure 4.10: USEC & Far East Trade Services Calling at Livorno, Genoa and La Spezia Ports
Figure 4.11: USEC & Far East Services Calling at Secondary Ports
Figure 4.12: USEC & Far East Trade Services Calling at Main Transhipment Ports
Figure 4.13: USEC & Far East Trade Services Calling at Barcelona and Valencia Ports
Figure 4.14: Comparative Vessel Sizes Calling at Livorno in 2013-2014
Figure 4.15: Vessel Capacity North Europe, Intra-Med Trade and Feeder Services
Figure 4.16: Maersk Line Fleet Development, 2007-2014 (000 TEUs)
Figure 4.17: MSCs Fleet Development, 2007-2014 (000TEUs)
Figure 4.18: CMA-CGMs Fleet Developments, 2005-2014 (000TEUs)
Figure 4.19: Evergreens Fleet Development, 2007-2014 (000 TEUs)
Figure 4.20: Evergreens Change of Heart on The Capacity of Vessels Deployed
Figure 4.21: Hapag-Lloyds Fleet Development, 2007-2014 (000TEUs)
Figure 5.1:Map of Ports on the Northern Tyrrhenian Sea and Other Primary Competition for
Livorno
Figure 5.2: Port of Livorno (Europa Platform)
Figure 5.3: La Spezia Container Terminal
Figure 5.4:PSAs Voltri (VTE) Terminal
Figure 5.5:SECH Terminal
Figure 5.6: Planned Design of APMTs Vado Ligure Project
Figure 5.7:Marseille-Fos
Figure 5.8: Ports on the Tyrrhenian Sea
Figure 5.9: Naples Container Port
Figure 5.10: Salerno Container Terminal
Figure 5.11: Civitavecchia Port
Figure 5.12: Map of Ports on The Adriatic Sea
Figure 5.13: Port of Trieste
Figure 5.14: Port of Venice Offshore Terminal Project
Figure 5.15: Port of Ancona
Figure 5.16: Port of Ravenna
Figure 5.17: Link between Ports TEU Volumes, Depth and Evolution in Vessel Size
Figure 5.18: Comparative Water Depth (m) and Draft (m) of Major Livorno Port Competition
Figure 6.1: Main Competitive Port System
Figure 6.2:Italian Motorway Network
Figure 6.3: Accessibility Port of La Spezia
Figure 6.4: Road Accessibility of the Port of Venice
Figure 6.5: Railway Accessibility to the Port of Venice
Figure 6.6: Benefits to Ports from Road Infrastructure Works
Figure 6.7: Development of Railway Infrastructure - Modules Until 2017
Figure 6.8: Development of Railway Infrastructure - Gauges until 2017

Livorno Port Authority, Livorno, Italy


Financial Engineering Plan for the Development of the Platform Europe (CIG: 60079415C0)
Competitive Analysis and Traffic Forecasts for the Europe Platform of Livorno

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LIST OF FIGURES
(Continuation)
Figure No.
Figure 6.9: Rhein-Alps Corridor and Terzo Valico di Giovi
Figure 6.10: Ports with Major Benefits From Railway Infrastructural Works
Figure 6.11: The Italian Freight Villages System
Figure 6.12: Ports and Linked Freight Villages
Figure 6.13: Italian Ports and European Cities
Figure 7.1: Long Term IFO Bunker Price Development 1976-2015
Figure 7.2: Total At-Sea Trading Costs at Different Bunker Price (21 Knots)
Figure 7.3: Road Costs Estimation-FEU
Figure 8.1: Livorno Port Demand (000 TEUs), 2014-2035
Figure 8.2: Livorno Port Demand (000TEUs) Less Transshipment, 2014-2035
Figure 8.3: Livorno Port Supply /Demand Balance (000TEUs), 2014-2025
Figure 9.1: Livorno Revised Demand Forecast Do Nothing Approach

Livorno Port Authority, Livorno, Italy


Financial Engineering Plan for the Development of the Platform Europe (CIG: 60079415C0)
Competitive Analysis and Traffic Forecasts for the Europe Platform of Livorno

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REPORT
FINANCIAL ENGINEERING PLAN FOR THE DEVELOPMENT OF THE
PLATFORM EUROPE (CIG: 60079415C0)
COMPETITIVE ANALYSIS AND TRAFFIC FORECASTS FOR THE EUROPE
PLATFORM OF LIVORNO

EXECUTIVE SUMMARY LIVORNO EUROPE PLATFORM

1.1

INTRODUCTION
The container markets that are served by the Livorno are undergoing a transformation. The
size of vessels that are being deployed on the major regional trades is increasing rapidly and,
despite macro-economic conditions, demand continues to increase for the Italian market as a
whole. In addition, there are moves to increase the hinterland reach of the regions ports to
include transit markets to the north. The position in Livorno is uncertain. The existing
facilities are already seeing their competitive position eroded as a result of lack of water
depth. Without significant investment the role of Livorno in the container trades will
inevitably stagnate and then decline. A major project to transform the port the Livorno
Europa Platform is planned to transform the role of the port to allow the largest vessels to
call at the port and to permit the extension of the hinterland across the broader region.
Against this background, the Livorno Port Authority launched a tender won by DAppolonia
(part of RINA Group SPA) and Ocean Shipping Consultants (part of Royal Haskoning DHV
UK Ltd.) to assist them in providing a Market Study to assess the competitive position of the
proposed development plans for the new facility in the port of Livorno (The Europa
Platform).
The position of such a project is determined by the following key issues:
overall demand development macro-economic outlook and container flows;
the current and future balance of the market i.e. the supply/demand position for the
facility;
the relative position of the project in comparison to competing terminals (existing and
planned);
the suitability of the proposed terminal for handling the largest existing and planned
vessels;
the hinterland reach of the terminal especially with regard to intermodal services.
The following is a brief review of each of these points, which are addressed in the body of
the Study:
Overall demand development: It is well known that container volumes in the regional range
have been stable as a result of the economic conditions facing Italy in the past few years.
However, with economic recovery there will undoubtedly be very strong demand growth in
the region. Potential demand in the region will also be driven by the concentration of port
calls, with much larger vessels and also the potential extension of the hinterland to the north.
a RINA company

DAPPOLONIA S.p.A.
Societ a socio unico RINA S.p.A.
Via San Nazaro, 19 - 16145 Genova
Tel. +39 010 3628148 - Fax +39 010 3621078 - www.dappolonia.it - dappolonia@dappolonia.it
C.F. / P. IVA / R.I. Genova N. 03476550102 - Cap. Soc. 520.000,00 i.v.

Doc. No. 14-1394-H1


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There is a long-standing potential to extend the reach of Italian ports into Switzerland,
Austria, Southern Germany and other regional central European markets.
The current/future supply/demand balance: The existing capacities of ports in the range
from Livorno to the north will not be sufficient to handle anticipated demand. Even with
proposed developments at Genoa and at Vado Ligure, the outlook is for a shortage of
absolute demand over a ten year horizon. It should also be noted that all capacity is not
equally attractive. Much of the capacity in the port range will become obsolete over the
period as a result of ship-size constraints. There is also clear potential to significantly extend
the hinterland of Livorno to the south, where there is a lack of suitable deep water port
capacity.
It is apparent that there is a prima facie case for the development of new capacity in the port
range of which Livorno is a part.
Relative position of the project: In terms of the proposed capabilities of the new terminal it
is apparent that the facilities will offer market-leading capabilities in the region. The ability
to berth the largest vessels will be significantly better than that offered in other facilities
(especially Genoa) and this will be congruent with the future demands of the market. This
competitive position will be sufficient to stimulate significant interest from the major
shipping lines (and perhaps more importantly shipping alliances) serving the region.
The proposed development at Livorno will be highly competitive.
Suitability for current and future vessels: The increase in vessel sizes that is currently
underway will be a critical driver at Livorno. OSC are currently heavily involved in these
issues and can confirm the likelihood of 18,000TEU and possibly much larger vessels
seeking to call at ports in the range in the near/medium term. The current proposal for the
Livorno terminal will offer this capability, although there may be some requirement for a
limited design modification to sufficiently future-proof the concept.
The proposed facilities will be competitive with regard to maritime access requirements.
Hinterland links: The situation with regard to containers on the Italian railways is well
known, both with regard to distribution within Italy and also for transit containers to the
north. The development of the new capacity at Livorno will not, by itself, solve these
problems. However, the proposed provision of a rail terminal directly adjacent to the facility
and the development of a local distribution centre will allow the port to offer a highly
competitive argument in contrast to competing locations. This will be very important for any
investor looking at a long term commitment to the Italian and transit markets.
The proposed terminal will be better placed than its competitors with regard to intermodal
links.
These factors together constitute a compelling argument for the successful development of
the project and will be sufficient to attract commercial investment. A further point to
mention is that the proposed development at Livorno offers a conventional solution to the
provision of capacity for northern Italy that is based upon optimal berth and terminal layout
and hinterland links. This is a concept that will be well understood in the market and will be
readily appraisable in commercial terms. This is a quite different proposition to that which is
being proposed at Venice.

Livorno Port Authority, Livorno, Italy


Financial Engineering Plan for the Development of the Platform Europe (CIG: 60079415C0)
Competitive Analysis and Traffic Forecasts for the Europe Platform of Livorno

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1.2

HISTORICAL CONTAINER TRAFFIC VOLUMES FOR THE REGION


Current volumes at Livorno represent 7.92 per cent of the regional total, with recent volumes
reaching 0.58m TEU. This is still less than the highs of 0.78m TEU recorded prior to the
economic slump in 2009.

Figure 1.1: Total Regional Container Port Demand 200-2014


The region in this instance is defined by the primary competition that the port of Livorno
is likely to face which incorporates:
ports in the immediate vicinity of Livorno on the Northern Tyrrhenian Sea;
developed and developing ports on the Italian Adriatic Coast;
the Tyrrhenian Sea ports closer to Rome;
facilities in South France.
The port suffered badly in 2009, with volumes dropping by just under 24 per cent before
recovering in 2010-11 only then to lose business in 2012 to developing facilities primarily in
Genoa. Recovery since then has been steady rather than dramatic and it is clear that the port
facility will need to develop if it is to be able to compete with its neighboring competition,
which is the primary purpose of this report.
Provided that the necessary improvements in water depth, quay length and shore-side
equipment are made, then there is no reason why the Port of Livorno should not be able to
compete in the following main markets:
local Livorno market and expansion into local north and central Italian markets;
transit markets to Switzerland, Slovakia, Czech. Republic, Slovenia, Austria and Hungary
(plus south Germany);
transshipment (where these is some potential, but to a much lesser extent).

Livorno Port Authority, Livorno, Italy


Financial Engineering Plan for the Development of the Platform Europe (CIG: 60079415C0)
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The central Mediterranean region as a whole has a long history of handling large volumes of
transshipment and although there have been some slight declines in recent years volumes on
the whole are showing signs of recovery. However, although ports on the Northern
Tyrrhenian Sea could see some increases in transshipment demand, this is not the target area
for the Europa Platform. Together the Northern Tyrrhenian Sea ports represent just 2.3 per
cent of the transshipment demand with about 0.35m TEU recorded in 2014, of which
Livorno represents just 0.4 per cent.

1.3

DEVELOPMENT OF LIVORNOS CONTAINER TRAFFIC MARKETS TO


2035
The economic relation between GDP, trade, container port demand is very useful in
forecasting the development of the container sector. In the Italian economy, the initial
relationship between GDP growth and trade growth appears to have broken down recently,
but is expected to return to equilibrium in two to three years, by 2017. Despite this and the
numerous factors at work, which need to be built into (or allowed for in the interpretation of)
forecasts, the generation of trade through economic growth provides the most rational basis
for predicting the future direction and scale of container port demand.
The relationship between Italian GDP growth and import/export remained strong throughout
the period of economic decline up to 2009 and up to 2011. By 2012, the first signs of the
breakdown in the relationship between trade growth and economic growth were evidenced,
and although there is some sign of recovery in 2014, the future prospects suggests a further
breakdown in the relationship in the short-term (See Figure 1.2).
When looking at the import/export volumes and GDP forecast from 2014 and comparing
them with the economic development, it is apparent that the Italian economy is passing
through a transition period with important structural changes, which has temporarily
displaced the direct relationship between GDP and container volumes. Despite the GDP
continuing to be negative or near zero with a slight recovery forecast for 2015, local demand
growth has achieved positive growth figures for 2014 and is set to record 3.5-4.0 per cent
growth in both import and export volumes. There is indication that Italy is shifting towards
an export-driven economy, meaning that the elasticity demand/GDP is growing towards
levels more typical in export-driven countries such as Germany. This indicates that a
reasonable and realistic traffic forecast to be achieved specific attention must be paid to the
trade forecast.

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Figure 1.2 : Italy : GDP and I/E Container Port Volumes 2000-2015
Due to the questionable merits of the short-term relationship between Italian GDP-growth
and trade growth it is reasonable to assume that the short-term forecast to 2017 should be
based on the Italian export demand with the later methodology returning to the normal
GDP/trade growth relationship from 2018 for the balance of the forecast period. In all three
cases it is envisioned that economic and trade recovery will be gradual due to anticipated
continued restraints on credit, as banks rebuild their balance sheets, and the dampening effect
that fiscal measures to repay government debt exert on consumer expenditure growth. It is
the opinion of Ocean Shipping Consultants (OSC) that deferring this recovery for a year or
two would seem the wisest assumption.
It is assumed that during the scope of this analysis that any commercial initiative, pricing
policy, etc. has or will improve a particular terminals market share of increase the expected
demand forecast related to that terminal. From 2000 to 2014 the GDP growth to trade growth
ratio has been 1:4.16 with the pre-economic crash ratio being 1: 4.02 from 2000 to 2006. It is
expected that the ratio will bounce back to 1: 3.00 by 2017/2018, before returning to a more
realistic continental level of 1: 2.00 from 2020 (See Table 1.1).
Table 1.1: Assumed Percentage GDP Growth and Multipliers for Italian Local
Regional
Forecast
Base -Case
Assumed Percentage GDP Growth and Multipliers
for ItalianForecast
Local Regional
Base Case
Table 1

GDP % Grow th

2012

2013

2014

2015

2016

2017

2018

2019

2020-24

2025-2029 2030-2035

0.54

1.20

1.15

1.10

1.05

1.00

1.50

2.00

2.73

2.38

2.00

1.33

1.00

3.00

2.50

2.00

2.00

2.00

-2.37

-1.85

-0.32

Local % Grow th -1.34

0.81

2.58

% Ex port Grow th 2.14

0.13

1.99

2.50

3.00

3.50

Multiplier

-1.50

-0.83

4.65

2.50

3.04

3.18

NB: it is assumed that forecasts w ill be based on ex port figures for 2015-2017 and GDP grow th for the balance of the period
Source: Ocean Shipping Consultants

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Using these multipliers shown in Table 1.1, the total Northern Tyrrhenian port regional
volumes are expected to increase from 4.49m TEU in 2014 to between 5.68-6.21m TEU in
2020; 6.40-7.01m TEU in 2025; 7.22-7.92m TEU in 2030 and 7.86-8.87m TEU in 2035 (See
Figure 1.3). Even without any transshipment volumes (which it is wise to exclude because
of their transient nature), it is clear from supply/demand calculations that the region will be
in need of additional capacity from around 2016-17, which is why it is imperative for The
Europa Platform project to go ahead as soon as is practical.

Figure 1.3: Forecast Total Northern Tyrrhenian Sea Port Demand (Base Case),
000 TEUs

1.4

CONTAINER SHIPPING TRENDS AND IMPLICATIONS FOR LIVORNO


There is growing evidence that the majority of shipping lines are committed to a strategy of
building/utilising ever larger ships with the current focus on shifting shipping building
production towards the construction of Ultra Large Container Ships (ULCS). As at October
2014 (or Q4 2014), the total number of vessels on order stood at 469 with a total tonnage of
3.49mTEU, 47 per cent of which can be accounted for by orders of vessels over 12,000
TEU. Of these new orders, 21 vessels with capacity >8,000TEU were delivered during 2014
(October-December); 131 during 2015; 65 during 2015 and 23 from 2017 onwards (See
Figure 1.4).
These developments will be manifested in the rapid introduction of much larger vessels into
secondary services. The role of these vessels will be as mother ships offering transhipment
hub port calls on the major arterial trades. In addition, regional ports will increasingly be
used to link distinct deepsea services for markets outside the immediate region. The driving
force of these developments will be the introduction of larger vessels and the lines need to
fill them.
The pace of this ship size revolution continues to accelerate, with recent confirmed orders for
vessels of over 20,000TEU (Mitsui OSK Lines) and also detailed evaluation of 22,000TEU
and 24,000TEU designs. Long term planning for container terminals must take these
developments into account.

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Figure 1.4: World Container Fleet Development 1990-2016 (000TEUs)


Impact on the Port of Livorno
For Livorno, this means that the majority of mainline services will be controlled by four
main Alliance groups, which will increasingly be calling at fewer ports on their main haul
services in order to save money. This will have the added result of increasing the amount of
transshipment units handled at what few ports the main Alliance groups call at. Of the four
main Alliance groups, both 2M and Ocean Three Alliance have their own terminal interests,
so it is more likely (although not impossible) that Livorno will only have an opportunity to
attract vessels from the CKYHE or G6 Alliance, but will be able to offer improved port
facilities at a port where the major shipping lines, such as Maersk, MSC and CMA-CGM,
are not having any priority berthing advantages, which in itself is a very attractive selling
point.
However, that said, both the 2M services and the Ocean Three Alliance services have
recently announced a number of vessel calls from Asia and the US into ports on the Northern
Tyrrhenian Sea, Tyrrhenian Sea and the Adriatic, all of which could be potential calls for the
newly developed Livorno facility and it is important that Livorno does not ignore this
opportunity entirely.
With the various planned port developments at Livorno, the possibility of being able to
compete with Genoa, La Spezia, Trieste, Gioia Tauro, Marsaxlokk, etc. remains good and
the port has a good chance of attracting services operated by either the CKYHE or G6
Alliances, whether mainline to Asia or US East Coast or feeder vessels. There also remain
some lines that are not yet aligned to main Alliances (such as Zim Line or PIL-Wan Hai) and
their volumes also offer a further opportunity for Livorno.

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LIVORNOS COMPETITIVE POSITION

1.5

The competitive position of any port is the result of its physical capabilities, location and the
built-up transport costs versus alternative port facilities. It is felt that Livornos primary
competition falls into the following categories:
other ports on the Northern Tyrrhenian Sea, i.e. La Spezia, Genoa (V.T.E., SECH and
Vado Ligure), and Marseille-Fos;
secondary competition on the Tyrrhenian Sea, including Naples, Salerno and
Civitavecchia;
other ports on the Adriatic Sea, i.e. Trieste, Venice, Ancona and Ravenna;
Central Mediterranean transshipment hubs such as Gioia Tauro, Cagliari, Taranto and
Marsaxlokk;
gateway terminals such as Barcelona and Valencia.
The Livorno Port Authority is currently in a position of having the capability of deciding
precisely what facilities it should look to create as part of the Europa Platform Project.
Obviously, the additional depth of water (18m) compared with the original plans would
ensure that the port is future proofed against any expected vessel size changes in the mid
to long term and together with the potential for strong rail links into northern Italy and into
parts of central Europe, the future demand potential would be attractive to would be terminal
operator. With a capable terminal operator the terminal could go from strength to strength,
improving both terminal and customs efficiencies. Table 1.2 highlights the SWOT Analysis
for The Europa Platform in Livorno.
Table 2
Livorno Europa Platform SWOT Analysis

Table 1.2: Livorno Europa Platform SWOT Analysis

Strengths

Weaknesses

Opportunities

Threats

Planned relativ ely deepw ater in the near term

Shallow er w ater than Vado Ligure and Trieste

Improv e customs clearance times

Failure to improv e w ater depth to 18.0m w ill lose

Good potential for transit markets

Productiv ity lev els low er than t/s hubs

Potential to attract major lines w ith larger

competitiv e adv antage to Vado Ligure and Trieste


Accelerated dev eloment of Collata Bottolo

v essels - 18,000TEU possible


Significant local market in Liguria and north Italian

Need for deeper w ater alongside (especially from

Scope for dedicated/priority arrangements

Failure to deepen port w ould hit competitiv e

regions

2018)

w ith major lines

position - loss of major opportunity

Ability to combine transit and import/ex port

Customs reputation not good but potentially better

Scope to further boost productiv ity

containers

than Genoa

Reasonable cost structure

Scope to combine local and transit business

Reasonable lev els of productiv ity

Marginal potential for local transshipment

Good rail connection direct to the port

Barge direct from terminal into hinterland

Source: Ocean Shipping Consultants

1.6

ANALYSIS OF THE ITALIAN ROAD AND RAIL NETWORK


The ports under consideration are generally well connected to their major hinterlands by
road. There are some significant bottlenecks but investment is underway or planned to
alleviate these constraints. Livorno is well placed in this regard and enjoys relatively good
access not simply to the northern hinterland but also to the central Italian markets.
The situation with regard to rail is more problematic. There is a well-established and mature
rail network, but this has been restricted by a lack of investment for freight operations

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(particularly for containers). Further investment is planned, but attention is required both for
investment in new capacity and the modernisation of operating practices. There is very little
international rail movements of containers and, in the longer run, the position of all ports
(including Livorno) will depend upon the extension of the hinterland to the north by means
of intermodal trains.

Source: DAppolonia

Figure 1.5: Italian Freight Village System


Investments in both road and rail capabilities will significantly extend Livornos hinterland.
The freight village network is an important aspect of domestic containerised goods
distribution and Livorno is well connected into this system (See Figure 1.5).

1.7

BUILT-UP COST ANALYSIS


Direct calls at deepwater port facilities clearly offer the most cost-effective way of serving
the northern Italy regions and the more distant regions of central Europe. On a unit cost
basis, the arguments still clearly favour direct shipments rather than feeder services, although
it should be recognised that some shipping lines do not have the necessary volume to make a
direct call economically viable and so will have to use the more expensive feeder option.
Table 1.3 highlights the size of vessels that the competing ports can handle on the two main
trade lanes both now and in the future.

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Table 1.3: Comparison of Maximum Size of Vessels Accomodatable at Various


Ports
Comparison of Maximum Size of Vessels Accomodatable at Various Ports
Table 3

Terminal

Depth (m) Max.Capacity (TEU)

Europa Platform

Required-USEC

Required-FE

Required-USEC

Required-FE

Current

Current

Future

Future

16.0 (18.0)

12,500 (18,400)

4,500

8,500

8,500

18,400

11.8

3,000

4,500

8,500

8,500

18,400

Vado Ligure

17

18,400

4,500

8,500

8,500

18,400

VTE

15

8,000

4,500

8,500

8,500

18,400

SECH

14.5

6,400

4,500

8,500

8,500

18,400

LSCT

14

5,000

4,500

8,500

8,500

18,400

Trieste

18

18,400

4,500

8,500

8,500

18,400

Fos

15

8,000

4,500

8,500

8,500

18,400

Salerno

9.7

2,500

4,500

8,500

8,500

18,400

Civ itav ecchio

14

5,000

4,500

8,500

8,500

18,400

Darsena Toscana

Source: Ocean Shipping Consultants

This means that together with Vado Ligure and Trieste, The Europa Platform remains well
placed to offer cost-effective solutions to any number of destinations, particularly on trade
lanes where the ULCSs are already being deployed and where the ports deepwater
advantage can be maximised. This is the case on the main arterial trade lanes such as AsiaEurope, but vessels of this magnitude, i.e. >18,000TEU have yet to cascade onto secondary
trade lanes such as the US east coast services, where it is only likely that vessels will
increase to 8,500TEU capacity in the mid-term, because of demand restrictions as well as US
port restrictions in terms of the vessel sizes that they can handle. These issues will be
resolved in the long-term and the deepwater ports will again be well prepared for
accommodating the larger tonnage.
Table 1.4 and 1.5 highlight the total built-up costs of shipping containers from a number of
different ports to a number of different locations both in Italy and in central Europe.
Table 4

Table 1.4: Direct Cost Options ex Far East (000 ??)

Direct Cost Options ex Far East


Milan

Bologna

Padua

Rome

Turin

Parma

Munich

Basle

Vienna

Budapest

Europa Platform

1759.34

1345.78

1751.88

1856.12

1941.47

1368.54

3160.55

2900.08

3703.19

3485.36

Vado Ligure

1214.65

1811.40

2045.37

2558.34

1325.57

1458.48

2924.24

2437.41

3761.26

4113.00

VTE

1278.60

1875.36

2109.33

2622.29

1389.52

1522.43

2988.19

2501.36

3825.21

4176.96

SECH

1261.50

1858.26

2092.23

2605.19

1372.42

1505.33

2971.09

2484.26

3808.11

4159.86

LSCT

1608.79

1586.15

1990.55

2341.73

1792.89

1212.14

3032.03

2799.47

3742.69

4097.34

Trieste

2221.28

1754.71

1352.20

3135.12

2616.42

1992.52

2467.58

3227.27

2414.86

2659.83

Fos

2769.77

3259.69

3682.63

3759.31

2301.55

2968.22

4050.01

3197.68

4246.52

4530.25

Salerno

3904.15

3413.20

3802.78

2075.62

4025.08

3541.36

4301.44

4283.81

4478.58

4759.97

Source: Ocean Shipping Consultants

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Table 5

Table 1.5: Direct Cost Options to US East Coast (000 ??)

Direct Cost Options to US east coast


Milan

Bologna

Padua

Rome

Turin

Parma

Munich

Basle

Vienna

Budapest

Europa Platform

1605.98

1192.41

1598.52

1702.75

1788.10

1215.18

3007.18

2746.71

3549.82

3331.99

Vado Ligure

1057.86

1654.62

1888.58

2401.55

1168.78

1301.69

2767.45

2280.62

3604.47

3956.22

VTE

1057.86

1654.62

1888.58

2401.55

1168.78

1301.69

2767.45

2280.62

3604.47

3956.22

SECH

1040.76

1637.52

1871.48

2384.45

1151.68

1284.59

2750.35

2263.52

3587.37

3939.12

LSCT

1378.47

1355.82

1760.22

2111.41

1562.57

981.81

2801.70

2569.14

3512.36

3867.02

Trieste

2106.09

1639.51

1237.01

3019.93

2501.22

1877.33

2352.38

3112.08

2299.67

2544.63

Fos

2535.52

3025.44

3448.38

3525.06

2067.30

2733.97

3815.76

2963.43

4012.27

4296.00

Salerno

3698.89

3207.94

3597.52

1870.36

3819.82

3336.10

4096.18

4078.55

4273.32

4554.71

Source: Ocean Shipping Consultants

It is clear from this that Livorno direct is the most cost-effective option for cargo to/from
Bologna and Rome;
direct options to/from all three deepwater ports (The Europa Platform, Vado Ligure and
Trieste) offer the most cost-effective routes to all the destinations under consideration.
Although the cost effectiveness of various cargo routings is important, it is also necessary to
stress that this is not the only factor that shipping lines will assess in order to determine
which ports they serve, although in truth these too are also driven by financial requirements,
because of the expensive nature of the ULCSs they operate. Other factors include:
terminal efficiency, i.e. the number of containers that can be handled per hour. This
affects the amount of time spent in port and therefore the cost of a port stay. The more
productive a port can be on a regular and reliable basis, the cheaper the port stay and also
the slower a vessel needs to sail between ports to meet the next berthing window, giving
further fuel savings;
customs clearance it is again important to ensure that once a container has been
discharged, it is not delayed unnecessarily with customs and security checks that delay
the final delivery date/time of a consignment, which could (depending on the commodity)
effect the output of a factory production line;
frequency, reliability and capacity of intermodal services particularly for distances of
>500km it is likely that the containers will be moved from the quay via rail. In order not
to lose the benefit of a quick discharge on the quayside, it is imperative that the rail
providers have the necessary capacity and frequency of services to ensure that the
containers are not left waiting for a connection;
frequency, reliability and capacity of road haulage the same is true for road haulage
options for distances <500km;
further volume discounts are also possible to offer to major clients in order to reduce their
built-up costs and guarantee some core port volumes.
In the future, there will remain some local and international competition challenges for The
Europa Platform particularly with Trieste and Vado Ligure locally and major north
European ports for central European destinations, but there remain sufficient incentives to

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call at The Europa Platform to warrant the interest of an international terminal operator
and/or major shipping line to further investigate the possibility of a direct call. Once a major
operator is secured, together with shipping line volumes, then The Europa Platform future is
secured. It is imperative therefore that the Port Authority can attract such a client.

1.8

LIVORNO FORECAST TO 2035

Figure 1.6: Livorno Port Demand (000TEUs) Less Transshipment, 2014-2035


Figure 1.6 illustrates the potential Livorno forecast (excluding the limited transshipment
potential). Following the initial ramp-up expected in the first few years of partial
operation from 2019-2021, the Livorno share of the Northern Tyrrhenian Sea port market is
expected to increase as follows, based on its deepwater advantage:
the share of the local market is expected to reach 20 per cent by 2021 before increasing
further to 23 per cent in 2025; 25 per cent in 2030 and 28 per cent in 2035;
the share of the international transit market is expected to reach 20 per cent in 2021
before then increasing to 30 per cent in 2025; 40 per cent in 2030 and 50 per cent in
2035;
although of relatively minor importance, the transshipment share at Livorno is likely to
increase to 17 per cent in 2021; 18 per cent in 2025; 19 per cent in 2030 and 20 per cent
in 2035.
Livorno demand is expected to increase from 0.58m TEU demand in 2014 to between 0.640.67m TEU demand in 2015; 0.93-1.02m TEU in 2020; 1.49-1.63m TEU in 2025; 1.902.08m TEU in 2030 and 2.33-2.67m TEU in 2035.
However, the outlook for Livorno if the port is not developed will be highly problematic.
The trend towards the introduction of much larger vessels into the trades will see the limited
facilities at the port increasingly marginalised. This will result in a decline in container
volumes and a reduction to feeder port status. This will see much higher costs for regional
cargo owners and act as a disincentive for regional development.

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The additional capacity developments planned in Vado Ligure, plus the existing capacity at
established Genoese facilities at Voltri and SECH add to the improvement in the competitive
position of the major competitors in the region meaning that there really is no alternative for
Livorno but to go ahead with the planned expansion plans (Figure 1.7 further illustrates the
supply/demand balance for Livorno).

Figure 1.7: Livorno Port supply/Demand Balance (000TEUs), 2014-2025


However, the total capacity available can also be somewhat misleading since it is the
importance of deepwater capacity, rather than the total capacity, that is key to Livornos
future prosperity. In this respect, Livorno with The Europa Platform, and Vado Ligure are
the two main facilities in the region that can handle the largest type of container vessels
(although Vado Ligure has a further depth advantage over Livorno) and are best placed to
attract the main clients.
It is important to reiterate that whilst Livorno will be well placed to take advantage of the
deepwater capacity, it makes sense to future proof the port at this stage against any potential
requirements for deeper vessels in the coming years. Vado Ligure and Trieste are already
better suited to withstand any such future developments and so it is prudent for Livorno to
deepen to 18m alongside the main berth to ensure its continued competition with these port
facilities and those in northern Europe for transit volumes.

1.9

LIVORNO GAP ANALYSIS


Failure to develop the port of Livorno will result in a continuous reduction of container
volumes from 2018 on as cargo and shipping lines will move to those bigger and deeper
ports that are able to handle the larger vessels that will be deployed in the region in the near
future. This reduction will continue until eventually Livorno will not be able to offer a
sustainable business case based on its declining container volumes.
In the short-term, Livorno would still be able to attract cargo volumes similar to what it does
today (0.3m TEU), but by 2025 in particular, the number of ULCSs delivered to all major
shipping lines will mean that any port that doesnt have the capability to handle these ships

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will lose significant amounts of business and continue to do so for the balance of the forecast
period. Figure 1.8 illustrates the revised demand forecast if the Port Authority were to Do
Nothing and clearly illustrates that the port would rapidly lose trade share to competing
deepwater facilities in the region.

Figure 1.8: Livorno Revised Demand Forecast Do Nothing Approach


It is assumed that the port will maintain its current market share of local and transshipment
cargo from now until 2018 when the Vado Ligure deepwater development is expected to be
operational. At this point it is reasonable to assume that:
Livornos share of the local market will reduce, initially by the same share that we have
assumed it will increase if Europa Platform and the deepwater facility were to go ahead,
i.e. by 6.2 per cent, down from 13.8 per cent share to 7.6 per cent in 2021. With no
deepwater berthage to attract shipping lines, cargo will gradually move to other facilities
that are better equipped to handle larger vessels. The share of local cargo in Livorno will
continue to drop to five per cent in 2025; three per cent in 2030 and just two per cent in
2035;
no European transit cargo is likely to develop with no rail developments expected and no
shipping lines operating ULCSs calling at the port with just feeder vessels with minimal
cargo volumes calling;
with no deepwater berthage, what little share of transshipment there is will
considerably and eventually fall to nothing by the end of the forecast period.
feeder volumes will remain and so the share is likely to reduce from the current
share of 16 per cent to just three per cent in 2021; two per cent in 2025; one per
2030 and zero on 2035.

reduce
Some
market
cent in

The port world is full of examples of facilities that have failed to take such an
opportunity to make the required adjustments to the port in order to allow the port to
accept larger vessels. This has generally resulted in marginalized volumes and reduced
revenues. Livorno really has no choice. It either develops to meet the future needs of

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the shipping lines, or it becomes nothing, but a feeder outport or niche provider with no
sustainable future.
The Europa Platform project represents a strong future for the port and will be
competitive with regard to other ports in the region and other major terminals under
consideration for northern Italy (e.g. Venice). The proposed facilities will be well
formatted for the requirements of the shipping lines and also offer a compelling
hinterland argument. There is also clear scope to compete for northern transit markets
from this location as intermodal links are progressively improved. This Market Study
confirms the need for the proposed development.

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HISTORICAL CONTAINER TRAFFIC VOLUMES FOR THE


REGION

2.1

INTRODUCTION AND MARKET DEFINITION


The basic approach taken by this study is to firstly define the market for the port of Livorno.
Separate analyses will be developed for the following markets:
the local Italian import/export market;
the transit market primarily to north Italy, but also to Switzerland, Austria and South
Germany;
the regional transshipment hub market.
For the regional transshipment market, this study concentrates on the development of the
markets in central Mediterranean. At present, this business is confined to activities at Gioia
Tauro, Cagliari, Taranto, La Spezia and Marsaxlokk, with some limited volumes also being
handled in Genoa and Livorno.
The narrowly defined Central Mediterranean market is a subset of a more significant and
broader geographical region and in evaluating future developments, and supply/demand
balances, it is clearly necessary to take a broader perspective of demand. In this study, it is
clear that transshipment activity in the Central Mediterranean will be competing to varying
degrees with major transshipment hubs and gateway ports handling significant volumes of
transshipment business.
Therefore, the region that is relevant to the current review comprises the following locations:
Central Mediterranean Hub Ports these include the major terminals in Italy (Cagliari,
Gioia Tauro, La Spezia and Taranto) and also Marsaxlokk (Malta), with some minor
volumes also handled in Genoa and Livorno;
the Gibraltar Strait currently Algeciras, Malaga and Tangiers and, in the future, other
terminals in southern Spain and Morocco;
the Mediterranean Spanish Gateway Ports Valencia and Barcelona together with some
further potential developments;
Atlantic Terminals the major transshipment terminals in the Canary Islands and in
Lisbon, together with the under-utilised facilities at Sines.
Not all these terminals are equally competitive with the Italian ports and nor do they have
directly overlapping transshipment hinterlands and market roles. However, the relative
position of each of the ports in each sector will be assessed and conclusions drawn.
Some remarks are also necessary concerning the definitions of transshipment in the current
context. In simplified terms transshipment refers to the transfer of a container from one
vessel to another (usually via the quay).
However, there are two distinct sectors here, which are driven by different pressures:

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Hub-and-spoke Transshipment. As ship sizes continue to increase and shipping line


mergers and alliances continue (note especially the 2M Alliance and the Oceans Three
Alliance), the economic advantages of reducing the number of port calls becomes ever
more pronounced. These advantages flow directly from the high capital costs associated
with containership construction and the time penalties involved in calling at several ports
to load/unload relatively small consignments. The trend to fewer port calls will continue
and will favour the larger, centrally placed ports in a region.
However, increasing transshipment also implies increasing feeder flows, which place
demands on smaller ports to gear up to handle containers at dedicated container berths.
Transshipment already has a significant place in the global market and its share is
expected to continue increasing. The major lines will continue to serve port regions by as
few direct calls as possible, and thus the role of hub-and-spoke container distribution will
continue to strengthen. This will be strongly manifested in the Central Mediterranean
markets;
Relay Transshipment (or Interlining). The relay sector is driven by different factors,
although, from a port perspective, the requirement to move containers between vessels is
similar. The aim of relay transshipment is to extend service coverage and flexibility by
linking two or more mainline services typically east-west services with north-south
services. This enables carriers to increase the number of revenue earning legs on their
larger vessels. With increasing complexity of vessel itineraries, relay transshipment will
also continue to become more widespread. This is a major feature of demand in the
Gibraltar Straits markets, although some instances of relay transshipment can also be
evidenced in the Central Mediterranean hubs.
The development of the transshipment sector will, therefore, be a compound of both
economic growth-induced demand and the policies of major operators in converting direct
flows into transshipped flows.
Leading operators will typically have transshipment hubs in at least two out of the three main
Mediterranean zones (West, Central and East), in order to reduce transit times to/from ports
in the East Mediterranean, Central Mediterranean and West Mediterranean as well as to/from
various relay trades.
Maersk Line, for example, have transshipment hubs centred in Algeciras (and/or Tangiers),
Gioia Tauro and Port Said, each of which is shown in a separate geographical circle in
Figure 2.1. Similarly, CMA/CGM, concentrates the bulk of their transshipment activities in
Malta (or Gioia Tauro) and Port Said, with some services also calling at Damietta in the
East.
The introduction of more and larger alliance groups has already led to the greater
cooperation of lines over their choice of transshipment hubs. However, in practise this has
usually resulted in some shipping lines having to accept that they may have to use more than
one transshipment hub in each zone, which will not enable them to be able to provide their
customers with the optimum coverage and maximum service synergies they crave.

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Figure 2.1:Major Hub and Spoke Transshipment Hubs in West-Central and


East Mediterranean

2.2

ITALIAN REGIONAL DEMAND: GENERAL PERSPECTIVE


The primary competition for the local regional market for the port of Livorno is comprised of
the container port facilities located in the Northern Tyrrhenian Sea, namely Savona, Genoa
(especially SECH and VOLTRI) and La Spezia (LSCT). Further competition is also
possible, to a greater or lesser extent depending on the quality of the terminal, from
secondary container facilities located on the Tyrrhennian Sea, Adriatic Sea and also the
south of France.
It is apparent that regional demand grew rapidly up until the economic downturn of 2008/9.
Total demand growth, with an overall CAGR for the defined region of some 3.7 per cent
noted over the period reaching around 6.8m TEU in 2008.
In 2009, total regional volumes dropped by some 11.4 per cent to a little under 6.0m TEU,
but the crisis proved to be short-lived in the region. Volumes recovered to 7.3m TEU in
2014.
The broad scale of regional demand growth over the period 2000-2014 is summarised in
Table 2.1. This highlights the region that is under review. This comprises the Northern
Tyrrhenian Sea, Tyrrhennian Sea, Adriatic Sea and south France markets, where the level of
transshipment units are relatively minor compared with the major central Mediterranean
transshipment hubs. The focus for the Northern Tyrrhenian Sea market of which Livorno is
a part is for local and transit volumes to certain parts of central Europe.

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Table 2.1

Table 2.1: The Total Regional Hinterland Demand, 2000-2014

The Total Regional Hinterland Demand, 2000-2014


'000 TEUs
2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014 *

Italy - Ligurian Sea


Livorno

519.2

531.8

546.9

592.8

638.6

658.5

657.6

745.6

778.9

592.1

628.5

637.8

549.0

559.2

577.5

Genoa

1500.6

1526.5

1531.3

1605.9 1628.6

1625.0

1657.1

1855.0

1766.6

1533.6

1758.9

1847.1

2064.8

1988.0

2172.9

910.0

974.6

975.0

1006.6 1040.4

1303.0

36.9

50.1

54.8

2966.7

3083.0

3108.0

Naples

396.6

430.1

446.2

433.3

Salerno

276.0

321.3

374.9

417.5

na

na

na

672.6

751.4

Venice

218.0

Trieste

206.1

Rav enna

La Spezia

1024.5

1136.7

1187.0

1246.1

1046.1

1285.2

1307.3

1247.2

1300.4

83.9

219.9

227.2

242.7

252.8

196.3

220.0

170.4

75.3

77.9

81.8

3258.8 3391.5

3527.9

3678.6

4030.3

4044.4

3368.1

3892.6

3962.6

3936.4

3925.5

4135.2

347.5

373.7

445.0

460.8

481.5

515.9

534.7

526.8

546.8

480.0

418.8

411.6

418.2

359.7

385.3

330.4

269.3

234.8

235.2

208.6

263.4

265.0

na

na

na

na

na

25.2

28.3

41.5

38.2

51.0

54.0

65.2

821.1

850.8

759.1

791.9

804.7

846.1

837.1

813.5

811.0

800.1

806.4

797.4

749.0

246.2

262.3

283.7

290.9

289.9

316.6

329.5

379.1

369.5

392.9

458.4

429.9

446.6

456.1

200.6

185.3

120.4

174.0

198.3

220.3

265.9

335.9

277.0

281.6

393.2

408.0

458.6

476.5

181.4

158.4

160.6

160.4

169.5

168.6

162.1

206.8

214.5

185.0

183.0

215.3

208.2

226.9

222.6

83.9

90.0

94.3

84.8

86.0

85.4

97.0

87.2

102.2

105.5

110.4

120.7

142.2

152.4

75.8

689.4

695.2

702.6

649.3

720.3

742.2

796.0

889.4

1031.6

937.0

967.9

1187.6

1188.3

1284.5

1230.9

Marseille-Fos

722.4

742.0

808.9

833.0

916.3

906.1

946.4

1002.9

851.2

876.8

953.4

930.0

1061.2

1099.2

1175.9

Total

722.4

742.0

808.9

833.0

916.3

906.1

946.4

1002.9

851.2

876.8

953.4

930.0

1061.2

1099.2

1175.9

5051.1

5271.6

5440.6

5591.9 5787.2

5968.1

6225.7

6768.6

6764.3

5995.4

6625.0

6880.3

6992.2

7106.6

7291.0

Sav ona
Total

53.5

Italy - Tyrrhennian Sea

Civ itav ecchio (Rome)


Total
Italy - Adriatic Sea

Ancona
Total
South France

Regional Total
* partially estimated

Sources: Ports / Ocean Shipping Consultants

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Regional demand growth is further detailed in Figure 2.2.

Figure 2.2: Total Regional Container Port Demand 200-2014

2.3

HISTORICAL DEMAND BY ROUTING


The Domestic Market and the Further Potential for Livorno
Current volumes at Livorno represent 7.92 per cent of the regional total recorded in Table
2.1, with recent volumes reaching 0.58m TEU. This is still less than the highs of 0.78m TEU
recorded prior to the economic slump in 2009. The region in this instance is defined by
the primary competition that the port of Livorno is likely to face which incorporates:
ports in the immediate vicinity of Livorno on the Northern Tyrrhenian Sea;
developed and developing ports on the Italian Adriatic Coast;
the Tyrrhenian Sea ports close to Rome;
facilities in South France.
The port suffered badly in 2009, with volumes dropping by just under 24 per cent before
recovering in 2010-11 only then to lose business in 2012 to developing facilities primarily in
Genoa. Recovery since then has been steady rather than dramatic and it is clear that the port
facility will need to develop if it is to be able to compete with its neighboring competition,
which is the primary purpose of this report.
Provided that the necessary improvements in water depth, quay length and shore-side
equipment are made, then there is no reason why the Port of Livorno should not be able to
compete in the following main markets:
local Livorno market and expansion into local north Italian transit markets;
transit markets to Switzerland, Slovakia, Czech. Republic, Austria and Hungary (plus
south Germany);
transshipment

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Figure 2.3:Main Italian Regions


Figure 2.3 illustrates the 20 main Italian regions, of which the following nine are within the
expanding reach of Livorno port and its primary competition in both the Adriatic Sea and the
Northern Tyrrhenian Sea:
Toscana;
Liguria;
Emillia-Romagna;
Piemonte;

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Valle dAosta;
Veneto;
Lombardia;
Friuli-Venezia Giulia;
Trentino Alto Adige.
Table 2.2 provides more detail of the Livorno port volumes since the economic slump of
2008-9.
Table 2.2

Table 2.2: Livorno Container Volumes, 2008-2014

Livorno Container Volumes, 2008-2014


'000 TEUs
2008

2009

2010

2011

2012

2013

2014

Import

339.36

263.11

278.26

288.64

259.83

263.03

263.90

Ex port

356.56

273.10

299.97

305.01

262.71

264.32

255.60

82.94

55.85

50.26

44.16

26.51

31.83

57.97

778.86

592.05

628.49

637.80

549.05

559.18

577.47

10.65%

9.43%

8.00%

6.92%

4.83%

5.69% 10.04%

Full - Local

524.32

405.04

441.57

461.35

400.33

401.05

392.79

Empty - Local

171.60

131.17

136.66

132.29

122.22

126.30

126.71

Total

695.92

536.20

578.23

593.64

522.54

527.35

519.50

Transshipment
Total
% Transshipment

Source: Liv orno Port Authority / Ocean Shipping Consultants

Figure 2.4: Total Livorno Container Port Demand 2008-2014

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These details are further illustrated in Figure 2.4.


Although Livorno has historically been almost entirely directed toward the local Livorno
markets (Tuscany and Emillia-Romagna), it is apparent that with the establishment of
effective and reliable rail intermodal and haulage links to/from the port into north Italy and
further afield to Switzerland, Austria and South Germany, it should be possible to further
develop the volumes of transit cargo shipped.
Figure 2.5 illustrates the regions of North Italy and the ports that have the potential to access
these regions. In addition, the south France port of Marseille-Fos should also be considered
as competition for Livorno, particularly for the more north western Italian regions.

Figure 2.5: Map of Northern Italy


Although it is difficult to locate the exact origin and destination of Italian container volumes,
there are Government statistics that provide total annual transit volumes by region and by
weight, which provide some guidance and Ocean Shipping Consultants/DApollonia have
reviewed the data in detail and are confident the data shown is the best that can be defined.
These details are reported in Table Table 2.3.

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Table
Total
Table 2.3 Total Imports and Exports for Selected North
Italian 2.3:
Regions
(bn kg)
Region

2004
Imports

2005

Exports Imports

Imports and Exports for Selected North Italian Regions (bn kg)

2006

Exports Imports

2007

Exports Imports

2008

Exports Imports

2009

Exports Imports

2010

Exports Imports

2011

Exports Imports

2012

Exports Imports

2013

Exports Imports

Exports

Toscana

4,121

1,762

4,094

1,868

4,409

1,958

4,584

2,025

4,014

1,613

3,887

1,660

3,635

1,865

3,122

1,782

3,007

2,033

3,357

1,741

Liguria

5,122

493

4,393

2,671

4,706

550

3,984

3,545

3,793

3,844

3,793

2,595

3,856

2,165

3,782

2,771

3,426

888

2,431

4,250

Emilia Romagna

6,746

3,449

5,765

3,604

6,782

3,838

7,103

3,905

5,813

3,476

5,375

3,341

5,837

3,653

5,566

3,842

5,501

3,769

5,765

3,891

Piemonte

4,341

2,615

3,872

2,720

4,240

2,876

4,313

2,898

3,250

2,549

3,666

2,608

3,183

2,755

2,948

2,711

2,885

2,639

3,161

2,813

Valle d'Aosta

35

52

33

71

37

78

36

80

25

63

31

65

31

72

29

69

24

65

31

67

Veneto

7,467

3,144

7,437

3,228

8,074

3,814

7,535

3,670

6,987

3,396

6,511

3,152

6,912

3,719

5,639

3,723

6,335

3,652

6,661

3,607

Lombardia

21,063

5,955

20,902

6,566

18,624

7,151

17,502

7,705

14,098

6,933

16,790

6,396

15,359

6,943

13,750

6,852

13,207

6,796

12,432

7,027

Friuli-Venezia Guilia

2,856

1,251

3,099

1,256

3,038

1,472

3,211

1,501

2,811

1,440

2,926

1,260

2,825

1,434

2,908

1,484

2,787

1,406

2,877

1,403

Trentino Alto Abige

1,066

557

1,100

585

1,135

581

1,201

613

1,024

556

1,045

581

1,063

685

1,033

686

1,000

679

977

744

Others

8,720

2,944

7,888

2,843

7,766

3,418

8,454

3,443

8,381

2,734

6,993

3,095

10,107

3,368

8,704

3,160

6,343

3,085

6,627

2,777

Total

61,537

22,222

58,583

25,410

58,810

25,736

57,923

29,384

50,195

26,604

51,018

24,753

52,808

26,659

47,482

27,080

44,515

25,011

44,320

28,319

Source: Ocean Shipping Consultants

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For Italian import volumes, Lombardia consistently has the highest share ranging from a
high of 35.7 per cent in 2005 to 28.0 per cent in 2013. Veneto has increased its share from
12.1 per cent in 2004 to 15.0 per cent in 2013 and Emilia Romagna has increased from 11.0
per cent in 2004 to 13.0 per cent in 2013. Further details are illustrated in FigureFigure 2.6.

Figure 2.6: Italian Import Cargo by Region, 2004-2013


Figure 2.7 illustrates the Italian export volumes. Once again the region of Lombardia is
responsible for the majority of the cargo representing a share of 26.8 per cent in 2004 and
24.8 per cent in 2013. However, Liguria represents the second highest export region having
increased from a 2.2 per cent share in 2004 to 15.0 per cent in 2013. Elsewhere, Veneto
represented a share of 14.1 per cent in 2004, decreasing to 12.7 per cent in 2013 and Emilia
Romagna also showed a decrease from 15.5 per cent in 2004 to 13.7 per cent in 2013.

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Figure 2.7: Italian Export Cargo by Region, 2004-2013


The primary competition for the port of Livorno for local cargoes, are ports located on the
Northern Tyrrhenian Sea, i.e. terminals in Genoa, La Spezia and Savona. Volumes handled
at these ports in isolation are illustrated in Figure 2.8, which shows that volumes handled in
Livorno lag behind volumes in La Spezia and Genoa.

Figure 2.8: Total Regional Container Port Demand 2000-2014,


Italy-Northern Tyrrhenian Sea

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However, this does not tell the full story, because volumes handled in Genoa are spread over
seven terminals, where only V.T.E. (Voltri) records more than Livorno and where SECH is
more or less Livornos equal. This means in effect that only La Spezia Container Terminal
(LSCT) and V.T.E. have historically handled more than Livorno in the immediate vicinity.
Table 2.4 highlights the total volume of containers handled at each Genoese facility since
2000 and is further illustrated in Figure 2.9 by import/export and transshipment type. The
relatively small portion of transshipment for the facilities of this major Northern Tyrrhenian
Sea port facility is evident.
Figure 2.9 Genoa Port Import / Export and T/S Container Traffic

2,500

2,000

TEU 000S

1,500
T/S
Import / Export
1,000

500

0
2008

2009

2010

2011

2012

2013

2014

Figure 2.9: Genoa Port Import/Export and T/S Container Traffic

Livorno Port Authority, Livorno, Italy


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2.4:000s)
Port
Table 2.4 Port of Genoa Container Traffic Volumes byTable
Terminal (TEU
Terminal

SECH

2008

2009

of Genoa Container Traffic Volumes by Terminal (TEU 000s)


2010

2011

2012

2013

2014

Total TEU TEU T/S

%T/S

Total TEU TEU T/S

%T/S

Total TEU TEU T/S

%T/S

Total TEU TEU T/S

%T/S

Total TEU TEU T/S

%T/S

Total TEU TEU T/S

%T/S

Total TEU TEU T/S

%T/S

314.51

6.69

2.1%

244.88

5.70

2.3%

316.87

8.96

2.8%

205.50

0.75

0.4%

327.20

0.29

0.1%

325.43

1.88

0.6%

447.34

57.75

12.9%

Messina 235.80

57.41

24.3%

216.99

42.60

19.6%

244.53

59.44

24.3%

280.02

43.06

15.4%

211.87

46.96

22.2%

186.25

36.63

19.7%

196.63

54.53

27.7%

V.T.E.

1009.49

84.85

8.4%

885.28

50.07

5.7%

980.95

59.44

6.1%

1140.12

89.58

7.9%

1242.95

133.87

10.8%

1177.25

81.99

7.0%

1157.08

79.18

6.8%

Rebora

118.82

275.68

18.70

6.8%

Total

1766.61

2172.94

210.16

9.7%

108.37
148.95

8.4%

1533.63

121.78
98.37

6.4%

1758.86

145.26
145.10

8.2%

1847.10

221.98
133.38

7.2%

2064.81

210.26
181.13

8.8%

1988.01

125.11

6.3%

Source: Genoa Port

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Since 2008, Livornos share of this specific regional market has decreased from 17.5 per
cent in 2000 to 14.0 per cent in 2014. This compares with La Spezias share of 31.1 per cent
in 2008 and 31.4 per cent in 2014; Voltris share of 30.0 per cent in 2008 and 28.0 per cent
in 2014 and SECHs share of 9.3 per cent in 2008 and 10.8 per cent in 2014 respectively.
This suggests that Livornos share of this market has been lost to La Spezia and SECH,
although some could also have moved to ports outside this core Northern Tyrrhenian region.
With improved terminal capabilities there is no reason why Livorno should not be able to
increase its share of the local and transit markets.
Similarly, with the development of a relatively deep water facility, it should be possible to
increase Livornos share of transshipment volume beyond the 10 per cent of the existing
total currently enjoyed.
Regional Transhipment Market - Central Mediterranean
The central Mediterranean transshipment market is extensive and likely to continue to grow
with the introduction of still larger vessels on the main arterial trade lanes requiring fewer
direct port calls by the main services and thus by association an increase in the amount of
units served via transshipment hubs.
Demand has been funded by very rapid growth in local cargo traffic (import/export flows)
and also by the transshipment sector. The shift to larger vessel sizes has been a major
catalyst in the development of both gateway terminals (combining import/export and
transshipment flows) such as Barcelona and Valencia and also for major transshipment hub
ports Gioia Tauro, Malta, etc.
The recent vessel orderbooks of the top twenty shipping lines would suggest that further
average increases in vessel sizes are extremely likely in the short-term.
The overall transshipment market that is relevant here includes hub ports in the central
Mediterranean and includes Gioia Tauro, Marsaxlokk, Taranto and Cagliari and is based on a
geographical arc from Valencia to Livorno. The increasing use of transshipment relative to
direct shipment, combined with the two container moves generated for each transshipment
operation, has generally led to a much more rapid growth in transshipment demand than for
hinterland traffic.
This paper assumes that for hub and spoke transshipment future demand will be related
to economic growth in the entire region, and will be a compound of economic growthinduced demand and the policies of major operators in converting direct flows into
transshipped flows. In the longer term, as the possibilities for further conversion to
transshipment decreases, it can be expected that the differential between the growth of nontransshipment demand and transshipment demand will decrease.
For relay demand, the main drivers are the level of deepsea container trade growth for
services transiting the region and the relative economics of direct services and interlined
links between discrete liner services. By definition, this sector is determined by factors
outside the geographic region under direct review.
The development of demand at the transshipment ports under consideration is summarised in
Table 2.5 for the period since 2000.

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Table 2.5: Regional Container Transshipment Market by Port, 2000-2014


(000 TEUs)

Table 2.5

Regional Container Transshipment Market by Port, 2000-2014


'000 TEUs

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014*

Algeciras

1890.7

2039.1

2124.5

2367.7

2803.5

3051.5

3121.3

3249.7

3164.7

2890.9

2622.5

3347.1

3757.6

3948.2

4237.1

Valencia

207.1

297.6

471.5

573.0

609.6

702.9

808.3

1034.3

1582.2

1824.6

2155.6

2226.3

2280.6

2158.3

2488.0

Barcelona

295.0

317.0

328.7

406.7

573.7

704.3

867.3

989.0

995.9

606.3

633.1

656.8

435.8

276.8

307.9

85.2

235.1

446.5

527.4

409.8

274.0

279.6

450.7

300.4

261.7

55.3

835.1

587.7

674.9

839.1

790.2

602.5

537.9

'000 TEUs

Malaga
Las Palmas
Lisbon

186.1

223.9

273.4

502.2

637.8

645.0

835.0

927.1

13.5

25.2

40.8

71.0

40.4

33.3

16.3

19.1

22.8

13.7

16.9

16.5

18.8

19.5

20.0

61.0

894.3

1175.9

2004.0

2011.9

1750.9

2397.1

1372.8

Tangiers
Cagliari
Gioia Tauro

Liv orno

302.3

488.6

617.5

675.9

520.1

241.3

697.2

558.2

613.2

627.6

682.7

656.0

3021.5

3116.6

3052.2

2788.3

3300.6

3336.0

2772.7

2785.7

2252.0

2548.0

2716.9

2901.7

2377.6
194.0

452.7

610.4

664.1

631.0

758.0

756.0

775.0

741.5

581.9

604.4

263.5

193.3

161.2

966.4

1087.5

1119.8

1170.0

1315.2

1188.0

1390.6

1804.1

2239.6

2165.9

1801.2

1793.6

2425.0

2612.5

2494.0
58.0

Taranto
Marsax lokk

25.0
2827.2

2546.5

17.8

29.9

27.1

52.2

59.3

57.1

61.3

74.7

82.9

55.8

50.3

44.2

26.5

31.8

La Spezia

131.2

140.5

112.1

148.3

128.9

108.0

156.3

233.1

204.2

155.5

185.7

98.0

91.1

101.4

95.1

Genoa

195.5

187.9

149.1

195.6

201.3

182.7

141.8

160.9

148.9

98.4

145.1

133.4

181.1

125.0

210.2

Total

6449.8

6920.2

7951.9

9420.9 10724.2 11208.6 12066.9 13657.1 14932.7 14060.0

14494.6

15087.2

15497.2

16127.8

15595.1

Algeciras

29.3

29.5

26.7

25.1

26.1

27.2

25.9

23.8

21.2

20.6

18.1

22.2

24.2

24.5

27.2

Valencia

3.2

4.3

5.9

6.1

5.7

6.3

6.7

7.6

10.6

13.0

14.9

14.8

14.7

13.4

16.0

Barcelona

4.6

4.6

4.1

4.3

5.3

6.3

7.2

7.2

6.7

4.3

4.4

4.4

2.8

1.7

2.0

0.8

2.1

3.7

3.9

2.7

1.9

1.9

3.0

1.9

1.6

0.4

Per cent share

Malaga
Las Palmas

2.9

3.2

3.4

5.3

5.9

5.8

6.9

6.8

5.6

4.2

4.7

5.6

5.1

3.7

3.4

Lisbon

0.2

0.4

0.5

0.8

0.4

0.3

0.1

0.1

0.2

0.1

0.1

0.1

0.1

0.1

0.1

0.4

6.0

8.4

13.8

13.3

11.3

14.9

8.8

Tangiers
Cagliari
Gioia Tauro

4.6

5.5

5.6

3.8

1.6

5.0

3.9

4.1

4.0

4.2

4.2

32.1

29.1

27.2

23.1

24.2

22.3

19.7

19.2

14.9

16.4

16.8

18.6

39.5

34.4
2.8

5.7

6.5

6.2

5.6

6.3

5.5

5.2

5.3

4.0

4.0

1.7

1.2

1.0

15.0

15.7

14.1

12.4

12.3

10.6

11.5

13.2

15.0

15.4

12.4

11.9

15.6

16.2

16.0

Liv orno

0.3

0.4

0.3

0.6

0.6

0.5

0.5

0.5

0.6

0.4

0.3

0.3

0.2

0.2

0.4

La Spezia

2.0

2.0

1.4

1.6

1.2

1.0

1.3

1.7

1.4

1.1

1.3

0.6

0.6

0.6

0.6

Genoa

3.0

2.7

1.9

2.1

1.9

1.6

1.2

1.2

1.0

0.7

1.0

0.9

1.2

0.8

1.3

100.0

100.0

99.7

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

Taranto
Marsax lokk

Total

35.6

3.2

* partially estimated
Sources: Ports / Ocean Shipping Consultants

Several major trends are apparent within this overview:


the development of demand has been extremely dynamic, with a CAGR of 11.1 per cent
recorded for the entire period from 2000 to 14.9m TEU in 2008, before an economic
decline to 14.1m TEU in 2009, followed by a further CAGR of 2.1 per cent rise, during
the recovery phase to 15.6m TEU in 2014;
demand has fragmented over the period as new terminals have been introduced into the
market. Gioia Tauro, Algeciras and Malta have historically been the most significant
container terminals for transshipment, but secondary hubs and regional gateway ports
have recorded significant demand increases over recent years;
the three major established terminals have seen combined shares of 83.8 per cent in 2000
(Algeciras 29.3 per cent; Gioia Tauro 39.5 per cent and Marsaxlokk 15.0 per cent),
reduced to 65.0 per cent in 2005 (Algeciras 27.2 per cent; Gioia Tauro 27.2 per cent and
Marsaxlokk 10.6 per cent) and still further to 61.8 per cent in 2014 (Algeciras 27.2 per
cent; Gioia Tauro 18.6 per cent and Marsaxlokk 16.0 per cent);

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indeed, of the big three terminals, both Malta and Gioia Tauro have struggled to show
year on year increases in volumes. Gioia Tauro has still to recover to the pre-crisis highs
of 2008, whilst volumes at Malta declined in three consecutive years from 2009-2011,
before showing signs of recovery in 2012 and 2013;
without any significant local volumes at either Gioia Tauro or Marsaxlokk, both terminals
are reliant on the strategies of the major shipping lines to handle the majority of their
transshipment volumes. Increasingly, shipping lines want to offer a transshipment hub
that also has the potential for significant local cargoes, is cost efficient and has the ability
to handle larger vessels efficiently. This puts both Gioia Tauro and Marsaxlokk in an
increasingly vulnerable position;
the recent winners of market share for transshipment calls are both Valencia and TangerMed. Valencia is also able to offer some local cargoes whilst Tanger-Med is much
cheaper than its competition. In 2014, the top three transshipment hubs in the region
were Algeciras with 27.2 per cent; Gioia Tauro with 18.6 per cent and both Valencia and
Malta with 16.0 per cent each;
Cagliari saw a significant drop in 2008 as a result of Maersk Line moving business away
from the terminal, but in 2009 CICT was able to attract business from the Grand Alliance,
returning volumes to 2007 levels;
operated by Contship Italia, Gioia Tauro is the busiest transshipment port in central
Mediterranean; its transshipment volumes had increased to a peak of 3.3m TEU in 2008,
before declining in 2009. Volumes have gradually recovered, but in 2014 still had not
reached the pre-crisis heights. In 2013, the port handled some 2.90m TEU.
Other ports in the region, like Taranto and Marsaxlokk, also experienced important increases
over the period to 2008. Marsaxlook peaked at 2.2m TEU in 2008 before declining due to
the prevailing world economic situation. Volumes have recovered to 2.5m TEU in 2014,
mainly as a result of CMA-CGM volumes. Taranto also peaked in 2008 at 0.8m TEU, but
has dropped to under 200,000TEU/annum by 2013-14:
the major central Mediterranean terminals have been considered together as they are
primarily orientated toward hub-and-spoke distribution in the central region. They do
have some overlap with the Gibraltar Straits terminals, however. In 2008, total demand
from these ports reached a peak level of 6.6m TEU, but Cagliari, Taranto and Marsaxlokk
volumes have continued to drop. Only Gioia Tauro has shown any sign of consistent
recovery with volumes increasing in 2010, 2012, 2013 and 2014.
These developments are further summarised in Figure Figure 2.10.

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Figure 2.10: Broad Region: Transshipment Volumes 2000-2014


As is summarised in Figure 2.11 in proportional terms the initial shift was in favour of the
central Mediterranean hub terminals, but more recently stronger growth has been noted
particularly in Tanger-Med, but also in the Atlantic and Spanish gateway transshipment
terminal markets.
The combined share of the Gibraltar Straits and Tangiers shows an increase of 8.1 per cent
from the 49.8 per cent share in 2007 when Tanger-Med first opened for business and 57.9
per cent in 2014, making it the highest regional share of transshipment, with an even greater
share than the combined central Mediterranean hubs with a share of 39.8 per cent of the
regional transshipment market. This change in dominance is well illustrated in Figure
Figure 2.11.

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Figure 2.11: Regional Transshipment Demand by Zone 2000-2014

2.4

CONCLUSION
The central Mediterranean region as a whole has a long history of handling large volumes of
transshipment and although there have been some slight declines in recent years volumes on
the whole are showing signs of recovery. This is primarily being felt in the main hub ports
of Gioia Tauro and Marsaxlook, but with the requisite deep water and significant local and
transit market potential, there is no reason why the Italian ports on the Northern Tyrrhenian
Sea shouldnt see increases in transshipment demand. Together the Northern Tyrrhenian Sea
ports represent about just 2.3 per cent of the transshipment demand with about 0.35m TEU
recorded in 2014, of which Livorno represents just 0.4 per cent. Although it has the potential
to increase over time after the port developments have taken place, the key demand growth is
focused on local and transit markets rather than the highly competitive transshipment market.
Future demand will be determined not only by developments within the regional market, but
also by external factors. In order to develop a coherent set of forecasts in these sectors, it is
therefore necessary to evaluate these factors. These will be further developed in Chapter III
of this Study.

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DEVELOPMENT OF
MARKETS TO 2035

3.1

INTRODUCTION

LIVORNOS

CONTAINER

TRAFFIC

This Section develops the methodology for the analysis of the macro-economic factors
shaping regional demand which leads to the provision of a series of forecasts concerning the
development of regional container demand for specific terminal facilities. Individual
container facility demand in Livorno for the same period is subsequently derived from this.
The approach taken is as follows:
the relationship between economic development at the macro level and container port
demand in the region is considered;
the general economic outlook for the region is defined in terms of different cases
(scenarios) and the link between economic development and containerised trade assessed;
a series of forecasts for local and regional demand are developed.
This is obviously an over-simplification, given the varying particular factors relevant to
specific trades and regional markets. Nevertheless, a clear methodological link has been
established between world GDP and total container demand. This provides the best tool for
examining the likely future course of demand growth especially over the timescale
appropriate for the current study.
However, in the case of Italy since the global recession, the countrys economic growth has
been flat whilst the trade growth has been somewhat more buoyant. This means that the
current relationship between the Italian GDP and container demand has broken down and
will therefore necessitate another forecast method for the short-term future. This will be
discussed later in the Section.

3.2

RELATIONSHIP OF GDP GROWTH WITH TRADE GROWTH


General Considerations
General analysis indicates that there is a relation between the rate of expansion of a
particular regional economy and the level of trade growth. This, in turn, is manifested in the
level of import/export demand at the regional container ports. This aggregate relationship is
very important in assessment of the future expansion of the potential hinterland of the
regional ports.
The relation between macroeconomic growth and trade is fundamental to an understanding
of the development of the container port market in the region as a whole. Furthermore, trade
in manufactured and intermediate goods the prime constituents of containerisation has
been at the centre of world economic expansion in recent years and the integration of the
region into the global trading system is well advanced, but still has further to progress.
As an indicator of these long-term relationships in more mature markets Figure 3.1 provides
a summary of the development of key variables for the EU economy for the period since
1990. This allows a comparison of the year-on-year proportional development of container
port demand and GDP.
Although some evidence of a parallel development appears since 1993, prior to this period
the relation was much more erratic. It remains the case, however, that container port

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throughput increased generally much more rapidly than GDP highlighting the nature of the
recent, consumption-led maintenance of economic growth. The continued growth of
container throughput during periods of economic downturn has been a feature of the
containerised market world-wide.
This fundamental position and relationship has been sustained over the entire period. During
the economic crisis, declines in output were directly reflected in lower trade and
containerised port demand level. The subsequent recovery and now stagnation is also
reflected in container volumes.

Figure 3.1: N. Europe Economic & Trade Indicators 1992-2013


The actual global position has also been considered and the results of the year-on-year
development of GDP and container port volumes are summarised in Figure 3.2. The
massive growth in container trades in recent decades has been generated by the globalisation
of manufacturing industries, which have increasingly sourced finished or partially
manufactured goods in low-cost regions of the world. As economies have expanded, trade
has also increased to meet the demands of industry for raw materials and intermediate goods
as well as the demands of consumers for competitive products. This trade has provided the
primary constituents of containerisation.
The pattern of sustained expansion was severely disrupted by the collapse of world
economies in 2008-2009. The economic contraction was of a different nature to the cyclical
downturns of the 1980s and 1990s, and it will take some years to unravel the consequences
of the global banking crisis and continuing government indebtedness. This has had a
particularly negative impact on Italy.
The container system has been a beneficiary and a catalyst of global sourcing trends. The
availability of low-cost transport effectively eliminates freight charges as a significant
consideration in the cost of most high-value commodities. This allows complex global
sourcing patterns to be developed.

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The figure below contrasts world economic growth with the development of global container
port demand since 1991. It is clear that there is a relation between the development of GDP
and that of container handling demand, though the inexactitude of these measures leads to
some distortion, and the relationship is clearer for some countries than others.

Figure 3.2: World GDP & Container Port Trade 1991-2013 (% Change)

3.3

GENERAL ECONOMIC SCENARIOS AND DRIVERS


This economic relation between GDP, trade and container port demand is very useful in
forecasting the development of the container sector. Of course, it is not a sufficient
explanation of the development of container port demand. The more focused the analysis
becomes, the less accurate such an aggregate approach will be. There are numerous other
factors at work, and the limitations of economic data (which are often revised) and container
handling statistics further complicate the picture.
Other factors affecting the development of container port demand, and issues relating to the
measurement and comparison of GDP growth and container port demand growth, include:
the imbalance of the trades means that high volumes of empty containers are handled.
Moving empties is a major part of a terminals business, but they do not represent cargo
actually being traded;
although of limited relevance for Livorno and the ports on the Northern Tyrrhenian Sea,
transshipment doubles the number of port moves per container (and hence the TEU
count), but again it does not represent additional cargo. As a component of overall
container port demand, transshipment demand is only indirectly related to underlying
import/export container demand;

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the increasing penetration of containerisation. In the current regional market under


review there is scope for further containerisation of the general cargo base. In addition,
an imbalance of loaded containers between inbound and outbound traffic means that
shippers continually search for more cargo to containerise on the return legs, increasing
the use of containers in low value cargo sectors;
container throughput is quantified in volume terms and GDP is measured in value terms.
Clearly, the two measures are not directly comparable. In recent years, the volume of
containerised cargo has increased more rapidly than its real value, due to factors such as
the fall in the price of electronic goods;
there are other significant economic relationships, which modify the underlying link
between economic growth and trade growth. For example, fluctuations in the relative
propensities to consume or save, to import or purchase domestically, to export or sell
domestically are volatile. Relative movements in prices, incomes, exchange rates, tastes,
confidence and other factors mediate all of these factors;
in addition to the limitations of available economic data, there are lags in the economy
between causes and their effects, so that it is not always clear which periods should be
compared when different aspects of economic development (such as GDP and trade) are
contrasted.
In analysing the development of demand over the period under review it is also necessary to
consider other somewhat less mechanically forecastable issues. These are summarised in
Table Table 3.1.

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Table 3.1
FurtherTable
Issues Determining
FutureIssues
Container Determining
Port Demand Growth
3.1: Further
Future

The Penetration of Containerisation

Container Port Demand Growth

The impact of this is largely complete, but there are significant sectors
w here containerisation of new commodities w ill further boost demand.

Possible Limits to Growth

The current economic model w ill not be constrained by limits to


demand in the period to 2020. There is much potential demand that
w ill fund increased container trade.

Demand Saturation

Large sectors of the w orld economy are at a relativ ely low phase
of demand dev elopment. Grow th to current OECD consumption
lev els w ill sustain demand ex pansion ov er the period to 2020.

Trade Imbalances

The imbalances resulting from OECD demand w ill become more


difficult to finance but shifts in ex change rates w ill ease these
pressures. Increased import demand w ill be generated from major
ex porting economies.

Demand Elasticities

There w ill be a further slow dow n in the intensity of GDP : trade


co-efficient. How ev er, a sustainable rate of 1 : 1.8/2.0 w ill deliv er grow th.

One-Off Globalisation?

Globalisation w ill be focussed in the nex t 10/15 y ear period. This process
is still underw ay and far from complete and w ill remain the most significant
issue for the current study period.

Regionalisation

Ev idence indicates that regional dev elopment has slow ed and that global
sourcing is the optimum structure. Low cost regional manufacturers
cannot compete w ith China and (in the future) w ith India.

Transshipment

Will continue to grow more rapidly than import/ex port flow s


- this w ill further amplify the economy : port demand relationship.

Source: Ocean Shipping Consultants

In addition to the economic data, there are always lags in the economy between causes and
their effects, so that it is not always clear which periods should be compared when different
aspects of economic development (such as GDP and trade) are contrasted.
In recent decades, as economies have expanded, so trade has also increased to meet the
demands of industry for raw materials and intermediate goods, and the demands of
consumers for competitive products. Trade in manufactured goods and intermediate goods
the prime constituents of containerisation has been at the centre of this global economic
expansion.
During this period, the fundamental structure of the world economy has altered. The ability
to source finished or partially manufactured goods in areas of low costs has been at the
centre of the 'globalisation' of industries. Not only has this boosted world output, but it has
also intensified the relation between economic output and trade. In the longer run, it will be
the sustainability of this pattern of growth that will define the outlook for containerisation.
The container system has been both a catalyst and a beneficiary of these developments. The
availability of low-cost transport effectively eliminates freight charges as a significant
consideration in the cost of most higher-value commodities. This allows complex global
sourcing patterns to be developed. With the continued availability of low-cost labour in

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China and other developing regions, the migration of manufacturing to these locations seems
certain to continue.
In addition to direct, trade-related factors and transshipment, containerport demand has also
been boosted by the continuing containerisation of backhaul bulk cargoes in developed
markets. These factors, and others discussed below, mean that the relationship between
GDP growth and containerport demand growth is not clear-cut.
The container sector has passed through a period of uncertainty at the global level and this
has been particularly manifested with regard to Italy. A more detailed assessment of the
relationship between trade and the economy for Italian ports will be provided in Section 3.4.
The initial relationship between GDP growth and trade growth appears to have broken down
recently, but is expected to return to equilibrium in two or three years, by 2017. A slightly
different methodology for the short-term demand forecast is therefore used and fully
explained later in this Section.
Despite this and the numerous factors at work, which need to be built into (or allowed for in
the interpretation of forecasts) the generation of trade through economic growth provides the
most rational basis for predicting the future direction and scale of container port demand.

3.4

ITALIAN REGIONAL ECONOMIC POSITION


The overall link between GDP growth and national import/export demand is very important.
In general, this relationship is very useful in determining the general outlook for demand
growth. The relationship is further detailed in Figure 3.3 and further reflected in Table 3.2.
The relationship between GDP growth and import/export remained strong throughout the
period of economic decline up to 2009 and up to 2011. By 2012 the first signs of the
breakdown in the relationship between trade growth and economic growth were evidenced
and although there is some sign of recovery of the relationship in 2014, the future prospects
suggests a further breakdown in the relationship in the short-term.
In the short-term, at least, the increasing importance of exports is important to stress and will
also be used as a measure for future demand growth.

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Figure 3.3 Italian Economy Macroeconomic Indicators and Forecasting


15,00

10,00

5,00

0,00
2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

-5,00

-10,00

-15,00

-20,00
GDP (constant prices, % change)
Volume of Imports of Goods and Services (% change)
Volume of Exports of Goods and Services (% change)

Source: IMF

Figure 3.3: Italian Economy Macroeconomic Indicators and Forecasting

TableMacroeconomic
3.2: Italian
Economy
Macroeconomic
Table 3.2 Italian Economy
Indicators
and Forecasting
Description

Units

Indicators and Forecasting

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

% change -1.16

-5.49

1.72

0.45

-2.37

-1.85

-0.17

0.85

1.30

1.25

1.05

1.05

% change -2.96

-13.37

12.57

0.78

-7.05

-2.75

1.31

2.65

3.80

3.80

3.70

3.60

% change -2.83

-17.51

11.36

6.23

2.14

0.13

1.99

3.49

3.65

3.60

3.45

3.40

Gross domestic product


constant prices
Volume of imports of
goods and serv ices
Volume of ex ports of
goods and serv ices

* Shaded cells indicate forecasted v alues


Source: IMF

Looking at the import/export volumes and GDP forecast from 2014 and comparing them
with the economic development, it is apparent that the Italian economy is passing through a
transition period with important structural changes, which has temporarily displaced the
direct relationship between GDP and container volumes. As can be observed in Figure 3.4,
whilst GDP growth has continued to be negative or almost zero, with some slight recovery
forecast from 2015 at/around one per cent, local demand growth (exports and empties) has
achieved positive growth figures in 2014 and is set to record 3.5-4.0 per cent growth in both

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import and export volumes. In other words, despite the economic downturn, container
demand has continued to grow.

Figure 3.4: Italy: GDP and I/E Container Port Volumes 1996-2015
Figure 3.5 provides a comparison of Italian Northern Tyrrhenian Sea import/export TEUs
(Livorno, Genoa, La Spezia and Savona) with the volume growth of Italian import and
export goods, Figure
since3.52000.
Comparison of Ligurian Sea Container Trade Growth with Italian local growth
20%

20%

15%

15%

10%

10%

5%

5%

0%

0%

-5%

-5%

-10%

-10%

-15%

-15%

-20%

-20%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
% growth Italian import tonnes

% growth Italian export tonnes

% growth in Northern Tyrrhenian Sea imp/exp

Figure 3.5: Comparison of Northern Tyrrhenian Sea Container Trade Growth


with Italian Local Growth

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In recent years, Italian exports have been increasing as companies seek to replace the
depressed internal demand. It is apparent that there is a good relationship with the trade of
goods in general, but more robust between exports and container volumes. The latter can be
explained by the high proportion of exported goods that are containerised, while a high
percentage of imported goods are related to the energy sector, such as oil and gas, and thus
not containerised. As the economy develops and reaches higher levels of income, the
consumer patterns change and the correlation between GDP and trade changes accordingly.
However, the Italian economy is shifting towards an export-driven economy, meaning that
the elasticity demand/GDP is growing towards levels more typical in export-driven countries
such as Germany.
This analysis indicates that, in order to produce a reasonable and realistic traffic forecast,
specific attention must be paid to the trade forecast, instead of relying exclusively on general
GDP forecast. Thus a correlation with trade must be used at least for a transitional period
until the Italian economy stabilises, reaching a new equilibrium. It is clear that this
behaviour will not last forever, and once the economy stabilises the relationship between
GDP and trade growth will return to equilibrium.
Economic experts are struggling to agree on precisely what will happen in the Italian
economy (See Table 3.3), although the IMF have assumed that there will be a return to a
definitive relationship between container demand and GDP growth almost immediately, it
would seem wise to defer this recovery a year or two.
Table
3.3: Comparison
of GDP
Growth
Table 3.3
Comparison
of GDP Growth Forecasts
For Italy

Forecasts for Italy

Bank

Units

2014

2015

2016

2017

2018

2019

ISTAT - Bank of Italy

% change -0.30

0.50

1.00

na

na

na

European Commission

% change -0.40

0.60

1.10

na

na

na

OECD

% change -0.40

0.20

1.00

na

na

na

IMF

% change -0.17

0.85

1.30

1.25

1.05

1.05

Source: Ocean Shipping Consultants

There remains some considerable uncertainty about the short-term economic position of
Italy, as evidenced by the following action taken by Italian banks, OECD and the European
Commission, all of which are less optimistic than the IMF at present about the short-term
Italian economic position:
Italy's central bank slashed 2015 growth forecast and believes deflation will persist
throughout 2015;
Italian Government forecasts 0.6 percent growth this year, while the Organisation for
Economic Cooperation and Development projects growth of 0.2 percent and the
International Monetary Fund forecasts 0.8 percent;
quantitative easing is expected to boost economic growth-bond purchase program which
would provide space for reforms.

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EU reports suggest that the further contraction in the economy in 2014 will result in an
acceleration of external demand to drive a fragile recovery during 2015, with higher import
prices keeping inflation positive. Private consumption has been recovering slowly since
2013. As global trade lost momentum, Italys exports did not trigger the anticipated
recovery in equipment investment as quickly as expected and a weak recovery is likely in
2015. There is, however, potential for strengthening in 2016 with this being driven by
improving external demand and a lower exchange rate, which should result in higher exports
and an increase in equipment investment. The country is in a weak economic situation
where the historical indicators of high levels of unemployment (currently 12.6 per cent) and
low inflation impede the increase in domestic demand.
The Bank of Italy has reported growth in consumption and disposable income, but not in
investment. Credit conditions are gradually improving, but there is still high perceived credit
risk. Interest rates for new loans are 30 basis points above the euro-area. Recovery depends
on investment recovery and economic policies (an expansive stance on monetary
policy/expansionary government measures, fiscal consolidation and the 2015 Stability Law;
adjusts public finances in pace to suit cyclical economic conditions), but forecasts are still
subject to considerable uncertainty.
In summary, the Italian economic difficulties need to be addressed, but once addressed
further growth is expected. This is a good thing for the Europa Platform Project, which
should be ready in time to take advantage of this expected recovery.

3.5

REGIONAL (NORTHERN TYRRHENIAN) ITALIAN FORECAST TO 2035


As has been evidenced in the preceding sub-section, the relationship between GDP growth
and trade growth in the immediate short-term is subject to question. It is reasonable to
assume therefore that the short-term forecast to 2017 should be based on the Italian export
demand rather than the relationship between GDP and trade growth, although the latter
methodology will return from 2018 for the balance of the forecast period.
Demand forecasts will be developed at the regional level. Three macro-economic cases
(Base, Low and High) will be developed for the period to 2035, with this allowing an
identification of the Base Case for the Italian region under review, taking into account all
competing facilities in the region (such as Genoa and La Spezia) and also the core likely
range of macro-economic outcomes. This will define the general background against which
the position of the specific Livorno terminal will be assessed.
In addition to macro-economic drivers, the analysis will focus on the further development of
vessel sizes on key
trades, the process of port concentration (balance of supply and demand) and specific
regional issues. The focus of this aspect of the work will be on the integration of macroeconomic factors with specific containerisation and other issues, such as the increase in
vessel sizes on shipping line services calling in the region, in order to develop informed
views of market developments for each shipping sector. Regional local, transit and
transshipment forecasts will be developed.
The inter-dependencies within the worlds economy and foreign trade mean that it is
necessary to consider the global and regional economic scenarios that are likely to underpin
economic growth, trade and hence port demand both within the region and in the broader
relay context. Three cases have been developed:

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Base Case continued growth over 2015-19, as forecast by the economic experts. Since
there is a disagreement between IMF, OECD, The European Commission and Italian
Banks (ISTAT) an average of what they all report will be used to form the expected
growth rates. From the current perspective, the Base Case remains the most likely
outcome;
Low Case Continued Instability recovery is slower and weaker, and is followed by
a slower pace of expansion in the medium term. Continued uncertainty, posed in
particular by financial instability in parts of the euro area, manifests in a sharper
downturn in 2015;
High Case: Enhanced-Recovery this assumes a stronger performance in 2015 and
more positive subsequent development, followed by a somewhat higher rate of economic
expansion in the medium term.
In all three cases, it is envisaged that economic and trade recovery will be gradual due to
anticipated continued restraints on credit, as banks rebuild their balance sheets, and the
dampening effect that fiscal measures to repay government debt exert on consumer
expenditure growth.
Of course, any series of projections of macro-economic conditions can only offer a range of
possible developments and, in any particular year, there will be volatility around these
conditions. Nevertheless, for current purposes, this simplified perspective provides a
suitable basis for projections. It will be developments at this macro-economic level that are
critical in determining the position for the regional economies.
The essential global and regional conditions for the three cases on which the economic
growth forecasts in this study are based are as follows:
Base Case
Economic fall-out of global financial crisis continues to settle over 2015-16;
Government and financial-sector imbalances are addressed, and credit availability
improves;
Economic growth and free trade policies in the EU;
Return to long-term growth of US economy, accompanied by free-trade policies;
Euro zone pressures intensify, but are managed;
Economic and currency stability in East Asia;
Political stability, economic expansion, continuing structural reforms and successful
management of economic overheating in China;
Continued deregulation, restructuring and revitalisation of the Japanese economy;
Oil price stable at relatively medium levels;
Stable trade framework and continued foreign direct investment in emerging and
developing economies;
Deceleration of decline in the economy related to the specific terminal followed by return
to expansion path and renewed import-based growth;
Some progress on economic reform in Italy.

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Low Case: Continued Instability


Weak short-term outlook manifests in sharp deceleration in 2015-16 growth relative to
base case, and subsequent expansion continues to be affected by longer-term
repercussions of the recession;
Restoration of government and financial-sector balances continues to be difficult, and
restrictions on credit availability remain at least in the short term;
Slower growth in the EU economies;
More prolonged slowdown in US, leading to slower world growth;
Renewed inflexibility of economic management and irreconcilable policy objectives in
euro zone;
Economic uncertainty in China;
More prolonged stagnation of the Japanese economy, with inadequate structural
adjustment;
Uncertain and volatile development of oil prices;
More uncertain trade and foreign investment climate in emerging and developing
economies;
The economy related to the specific terminal under review records more sluggish
development;
Continued uncertainty in Italian economy.
High Case: Enhanced Recovery
Economic fall-out of global financial crisis settles more rapidly and pace of subsequent
growth is stronger and sustained at a higher level;
Restoration of government and financial-sector balances proceeds more successfully, and
credit availability improves more rapidly;
Economic growth and free trade policies in the EU;
Stronger return to long-term growth of US economy, stimulating greater expansion in
trade and eased credit conditions;
Euro zone pressures are managed;
Accelerated economic and currency stability in East Asia;
Political stability, economic expansion, continuing structural reforms and successful
management of economic overheating in China;
Continued deregulation, restructuring and revitalisation of the Japanese economy;
Oil price stable at relatively high levels;
Stable trade framework and continued direct foreign investment in emerging and
developing economies;
Earlier and steeper recovery of the economy related to the particular facility under
review, and renewed import-based growth;
Stabilisation in Italian economy and easing of debt crisis.

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At no stage during the scope of the analysis has any commercial initiative, pricing policy etc.
been assumed to improve a particular terminals market share or increase the expected
demand forecast related to that terminal.
Over this period as a whole, the ratio between GDP growth and trade growth has been 1 :
4.16 (see Table 3.4 including 2009-10 and 2012-14 and Figure Figure 3.6), with the preeconomic crash recording a ratio of 1 : 4.02 between 2001 and 2006. It is expected that the
ratio will bounce back to 1 : 3.00 by 2017/18, before returning to a more realistic continental
level of 1 : 2.00 from 2020.
Table 3.4

Table 3.4: Italy


GDP
Northern
Tyrrhenian
Import/Export
Container Port
Italy:
GDP andand
Ligurian
Import/Export
Container Port
Demand
Demand

Annual
Real
%
Change
- annual real % change
GDP

I/E Port Demand

2000

3.7

2001

1.8

3.91

2002

0.5

3.49

2003

0.1

1.53

2004

1.5

4.87

2005

0.6

5.93

2006

1.8

4.37

2007

1.5

7.30

2008

-1.2

1.31

2009

-5.5

-15.24

2010

1.7

14.82

2011

0.5

5.00

2012

-2.4

-1.34

2013

-1.9

0.81

2014

-0.3

2.58

Source: Ocean Shipping Consultants

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Figure 3.6: GDP and Northern Tyrrhenian Import/Export Container Port


Demand
In considering the short term development of demand it is realistic to assume that this more
recent ratio will continue to be manifest in the local market once a return to equilibrium has
been made, although some moderation is anticipated.
This methodological allows demand forecasts to be generated for the Italian economy and
the range of developments are summarised in Table 3.5. The approach taken is to summarise
independent forecasts that have been prepared for the development of Italian GDP over the
period to 2019 and to take an average. These have been taken from the OECD Italian
outlook and from similar projections published by the IMF. In addition, the projections
offered by the European Commission and The Italian Banks (ISTAT) have also been
included. All of these projections have been presented since 2014 and can be regarded as
current. They clearly factor-in current uncertainties.
Table 3.5

Table 3.5: Assumed Percentage GDP Growth and Multipliers for Italian Local

Assumed Percentage GDP Growth and Multipliers


for Italian Local
Regional Forecast
Case
Regional
Forecast
Base- Base
Case

GDP % Grow th

2012

2013

2014

2015

2016

2017

2018

2019

2020-24

2025-2029 2030-2035

0.54

1.20

1.15

1.10

1.05

1.00

1.50

2.00

2.73

2.38

2.00

1.33

1.00

3.00

2.50

2.00

2.00

2.00

-2.37

-1.85

-0.32

Local % Grow th -1.34

0.81

2.58

% Ex port Grow th 2.14

0.13

1.99

2.50

3.00

3.50

Multiplier

-1.50

-0.83

4.65

2.50

3.04

3.18

NB: it is assumed that forecasts w ill be based on ex port figures for 2015-2017 and GDP grow th for the balance of the period
Source: Ocean Shipping Consultants

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The next step is to apply these GDP projections to the known 2014 import/export volumes
for Italy by means of the co-efficient (multiplier) identified in the recent past. This is then
reduced to a more sustainable level from 2020 where the multiplier is adjusted to a similar
level as currently experienced in north Continent ports. This gives a conservative estimate
of the total development of demand over the forecast period. This rate of change is also
applied directly to the overall development of demand in the four ports that are in direct
competition (Genoa, La Spezia, Livorno and Savona). Given the limited role of
transshipment in these ports, this is a realistic assumption. This allows an estimation of the
total potential market that Livorno will be competing for over the period to 2035 to be
estimated.
Demand shown in Table 3.4 corresponds to local Italian import/export volumes in TEU for
the Northern Tyrrhenian Sea region (including Livorno, Genoa, La Spezia and Savona).
Despite attempts in particular by La Spezia and Genoa to extend the reach of their terminals
by railway developments, at present the number of containers that transit a Northern
Tyrrhenian port to another country in central Europe, such as Austria, Switzerland or
Germany, is so small as to be insignificant. It is therefore reasonable to assume that all the
units included in the regional demand forecast here shown are from/to points in Italy.
For the future, however, the developments at Europa Platform will allow the future
reorientation of cargo to include transit cargo to/from central European countries.
It is also important to try and assess where within Italy these units originate or are destined
to. In Section II, the current import/export volumes has been assessed for the whole of Italy
by region and this data will again be used to provide details of which Italian region the local
cargo for this forecast is likely to have come from or be destined to (it is assumed that the
same ratio will apply throughput the forecast period). The data shown has adjusted each
regional share to make it more specific to the Northern Tyrrhenian Sea port reach. To this
end units to/from Veneto, Trentino and Friuli-Venezia Giulia are taken out (these regions are
far more likely to be served via Adriatic ports) and the balance of the regions weighted
between the remaining seven Italian regions that are within easy reach of the Northern
Tyrrhenian Sea ports.
The regional demand forecast by region is shown in Table Table 3.6

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Table 3.6
Forecast Total Ligurian Import/Export
Regional
Demand
to 2035
Table
3.6: Container
Forecast
Total
Northern

2014

Tyrrhenian Import/Export Regional Container Demand to 2035

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

GDP

0.54

1.20

1.15

1.10

1.05

1.00

1.00

1.00

1.00

1.00

1.50

1.50

1.50

1.50

1.50

2.00

2.00

2.00

2.00

2.00

2.00

Multiplier

4.65

2.50

3.04

3.00

2.50

2.00

2.00

2.00

2.00

2.00

2.00

2.00

2.00

2.00

2.00

2.00

2.00

2.00

2.00

2.00

2.00

4327.4

4435.5

4570.5

4707.7

4825.3

4921.8

5020.3

5120.7

5223.1

5327.6

5434.1

5542.8

5653.7

5766.7

5882.1

5999.7

6119.7

6242.1

6366.9

6494.3

6624.2

GDP

0.40

0.80

0.80

0.70

0.75

0.75

0.75

0.75

0.75

0.75

1.10

1.10

1.10

1.10

1.10

1.60

1.60

1.60

1.60

1.60

1.60

Multiplier

2.75

1.63

2.25

3.00

2.50

2.00

2.00

2.00

2.00

2.00

2.00

2.00

2.00

2.00

2.00

2.00

2.00

2.00

2.00

2.00

2.00

4248.9

4318.0

4415.1

4547.6

4661.3

4754.5

4849.6

4946.6

5045.5

5146.4

5249.3

5354.3

5461.4

5570.6

5682.0

5795.7

5911.6

6029.8

6150.4

6273.4

6398.9

GDP

0.75

1.50

1.50

1.50

1.45

1.45

1.45

1.45

1.45

1.45

1.90

1.90

1.90

1.90

1.90

2.40

2.40

2.40

2.40

2.40

2.40

Multiplier

6.67

4.67

5.33

3.00

2.50

2.00

2.00

2.00

2.00

2.00

2.00

2.00

2.00

2.00

2.00

2.00

2.00

2.00

2.00

2.00

2.00

4410.9

4616.7

4862.9

5008.8

5134.1

5236.7

5341.5

5448.3

5557.3

5668.4

5781.8

5897.4

6015.4

6135.7

6258.4

6383.6

6511.2

6641.4

6774.3

6909.8

7048.0

Base Case

000TEUs

4135.2

Low Case

000TEUs

4135.2

High Case

000TEUs

4135.2

Source: Ocean Shipping Consultants

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Table 3.7

Table 3.7: Forecast Total Northern Tyrrhenian Regional Container Demand by Region to 2035
(000TEUs)

Forecast Total Ligurian Regional Container Demand by Region to 2035


- '000TEUs
2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

Toscana

374.0

391.4

401.2

413.4

425.8

436.4

445.2

454.1

463.1

472.4

481.9

491.5

501.3

511.3

521.6

532.0

542.6

553.5

564.6

575.9

587.4

599.1

Liguria

490.1

512.8

525.7

541.7

557.9

571.9

583.3

595.0

606.9

619.0

631.4

644.0

656.9

670.0

683.4

697.1

711.0

725.2

739.8

754.5

769.6

785.0

Emilia Romagna

708.3

741.2

759.7

782.9

806.4

826.5

843.0

859.9

877.1

894.6

912.5

930.8

949.4

968.4

987.8

1007.5

1027.7

1048.2

1069.2

1090.6

1112.4

1134.6

Piemonte

438.2

458.6

470.1

484.4

498.9

511.4

521.6

532.0

542.7

553.5

564.6

575.9

587.4

599.2

611.1

623.4

635.8

648.6

661.5

674.8

688.3

702.0

7.2

7.5

7.7

7.9

8.2

8.4

8.6

8.7

8.9

9.1

9.3

9.5

9.6

9.8

10.0

10.2

10.4

10.6

10.9

11.1

11.3

11.5

1427.5

1493.9

1531.2

1577.8

1625.2

1665.8

1699.1

1733.1

1767.7

1803.1

1839.2

1875.9

1913.5

1951.7

1990.8

2030.6

2071.2

2112.6

2154.9

2198.0

2241.9

2286.8

Base Case

Valle d'Aosta
Lombardia
Others

689.9

721.9

740.0

762.5

785.4

805.0

821.1

837.5

854.3

871.3

888.8

906.5

924.7

943.2

962.0

981.3

1000.9

1020.9

1041.3

1062.2

1083.4

1105.1

Total

4135.2

4327.4

4435.5

4570.5

4707.7

4825.3

4921.8

5020.3

5120.7

5223.1

5327.6

5434.1

5542.8

5653.7

5766.7

5882.1

5999.7

6119.7

6242.1

6366.9

6494.3

6624.2

Toscana

374.0

384.3

390.5

399.3

411.3

421.6

430.0

438.6

447.4

456.3

465.5

474.8

484.3

494.0

503.8

513.9

524.2

534.7

545.4

556.3

567.4

578.8

Liguria

490.1

503.5

511.7

523.2

538.9

552.4

563.5

574.7

586.2

597.9

609.9

622.1

634.5

647.2

660.2

673.4

686.8

700.6

714.6

728.9

743.5

758.3

Emilia Romagna

708.3

727.8

739.6

756.2

778.9

798.4

814.4

830.7

847.3

864.2

881.5

899.1

917.1

935.5

954.2

973.3

992.7

1012.6

1032.8

1053.5

1074.6

1096.0

Piemonte

438.2

450.3

457.6

467.9

481.9

494.0

503.9

513.9

524.2

534.7

545.4

556.3

567.4

578.8

590.4

602.2

614.2

626.5

639.0

651.8

664.8

678.1

7.2

7.4

7.5

7.7

7.9

8.1

8.3

8.4

8.6

8.8

9.0

9.1

9.3

9.5

9.7

9.9

10.1

10.3

10.5

10.7

10.9

11.1

1427.5

1466.8

1490.6

1524.2

1569.9

1609.1

1641.3

1674.1

1707.6

1741.8

1776.6

1812.2

1848.4

1885.4

1923.1

1961.5

2000.8

2040.8

2081.6

2123.2

2165.7

2209.0

Low Case

Valle d'Aosta
Lombardia
Others

689.9

708.8

720.3

736.5

758.6

777.6

793.2

809.0

825.2

841.7

858.5

875.7

893.2

911.1

929.3

947.9

966.9

986.2

1005.9

1026.0

1046.6

1067.5

Total

4135.2

4248.9

4318.0

4415.1

4547.6

4661.3

4754.5

4849.6

4946.6

5045.5

5146.4

5249.3

5354.3

5461.4

5570.6

5682.0

5795.7

5911.6

6029.8

6150.4

6273.4

6398.9

Toscana

374.0

398.9

417.6

439.8

453.0

464.4

473.6

483.1

492.8

502.6

512.7

522.9

533.4

544.1

554.9

566.0

577.4

588.9

600.7

612.7

625.0

637.5

Liguria

490.1

522.7

547.1

576.3

593.6

608.4

620.6

633.0

645.7

658.6

671.8

685.2

698.9

712.9

727.1

741.7

756.5

771.6

787.1

802.8

818.9

835.3

Emilia Romagna

708.3

755.5

790.8

833.0

857.9

879.4

897.0

914.9

933.2

951.9

970.9

990.3

1010.1

1030.3

1051.0

1072.0

1093.4

1115.3

1137.6

1160.3

1183.5

1207.2

Piemonte

438.2

467.5

489.3

515.4

530.8

544.1

555.0

566.1

577.4

588.9

600.7

612.7

625.0

637.5

650.2

663.3

676.5

690.0

703.8

717.9

732.3

746.9

7.2

7.7

8.0

8.5

8.7

8.9

9.1

9.3

9.5

9.7

9.9

10.1

10.3

10.5

10.7

10.9

11.1

11.3

11.6

11.8

12.0

12.3

1427.5

1522.7

1593.8

1678.8

1729.1

1772.4

1807.8

1844.0

1880.8

1918.5

1956.8

1996.0

2035.9

2076.6

2118.1

2160.5

2203.7

2247.8

2292.7

2338.6

2385.4

2433.1

High Case

Valle d'Aosta
Lombardia
Others

689.9

735.8

770.2

811.3

835.6

856.5

873.6

891.1

908.9

927.1

945.6

964.5

983.8

1003.5

1023.6

1044.1

1064.9

1086.2

1108.0

1130.1

1152.7

1175.8

Total

4135.2

4410.9

4616.7

4862.9

5008.8

5134.1

5236.7

5341.5

5448.3

5557.3

5668.4

5781.8

5897.4

6015.4

6135.7

6258.4

6383.6

6511.2

6641.4

6774.3

6909.8

7048.0

Source: Ocean Shipping Consultants

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3.6

TRANSIT FORECAST TO 2035


Although there are no current transit volumes from Northern Tyrrhenian ports to countries
such as Austria, Switzerland and south Germany, the development of efficient and reliable
intermodal links from any of the Northern Tyrrhenian Sea ports, coupled with new terminal
facilities and deep water designed to handle the largest class of vessels suggest that it is
possible that the better developed terminals (of which Livorno will be one) will have the
possibility of attracting shipping lines that would consider routing their central European
cargo via the Northern Tyrrhenian Sea instead of the current practise of shipping to these
central destinations from ports in North Europe, or even on the Baltic Sea. Figure 3.6
illustrates the geographical location of the countries in question. Switzerland and Austria are
the most accessible from Liguria together with south Germany although there are some
challenges in convincing consignees to route their cargo via anything other than a German
port. Other more distant central European countries may be considered but are unlikely to be
major volumes due distances involved.

Figure 3.7: Relevant Central European Transit Countries


In order to be able to provide a demand forecast for transit volumes, it is first necessary to
assess the volumes of containers that are currently being routed in other ways and to assess
the likely range of countries that the Northern Tyrrhenian Sea ports can reach. Details of the
costs associated with the latter is included in the built-up cost analysis review reported in
Section VII, but obtaining details of the combined central European transit volumes of north
European, Baltic and Black Sea ports can be problematic. Fortunately, Ocean Shipping
Consultants has done enough detailed work and assessments for ports in all these areas and is
able to provide a reasonable assessment of these total transit volumes and how they are
routed. This data can then be used to predict the likely share of this volume that Northern
Tyrrhenian Sea ports could attract in the future.

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Table 3.8 examines the GDP growth developments expected of potential central European
transit countries.
Table
3.8: Forecast Regional GDP Development for Potential Central European
Table 3.8
Transit Volumes to 2035 Annual Percentage Change
Forecast Regional GDP Development For Potential Central European Transit Volumes to 2035
- annual percentage change
2014

2015

2016-2020

2021-2025

2026-2030

2031-2035

Czech Rep.

1.5

2.1

2.3

1.1

1.2

1.2

Slov ak Rep.

2.4

2.7

3.1

3.0

3.2

3.4

Austria

1.0

1.9

1.5

1.8

1.9

2.0

Slov enia

1.4

1.4

1.8

1.9

2.0

2.0

Sw itzerland

1.3

1.6

1.9

1.8

1.8

2.0

Hungary

2.8

2.3

1.8

1.8

1.9

2.0

Central Europe

1.7

2.0

2.1

1.9

2.0

2.1

Czech Rep.

1.5

2.1

2.2

1.0

1.1

1.1

Slov ak Rep.

2.4

2.7

2.9

2.8

3.0

3.2

Austria

1.0

1.9

1.4

1.7

1.8

1.9

Slov enia

1.4

1.4

1.7

1.8

1.9

1.9

Sw itzerland

1.3

1.6

1.4

1.7

1.7

1.9

Hungary

2.8

2.3

1.6

1.6

1.7

1.8

Central Europe

1.7

2.0

1.9

1.8

1.9

2.0

Czech Rep.

1.5

2.1

2.5

1.2

1.3

1.3

Slov ak Rep.

2.4

2.7

3.3

3.2

3.4

3.6

Austria

1.0

1.9

1.6

1.9

2.0

2.1

Slov enia

1.4

1.4

1.9

2.0

2.1

2.1

Sw itzerland

1.3

1.6

2.0

1.9

1.9

2.1

Hungary

2.8

2.3

2.0

2.0

2.1

2.2

Central Europe

1.7

2.0

2.2

2.0

2.1

2.2

Base Case

Low Case

High Case

Source: IMF, Ocean Shipping Consultants

Table Table 3.9 now assesses the ratio between the forecast regional GDP growth figures
and the expected import/export demand, based on historical data obtained from ports in
Germany, Belgium, The Netherlands and The Baltic States, all of which have shipped
containers to central Europe in recent years. These figures can then be used to develop a
total forecast figure for the central European transit volumes.
It remains extremely unlikely that any German cargo will be routed via anything but north
European ports and so the total central European volumes that could possibly be routed via
Northern Tyrrhenian Sea ports concentrates on cargo for Austria, Switzerland and Slovenia,
with some limited potential from Hungary, Slovakia and the Czech Republic.

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Table 3.9

Table 3.9: Forecast Regional GDP Import/Export Container Demand to 2035 Ratio
- ratio
Forecast Regional GDP : Import/Export Container Demand to 2035

2012-2015

2016-2020

2021-2025

2026-2030

2031-2035

Czech Rep.

2.2

2.0

2.0

2.0

2.0

Slov ak Rep.

2.4

2.1

2.1

2.1

2.1

Austria

1.8

1.8

1.8

1.8

1.8

Slov enia

1.8

1.8

1.8

1.8

1.8

Sw itzerland

1.9

1.9

1.8

1.7

1.7

Hungary

2.1

2.0

1.8

1.8

1.8

Percentage of demand ex pansion generated by one per cent of GDP grow th


Source: Ocean Shipping Consultants

Table Table 3.10 provides details of the unconstrained central European forecast that
Northern Tyrrhenian ports will take a share of once fully developed and competitive.
However, determining the share of this volume that could be re-routed differently to the way
that it is currently routed is largely subjective, although assessing major shipping lines future
strategies and the revised capabilities of newly developed ports in the region (especially
Livorno and Vado Ligure) in comparison to existing terminal facilities and possible
congestion in some north European ports can all be helpful as determining factors.

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Table 3.10

Table
Forecast
Regional
Central
European
Container Demand to 2035
Forecast3.10:
Regional
Central European
Container
Demand to
2035
000TEUs
- '000TEUs
2015

2020

2025

2030

2035

Czech Rep.

352.9

443.6

494.6

556.9

627.0

Slov ak Rep.

279.5

383.1

520.0

719.8

1016.2

Austria

632.6

722.7

847.7

1002.9

1196.9

Slov enia

189.4

246.2

287.8

338.4

405.6

Sw itzerland

257.6

303.4

354.3

412.0

486.9

Hungary

449.9

527.6

618.8

732.1

873.8

2161.9

2626.8

3123.2

3762.1

4606.4

Czech Rep.

352.9

438.2

485.6

541.4

603.6

Slov ak Rep.

279.5

375.6

499.8

678.4

939.1

Austria

632.6

717.6

834.0

978.2

1157.3

Slov enia

189.4

242.0

272.2

319.2

382.8

Sw izerland

257.6

291.7

339.2

391.1

458.5

Hungary

449.9

518.5

597.6

694.8

814.9

2161.8

2583.6

3028.4

3603.1

4356.2

Czech Rep.

352.9

449.1

503.8

572.8

651.3

Slov ak Rep.

279.5

390.7

540.9

763.6

1099.3

Austria

632.6

727.9

861.5

1028.2

1237.8

Slov enia

189.4

251.1

293.7

343.6

412.3

Sw itzerland

257.6

307.4

363.7

426.4

508.1

Hungary

449.9

536.9

640.7

771.4

936.7

2161.8

2663.2

3204.4

3905.9

4845.4

Base Case

Total
Low Case

Total
High Case

Total

Source: Ocean Shipping Consultants

Figure Figure 3.8 provides an assessment of the likely transit volumes based on the
following developing shares. These shares are derived based on the competitive position of
the port (Section V) and the Built-Up Cost Analysis (Section VII). Despite planned
developments in the Northern Tyrrhenian Sea ports it remains unlikely that the initial share
of traffic will be substantial and that any traffic will be slow to develop. The following
figures reflect the likely share of each central European market under review:
Czech Republic 0.5 per cent share in 2020 to be increased to 1.0 per cent in 2025; 1.5
per cent in 2025 and 2.0 per cent in 2035;
Slovakia 0.5 per cent share in 2020 and maintained for the balance of the forecast
period;
Austria 40.0 per cent share in 2020 to increase to 45.0 per cent in 2025; 50.0 per cent
in 2030 and 2035;

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Slovenia an initial 40.0 per cent share in 2020 to increase to 45.0 per cent in 2025; 50.0
per cent in 2030 and 2035;
Switzerland an initial 40.0 per cent share in 2020 to increase to 45.0 per cent in 2025;
50.0 per cent in 2030 and 2035;
Hungary 0.5 per cent share in 2020 and maintained for the balance of the forecast
period.

Figure 3.8: Potential Central European Volumes via Northern Tyrrhenian Ports
(Base Case)
Volumes are conservative given the uncertain nature of the routing of the transit volumes
over time and the many factors in play particularly related to shipping lines strategy that
can change the routing of this cargo. In the Base Case, it is reasonable to assume that
volumes can increase to a combined volume of 515,728TEU in 2020; 681,045TEU in 2025;
892,229TEU in 2030 and 1,066,680TEU in 2035 the vast majority of the volumes being
to/from Austria, Switzerland and Slovenia.

3.7

TRANSSHIPMENT FORECAST TO 2035


It is worth noting from the outset that with spare capacity in Taranto and other established
major transshipment hubs located in the central Mediterranean such as Gioia Tauro and
Marsaxlokk in particular, the chances of even a deep-water facility taking a substantial share
of the total transshipment volumes for the region are remote. Indeed the new Livorno
facility will concentrate primarily on local import/export volumes plus some additional
transit volumes to/from some central European countries.

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Transshipment Forecast Methodology


With regard to import/export volumes (hinterland) cargoes, the pace of economic
development and pace of globalisation of the economy are central considerations. In the
case of transshipment, the position is more complex. Whereas non-transshipment container
handling demand is directly related to economic development in the port hinterland, huband-spoke transshipment demand is related to regional import/export container handling
demand, and hence economic development in the transshipment region, as well as the
decisions of carriers to optimise the economics of operating large containerships.
The development of regional transshipment demand will be determined by developments
both within the regional market and also by external factors, such as:
the ability of a terminal to handle large container vessels (>10,000TEU capacity);
the respective strategies of the main shipping lines calling at the terminal.
The level of future regional hub and spoke demand will be a function of local demand, the
size of typical consignments and the adequacy of regional port infrastructure. The specific
strategies and investments of the major shipping lines will be a critical input.
Hub-and-spoke transshipment
As ship sizes continue to increase and shipping-line mergers and alliances multiply, so the
economic advantages of reducing the number of port calls for each string become more
pronounced. The economic imperative for keeping the number of port calls to a minimum
flows from the combination of the high capital costs of containership construction and the
time penalties involved in calling at numerous ports with small consignment sizes and
throughput volumes. The trend to fewer port calls will continue to favour the growth of
large, centrally-placed hub ports within port regions. In this respect, Northern Tyrrhenian
Sea ports are not as well placed as ports such as Gioia Tauro and Marsaxlokk.
Relay transshipment
The relay sector is driven by different factors, although, from a terminal-operations
perspective, the requirement to move containers between vessels is similar. The aim of relay
transshipment is to extend service coverage and flexibility by linking two or more mainline
services typically east-west services with north-south services. This enables carriers to
increase the number of revenue-earning legs on their larger vessels. Increasingly
comprehensive service networks are boosting the opportunities and scope for relay
transshipment, although any relay transshipment operation is driven by specific operators
(shipping lines) looking to combine services. With this in mind, it remains extremely
unlikely that Livorno (or other Northern Tyrrhenian Sea ports) will be able to entice a major
operator to start performing any relay operations and should really only be considered as a
remote, upside potential.
For Central Mediterranean hubs per se, the type of transshipment typically witnessed
is primarily hub and spoke, although based on 2014 data there is also 17 per cent of
this transshipment volumes that is considered as relay (although only three per cent
in Northern Tyrrhenian Sea ports). This is mainly due to the geographical preference
of most lines to link two mainline services, one from East-West rotations and one from
North-South rotations, at transshipment hubs in the West Mediterranean, rather than
the central Mediterranean.
Hub and Spoke Transshipment Forecasts

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The level of demand for hub and spoke container transshipment in the region under review
will be a function of the overall development of demand in the individual markets and the
relation between direct and feeder container movements. The approach taken is to initially
identify the anticipated scale of overall demand growth in each of the target feeder markets
on the basis of coefficients between GDP and container trade and to consider how these will
develop under the three macro-economic cases developed in this report. By the very nature
of the feeders deployed particularly in the Northern Tyrrhenian Sea, but even at the main
central Mediterranean hubs, this is heavily influenced by the Italian market, with larger
numbers of feeder services covering the Adriatic, Tyrrhenian Sea and Northern Tyrrhenian
Sea.
A review of the proportional importance of feedered containers in the current market place is
then undertaken and an estimate of how the importance of feedering will develop in the
forecast period for each market. This is then used to project the level of containers shipped
indirectly into these markets.
The final step is to multiply these containers by a factor of two to reflect the double port
move involved in transshipment. This generates the resulting level of hub and spoke
transshipment that can be anticipated for the region, which represents a core aspect of
regional demand growth.
Table 3.11 details the hub and spoke demand forecast for the central Mediterranean ports,
including the Northern Tyrrhenian Sea ports. Ports in the latter region are set to increase
transhipment volumes from 0.35m TEU in 2014 to between 0.43-0.47m TEU in 2020; 0.500.53m TEU in 2025; 0.58-0.62m TEU in 2030 and 0.67-0.72m TEU in 2035.
Attention is now turned to the share of the relay transhipment volumes.
Relay Transshipment Forecasts
The development of relay demand is more problematic than the hub and spoke sector. The
transfer of containers between discrete deep-sea services (usually operated by the same
shipping line) is dependent upon the following:
the scale of demand growth on the potential relay trades;
the relative economics of relayed versus direct services;
the individual network considerations and opportunities open to a specific operator.
Although a top-down estimate can be made concerning the overall potential in this market
sector, it will be the decisions made by the major lines that are the primary drivers of this
part of the market. It is clear that there are few lines with the critical mass to allow complex
interlining in the region and those which have the capacity have made heavy terminal
commitments. Based on this conclusion, it would seem highly unlikely that Northern
Tyrrhenian Sea ports will handle any relay volumes and what they could do should only be
considered as upside potential.

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Table 3.11: Forecast Regional Feeder Demand to 2035 000TEUs


2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

352,3

368,7

377,9

389,4

402,2

415,5

429,0

443,0

457,4

472,2

487,6

502,2

517,3

532,8

548,8

565,2

582,2

599,7

617,6

636,2

655,3

674,9

C.Med hubs

5156,7

5396,3

5531,2

5699,6

5887,7

6082,0

6279,6

6483,7

6694,4

6912,0

7136,6

7350,7

7571,3

7798,4

8032,4

8273,3

8521,5

8777,2

9040,5

9311,7

9591,0

9878,8

Total TEUs

2754,5

2882,5

2954,6

3044,5

3145,0

3248,7

3354,3

3463,3

3575,9

3692,1

3812,1

3926,5

4044,3

4165,6

4290,6

4419,3

4551,9

4688,4

4829,1

4973,9

5123,2

5276,8

Port Mov es

5509,0

5765,0

5909,1

6089,0

6289,9

6497,5

6708,6

6926,7

7151,8

7384,2

7624,2

7852,9

8088,5

8331,2

8581,1

8838,6

9103,7

9376,8

9658,1

9947,9 10246,3 10553,7

Base Case
N. Ty rrhenian ports

High Case
N. Ty rrhenian ports

352,3

375,8

393,3

414,3

428,0

442,1

456,5

471,3

486,6

502,4

518,8

534,3

550,4

566,9

583,9

601,4

619,4

638,0

657,2

C.Med hubs

5156,7

5500,5

5757,2

6064,2

6264,3

6471,1

6681,4

6898,5

7122,7

7354,2

7593,2

7821,0

8055,7

8297,3

8546,2

8802,6

9066,7

9338,7

9618,9

9907,4 10204,7 10510,8

676,9

697,2

Total TEUs

2754,5

2938,1

3075,3

3239,3

3346,2

3456,6

3568,9

3684,9

3804,7

3928,3

4056,0

4177,7

4303,0

4432,1

4565,1

4702,0

4843,1

4988,4

5138,0

5292,2

Port Mov es

5509,0

5876,3

6150,5

6478,5

6692,3

6913,2

7137,8

7369,8

7609,3

7856,7

8112,0

8355,4

8606,0

8864,2

9130,1

9404,0

9686,1

9976,7 10276,0 10584,3 10901,8 11228,9

352,3

362,0

367,9

376,2

388,6

401,4

414,4

427,9

441,8

456,2

471,0

485,1

499,7

514,7

530,1

546,0

562,4

579,3

596,6

614,5

633,0

652,0

C.Med hubs

5156,7

5298,5

5384,6

5505,8

5687,5

5875,1

6066,1

6263,2

6466,8

6677,0

6894,0

7100,8

7313,8

7533,2

7759,2

7992,0

8231,8

8478,7

8733,1

8995,1

9264,9

9542,9

Total TEUs

2754,5

2830,3

2876,2

2941,0

3038,0

3138,3

3240,3

3345,6

3454,3

3566,6

3682,5

3793,0

3906,7

4023,9

4144,7

4269,0

4397,1

4529,0

4664,9

4804,8

4948,9

5097,4

Port Mov es

5509,0

5660,5

5752,5

5881,9

6076,0

6276,5

6480,5

6691,1

6908,6

7133,1

7365,0

7585,9

7813,5

8047,9

8289,3

8538,0

8794,1

9058,0

9329,7

9609,6

9897,9 10194,8

5450,9

718,1
5614,4

Low Case
N. Ty rrhenian ports

Source: Ocean Shipping Consultants

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3.8

CONCLUSION
Table 3.12 and Figure 3.9 combine the forecast volumes from 2014 to 2035 for Northern
Tyrrhenian Sea ports including local, transit and hub and spoke transshipment volumes.

Figure 3.9: Forecast Total Northern Tyrrhenian Sea Port Demand (Base Case),
000 TEUs
Volumes are expected to increase from 4.49m TEU in 2014 to between 5.68-6.21m TEU in
2020; 6.40-7.01m TEU in 2025; 7.22-7.92m TEU in 2030 and 7.86-8.87m TEU in 2035.
Figure 3.10 and Figure 3.11 assess the supply/demand balance for the region both including
transshipment in the total demand and alternatively with the transshipment portion taken out.
The supply/demand balance is calculated on the total capacity expected in the region, but
also on 80 per cent of the total capacity. It is well recognised in the industry that when a port
facility reaches 80 per cent utilisation, the port can start suffering some operational
difficulties and so it is important for ports not to get to this level of utilisation if it can be
avoided.

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Table 3.12
Forecast Total Ligurian Port Demand to 2035
- '000TEUs

Table 3.12: Forecast Total Northern Tyrrhenian Port Demand to 2035 000TEUs

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

4135.2

4327.4

4435.5

4570.5

4707.7

4825.3

4921.8

5020.3

5120.7

5223.1

5327.6

5434.1

5542.8

5653.7

5766.7

5882.1

5999.7

6119.7

6242.1

6366.9

6494.3

6624.2

0.0

0.0

0.0

0.0

171.9

343.8

515.7

548.8

581.9

614.9

648.0

681.0

723.3

765.5

807.8

850.0

892.2

927.1

962.0

996.9

1031.8

1066.7

Base Case
Import/Ex port
Transit
Transshipment
Total

352.3

368.7

377.9

389.4

402.2

415.5

429.0

443.0

457.4

472.2

487.6

502.2

517.3

532.8

548.8

565.2

582.2

599.7

617.6

636.2

655.3

674.9

4487.5

4696.0

4813.4

4959.9

5281.8

5584.7

5866.6

6012.0

6159.9

6310.2

6463.1

6617.4

6783.3

6952.0

7123.3

7297.3

7474.1

7646.5

7821.7

8000.0

8181.3

8365.8

4135.2

4410.9

4616.7

4862.9

5008.8

5134.1

5236.7

5341.5

5448.3

5557.3

5668.4

5781.8

5897.4

6015.4

6135.7

6258.4

6383.6

6511.2

6641.4

6774.3

6909.8

7048.0

0.0

0.0

0.0

0.0

173.8

347.6

521.5

556.1

590.7

625.3

659.9

694.5

738.6

782.8

827.0

871.2

915.3

952.7

990.1

1027.5

1064.9

1102.3

High Case
Import/Ex port
Transit
Transshipment
Total

352.3

375.8

393.3

414.3

428.0

442.1

456.5

471.3

486.6

502.4

518.8

534.3

550.4

566.9

583.9

601.4

619.4

638.0

657.2

676.9

697.2

718.1

4487.5

4786.7

5010.0

5277.3

5610.6

5923.8

6214.7

6368.8

6525.6

6685.0

6847.0

7010.6

7186.4

7365.0

7546.5

7730.9

7918.3

8102.0

8288.7

8478.7

8671.8

8868.3

4135.2

4248.9

4318.0

4415.1

4547.6

4661.3

4754.5

4849.6

4946.6

5045.5

5146.4

5249.3

5354.3

5461.4

5570.6

5682.0

5795.7

5911.6

6029.8

6150.4

6273.4

6398.9

Low Case
Import/Ex port
Transit
Transshipment
Total

0.0

0.0

0.0

0.0

169.1

338.1

507.2

537.9

568.6

599.3

630.0

660.8

700.5

740.1

779.8

819.5

859.2

850.1

841.0

832.0

822.9

813.8

352.3

362.0

367.9

376.2

388.6

401.4

414.4

427.9

441.8

456.2

471.0

485.1

499.7

514.7

530.1

546.0

562.4

579.3

596.6

614.5

633.0

652.0

4487.5

4610.9

4685.8

4791.3

5105.2

5400.8

5676.1

5815.4

5957.0

6101.0

6247.4

6395.2

6554.5

6716.2

6880.6

7047.6

7217.3

7341.0

7467.5

7596.9

7729.3

7864.7

Source: Ocean Shipping Consultants

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Figure 3.10: Northern Tyrrhenian Sea Port Supply/Demand Balance (000


TEUs),
2014-2025

Figure 3.11: Northern Tyrrhenian Sea Port Supply/Demand Balance Excluding


Transshipment (000 TEUs),
2014-2025
Even without any transshipment volumes, it is clear from these supply/demand illustrations
that the region will be in need of additional capacity from around 2016-17, which is why it is
imperative for the Europa Platform project to go ahead. The fraction of this regional volume
that can be considered for the new facility in Livorno will be discussed in more detail in
Section 8.

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CONTAINER SHIPPING TRENDS AND IMPLICATIONS FOR


LIVORNO

4.1

INTRODUCTION
This Section provides an overview of the Major container shipping trends and global ship
size revolution and the impact that this has on the specific region that the port of Livorno is
operating in, highlighting the increase in the size of tonnage deployed; the increase in the
importance of larger vessels in the container fleet and the impact on the following main
issues:
shipping lines are striving for improved scale economies this has meant the introduction
of much larger vessels;
there has been a miss-match between supply and demand, with this being due to the
introduction of much larger vessels and weaker than anticipated demand growth
following from global economic conditions. This has resulted in severe and prolonged
over-capacity;
the Asia-Europe container trade cannot absorb all of the largest vessels that have been
added to the market. The result has been a period of cascading of large vessels onto
other trades usually ahead of underlying demand and port capabilities;
the search to fill the largest vessels has seen increased use of transshipment. The number
and size of feeder vessel services has increased - Indeed, this is vital to the economics of
the largest vessels;
the reduction in the number of facilities that are able to handle the ULCSs;
the importance to shipping lines of being able to take full advantage of the economies of
scale by ensuring that the ULCSs are well utilised;
further use of Vessel Share Agreements and more formal alliance partnerships.
The proposed global and regional strategies of the major container shipping lines will is
reviewed as will their strategies related to both transshipment in the Mediterranean and
Northern Tyrrhenian Sea region and direct calls in the Livorno region.

4.2

THE INTERNATIONAL CONTAINER SHIP SIZE REVOLUTION


It is apparent that this process is still underway, with the shares of the largest vessels set to
increase further. Serious evaluation is underway concerning the addition of even larger
vessels (It is evident in Figure 4.1 that vessels of >8,000TEU have been on the increase since
2005 and that vessels of >10,000TEU have also been on the increase since their introduction
in 2009. It is now common for 14,500-15,500TEU vessels to be deployed on the main
services from Asia-Europe and in 2013 vessels of 18-19,000TEU have also been introduced.
The expectation is for vessels to continue to increase to 22-24,000TEU and for vessels of
this size to be common by 2030.)
The shipping lines attempts to manage these developments will significantly change the
structure of various port sectors. The process of consolidation and increased use of
transshipment are set to radically change the market.
This Section presents a summary of the development of vessel sizes and types that can be
anticipated over the period to 2030. The focus is on:

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Asia-Europe trades, where the largest vessels will be deployed. A summary is presented
of the dimensions of vessels that will be used on these trades;
the cascading effect on secondary deepsea trades will be a critical development. This is
already underway and there will be a further upsizing of vessels for redeployed AsiaEurope tonnage;
port concentration. There are strong economic pressures to reduce the number of port
calls on the mainline services, with these intensified by increasing vessel sizes;
the role of transshipment and hinterland volumes will increase in importance on a global
basis, but particularly in the Mediterranean, North Europe and Caribbean markets.
For the purposes of this study, a phased development is apparent:
for the period to around 2018, the outlook is fairly clear. The orderbook commitments of
the major lines are fairly firmly set and the actual physical structure of the container fleet
is apparent. However, there remain great uncertainties over the management of the fleets.
The uncertainty over the failed P3 alliance proposal and the subsequent introduction of
the 2M as an alternative by Maersk and MSC and The Ocean Three alliance by CMACGM (with CSCL and UASC, plus a loose agreement with Hamburg Sud) is indicative
of the state of flux in the markets;
the outlook from 2019 will be much more complex and there are many more variables
that need to be considered. These include:

the timing and introduction of even larger vessels on the Asia-Europe trades,
there will also be further vessel size generational shifts for secondary deepsea trades,
the potential fracturing of the Asia-Europe trades,
direct calls vs feedering in this future.

The port and terminal requirements for container handling gantries and quay wall strength
will vary under different alternatives.
The shift to larger vessels has been the most significant feature for deepsea containerisation.
The search for scale economies is at the heart of this drive. On a tonnage-mile basis, the
savings from larger vessels are significant and also one of the few factors that are directly
controlled by ship operators. Furthermore, as soon as one major operator advances to the
next size echelon, the competitive nature of the shipping industry may force other operators
to follow suit. The net effect is a rise in both average vessel size and the size of the largest
vessels deployed.

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Figure 4.1: World Container Fleet Development 1990-2016 (000TEUs)


As Figure Figure 4.1 shows, the trend in favour of larger vessels is well established and has
accelerated since 2004. The share of 12,000TEU+ vessels increased from 1 per cent of the
containership fleet at the beginning of 2008 to 12 per cent at present. The very largest
vessels are deployed on trades between East Asia and Europe. The oversupply of these
largest classes of vessels is now resulting in pressure to re-deploy these vessels on other
trades. There is likely to be pressure to deploy further larger vessels on these trades, where
water depth and other considerations permit such operations.
Figure Figure 4.2 illustrates the deployment of container vessels up to and including the
18,300 TEU Triple EEE Class units (pictured in Figure Figure 4.3), with these
developments further considered in Table Table 4.1.

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Figure 4.2: Evolution of Largest Container Ships to 2014

Figure 4.3: Maersks EEE-Class Vessel

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Table 4.1: Design Development of Large Containerships


Design
Development
Containerships

of

Large

TEUs

First generation: 1968

Length
overall
(m)

Beam (m)

Maximum
draught*
(m)

Noted Required
berth depth
(m)*

213

27.4

10.8

12.0

1,100

Second generation: 1970-80

2-3,000

Panamax: 1980-90

3-4,500

294

32.0

12.2

12.8-13.0

Post-panamax: 1988-95

4-5,000
6,4008,000
8,00011,400

280-305

41.1

12.7

13.5-14.0

300-347

42.9

14.0-14.5

14.8-15.3

320-380

43-47

14.5-15.0

15.3-15.8

14,500

380-400

56.4

15.5

16.4

New-panamax: 2010

12,500

366

49.0

15.2

16.1

Triple E-Class

18,270

400

59.0

15.5

16.4

CSCL 19,100 Class

19,100

400

58.6

15.5

16.4

MSC Oscar

19,244

400

59.0

15.5

16.4

Fifth generation: 1996-2005


Super post-panamax: 1997->
Ultra large container ships:
2006->

* Maximum draught is rarely realised, even when vessels are fully laden, so required berth depth is less in
practice.
Source:
Ocean
Shipping
Consultants

Vessels have recently increased beyond 19,000TEU capacity (See Figure 4.4). The
requirements of the larger ships, such as the Triple E-Class and MSC Oscar, can be noted in
terms of vessel length (meaning longer quays are needed to berth) and berth depth (meaning
deeper water needed at ports and terminals).
Vessel width is also a relevant factor that might force terminals to invest in order to be able
to accommodate larger vessels entering service.

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Figure 4.4: Ship Size Increases 2013/15


Since June 2013, when the first Maersk EEE unit was delivered, several contenders have
emerged to stake their claims to be the worlds largest in terms of advertised container
intake. The Maersk Triple-E class vessels (18,340TEU) were surpassed by CSCL. The
CSCL Globe has an official capacity of 18,982TEU, but CSCL have advertised a
19,100TEU capacity on earlier occasions. MSCs new MSC Oscar has a declared capacity
of 19,224TEU and was delivered into service in January 2015, but for may lose its largest
ship title when UASCs Barzan is deployed in April 2015. Although currently listed as
18,800TEU capacity, UASC have indicated that the capacity will be adjusted upwards prior
to delivery.
All of the aforementioned ships share similar dimensions. Each has a breadth of 58.6059.00m allowing to stow 23 rows of containers on deck and 21 rows in holds. They also
have a similar length of 395-400m that fits 24 bays of 40 containers.
Factors defining the upper limits of the size of container vessels
It is apparent that the size of container vessels is now approaching a peak. Factors which
define upper limits are:
scale of demand. This is the most obvious determining factor. Attempts to increase ship
size beyond that called for by market demand result in half-empty vessels, trading with
the costs, but not the benefits of scale;
at-sea versus in-port costs, long versus short hauls, and number of port calls: economies
of scale are reaped whilst vessels are at sea. Limitations in productivity of container
terminals are a limit to the maximum size of container vessels;

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the new Panamax dimensions will restrict maximum vessel sizes on some trades to 369m
loa x 49m beam x 15.2m maximum draught. The new locks being built in the Panama
Canal will make longer hauls, incorporating a Panama-Canal transit, possible for larger
vessels, which is a core consideration. Transshipment will be central to raising load
factors on such services, with more ports capable of competing simply as a transshipment
hub;
limits to scale economies. There are diminishing returns from increasing vessel size
beyond certain limits to obtain the same percentage increases in economies of scale it is
necessary to expand vessel size by increasingly large margins. This is reviewed in more
detail in Section VII of this report;
available ports: The largest vessels can only be accommodated at very few ports, and
possibly only when partially loaded, thus negating the theoretical benefits to be gained by
scale economies, but not the higher costs of the vessels. The opportunities for utilising
such vessels are therefore limited;
terminal capacity and hinterland links. Much higher consignment sizes will place
increased pressures on the supporting infrastructure. This will limit the advantages of
shipping scale economies.
Future Maximum Vessel Sizes
As we have seen, vessels >19,000TEU have recently been advertised, but there are also
further pressures to develop yet larger containerships and there have also been conceptual
assessments of even bigger vessels (c. 22,000-24,000TEU), which will potentially be up to a
further 50m in length.
Ocean Shipping Consultants has been heavily involved in discussions with Lloyds Register
(and shipping lines) concerning the likely dimensions of this new class of vessel and it seems
possible in principle to fit 20,000TEU into a vessel with a length of 400-433m. This is the
same as for the 18,000TEU vessels with the addition of 4 x 20 bays and two cross-decks,
with the same beam and draught as the EEE class vessels. These are likely to be
introduced over the next five to ten years into the Asia-Europe trades, resulting in tonnage
that is currently deployed on the main arterial routes having to be cascaded to the secondary
trades, thereby increasing the average size of vessels deployed on these trade lanes.
These possibilities are examined in the following, within which these overall constraints and
configurations may be universally applied:
a design constraint for all modern designs of container ship is the height to which
containers may be stacked. In the container holds and on deck the greatest stack height is
constrained by the strength of the containers, so the lowest box is not crushed and there is
not unacceptable constraint on the weight of containers which can be carried in each
stack;
the twin island configuration is used almost universally in order to maximise the
container capacity within the constraints of bridge visibility requirements.
This assessment has not identified any major technical obstacles to the development of ships
of 20,000 TEU and above.
Current large container ships have breadth consistent with carriage of 22 or 23 stacks abreast
on deck. The capacity then becomes a function of vessel length. It is considered that vessel
capacity increases by greater

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length alone is nearing the upper limit. As ever, more boxes will be squeezed into the
current breadth limit, but it is unlikely that vessel capacity will exceed 22,000TEU without
increasing the breadth.
There are many options available to ship owners who wish to progress to container ships
with capacities greater than those in service today. In addition, it is possible for some
existing ships to be lengthened to provide increased capacity. Some of the options have been
evaluated here and indicative vessel dimensions deduced.

Figure 4.5: Estimated Vessel LOA for Different Capacities and L/B Ratios
(Source: Lloyds Register)
Figure 4.5 summarises the options which are available for increased capacity of large
container ships. It is a compromise between increasing breadth, with consequential
challenges for the terminals, and increasing length, with consequential challenges for the
bending strength of the ship that will determine the optimum. It is unlikely that very small
values of L/B will predominate, so the lesser values of length are unlikely to represent the
upper limits which we will be seen on ship length. Equally, ship length comes at a price, so
it unlikely that high L/B values will dominate. So, on this basis, it would seem that 450
metres LOA is a realistic upper limit for vessel length in the foreseeable future so the
design of berths for the very largest anticipated container ships should be predicated on a
vessel length of 450m.
The following are the estimated potential dimensions of vessels larger than those that are
currently trading/on order:

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Maersk EEE
SCL/UASC vessels
New generation I
New generation IIA
New generation IIB

TEUs

LOA m

Beam m

Max Draught m

18,270
18,400
22,000
24,000
24,000

400
400
430
450
430

59.0
58.6
59.0
59.0
61.5

15.5
15.5
15.5
15.8
15.5

The development of 22,000TEU vessels will be by means of increasing length, with 430433m being the likely dimension. There are seen to be two options for 24,000TEU vessels
either further lengthening, with a slightly deeper draught or a shift to broader vessels on a
length of up to 430m. This would entail an additional row of containers.
It is realistic to anticipate that 22,000TEU vessels with a length of around 430m+ and 23
rows wide will be deployed on the Asia-Europe trades. The shift to 24,000TEU+ vessels
will be more complex and would involve significant infrastructure and container crane
investments.

4.3

GLOBAL SUPPLY/DEMAND BALANCES & CASCADING


The level of ordering remains at high levels, with this focused on the largest class of vessels.
10,000TEU and larger vessels will increase their importance within the total fleet from
around 16 per cent at present to at least 20.5 per cent by the end of 2016. Clearly, this
cannot all be absorbed by the Asia-Europe trade and there will be increased pressures to
deploy much of this capacity on other trades. This is the cascade effect.
The breakdown of current capacity and deliveries by ship size sector are further summarised
in TableTable 4.2.
Table 4.2

4.2: Ultra
Ultra Large ContainerTable
Ship Deliveries
to 2016Large

In service 6/14
no.

Due by end 2014

000TEU

no.

Container Ship Deliveries to 2015

Due by end 2015

Due by end 2016

Total

000TEU

no.

000TEU

no.

000TEU

no.

000TEU

%
48.9%

10,000-12,999TEU

72

793.30

97.68

17

178.36

11

112.02

37

388.06

13,000-15,999TEU

145

1965.30

108.00

23

325.85

25

352.50

56

786.35

40.0%

12

212.50

160.68

31

556.91

18.80

41

736.39

346.5%

229

2971.10

26

366.36

71

1061.12

37

483.32

134

1910.8

64.3%

16,000TEU+

Total

Source: Lloy d's Register/Ocean Shipping Consultants

The anticipated balance of supply and demand in the global container fleet is summarised in
Table Table 4.3

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Table 4.3

Table 4.3:
Estimated
Container
Fleet
Supply/Demand
Balances 20012-2016
Estimated
Container Fleet
Supply/Demand
Balances
20012-2016
<4000TEU 4000-7999TEU 8000-9999TEU
Capacity - '000TEUs
2012
8303.5
3214.0
2028.4
2013
8128.7
3414.0
2154.3
2014
8299.9
3638.5
2725.5
2015
8410.5
3963.5
3010.3
2016
8395.0
4038.5
3160.3
Demand - '000TEUs
2012
129.10
121.90
18.55
2013
136.20
126.56
18.92
2014
142.33
134.47
19.20
2015
150.87
138.74
19.59
2016
159.17
147.32
19.98
Implied Productivity - TEUs/TEU
2012
15.55
37.93
9.15
2013
16.76
37.07
8.78
2014
17.15
36.96
7.05
2015
17.94
35.00
6.51
2016
18.96
36.48
6.32

10,000TEU+

Total

1796.1
2718.2
3337.8
4398.9
4882.2

15342.0
16415.2
18001.7
19783.2
20476.0

23.00
24.04
25.00
26.25
27.43

292.55
305.71
321.00
335.45
353.90

12.81
8.84
7.49
5.97
5.62

19.07
18.62
17.83
16.96
17.28

Source: Ocean Shipping Consultants

This brings together fleet capacity with anticipated demand by size sector. A mid-range
estimate of demand growth has been factored into the projection.
The severity of the effect is clear. The fleet as a whole will see a limited decline in average
productivity between 2012 and 2016, but the impact is concentrated in the larger size ranges.
It is anticipated that the productivity of the 10,000TEU+ fleet sector will decline by around
56 per cent over the period almost entirely as a result of supply-side developments. This
will result in very great pressures to redeploy this tonnage onto other trades and, indeed, this
is already being noted, even though the actual trade demand doesnt justify deploying larger
vessels at this stage.
The situation is further summarised in Figure 4.6, where it is clear that total fleet
productivity drops from 19.07 to 16.96 between 2012 and 2015, before increasing slightly to
17.28 in 2016. Similarly, productivity for the 10,000TEU+ fleet sector decreases from 12.81
to 5.62 between 2012 and 2016.

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Figure 4.6: Forecast Container Fleet Productivity to 2016 (TEUs/Fleet TEU)


Details of the orderbooks of the main container shipping lines operating on the main arterial
services are shown in Table 4.4 and highlights the number of lines that either have a fleet of
ULCSs and/or are ordering new vessels of this magnitude. Of the top twenty container
shipping lines only Zim Line and Wan Hai do not and will not possess vessels of this size in
the near future.
Table 4.4

Table
4.4:Asia-North
Fleet Status
for Major
Fleet Status
for Major
Europe Operators

Asia-North Europe Operators

Fleet Capacity

Orderbook*

million TEUs

million TEUs

12,000TEU+ orders*

Maersk

2.765

0.310

14 x 18270

MSC

2.500

0.505

6 x 18000, 5 x 15900, 8 x 14000

CMA CGM

1.578

0.252

3 x 16000

Ev ergreen

0.905

0.248

4 x 14400

Cosco

0.801

0.054

4 x 13400

Hapag lloy d

0.742

0.040

2 x 13200

APL

0.581

0.075

2 x 14000

Hanjin

0.594

0.074

4 x 14000

China Shipping

0.656

0.189

5 x 19000, 3 x 17900

Mitsui

0.584

0.081

3 x 14500

NYK

0.505

0.000

4 x 14000

OOCL

0.506

0.067

2 x 13200

Yangming

0.415

0.256

5 x 14500

Hy undai MM

0.396

0.077

3 x 13100

K Line

0.360

0.073

5 x 13900

UASC

0.299

0.192

6 x 18000, 11 x 14000

* - direct orders + long term charters


Source: Ocean Shipping Consultants

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TableTable 4.5 and Figure Figure 4.7 highlight the general increase in average size of
vessels deployed on some of the key Trade lanes from 2010 to 2014.
Table 4.5: The Development of Average Vessel Sizes on Key Container Trades
2010-2014 position at start of year (TEUs)
- position at start of y ear (TEUs)
The Development of Average Vessel Sizes on Key Container Trades 2010-2014

2010

2011

2012

2013

2014

Current largest
vessel

Asia-North Europe

8822

8880

9600

11250

12300

18270

Transatlantic (N.Europe)

3850

3995

4010

4050

4250

5892

Europe-South America Atlantic

4500

4500

4600

6050

6250

8760

Europe-Southern Africa

4425

4555

5015

5350

6050

10350

Europe-Middle East/Indian SC

3450

3650

4425

5500

7250

11250

Europe-Australasia

4250

4415

4450

4450

4600

5906

Transpacific

5350

5500

5700

6000

6250

14000

Asia-South America Pacific

3100

3750

5100

7300

7450

13100

Asia-Middle East

6050

6150

6950

8000

8100

14100

Source: Ocean Shipping Consultants

Figure 4.7: Average Vessel Sizes on europe Deepsea Container Trades


since 2010
The t introduction of the EEE Class vessels by Maersk Line followed by the subsequent
introduction of vessels 19,000TEU+ has increased the maximum size of vessels deployed on
the main arterial route, but the cascade effect of larger vessels onto secondary trade lanes is
also evident. The latter is also important for the increase in size of vessels that are used on
connecting north-south services, i.e. Europe-South America, Europe-ANZ or Europe-Africa.

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The following points should be noted:


there has been a progressive increase in the sizes of vessels deployed on all trade lanes
shown in Figure 4.7 barring the Europe-Australasia services. The structure of demand
means that restrictions at Melbourne limit the size of vessel that can be deployed. The
development of new deepwater capacity at Webb Dock in Melbourne and the use of partloaded tonnage will see an increase in vessel sizes in the next few years to around
8,000TEU;
development of vessel sizes on the Transatlantic trades will potentially be of very great
importance to Livorno, since this is the dominant trade in terms of current services calling
at Darsena Toscana. At present, the average vessel size is around 4,250TEU with the
largest units being around 6,000TEU. This will change in the medium term. The
improvement of the Panama Canal has resulted in a major round of port improvements in
the US Atlantic ports, which will see larger vessels cascaded onto the Transatlantic
trades.
For ports and terminals, the increase in container ship sizes will result in further pressure on
port performance levels and the pressure on terminals to increase their productivity levels
will intensify. The ports that do not improve their performance will lose market share, unless
they are able to make better use of the facilities at their disposal or expand their facilities in
order to ensure that they are better placed to handle the bigger vessels.
Feeder Vessel Size Developments
Apart from the evident increase in the number of ULCSs deployed and the cascade effect
this has had on the sizes of vessels deployed on secondary trade lanes, it is also important to
stress the impact on the number and size of feeder vessels ordered recently.
Figure Figure 4.8 illustrates the number of vessels ordered by TEU size range between 2010
and October 2014.

Figure 4.8: Percentage of Vessels Ordered by TEU: 2010-October 2014

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As a result of the increase in the size of vessels deployed, particularly on the main arterial
trade lanes and the decreasing number of terminal facilities that are able to handle these
vessels efficiently, the instance of
transshipment is also seen to be on the increase this is particularly true in Europe and the
Mediterranean.
Vessels >10,000TEU accounted for some 27 per cent of vessel orders since 2010, but at the
same time the orders of vessels of <2,000TEU have amounted to 24 per cent. In fact, the
single highest percentage share of vessels ordered between 2010 and October 2014 is 22 per
cent, which was the share of the 1,000-2,000TEU capacity segment (49 vessels).
Shipping lines have been slow to recognise the need for more feeder vessels and particularly
in the Mediterranean and Asian markets, where vessels of 25-30 years of age have remained
commonplace, new tonnage has long been overdue. Most of the orders thus far are
concentrated on the need for 1,000-1,100TEU vessels in North Asia and 1,600-1,700TEU
vessels in South-East Asia. As well as supporting the main Asia-Europe strings, these feeder
vessels are also important for operation in intra-Asia niche markets.
It stands to reason that with the continuing increase in vessel size on Asia-Europe strings that
more feeder vessels will also be required at the European end of the main trade lane, which
will also help promote intra-European/Mediterranean services.
Whilst mainline vessels continue to increase (as is suspected), the number and size of feeder
vessels that support the main networks will also increase. The demand for feeder vessels is
therefore expected to continue to represent a high percentage of the new vessel orders and
vessels are likely to increase from 1,700TEU to 2,500TEU in the short-term, to coincide with
the increase in the average size of vessels on the main arterial trades.

4.4

PORT CONCENTRATION
As a result of the increase in the size of vessels being deployed on all trades following the
cascading of larger tonnage from the main arterial trades, it is inevitable that the number of
ports that are capable of handling the larger size of vessel will decline not all ports will
have the necessary depth of water, length of quay or number and type of gantry cranes to be
able to handle vessels of this size.
Couple this with the increased total costs of calling at ports with larger tonnage and this will
result in shipping lines having to maximise the efficiencies of their deployed assets by
reducing the time spent in port and by reducing the actual number of direct calls (and
increasing transshipment).
The implications for terminals are clear in this highly competitive market:
they will have to expand terminal area, length of quay and depth of water are all crucial
if ports are to be able to increase the size of vessels they can handle and handle quickly
and efficiently;
they will need more yard space to be able to handle larger consignments;
they will need more gantry cranes and more efficient gantry cranes to be able to increase
their productivity, thereby reducing the port stay time;
they will need to train their crane drivers and other shore side staff in order to increase
their efficiencies.

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In markets such as North Europe and the Mediterranean, this will mean that transshipment
business will be focused on those terminals that can meet the requirements of the shipping
line. This has always been the case, but the economics of introducing much larger vessels
will accelerate this trend. This is an extremely important point for container facilities in
these regions.

4.5

THE DEVELOPMENT OF LINER SHIPPING SERVICES IN ITALY


So far this Section has been dealing with the general and global container shipping trends
evidenced over the last 5-10 years, but it is also imperative to relate this to the Italian port
region that the port of Livorno is a part of. It is clear from the preceding sub-sections that
there has been an increase of vessel sizes on the main arterial trades and that his has had a
knock-on effect on the secondary trade lanes, where the vessels that have been displaced
from the main services have been cascaded down to operate on smaller trade lanes.
To properly assess the development of vessel sizes in Italy, it is important to look at a series
of years and to split Livornos competing ports into different groups depending on their
competitive position versus Livorno. This analysis will look at the average tonnage
deployed on the US East Coast and Far East services for the following port groups in order
of their importance to Livorno as competition, for 2005, 2010 and 2015:
Livorno and other Northern Tyrrhenian Sea ports;
Secondary competition located on the Adriatic Sea and Tyrrhenian Sea ports as well as
Marseille-Fos;
Mediterranean transshipment hubs.
Table 4.6 4.8 shows how services develop between 2005, 2010 and 2015 on the main AsiaEurope trade lanes, whilst Table 4.9 4.11 show how Europe-US services developed over
the same years.

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Table 4.6

Table 4.6: Far East/Middle East-Mediterranean Service Lines for 2005

Far East/Middle East-Mediterranean Service Lines for 2005

Operator/grouping

Operation

Ports called

MSC

N/S EUROPE

ANR,VLC,SPE,FOS

P&O NEDLLOYD/CONTSHIP/CMA

EASTABOUT

ZEE,SPE

Freq. (days)

CGM/MARFRET/HAMBURG SUD/HAPAG-

RV (days)

No. of ships

Average teu

Trade Lane

91

13

2808

AUS-EUR

70

10

4113

AUS-EUR

LLOYD NETWORK
P&O NEDLLOYD/CONTSHIP/CMA

WESTABOUT

TIL,MXX,SPE

84

12

2357

AUS-EUR

AMX

SHA,NAP,GOA,BCN,VLC

14

56

4151

FE-MED

SIN,MXX,SPE

84

12

2357

FE-MED

CGM/MARFRET/HAMBURG SUD/HAPAGLLOYD NETWORK


CHINA SHIPPING (CSCL)
CMA CGM/CONTSHIP/P&O
NEDLLOYD/MARFRET
CMA CGM/NORASIA

MEX

BCN,FOS,GOA,MXX

49

4323

FE-MED

CMA CGM/NORASIA/APL

NCX

XGG,MXX

56

5770

FE-MED

COSCO/K LINE/YANGMING

AMX

BCN,VLC,NAP,GOA,FOS

49

3541

FE-MED

CSCL/ZIM

AEX 2

LYG,VLC

63

5499

FE-MED

EVERGREEN/LLOYD T.

FEM

BCN,VLC,TAR,GOA,FOS

56

2868

FE-MED

GRAN ALLIANCE

LOOP M

BCN,FOS,SPE

56

4656

FE-MED

GRAND ALLIANCE

AEX

GIT

63

4481

FE-MED

GRAND ALLIANCE

LOOP E

CAG

56

3642

FE-MED

HANJIN

EMA

SPE,FOS,VLC,GIT

56

2969

FE-MED

LLOYD TRIESTINO/CMA CGM

ADR

NBO,TRS

49

2626

FE-MED

MAERSK SEALAND

AE6

BCN,FOS,GIT,GIT,GOA

56

4566

FE-MED

MAERSK SEALAND

AE2

GIT

63

7362

FE-MED

MAERSK SEALAND

AE5

ALG,GIT,VLC

77

11

7836

FE-MED

MSC

DRAGON EXP

SPE,FOS,BCN,VLC,NAP

63

6718

FE-MED

MSC

SILK EXPRESS

LEH,VLC

63

7030

FE-MED

YANGMING/K LINE

AMS

GOA,LIV

56

5557

FE-MED

ZIM/NORASIA/CSCL

AMP

RIJ,VCE,TRS

91

134

3355

FE-MED

Source: Ocean Shipping Consultants

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Table 4.7: Far East/Middle East-Mediterranean Service Lines for 2010

Table 4.7

Far East/Middle East-Mediterranean Service Lines for 2010

Operator/grouping

Operation

Ports called

CMA CGM (NE/MED)

EPIC

HAM,MXX,

56

4268

EU-ME/SA

CSAV NORASIA (NE/MED)

IMEX

HAM,MXX,

56

4613

EU-ME/SA

IOS

HAM,CAG

49

4265

EU-ME/SA

HDS LINES EMCL (NE/MED)

EMCL

HAM,MXX,

10

50

2583

EU-ME/SA

MAERSK LINE

ME3 (MED)

GIT

42

3593

EU-ME/SA

MESSINA (MED)

MESSINA

MDC,GOA,NAP

14

42

1823

EU-ME/SA

MSC

FALCON SERVICE

SIN,GIT,SPE,BCN,VLC

35

3951

EU-ME/SA

MSC

IPAK SERVICE

ANR,GIT,VLC

49

5867

EU-ME/SA

MSC/SCI IMED (MED)

IMED

BCN,GOA,SPE

42

3262

EU-ME/SA

UNITED ARAB (UASC)/HANJIN (MED)

MINA/IMU

GOA,BCN,VLC

14

42

1823

EU-ME/SA

CKYH

MD2

SHA,GOA,LIV,FOS

56

6116

FE-MED

CKYH

MD1

SHA,NAP,GOA,BCN,VLC

56

5523

FE-MED

CKYH

MD3

PUS,SPE,BCN,VLC

56

5606

FE-MED

CMA CGM

MEX

VLC,BCN,FOS,GOA,NAP,MXX

77

11

6051

FE-MED

CSAV NORASIA

MNS

XGG,MXX,SPE,GOA,FOS,BCN,VLC

70

10

5689

FE-MED

EVERGREEN

UAM

TOK,TAR,GOA,BCN,VLC

98

14

5570

FE-MED

GRAND ALLIANCE

AEX

LCH,CAG

70

10

5712

FE-MED

GRAND ALLIANCE

EUM/MED

PUS,GOA,FOS,BCN,VLC

63

6690

FE-MED

PUS,TRS,VCE

56

4328

FE-MED

HAPAG-LLOYD/HAMBURG SUD IOS


(NE/MED)

HANJIN/HMM/UASC/YANGMING

AAX/MAE/ACM3/AA
X

Freq. (days)

RV (days)

No. of ships

Average teu

Trade Lane

HDS

AMEL

SHA,MXX

56

3411

FE-MED

MAERSK LINE

AE6/TP6

ALG,BCN,VLC

98

14

9685

FE-MED

MAERSK LINE/CMA CGM

AE12/PHEX

PUS,TRS

63

6628

FE-MED

MAERSK LINE/CMA CGM

AE11/MEX2

LYG,GIT,GOA,FOS

70

10

8225

FE-MED

MSC

LION SERVICE

HAM,VLC

77

11

11341

FE-MED

MSC

DRAGON EXPRESS

PUS,GIT,NAP,SPE,FOS,BCN,VLC

77

11

9168

FE-MED

MSC

TIGER SERVICE

PUS,GIT

70

10

8437

FE-MED

MSC

SILK EXPRESS

RTM,VLC

77

11

13945

FE-MED

UASC/CSCL

AMC1/AMX1

VLC,SPE,GOA,FOS

63

5681

FE-MED

CMA CGM

FAL1

HAM,MXX,

70

10

10837

NEU-FE

CMA CGM

FAL3

HAM,MXX,

70

10

9030

NEU-FE

CMA CGM/HAPAG-LLOYD

NEW NEMO/EAX

SIN,MXX,SPE

91

13

2798

NEU-FE

EVERGREEN

CES

SHA,TAR

70

10

7129

NEU-FE

SIN,GIT,SPE,MON

98

14

3153

NEU-FE

AUSTRALIA
MSC

SERVICE

Source: Ocean Shipping Consultants

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Table 4.8

Table
Far East/Middle East-Mediterranean Service Lines for 2015

4.8: Far East/Middle East-Mediterranean Service Lines for 2015

Operator/grouping

Operation

Ports called

Freq. (days)

RV (days)

CMA CGM

EPIC

Hamburg Sd/Hapag-Lloy d/CSAV (Norasia)

No. of ships

Average teu

Trade Lane

HAM,MXX

56

6556

EU-ME/SA

IOS

HAM, CAG

56

6229

EU-ME/SA

MSC

IPAK

RTM,GIT, VLC

49

8654

EU-ME/SA

MSC

New Falcon serv ice VLC, FOS, SPE, NAP, GIT, VLC

91

(12)

5000

EU-ME/SA

CKYH grouping

MD1/PM1

SIN, SPE, GOA, BCN, VLC

112

16

9699

FE-MED

CKYH grouping

MD2

SHA, GOA, BCN, FOS

70

10

8444

FE-MED

Ev ergreen

UAM

KHH, TRS

(112)

(16)

6018

FE-MED

G6 Alliance

EUM/MED

PUS, GOA, FOS, BCN, VLC

70

(9)

8817

FE-MED

Maersk Line

ME2

PTM, VLC, BCN, GOA, MXX

49

8238

FE-MED

Maersk Line/CMA CGM

AE20/MEX3

SHA, MXX, GOA, SPE

70

(9)

8939

FE-MED

Maersk Line/CMA CGM

AE11/MEX1

QIN, MXX, VLC, BCN, FOS

77

11

9748

FE-MED

Maersk Line/CMA CGM

AE12/PHEX

PUS, TRS

70

10

8272

FE-MED

MSC

Dragon Ex press

PUS, GIT, VLC, SPE, FOS, BCN

91

(12)

14030

FE-MED

MSC

Silk Ex press

RTM, GIT

84

12

13326

FE-MED

UASC/CSCL

AMC1/AMX1

QIN, SPE, GOA, FOS, BCN, VLC

77

11

8598

FE-MED

CMA CGM

FAL1

HAM, MXX

(84)

11

14023

NEU-FE

CMA CGM/Hapag-Lloy d

New NEMO/EAX

HAM, GOA, MXX

91

13

4289

NEU-FE

MSC/SCI

ISES

HAM, GIT

56

6369

NEU-FE

Source: Ocean Shipping Consultants

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Table 4.9
North America-Mediterranean Service Lines for 2005

Table 4.9: North America-Mediterranean Service Lines for 2005

Operator/grouping

Operation

Ports called

Freq. (days)

RV (days)

No. of ships

Average teu

Trade Lane

CANMAR

SENATOR B

VLC,LIV

28

1061

MED-NA

CANMAR

SENATOR A

GIT,SAL,GOA,FOS

28

1892

MED-NA

EXPRESS/MUS

CAG,LIV,GOA,FOS,VLC

35

1595

MED-NA

EASTABOUT

PHL,SPE

70

10

4113

MED-NA

LLOYD

WESTABOUT

DAM,MXX,SPE

84

12

2331

MED-NA

COSCO/K LINE/YANGMING

TAS 3

GOA,BCN,NAP

28

1663

MED-NA

COSTA CONTAINER LINES

CCM

BCN,FOS,LIV,SVL,VLC

36

1513

MED-NA

ITALIA/LYKES/TMM

MPE

VLC,LIV,GOA,FOS

11

66

2420

MED-NA

MAERSK SEALAND

GULF/MED

GIT,GOA

42

4175

MED-NA

MECL/TMM-LYKES

MED/GULF/MEXICO

CAG,LIV,GOA,BCN,VLC

8-9

42

3266

MED-NA

MELFI

MELFI

NAP,LIV,GOA,BCN,VLC

12

36

1111

MED-NA

MSC

MED/US

SPE,VLC,BCN,NAP

42

2489

MED-NA

LIV,NOL

21

84

1090

MED-NA

AMERIGO
CMA CGM/LLOYD TRIESTINO
CMA CGM/P&O NED./HAMBURG
SUD/MARFRET/HAMBURG SUD/HAPAGLLOYD
CMA CGM/P&O NED./HAMBURG
SUD/MARFRET/HAMBURG SUD/HAPAG-

NSCSA
P&O NEDLLOYD/HAPAG-LLOYD

FAMEX

ALY,SAL,SPE,CAG

42

2136

MED-NA

P&O NEDLLOYD/HAPAG-LLOYD/ZIM

GAMEX

CAG,SAL,GOA,BCN,

35

2165

MED-NA

UASC/HANJIN

MIX

ALY,SPE,FOS,BCN,VLC,GOA,GIT

77

11

2286

MED-NA

ZIM

ZCS

HFA,LIV,BCN

98

14

4623

MED-NA

Source: Ocean Shipping Consultants

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Table 4.10
North America Mediteranean Service Lines for 2010

Table 4.10: North America-Mediterranean Service Lines for 2010

Operator/grouping

Operation

Ports called

Freq. (days)

RV (days)

No. of ships

Average teu

Trade Lane

EVERGREEN UAM

UAM

VLC,GOA,BCN

98

14

5570

MED-NA

GRAND ALLIANCE

AEX

CAG

70

10

5712

MED-NA

HAPAG-LLOYD

MGX

CAG,LIV,GOA,FOS,BCN,VLC,

49

3298

MED-NA

HAPAG-LLOYD

MPS

LIV,GOA,FOS,BCN,VLC,CAG

12

72

2350

MED-NA

HAPAG-LLOYD/HANJIN

MCA/MC1

CAG,SAL,LIV,GOA,FOS,VLC

35

2144

MED-NA

MELFI LINES

MELFI

SAL,LIV,GOA,BCN,VLC,HLFX

12-13

38

1222

MED-NA

MSC

LOOP A

SPE,VLC,GIT,NAP

42

4409

MED-NA

MSC

LOOP B

NAP,SPE,BCN,VLC,GIT

42

4994

MED-NA

SPE,BCN,VLC

28

2710

MED-NA

NAP,SPE,VLC,GIT

56

3658

MED-NA

MSC
MSC

CANADA MOROCCO
EXPRESS
WEST MED
CALIFORNIA EXPRESS

MSC

CANADA EXPRESS

VLC

21

3295

MED-NA

MSC

TURKON

GEM,SAL

40

1155

MED-NA

MSC

ZIM ZCS

HFA,LIV,GOA

105

15

4900

MED-NA

LIV,PSD

21

84

1090

MED-NA

MXX,GIT,LIV,GOA,FOS

42

3021

MED-NA

PSD,SPE,GOA,BCN,VLC

63

3901

MED-NA

NSCSA
MAERSK LINE

MAERSK/CMA CGM
WEST MED/AMERIGO
EXPRESS

MAERSK LINE

UASC/HANJIN
MINA/IMU

Source: Ocean Shipping Consultants

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Table 4.11
North America-Mediterranean Service Lines for 2015

Table 4.11: North America-Mediterranean Service Lines for 2015

Operator/grouping

Operation

Ports called

Freq. (days)

RV (days)

No. of ships

Average teu

Trade Lane

CMA CGM

Amerigo Ex press

LIV, GOA, FOS, BCN, VLC, MXX

42

2876

MED-NA

Hapag-Lloy d

MGX

CAG, LIV, GOA, BCN, VLC

49

4897

MED-NA

Hapag-Lloy d

MCA

CAG, SAL, LIV, GOA, FOS, VLC

35

2552

MED-NA

Hapag-Lloy d/Hamburg-Sd

MPS/MCPS

LIV, GOA, FOS, BCN, VLC, CAG

77

11

4256

MED-NA

MSC

Canada Ex press

GIT, SPE, VLC

28

3793

MED-NA

GIT, CVV, SPE, VLC

70

10

4983

MED-NA

MSC

West Med California


Ex press

MSC

Med/US Loop A

SPE,VLC, GIT, NAP

42

5803

MED-NA

MSC

Med/US Loop B

SPE, BCN, VLC, GIT, NAP

49

6123

MED-NA

UASC/Hanjin

MINA/IMU

NYJ,VLC, SPE, GOA, FOS, BCN

77

11

4903

MED-NA

Zim

ZCA

HFA, LIV, GOA, BCN, VLC, LIV

49

4253

MED-NA

Source: Ocean Shipping Consultants

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The following graphs provide a summary of how the size of vessels has changed over time
on the main trade lanes. Figure Figure 4.9 illustrates the development of the size of vessels
deployed for all ports included in the above summary which are of interest to Livorno as
competing ports.

Figure 4.9: USEC & Far East Trade Services Calling at all Ports of Interest
This increase in vessel size mirrors the global position already highlighted, although it also
shows that the average size of vessels deployed even on the main trade lanes from/to the
Mediterranean lag behind the size of vessels deployed on north European trade lanes.
Figure Figure 4.10 illustrates the average size of vessels deployed on the Northern
Tyrrhenian Sea and which are the primary competition for Livorno ports local volumes.

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Figure 4.10: USEC & Far East Trade Services Calling at Livorno, Genoa and La
Spezia Ports
Although, illustrating the increase in tonnage deployed, there is seen to be a slight reduction
in vessel size noted for vessels that call in Liguria when compared with the rest of the sample
of services reviewed.

Figure 4.11: USEC & Far East Services Calling at Secondary Ports

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Figure Figure 4.11 illustrates the average size of vessels deployed on ports that are regarded
as secondary competition for the local Livorno market, but which will also compete for
transit volumes into north and central Italy as well as Germany, Austria and Switzerland.
The trend for the average size of these vessels deployed is also slightly higher than those
calling in Northern Tyrrhenian Sea ports.

Figure 4.12: USEC & Far East Trade Services Calling at Main Transhipment
Ports
Figure Figure 4.12 illustrates the average size of vessels deployed over time for the main
central Mediterranean transshipment hubs. Once again the average size of vessels is
generally bigger than those on the Northern Tyrrhenian Sea but a little less than the
secondary ports. This suggests that larger vessels are calling in Trieste, where there is
deep water, for transshipment as well as local and transit volumes, thereby increasing the
average size of vessels in this sector.
By way of comparison, the same exercise is done for the major Spanish gateway ports of
Barcelona and Valencia. Here the average size of vessels are greater than the Italian ports,
suggesting a higher demand, although in this instance demand is comprised of local, transit
and transshipment volumes, which is the model that Livorno should look to replicate.
Details are illustrated in Figure Figure 4.13.

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Figure 4.13: USEC & Far East Trade Services Calling at Barcelona and
Valencia Ports
The following conclusions can be drawn:
although shipping lines have been ordering bigger and bigger vessels, the largest vessels
have yet to be deployed on any Mediterranean services, with those available vessels being
deployed on north European services instead. However, the 16,600TEU MSC London
did call at La Spezia in February 2015 suggesting that it will be possible for larger vessels
to call at ports in the region, especially now that 19,000TEU+ vessels are on order;
in general, vessels calling at ports in the Northern Tyrrhenian Sea a slightly smaller than
the rest of the sample under review. This could well change with the improvement s to a
number of facilities on this coastline in the near future;
for Northern Tyrrhenian Sea ports, the size of Asian trade services has increased in
capacity by 120 per cent to 8,450TEU between 2005 and 2015. Similarly, on the US East
Coast trade, vessels have increased 89.2 per cent to 4,444TEU. This is representative of
the tonnage capacity increases experienced elsewhere in Italy;
gateway ports (such as Valencia and Barcelona), which are able to attract local, transit
and transshipment volumes require larger tonnage than ports that concentrate on either
local or transhipment volumes alone;
vessels that are currently calling at Livorno are feeder vessels, but there is potential to
attract services on secondary trade lanes or even main arterial trades once the port
improvements have been made.
Figure Figure 4.14 illustrates the size of vessels deployed in Livorno over the last two years
and further illustrates that Livorno is currently used only as a feeder destination port.
Vessels between 2,000-5,000TEU are on the increase suggesting an increase in the size of
feeders used, but also an increase in short-sea intra-Med services.

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Figure 4.14: Comparative Vessel Sizes Calling at Livorno in 2013-2014


A review of owned (Maersk, MSC and CMA-CGM) and major third party feeder services
(UFS, MFI, X-Press Container Services) confirms that there has been an increase in the
average size of feeder vessel deployed between 2005 and 2015. Feeder vessels are generally
on short-term (3-12 months) charter, so it is relatively easy to flex the capacity of a
service. Figure 4.15 illustrates that the average feeder has increased 120 per cent between
2005 and 2015, to 1,778TEU capacity.

Figure 4.15: Vessel Capacity North Europe, Intra-Med Trade and Feeder
Services

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4.6

MEDITERRANEAN STRATEGIES OF MAJOR CONTAINER SHIPPING


LINES
A number of transshipment ports have been established in the Mediterranean and the Black
Sea over the last twenty years or more, with more competition likely as larger vessels are
brought onto the main arterial trades. These vessels require deeper water and high capacity
cranes, supported by more container handling equipment and a skilled work force in order
for shipping lines to be able to turn the vessels around quickly, thereby ensuring that they
can continue to maximise the economies of scale. The expense of these vessels will also
mean that shipping lines will seek to minimise the number of direct port calls made, thereby
increasing their reliance on feeder services and reliable transshipment hubs.
The ideal transshipment hub would also be able to offer a reasonable proportion of local
cargo, so that the port is not entirely reliant on transshipment volumes. Ports such as
Algeciras, Marsaxlokk, Gioia Tauro, Taranto and Cagliari are almost entirely reliant on
transshipment volumes, with their respective volume throughput including at least 90 per
cent of transshipment volumes.
With new transshipment hubs being introduced into the Black Sea region recently (e.g.,
Constanta and Ambarli), it is also feasible that shipping lines could also look to add an
Adriatic port as part of their portfolio of transshipment hubs. However, shipping lines
generally have transshipment hubs in the at least two out of three of the following regions:
West Mediterranean;
Central Mediterranean;
East Mediterranean/Black Sea.
It is apparent that a transshipment location in the Northern Tyrrhenian Sea or the Adriatic
could be competitive with Taranto, Cagliari, Gioia Tauro and Marsaxlokk, although shipping
lines may not want to add yet another hub to an already crowded portfolio. The current
transshipment hubs of choice for the main shipping lines are highlighted in Table Table 4.12.
Table 4.12

4.12:Hub
Major
Lines
Major LinesTable
Transshipment
Strategies

Transshipment Hub Strategies

Shipping Line

West Med

Central Med

East Med/Black Sea

Maersk Line

Algeciras, Tanger-Med

Gioia Tauro

Port Said East, Constantza

MSC

Valencia

Gioia Tauro

Piraeus, Ambarli

CMA CGM

Tanger-Med

Marsax lokk

Damietta, Beirut

Ev ergreen

Taranto

Port Said, Damietta, Ambarli

Grand Alliance

Gioia Tauro, Cagliari

Damietta

New World Alliance

Gioia Tauro

Damietta

CKYH Alliance

Algeciras

China Shipping

Port Said
Damietta

Source: Ocean Shipping Consultants

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The review of the strategies of the major shipping lines in the Mediterranean will concentrate
on the top five liner shipping companies, namely Maersk Line, MSC, CMA-CGM,
Evergreen and Hapag-Lloyd, these being a representative sample of all the main Alliance
groups.
Maersk Line
Maersk is the largest international container shipping line in terms of container shipping
capacity (i.e. a combination of owned and chartered-in vessels).
The current fleet of Maersk Line at July 2014 comprised 585 containerships with an overall
capacity of 2.8m TEU. Out of this fleet, 329 ships (56 per cent of the fleet) are chartered-in.
This gives Maersk Line plenty of flexibility to either increase or decrease the size of vessels
deployed, or even to pull out of non-profitable services. However, other lines such MSC and
CMA-CGM operate with a higher ratio of chartered tonnage, 67.6 per cent and 77.9 per cent
respectively.

Figure 4.16: Maersk Line Fleet Development, 2007-2014 (000 TEUs)


The following points should be noted:
with a current fleet capacity of 2.8m TEU, Maersk Line is some 10.6 per cent bigger than
its largest competitor, MSC, operating 85 more vessels. However, the difference has
been shrinking during the last decade;
the capacity of the fleet has increased steadily year on year with an expansion of 47 per
cent recorded (in TEU terms) between the end of 2007 and July 2014;
like the other two major shipping lines, Maersks fleet is heavily biased in favour of
larger vessels and this is also reflected in the companys orderbook. This will also mean
that Maersk Line has been, and will continue to be, looking for ports with deeper water in
the future in order to be able to handle the larger capacity vessels;
the sheer scale that Maersk Line is able to operate with is its main advantage.
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A total of 14 additional containerships are now on order, all of which are 18,270 TEU
capacity vessels. Delivery dates are: five units during 2014 (three delivered in Q1), six units
during 2015, and the balance during 2016. The emphasis is still on the largest classes of
vessels and now on increasing the average size of deployed tonnage, which are likely to be
utilised in the Asia-Europe trades, resulting in large vessels cascading onto secondary trades.
In terms of financial position, and according to H1 2014 results, Maersk remains the most
profitable container carrier, with an operating profit of US$ 1,001 million. The ownership of
APM Terminals, giving preferential tariffs to Maersk Line, plus a sheer use of the scale
economies, could be one of the reasons for the financial success of the line.
Regional Mediterranean Strategy
Maersk Line used to have their transshipment hub operations centred in Algeciras, Gioia
Tauro and Port Said East. With larger ship deployment, more and more Maersk Line and
2M Alliance services will offer transshipment options. Although with MSC involvement
hubs are also likely to involve Valencia and Piraeus, and may also look at other new
alternatives such as Tanger-Med where cheaper vessel handling is extremely attractive if it
can be coupled with a productive facility.
Italian Strategy
Maersk Line currently operates a significant number of owned Mediterranean feeder vessels
for the more mature markets, but also continue to utilise space on third party feeder vessels
if they dont have sufficient owned volumes. In the future, there is also likely to be further
cooperation with MSC on feeder services, where the deployment of jointly owned tonnage
can create the required economies of scale to make services attractive and almost risk free if
vessels are chartered for less than 12 months at a time.
With the introduction of larger tonnage onto the Asia-Europe strings, it remains most
likely that vessels currently deployed on this main arterial service will be cascaded to
secondary trades, such as the Transpacific Trade. Maersk already deploy a series of
owned feeder vessels in the Mediterranean and the likelihood is that both the size and
frequency of these feeder services will increase as soon as larger vessels have been
introduced onto the mainline services, which are likely to coincide with the widening of
the Panama Canal and the cascade of services to this part of the world. Maersks
volumes and service structures will be sufficient to justify at least two major hub port
investments in the Mediterranean region, although there currently doesnt appear to be
a need to move the central Mediterranean hub away from Gioia Tauro.
It should also be noted that Maersks terminal operating arm, APMT, also has an
interest in developing the Vado Ligure site, which is due to be operational by 2018 and
it is highly likely that Maersk Line will utilise the facility for some services, if not all.
Mediterranean Shipping Company (MSC)
MSC is the second largest international container shipping line in terms of container
shipping capacity. Of the 500 containerships in the current fleet (2.5m TEU capacity), 68
per cent of vessels have been chartered-in and
32 per cent are owned. This also gives MSC plenty of flexibility to either increase or
decrease the size of vessels deployed, or even to pull out of non-profitable services.

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Figure 4.17: MSCs Fleet Development, 2007-2014 (000TEUs)


The following points should be noted:
the capacity of the fleet has increased very rapidly with an expansion of 106 per cent
recorded (in TEU terms) between the end of 2007and July 2014;
like Maersk Line, MSCs fleet is heavily biased in favour of larger vessels and this is also
reflected in the companys orderbook. This will also mean that MSC will be focused on
deepwater ports and a transshipment-intensive strategy.
After an impressive fleet growth in the last seven years, MSC has ceased orders at the time
of writing. It is clear that MSC are relatively content with the structure of their current fleet
and are continuing to look to take full advantage of the economies of scale and to maintain,
their market share particularly on the main arterial trades. In order to fill these vessels it will
be necessary to develop a significantly expanded transshipment presence in all the major
markets, but as part of the 2M Alliance will be able to maximise the efficiencies of the
tonnage deployed by sharing space with Maersk Line.
Regional Mediterranean Strategy
This line has expanded very rapidly at the global level and their role in the Mediterranean
has been a part of this strategy. MSCs use of Gioia Tauro in the central Mediterranean is a
good fit with its 2M Alliance partner doing likewise. However, MSCs call by the
16,600TEU MSC London at La Spezia gives hope for other Italian terminals that have the
capability of handling vessels of at least 12,500-16,600TEU., although these are unlikely to
be transshipment calls.
Italian Strategy
As part of recent cooperation with Maersk Line, MSC have a number of slot swap deals with
Maersk, whereby MSC take some slots on Maersks services in the Mediterranean and vice
versa. This form of exchange is likely to become more common place between the two

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partner lines, so that they can take advantages of the scale economies even on feeder services
as well as mainline services.
In the Mediterranean, MSCs strategy is driven by their overall policy regarding the
size of vessels deployed on mainline services. Like all the major lines, MSC will order
more and bigger mainline vessels, which will result in the cascading of what are
currently deemed to be large vessels onto secondary trades. Like Maersk, this will
result in the need for more and bigger feeders in the Mediterranean. MSC currently
operates with some owned and some third party tonnage in the region, with the
likelihood being that they will look to increase both the size and number of owned
feeder vessels deployed in the future, as well as taking advantage of any doubledipping opportunities that may appear on newly configured services. The possibility
of joint 2M or Ocean Three feeders in the Mediterranean should also not be
discounted.
CMA CGM
CMA CGMs current fleet (July 2014) comprises 431 containerships and has an overall
capacity of 1.6m TEU. CMA CGM is the third largest international container shipping line
in terms of container shipping capacity (i.e. a combination of owned and chartered-in
vessels). Of the 431 containerships in the current fleet, 77.9 per cent of vessels have been
chartered-in and 22.1 per cent are owned. This gives CMA CGM plenty of flexibility to
either increase or decrease the size of vessels deployed, or even to pull out of non-profitable
services.
The following points should be noted:
the capacity of the fleet has increased very rapidly with an expansion of 286 per cent
recorded (in TEU terms) between 2005 and July 2014;
the total number of vessels (owned and chartered) remains stable at a little over 400 units,
meaning that the increase in capacity has been led by increase in average vessel size;
CMA CGMs fleet is heavily biased in favour of larger vessels and this is also reflected in
the companys orderbook.
A total of only three additional containerships (16,000TEU) are now on order. This
represents significantly less ambition, probably driven by the difficult financial situation in
the last years, and also because CMA CGM has recognised that it was heavily exposed by
virtue of its existing fleet and orderbook commitments to supply/demand balances on the
major east-west arterial trades and it is on these trades that market over-capacity is likely to
be most acute. CMA CGM is reducing their exposure to this, by reducing the number of
newbuilds they have on order in 2014. Their exposure will be further reduced with the
planned cooperation with OOCL and UASC, which will assist CMA CGM fill their ULCSs
on main arterial trades.
CMA CGM has reported an operating profit of US$ 411.5 million in the third quarter of
2014 a very healthy return for a line that has suffered some financial concerns in recent
years, but which now appears to have turned the corner.
The Yildirim Group invested $500m in CMA CGM by acquiring five year ORA equity
notes, which gave them access to 20 per cent of CMA CGMs share capital. In return, the
agreement enables CMA CGM to strengthen

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its equity base and secure the financing of its investment plan (the purchase of new vessels).
The issue has sustainably strengthened the Groups equity funds, while providing additional
funds to support expansion.

Figure 4.18: CMA-CGMs Fleet Developments, 2005-2014 (000TEUs)


Regional Mediterranean Strategy
At present, the line has a major transhipment hub port concentration at Marsaxlokk in the
central Mediterranean and Tanger Med in the West Mediterranean, but with a new alliance
introducing partners (UASC and China Shipping) with no real preference for any hubs in the
central Mediterranean, it would seem likely that the Ocean Three Alliance will look to
consider its hub port alternatives, which could provide an opportunity for a new gateway
hub.
Italian Strategy
Aside from some calls at Gioia Tauro on mainline vessels in the past, CMA-CGM has
usually served the rest of Italy Northern Tyrrhenian Sea and Tyrrhenian Sea with third
party feeder vessels. Additional CSCL and UASC volumes could make it more attractive to
form a joint feeder service for some of these areas.
In the Mediterranean, CMA CGM has hitherto been keen to control their own destiny
by operating a number of owned feeder vessels. Once the requirement for more and
bigger feeder vessels becomes evident as a result of the other two partner lines gaining
some critical mass, CMA CGM will have a tough decision to make as to whether to
combine volumes currently being shipped on third party feeder services such as those
deployed by X-Press Container Services or UFS.
On the one hand, their usual global policy has been to grow the size and frequency of
owned tonnage, but with limited funds currently available, it is possible that CMA
CGM will look instead to third party feeder operators to provide them with the
necessary additional feeder coverage.

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Alternatively, the new alliance with two other large shipping lines (UASC and CSCL)
could yet set some further collaboration between lines in terms of joint feeders in the
Mediterranean markets.
Evergreen
Evergreen has formally joined the CKYH Alliance on Asia-Europe trades, where it will
initially contribute 17 vessels, with COSCO providing 15, Hanjin 13, Yang Ming 9 and KLine 8.
The current fleet (July 2014) comprises 191 containerships (owned and chartered) and has an
overall capacity of 0.90m TEU.

Figure 4.19: Evergreens Fleet Development, 2007-2014 (000 TEUs)


Evergreen is the fourth ranked container shipping line in terms of container shipping
capacity (i.e. a combination of owned and chartered-in vessels). Of the 191 containerships in
the current fleet, 44.5 per cent of vessels have been chartered-in and 55.5 per cent are owned.
This is a similar ratio to that employed by Maersk Line and gives Evergreen plenty of
flexibility to either increase or decrease the size of vessels deployed.
The following points should be noted:
the capacity of the fleet has increased 46 per cent since 2007, with a one-off decline of
10.2 per cent noted in 2009 during the economic slowdown;
unlike other major shipping lines, Evergreen have hitherto been keen to distance
themselves from the race for ever larger tonnage, preferring instead to concentrate on
operating vessels between 6-8,000TEU capacity. That is until recently when they have
ordered some 14,400TEU size tonnage. A total of four vessels are now under order, all of
them of 14,400 TEU capacity, to be delivered between 2014 and 2015;

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at the beginning of February 2015, Evergreen announced an order of 11 x 18,000TEU


vessels, for delivery from early 2018 to 2019;
details of Evergreens change of strategy, is further illustrated in Figure 4.20.

Figure 4.20: Evergreens Change of Heart on The Capacity of


Vessels Deployed
Regional Mediterranean Strategy
In H1 2014, Evergreen reported an operating loss of US$50 million, which the company
hopes to turn around by taking advantage of economies of scale and through shared space on
alliance vessels.
Evergreens primary regional commitment is at Taranto, although volumes have been
declining steadily since 2008. With the added volumes that could be provided by other
members of the CKYHE Alliance, coupled with the change of heart in terms of the size of
vessels to order, additional owned feeder vessels are a distinct possibility in the future,
although it remains uncertain as to whether Taranto will remain their hub of choice.
Italian Strategy
There is no evidence of too many direct calls in Italy as yet, but with additional alliance
volumes and a need for a new, reliable gateway hub, there are a number of distinct
possibilities on the Northern Tyrrhenian Sea that could be of interest.
In the Mediterranean, the alliance with CKYHE could also prove useful. Evergreen
currently utilises a number of owned feeder or short-sea services and with the
introduction of larger tonnage expected on the secondary mainline services, in the
wider region, the need to deploy bigger feeder vessels is also highly likely. With some
additional cooperation with members of the CKYHE Alliance, to help to fill the feeder
vessels, there is more likelihood that Evergreen will agree to increase their feeder

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tonnage rather than use third party feeder services to take any overflow from the
feeder services they currently deploy.
Hapag-Lloyd
German carrier Hapag-Lloyd and Chilean operator CSAV have confirmed their intention to
merge, in what will create the fourth largest liner company in terms of capacity. Following
the integration, the carrier will operate a fleet of around 194 ships of a combined 1.0m TEU,
and transport around 7.5m TEU a year. In H1 2014 Hapag-Lloyd reported an operating loss
of US$234 million, which the company hopes to turn around through acquisitions and the
use of combined alliance volumes to maximize the scale economies of the G6 vessels
deployed.
Hapag Lloyds current fleet (July 2014) comprises 146 containerships and has an overall
capacity of 0.74m TEU. Details in the fleet development are shown in Figure Figure 4.21.

Figure 4.21: Hapag-Lloyds Fleet Development, 2007-2014 (000TEUs)


The total fleet represents an increase of 50.0 per cent in capacity terms on the end 2007
figures, with the fleet decreasing by four vessels;
Of the total deployed fleet, Hapag-Lloyd has 45.9 per cent of owned vessels and 54.1 per
cent chartered-in. As observed in the previous figure, the percentage of chartered vessels
has been increasing since 2009.
Hapag-Lloyd ordered only two vessels for delivery in 2014, each with 13,200 TEU capacity.

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Regional Mediterranean Strategy


Hapag-Lloyd have recently merged with CSA, but their respective liner networks are largely
complementary, as CSAV is focused on the Latin America trades after it gave up most of its
East-West and North-South network in 2011. As a member of the Grand Alliance HapagLloyd has a primary central Mediterranean hub interest at Gioia Tauro, but with the 2M
Alliance likely to want to use MCT and with five other partner lines to think about in the G6
Alliance, it remains uncertain where Hapag-Lloyd and its G6 partners will concentrate their
Mediterranean hub activities, although it remains highly likely that two or three hub ports
will be utilised and they will also look to avoid conflict with either the 2M Alliance or the
Ocean Three Alliance, leaving the way open for other alternatives that can provide some
local and transit volumes as well as provide the necessary deep water to handle larger ships.
Ports on the Northern Tyrrhenian Sea are set to compete for this major business.
Italian Strategy
All G6 member lines have concentrated on offering their feeder services via third party
operators. This may change if an agreement can be reached between the six members as to
where to transship their cargo from.
In the past, as member of the Grand Alliance, Hapag-Lloyd were very keen to combine
volumes with member lines and it would seem even more likely, now that they have five
partners, that they will be keen to do so again in an effort to take advantage of the
economies of scale by operating slightly larger feeder vessels.

4.7

IMPACT OF ULTRA-LARGE SHIPPING LINE ALLIANCES


Although shipping lines want to operate bigger vessels in order to be able to take advantage
of the economies of scale and ship units with a lower unit cost, the actual total costs are more
expensive and any savings therefore rely on the shipping lines being able to fill the available
space.
However, the current global demand suggests that there is not yet the demand required for
lines to be able to fully utilise the new bigger vessels cost-effectively. Shipping lines have
therefore developed a number of strategies designed to ensure that their main aim, i.e. filling
their ships, is achieved. The main strategies are as follows:
shipping lines that are having financial difficulties either look to merge with other lines,
e.g. the recent merger of Hapag-Lloyd and CSAV, or look to concentrate on core
markets, e.g. Zim Lines decision to exit the Asia-Europe trade and concentrate on
secondary trades such as the Caribbean;
the use of formal alliance agreements, or Vessel Share Agreements and less formal slot
swap arrangements are designed by lines to allow like-minded lines to have access to
space on their vessels, in order to increase the level of utilisation on these vessels, thereby
reducing the slot costs. Typically lines reciprocate these arrangements with lines of
similar magnitude and a similar marketing mind set. Smaller lines tend only to be used to
fill smaller volumes of cargo, which can usually be arranged with slot purchases or slot
swaps.

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Marriages of convenience such as the aborted P3 Alliance, the new 2M Alliance, The
Ocean Three Alliance, G6 Alliance and the recently expanded CKYHE Alliance, where
lines that would normally not cooperate are entering into more formal alliances, are
examples of the lengths that lines are prepared to go to in order to ensure that they are
able to fill their ULCSs and take full advantage of the economies of scale;
lines maintain their marketing differences by offering add on services to differentiate
themselves from other carriers despite using the same mainline vessels. These can take
the form of offers of logistical assistance, feeder services or intermodal rail/road
opportunities etc.;
reports suggest that the total vessel capacity absorbed by slow and extra-slow steaming
has reached about seven per cent of the total fleet. Vessels have been asked to operate at
speeds as low as 14 knots on certain legs on the main arterial trades in order to save fuel
costs, whilst also absorbing additional tonnage and mitigating the additional cost of these
newbuilds.
However, reports since November 2014 are now suggesting that fuel costs are on the
decrease, which is likely to see a reverse in the slow-steaming trend, because the
economic benefits of doing so are being eroded. This will depend a great deal on the
percentage of vessels owned/chartered by each individual line. As well as being a useful
tool to save fuel costs, it has often been thought that the addition of more tonnage to
certain service rotations has suited some shipping lines that have a surplus
of available owned capacity to slow-steam. For them, this news will not provide the
same opportunity as for the lines that have chartered in additional tonnage to allow slowsteaming, but that can now off-hire these vessels and maintain rotations at a more
reasonable speed, where fewer vessels are required;
the final option that shipping lines have to be able to ensure that they are able to
maximise the utilisation levels of the vessels they deploy is to put some vessels in lay-up.
This parking of vessels is designed to reduce the money lost on vessels that are not
needed, but is only a short-term fix.
As already discussed, scale economies are only available when the vessel is well utilised
otherwise the costs are very high and hence the desire by like-minded shipping lines to
cooperate in alliances and share some of the fixed costs. The culmination of this desire for
cooperation was the recently aborted P3 Alliance, which was to have been between the three
main global container shipping lines.
It is also important to recognise that the Grand Alliance and the New World Alliance have
already been operating as The G6 Alliance since March 2012 on Asia-Europe trades with a
combined share of 29.5 per cent and on the Transpacific trade since May 2013 with a
combined share of 32 per cent.
Further consolidation is also imminent with the CKYHE Alliance having recently embraced
Evergreen and China Shipping and UASC set to join forces with CMA-CGM in the
proposed Ocean Three Alliance (CMA-CGM, CSCL and UASC), together with Hamburg
Sud taking slots on some services. This would effectively reduce the options on the AsiaEurope services to just four alliances. Other examples of cooperation are as follows:
the Grand Alliance (Hapag-Lloyd, OOCL and NYK Line) and the New World Alliance
(APL, Hyundai Merchant Marine and Mitsui OSK Line) agreed to merge and form The
G6 Alliance with effect from December 2011;

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as a result of tactical moves by nine of the major shipping lines, the remaining carriers on
the Asia-Europe trade have also begun to look at further cooperation. The carriers in the
CKYH alliance already have individual slot arrangements, involving Hanjin with UASC,
Yang Ming with China Shipping and COSCO with PIL-Wan Hai, but with effect from
April 2014, Evergreen have extended the alliance to form the new CKYHE alliance.
The major change that has been noted in recent months has been the announcement that the
proposed new operational alliance between the three largest global carriers Maersk Line,
Mediterranean Shipping Co. and CMA CGM for their Asia-Europe services (the so-called
P3 Alliance) did not receive the formal ratification from the Chinese Ministry of
Commerce. The proposed Alliance was driven by concerns on the balance of supply and
demand on the Asia-Europe trades, where severe over-capacity is currently noted and will
continue to worsen, and which still exists now that the P3 agreement has been banned by the
Chinese.
Instead, three weeks after the P3 announcement on 10th July, Maersk Line and MSC, took
the decisive step of announcing a further co-operation agreement to replace the previous P3
Alliance, called the 2M Alliance. The new ten-year VSA (although if like the P3
agreement, this is also likely to include a two year drop out clause) will supersede the P3
Alliance and is expected to start early 2015 (pending regulatory approval).
The impact was expected to be significant on CMA CGM, since the termination of the P3
service agreements left CMA CGM with a number of service gaps. However, as suspected,
CMA-CGM were extremely quick in identifying China Shipping and UASC as the most
obvious alternative partners and have subsequently announced the formation of the Ocean
Three Alliance, designed to compete with the 2M Alliance particularly on the main trade
lanes.
This change of Alliance structure will have a number of potential implications for various
ports and terminals, because each of the former P3 member lines have existing or planned
equity involvements in container terminals, which is where they are likely to focus their
ports of call where possible.
This way of consolidation in the container shipping sector is a means of pooling vessel
capacity by two or more carriers. This is done by either exchanging slot capacity or by
pooling vessels. Consortia have vessel sharing agreements on certain trades and usually also
jointly procure port and terminal services. Consortia serve to maximize the efficiency of
resources and optimize service levels (i.e. frequency, transit times). Due to strategic or
commercial changes and to mergers and acquisitions, consortia have tended to change on a
regular basis.
2M and Ocean Three Alliance Services
2M
On 16th July 2014, MSC and Maersk Line agreed to form a vessel sharing agreement called
2M, operating with a total capacity of 2.1m TEU, with the majority of the ULCSs deployed
on the East-West services. With a surplus of vessels of most size types, 2M will be able to
offer improved schedule integrity and more weekly departures by adding additional vessels
to each service and as a result of building in more slack in each pro-forma schedule giving
sufficient buffer to allow for both slow steaming and recovery time from any unexpected
delays to ensure that vessels are always on time. It should also be recognised that as well as

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offering combined services, MSC and Maersk Line will also be operating their own services
on some trade lanes, in order to ensure that some of their niche markets are also covered.
The combined services include the following services calling at Mediterranean ports:
From Asia:
Lion service Middle East and China to north Europe also calls at Tanger-Med and Gioia
Tauro;
Dragon service Beirut, Gioia Tauro, La Spezia, Genoa, Fos, Barcelona and Valencia;
Jade service Port Said, Marsaxlokk, Valencia, Barcelona and La Spezia;
Phoenix service Pot Said, Koper, Trieste and Rijeka;
Tiger service Port Said, Piraeus, Ambarli and Izmit;
Great Sea Izmir, Novorossiysk, Odessa, Ilyichevsk, Constanta, Ambarli and Port Said.
From Transatlantic:
Medusec service Algeciras, Valencia, Gioia Tauro, Naples, Livorno, La Spezia, Genoa
and Sines;
Medgulf service Gioia Tauro, Naples, La Spezia, Barcelona, Valencia, Algeciras and
Sines.
Of these services there are a number that could call at Livorno instead of La Spezia and/or
Genoa or Fos when port developments are completed in Livorno.
Ocean Three
On 9th September 2014 CMA CGM, CSCL and UASC announced the creation of Ocean
Three with the signing of a combination of vessel sharing, slot exchange and slot charter
agreements. Their new combined services will enable increased geographic coverage and
optimised calls with competitive transit times to all major Asian, European and North
American ports.
The agreements relate to the following service routes: Asia-Europe, Asia-Mediterranean,
Transpacific and Asia United States East Coast and include the following calling at
Mediterranean ports:
FAL1 Service: Far East to North Europe through Malta hub (direct call) to provide
effective feeder services to North Africa, Adriatic and Mediterranean;
MEX1 Service: Far East/Middle East to Malta, Valencia, Barcelona, Fos-Sur Mer;
shortest transit time to Spain and France and feedering services to North Africa through
Malta;
MEX2 Service: Far East/Middle East to Port Said, La Spezia, Genoa, Fos-Sur-Mer,
Valencia; shortest transit time to Italy (Ningbo-Genoa 28days);
PHOEX Service: Far East to Malta, Koper, Trieste, Rijeka, Venice; the only direct call to
Venice from Asia;
AEGEX Service: Far East to Piraeus, La Spezia, Genoa, Barcelona, Valencia; linking
Greece to Spain and Italy.
Of these services, there is potential for Livorno to attract services currently calling at La
Spezia and Genoa , namely MEX2 and AEGEX.

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Potential agreements regarding Translantic trade services are still under discussion.
It should be noted that eighteen of the top twenty international container lines have
committed to the ULCS strategy (the exceptions are Zim Line and Wan Hai) and
during the market slowdown none of these orders were cancelled, only deferred. This
is further evidence that the majority of lines are committed to this strategy for the longterm.
As at October 2014 (or Q4 2014), the total number of vessels on order stood at 469 with
a total tonnage of 3.49mTEU, 47 per cent of which can be accounted for by orders of
vessels over 12,000 TEU. Of these new orders, 21 vessels with capacity >8,000TEU
were delivered during 2014 (October-December); 131 during 2015; 65 during 2015 and
23 from 2017 onwards.
These developments will be manifested in the rapid introduction of much larger vessels
into secondary services. The role of these vessels will be as mother ships offering
transshipment hub port calls on the major arterial trades. In addition, regional ports
will increasingly be used to link distinct deepsea services for markets outside the
immediate region. The driving force of these developments will be the introduction of
larger vessels and the lines need to fill them.
Impact on The Port of Livorno
For Livorno, this means that the majority of mainline services will be controlled by
four main Alliance groups, which will increasingly be calling at fewer ports on their
main haul services in order to save money. This will have the added result of
increasing the amount of transshipment units handled at what few ports the main
Alliance groups call at. Of the four main Alliance groups, both 2M and Ocean Three
Alliance have their own terminal interests, so it is more likely (although not impossible)
that Livorno will only have an opportunity to attract vessels from the CKYHE or G6
Alliance, but will be able to offer improved port facilities at a port where the major
shipping lines, such as Maersk, MSC and CMA-CGM, are not having any priority
berthing advantages, which in itself is a very attractive selling point.
However, that said, both the 2M services and the Ocean Three Alliance services have
recently announced a number of vessel calls from Asia and the US into ports on the
Northern Tyrrhenian Sea, Tyrrhenian Sea and the Adriatic, all of which could be
potential calls for the newly developed Livorno facility and it is important that Livorno
does not ignore this opportunity entirely.
With the various planned port developments at Livorno, the possibility of being able to
compete with Genoa, La Spezia, Trieste, Gioia Tauro, Marsaxlokk etc. remains good
and the port has a better than average chance of attracting services operated by either
the CKYHE or G6 Alliances, whether mainline to Asia or US East Coast or feeder
vessels. There also remain some lines that are not yet aligned to main Alliances (such
as Zim Line or PIL-Wan Hai) and their volumes also offer a further opportunity for
Livorno.

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LIVORNOS COMPETITIVE POSITION

5.1

INTRODUCTION
The competitive position of any port is the result of its physical capabilities, location and the
built-up costs versus alternative port facilities. This Section examines the physical attributes
of the facilities, plus the number of gantry cranes in operation and specifically the depth of
water available. Details of hinterland links are shown in Section VI and a full Built-Up Cost
Analysis provided in Section VII.
The primary purpose of this Section is to assess the competitive position of the Port of
Livorno against a series of ports where the primary focus could be either local/transit port
volumes or transshipment volumes. It is felt that Livornos primary competition falls into
the following categories:
other ports on the Northern Tyrrhenian Sea, i.e. La Spezia, Genoa (V.T.E. and SECH),
and Marseille-Fos;
secondary competition on the Tyrhennian Sea, including Naples, Salerno and
Civitavecchia;
other ports on the Adriatic Sea, i.e. Trieste, Venice, Ancona and Ravenna;
central Mediterranean transshipment hubs such as Gioia Tauro, Cagliari, Taranto and
Marsaxlokk;
gateway terminals such as Barcelona and Valencia.
The review will assess the following aspects for each of these terminal facilities and be
structured as follows:
current terminal facilities;
future planned developments;
productivity;
comparative container handling costs;
regional capacity developments, 2014-2025;
SWOT Analysis.

5.2

CURRENT TERMINAL
DEVELOPMENTS

FACILITIES

AND

PLANNED

TERMINAL

The following analysis provides a review of the current terminal facilities at the port of
Livorno and its main competitors as well as with details of planned and confirmed terminal
developments by region.
Northern Tyrrhenian Sea
TableTable 5.1 provides details of the main existing port terminal facilities in the Northern
Tyrrhenian Sea, together with the two new planned facilities at Vado Ligure and The Europa
Platform (The subject of this Study). A map of the ports included in this sub-Section,
namely Livorno, Genoa, La Spezia, Savona and Marseille are illustrated in Figure 5.1.

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5.1:
Terminal
Facilities
of Livorno,
Genoa,
Table 5.1Table
Terminal
Facilities
of Livorno,
Genoa, La Spezia
and Marseille
Ports
Port

Area

Quay Length

Berth Depth

Capacity

(ha)

(metres)

(metres)

(000s TEU/y ear) Quay Cranes P

PP

SPP

42.0

1,450

16.0

1,500

11

Genoa/Savona Vado Ligure

21.0

700

17.0

900

Livorno

Darsena Toscana

38.4

1,430

11.8

900

Lorenzini

8.92

540

7.90-13

170

4 mobile

Commerciale

16

760

LTM

7.89

1,300

Livorno

Terminal

La Spezia and Marseille Ports

Europa Platform

Cranes

Terminal Porto
2

Sintermar
Genoa

3 /+1 mobile

20.6 + 2.6 by
SECH

end of y ear

526

14.5

20.6

1,600

11/12 draft

500

Multipurpose
San Giorgio

4 mobile

10/12.5
Messina

25.3

1,687

backdrop

up to 11m
Genoa Metal

10

925

Rebora

12

1,056

V.T.E.

110
28.6 internal +

1,400

15

1,500

LSCT

5.20 ex ternal

1543

14

1,200

Terminal del Golfo 3.120 ex ternal

337

8-12 draft

220

2XL1

231

15

2XL2

231

15

2XL3

228

15

2XL4

162

15

925

max draft 11.40 9.6

La Spezia

backdrop

4.25 port area +


Marseille-Fos

10+2 mobile
1 STS + 2
mobile

Terminal de
Mediterranee
Seay ard 2XL
Brule-Tabac berth
Med
Europe/Mourepiane 33

p = panamax ; pp = post panamax ; spp = super post panamax


Source: Ocean Shipping Consultants

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Figure 5.1:Map of Ports on the Northern Tyrrhenian Sea and Other Primary
Competition for Livorno
Livorno
Darsena Toscana is by far the largest facility in the port of Livorno with a berth length of
some 1,430m, nine quay cranes and capacity of 0.9m TEU. The main restriction is the
limited depth of water available. With only 11.8m, the terminal can only hope to handle
vessels of <3,000TEU, which is why there is a need for further developments at the port
facility. Without deepening the berth, Livorno will lose cargo to competing ports in the
Northern Tyrrhenian Sea who are readying themselves to be able to handle ULCSs. Section
IX provides a gap analysis to show what will happen to Livorno volumes if no action is
taken to improve the facility.
In January 2015 before the return of the Israeli shipping company Zim Line and UASC,
there were further positive signals from the terminal Livorno DTT, which increased from an
average of 19-20,000 monthly moves to 28-30,000 monthly moves. DTT are also
concluding an important deal with Grimaldi and have recently exceeded 0.5m TEU/annum.
The combined additional volumes of Zim Line and UASC, coupled with new development
plans in the port could see a big increase in port volumes in the coming year.
A new deepwater container facility, The Europa Platform (which is the subject of this
analysis) is being designed to be operational in 2019 (although full capacity of 1.5m
TEU/annum is unlikely to be ready until 2021) and is expected to consist of the following
salient features, designed to attract the largest container vessels to the port:

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one main berth of 900m length with the possibility of extending a further 220m (latter
will require dredging from 5.0m to at least 16.0m) and a feeder berth of 550m;
depth alongside of 16.0m at main berth and 13.0m at feeder berth;
approach depth of 15.0m to be dredged to 17.0m and a turning circle of 600m diameter
and 16.0m depth;
initial plan for nine STS gantry cranes are to be provided by the terminal operator,
although there is potential for this to be increased to eleven to improve terminal
efficiencies;
terminal area of 42ha adjacent to the main berth, plus the possibility of a further 30ha of
land which is currently not paved;
further possibilities to extend berth parallel to main berth although this will necessitate
moving the existing oil terminal and further dredging.
The order of the works at Livornos Europa Platform is as follows:
1. consolidate dredging material on platform (started in 2014/5);
2. remove the existing breakwater to be able to provide proposed turning circle free of
obstructions;
3. find private investor and operator in 2015 launch private finance tender in April 2015;
4. seek agreement to build main pier and feeder pier from council of public work and
Ministry of Environment if successful expect to start work in 2019;
5. private operator to provide further investment for land and shore-side equipment as well
as for the provision of water, electricity, terminal buildings etc.

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Figure 5.2: Port of Livorno (Europa Platform)

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La Spezia
The Italian of La Spezia announced a ten per cent growth in cargo moved by rail in 2014,
raising the proportion of traffic by rail, mostly in containers, to 35 per cent. This suggests
that La Spezia is keen to develop its reach for transit cargoes from La Spezia.
In January 2015, an additional two STS gantry cranes designed for LSCT and to reach 23
rows wide has been ordered and are likely to be delivered in the middle of 2015. Also, at the
beginning of the year in February 2015, LSCT handled the MSC London at a nominal
capacity of 16,600TEU, it is the largest the port has ever handled and a further sign that
LSCT are looking to compete for major trade lanes and major shipping lines. LSCTs depth
of 14m alongside will have to improve if they are to be able to regularly handle vessels of
this size.
Contship Italias La Spezia Container Terminals (LSCT) acquisition of Speter S.p.A, was
completed in January 2015, as is the integration of the organisation, systems and processes.
The terminal has expanded services to include short sea trades linking Italy and North
Africa, handling containers, general cargo and bulk cargoes.

Figure 5.3: La Spezia Container Terminal


Genoa
The Port of Genoa is comprised of seven container facilities, of which SECH and Voltri
(VTE) are the stand out facilities with 14.5m and 15.0m depth alongside and capacity of
0.5m TEU/annum and 1.5m TEU/annum respectively.

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Figure 5.4:PSAs Voltri (VTE) Terminal

Figure 5.5:SECH Terminal


Recent developments in Genoa can be summarised are as follows:
by August 2014 investments in quayside equipment included two new super postpanamax container gantries at VTE, upgrades to four cranes at SECH terminal, and a new
super post-panamax mobile harbour crane installed at Genoa Port Terminal, managed by
the Spinelli Group;

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the Calata Bettolo container terminal is scheduled to be completed by April 2016 and
would boast a 625 m quay with a 17m draught, and will be equipped to handle 0.85m
TEU/annum. However, although the Government paid a large sum of money to create
the necessary land site, there would need to be further expense for modifications to the
breakwater and a need to also develop road and rail links in a busy city. With all this
considered, it would seem highly unlikely that this expensive project will go ahead in the
near future, if at all;
the EU Commission has assigned a total of 260m for 13 projects, including the Genoa
Port Authority, which will see improved access to the port of Voltri at a cost of 35m;
another proposal is for the reconfiguration of access by sea to the harbor basin of
Sampierdarena and the new 'master plan' for the port of Genoa, for a total cost of 11.5m.
Also on the list, among others, is the dredging plan to allow the transit of larger ships
from Bocca di Levante (22.5 m). This is merely speculation at the current time;
a new railway line is to be developed which runs between Liguria and Piedmont, through
twelve municipalities in the provinces of Genoa and Alessandria. The planned route is
about 53 km, including 39 km of tunnels and 14 km of interconnections with the existing
rail network, for a total of 67 total kilometers of new infrastructure. The aim for this rail
line, according to the proposal, is to "allow a significant expansion for freight traffic,
increasing the connections between Genoa, with the system of the northern ports of the
Tyrrhenian Sea with north Italy and Europe;
in August 2014 it was reported that the merger of Savona and Genoa port authorities is
far from a done deal. The Port Authority of Genoa is in favour of combining the two
ports, but rejects accusations that this is a bid for hegemony. Although there is clear
enthusiasm in Genoa for the merger, the authorities at Savona are yet to be convinced,
although noted that neighbouring ports share both the same problems and opportunities,
starting with the corridor serving the hinterland. Co-operation aimed at finding joint
solutions is essential and many synergies can be achieved, although that doesn't
necessarily imply that the port authorities need to merge;
Genoa can handle 3m TEU/year currently. In addition, both VTE and SECH are equipped
to accommodate the largest ships now working on the east-west trade routes.
Vado Ligure
Vado Ligure falls under the control of The Savona Port Authority and with the major Maersk
platform under construction will have an annual capacity of 900,000 TEU when finished in
2017. The first vessel expected to call is expected to be in 2018, although the proposed
merger of the port authorities of Genoa and Savona might negatively impact these plans.
The plan for the construction of a multipurpose platform in Vado Ligure will be realised
through project finance, with an investment of 450m (300m earmarked by the State and
150m by the work promoter, i.e. the syndicate of companies formed by APM Maersk,
Grandi Lavori Fincosit and Technital). The platform will expanse a surface of 210,000 m2,
have five STS cranes (22 rows reach) and will provide a container terminal with a 700m long
rectilinear quay and two deep water berths - one at the root of the pier (depth 15.00 m) and
the other one at the head (depth 20.00 m). The natural deep waters (a distinctive feature of
Savona-Vado harbour, if compared to the other ports in the Northern Sea) will allow even
the last-generation container vessels, with a capacity of more than 18,000 TEU, to berth
safely. APMTs links with Maersk Line could also entice vessels/services from the 2M
Alliance to call at the facility, providing the new facility with the core cargo it needs.

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Figure 5.6: Planned Design of APMTs Vado Ligure Project


Once unloaded, the cargo must be efficiently processed: to this purpose, a dedicated road
system and a new tollbooth are to be constructed. The most important challenge is
represented by the railway transport. In order to improve the efficiency of train loadingunloading operations (40 per cent of the containers handled in the new terminal will be
forwarded from the port by rail, thanks to the rail shuttle service devised by the Port
Authority), the Port Authority and Maersk Line decided to adopt Metrocargo: an
innovative and high-performing horizontal loading/unloading system, which allows to
significantly reduce the handling times and the environmental impact of the operations.
The plant will be set up on the dedicated rail yard behind the platform.
Marseille-Fos
Last year was another record year for containerised traffic in Marseilles after it handled just
over 1m TEU. The port continues to benefit from improved industrial relations and
enhanced operations since the implementation of the French port reforms in 2011.

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Figure 5.7:Marseille-Fos
In December 2014 Marseille-Fos unveiled an ambitious 360m ($441m) growth strategy as
it looks to position itself as a viable alternative to the major ports in Europes northern range.
The French ports vision up until 2018 is to offer its customers a dynamic EuroMediterranean logistics and industrial cluster, in which the development of its box business
will be central to this theme. Under the proposed plans, the Marseille-Fos Port Authority
will develop the existing land between the two Fos 2XL container terminals, Terminal de
Mediterrane and the Seayard Terminal, to create a dedicated quay for the handling of
containers.
Over five years, the port of Marseille Fos is expecting an ambitious seven per cent per
annum growth on containers to reach 1.5 million TEUs in 2018. After starting the two
container terminals "Fos 2XL" in 2012, a third, "Fos 4XL" is planned for 2018 with
Hutchison providing the port operations.
Despite these ambitious plans, the port of Marseille-Fos offer only peripheral competition to
the ports on the Northern Tyrrhenian Sea.
The Tyrrhenian Sea
Table 5.2 provides details of the main port terminal facilities in the Tyrrhenian Sea. A map
of the ports included in this sub-Section, namely Naples, Salerno and Civitavecchia are
illustrated in Figure 5.8.

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Figure 5.8: Ports on the Tyrrhenian Sea


5.2:
Table 5.2 Terminal Facilities ofTable
Tyrrhenian
SeaTerminal
Ports
Port

Terminal

Civitavecchia

Naples

Salerno

Facilities of Tyrrhenian Sea Ports

Area

Quay Length

Berth Depth

Capacity

Cranes

(ha)

(metres)

(metres)

(000s TEU/y ear) Quay Cranes P

Terminal
23
G. Bausan w harf +

730

15 draft

700

Granili Quay

850

4+3mobile

Flav io Gioia Pier

600

3 mobile

Container Terminal 12

890

PP

SPP

Roma Container

20.0 for all 3

9-12 max draft

p = panamax ; pp = post panamax ; spp = super post panamax

Source: Ocean Shipping Consultants

Naples
Although advertised as a port of call on the 2M Alliances Transatlantic MedGulf service,
Naples is typically served by feeder services and operated either with ships own gear or
with mobile cranes. With no planned developments and a great deal of competition from
ports in other Italian regions, it would seem that vessels >6,500TEU are unlikely to call. The

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port will therefore be restricted to handling short-sea and feeder services with some limited
US trade involvement.

Figure 5.9: Naples Container Port


Salerno
With a limited draft alongside, Salerno has always struggled to attract deepsea vessels,
although in the 1990s the P&ONL Famex and Gamex US flag services (formerly Farrell
Lines) offered services to the US east coast and US gulf coast. With a draft of 9.7m, it is
highly unlikely that deepsea vessels will call again and Salerno will have to concentrate on
handling feeder vessels, or some secondary trade lane services.

Figure 5.10: Salerno Container Terminal


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Civitavecchia
There is a three-year work plan developed between 2013 and 2015. Once wharf 25 is free of
cruise traffic, the RPR can be fully implemented which will be used to serve the Container
Terminal. The same Terminal will be upgraded with six new ship-to-shore gantry cranes and
capacity will increase to 700,000 TEUs with the goal of handling a total of 300,000 TEUs by
next year.

Figure 5.11: Civitavecchia Port


Adriatic Sea
Table 5.3 provides details of the main port terminal facilities in the Adriatic Sea relevant to
this study. A map of the ports included in this sub-Section, namely Trieste, Venice, Ravenna
and Ancona are illustrated in Figure 5.12.

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Figure 5.12: Map of Ports on The Adriatic Sea


5.3:
Terminal
Table 5.3 Terminal Facilities Table
of Adriatic
Sea Ports
Port

Terminal

Facilities of Adriatic Sea Ports

Area

Quay Length

Berth Depth

Capacity

(ha)

(metres)

(metres)

(000s TEU/y ear) Quay Cranes P

29 y ard

852m

Venice

VECON

Trieste

Molo VII Container 40.0 stacking

770

Terminal

operational+600

surface

Cranes

400
18 draft

PP

SPP

650

supporting
Ravenna

Setramar Terminal

4 mobile

Terminal Container

640

Rav enna
Ancona

Adriatic Container
Terminal

10.6 draft

280 y ard

1 mobile

p = panamax ; pp = post panamax ; spp = super post panamax

Source: Ocean Shipping Consultants

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Trieste
After changing hands several times (to Rotterdams ECT on privatisation in 1998, then to
Luka Koper in 2001), Triestes container terminal on Pier 7 was acquired in stages by TO
Delta during the course of 2004.
Following a terminal reorganisation, the replacement of four container gantry cranes with
four new 16-row outreach units in 2005 (and the upgrading of three remaining cranes in
2008), the renamed Trieste Marine Terminal (TMT) has a 770m quay with 17.35m depth
alongside for mainline vessels and a further 650m support quay, equipped with a total of
seven container gantry cranes. The removal of rail tracks at the centre of the terminal in
2009 and addition of two RMGs allowed stacking space to be increased, thereby boosting
capacity to 0.60m TEU/year.
In 2010, the Italian bank, Unicredit, and APM Terminals agreed a 1bn public-private
project with Friuli Regione Venezia Giulia and Generali (an insurance company) for a new
container port at Trieste/Monfalcone. The consortium will be granted a 35-year concession,
to be managed by APMT. A 1.6m TEU/year capacity is to be developed in the first phase.
Following dredging to accommodate 13,000 TEU vessels, capacity would be doubled to
3.2m TEU/year with the final phase raising capacity to 5.5m TEU/year. Significant
upgrading of road and rail connections is to be included. With the aim of handling 60 per
cent of inland moves by rail, European Rail Shuttle (Maersks railway company) and
Trenitalia are to form a joint venture.
2014 was a record year for the Port of Trieste, had record volumes in 2014 with them
witnessing a 10.3 per cent increase since 2013, achieving 0.5m TEU for the first time.

Figure 5.13: Port of Trieste

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Venice
The Vecon container terminal has a berth length of 852m with an alongside depth of 10.5m,
and there are four panamax container gantry cranes. There are plans to add a further 350m,
which will boost capacity by some 0.10m TEU/year, when the paving of associated yard area
is completed. An exchange of equity in 2008, between PSA Sinport and GIP (both operators
of container terminals at Genoa), gave GIP a 40 per cent holding in Vecon, with PSA
retaining 60 per cent.
In 2003, Mariner SpA, part of Maltas Hili Group, and Marinvest, which has links with
MSC, acquired a multipurpose terminal called Terminal Intermodale Venezia (TIV) at
Venices Marghera harbour. A container area of over 6h was allocated within the terminal,
and mobile cranes, reach stackers and container tracking equipment were installed. MSC
vessels are typically handled at either Berth 10, which is 220m long and 9.6m deep, or
Berths 12-15 which provide 575m at 10.3m depth.
The need to deepen the ports access channel and berths has become increasingly urgent in
recent years. As disagreements about the disposal of dredge spoil blocked efforts to deepen
the channel, prolonged silting has reduced its depth from 12.0 to 9.4m. The loss of the ports
last direct deep-sea calls intensified efforts by the port authority to rectify matters to lure
them back, and some berths and channels were deepened to 11m in 2008-09.
In 2010, the port submitted a plan to government for a 1.3bn offshore terminal for tankers
and deep-sea containerships. The proposed location, eight nautical miles from the mainland,
has a 20m natural depth. A 1,400m quay and automatic handling system that would transfer
containers between containerships and barges, the latter shuttling to/from a new, 91h barge
terminal in Venices Porto Marghera. Capacity would be built up from 0.65m TEU/year
initially to 1.4m TEU/year of containers and 7mt/year of oil upon completiont.

Figure 5.14: Port of Venice Offshore Terminal Project


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The New Venice Container Terminal is expected to be fully integrated with the freight
villages located in the Veneto region and enable the Upper Adriatic port system to act as
main gateway for goods exchanged between Central and Eastern Europe and the Far East.
However, despite the advantage of naturally deep water, the concept of discharging
containers and then re-handling them on barges to Venice is flawed and will incur additional
handling fees. Coupled with the potential hazards of loading containers on barges without
lashings as is currently suggested and it would seem unlikely that this project will receive the
backing it is seeking from the Government to go ahead with the proposal.
Ancona
In December 2014, the European Union announced the plan to spend 34.6m on construction
of an additional 273m of dock, thereby increasing the berth length overall to 616m and
bringing the alongside depth to 14m.
Behind the new quay, the contract involves the construction of 35,000 m2 terminal yard,
allowing for the better management of the facility and increasing efficiency. There are also
plans to provide runways for gantry cranes.

Figure 5.15: Port of Ancona


Ravenna
In December 2014 Ravenna announced that it was pushing ahead with its Global Port Hub
(GPH) project, which will deepen the access channel and lead to the development of a much
larger container-handling facility. This is to be partially funded by the European Investment
Bank and includes an ambitious dredging plan from 11m to 14.5m and to relocate a much
bigger container terminal elsewhere in the port. The aim is to increase capacity to 0.65m
TEU/annum (twice the current level), with the help of investment in new systems,
infrastructure and equipment by the terminal operator Contship Italia. The discussions
have been ongoing for the last five years.

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In 2014, two quay cranes with an outreach of 17 containers across were commissioned as
part of the investment program and the terminal now has the capability of handling
8,000TEU capacity vessels.

Figure 5.16: Port of Ravenna


Central Mediterranean Transshipment Hubs
The Italian ports of Cagliari, Gioia Tauro and Taranto as well as the Maltese port of
Marsaxlokk, continue to be the major transshipment hubs for the Central Mediterranean.
With annual capacities in the multi-million TEU/annum these facilities are well placed to
expand their market share of transshipment services for the region. The combined annual
capacity for these terminals is over 10m TEUs. Together they represent the majority of the
transshipment market capacity within the Central Mediterranean with each of these facilities
operating the latest equipment. Being able to accommodate some of the largest vessels they
can each boast berthing lines in the thousands of metres and quay-side depths no shallower
than 15.5m. Marsaxlokk and Taranto are continuing with major development, whilst MCT
is largely sufficient with the equipment it has to meet the requirements of existing and future
ship sizes and volumes.
Table Table 5.4 details the main characteristics of the main central Mediterranean
transshipment hubs and it is clear from this that the Europa Platform is unlikely to compete
with these facilities for transshipment volumes, concentrating instead in the main on local
Italian volumes and some central European transit cargo.

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Table
5.4: Terminal
Table 5.4 Terminal Facilities
of Transhipment
Ports
Port

Terminal

Gioia Tauro

Medcenter

Facilities of Transhipment Ports

Area

Quay Length

Berth Depth

Capacity

(ha)

(metres)

(metres)

(000s TEU/y ear) Quay Cranes P

160

3,400

18

4,200

Container Terminal
International

40

1,520

16

1,300

49

1,290

17north quay +

Container Terminal
Malta Freeport Terminal 1

PP

SPP

22 gantries +
1 mobile

Cagliari
Cagliari

Cranes

7 gantries + 1
mobile

w est q being
dredged to 13m
Terminal 2

22

1,511

17 (ro-ro berth is

11

12.5)
Taranto

Container Terminal 110

1,500

15,5

35.31 stacking

1 mobile

capacity
p = panamax ; pp = post panamax ; spp = super post panamax
Source: Ocean Shipping Consultants

Gateway Terminals
Although not direct competition for Livorno, gateway terminals in Barcelona and Valencia
will detract from the ability of Livorno to handle transshipment containers in particular.
Table Table 5.5 summarise the main technical characteristics of gateway facilities at
Barcelona and Valencia.
Table
5.5:
Terminal
Facilities
Table 5.5 Terminal
Facilities
of Barcelona
and Valencia
Ports
Port

Barcelona

Terminal

of Barcelona and Valencia Ports

Area

Quay Length

Berth Depth

Capacity

(ha)

(metres)

(metres)

(000s TEU/y ear) Quay Cranes P

1,380

16 draft

1,300

60 y ard

1,000

16.5 draft

1,000

35

770

16 draft

1,660

9-16m draft

1,780 (2,318)

16

Terminal Muelle

54 y ard

Sur (TCB)

ex tension

Cranes
PP

SPP

Barcelona Europe
South Terminal

11

(BEST)-TerCat
Valencia

MSC Terminal

8 STS

Valencia
Terminal Muelle de 37

10 ov er super 1

Lev ante (TCV)


Noatum Container

106 (158)

150

Terminal Valencia

post panamax

p = panamax ; pp = post panamax ; spp = super post panamax


Source: Ocean Shipping Consultants

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5.3

PRODUCTIVITY COMPARISON
In general terms, target productivity levels depend on the size (capacity) of the ports in
question and their location. This is less true of transshipment hubs that primarily have to be
able to compete with global benchmarks in order to develop a secure market role. The
terminals under review in this study are essentially a combination of some small to medium
capacity facilities and transshipment hubs (Gioia Tauro, Marsaxlokk and Cagliari).
It should be noted that the key benchmark is the availability of sufficient deepwater berthage.
In addition, the level of back-up land (terminal area) is also important to be able to assess
whether the space will be sufficient to handle the anticipated demand. In our experience, it
has often been possible to increase terminal throughput by intensifying land use, but it is far
more difficult to rapidly accelerate berth productivity.
In the traditional annual productivity comparison there are two approaches:
TEU per berth metre;
TEU per gantry crane.
There are various strengths and weaknesses of the two traditional approaches to the
analysis of container terminal productivity.
Apart from the obvious advantages of this type of data being readily available and
transparent from the various ports and easily understood, the results generally can only
provide a guideline when used to compare port performance levels at the various container
terminals.
Annual Productivity TEU per berth metre
Table 5.6 provides details of the total berth length for the container terminals under review.
Table 5.6
Total Berth
Length
(m) at Berth
Comparative
Container(m)
Ports at Comparative Container Ports
Table
5.6:
Total
Length
Port

Terminal

Liv orno

Darsena Toscana

Genoa

SECH

2010

2011

2012

2013

2014

1,430

1,430

1,430

1,430

1,430

526

526

526

526

526

VTE

1,400

1,400

1,430

1,430

1,430

La Spezia

LSCT

1,438

1,388

1,500

1,500

1,543

Gioia Tauro

MCT

3,011

3,011

3,391

3,391

3,391

Cagliari

CICT

1,520

1,520

1,520

1,520

1,520

Taranto

Container Terminal

1,500

1,500

1,500

1,500

1,500

Marsax lokk

Terminals 1 & 2

2,258

2,258

2,258

2,258

2,581

Trieste

Molo VII Trieste Marine

1,420

1,420

1,370

1,370

1,370

Venice

Vecon

510

852

852

852

852

Source: Ocean Shipping Consultants/Ports/Articles/CI Yearbook

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The major differences in the total berth lengths of the ports under review for each of the
years under review are as follows:
in 2012, LSCT added 112m of feeder berth;
in 2012, a further feeder berth was added to the main berth at MCT, Gioia Tauro (380m);
in 2014, Marsaxlokk added 323m of quay;
Venice added 342m in 2011.
Of course, the level of productivity at a particular port (or terminal) will be influenced by the
stage of development of the specific location. That is to say, as new terminal capacity is
added in large tranches and demand tends to increase (or fluctuate) incrementally, the level
of recorded productivity will vary significantly on a year-by-year basis.
Despite these limitations, the measure of moves per berth metre is one of the most effective
measures of productivity. A target level of 1,000-1,250 TEU/berth metre/year is achievable
for medium sized ports with a high transshipment component, with some 1,500-1,750
TEU/berth metre/year being more appropriate for large ports and about 400-500 TEU/berth
metre/year for those smaller ports and terminals at the other end of the scale.
In this context, it is important to clarify the following definitions of a small, medium or large
container terminal:
small container terminals are terminals handling less than 2 million TEU per annum;
medium container terminals are terminals handling between 2 and 5 million TEU per
annum;
large container terminals are terminals handling more than 5 million TEU per annum.
Based on 2010-2014 volume data, Table 5.7 provides an indicative productivity measure in
terms of TEU per berth metre/annum for the ports under review.

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Table 5.7.

Table 5.7:
Productivity
Annual Productivity-TEUs
per Annual
Berth Length
(m)
Port

Terminal

Liv orno
Genoa

TEUs per Berth Length (m)

2010

2011

2012

2013

2014

Darsena Toscana

439.50

446.01

383.95

391.03

403.83

SECH

602.41

532.36

622.06

618.69

850.46

VTE

700.68

814.37

869.19

823.25

809.15

La Spezia

LSCT

787.30

852.05

739.55

773.61

771.15

Gioia Tauro

MCT

946.95

765.52

802.45

910.47

618.40

Cagliari

CICT

414.01

403.41

412.90

461.94

431.58

Taranto

Container Terminal

387.93

402.94

175.64

131.54

98.49

Marsax lokk

Terminals 1 & 2

845.66

1,045.17

1,124.89

1,217.89

1,123.60

Trieste

Molo VII Trieste Marine

198.31

276.89

297.83

334.74

347.82

Venice

Vecon

770.39

537.98

504.57

524.17

535.29

Source: Ocean Shipping Consultants/Ports/CI Yearbook

Based on the earlier guidelines, it is possible to conclude as follows:


based on annual port volumes, Gioia Tauro should be considered a medium sized
terminal and should therefore be achieving productivity levels in excess of 1,000 TEU per
berth metre/annum, especially given a transshipment level of 97 per cent and is close to
achieving this in 2010 and 2013;
Marsaxlokk should be considered in the same category as Gioia Tauro, but regularly out
performs its main competition;
the majority of the other terminals reviewed fall into the small container terminal
category and as such should be achieving 400-500TEU/berth metre and of the sample of
ports reviewed only Taranto (low volumes) and Trieste have failed to reach these levels;
Livorno is currently achieving a par score, but there is still room for some
improvement.
Annual Productivity TEU per crane
Crane moves per hour calculations can be misleading and depend on shift patterns, methods
of recording and meal breaks, so are not generally meaningful without detailed and focused
analysis. In the current context an overall view of TEUs handled per container gantry crane
(or equivalent) per year has been undertaken with this providing a useful starting point for
investigation.
Table Table 5.8 provides details of the number of ship-to-shore gantry cranes (or their
equivalent) at each of the ports under review.

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Table 5.8

Table
Total
of atSTS
Gantry
Cranes
Total5.8:
number
of STSNumber
Gantry Cranes
Comparative
Container
Portsat Comparative Container Ports
Port

Terminal

2010

2011

2012

2013

2014

Liv orno
Genoa

Darsena Toscana

10

10

SECH

VTE

10

10

10

10

10

La Spezia

LSCT

10

10

10

10

10

Gioia Tauro

MCT

18

18

25

22

22

Cagliari

CICT

Taranto

Container Terminal

10

10

10

10

10

Marsax lokk

Terminals 1 & 2

23

22

21

20

20

Trieste

Molo VII Trieste Marine

Venice

Vecon

Source: Ocean Shipping Consultants/Ports/Articles/CI Yearbook

The major developments in the total number of gantry cranes at the ports under review are as
follows:
in 2012 MCT in Gioia Tauro added a further seven STS gantry cranes, before three of the
existing cranes were taken out of service in subsequent years;
the other terminals under review made no major changes.
Table Table 5.9 provides an indicative productivity measure in terms of TEU per gantry
crane per annum for the ports under review, based on volume data from 2010-2014.
A level of 100,000-150,000 TEU/gantry crane/year is a reasonable target for these markets,
on the assumption that one gantry crane is required for every 86-115m of quay (depending
on the LOA of the post-Panamax vessel type in question). Given that a minimum total berth
length of 700m is required to berth two fifth generation post-Panamax vessels, three to four
gantry cranes will be required in order to ensure that the maximum levels of productivity are
achievable.
It should be added that transshipment moves are generally considered to be easier and
quicker to make than moves for local import/export boxes. This means, that with other
matters equal, ports with the highest ratio of transshipment units should perform better.
However, other factors such as automation and better work practices, which are usually the
result of a terminal being operated by an international class terminal operator, also have a
significant impact on terminal performance levels.

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Table 5.9

Table 5.9:
Annual
ProductivityAnnual Productivity-'000s
TEUs
per STS Gantry
Crane
Port

Terminal

Liv orno
Genoa

000s TEUs per STS Gantry Crane

2010

2011

2012

2013

2014

Darsena Toscana

78.56

63.78

54.90

62.13

64.16

SECH

63.37

56.00

65.44

65.09

89.47

VTE

98.10

114.01

124.29

117.72

115.71

La Spezia

LSCT

113.21

118.26

110.93

116.04

118.99

Gioia Tauro

MCT

158.40

128.05

108.84

140.34

95.32

Cagliari

CICT

89.90

87.60

89.66

100.31

93.71

Taranto

Container Terminal

58.19

60.44

26.35

19.73

14.77

Marsax lokk

Terminals 1 & 2

83.02

107.27

120.95

137.50

145.00

Trieste

Molo VII Trieste Marine

40.23

56.17

58.29

65.51

68.07

Venice

Vecon

78.58

91.67

107.47

111.65

114.02

Source: Ocean Shipping Consultants/Ports/Articles/CI Yearbook

There is a distinct relationship between the ports that do more transshipment and the
higher productivity levels, as well as a link between higher port performance and
international terminal operators. This is particularly true of ports in the Mediterranean;
other ports with a high proportion of transshipment also performed within the set
guidelines at 100,000-150,000 TEU/ gantry crane/annum for example:
Gioia Tauro 97 per cent transshipment and 140,000 TEU/gantry crane/annum in
2013,
Marsaxlokk 86 per cent transshipment and 145,000 TEU/gantry crane/annum in
2014;
of the other ports, La Spezia, Voltri and Venice have all achieved more than 110,000
TEU/gantry crane/annum, and have a share of local, transit and transshipment cargo that
helps to improve their efficiencies. LSCT and VTE are also managed by international
terminal experts who are masters at being able to get the most out of small ports;
in this measure, Livorno has some considerable room for improvement, lagging behind its
competition quite considerably.

5.4

CONTAINER HANDLING COSTS


Table 5.10 compares the terminal handling costs for local import/export units and for
transshipment units for Livorno and its main competitors. Section VII will review the builtup cost analysis of deep-sea container moves and so it is important to highlight the handling
costs not only for ports from which the containers can be railed/trucked to the final
destination, but also the transshipment costs so that a cost comparison for a feeder alternative
can be calculated and compared with the costs of a direct shipment.

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Table 5.10

Table 5.10: Stevedoring Costs 2014 US$ - per 40 Loaded Container

Stevedoring Costs - 2014

US$ - per 40' loaded container


Livorno

SECH

VOLTRI

La Spezia

Fos

Trieste

Salerno Gioia Tauro Marsaxlokk

Taranto

137.94

171.00

188.10

182.40

216.60

155.04

176.70

na

na

na

110.58

228.00

136.80

131.10

131.10

124.26

108.30

153.90

149.91

151.05

Import / Export
40' container
Transshipment
40' container

Ty pically , these are prices discounted for v olume customers.


Transshipment full cy cle cost - v essel-y ard-v essel w ith discount for 100-340k box es.
Import/ex port - v essel-gate
Source: Ocean Shipping Consultants

Costs of handling containers at Northern Tyrrhenian Sea ports are more or less in line with
one another, although handling costs at Voltri are the most expensive and those at Livorno
are the cheapest. There is also little difference between the transshipment rates for the three
major central Mediterranean transshipment hubs.
Handling costs in Trieste are
representative of handling costs in the Adriatic, and Fos representative of more westerly port
costs such as those charged in Spanish ports. Salerno is generally seen to be cheaper than
most Northern Tyrrhenian ports (apart from Livorno) although its relative merits (relatively
shallow water and limited handling capacity) are such that shipping lines will only call here
for feeder services. Livornos charges slightly below the market level for similar ports, but
this will help to attract additional business especially when the new terminal is developed as
well.

5.5

REGIONAL CAPACITY DEVELOPMENTS, 2014-2025


Table 5.11 provides details of the known capacity developments for Livornos primary
competition in the Northern Tyrrhenian Sea region. Although there are other ports in the
Adriatic Sea and Tyrrhenian Sea, as well as a number of central Mediterranean
transshipment hubs, the terminals included represent the primary competition for the Italian
local import/export markets and to a lesser extent the international transit markets. It is
primarily the extension of the local Italian port volumes that will determine the success of
the Europa Platform project, coupled with some added value in central European cargoes
especially to/from Austria, Switzerland and Slovenia. Although parts of southern Germany
are also theoretically within reach, it would seem unlikely that German shippers or
consignees would agree to a routing via Italy.

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Table 5.11

Sea Port Capacity Developments to 2025


Million TEUs

Table
5.11:
Northern
Tyrrhenian
Ligurian
Sea Port
Capacity
Developments
to 2025
- million TEUs

Liv orno

2014

2015

2016

2017

2018

0.85

0.85

0.85

0.85

0.85

Europa Platform

2019

2020

2021

2022

2023

2024

2025

0.85

0.85

0.85

0.85

0.85

0.85

0.85

0.50

1.00

1.50

1.50

1.50

1.50

1.50

SECH

0.50

0.50

0.50

0.50

0.50

0.50

0.50

0.50

0.50

0.50

0.50

0.50

Voltri

1.50

1.50

1.50

1.50

1.50

1.50

1.50

1.50

1.50

1.50

1.50

1.50

Other Genoa

1.00

1.00

1.00

1.00

1.00

1.00

1.00

1.00

1.00

1.00

1.00

1.00

0.90

0.90

0.90

0.90

0.90

0.90

0.90

0.90

Vado Ligure
LSCT

1.90

1.90

1.90

1.90

1.90

1.90

1.90

1.90

1.90

1.90

1.90

1.90

Total

5.75

5.75

5.75

5.75

6.65

7.15

7.65

8.15

8.15

8.15

8.15

8.15

Source: Ocean Shipping Consultants

These capacity development details will be used when developing the supply/demand
balance for Livorno in Section VIII of this Study, which will determine the necessity of this
additional capacity to meet the demand. It is clear from this review that there is a need for
the additional Europa Platform capacity.

5.6

SWOT ANALYSIS
Table 5.12 assesses the strengths, weaknesses, opportunities and threats for the Europa
Platform project. It is important that the Livorno Port Authority takes the maximum possible
advantage of this planned development and although a depth of 16.0m alongside may well be
suitable for the size of vessels currently calling at Livorno, this is an opportunity to future
proof the port against the introduction of bigger vessels on a number of different trade
lanes. Given also the additional depth that will be offered in Vado Ligure (17m) and is
already available in Trieste (18m), it is crucial that this opportunity to at least match the
competition is not lost. A failure to do so could result in the new facility being a far less
saleable commodity to prospective terminal operators and/or financial investors.
Although water depth is not the only criteria used to judge the viability of a new project, it is
one of the major considerations, because without a certain depth of water some shipping
lines may not be able to berth vessels of the size that they would want to or with the
utilisation rate that they would ideally be aiming for.
Detail of the respective depth of water offered at the major competing ports and what this
represents in terms of the maximum size of container vessel that can be accommodated is
illustrated in Figure 5.17: Link between Ports TEU Volumes, Depth and Evolution in Vessel
Size and Figure 5.18.

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Table 5.12
Livorno Europa Platform SWOT Analysis

Table 5.12: Livorno Europa Platform SWOT Analysis

Strengths

Weaknesses

Opportunities

Threats

Planned relativ ely deepw ater in the near term

Shallow er w ater than Vado Ligure and Trieste

Improv e customs clearance times

Failure to improv e w ater depth to 18.0m w ill lose

Good potential for transit markets

Productiv ity lev els low er than t/s hubs

Potential to attract major lines w ith larger

competitiv e adv antage to Vado Ligure and Trieste


Accelerated dev eloment of Collata Bottolo

v essels - 18,000TEU possible


Significant local market in Liguria and north Italian

Need for deeper w ater alongside (especially from

Scope for dedicated/priority arrangements

Failure to deepen port w ould hit competitiv e

regions

2018)

w ith major lines

position - loss of major opportunity

Ability to combine transit and import/ex port

Customs reputation not good but potentially better

Scope to further boost productiv ity

containers

than Genoa

Reasonable cost structure

Scope to combine local and transit business

Reasonable lev els of productiv ity

Marginal potential for local transshipment

Good rail connection direct to the port

Barge direct from terminal into hinterland

Source: Ocean Shipping Consultants

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Figure 5.17: Link between Ports TEU Volumes, Depth and Evolution in Vessel Size

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Figure 5.18: Comparative Water Depth (m) and Draft (m) of Major Livorno Port
Competition
Section 7 will look in more detail at the built-up cost analysis of serving various towns/cities
via different ports, The deepsea cost is obviously a major part of this equation and one
heavily related to the depth of water available alongside at each port (although length of
berth, strength and size of quay and number and type of gantry cranes are also of relevance),
which determine the maximum size of vessel accommodatable and also therefore the cost per
slot onboard related to the economies of scale of each vessel size type.

5.7

CONCLUSION
The Livorno Port Authority is currently in a position of having the capability of deciding
precisely what facilities it should look to create as part of the Europa Platform Project.
Obviously, the additional depth of water compared with the original plans would ensure that
the port is future proofed against any expected vessel size changes in the mid to long term
and together with the potential for strong rail links into northern Italy and into parts of
central Europe, the future demand potential would be attractive to would be terminal
operator. With a capable terminal operator the terminal could go from strength to strength,
improving both

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ANALYSIS OF THE ITALIAN ROAD AND RAIL NETWORK

6.1

THE PORTS CONSIDERED


There are currently several ports that compete with Livorno for the forwarding of container
traffic into the immediate hinterland:
Port of Genoa well placed to serve the north-western region of Italy, the ports
strategic position allows for a potentially excellent connection to the European economic
and commercial hinterland;
Port of La Spezia a major merchant port on Northern Tyrrhenian Sea, with a strong
container base;
Port of Venice a primary port in the Adriatic Sea in terms of volume of commercial
traffic;
Port of Civitavecchia located on the Tyrrhenian Sea, it is a multi-functional port that
handles several types of cargo including Ro-Ro, Ro-Pax, container and liquid/sold bulks;
Port of Marseilles the largest French port on the Mediterranean Sea, its strategic
position allows for excellent access to the French hinterland and on into the rest of
Europe.

Source: DAppolonia

Figure 6.1: Main Competitive Port System

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6.2

ANALYSIS OF THE ITALIAN ROAD AND RAILWAY NETWORK


The Italian Road network
The Italian road network (minus municipal roads) currently has an overall length of 183,705
km and is divided into several different classes:
motorways (autostrade) designed to handle very high volumes of traffic safely, these
form the long-distance road network in the country;
a-Roads (Strade Statali) these represent national arteries and are managed by the
Government through ANAS. Many lead to national borders or connect main commercial
areas such as ports, airports, and freight villages, to the major urban areas;
regional Roads (Strade di interesse regionale) these roads connect the provincial
main towns of the same region or municipalities;
provincial Roads (Strade provinciali) these roads of secondary importance, owned
and managed by the province themselves;
The main structure of the Italian road system is formed by motorways and A-roads, which
represent the transit routes for medium to long distance connections.
The motorway network includes major road connections such as A1 Milano-Napoli and
A14 Bologna-Taranto that ensure the North-South connections along the Tyrrhenian and
Adriatic coasts. The cross-connections are A4 Torino-Trieste in the North, A24 RomaPescara in the Centre, and the A16 Napoli-Canosa in the peninsular regions in the South.
Due to being the economic heart of the nation the motorway system in the north is very busy,
with the presence of many industrial areas and the local commercial network (Veneto,
Emilia Romagna and Lombardy). This area has a high concentration of logistics
infrastructure (freight villages in Bologna, Verona, Padua, Torino and Orbassano) including
the major ports of Genoa and Trieste, Venice, etc. (Figure 6.2).
The further south, the sparser the road network becomes and there are entire areas that are
not covered, especially in the centre of the country. In particular the cross-connections
between the two sides of the peninsula need further improvement.
Livorno is well served with road connections to the major hinterland regions to the north and
also has good access to the central Italian regions.
Critical issues of the Italian Road System
One of the main critical issues with the Italian road network has been a lack of upgrades due
to work having been put on hold for years. The works (according to the provisions of the socalled "Legge Obiettivo") were aimed at increasing road safety through the preparation of a
specific plan, but often such works have been stopped due to lack of funds.
In Italy, approximately 90 per cent of goods and passengers are transported by road. This
obviously causes congestion on some routes, with high external costs in terms of
environmental pollution and in time spent for the travel, as well as an increased risk of
accident.

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Source: DAppolonia

Figure 6.2:Italian Motorway Network

6.3

THE ITALIAN RAIL NETWORK


The railway network managed by RFI has an extension of 16,701 km.
classified as follows:

The lines are

Fundamental Lines Characterised by a high volume of traffic and high quality of the
infrastructure. They include the international routes and the connections between the
main Italian cities;
Complementary Lines With lower volumes of traffic, these form the connection
between regions, and the connections between these regions and the main routes;
Junction Lines developed to serve high traffic areas, these connect fundamental and
complementary lines located within metropolitan areas.
At present complementary lines represent 56 per cent of the network and they are present
mainly in the Southern regions. The fundamental lines include North-South connections and
those cross-connections linking the Tyrrhenian and Adriatic Sea. The double track lines

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represent 45 per cent of the total with most of them electrified (7,431 km). The diesel
traction lines all have single track.
Critical issues of the Italian Railway System
The inherent weakness of the railway system is the main critical issue within the Italian
logistic system, especially when considering that hinterland transport has an increasingly
higher impact on the total cost of transport and is a crucial competitive element.
In fact, the infrastructure network for rail transport has critical elements that are both
structural and interconnected, which generate a strong divergence between the rail networks
capacity and the demand for rail transport. With regard to structural aspects, there has been
a significant lack of infrastructure development in the South region, which has seen little
extension in network coverage and is technologically outdated and inefficient compared to
the networks of the Centre or Northern regions (at the end of 2011, less than 60 per cent of
the network was electrified, with a reduced double track coverage, equivalent to 29.4 per
cent of the total).
Provision of effective rail capacity will be a key factor in determining the hinterland reach of
Livorno.
The existing limitations of the rail network hamper the transport of containerised goods.
These limitations include the following issues:
capacity shortfall in some strategic nodes, in particular along the international crossing
points, which cause considerable bottlenecks. These severely restrict access to Italian
industry and limit the efficiency of cross border container movements;
scarce railway infrastructure in the ports, which is responsible for the high costs of rail
activities within port areas (shunting in port typically accounts for 30 per cent of the
overall cost of a train).
Substantial development of the infrastructure and organisational/technological systems are
necessary to remove capacity constraints.
The Position in Marseille/Fos
At present, Livorno has very limited interaction with the southern French markets.
However, in the future increased competition between the Livorno (and Italian Northern
Tyrrhenian ports) and Marseille will be noted. The analysis now briefly considers road and
railway connections that are realistically viable for connecting the Italian border
(Ventimiglia) with the Marseilles.
The road network that connects the Port of Marseilles to Italy is well structured and does not
have any apparent critical issues (A8 up to Aix-en-Provence and A51 that joins A7 connects
Marseilles port with Ventimiglia).
The railway network that serves the Port of Marseilles is primarily designed to link it with
the north of France; the connections towards the East (Marseilles-Toulouse-NiceVentimiglia-Genoa) currently make it possible to meet the transport demand.
A major issue is found at the Italian border where the rail network into The Alps reduces to a
single-track segment that is shared by both passenger transport and cargo, with the former
always taking precedence. This has been the major constraint in developing cross-border
container flows.

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6.4

PORT ROAD AND RAIL CONNECTIONS


The following sections summarise the infrastructure, roads and railways for the competing
ports.
Port of Livorno

Road Network
The main access to the Port of Livorno is the A12 Genova-Livorno-Rosignano. Along its
route there are numerous and important connection nodes with other motorways such as A11
Firenze-Mare (in turn connected to A1 Milano-Napoli), A15 Parma-La Spezia, A10 GenovaVentimiglia and A7 Genova-Milano.
The A-road that directly serves the town is the S.S.1 Aurelia, which goes through the
Province of Livorno for more than 90km, occupying the whole Tyrrhenic Corridor. This road
connects the area with the north of Italyvia its junction with the SS62, and then with the A 15
Parma-La Spezia and the SS 63 in the direction of Reggio Emilia. Also, towards the East,
connections are possible from the Aurelia thanks to the Pisa junction which connects the
S.S.12 of Abetone and Brennero, which goes all the way to the Province of Modena, and the
S.S.67 Tosco-Romagnola, which goes through Empoli, carries on towards Florence and
Pontassieve, turns towards Forl and finally reaches Ravenna.
An alternative/complementary artery in Aurelia is the S.S. 206 Pisana- Livornese. This road
has approximately 35 of its 41.5km in the Province of Livorno, starting from S. Giusto (Pisa)
and running parallel to Aurelia it then joins the same S.S. 1 Aurelia, north of Cecina.
The four lane Variante Aurelia plays an important role for traffic flow. This connects to
motorway A12 north of Livorno, and reaches Rosignano that runs parallel with the A12
section Collesalvetti-Rosignano and continues to a few kilometres beyond Grosseto, where it
stops for 30km restarts and finishes neat Civitavecchia.
The Strada di Grande Comunicazione (S.G.C.), along the Arno Valley corridor, is
fundamental for the cross-penetration of traffic. Firenze-Pisa-Livorno with four lanes runs
along the left bank of the river Arno and, near Cascina. It splits into two sections: the first
section runs towards Pisa joining the A12, whereas the second section runs towards Livorno,
crossing the S.S. 1 and joining the port area directly in the industrial port (Darsena ToscanaDarsena no. 1).
The junctions of S.G.C. Firenze-Pisa-Livorno running through the Freight village A.
Vespucci near Guasticce connects it directly with this important artery and the industrial
areas that it serves.
Rail Network
The railway network that serves the port of Livorno includes the following lines:
Tirrenica Genoa-Rome Line, which provides the ability of routing to the north
towards the western Alpine passes (Ventimiglia, Frejus and Sempione) and to the south
towards the Centre and South of Italy. The Pisa junction in the north and the Vada
crossroads in the south are located off this line;

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Firenze-Pisa Line that runs parallel with River Arno, connecting the important centres of
Empoli and Pontedera and that, through the Florence junction, is connected with the
central ridge Milan/Bologna-Florence/Rome/South of Italy and to the system of minor
Apennines passes. Amongst these are the Transapennines itinerary formed by the line
"Faentina", which is also used for some specific connections between Livorno and
Ravenna;
Line Prato-Pistoia-Lucca-Pisa Line;
"Pontremolese" La Spezia/Sarzana-Pontremoli-Parma/Fidenza Line, with Apennines
Pass along the Tirreno-Brennero corridor which joins at Sarzana on the Tirrenica;
The minor line Pisa-Collesalvetti-Vada which joins at Vada on the Tirrenica southbound
and has access to the station of Pisa northbound, and Livorno Calambrone-GuasticceCollesalvetti Line (which is essential for the future for the operation of the Freight village
A. Vespucci of Guasticce), which at Collesalvetti could join the line Pisa-CollesalvettiVada, for the North-South routings. The line is currently managed as a feeder line for the
Livorno-Guasticce whereas it is not used along the section Guasticce-Collesalvetti, where
the upgrade of the canals in the area caused the interruption of the track at several
locations. The line is used as a feeder line for transports towards the industrial area of
Stagno and, in the future, towards the Freight village.
These lines provide The Port of Livorno with a comprehensive range of routing options
towards the national inland and onwards towards Central and Northern Europe.
Livorno critical infrastructure issues
The most important issue is the completion of the Tyrrhenic multimodal motorway corridor
with the construction of the motorway section between Rosignano and Civitavecchia and the
construction of the Maroccone-Chioma stretch of the Variante Aurelia motorway.
In addition, construction of the Variante Aurelia section between Rosignano and
Civitavecchia is being completed by the Government in order to finally bring the motorway
to a completion.
The road system closest to the port has some issues that can be summarised with the
following objectives:
the immediate connection of the port areas with the port hinterland areas (reorganisation
of port crossings);
overcoming the connection limits between the internal areas: between the historic port
and the commercial port and between the various parts of the industrial port;
separation between the flows of commercial, tourist, and town traffic by using S.
Orlando for the commercial traffic, the Valessini and Zara crossing, and via delle
Cateratte for the tourist/town traffic;
doubling the lanes in via L. Da Vinci to separate commercial from light traffic.
With regard to the rail network, the crossing of the Apennines forms the most critical aspect
of the railway connections. Although the Bologna Transapennines route could have good
traffic capacity, the northbound and north-westbound rail connections are limited by the
Pontremolese line, which has gradients that limit the performance of the locomotives and
reduce the transport capacity of the individual trains.

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The capacity of the railway system along the Tyrrhenic route is fairly uniform along the
whole Tuscan section.
The possible use of the lines Firenze-Bologna for the transport of goods from the Livorno
Tyrrhenic area towards Triveneto and Austria (Tarvisio) highlights a further possible critical
issue. For the cross-line Pisa-Firenze, on the section Empoli-Bivio Olmatello, the regional
service to and from Siena has significant traffic congestion and is currently undergoing a
four-track upgrade development.
It should also be noted that the line Prato-Pistoia-Lucca-Pisa-Viareggio is inadequate along
the section Pistoia-Viareggio due to a single track and it not being electrified.
Port of Genoa
Road Network
Genoa is connected by the A10 motorway to Ponente (West) and France, the A7 and A26
motorways to the North and Pianura Padana and A12 motorway to Levante (East). The
Genova Ovest exit can be used by both commercial traffic to rapidly reach the port terminals
located in the Sampierdarena area and by private traffic to reach the Maritime Station and the
Ferry Terminal. The commercial vehicles going to the VTE must use the Genova-Voltri toll
plaza.
Rail Network
The rail system servicing the port of Genoa consists of the lines: Torino-Genova/Milano, the
Genoa branch line and the Ventimiglia-Savona-Genova-Roma coast line.
The backbone of the railway system is formed by a coast route and two valley routes. The
main valley route is Val Polcevera-Valle Scrivia, where there are two distinct lines that
converge at Ronco Scrivia, and the construction of a third line, dedicated to the transport of
goods. The connection of this route with the coastal route is at the Sampierdarena and
Principe junctions, where the internal sections leading to the Port of Genoa are also
connected.
The Valle Stura line, which is of inter-regional interest and currently undergoing
development, does not have its own connection with the coastal route. However, through the
foothill connection of the Mele-Borzoli-Rivarolo line, it reaches the Sampierdarena junction.
The road link of the Port of Voltri with Rivarolo goes through the station of Borzoli, and it is
designed to run through the third pass.
In the future, Rivarolo should have a traffic junction specialised for the transport of goods.
The Sampierdarena and Principe junctions connect at a T-junction, which is a very
inefficient structure. In the Genova Principe station the traction unit exchange must be
carried out for the trains coming from Milan and going West towards Liguria and vice versa.
The following junction on the Padana route is Arquata Scrivia, outside of the provincial
territory, where the routes to Alessandria-Torino and Pavia-Milano depart.
Genoa critical infrastructure issues
At present, the capacity of the Voltri terminal is 24 trains per day. Outside of the port, the
railway connections are difficult due to the absence of the third pass. The network on
corridor 24 Genoa-Rotterdam, besides having a strong gradient that penalises a lot the goods
traffic in terms of efficiency, is still not completely fitted with the ERTMS signaling system
(European standard).

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Another infrastructural issue regards the railway connection towards Ventimiglia where
goods flow is significantly slowed due to the infrastructure limitations in both directions.
With regard to the road transport, there are serious congestion problems on the Genoa
motorway junction. The ordinary road system is currently undergoing development to
facilitate increased motorway connections. However, on the motorway network and in
particular on the Genoa junction roads, development to relieve congestion has been
suspended with the timing of resumption unknown.
Port of La Spezia
Road Network
The Port of Spezia can be reached directly by motorway thanks to the exit La Spezia-Santo
Stefano Magra at the crossing between A12 and A15. A motorway link connects the dry
port logistic area of S. Stefano di Magra with the provinces main town and its port area.
The municipal territory of La Spezia is crossed by S.P. no. 1 / S.S. no. 1 "Aurelia" and then it
utilises a network that is mainly formed by the S.S. no. 330 ("di Buonviaggio"), by the S.S.
no. 331 ("di Lerici"), by the S.S. no. 370 ("Litoranea delle Cinque Terre") and by the S.S. no.
530 ("di Porto Venere).
Rail Connections
La Spezia is well connected to the rail network. It is at the crossing between the Tyrrhenic
line (Genoa-La Spezia-Piss-Livorno) and the Pontremolese line (Parma-La Spezia).

Source: DAppolonia

Figure 6.3: Accessibility Port of La Spezia


La Spezia critical infrastructure issues
The rail transport of the Port of La Spezia is divided into two main sections. The first route
towards Genoa suffers from the same critical issues outlined for the Port of Genoa; indeed
the northbound connections mainly go through the junction of the Northern Tyrrhenian main
towns and are therefore affected by the same issues as earlier mentioned.
The second route (Pontremolese line) is oriented towards the transport of goods between the
north Tyrrhenian Sea and the industrial areas of northern Italy and the centre-east of Europe
while also reaching the passes of Brennero and Tarvisio. The Pontremolese line for

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connecting the Port of La Spezia also suffers from the same issue as was highlighted for the
port of Livorno.
Port of Civitavecchia
Road Network
The port of Civitavecchia enjoys a strategic position with regard to the port access
infrastructure. From the port basin it is possible to rapidly access the motorway A12
Genova-Roma and the A-road SS 1 Aurelia, which runs along the Tyrrhenian coast up to the
border with France. Besides the Aurelia, the port is connected to the SS 675 Umbro-Laziale
that makes it possible to reach Orte, where there is a freight village base for traffic from the
North and Centre of Italy. Along this axis, preliminary planning for the final section of the
connection between the port of Civitavecchia and the Orte ISO container junction has begun
with hopes of completing the East-West road route.
Rail Connections
The port is connected with the Torino-Genova-Civitavecchia-RomaNapoli-Reggio Calabria
Line and with the Civitavecchia-Capranica-Orte Line, which is partially closed, but it is
expected to be reopened and it will allow the direct connection between the port and freight
village areas.
Civitavecchia critical infrastructure issues
The port is preparing for the re-launching of goods via rail from the port to the hinterland
and 1.5km away there is also the Civitavecchia freight village, which is currently only
connected with the road network. The northbound railway connections are not upgraded and
do not facilitate the transport of goods northbound.
In addition to this, the current layout of the port of Civitavecchia requires a substantial
reorganisation of the railway system, among which the restoration of the Orte-Civitavecchia
Line as far as the East-West ridge connecting with the Orte freight village
Port of Venice
Road Network
The Port of Venice is directly connected to the national and European road network
(corridors I, V and Adriatic-Baltic).
The incoming/outgoing goods traffic of the Marghera port section, where the commercial
and industrial terminals are located, as well as the companies that operate in the port, goes
through via dellElettricit and is connected by the road network through the A-road Romea
(SS309-E55), the Regional Road Padana Superiore (SR11), and the A4 and A27 motorways.
These connections link the Port of Venice to the European corridors Lisbon-Kieve, BerlinPalermo, Adriatic-Baltic.

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Source: DAppolonia

Figure 6.4: Road Accessibility of the Port of Venice


In order to increase the road accessibility, new roundabouts are to be developed, as well as
the arrangement of the crossings with the major traffic roads. The construction of an
overpass and the extension of the connection links with the long-distance roads are to be
completed in addition to the re-planning of the Port internal road system (such as the
extensions in via dell'Azoto and via dell'Elettronica).
Rail Connections
The port of Venice has more than 200km of internal railway network, its own freight yard,
and is connected with the rest of Europe through rail corridors of international relevance.
The rail network is directly connected to the different terminals with rail lines going all the
way to the quays. The network serves both the commercial and industrial traffic for the
Marghera port.

Source: DAppolonia

Figure 6.5: Railway Accessibility to the Port of Venice

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Marghera railway station, through the hinge Venezia-Mestre, connects the Port of Venice
with the international rail network. At Marghera railway station the arriving/departing trains
can stop or transit after loading/unloading.
From the Port of Venice, trains can easily reach important European destinations. There are
four main road connections: Venezia-Milano-Torino-Lione; Venezia-Udine-TarvisioVienna; Venezia-Padova-Bologna-Roma; Venezia-Trieste-Lubiana-Budapest.
Venice critical infrastructure issues
The following are the critical issues for the port:
the non-electrification of the incoming second track at the Venezia-Mestre station;
the need for a direct connection between the Peninsula of Chemical-Fusinae and the line
Venezia-Milano to bypass the Mestre junction;
the lack of suitable rail equipment for the container terminal and for the Distripark.

6.5

ACCESSIBILITY TO PORTS
The major ports have good access to both the road and railway networks within Italy. The
following table provides a brief overview of the accessibility of each port on the basis of a
qualitative scale based on the summary of the road and railway infrastructure equipment.
Table 6.1: Road and Rail Network Accessibility

Towards
NORTH
Good

Towards
SOUTH
Inadequate

Adequate

Connections
with
Freight
villages
Good

Adequate

Inadequate

Adequate

Good

Good

Inadequate

Adequate

Good

Good

Adequate

Good

Good

Adequate

Good

Adequate

Adequate

Road accessibility

Port of Livorno
Port of Genoa
Port
of
La
Spezia
Port of Venice
Port
of
Civitavecchia

Rail
accessibility

Source: DAppolonia

As can be seen from the above table, the ports of Livorno, Genoa and La Spezia have
inadequate road infrastructure for southbound connections. However, this has a limited
impact on these ports attractiveness because the container traffic is mainly directed towards
the industrialised areas of Northern Italy.
With the exception of Venice, nearly all southbound railway connections run along the same
railway line, with each port being affected by the same difficulties resulting from this.

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6.6

MAIN IMPROVEMENT WORKS TO THE ITALIAN ROAD NETWORK


The main developments expected for the road network that could improve access for the
ports being overviewed in this analysis are:
Motorway Nuova Romea;
TiBre-Autocamionale della Cisa;
Motorway A1 Milano-Napoli Variante di Valico;
The Tyrrhenian Corridor.
The infrastructure developments for road network will have differing benefits for the access
to the ports currently under review. The following table shows the impact he road works
will have on the access to ports with a qualitative scale that goes from 0 (no impact) to
+++ (maximum impact).
Table 6.2: Impact of road network works on ports
Port
Road works
Motorway Nuova Romea
TiBre - Autocamionale della Cisa
Motorway A1 Milano-Napoli
Variante di Valico
Tyrrhenian Corridor

La
Spezia
0

+++

++

+++

++

++

++

+++

+++

Genoa

Livorno

Civitavecchia

Venice

Source: DAppolonia

Through a multi-criteria analysis an assessment was made to ascertain which port would
expect to receive greater benefits from road network developments. The multi-criteria
analysis was conducted through a weighted summation in which the same weights were
assigned to all developments. The obtained results are evaluated on a scale between 0 and 1,
assigning for each port a value that identifies the greater benefit obtained during the
development.

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Source: DAppolonia

Figure 6.6: Benefits to Ports from Road Infrastructure Works


Figure 6.6 shows the result of the multi-criteria analysis between the ports considered on the
basis of the potential benefits that can be obtained from developments to infrastructure. As
the figure above shows, the port of Livorno is in the best position to benefit from the
development of the national motorway system.

6.7

MAIN IMPROVEMENT WORKS TO THE ITALIAN RAILWAY NETWORK


The main improvements planned comprise the following:
increase of the maximum permissible length for the trainsets on the network. This is
necessary to guarantee greater cost-effectiveness for goods services particularly for
container trains to lengths (modules) of up to 750m;
the adaptation of the gauges on the main goods lines for the PC80 container traffic;
development of the railway connection between the core network ports and the main ISO
container terminals.
The works expected by 2017 are the following:
Mediterranean Corridor:
Completion of PC80 Torino-Trieste,
Module 750m Torino-Trieste;
Rhein-Alps Corridor:
PC80 Chiasso and Luino lines,
Module 750m lines Chiasso, Luino and Domodossola via Arona and Borgomanero;
Scandinavia-Mediterranean Corridor (Northern Tyrrhenian Sea Ports):
PC80 Brennero -Livorno / La Spezia,
Module 750m;

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Baltic-Adriatic Corridor:
Module 750m,
Enhancement Udine connection;
Scandinavia-Mediterranean Corridor (Adriatic port and ports in the South):
PC80 Ancona-Bari-Taranto,
Module 650 m.
The aim of the developments is to increase the loading gauge and the maximum station
module of the trains in order to increase the container and semi-trailer traffic connection to
the north of Europe.
Figure 6.7 and Figure 6.8 highlight the current railway network and the improvement works
expected and in progress.

Source: DAppolonia

Figure 6.7: Development of Railway Infrastructure - Modules Until 2017

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Source: DAppolonia

Figure 6.8: Development of Railway Infrastructure - Gauges until 2017


In the longer term, the Terzo Valico of Giovi is a new high-capacity speed line that will
make it possible to increase the connections of the Northern Tyrrhenian port system with the
main railway lines in the North of Italy and the rest of Europe. The work is part of the Rhein
- Alps Corridor, which is one of the corridors of the strategic transport trans-European
network (TEN-T core network) that connects the more densely populated and more
industrialised regions of Europe. This will be critical for the longer term development of the
reach of the ports under review.

Source: COCIV

Figure 6.9: Rhein-Alps Corridor and Terzo Valico di Giovi


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The infrastructural interventions expected on the railway network will define railway access
to the ports. These benefits will have a varying impact.
The following table shows the impact of the rail works on the access to ports with a
qualitative scale that goes from 0 no impact to +++ maximum impact.

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Table 6.3: Impact of Railway Network Works on Ports


Port
Railway works
Genoa

La
Spezia

Livorno

Civitavecchia

Venice

+++

+++

++

+++

+++

+++

Mediterranean Corridor
Completion of PC80 Torino-Trieste
Module 750 m Torino-Trieste
Rhein-Alps Corridor
PC80 Chiasso and Luino lines
Module 750 m lines Chiasso, Luino and Domodossola via
Arona and Borgomanero.
Scandinavia
- Mediterranean Corridor (Northern
Tyrrhenian Sea Ports)
PC80 Brennero Livorno / La Spezia
Module 750 m.
Baltic-Adriatic Corridor
Module 750 m
Enhancement Udine connection
Scandinavia-Mediterranean Corridor (Adriatic port and
ports in the South)
PC80 Ancona-Bari-Taranto
Module 650 m.

Source: DAppolonia

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A multi-criteria analysis was also conducted for the rail network which defines which port
will gain the most benefits from the development on the railway network.
The multi-criteria analysis was conducted through a weighted summation with the same
weighting being assigned to all rail works.
Figure Figure 6.9 shows the result of the multi-criteria analysis that is the classification
between ports considered on the basis of benefits obtained from the developments. The
obtained results are evaluated on a scale between 0 and 1, assigning for each port a value that
identifies the greater benefit obtained from the development.
It is concluded that all ports will benefit from the infrastructure developments except for the
port of Civitavecchia, which obtains fewer benefits from the developments.

Source: DAppolonia

Figure 6.10: Ports with Major Benefits From Railway Infrastructural Works

6.8

THE ITALIAN FREIGHT VILLAGE SYSTEM


The Italian freight village system is characterised by the presence of a high number of nodes
that have different characteristics not only in terms of volumes handled and physical
dimension of the spaces, but also in terms of quality and type of services on offer.
To date in Italy there are 23 freight villages (see Figure 6.11). The most significant portion
of freight villages are in the North, particularly in Veneto (Verona, Rovigo, Padova), in
Emilia Romagna (Parma and Bologna) and in Piedmont (Torino, Rivalta Scrivia). In the
regions of the Italian centre, the operating freight villages are the ones of Livorno, Prato, Jesi
and Civitavecchia (Orte).

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Figure 6.11: The Italian Freight Villages System


The Piedmontese logistic system integrates with the Northern Tyrrhenian ports. This
territory is characterised by the presence of two incomplete European corridors, which give
the area a strong potential and an interesting development prospective.
The Northern Tyrrhenian port represents one of the main models of the national ISO
container (and inter-port) system and is focused towards the freight village of Rivalta
Scrivia.
La Spezia which is orientated towards the Brennero axis with active connections on the
freight villages of Verona, Bologna and Padova, as well as on the inland terminal of Melzo.
In the North-East the ports are affected by their relationship with Austria and they are among
the few ports that use the railway mode to ship across the border. A strategy of specialisation
of the freight villages in this region have been adopted both on the basis of the type of
handled load, and on the basis of the main traffic routes. In this context, there is a plan for
strengthening the commercial relationships between the port of Venice and the freight
village of Padova by developing the canals between Padova and Venice.
The central region is characterised by a freight village logistic system where different
regional networks from Tuscany, Lazio, Umbria and Marche coexist.

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Source: DAppolonia

Figure 6.12: Ports and Linked Freight Villages

6.9

THE ROLE OF FREIGHT VILLAGES IN THE ITALIAN LOGISTIC SYSTEM


As the previous chapter highlighted, the Italian logistic system is structured via various
freight villages and although their emphasis is for rail connectivity they play an important
role also for the distribution of the goods by road.
The freight villages have been selected on the basis of several factors including the
connections with the ports, their relative location and the relationship with respect to the
final destination of the shipped goods.
Road Transport
The following tables highlight the distances in kilometres between the competing ports and
the main freight villages as well as the related transport costs on the same routes with regard
to road transport.

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Table 6.4: Distance Matrix-Road


Rivalta
Scrivia

Bologna
Int.

Padua
Int.

Milan

Turin

Verona
PN

Orte

231

195

309

298

342

323

306

Genoa

65

297

364

147

166

283

443

La Spezia

155

206

318

223

267

219

341

Civitavecchia

474

358

472

555

582

491

85

Venice

382

204

92

246

393

168

505

Km
Livorno

Source: DAppolonia

Rail Transport
A similar approach has been taken for rail transport, with the following table showing the
railway distance between the ports that are the object of the analysis and the main freight
villages used to connect the most important Italian internal markets.
Table 6.5: Distance Matrix-Railway
Rivalta
Scrivia

Bologna
Int.

Padua
Int.

Milan
despatch.

Turin
despatch.

Verona
PN

Orte

244

185

306

322

341

298

n.a.

Genoa

75

302

351

179

167

281

n.a.

La Spezia

157

215

330

250

249

271

n.a.

Civitavecchia

477

417

538

553

573

531

n.a.

Venice

376

148

28

247

405

110

n.a.

Km
Livorno

Source: DAppolonia

Distances for International Shipments


The nations under review for this analysis are Switzerland, Austria and Germany.
Although at present there are very few goods that actually reach other European countries
from Italian ports, the associated distances involved have been analysed. From this analysis
the cost of transporting goods from the ports in question to several non-Italian cities has been
estimated.
The fact very few goods cross the border is the result of the infrastructure limitations
highlighted in the previous sections as well as a lack of port infrastructures that are suitable
to receive the ULCSs in conjunction with this, which will potentially become an even more

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significant issue in the future when more of the larger vessels call at Italian and Northern
Tyrrhenian ports on a regular basis.

Source: DAppolonia

Figure 6.13: Italian Ports and European Cities


International Road Transport
The table below shows the road distances in kilometres between the considered ports and
suggested European cities.
Table 6.6: Distance Matrix-European Cities
Km

Vienna

Innsbruck

Munich

Graz

Zurich

Bern

Zagreb

Livorno

926

563

724

734

582

610

696

Genoa

981

524

629

799

420

424

751

La Spezia

938

469

604

756

501

533

708

Civitavecchia

1092

740

875

910

839

910

862

Venice

557

333

428

375

593

665

327

Source: DAppolonia

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International Rail Transport


The table below summarises the railways distances in kilometres between the considered
ports and European cities.
Table 6.7: Railway Distance Matrix-European Cities/km
Km

Vienna

Innsbruck

Munich

Graz

Zurich

Bern

Zagreb

Livorno

939

567

718

820

606

562

741

Genoa

867

446

397

789

987

555

711

La Spezia

961

538

695

848

528

480

769

Civitavecchia

1172

800

956

1052

840

800

974

Venice

586

443

548

466

603

594

388

Source: DAppolonia

Detailed cost estimates of both road and intermodal transport from the main competing
Italian ports to major Italian markets and to European markets are detailed as part of the
overall built-up cost analysis in Section 7.

6.10

CONCLUSIONS
The ports under consideration are generally well connected to their major hinterlands
by road. There are some significant bottlenecks but investment is underway or
planned to alleviate these constraints.
Livorno is well placed in this regard and enjoys relatively good access not simply to the
northern hinterland but also to the central Italian markets.
The situation with regard to rail is more problematic. There is a well-established and
mature rail network, but this has been restricted by a lack of investment for freight
operations (particularly for containers). Further investment is planned, but attention is
required both for investment in new capacity and the modernisation of operating
practices. There is very little international rail movements of containers and, in the
longer run, the position of all ports (including Livorno) will depend upon the extension
of the hinterland to the north by means of intermodal trains.
Investments in both road and rail capabilities will significantly extend Livornos
hinterland.
The freight village network is an important aspect of domestic
containerised goods distribution and Livorno is well connected into this system.

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BUILT-UP COST ANALYSES

7.1

INTRODUCTION
Aside from the physical availability of container handling facilities and the adequacy of
hinterland links, the key determinant of the level of demand will be the comparative costs
involved. This Section develops an analysis of the current structure of delivered container
costs in the two markets that are of immediate significance for Livorno, namely:
the Italian import/export markets by region;
the potential transit markets to central European countries and in particular Switzerland,
Austria, Slovenia and Southern Germany.
The following approach is taken:
the comparative cost structures involved in introducing a direct call to Livorno. This is
based upon the transport costs associated with individual shipments to different
destinations within northern Italy and central Europe and is compared with routings via
other Northern Tyrrhenian Sea ports as well as ports on the Tyrrhenian Sea and Adriatic
Sea;
a parallel analysis is developed concerning the scope for transshipment hub operations in
the region and compares transshipment costs via Gioia Tauro, Marsaxlokk, Taranto and
Cagliari with direct calls at Livorno and other ports on the Northern Tyrrhenian Sea;
against the background of underlying transport costs comparisons, the overall strategic
considerations that are relevant for the direct call versus feedered decision are detailed.
The analysis is developed on the basis of current costs (2014).

7.2

NORTH ITALIAN INLAND MARKETS


The greatest potential for containerised trade growth for the Livorno market lies with trade to
the US east coast and from Asia.
An analysis of current cost structures has been developed that identifies representative
through-transport costs from major trading partners to representative Livorno markets for
containers shipped via Livorno (for local cargoes), and for containers shipped via central
Mediterranean transshipment hubs (Gioia Tauro, Cagliari, Taranto and Marsaxlokk), for
transshipment volumes.
The following analyses focus on deepsea shipping costs, stevedoring costs and inland
distribution costs. It is the total of these costs that will determine the true underlying
competitive position. The resulting figures highlight the importance of cheap bunkers in the
overall shipping costs as well as the importance of the inland cost elements. The analysis is
based upon costs collated for 2014.
Deep-Sea Shipping Costs
A review has been undertaken of the transport costs for different deepsea vessels that are
utilised for shipping containers between various trading regions and the Mediterranean
markets. The scale economies available from the introduction of larger vessels are clearly
illustrated in Table 7.1. 18,270TEU capacity vessels have also been added in view of the

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recent deployment of vessels of this magnitude by Maersk Line and other major shipping
lines on the main arterial trade lanes.
Table 7.1
TableCosts
7.1:2014
Deep-Sea
Deep-Sea Containership Trading

Containership Trading Costs 2014

2000TEU 3500TEU 4500TEU 6800TEU 8500TEU 10800TEU 12500TEU 14500TEU 18270TEU


Capacity - TEUs

2000

3500

4500

6800

8500

10800

12500

14500

18270

25.0
10,307

35.5
14,636

40.0
16,491

57.5
23,706

76.5
31,539

90.0
37,104

112.0
46,174

130.0
53,595

162.0
66,788

3,200
1,096
655
1,000
5,951

3,650
1,568
936
1,100
7,253

3,650
1,734
1,035
1,100
7,519

3,650
2,456
1,466
1,200
8,773

3,650
2,903
1,733
1,200
9,486

3,650
3,238
1,933
1,200
10,021

3,650
3,573
2,133
1,300
10,656

3,800
3,948
2,350
1,475
11,573

4,100
4,353
3,100
1,650
13,203

355
610
18 knots
32.8
2.0

355
610
18 knots
50.3
2.5

355
610
19 knots
53.5
2.5

355
610
19 knots
79.5
2.8

355
610
19 knots
98.6
2.8

355
610
19 knots
113.0
3.0

355
610
19 knots
136.5
3.2

355
610
19 knots
153.5
3.2

355
610
19 knots
163.5
3.2

0
2.0
12,864
1,220

0
2.8
19,382
1,525

0
2.8
20,518
1,525

0
2.8
29,931
1,708

0
2.8
36,711
1,708

0
3.0
41,945
1,830

0
3.2
50,410
1,952

0
3.2
56,445
1,952

0
3.2
59,995
1,952

29,122
17,478

41,270
23,414

44,527
25,535

62,409
34,186

77,736
42,733

89,070
48,955

107,239
58,782

121,613
67,120

139,985
81,943

Per TEU at Sea - $/day


Per TEU in Port - $/day

14.56
8.74

11.79
6.69

9.89
5.67

9.18
5.03

9.15
5.03

8.25
4.53

8.58
4.70

8.39
4.63

7.66
4.49

Per FEU at Sea - $/day


Per FEU in Port - $/day

29.12
17.48

23.58
13.38

19.79
11.35

18.36
10.05

18.29
10.05

16.49
9.07

17.16
9.41

16.77
9.26

15.32
8.97

Capital Costs
New build Price - mUS$
Daily Capital Charge - $
Operating Costs
Manning - US$/day
Repair & Maintenance - US$/day
Insurance - US$/day
Admin/Other Charges* - US$/day
Total
Fuel Costs
HFO - US$/tonne
MDO - US$/tonne
Consumption At Sea
HFO - tonnes/day
MDO - tonnes/day
Consumption In Port
HFO - tonnes/day
MDO - tonnes/day
Fuel Costs At Sea - US$/day
Fuel Costs In Port - US$/day
Total Costs at Sea - $/day
Total Costs in Port - $/day

* ex cludes agency , marketing and liner serv icing costs.


Source: Ocean Shipping Consultants

The oversupply of container shipping capacity (especially in the larger size ranges) has
resulted in shipping lines seeking to absorb excess capacity by slowing down trading speeds.
This has also been stimulated by relatively expensive bunker prices (although recent data
from October 2014 to February 2015 - suggests that fuel costs are starting to decrease). In
the current market, shipping lines are faced with excess tonnage and have developed some
slow multi-port itineraries that will absorb some of this capacity. The degree to which this
strategy will survive a recovery in freight rates and improved utilisation remains uncertain,
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although the level of the short-term orderbooks for the major shipping lines, suggests that the
need for slow-steaming is likely to remain for the next 2-3 years at least. Trading speeds for
deepsea operations have been calculated on the basis of current operating regimes, but with
the latest fuel prices in Singapore (US$ 355/t for HFO and US$610/t for MDO).
Under current cost conditions, the at sea costs of transporting a forty foot container (FEU)
are placed at between US$29.12 and US$15.32 per day, depending upon the size of deepsea
vessel that is deployed. It is important to note that scale economies offer declining returns.
One of the main elements as far as the built-up cost analyses is concerned, is the price of
fuel. Indeed, in recent years this has become an overriding consideration for the shipowners
profitability. Figure 7.1 illustrates the bunker price developments from 1976-2015 and
indicates the rapid increase in the price of fuel over this 39-year period. Recent indications
are that the IFO price per tonne will decrease during 2014-15, based on the recent chargeable
rates in Rotterdam and Singapore.

Figure 7.1: Long Term IFO Bunker Price Development 1976-2015


The implications of these expenses are further illustrated in Figure 7.2. This further
highlights the trading costs associated with various vessel sizes and the impact in terms of
US$/day that the various bunker costs have on a shipping lines profitability.

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Figure 7.2: Total At-Sea Trading Costs at Different Bunker Price (21 Knots)
Although this a key issue for shipping lines, it is questionable whether Livorno could benefit
in any significant way by developing itself as a bunker provider although the provision of
LNG as a bunker fuel may be worth some further consideration. However, the lack of
bunkering facilities at Livorno will not be a major constraint in developing the port as a
major container handling facility.
Examples of Deep-Sea Shipping Costs
This is, of course, only one aspect of the transport cost calculation and other cost sectors are
considered below.
The method used in calculating deepsea shipping costs is summarised in Tables 7.2-7.3,
which show the position with regard to deepsea Asian containers shipped into Italian ports
from Singapore and deepsea US east coast containers shipped from Italian ports to New
York shown in Tables 7.4-7.5.
The data presented reflects the size of vessel that could currently be berthed at each of the
competing Italian ports and other competing facilities for the services under review. The
maximum possible vessel sizes that can be handled at each of the facilities is shown in Table
7.6. It is also important to stress that there also needs to be a requirement for main shipping
lines to put vessels of this magnitude into the region for local Italian and central European
transit volumes. The smaller the vessels are that are eventually enticed to make a call, the
less the differential between the cost of the calls and the less chance of lines moving to
Livorno from existing routes.
Although details of current services calling at Livorno are nowhere near the size of vessels
required for the scale economies discussed, it should be recognised that the situation after the
ordering of additional ULCSs is likely to be significantly different to the situation we have

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today. It remains quite possible that some shipping lines would look to make a call at a
Northern Tyrrhenian Sea port from Asia with vessels of 18,000TEU+ capacity.
For Livorno, the cost is US$72.14 cheaper if an 18,000TEU vessel can be attracted
compared with a maximum 6,800TEU vessel. This is quite a significant differential, but
needs to be taken as part of the whole built-up costs to show any true value and compared
with other competing ports.
Similarly, for the American trades it is clear that if 8,500TEU vessels were handled at
Livorno, they would be US$17.16 cheaper than if a 4,500TEU vessel were handled (subject
to their being a need for vessels of this size).
It is clear that the differentials in deepsea shipping costs under review are relatively high and
that scale economies are and will remain the driving factor in port choice for the longer
haul trades.
In considering these costs, some further remarks are necessary with regard to the impact of
the current level of oversupply in the container market. In summary, the following should be
noted:
major shipping lines have too many large vessels higher bunker prices have been a
pretext for this decision. This is set to continue with the introduction of more, larger
vessels being included in the orderbooks of all the major shipping lines;
in order to absorb excess tonnage, trading speeds have been slowed and new multiport
itineraries have been introduced. This is also set to continue for the short-term, in view of
the continuing need to absorb tonnage;
direct services have been introduced earlier than volume growth would usually justify.
The introduction of 18,000TEU vessels on main arterial trade lanes is a case in point.
Although volumes are on the increase, vessels of around 10,500TEU are more justifiable,
given the level of demand;
as the market moves back towards equilibrium, after the next wave of newbuilds have
been introduced, it can be anticipated that port concentration will be reasserted. Faster
deepsea services will be reintroduced and pressure to increase feedering and
transshipment will intensify. Establishment of correct network solutions in advance of
these developments will be in the interests of the major lines and will influence the size of
vessels deployed on main and secondary trade lanes.
It is also apparent from this review that it will be the inland delivery costs that are the critical
factor in determining competitive cost structures for the end users (the shippers).

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Table 7.2: Deep-Sea Shipping Costs from Singapore to Trieste, La Spezia and Genoa

Table 7.2.

Deep-Sea Shipping Costs from Singapore to Trieste, La Spezia and Genoa

Singapore to Trieste
Vessel Capacity - TEUs

4500

Load factor - %

6800

8500

10800

Singapore to La Spezia
12500

14500

18000

4500

6800

8500

10800

Singapore to Genoa
12500

14500

18000

4500

6800

8500

10800

12500

14500

18000

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

Ocean haul length - nm

7,116

7,116

7,116

7,116

7,116

7,116

7,116

7,217

7,217

7,217

7,217

7,217

7,217

7,217

7,255

7,255

7,255

7,255

7,255

7,255

7,255

Sea day s

16.47

15.61

15.61

15.61

15.61

15.61

15.61

16.71

15.83

15.83

15.83

15.83

15.83

15.83

16.79

15.91

15.91

15.91

15.91

15.91

15.91

4.28

4.87

5.59

6.56

6.52

7.25

8.51

4.28

4.87

5.59

6.56

6.52

7.25

8.51

4.28

4.87

5.59

6.56

6.52

7.25

8.51

Cargo size - box es

2,850

4,307

5,383

6,840

7,917

9,183

11,400

2,850

4,307

5,383

6,840

7,917

9,183

11,400

2,850

4,307

5,383

6,840

7,917

9,183

11,400

Sea costs per day

$44,527

$62,409

$77,736

$89,070

$107,239

$121,613

$139,985

$44,527

$62,409

$77,736

$89,070

$107,239

$121,613

$139,985

$44,527

$62,409

$77,736

$89,070

$107,239

$121,613

$139,985

Port costs per day

$25,535

$34,186

$42,733

$48,955

$58,782

$67,120

$81,943

$25,535

$34,186

$42,733

$48,955

$58,782

$67,120

$81,943

$25,535

$34,186

$42,733

$48,955

$58,782

$67,120

$81,943

Vessel Sea costs

$733,464

$973,903

$1,213,085

$1,389,961

$1,673,498

$1,897,797

$2,184,507

$743,874

$987,726

$1,230,303

$1,409,689

$1,697,251

$1,924,733

$2,215,512

$747,791

$992,927

$1,236,781

$1,417,112

$1,706,187

$1,934,867

$2,227,177

Vessel Port costs

$109,289

$166,524

$238,828

$321,145

$383,482

$486,461

$697,684

$109,289

$166,524

$238,828

$321,145

$383,482

$486,461

$697,684

$109,289

$166,524

$238,828

$321,145

$383,482

$486,461

$697,684

Port dues

$109,450

$199,000

$215,500

$235,500

$255,500

$281,120

$315,000

$109,450

$199,000

$215,500

$235,500

$255,500

$281,120

$315,000

$109,450

$199,000

$215,500

$235,500

$255,500

$281,120

$315,000

Canal Charges

$217,533

$362,555

$425,678

$425,678

$582,847

$630,720

$695,967

$217,533

$362,555

$425,678

$425,678

$582,847

$630,720

$695,967

$217,533

$362,555

$425,678

$425,678

$582,847

$630,720

$695,967

$1,169,736

$1,701,982

$2,093,091

$2,372,284

$2,895,327

$3,296,098

$3,893,157

$1,180,146

$1,715,805

$2,110,309

$2,392,012

$2,919,079

$3,323,034

$3,924,163

$1,184,063

$1,721,006

$2,116,787

$2,399,434

$2,928,016

$3,333,168

$3,935,828

2,138

3,230

4,038

5,130

5,938

6,888

8,550

2,138

3,230

4,038

5,130

5,938

6,888

8,550

2,138

3,230

4,038

5,130

5,938

6,888

8,550

$547.24

$526.93

$518.41

$462.43

$487.63

$478.56

$455.34

$552.12

$531.21

$522.68

$466.28

$491.63

$482.47

$458.97

$553.95

$532.82

$524.28

$467.73

$493.14

$483.94

$460.33

Port (and canal) day s

Voy age Cost


Cargo size in FEUs
Cost per FEU - $

Source: Ocean Shipping Consultants

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Table 7.3: Deep-Sea Shipping Costs from Singapore to Livorno, Salerno and Fos

Table 7.3

Deep-Sea Shipping Costs from Singapore to Livorno, Salerno and Fos

Singapore to Livorno
Vessel Capacity - TEUs

4500

Load factor - %

6800

8500

10800

Singapore to Salerno
12500

14500

18000

4500

6800

8500

10800

Singapore to Fos
12500

14500

18000

4500

6800

8500

10800

12500

14500

18000

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

Ocean haul length - nm

7,202

7,202

7,202

7,202

7,202

7,202

7,202

6,839

6,839

6,839

6,839

6,839

6,839

6,839

7,429

7,429

7,429

7,429

7,429

7,429

7,429

Sea day s

16.67

15.79

15.79

15.79

15.79

15.79

15.79

15.83

15.00

15.00

15.00

15.00

15.00

15.00

17.20

16.29

16.29

16.29

16.29

16.29

16.29

4.28

4.87

5.59

6.56

6.52

7.25

8.51

4.28

4.87

5.59

6.56

6.52

7.25

8.51

4.28

4.87

5.59

6.56

6.52

7.25

8.51

2,850

4,307

5,383

6,840

7,917

9,183

11,400

2,850

4,307

5,383

6,840

7,917

9,183

11,400

2,850

4,307

5,383

6,840

7,917

9,183

11,400

Sea costs per day

$44,527

$62,409

$77,736

$89,070

$107,239

$121,613

$139,985

$44,527

$62,409

$77,736

$89,070

$107,239

$121,613

$139,985

$44,527

$62,409

$77,736

$89,070

$107,239

$121,613

$139,985

Port costs per day

$25,535

$34,186

$42,733

$48,955

$58,782

$67,120

$81,943

$25,535

$34,186

$42,733

$48,955

$58,782

$67,120

$81,943

$25,535

$34,186

$42,733

$48,955

$58,782

$67,120

$81,943

Vessel Sea costs

$742,328

$985,673

$1,227,746

$1,406,759

$1,693,723

$1,920,732

$2,210,907

$704,913

$935,993

$1,165,864

$1,335,855

$1,608,355

$1,823,922

$2,099,472

$765,725

$1,016,741

$1,266,443

$1,451,099

$1,747,108

$1,981,272

$2,280,593

Vessel Port costs

$109,289

$166,524

$238,828

$321,145

$383,482

$486,461

$697,684

$109,289

$166,524

$238,828

$321,145

$383,482

$486,461

$697,684

$109,289

$166,524

$238,828

$321,145

$383,482

$486,461

$697,684

Port dues

$109,450

$199,000

$215,500

$235,500

$255,500

$281,120

$315,000

$109,450

$199,000

$215,500

$235,500

$255,500

$281,120

$315,000

$109,450

$199,000

$215,500

$235,500

$255,500

$281,120

$315,000

Canal Charges

$217,533

$362,555

$425,678

$425,678

$582,847

$630,720

$695,967

$217,533

$362,555

$425,678

$425,678

$582,847

$630,720

$695,967

$217,533

$362,555

$425,678

$425,678

$582,847

$630,720

$695,967

$1,178,600

$1,713,752

$2,107,752

$2,389,082

$2,915,552

$3,319,033

$3,919,558

$1,141,184

$1,664,072

$2,045,870

$2,318,177

$2,830,183

$3,222,223

$3,808,123

$1,201,997

$1,744,820

$2,146,449

$2,433,422

$2,968,936

$3,379,573

$3,989,244

2,138

3,230

4,038

5,130

5,938

6,888

8,550

2,138

3,230

4,038

5,130

5,938

6,888

8,550

2,138

3,230

4,038

5,130

5,938

6,888

8,550

$551.39

$530.57

$522.04

$465.71

$491.04

$481.89

$458.43

$533.89

$515.19

$506.72

$451.89

$476.66

$467.84

$445.39

$562.34

$540.19

$531.63

$474.35

$500.03

$490.68

$466.58

Port (and canal) day s


Cargo size - box es

Voy age Cost


Cargo size in FEUs
Cost per FEU - $

Source: Ocean Shipping Consultants

Livorno Port Authority, Livorno, Italy


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Table 7.4: Deep-Sea Shipping Costs from New York to Trieste, La Spezia and Genoa

Table 7.4

Deep-Sea Shipping Costs from New York to Trieste, La Spezia and Genoa

New York to Trieste


Vessel Capacity - TEUs

4500

Load factor - %

6800

8500

10800

New York to La Spezia


12500

14500

18000

4500

6800

8500

10800

New York to Genova


12500

14500

18000

4500

6800

8500

10800

12500

14500

18000

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

Ocean haul length - nm

5,391

5,391

5,391

5,391

5,391

5,391

5,391

4,551

4,551

4,551

4,551

4,551

4,551

4,551

4,524

4,524

4,524

4,524

4,524

4,524

4,524

Sea day s

12.48

11.82

11.82

11.82

11.82

11.82

11.82

10.53

9.98

9.98

9.98

9.98

9.98

9.98

10.47

9.92

9.92

9.92

9.92

9.92

9.92

4.28

4.87

5.59

6.56

6.52

7.25

8.51

4.28

4.87

5.59

6.56

6.52

7.25

8.51

4.28

4.87

5.59

6.56

6.52

7.25

8.51

2,850

4,307

5,383

6,840

7,917

9,183

11,400

2,850

4,307

5,383

6,840

7,917

9,183

11,400

2,850

4,307

5,383

6,840

7,917

9,183

11,400

Sea costs per day

$44,527

$62,409

$77,736

$89,070

$107,239

$121,613

$139,985

$44,527

$62,409

$77,736

$89,070

$107,239

$121,613

$139,985

$44,527

$62,409

$77,736

$89,070

$107,239

$121,613

$139,985

Port costs per day

$25,535

$34,186

$42,733

$48,955

$58,782

$67,120

$81,943

$25,535

$34,186

$42,733

$48,955

$58,782

$67,120

$81,943

$25,535

$34,186

$42,733

$48,955

$58,782

$67,120

$81,943

Vessel Sea costs

$555,664

$737,818

$919,020

$1,053,018

$1,267,823

$1,437,749

$1,654,957

$469,083

$622,855

$775,822

$888,942

$1,070,277

$1,213,726

$1,397,090

$466,300

$619,159

$771,220

$883,668

$1,063,927

$1,206,525

$1,388,801

Vessel Port costs

$109,289

$166,524

$238,828

$321,145

$383,482

$486,461

$697,684

$109,289

$166,524

$238,828

$321,145

$383,482

$486,461

$697,684

$109,289

$166,524

$238,828

$321,145

$383,482

$486,461

$697,684

Port dues

$109,450

$199,000

$215,500

$235,500

$255,500

$281,120

$315,000

$109,450

$199,000

$215,500

$235,500

$255,500

$281,120

$315,000

$109,450

$199,000

$215,500

$235,500

$255,500

$281,120

$315,000

$774,403

$1,103,342

$1,373,348

$1,609,663

$1,906,805

$2,205,330

$2,667,641

$687,822

$988,379

$1,230,150

$1,445,587

$1,709,258

$1,981,307

$2,409,773

$685,039

$984,684

$1,225,548

$1,440,313

$1,702,909

$1,974,106

$2,401,485

2,138

3,230

4,038

5,130

5,938

6,888

8,550

2,138

3,230

4,038

5,130

5,938

6,888

8,550

2,138

3,230

4,038

5,130

5,938

6,888

8,550

$362.29

$341.59

$340.15

$313.77

$321.15

$320.19

$312.00

$321.79

$306.00

$304.68

$281.79

$287.88

$287.67

$281.84

$320.49

$304.86

$303.54

$280.76

$286.81

$286.62

$280.88

Port (and canal) day s


Cargo size - box es

Canal Charges
Voy age Cost
Cargo size in FEUs
Cost per FEU - $

Source: Ocean Shipping Consultants

Livorno Port Authority, Livorno, Italy


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Table 7.5: Deep-Sea Shipping Costs from New York to Livorno, Salerno and Fos
Table 7.5
Deep-Sea Shipping Costs from New York to Livorno, Salerno and Fos

New York to Livorno


Vessel Capacity - TEUs

4500

Load factor - %

6800

8500

10800

New York to Salerno


12500

14500

18000

4500

6800

8500

10800

New York to Fos


12500

14500

18000

4500

6800

8500

10800

12500

14500

18000

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

95

Ocean haul length - nm

4,560

4,560

4,560

4,560

4,560

4,560

4,560

4,700

4,700

4,700

4,700

4,700

4,700

4,700

4,378

4,378

4,378

4,378

4,378

4,378

4,378

Sea day s

10.56

10.00

10.00

10.00

10.00

10.00

10.00

10.88

10.31

10.31

10.31

10.31

10.31

10.31

10.13

9.60

9.60

9.60

9.60

9.60

9.60

4.28

4.87

5.59

6.56

6.52

7.25

8.51

4.28

4.87

5.59

6.56

6.52

7.25

8.51

4.28

4.87

5.59

6.56

6.52

7.25

8.51

2,850

4,307

5,383

6,840

7,917

9,183

11,400

2,850

4,307

5,383

6,840

7,917

9,183

11,400

2,850

4,307

5,383

6,840

7,917

9,183

11,400

Sea costs per day

$44,527

$62,409

$77,736

$89,070

$107,239

$121,613

$139,985

$44,527

$62,409

$77,736

$89,070

$107,239

$121,613

$139,985

$44,527

$62,409

$77,736

$89,070

$107,239

$121,613

$139,985

Port costs per day

$25,535

$34,186

$42,733

$48,955

$58,782

$67,120

$81,943

$25,535

$34,186

$42,733

$48,955

$58,782

$67,120

$81,943

$25,535

$34,186

$42,733

$48,955

$58,782

$67,120

$81,943

Vessel Sea costs

$470,010

$624,086

$777,357

$890,700

$1,072,393

$1,216,126

$1,399,852

$484,441

$643,247

$801,223

$918,046

$1,105,318

$1,253,463

$1,442,830

$451,251

$599,178

$746,330

$855,150

$1,029,592

$1,167,588

$1,343,981

Vessel Port costs

$109,289

$166,524

$238,828

$321,145

$383,482

$486,461

$697,684

$109,289

$166,524

$238,828

$321,145

$383,482

$486,461

$697,684

$109,289

$166,524

$238,828

$321,145

$383,482

$486,461

$697,684

Port dues

$109,450

$199,000

$215,500

$235,500

$255,500

$281,120

$315,000

$109,450

$199,000

$215,500

$235,500

$255,500

$281,120

$315,000

$109,450

$199,000

$215,500

$235,500

$255,500

$281,120

$315,000

$688,749

$989,611

$1,231,685

$1,447,345

$1,711,375

$1,983,707

$2,412,536

$703,179

$1,008,771

$1,255,551

$1,474,691

$1,744,299

$2,021,044

$2,455,514

$669,990

$964,702

$1,200,659

$1,411,795

$1,668,573

$1,935,169

$2,356,665

2,138

3,230

4,038

5,130

5,938

6,888

8,550

2,138

3,230

4,038

5,130

5,938

6,888

8,550

2,138

3,230

4,038

5,130

5,938

6,888

8,550

$322.22

$306.38

$305.06

$282.13

$288.23

$288.02

$282.17

$328.97

$312.31

$310.97

$287.46

$293.78

$293.44

$287.19

$313.45

$298.67

$297.38

$275.20

$281.02

$280.97

$275.63

Port (and canal) day s


Cargo size - box es

Canal Charges
Voy age Cost
Cargo size in FEUs
Cost per FEU - $

Source: Ocean Shipping Consultants

Livorno Port Authority, Livorno, Italy


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Table 7.6: Comparison of Maximum Size of Vessels Accommodatable at


Ports

Table 7.6

Comparison of Maximum Size of Vessels Accomodatable at Various


Ports
Various
Terminal

Depth (m) Max.Capacity (TEU)

Europa Platform

Required-USEC

Required-FE

Required-USEC

Required-FE

Current

Current

Future

Future

16.0 (18.0)

12,500 (18,400)

4,500

8,500

8,500

18,400

11.8

3,000

4,500

8,500

8,500

18,400

Vado Ligure

17

18,400

4,500

8,500

8,500

18,400

VTE

15

8,000

4,500

8,500

8,500

18,400

SECH

14.5

6,400

4,500

8,500

8,500

18,400

LSCT

14

5,000

4,500

8,500

8,500

18,400

Trieste

18

18,400

4,500

8,500

8,500

18,400

Fos

15

8,000

4,500

8,500

8,500

18,400

Salerno

9.7

2,500

4,500

8,500

8,500

18,400

Civ itav ecchio

14

5,000

4,500

8,500

8,500

18,400

Darsena Toscana

Source: Ocean Shipping Consultants

Table Table 7.6 details the main competition for Livorno, highlighting the maximum size of
vessel that can currently be handled (For Europa Platform the current planned depth and our
recommended depth are included). Cells highlighted in green are the current and future
vessel sizes that can be handled at each port facility, whereas cells in red highlight the size of
vessels for each of two trade lanes that cannot be handled. Cells in yellow are marginal in
terms of whether they can be handled or not.
It can be seen that although the vast majority of the terminals under review can handle the
current US east coast services without too much difficulty, the challenge arises with the
expected future increase in vessel sizes on this trade lane and also on the Far EastMediterranean services. When vessel sizes increase, it becomes clear that Vado Ligure and
Trieste offer the most competition to the Europa Platform project.
Stevedoring charges
OSC have been reviewing these developments since the early 1990s, and the following
assessment provides a summary of market developments. The methodology focuses on the
specific, component cost sectors involved in container handling. Once these costs have been
identified, the competitive position for transshipment containers is then analysed.
With regard to container stevedoring, the starting point for the review is an identification of
the charge made for container handling. This constitutes the 'headline rate' that is quoted by
the stevedore for the basic operation of container shipment. In simplified terms, this
represents the movement of a container from a vessel to the yard and then reloading on
another vessel.
It only makes sense to compare individual terminal tariff and costing structures if a similar
requirement can be identified. Each customer calling at the major regional hub ports
generates a specific requirement and it is apparent that these are never identical.
Furthermore, the pattern of typical customers is seen to differ fairly significantly between
ports. In order to minimise these differences, a representative deepsea liner customer has
been selected, and the key details are as follows:

Livorno Port Authority, Livorno, Italy


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Annual volumes:

50,000-75,000 containers;

Calls per annum:

52;

Average consignment:

964-1442 containers;

Vessel size:

4,500-6,800TEU vessels;

TEU : FEU box ratio:

50 : 50.

Loaded : Empty ratio: 80 : 20


It should be noted that these volumes are primarily appropriate for the higher volume
transshipment hub ports, in other ports a somewhat smaller consignment size may be more
representative. The real fixed costs in the equation relate to port dues and vessel charges,
which will thus differ widely on the basis of consignment size (number of containers). Over
time, the average vessel size has increased sharply, as has the typical consignment size
handled.
There will be some minor differences in charges for container handling for alternative sizes
and annual container volumes, but in order to maintain ease of direct comparison and to
simplify the number of alternatives, these charges have been focused on for the market as a
whole.
The data summarised in Table 7.7 presents the conclusions of a detailed series of reviews of
the development of container handling charges in the major competitive deepsea terminals
for the period since 2005. Container handling costs are detailed in terms of dollars per
container and do not include additional charges for special containers or specific rates for
empty boxes. These figures are replicated in Section 5, where further analysis of the rates is
provided.

Table 7.7

Stevedoring Costs - 2014

Table 7.7: Stevedoring Costs- 2014 US$ - per 40 Loaded Container

US$ - per 40' loaded container

Livorno

SECH

VOLTRI

La Spezia

Fos

Trieste

Salerno Gioia Tauro Marsaxlokk

Taranto

137.94

171.00

188.10

182.40

216.60

155.04

176.70

na

na

na

110.58

228.00

136.80

131.10

131.10

124.26

108.30

153.90

149.91

151.05

Import / Export
40' container
Transshipment
40' container

Ty pically , these are prices discounted for v olume customers.


Transshipment full cy cle cost - v essel-y ard-v essel w ith discount for 100-340k box es.
Import/ex port - v essel-gate
Source: Ocean Shipping Consultants

Inland Costs
Inland costs are by far the most significant cost sector in the chain. Table 7.8 provides a
summary of distances between various competing ports and representative central European
destinations. These destinations have been chosen based on the most common routes used
by a series of major shippers. The relative importance of different costs within the transport
chain is of very great significance in determining the scope for services via each of the ports
competing with Livorno (Europa Platform).

Livorno Port Authority, Livorno, Italy


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Chapter 6 provides details of the current main hinterland links from the competing ports to
the main logistics hubs in northern Italy, but this Section will expand on this current situation
by assuming that better rail connections into central Europe will be available in the future
and so additional transit volumes not only to points in northern Italy, but also to points in
central Europe need to be examined and their total built-up costs determined.
Table 7.8: Distance (km) Matrix between Ports of Interest and Indicative
Destinations
Distance (km) Matrix between Ports of Interest and Indicative Destinations
Table 7.8

Ports/Destination

Milan

Bologna

Padua

Rome

Turin

Parma

Munich

Basle

Vienna

Budapest

Livorno

300

190

298

326

349

196

724

640

899

1020

Genoa

142

300

363

513

171

206

631

474

961

1082

La Spezia

223

217

325

420

272

119

638

563

925

1047

Fos

549

707

770

926

398

613

1026

687

1367

1489

Naples

776

586

694

222

872

659

1122

1115

1295

1417

Salerno

816

626

734

262

912

699

1162

1155

1335

1456

Rome

585

395

503

682

468

931

925

1104

1226

Trieste

421

295

188

672

544

359

496

741

479

558

Venice

275

156

49

535

405

220

502

602

587

709

Ravenna

290

76

172

352

409

173

634

629

713

834

Source: Michelin Website

These distances are now used to generate a cost comparison matrix for both road and rail
connections. It is envisaged that there will be an improvement in long distance road and rail
links from Italian ports in particular and so detailed costs have been based on similar costs
associated with road/rail haulage from north European ports where the road and rail systems
are thought to be more advanced.
Table 7.9 provides indicative road haulage rates.
Table 7.9

Table 7.9: Total Road Transport Cost ()

Total Road Transport Cost ()

Ports/Destination
Livorno

Milan

Bologna

Padua

Rome

Turin

Parma

Munich

Basle

Vienna

Budapest

1,020

657

1,014

1,105

1,180

677

2,479

2,163

2,979

3,406

Genoa

497

1,020

1,225

1,709

594

711

2,235

1,634

3,172

3,599

La Spezia

767

747

1,102

1,410

928

419

2,207

1,918

3,060

3,490

Fos

1,874

2,375

2,574

3,063

1,389

2,078

3,425

2,312

4,479

4,903

Naples

2,543

1,942

2,284

764

2,844

2,174

3,723

3,651

4,207

4,633

Salerno

2,669

2,069

2,411

896

2,969

2,300

3,847

3,775

4,331

4,752

Rome

1,939

1,329

1,677

na

2,246

1,564

3,129

3,060

3,617

4,045

Trieste

1,413

1,004

651

2,215

1,808

1,212

1,754

2,633

1,700

1,952

Venice

938

544

178

1,779

1,361

757

1,773

2,093

1,995

2,432

Ravenna

987

272

597

1,190

1,374

601

2,194

2,128

2,394

2,825

Source: Ocean Shipping Consultants, Ports

Livorno Port Authority, Livorno, Italy


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Haulage rates have been calculated based on a series of actual road haulage quotes and then
these quotations used to derive a cost per km that was then applied to the remaining links.
This is not an exact science (some rates could be reduced with volume discounts) and so a
line of best fit was derived for the costs per km. This is illustrated in Figure 7.3

Figure 7.3: Road Costs Estimation-FEU


For comparison purposes, Table 7.10 provides indicative intermodal rates for the same
inland links. It is generally believed that the road rates will be the cheapest option for the
relatively short distances (<500km), whereas longer haul distances are generally cheaper via
rail. Road transport is relatively expensive in Italy but is still used for short distances
(<500km) because of the unreliability of rail and its poor frequency and lack of space. It
should also be recognised that any rail haulage also includes a final delivery by road, which
adds to the overall cost of this mode of transport.
Table 7.10

Table 7.10: Total Rail Transport Cost ()

Total Rail Transport Cost ()

Ports/Destination
Livorno

Milan

Bologna

Padua

Rome

Turin

Parma

Munich

Basle

Vienna

Budapest

1,096.00

796.80

1,090.56

1,166.72

1,229.28

813.12

2,249.28

2,020.80

2,725.28

2,534.20

Genoa

666.24

1,096.00

1,267.36

1,675.36

745.12

840.32

1,996.32

1,569.28

2,730.55

3,039.10

La Spezia

886.56

870.24

1,164.00

1,422.40

1,019.84

603.68

2,015.36

1,811.36

2,638.75

2,949.85

Fos

1,773.28

2,203.04

2,636.20

2,641.30

1,362.56

1,947.36

2,896.30

2,148.64

3,068.68

3,317.56

Naples

2,390.72

1,873.92

2,403.64

883.84

2,651.84

2,072.48

2,759.62

2,744.15

2,921.80

3,170.68

Salerno

2,499.52

2,195.56

2,526.04

992.64

2,605.60

2,181.28

2,848.02

2,832.55

3,003.40

3,250.24

Rome

1,871.20

1,354.40

1,648.16

na

2,135.04

1,552.96

2,654.05

2,638.75

2,719.84

2,781.04

Trieste

1,425.12

1,082.40

791.36

2,336.32

1,759.68

1,256.48

1,629.12

2,295.52

1,582.88

1,797.76

Venice

1,028.00

704.32

413.28

1,735.20

1,381.60

878.40

1,645.44

1,917.44

1,876.64

2,208.48

Ravenna

1,068.80

486.72

747.84

1,237.44

1,392.48

750.56

2,004.48

1,990.88

2,219.36

2,548.48

Source: Ocean Shipping Consultants, Ports

Livorno Port Authority, Livorno, Italy


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Details of the cheapest inland haulage options are summarised in Table 7.11 and converted
to US$ in order to provide a comparative part of the full built-up cost analysis. Rates shown
in green are road rates and those in red are rail rates.
Table 7.11

Table 7.11: Cheapest Option Matrix (US $/FEU)

Cheapest Option Matrix (US$ / FEU)

Ports/Destination

Milan

Livorno

Bologna

Padua

Rome

Turin

Parma

Munich

Basle

Vienna

Budapest

1,162.97

749.41

1,155.52

1,259.75

1,345.10

772.17

2,564.18

2,303.71

3,106.82

2,888.99

Genoa

566.21

1,162.97

1,396.94

1,909.91

677.14

810.05

2,275.80

1,788.98

3,112.83

3,464.57

La Spezia

874.28

851.63

1,256.03

1,607.22

1,058.38

477.62

2,297.51

2,064.95

3,008.18

3,362.83

Fos

2,021.54

2,511.47

2,934.40

3,011.08

1,553.32

2,219.99

3,301.78

2,449.45

3,498.30

3,782.02

Naples

2,725.42

2,136.27

2,604.09

870.51

3,023.10

2,362.63

3,145.97

3,128.33

3,330.85

3,614.58

Salerno

2,849.45

2,358.50

2,748.08

1,020.92

2,970.38

2,486.66

3,246.74

3,229.11

3,423.88

3,705.27

Rome

2,133.17

1,515.14

1,878.90

2,433.95

1,770.37

3,025.62

3,008.18

3,100.62

3,170.39

Trieste

1,610.90

1,144.33

741.82

2,524.74

2,006.04

1,382.14

1,857.20

2,616.89

1,804.48

2,049.45

Venice

1,069.61

619.86

203.11

1,978.13

1,552.00

862.96

1,875.80

2,185.88

2,139.37

2,517.67

Ravenna

1,125.67

310.08

680.95

1,356.22

1,566.73

684.76

2,285.11

2,269.60

2,530.07

2,905.27

na

Source: Ocean Shipping Consultants, Ports

It is clear from this that Livorno direct is the most cost-effective option for cargo to/from
Bologna and Rome;
direct options to/from all three deepwater ports (Europa Platform, Vado Ligure and
Trieste) offer the most cost-effective routes to the destinations under consideration.
The Feedering Alternative
Despite suggestions of a direct call at Livorno or other Italian ports on the Northern
Tyrrhenian Sea, Tyrrhenian Sea or Adriatic Sea, in addition to direct services, the Italian
market is currently more often served by feeder services from central Mediterranean hub
ports such as Gioia Tauro, Cagliari, Taranto and Marsaxlokk for delivery to feeder ports and
then onward overland delivery to final inland destinations.
The built-up cost analysis now looks at the feedering alternative i.e. the comparative costs
of feedering via the aforementioned hubs to ports in the Northern Tyrrhenian Sea in contrast
to the direct Livorno options. Once again, the analysis is considered for the same
representative inland destinations. Details of the deepsea costs for the main trade lanes to a
comparative transshipment hub under review are shown in Table 7.12.
In the current market it is apparent that the feedering option is broadly competitive versus
direct calls that are made with the smaller size of mainline tonnage. It should be noted that,
with current volumes, it makes sense to serve Livorno as part of a broader Mediterranean
feeder rotation, especially for lines with a limited presence in the local market itself. Smaller
shipping lines or lines with only a limited market presence will typically review their
volumes on at least a quarterly basis so this volume requirement can be the subject of
short-term reappraisal. It is also possible that some lines with only a limited market presence
would look to combine volumes in some form of joint approach, but often the requirements
of each line can be so diverse as to make the designing of an owned feeder rotation for an

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alliance particularly taxing, usually resulting in lines deciding to do their own thing with
third party feeders.
Shipping lines will initially look to enter into a new market by utilising space on
common/third party operated feeder vessels, before then looking to start their own dedicated
feeder services, which will prove more cost-effective than common feeders, when the line
has sufficient volume. The next stage is then for the line to develop sufficient volume to
make a direct call into a specific market more cost-effective than a dedicated feeder service.
The size of vessels on the direct service can then be adjusted further if/when the necessary
volume is apparent.
For the Italian market, the focus is between containers fed from a transshipment hub port
versus direct shipments. When volumes increase, the direct option rapidly becomes more
attractive.

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Table 7.12

7.12:
Deep-Sea
Deep-Sea Shipping Costs from Singapore and Table
New York to
Gioia Tauro

Shipping Costs from Singapore and New York to Gioia Tauro

Singapore to Gioia Tauro


Vessel Capacity - TEUs

4500

Load factor - %

6800

8500

10800

New York to Gioia Tauro


12500

14500

18000

4500

6800

8500

10800

12500

14500

18000

95

95

95

95

95

95

95

95

95

95

95

95

95

95

Ocean haul length - nm

6,192

6,192

6,192

6,192

6,192

6,192

6,192

4,343

4,343

4,343

4,343

4,343

4,343

4,343

Sea day s

14.33

13.58

13.58

13.58

13.58

13.58

13.58

10.05

9.52

9.52

9.52

9.52

9.52

9.52

Port (and canal) day s

4.28

4.87

5.59

6.56

6.52

7.25

8.51

4.28

4.87

5.59

6.56

6.52

7.25

8.51

2,850

4,307

5,383

6,840

7,917

9,183

11,400

2,850

4,307

5,383

6,840

7,917

9,183

11,400

Sea costs per day

$44,527

$62,409

$77,736

$89,070

$107,239

$121,613

$139,985

$44,527

$62,409

$77,736

$89,070

$107,239

$121,613

$139,985

Port costs per day

$25,535

$34,186

$42,733

$48,955

$58,782

$67,120

$81,943

$25,535

$34,186

$42,733

$48,955

$58,782

$67,120

$81,943

Vessel Sea costs

$638,225

$847,443

$1,055,568

$1,209,477

$1,456,197

$1,651,371

$1,900,852

$447,644

$594,387

$740,364

$848,314

$1,021,361

$1,158,253

$1,333,237

Vessel Port costs

$109,289

$166,524

$238,828

$321,145

$383,482

$486,461

$697,684

$109,289

$166,524

$238,828

$321,145

$383,482

$486,461

$697,684

Port dues

$109,450

$199,000

$215,500

$235,500

$255,500

$281,120

$315,000

$109,450

$199,000

$215,500

$235,500

$255,500

$281,120

$315,000

Cargo size - box es

Canal Charges
Voy age Cost

$217,533

$362,555

$425,678

$425,678

$582,847

$630,720

$695,967

$1,074,497

$1,575,523

$1,935,574

$2,191,800

$2,678,026

$3,049,672

$3,609,503

$666,383

$959,912

$1,194,692

$1,404,958

$1,660,342

$1,925,834

$2,345,921

2,138

3,230

4,038

5,130

5,938

6,888

8,550

2,138

3,230

4,038

5,130

5,938

6,888

8,550

$502.69

$487.78

$479.40

$427.25

$451.04

$442.78

$422.16

$311.76

$297.19

$295.90

$273.87

$279.64

$279.61

$274.38

Cargo size in FEUs


Cost per FEU - $

Source: Ocean Shipping Consultants

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The cost structures for these alternatives are summarised in Table 7.13 and Table 7.14 for the
Far East and US East coast deepsea trades under review, using Gioia Tauro as being typical
of a major transshipment hub. Deepsea costs for each port option are based on the largest
vessel that can be handled at Gioia Tauro (18,400TEU for Far East and 8,500TEU for US
east coast future demand) and feeder rotations use a typical feeder size of 1,500TEU.
Table
Table 7.13

7.13: Total Built-up Costs for the Feeder Options Serving Major Markets

ex Far
(via
Gioia
Tauro)
Total Built-Up Costs for the Feeder Option Serving
MajorEast
Markets
ex Far
East (via
Gioia Tauro)
Milan

Bologna

Padua

Rome

Turin

Parma

Munich

Basle

Vienna Budapest

Deepsea Costs

422.16

422.16

422.16

422.16

422.16

422.16

422.16

422.16

422.16

422.16

Transshipment Stev edoring

153.90

153.90

153.90

153.90

153.90

153.90

153.90

153.90

153.90

153.90

Feedering

244.89

244.89

244.89

244.89

244.89

244.89

244.89

244.89

244.89

244.89

Final Stev edoring

137.94

137.94

137.94

137.94

137.94

137.94

137.94

137.94

137.94

137.94

Inland Deliv ery

1162.97

749.41

1155.52

1259.75

1345.10

772.17

2564.18

2303.71

3106.82

2888.99

Total

2121.87

1708.31

2114.41

2218.65

2304.00

1731.07

3523.08

3262.61

4065.72

3847.89

Source: Ocean Shipping Consultants

Table
Table 7.14

7.14: Total Built-up Costs for the Feeder Options Serving Major Markets
to US
East
(via
Gioia
Tauro)
Total Built-Up Costs for the Feeder Option Serving
Major
Markets
to US
East Coast
(via Gioia Tauro)
Milan

Bologna

Padua

Rome

Turin

Parma

Munich

Basle

Vienna Budapest

Deepsea Costs

295.90

295.90

295.90

295.90

295.90

295.90

295.90

295.90

295.90

295.90

Transshipment Stev edoring

153.90

153.90

153.90

153.90

153.90

153.90

153.90

153.90

153.90

153.90

Feedering

244.89

244.89

244.89

244.89

244.89

244.89

244.89

244.89

244.89

244.89

Final Stev edoring

137.94

137.94

137.94

137.94

137.94

137.94

137.94

137.94

137.94

137.94

Inland Deliv ery

1162.97

749.41

1155.52

1259.75

1345.10

772.17

2564.18

2303.71

3106.82

2888.99

Total

1995.61

1582.04

1988.15

2092.38

2177.73

1604.81

3396.81

3136.35

3939.45

3721.62

Source: Ocean Shipping Consultants

It is apparent that the direct Livorno option is currently much cheaper than is a shipment via
the Mediterranean transshipment ports, even when the lower cost feeder option is included in
the review. Considered simply from this narrow unit cost perspective, the direct call is the
favourable option, even without allowing for the upside potential of larger vessels calling at
Livorno. However, there are other significant considerations relating to volumes and critical
mass for a particular shipping line or consortium.
The overall cost comparison for Livorno is summarised in Table 7.15 and Table 7.16, which
illustrates the comparative delivered costs ex Singapore (and to New York) to various Italian
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and central European destinations and contrasts the cost of direct shipments with feedered
containers from central Mediterranean hub ports shown in Table 7.13 and Table 7.14. The
cheapest direct built-up cost options are highlighted in green, all of which are cheaper than
the feeder alternative.
Table 7.15

Table 7.15: Direct Cost Options ex Far East

Direct Cost Options ex Far East


Milan

Bologna

Padua

Rome

Turin

Parma

Munich

Basle

Vienna

Budapest

Europa Platform

1759.34

1345.78

1751.88

1856.12

1941.47

1368.54

3160.55

2900.08

3703.19

3485.36

Vado Ligure

1214.65

1811.40

2045.37

2558.34

1325.57

1458.48

2924.24

2437.41

3761.26

4113.00

VTE

1278.60

1875.36

2109.33

2622.29

1389.52

1522.43

2988.19

2501.36

3825.21

4176.96

SECH

1261.50

1858.26

2092.23

2605.19

1372.42

1505.33

2971.09

2484.26

3808.11

4159.86

LSCT

1608.79

1586.15

1990.55

2341.73

1792.89

1212.14

3032.03

2799.47

3742.69

4097.34

Trieste

2221.28

1754.71

1352.20

3135.12

2616.42

1992.52

2467.58

3227.27

2414.86

2659.83

Fos

2769.77

3259.69

3682.63

3759.31

2301.55

2968.22

4050.01

3197.68

4246.52

4530.25

Salerno

3904.15

3413.20

3802.78

2075.62

4025.08

3541.36

4301.44

4283.81

4478.58

4759.97

Source: Ocean Shipping Consultants

For the Far East services, it has been assumed that Trieste, Vado Ligure and The Europa
Platform are served by 18,400TEU vessels, VTE, SECH and Fos by 8,500TEU vessels,
LSCT by 4,500TEU vessels and Salerno by 2,000TEU.
It is clear from Table 7.15 that the ability to handle the largest vessels has a huge bearing on
the total built-up cost of serving a number of inland destinations, nine out of ten of which are
better served by a deepwater facility. The rest of the cost distinction is largely a result of the
geographical position of the port in relation to the final destination or origin of the cargo. In
this respect, Trieste is better placed to handle some of the more distant central European
cities, whereas Vado Ligure and the Europa Platform will be better placed to handle some of
the northern Italian cargo.
For the US east coast services, it has been assumed that the largest vessel likely to be
deployed on such a service in the short-term will be vessels of 8,500TEU. This will
therefore reduce the advantage of the deepwater ports until such time as much bigger
tonnage is cascaded onto these services, although in the mid to long-term a deepwater
advantage will be crucial to this trade lane as well.
Table 7.16 highlights the built-up costs on this basis and highlights a much wider split in
terms of the cheapest built-up cost options than is envisaged for the Far East trade services
where the ship size revolution effect has progressed much further.

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Table 7.16
Direct Cost Options to US east coast

Table 7.16: Direct Cost Options to US East Coast

Milan

Bologna

Padua

Rome

Turin

Parma

Munich

Basle

Vienna

Budapest

Europa Platform

1605.98

1192.41

1598.52

1702.75

1788.10

1215.18

3007.18

2746.71

3549.82

3331.99

Vado Ligure

1057.86

1654.62

1888.58

2401.55

1168.78

1301.69

2767.45

2280.62

3604.47

3956.22

VTE

1057.86

1654.62

1888.58

2401.55

1168.78

1301.69

2767.45

2280.62

3604.47

3956.22

SECH

1040.76

1637.52

1871.48

2384.45

1151.68

1284.59

2750.35

2263.52

3587.37

3939.12

LSCT

1378.47

1355.82

1760.22

2111.41

1562.57

981.81

2801.70

2569.14

3512.36

3867.02

Trieste

2106.09

1639.51

1237.01

3019.93

2501.22

1877.33

2352.38

3112.08

2299.67

2544.63

Fos

2535.52

3025.44

3448.38

3525.06

2067.30

2733.97

3815.76

2963.43

4012.27

4296.00

Salerno

3698.89

3207.94

3597.52

1870.36

3819.82

3336.10

4096.18

4078.55

4273.32

4554.71

Source: Ocean Shipping Consultants

7.3

CONCLUSION
Direct calls at deepwater port facilities clearly offer the most cost-effective way of serving
the northern Italy regions and the more distant regions of central Europe. On a unit cost
basis, the arguments still clearly favour direct shipments rather than feeder services, although
it should be recognised that some shipping lines do not have the necessary volume to make a
direct call economically viable and so will have to use the more expensive feeder option.
This means that together with Vado Ligure and Trieste, the Europa Platform remains well
placed to offer cost-effective solutions to any number of destinations, particularly on trade
lanes where the ULCSs are already being deployed and where the ports deepwater
advantage can be maximised. This is the case on the main arterial trade lanes such as AsiaEurope, but vessels of this magnitude, i.e. >18,000TEU have yet to cascade onto secondary
trade lanes such as the US east coast services, where it is only likely that vessels will
increase to 8,500TEU capacity in the mid-term, because of demand restrictions as well as US
port restrictions in terms of the vessel sizes that they can handle. These issues will be
resolved in the long-term and the deepwater ports will again be well prepared for
accommodating the larger tonnage. Once the Panama Canal widening has been completed in
2016, an initial increase in the average size of vessels in the US is envisaged. There are only
a limited number of relatively deepwater ports in the region at present and this should mean
that vessels up to 8,500TEU capacity could call at this time, but larger vessels are likely to
be introduced thereafter after further port developments on the US east coast.
Although this Section has concentrated on the cost effectiveness of various cargo routeings,
it is important to stress that this is not the only factor that shipping lines will assess in order
to determine which ports they serve, although in truth these too are also driven by financial
requirements, because of the expensive nature of the ULCSs they operate:
terminal efficiency, i.e. the number of containers that can be handled per hour. This
affects the amount of time spent in port and therefore the cost of a port stay. The more
productive a port can be on a regular and reliable basis, the cheaper the port stay and also
the slower a vessel needs to sail between ports to meet the next berthing window, giving
further fuel savings;

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customs clearance it is again important to ensure that once a container has been
discharged, it is not delayed unnecessarily with customs and security checks that delay
the final delivery date/time of a consignment, which could (depending on the commodity)
effect the output of a factory production line;
frequency, reliability and capacity of intermodal services particularly for distances of
>500km it is likely that the containers will be moved from the quay via rail. In order not
to lose the benefit of a quick discharge on the quayside, it is imperative that the rail
providers have the necessary capacity and frequency of services to ensure that the
containers are not left waiting for a connection;
frequency, reliability and capacity of road haulage the same is true for road haulage
options for distances <500km;
further volume discounts are also possible to offer to major clients in order to reduce their
built-up costs and guarantee some core port volumes.
In the future, there will remain some local and international competition challenges for
The Europa Platform particularly with Trieste and Vado Ligure locally and north
European ports for central European destinations, but there remain sufficient
incentives to call at The Europa Platform to warrant the interest of an international
terminal operator and/or major shipping line to further investigate the possibility of a
direct call.
Once a major operator, together with shipping line volumes are secured, then the
Europa Platform future is secured. It is imperative therefore that the Port Authority
can attract such a client, because without it there is no future.

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LIVORNO FORECAST TO 2035

8.1

INTRODUCTION
Regional demand forecasts have been developed in Chapter 3, with three macro-economic
cases (Base, Low and High) for the period of to 2035. This forecast will allow for an
identification of the Base Case for the Italian Northern Tyrrhenian Sea region under review,
taking into account all competing facilities in the region (such Livorno, Genoa and La
Spezia) as well as the core likely range of macro-economic outcomes. This defines the
general background against which the position of the specific Livorno terminal will be
assessed.
Demand forecasts will now be further developed for Livorno (and the Europa Platform) in
isolation. This will be done for local, transit and any potential transshipment flows and
calculated in relation to the regional forecast already identified. The output for the Port of
Livorno will be on the basis of a TEU forecast for local, transit and some limited
transshipment.
The approach taken is to consider the potential market share of Livorno within this market.
Of course, this will be modified by a review of the specific position for individual lines at the
port as well as the impact that port developments in Livorno, Genoa and Vado Ligure will
have when considering the ability of the newly developed terminals to handle larger vessels.
This will give a realistic range of top-down estimates of demand.

8.2

LIVORNO DEMAND TO 2035


Table 8.1 indicates the demand forecast for the port of Livorno from 2014 to 2035. The
Livorno container facilities currently represent the following share of the Northern
Tyrrhenian ports market:
13.8 per cent of the local import/export market;
0 per cent of the international transit market (to central European countries);
16.0 per cent of the relatively small transshipment market.
It is envisaged that the current share of each of the constituent parts of the Northern
Tyrrhenian Sea market will remain constant for the years 2015 to 2019, after which time the
developments at the Europa Platform will start to have an effect on the annual flows by
attracting larger tonnage. With its deeper water and better hinterland connections, both to
parts of northern Italy for an increased share of the northern Italian regions cargo volumes
and also international transit to parts of central Europe as identified in Chapter 3 and 6,
larger vessels are expected to call at the facility and an increased share of the market result.

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Table 8.1
Forecast Total Livorno Port Demand to 2035

Table 8.1:Forecast Total Livorno Port Demand to 2035

- '000TEUs
2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

519.5

596.0

610.9

629.5

648.4

664.6

834.3

1004.1

1065.5

1127.0

1188.4

1249.8

1299.9

1349.9

1399.9

1449.9

1499.9

1570.9

1641.9

1712.8

1783.8

1854.8

0.0

0.0

0.0

0.0

0.0

0.0

54.9

109.8

133.4

157.0

180.7

204.3

234.8

265.3

295.9

326.4

356.9

392.2

427.5

462.8

498.1

533.3

Base Case
Import/Ex port
Transit
Transshipment
Total

58.0

58.8

60.3

62.1

64.2

66.3

70.8

75.3

79.1

82.8

86.6

90.4

94.4

98.5

102.5

106.6

110.6

115.5

120.4

125.2

130.1

135.0

577.5

654.8

671.2

691.6

712.6

730.9

960.0

1189.1

1278.0

1366.8

1455.7

1544.6

1629.1

1713.7

1798.3

1882.9

1967.4

2078.6

2189.7

2300.8

2412.0

2523.1

519.5

607.5

635.9

669.8

689.9

707.1

887.7

1068.3

1133.7

1199.1

1264.4

1329.8

1383.0

1436.2

1489.5

1542.7

1595.9

1671.4

1746.9

1822.4

1897.9

1973.4

0.0

0.0

0.0

0.0

0.0

0.0

55.6

111.2

135.5

159.8

184.1

208.3

239.9

271.5

303.0

334.6

366.1

403.1

440.1

477.1

514.1

551.1

High Case
Import/Ex port
Transit
Transshipment
Total

58.0

60.0

62.8

66.1

68.3

70.6

75.3

80.1

84.1

88.2

92.2

96.2

100.5

104.8

109.1

113.4

117.7

122.9

128.1

133.2

138.4

143.6

577.5

667.5

698.6

735.9

758.2

777.7

1018.6

1259.6

1353.3

1447.0

1540.7

1634.3

1723.4

1812.5

1901.6

1990.6

2079.7

2197.4

2315.1

2432.8

2550.5

2668.2

519.5

585.2

594.7

608.1

626.3

642.0

806.0

969.9

1029.3

1088.6

1148.0

1207.3

1255.7

1304.0

1352.3

1400.6

1448.9

1517.5

1586.0

1654.6

1723.1

1791.7

0.0

0.0

0.0

0.0

0.0

0.0

53.8

107.6

130.2

152.9

175.6

198.2

227.3

256.4

285.5

314.6

343.7

356.3

369.0

381.6

394.3

406.9

Low Case
Import/Ex port
Transit
Transshipment
Total

58.0

57.8

58.7

60.0

62.0

64.1

68.4

72.7

76.4

80.0

83.7

87.3

91.2

95.1

99.0

102.9

106.9

111.6

116.3

121.0

125.7

130.4

577.5

643.0

653.4

668.1

688.3

706.0

928.1

1150.2

1235.9

1321.6

1407.2

1492.9

1574.2

1655.5

1736.8

1818.1

1899.5

1985.4

2071.3

2157.2

2243.1

2329.0

Source: Ocean Shipping Consultants

Livorno Port Authority, Livorno, Italy


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It is also recognised that the developments at Vado Ligure will have a similar impact on the
ratio of containers being handled at other ports in the Northern Tyrrhenian Sea market and in
particular Voltri, SECH and LSCT. With the deepsea advantage of both Europa Platform
and Vado Ligure, there is likely to be an increase in the size/type of vessels calling at these
two ports, which will result in a greater share of local cargo being handled at these two
facilities at the expense of the share of cargo being handled at both the existing terminals in
Genoa and La Spezia.
Following the initial ramp-up expected in the first few years of partial operation from
2019-2021, the Livorno share of the Northern Tyrrhenian Sea port market is expected to
increase as follows:
the share of the local market is expected to reach 20 per cent by 2021 before increasing
further to 23 per cent in 2025; 25 per cent in 2030 and 28 per cent in 2035;
the share of the international transit market is expected to reach 20 per cent in 2021
before then increasing to 30 per cent in 2025; 40 per cent in 2030 and 50 per cent in
2035;
although of relatively minor importance, the transshipment share at Livorno is likely to
increase to 17 per cent in 2021; 18 per cent in 2025; 19 per cent in 2030 and 20 per cent
in 2035.
Livorno demand is expected to increase from 0.58m TEU demand in 2014 to between 0.640.67m TEU demand in 2015; 0.93-1.02m TEU in 2020; 1.49-1.63m TEU in 2025; 1.902.08m TEU in 2030 and 2.33-2.67m TEU in 2035.
The Livorno demand is further illustrated in Figure 8.1.

Figure 8.1: Livorno Port Demand (000 TEUs), 2014-2035

Livorno Port Authority, Livorno, Italy


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With the unreliable nature of transshipment volumes being such that volumes can easily
move from one transshipment hub to another, it is important to disregard these volumes
when considering the supply/demand balance for the Northern Tyrrhenian Sea region.
Figure 8.2 illustrates the total demand for Livorno without any transshipment volumes.

Figure 8.2: Livorno Port Demand (000TEUs) Less Transshipment, 2014-2035

8.3

SUPPLY/DEMAND BALANCE TO 2025


It is not only difficult to assess planned capacity developments beyond a five year time span
because of the lack of reliable information beyond this timeframe, but also because terminal
operators are becoming much more circumspect. Terminal operators are often only looking
to increase their capacity when there is sufficient demand to do so. This cautious approach is
understandable given the potentially large sums of money required to develop terminal
capacity in a significant way, but it means that we can only really offer a confident appraisal
of the supply/demand balance for Livorno and the Northern Tyrrhenian Sea region until
2020 with a much more cautious analysis to 2025 due to data between 2020-2025 being
much more unreliable.
The supply/demand balance for the region has been dealt with in Chapter 3. For Livorno in
isolation, the introduction of the Europa Platform project will provide much needed capacity
from 2019 (but particularly from 2021) onwards at a time when the capacity of Livorno was
beginning to look stretched.
Detail of the Livorno supply/demand balance are shown in Figure 8.3 and with demand
excluding any current or future transshipment volumes. With the introduction of the
additional capacity in Livorno, the port will avoid any potential initial congestion challenges
from 2018 and will also have sufficient capacity to meet future demand until around 2030/31
when Base Case projections (without transshipment) suggest that the port will be 79.0 / 83.6
per cent utilised and once again in need of further capacity to avoid any potential operational
delays.

Livorno Port Authority, Livorno, Italy


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Figure 8.3: Livorno Port Supply /Demand Balance (000TEUs), 2014-2025

8.4

CONCLUSION
The outlook for Livorno if the port is not developed will be problematic. The trend towards
the introduction of much larger vessels into the trades will see the limited facilities at the
port increasingly marginalised. This will result in a decline in container volumes and a
reduction to feeder port status. This will see much higher costs for regional cargo owners
and act as a disincentive for regional development.
The additional capacity developments planned in Vado Ligure, plus the existing capacity at
established Genoese facilities at Voltri and SECH add to the improvement in the competitive
position of the major competitors in the region meaning that there really is no alternative for
Livorno but to go ahead with the planned expansion plans.
However, the total capacity available can also be somewhat misleading since it is the
importance of deepwater capacity, rather than the total capacity that is key to Livornos
future prosperity. In this respect, Livorno with the Europa Platform, and Vado Ligure are
the two main facilities in the region that can handle the largest type of container vessels
(although Vado Ligure has a further depth advantage over Livorno) and are best placed to
attract the main clients.
It is important to reiterate that whilst Livorno will be well placed to take advantage of the
deepwater capacity, it makes sense to future proof the port at this stage against any potential
requirements for deeper vessels in the coming years. Vado Ligure and Trieste are already
better suited to withstand any such future developments and so it is prudent for Livorno to
deepen to 18.0m alongside the main berth to ensure its continued competition with these port
facilities.

Livorno Port Authority, Livorno, Italy


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LIVORNO GAP ANALYSIS

9.1

INTRODUCTION
The purpose of this Section is to assess the likely impact of The Port of Livorno taking no
action in terms of terminal developments. This do nothing approach will be assessed
based on the following criteria:
Livorno is able to maintain its existing trade share until 2019 when new deepwater
facilities become available at Vado Ligure and vessel size issues become more acute;
at this point, Livorno is gradually expected to lose its share of local import/exports, transit
containers and transshipment containers as shipping lines start to switch to those
deepwater facilities where larger vessels can be handled. Details of the competitive
position of the new facility are shown in Chapter 5.

9.2

GAP ANALYSIS
Table 9.1 assesses the likely loss of cargo volumes from 2019 onwards and compares the
planned Livorno demand forecast from Chapter 8 with a much lower expected demand based
on no port developments.
It is assumed that the port will maintain its current market share of local and transshipment
cargo from now until 2018 when the Vado Ligure deepwater development is expected to be
operational. At this point it is reasonable to assume that:
Livornos share of the local market will reduce, initially by the same share that we have
assumed it will increase if Europa Platform and the deepwater facility were to go ahead,
i.e. by 6.2 per cent, down from 13.8 per cent share to 7.6 per cent in 2021. With no
deepwater berthage to attract shipping lines, cargo will gradually move to other facilities
that are better equipped to handle larger vessels. The share of local cargo in Livorno will
continue to drop to five per cent in 2025; three per cent in 2030 and just 2 per cent in
2035;
no European transit cargo is likely to develop with no rail developments expected and no
shipping lines operating ULCSs calling at the port with just feeder vessels with minimal
cargo volumes calling;
with no deepwater berthage, what little share of transshipment there is will reduce
considerably and eventually fall to nothing by the end of the forecast period. Some
feeder volumes will remain and so the share is likely to reduce from the current market
share of 16 per cent to just three per cent in 2021; two per cent in 2025; one per cent in
2030 and zero on 2035.
The port world is full of examples of facilities that have failed to take such an opportunity to
make the required adjustments to the port in order to allow the port to accept larger vessels.
This has generally resulted in marginalized volumes and reduced revenues.

Livorno Port Authority, Livorno, Italy


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Table 9.1
Forecast Total Livorno Port Demand to 2035 - "Do Nothing Approach"

Table 9.1: Forecast Total Livorno Port Demand to 2035 Do Nothing Approach 000TEUs

- '000TEUs
2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

519.5

596.0

610.9

629.5

648.4

664.6

523.1

381.5

354.1

326.6

299.2

271.7

253.4

235.0

216.7

198.3

180.0

170.5

161.0

151.5

142.0

132.5
0.0

Base Case
Import/Ex port
Transit
Transshipment
Total

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

58.0

58.8

60.3

62.1

64.2

66.3

39.8

13.3

12.5

11.7

10.9

10.0

9.2

8.4

7.5

6.7

5.8

4.7

3.5

2.3

1.2

0.0

577.5

654.8

671.2

691.6

712.6

730.9

562.9

394.8

366.6

338.3

310.0

281.7

262.6

243.4

224.2

205.0

185.8

175.1

164.5

153.8

143.1

132.5

519.5

607.5

635.9

669.8

689.9

707.1

556.5

406.0

376.7

347.5

318.3

289.1

269.6

250.1

230.5

211.0

191.5

181.4

171.3

161.2

151.1

141.0
0.0

High Case
Import/Ex port
Transit
Transshipment
Total

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

58.0

60.0

62.8

66.1

68.3

70.6

42.3

14.1

13.3

12.4

11.5

10.7

9.8

8.9

8.0

7.1

6.2

5.0

3.7

2.5

1.2

0.0

577.5

667.5

698.6

735.9

758.2

777.7

598.9

420.1

390.0

359.9

329.9

299.8

279.4

258.9

238.5

218.1

197.7

186.4

175.0

163.7

152.3

141.0

519.5

585.2

594.7

608.1

626.3

642.0

505.3

368.6

342.0

315.5

289.0

262.5

244.7

227.0

209.3

191.6

173.9

164.7

155.5

146.3

137.2

128.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

58.0

57.8

58.7

60.0

62.0

64.1

38.4

12.8

12.1

11.3

10.5

9.7

8.9

8.1

7.3

6.4

5.6

4.5

3.4

2.2

1.1

0.0

577.5

643.0

653.4

668.1

688.3

706.0

543.7

381.4

354.1

326.8

299.5

272.2

253.6

235.1

216.6

198.0

179.5

169.2

158.9

148.6

138.3

128.0

Low Case
Import/Ex port
Transit
Transshipment
Total

Source: Ocean Shipping Consultants

Livorno Port Authority, Livorno, Italy


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Table 9.2
Forecast Total Livorno Port Demand Variance to 2035

Table 9.2: Forecast Total Livorno Port Demand Variance to 2035 - 000TEUs

- '000TEUs
2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

Import/Ex port

0.0

0.0

0.0

0.0

0.0

0.0

311.3

622.5

711.4

800.3

889.2

978.1

1046.5

1114.9

1183.2

1251.6

1319.9

1400.4

1480.9

1561.3

1641.8

1722.3

Transit

0.0

0.0

0.0

0.0

0.0

0.0

54.9

109.8

133.4

157.0

180.7

204.3

234.8

265.3

295.9

326.4

356.9

392.2

427.5

462.8

498.1

533.3

Transshipment

0.0

0.0

0.0

0.0

0.0

0.0

31.0

62.0

66.6

71.2

75.8

80.4

85.2

90.1

95.0

99.9

104.8

110.8

116.9

122.9

128.9

135.0

Total

0.0

0.0

0.0

0.0

0.0

0.0

397.1

794.3

911.4

1028.5

1145.7

1262.8

1366.6

1470.3

1574.1

1677.9

1781.6

1903.4

2025.2

2147.0

2268.8

2390.6

Import/Ex port

0.0

0.0

0.0

0.0

0.0

0.0

331.2

662.3

756.9

851.5

946.1

1040.7

1113.5

1186.2

1258.9

1331.6

1404.4

1490.0

1575.6

1661.2

1746.9

1832.5

Transit

0.0

0.0

0.0

0.0

0.0

0.0

55.6

111.2

135.5

159.8

184.1

208.3

239.9

271.5

303.0

334.6

366.1

403.1

440.1

477.1

514.1

551.1

Transshipment

0.0

0.0

0.0

0.0

0.0

0.0

33.0

66.0

70.9

75.7

80.6

85.5

90.7

95.9

101.1

106.3

111.5

117.9

124.3

130.8

137.2

143.6

Total

0.0

0.0

0.0

0.0

0.0

0.0

419.8

839.5

963.3

1087.0

1210.8

1334.5

1444.0

1553.5

1663.0

1772.5

1882.0

2011.1

2140.1

2269.1

2398.2

2527.2

Import/Ex port

0.0

0.0

0.0

0.0

0.0

0.0

300.7

601.3

687.2

773.1

859.0

944.9

1010.9

1076.9

1143.0

1209.0

1275.1

1352.8

1430.5

1508.3

1586.0

1663.7

Transit

0.0

0.0

0.0

0.0

0.0

0.0

53.8

107.6

130.2

152.9

175.6

198.2

227.3

256.4

285.5

314.6

343.7

356.3

369.0

381.6

394.3

406.9

Transshipment

0.0

0.0

0.0

0.0

0.0

0.0

30.0

59.9

64.3

68.8

73.2

77.6

82.3

87.1

91.8

96.5

101.2

107.1

112.9

118.7

124.6

130.4

Total

0.0

0.0

0.0

0.0

0.0

0.0

384.4

768.8

881.8

994.8

1107.8

1220.7

1320.6

1420.4

1520.3

1620.1

1720.0

1816.2

1912.4

2008.6

2104.8

2201.0

Base Case

High Case

Low Case

Source: Ocean Shipping Consultants

Livorno Port Authority, Livorno, Italy


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The variance between the two demand forecasts (the Livorno demand forecast is shown in
Table 8.1:Forecast Total Livorno Port Demand to 2035in the earlier Section) provides the
gap analysis for the do nothing approach and is shown in Table Table 9.2. The figures
highlighted in red are the port volumes that the port will lose by taking no action when
compared with the demand forecast expected with the terminal development.
Figure 9.1 further illustrates the expected dramatic decline in Livorno port volumes if no
action is taken.

Figure 9.1: Livorno Revised Demand Forecast Do Nothing Approach

9.3

CONCLUSION
It is clear from Table 9.1 and Table 9.2 that a failure to develop the port of Livorno will
result in a continuous reduction of container volumes from 2019 and for the balance of the
forecast period as cargo and shipping lines will move to those bigger and deeper ports that
are able to handle the larger vessels that will be deployed in the region in the near future.
This reduction will continue until eventually Livorno will not be able to offer a sustainable
business case based on its declining container volumes.
In the short-term, Livorno would still be able to attract cargo volumes similar to what it does
today (0.3m TEU), but by 2025 in particular, the number of ULCSs delivered to all major
shipping lines will mean that any port that doesnt have the capability to handle these ships
will lose significant amounts of business and continue to do so for the balance of the forecast
period.
Livorno really has no choice. It either develops to meet the future needs of the shipping
lines, or it becomes nothing, but a feeder outport or niche provider with no sustainable
future.
Penfold/Migliaccio/FCS/FLM/VR/GBP:plp

Livorno Port Authority, Livorno, Italy


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