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COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a Regulation of the European Parliament and of the Council establishing a framework on the market access to port services and the financial transparency of ports /* SWD/2013/0181 final */



COMMISSION STAFF WORKING DOCUMENT

IMPACT ASSESSMENT

Accompanying the document

Proposal for a Regulation of the European Parliament and of the Council

establishing a framework on the market access to port services and the financial transparency of ports

Table of Contents

1........... Procedural issues and consultation of interested parties. 1

1.1........ Organisation and timing. 1

1.2........ Consultation of stakeholders and external expertise. 1

1.3........ Revision by the Impact Asssessment Board. 2

2........... General Context 3

2.1........ Key figures. 3

2.2........ Functioning of the port: a chain of services. 4

2.3........ Policy context 5

2.4........ Diversity of ports in the EU.. 7

3........... Problem definition. 8

3.1........ Description of the main problem.. 8

3.1.1..... Structural performance gap in ports and impacts on the hinterland and congestions. 8

3.1.2..... Need to adapt to transport and logistics changes. 11

3.2........ Underlying drivers of the problem.. 12

3.2.1..... Suboptimal port services and operations in some TEN-T seaports. 13

3.2.2..... Port governance frameworks not attractive enough for investments 18

3.2.3..... Linking the problem to its drivers and root causes. 23

3.3........ Who is affected by the problem?. 23

3.4........ Application of EU horizontal instruments. 24

3.5........ How would the problem evolve, all things being equal 25

3.6........ Does the EU have the right to act?. 27

3.6.1..... Legal basis. 27

3.6.2..... Subsidiarity. 27

3.6.3..... Proportionality. 28

4........... Objectives. 29

4.1........ General objective. 29

4.2........ Specific objectives 29

4.3........ Operational objectives 29

4.4........ Linking the problem and objectives. 30

5........... Policy options. 31

5.1........ Discarded policy measures. 31

5.2........ List of considered policy measures. 32

5.2.1..... Measures to ensure optimal port services and operation in all TEN-T seaports. 32

5.2.2..... Measures to enable a more attractive investment climate. 35

5.3........ Policy Packages. 36

5.3.1..... Overview of measures proposed in the policy packages. 37

5.3.2..... Policy Package 1: “Horizontal Instruments and Transparency”. 37

5.3.3..... Policy Package 2: “Regulated competition”. 38

5.3.4..... Policy Package 2a: “Reinforced regulated competition and port autonomy”. 38

5.3.5..... Policy Package 3: “Full competition and port autonomy”. 39

5.3.6..... Stakeholders view on policy packages. 39

6........... Analysis of impacts. 39

6.1........ Economic impacts. 40

6.1.1..... Direct and indirect transport costs. 40

6.1.2..... Investments. 42

6.1.3..... Administrative burden. 43

6.1.4..... SMEs. 44

6.1.5..... Impact on transport and multimodality. 45

6.1.6..... International competitiveness. 46

6.2........ Environmental impacts. 46

6.3........ Social impacts. 47

6.4........ Mapping of impacts per stakeholder 49

6.5........ Summary of the economic, environmental and social impacts. 50

7........... Comparing the options. 52

7.1........ Effectiveness. 52

7.2........ Efficiency. 53

7.3........ Coherence. 54

7.4........ Summary on the comparison of policy packages. 54

8........... Conclusion: preferred option. 55

9........... Monitoring and evaluation. 56

Annexes

Annex I            Schematic overview of policy package PP2a

Annex II                       General Context: main features of the EU Port System

Annex III                      Eurostat Port Statistics 2012

Annex IV                      2007 Ports Policy Communication – Ex-Post evaluation

Annex V           Conclusions of the public consultation, June-December 2012

Annex VI                      Relative performance of TEN-T core ports

Annex VII         Modelling of impacts: main assumptions

Annex VIII       Matrix maritime traffic / port throughputs 2005 / 2030

Annex IX                      Administrative costs

Annex X           Port labour issues

Annex XI          Ports in the new TEN-T Strategy / Connecting Europe Facility

Annex XII         References

Annex XIII       Glossary

For the purpose of this report, port services refer to one or several of the eight following categories: - Pilotage - Towage - Mooring - Dredging - Bunkering - Cargo handling - Passenger services - Waste reception facilities

1.           Procedural issues and consultation of interested parties

Lead DG: Directorate General for Mobility & Transport (DG MOVE)

Agenda planning: 2013/MOVE/0161

This initiative forms part of the Single Market Act II[1] (Oct. 2012) and contributes to the development of fully integrated networks to drive new growth. It was announced in the White Paper on Transport of 2011[2]. The initiative supplements and is closely related to the proposal for a regulation on Guidelines for the development of the trans-European transport network (TEN-T)[3] and the financial instrument "Connecting Europe Facility (CEF)[4]" (Oct. 2011).

1.1.        Organisation and timing

The preparatory work started after the adoption of the Transport White Paper. DG MOVE established a formal impact assessment steering group (IASG) in April 2012 in which the following directorates-general actively participated: SG, COMP, ECFIN, EMPL, EUSTAT, JRC, MARE, MARKT and REGIO. The IASG held five meetings, the last one on 6 February 2013. Participants were invited to different public consultation events.

1.2.        Consultation of stakeholders and external expertise

Due to the nature of the file (inter alia, issues related to performance of ports, port technical services, hinterland connectivity, governance structures, port infrastructure charges, funding of port investments or  public service obligations in ports), DG MOVE decided to carry out a comprehensive targeted sectoral public consultation and not a full public consultation.

For that purpose, DG MOVE has kept an informal dialogue with the national administrations in charge of the ports' policy (Ministries of Transport). It held meetings with the main industry associations in the port sector, inter alia: port authorities (ESPO), private terminal operators (FEPORT), inland ports (EFIP), ship-owners (ECSA), pilots (EMPA), tug owners and operators (ETA), mooring operators (EBA), ship's agents (ECASBA), shippers (ESC), dredgers (EuDA) and logistic operators (CLECAT). DG MOVE also held meetings with the two main Unions of port workers, the International Dockers Council (IDC) and the dock workers' section of the European Transport Workers Federation (ETF). A sectoral dialogue committee could not be consulted, as this is still in the process of being set up.

The preparatory work was supported by an economic study on the quality and efficiency of European ports (PwC). The work took account of extensive research on transport economics, ports and logistics and involved several discussions with industry and research experts.

Stakeholders were consulted extensively through two targeted on-line surveys and an open stakeholders' two-day conference in Brussels (25-26 Sept. 2012)[5].

Some stakeholders, namely the two main Unions of port workers, considered that the questionnaire designed by PwC for the on-line surveys was not appropriate, pointing out that the questionnaire did not allow them to express their views and that some questions were leading and even prejudged the responses. Instead of participating in the survey, IDC and ETF sent their positions in written to DG MOVE[6].

A final targeted[7] public hearing, presenting the key problems and discussing policy options and their possible impacts was held on 18 January 2013. IDC and ETF were invited and participated actively both in the ports policy conference and in the public hearing.

The main results[8] of the consultation process (2012-2013) can be summarised as follows:

1) All stakeholders stressed the need for a stable and fair level playing field both for inter-ports (competition between ports) and intra-port (competition between providers of a same port service within a port) competition in the EU. The need for legal certainty and a business friendly environment with as less administrative burden as possible is a priority for all stakeholders, such as Member States, port authorities, terminal operators or the shipping sector, logistic operators and cargo interests.

2) There is a major concern about unfair competition between ports linked to public funding practices of port infrastructures. Member States and port authorities request a tight control of state aid.

3) A significant part of the users of port services, shipping companies and export-import industries, consider that port services in many EU ports are not satisfactory in terms of price, quality and administrative burden. In the ports of the core TEN-T network, around half of the users surveyed (shipping lines) consider that there are specific challenges in terms of price or quality with cargo handling (48% complain), pilotage (54% complain) and towage (49% complain). A smaller percentage ranging from 17% to 25% sees similar problems for other services such as mooring, bunkering, dredging, passenger services or waste management.

4) 30% of European port authorities do not consider that the current situation is satisfactory. However, the majority of them oppose the introduction of EU procedures limiting the capacities of public authorities to grant contracts and permissions to operators of port services through direct award. Applying EU concession rules to certain contracts granted in ports is highly controversial in certain Member States.

5) Port workers' trade unions extremely oppose any EU provision touching on the existing port labour regimes in certain Member States, in particular in Mediterranean Member States. Representatives of pilotage services argue that pilotage, although provided against remuneration, is not an economic service and should be excluded from competitive pressure.

6) Most stakeholders agree that the EU port system has to evolve and adapt to significant challenges in terms of scarce funding resources, competitiveness vis-à-vis ports in neighbouring third countries and other world regions, creation of added value and jobs as well as coping with environmental impacts. They all agree on the importance to secure and, if possible, increase, EU funding expenditure for supporting ports and maritime transport.

1.3.        Revision by the Impact Asssessment Board

A first version of this impact assessment report was submitted on 20 February 2013 to the Impact Assessment Board and discussed at a meeting convened on 20 March 2013.

This impact assessment report was comprehensively revised in the light of the opinion provided by the Impact Assessment Board on 22 March 2013. The main changes in this new version of the report concern: (1) a more precise description of the mains problem, i.e. differences in port performance, links with hinterland congestion issues and internal market restrictions, (2) a clarification of the scope for application of horizontal instruments, i.a. EU internal market  and transport policy acquis and competition rules, in the port sector, (3) more detailed data regarding the baseline scenario and future port capacity constraints assumptions, (4) a more detailed subsidiarity analysis, (5) a more fine-tuned presentation of objectives, (6) a more precise description of the links with the European Semester exercice and Structural Funds, as well as (7) further precisions on the impacts of the possible policy options on direct and indirect costs, maritime traffic impacts and possible distribution across different regions.

In addition, Annex II provides now an overview of recent and on-going port reforms and re-organisations in Member States; Annex V has been revised for better presenting the reactions of stakeholders to the questions of the on-line surveys; Annex VII has been revised with an extended presentation of the balance of demand and supply model for European ports up to 2030, and a more detailed description of the methodology underlying the assessment of impacts. Finally, Annex III contains the more recent and comprehensive statistics on shipping ports provided by Eurostat in March 2013.

2.           General Context[9]

2.1.        Key figures

Over 1.200 commercial seaports operate along some 70.000 kilometres of the Union’s coasts. The proposal for TEN-T guidelines identified 319 TEN-T ports, of which 83 are recognised as core network ports[10]. Europe is one of the most dense port regions worldwide. In 2011, around 3.7 billion tonnes of cargo (more than 60 000 port calls of merchant ships) transited through European ports. Bulk traffic represented 70% of it, containers 18% and Ro-Ro traffic 7%, the rest being other general cargo. Figure 1 provides an overview of the main container ports and their logistical gateway function.

Ports play a crucial role for the external trade of the EU. They handle, in volume, 74% of the goods exported or imported to the EU and from the rest of the world. They ensure the security of supply of the EU in energy and other basic commodities. As the main trade bloc in the world, the EU is highly dependent on the maritime transport system.

In terms of intra-EU trade, ports handle about 37 % of the total internal market exchanges of goods (in ton km). Short sea shipping represents 60% of the tons handled in EU ports. The latter are key nodal points of the EU intermodal transport chains using short sea shipping as an alternative to saturated land transport routes or as a way to link peripheral or island areas. Figures[11] suggest that short sea freight flows in the EU have remained stagnant over the last decade.

In terms of passengers transport, ports service regional and local traffic to link peripheral and island areas. EU ports handled almost 385 million maritime passengers in 2011. This marked the third successive annual decline in passenger numbers, down 2 % compared with 2009. However, ports face growth for specialised traffic related to cruise ships (+7.1% since 2010).

Port costs account for a significant fraction of the total costs associated with the logistics chain. Handling cargo, port dues and port nautical services may make 40%-60% of the total door-to-door logistic costs for typical short sea shipping. However, for deep-sea shipping in modern ports, using capital-intensive cargo-handling equipment and advanced IT systems, port costs can account for less than 4-5% of the total logistic costs[12].

Figure 1: Container ports and their logistical gateway function (Notteboom, 2010)

Port activities contribute directly to employment, inward investment and GDP growth (up to 3% in the Netherlands). 2,200 port operators currently employ around 110,000 port dockers. A much larger labour force serves the port industry covering maintenance and operation of maritime infrastructures, ship operations and services, land transport, logistics activities, cargo services (e.g. freight forwarding and customs broking) etc.. Ports represent 1.5 million direct jobs[13]. When adding indirect jobs, they represent a total of 3 million jobs in the 22 maritime Member States (Notteboom, 2010).

2.2.        Functioning of the port: a chain of services[14]

A port is a gateway through which goods and passengers are transferred between ships and the shore. While the port as a whole can be seen as a link in a logistics chain, the port product is itself a chain of consecutive links[15]. The functioning of a port requires a number of services, such as: provision of transport infrastructure, technical-nautical services (pilotage, towage, and mooring), operational infrastructure & equipment, cargo handling & passenger handling, waste reception facilities and ancillary (or general) services[16].

The total EU port cost to the shipping industry is estimated at around €11-17 billion in 2010 (PwC, 2013). An indicative repartition of the relative weight of the different costs items of the total port operation costs is presented in the table 1[17].

Table 1: Indicative relative weight of port operation costs[18]

|| % of total costs

Port dues (provision of general infrastructure) || 5%-10%

Vessel technical services (pilotage, towage, mooring) Of which Pilotage || 10% - 15% 5%-6%

Berthing costs || 5%-15%

Cargo handling operators || 45%-60%

Waste reception || 1%-5%%

Others || 5%-10%

2.3.        Policy context

In contrast with other transport sectors, with exception to port waste reception facilities[19], there is no EU legislation in the European port sector, be it on the access to the port services market, financial transparency or infrastructure charging[20]. The first step taken by the Commission to move towards a coherent ports policy was made in 1997, with the publication of a Green paper on that subject. In 2001, the Commission proposed a directive on market access to port services. This proposal was rejected by the European Parliament (EP) in 2003. In 2004, the Commission adopted a second proposal which was subsequently turned down and eventually withdrawn.

In 2007[21] the Commission came forward with a Communication on ports policy, announcing "soft" measures in the form of guidelines (state aids, environment), best practices (benchmarking, indicators) and close cooperation and dialogue with stakeholders. The problems identified at the time related to (a) threats on port performance and hinterland connections, (b) expanding capacity while respecting the environment, (c) modernisation of ports, (d) absence of clarity, for investors, operators and users and (e) issues on work in ports. An ex-post assessment of the progress achieved since 2007 is summarised below[22]:

1) The problems last identified in 2007 remain largely unsolved in spite of the adoption of a few of the envisaged measures. The main development has been the adoption of the proposal for the new TEN-T Guidelines and Connecting Europe Facility, both of which foresee substantial funding support for ports. The Commission also issued non-binding guidelines on the application of the birds and natural habitat directives in port areas.[23]

2) As of 2011, in the context of the European Semester exercise, the Commission has included reforms in the port sector as a part of the Country Specific Recommendations addressed to the Member States. In the cases of Greece, Ireland and Portugal, measures involving important port reforms have been undertaken in the context of the Economic Adjustment Programmes. 

3) Although initially envisaged by the 2007 Communication, the Commission does not intend anymore to adopt specific guidelines for state aid to ports. The main reason is that the case law from the Court of Justice has recently evolved and clarified certain issues (the case T-443/08 "Leipzig-Halle"), in particular that public financing of the construction of (airport) infrastructure constitutes state aid. The only exception concerns certain activities that are part of the exercise of public powers (security, police etc.). This judgement requires careful reflections for all sectors with heavy infrastructures such as the port sector. Moreover, the Commission will come forward with a modernisation of its state aid rules for all economic sectors by the end of 2013.

4) Contrary to expectations, the development of intra-EU maritime transport connections supporting internal market exchanges has stagnated. Inter-modality objectives have been largely missed.

5) In 2011, the Commission adopted a proposal for a Directive on Concessions[24]. This proposal applies to concession contracts granted in ports. Though, as there are other forms of awarding contracts in ports (like for instance land leases or authorisations) in parallel and as alternatives to concessions, this will lead to a situation where not all port service contracts would be subject to the same legal regime and European framework.

A Court of Auditors report (2012)[25] has shown that investments in port facilities create limited European value added if they are not connected as multimodal nodes to the national and regional transport network. Therefore, the CEF and the cohesion policy will give priority to projects concerning port access and hinterland connections to ensure that TEN-T ports, are developed as multimodal nodes which can clearly demonstrate, by performing a thorough cost benefit analysis, that they are desirable from the economic and financial point of view.[26]

As far as the different Member States are concerned, several of them have in the past years[27] reviewed their port policy. For example, Germany (2003), Finland (2010), France (2008) and Spain (2004) have undertaken reforms of their respective port sectors, including their port labour market. Moreover, in the context of the structural adjustments required by the Conditional Assistance Programme to Member States in financial difficulties, a radical reform of the ports regulatory regimes has been required in Greece, Portugal and Ireland[28]. Some other Member States however, have not significantly changed their national ports framework. 

The differences in degree, scope and eventual impact of the policy developments at national level involve a risk of further fragmentation of the Internal Market, with Member States adopting dissimilar approaches on market access conditions, transparency of public funding and charging policies or administrative requirements[29]. 

TEN-T, CEF and Structural Funds support to ports

Ports and connections of ports with the hinterland (motorways, railways and inland navigation channels) are key transport infrastructures for economic development. Over the years, in the context of the TEN-T and of the Structural Funds, the EU has provided constant and substantial funding for the completion, renewal and maintenance of those infrastructures in all maritime regions of the EU. As stated above, the EU funding effort supporting those infrastructures will continue in the years to come. The precise amounts to be allocated will depend on the final decision on the multiannual financial perspectives and of the assessment made by the Commission of the proposals submitted by Member States under the different EU funding instruments. As recalled by the Court of Auditors, it is of extreme importance that the EU effort sustaining ports delivers good returns in terms of performance and overall contribution to the objectives of the European Transport Policy.

Under this policy context, the Commission has emphasised in 2011 and 2012, in its White Paper on Transport and in the Single Market Act II the need to review its ports policy.

2.4.        Diversity of ports in the EU[30]

European ports have historically developed in their own diverse ways, even when located in the same country[31]. Large gateway ports, hub ports transhipping goods from large to smaller vessels, medium-sized and smaller ports each have specific characteristics in terms of hinterland markets served, commodities handled and locational qualities.

On a geographical basis, one usually distinguishes the maritime coastlines of the continent (Baltic, North Sea, Atlantic, Mediterranean, and Black Sea) or ranges of neighbouring, competing ports (e.g. Hamburg-Le Havre range). 20% of the EU cargo handling takes place in the ports of Rotterdam, Antwerp and Hamburg.  The nine largest ports of the Mediterranean account for 20% of the total.

The port governance structure also differs. In a significant number of ports, the government both owns the land, the infrastructure and the equipment, and runs the entire operation of all the services provided in the port. At the other end of the spectrum, in a number of ports, the landlord is a private owner and private interests provide the services. The dominant structure for port governance in Europe follows the landlord model, with public ownership of the land and infrastructure. Typically, port authorities finance large, long-term infrastructure investments from public funds. At the same time, many of them organise the provision of port services and act as referees on intra-port competition matters.

Table 2:  Ownership of port authorities (ESPO, European Port Governance report 2010)[32]

|| Hanse || New Hanse || Anglo-Saxon || Latin || New Latin

Publicly owned ports || 96.0% || 84.1% || 47.1% || 75.0% || 90.6%

National Authority || 6.5% || 71.3% || 35.3% || 64.4% || 87.3%

Region || 2.5% || 0.0% || 0.0% || 7.9% || 0.0%

Province || 4.3% || 0.0% || 0.0% || 2.7% || 0.0%

Municipality || 82.7% || 12.8% || 11.8% || 0.0% || 3.3%

Privately owned ports || 4.0% || 0.0% || 8.8% || 0.7% || 0.0%

Other || 0.0% || 15.9% || 44.1% || 24.3% || 9.4%

Total || 100.0% || 100.0% || 100.0% || 100.0% || 100.0%

Table 2 provides an overview of the ownership structure in the different regions. The ESPO 2010 European Port Governance report concludes that "the Hanseatic and Latin governance traditions of municipal and state influence are clearly confirmed (the ‘other’ category for Latin port authorities includes Italian port authorities which are de facto controlled by the state). Port authorities in Anglo-Saxon countries are either owned by the state (Irish ports), municipalities, and financial suitors or take the form of trust ports (UK ports). State ownership dominates for port authorities in the new regions."

It should be noted that, under all different models of port ownership  (public, private or mixed regimes), there are cases of excellent, well performing ports and cases of ports were problems of performance and long term decline have been reported. The TFEU rules are neutral in respect of forms of ownership of ports in the Member States and this impact assessment does not draw any conclusions in that regard.

3.           Problem definition

3.1.        Description of the main problem

The main problem is the structural performance gap in some TEN-T seaports. The problem is exacerbated by the need to adapt ports to new transport and logistics requirements at a moment of scarce public funding. This creates risks of congestion and puts at risk an efficient, interconnected and sustainable TEN-T and therefore the functioning of the internal market.

When adopting the proposal for new TEN-T guidelines and the CEF, the Commission set ambitious goals to develop an efficient, interconnected and sustainable TEN-T. But without tackling the port-related problems, achieving these goals could be at risk. Seaports are the TEN-T interface between land and sea and their performance determines to a large extent the fluidity of both land traffic (in their broad hinterland areas) and of short sea traffic (in the maritime exchanges and redistribution of cargoes to other EU ports).  Structural weaknesses on performance in certain ports lead to congestion problems and undermine the achievement of a sustainable transport system[33].

3.1.1.     Structural performance gap in ports and impact on the hinterland and congestions

Differences in ports performance is a normal market feature resulting from a variety factors including specialisation and strengthening of competitive advantages. From the perspective of the EU transport system, it could be expected that, over the years, the trend for all EU ports is to improve progressively performance, i.e. their capacity to adapt to the economic development requirements of the regions they serve (hinterlands). In recent years, while some EU ports have improved their performance by international standards, other EU ports have lagged behind, to the extent that some Member States have expressed concern about the structural decline of their port systems.

In the context of the European semester exercise[34], the need for improving the contribution of ports to economic recovery and growth, both in terms of performance and modernisation are part of the country-specific recommendations addressed to a number of Member States[35]. 

EU Ports are part of a network industry. A chain is only as strong as its weakest point. The fact that some TEN-T seaports have a low performance reduces the transport choices. This in turn accentuates the polarization of flows to hubs where the hinterland is congested. It also means a lost opportunity to develop SSS as alternative to saturated land transport routes and to better link peripheral and island areas. Overall it means a suboptimal functioning of the TEN-T.

The relative performance of TEN-T ports by international standards has been examined by PwC by means of a model based on data from the World Economic Forum, market shares per cargo categories and a proxy variable for measuring inter-port rivalry. Under the assumptions of the model a “well-performing” port is one that is located in a country where functioning of ports obtains a high rating in terms of users' appreciation and which achieves a high market share in circumstances where there is a high degree of inter-port rivalry.

The model has been applied to a representative sample of 115 TEN-T ports for the purpose of obtaining useful insight on port services performance, while recognising that there can be other factors, such as physical geography (e.g. distance from the sea, location of rivers) affecting performance. A detailed presentation of the model is given in Annex VII[36].

The results show a mixed picture: five ports are performing in the top category (25% of the relative ranking); 23 ports perform well (a relative score between 75%-50%); 51 ports perform moderate (between 50%-25%) and 36 ports have a relative low performance (lower than 25%). Figure 2 shows this distribution.[37]

Figure 2: performance distribution of EU ports (sample of 115 ports) (PwC, 2013)

While some ports seem underperforming and underutilised, other high performing ports have had or will have to face capacity and connectivity problems related to the need to rapidly evacuate from the port huge volumes of cargoes (containers trades, but also roll-on roll-off traffics).

It should be noted that other models examining the relative performance of EU ports exists[38] and that different research sources, including those of the World Economic Forum or the OECD referred to above consistently show significant differences of performance in EU ports

Congestion in the port hinterlands has a high external cost in the densely populated areas along the major TEN-T hubs. The cost of road congestion is estimated to 1-2% of the EU GDP, i.e. EUR 122-245 billion[39] and congestion is on average significantly higher in the broad hinterland of the major EU hubs (e.g. Benelux).

Congestion in ports is more difficult to appreciate. Port congestion already occurred in 2004, the year considered as the peak of globalisation in terms of trade (see table 3). For some trades, door-to-door logistic cost for European industries rose by 10% in 2004 because of such port congestion[40]. Although the congestion issue has been put on hold during the recession, the baseline scenario indicates that intra-port congestion will come back sooner or later in certain maritime ranges, due to the growth of traffic (see section 3.4).

Table 3:  North European Containers Deep Sea Ports Utilisation 2004 (Drewry Shipping Consultants & CLECAT)[41]

Port || Capacity Utilisation

Le Havre || 89.6%

Antwerp || 92.9%

Rotterdam || 92.5%

Bremerhaven || 95.5%

Hamburg || 93.2%

Southampton || 99.3%

Felixstowe || 77.1%

Total average || 86.6%

Major hubs ports have developed strategies to improve their rail and inland waterway hinterland connections, in line with the ideas of the TEN-T policy. For example, the port of Rotterdam is developing a rail and inland shipping programme for addressing the major road transport connectivity challenge posed by the expected growth[42]:

"Where currently about 6.8 million TEU travel to and from Rotterdam across the European continent - mainly by truck - expectations are that this will increase to 20 million TEU by 2035. By that time, the Port of Rotterdam Authority will bind customers to move 45 % of their hinterland transport from the Maasvlakte by inland shipping and 20 % by rail. In the current modal split, these percentages are respectively 39 % and 13.5 %"

A complementary strategy is to provide cargo streams with attractive multiple alternative routes in the same catchment area, which requires that all the ports on these alternative routes offer comparable performance levels.  The performance gaps between ports also undermine the development of short sea shipping, be it "hub and spoke" operations[43], Ro-Ro or other forms of short sea shipping (SSS). By avoiding additional cargo transport in the usually saturated hinterland of the major European hubs, SSS contributes to sustainable transport. However, SSS requires performing ports at the two ends.

SSS has a greater transport capacity than road haulage which considerably reduces the costs per cargo. Though, several factors affect the competitive edge of SSS. The two most commonly accepted are the complexity of administrative formalities (including customs procedures) which are different to what applies to the competing intra EU road transport,[44] and the low efficiency of ports.

From an EU-wide perspective, poor performance of certain ports penalises short sea shipping and multimodal transport solutions in ports. It also aggravates road transport congestion problems in other ports and puts strain on long-haul road corridors in the EU (crossings of EU and non-EU land locked regions). 

Hence, at several occasions, EU Member States have stressed[45] the necessity of more flexible and efficient port services allowing shipping services to offer frequent sailings at any time, as well as guaranteeing high-speed operations throughout the logistical chain and a quick turn-around time for ships in the port:

Extract from Council Conclusion 11-12 December 2006 on Short Sea Shipping (SSS)

· Promotion should, in particular, continue urging market players to integrate Short Sea Shipping more tightly into the whole transport logistics supply chain, inter alia by developing ports, as strategic nodes, and links to the hinterland, and services;

· Ports, as efficient and seamless nodal points for transhipment between the land and the sea, should further enhance and improve their services for Short Sea Shipping; work towards ensuring high-quality services and unrestricted and efficient access to ports from sea and from the hinterland should continue;

3.1.2.     Need to adapt to transport and logistics changes

The performance problem referred to above is compounded by the fact that new transport and logistics requirements have emerged to which ports need to adapt. The changes potentially make a part of the existing port capacity obsolete or require an infrastructure upgrade. In the discussion about the nature and extent of the problem, stakeholders identified a number of trends and signals of change that are appearing today and that are expected to become increasingly significant in the future. Those trends and signals of change (see also section 3.4) are:

· Increased size and complexity of the fleet, in particular ultra-large container ships, but also new types of Ro-Ro ferries and gas-carriers. The bigger ships pose a challenge of high peak capacity when delivering more cargo/boxes or (dis)embarking a high number of passengers in a single visit. For instance the new ship “Marco-Polo” owned by CMA in operation since November 2012 has a capacity of 16,000 containers and a length of 396 m. Maersk has ordered 20 ships for 2015 with a capacity of 18,000 containers. This is the equivalent of a theoretical loaded train of 280 km (distance between Rotterdam and Dusseldorf).

· Deployment of bigger vessels for short sea shipping and feeder services, with new needs in terms of energy efficiency, alternative bunkering fuels  and environmental performance (LNG, cold ironing[46]).

· Trends in logistics and distribution systems that attract more value added services within a port's area (relevant to the rules for competition within the port and for charging schemes).

· Significant changes in the energy trades, with a shift from oil and oil refined products towards gas; need for significant gasification facilities in ports; potential volumes of dry biomass and CO2 transport and storage; shore-side electricity supply. 

These changes place intense pressure in terms of infrastructure and investments: extension of berth, quay, deepening of basins and canals, reconfiguration to enable manoeuvring of larger ships. They require new facilities and operational procedures: cranes, new passenger terminals etc. However, public funding has become scarcer as a result of the economic crisis; hence the need to focus public funds on the most efficient port investment projects. Moreover since as a result of the recession, the return on investments of private funding may be lower than expected[47], ports may appear as a less attractive venue for financial firms.

Lastly, port capacity should ideally be available where it is needed, including in response to changes in inland distribution and ship call patterns that may occur. Therefore, capacity needs to be available at a wide range of locations for matching evolving demand needs, possibly with fluctuations of traffic between ports, creating occasional surplus and shortages in capacities.

3.2.        Underlying drivers of the problem

Three main underlying drivers of the problem have been identified: 1) port services and operations in some TEN-T seaports are suboptimal; 2) the current port governance framework in some TEN-T seaports does not provide enough incentives to attract investments and 3) inadequate connections with the hinterland, notably by rail and inland waterways. Problem driver (3) is already addressed by the above mentioned TEN-T and CEF proposals, and by the new cohesion policy (better planning of interventions by cohesion and structural funds). Therefore, it is not further analysed in this report. Other potential problem drivers such as persisting credit restrictions, curtailing private investments, leading to a technological standstill in the coming years, either go beyond the immediate regulatory intervention scope of the EU or are already covered by other EU initiatives not related to transport. They are therefore not further considered in this impact assessment.

Therefore, the section below presents evidence for the remaining underlying drivers 1) and 2). It does not imply that those drivers are present or have the same extent in every port. Nevertheless, each of them can be illustrated with concrete cases. The root causes of each of these drivers developed below are linked to typical regulatory and market failures which explains that self-regulation cannot provide a solution.

3.2.1.     Suboptimal port services and operations in some TEN-T seaports

Ports provide a chain of services. Suboptimal port services prevent the chain from operating in an efficient way. They prevent the network as a whole from functioning efficiently and to cope with the expected changes in transport demand. Port capability and efficiency can greatly influence the decision for locating a plant or distribution centre, and often determine whether a local producer can compete globally or regionally with other producers. The challenge is for ports to relate to the needs of their customers and assist them in improving their competitive positions by providing cost-efficient port services and by contributing to the sustainable development of the transport chain.

On the basis of discussions with stakeholders, evidence collected through the business surveys (opinions of users of port services) and academic research, the instances of suboptimal port services can be attributed to three main root causes: (1) weak competitive pressure in the port services market resulting from market access restrictions (2) market abuses by port service providers with special or exclusive rights and (3) administrative burden due to lack of coordination within ports.

Table 4 below gives a stakeholder's appreciation of the price and quality of the port services. Although the results only reflect perceptions and do not yield general conclusion applicable to all ports, they clearly point out a degree of dissatisfaction in certain seaports.

Table 4: problems identified by stakeholders per type of services in EU ports (PwC, 2013)

3.2.1.1.  Root cause 1: Weak competitive pressure in the port services market resulting from market access restrictions

Competitive pressure means that port operators have to make a constant effort to satisfy users' needs. Such competition helps to facilitate specialisation because competitors are competing under the same conditions. Specialisation in turn helps to improve cost efficiencies. However, the extent of this intra-port competition can be limited by market access restrictions:

Market access restrictions

National legislation, regulatory authorities or port authorities may limit de jure or de facto the possibilities of market entry. It can be linked to reasons of lack of space limiting the number of operators (e.g. terminals) or because certain activities are considered to be public services (imposing safety requirements e.g. pilotage). It can also be linked to state monopolies, historical contracts with incumbent operators, and/or existence of restricted professions.

Examples known[48] from complaints or reports from stakeholders include:

· Monopolistic rights with a long standing history, notably for technical-nautical services (pilotage, boatmen and towage). In some Member States the providers of those services fall under the category of regulated professions with long standing exclusive rights. The possibility to create new SMEs and jobs for those services (or for innovative services closely related) is seriously restricted or does not exist at all.

· Discretionary decisions of a public authority to grant or deny access to the port to a provider of port services or to impose disproportionate requirements. In certain Member States, market access often follows a “close door” negotiation: interested parties do not have even notice of the market opportunity. Appeals and complaints against such unilateral decisions are costly, take very long and often rejected because the local legislation authorises such decisions by port authorities.

· Denial of fair access to land in the port, assignation of a less favoured part of the port or lack of legal certainty on the authorisation granted by the port authority, i.e. possibility to impose unilateral changes or revoking access decisions without appeal procedures.   

Table 5 gives a broad indication of the presence of legal/regulatory market access restrictions for different ports services in EU ports. The 2012-2013 survey indicates de jure restrictions in 32% of the cases (for bunkering) and 85% (pilots). They also vary across Member States and even within Member State.

Table 5: Share of respondents indicating limitations to competitions by law/regulation (PwC, 2013)

Degree of competition in the market

Table 6 presents the share of ports where more than one operator provides a particular service. Figures are broken down by type of service. Intra-port competition is low in pilotage (only 12%) and not frequent for other technical-nautical services. By contrast, services indicated with a higher competitive pressure are bunkering (54%) and passenger services (48%). On cargo handling, although some market access restrictions were indicated (table 5), services are often provided in a competitive environment (64% of responding ports – table 6), and inter-port competition also often applies in this case. Annex II gives examples of the number of operators in key major ports.

Competition for the market

In the 2012 PwC Survey, port authorities were asked to describe the awarding process for the operation of main terminals and for port services: it was reported that the same port can have several different procedures in place to award contracts (e.g. for different terminals, operational areas, port services). Especially in the event where different awarding procedures are used for terminal awarding or service contracts, this puts the level-playing field into question and presents a possible distortion of competition. It is to be noted that, in certain Member States, port land rental or lease contracts can be granted by public authorities to commercial operators without following public procurement or concession rules.

Table 6: Presence of more than one operator per type of service (PwC, 2013)

Stakeholders' point of view

Port authorities, port services providers and terminal operators recognise that market entry barriers exist. However, they reckon that for a number of services it may be justified and that in any case the lifting of these barriers is a matter for national competence.  By contrast, shipping lines do not agree and consider that the freedom of service principle should be introduced.

3.2.1.2.  Root cause 2: Market abuses by port service providers in monopolistic or oligopolistic positions

A wide range of potential abuses of market power can occur in ports as a result of the many instances of market access restrictions described in the previous section and notably the exclusive rights or special rights granted by the State or the port authorities. A notorious abuse is the obligation to pay for pilotage services when entering the port even if the service is not needed and/or effectively provided.

Market abuses can also stem from de facto monopolistic or oligopolistic positions facilitated and /or reinforced by various degrees of integration between infrastructure providers and port users[49] and the difficulty to have access to facilities which are essential to provide port services[50].

 Some examples of market power abuse practices[51] are, inter alia:

· Excessive pricing to users, i.e. charging a price which is excessive because it has no reasonable relation to the economic value of the product supplied (ECJ definition)

· Refusal to supply, i.e. refusing access to the port to an operator involved in commercial passenger or freight shipping.

· Favourable treatment to incumbent operators, including subsidies: incumbent operators can receive particularly advantageous conditions, for example lower fees for port land lease contracts, obtain the best locations in the port or receive public subsidies for supporting their commercial activities.

In practice, this has led to complaints and even court proceedings by the national competition authorities or the Commission. There is substantive case law in terms of Commission Decisions' and Court of Justice judgements' on market abuses. Some examples:

· Italy: cargo-handling monopoly, Port of Genova[52]

· France:  refusal of access to LNG Terminals, Port of Fos[53]

· Germany: refusal to supply, Port of Puttgarden[54]

· Sweden: excessive pricing, Port of Helsingborg[55]

· Portugal: Tug services cartel, Port of Setubal[56]

However, in many other cases, abuses linked to the exclusive or special rights of port operators cannot be easily legally challenged. Complaints are costly and time consuming for the potential complainants, in particular SMEs. Moreover, in absence of secondary EU legislation implementing the principle of freedom to provide services in the port sector cannot be used to avoid abuses of monopolistic practices.

Stakeholders' point of view

Stakeholders recognise that, in some EU ports, market abuses by regulators, policy-makers or port authorities can occur. On one hand, port authorities and incumbent terminal operators consider that port service providers must keep a discretionary power in the management of the service, including the definition of price. In their view, competition authorities are already now well placed to intervene. On the other hand, port service users and would-be new entrants highlight that in absence of EU legislation, abuses cannot be easily challenged.

3.2.1.3.  Root cause 3: Users face excessive administrative burden due to lack of adequate coordination

The main causes of excessive administrative burden in ports that are usually mentioned are:

· the effect of cumulative regulation (international/EU, national and local sources) touching on different aspects of the port activity;

· lack of harmonisation of interfaces and between ports and ships and a lack of regulatory harmonisation at EU level;

· conflicting goals: e.g. trade facilitation vs. law enforcement, port revenue collection vs. available human resources, etc. and

· a lack of coordination between different administrations and poor interaction between the public and private sector agents within ports.

Below an illustration[57] of the excessive administrative burden:

“The survey demonstrates that as many as 150 separate actions may be needed to get a ship into a port, perform cargo operations and sail to the next port, many of which must be carried out in the very short timeframe allowed by the vessel’s schedule. Any delay in the progress of the port call, compliance with statutory requirements or arranging the delivery or collection of the cargo can have a significant effect on the cost of the call (and thus on the overall voyage) and on the vessel’s subsequent employment. There is very little consistency in the way these functions are handled – at the international, regional and even local level”.

The Commission will tackle issues related to the further simplification of customs procedures for intra-EU freight traffic in EU ports by means of the upcoming initiative on "Blue Belt"[58]. The Commission is also working on issues related to the inter-connection and/or inter-operability of port IT systems in the context of the so-called "e-maritime" initiative[59].

However, those initiatives do not touch on the issue of lack of coordination of different activities that are part of the same chain of services within the port. Some EU ports make pro-active efforts to facilitate users' needs in terms of administrative simplification, introducing quality standards and customer care departments. However, the PwC Survey reveals that while good practices exist (e.g. DK, NL, UK) there is serious lack of coordination between different administrations in too many EU ports (see table 7).

To tackle similar issues in airports, EU legislation[60] has introduced the requirement of giving users the possibility to exchange information and ideas and allow the concerns of interested parties to be raised and taken into account by the airport authorities on important decisions such as charging. Such committees provide customer orientation and a flexible coordination instrument by means of which port authorities and administrations listen to the users and users can interact to combine their activities to provide a better service to final users. Costs resulting from unnecessary administrative burden in ports are extremely difficult to estimate. The following table summarises the overall views resulting from the business survey (opinions of users) carried out in the context of the public consultation>

Table 7: Users views on coordination of administrative requirements in EU ports (PwC, 2013)

|| North Sea || Atlantic || Baltic Sea || West Med || East Med || Black Sea

Shippers / Freight forwarders || + + + || || + + || + + || + || +

Shipping Companies || + + + || + || + || + + || + || +

Other logistic operators || +  + + || + + || + || + + || + || +

 + + +      : “Users friendly”, i.e. good coordination, transparent procedures, customers consultation structures   + +        :  Lack of coordination, relatively transparent procedures, occasional consultation     +          :  Lack of coordination, uncertainty of results (time required), no consultation

Stakeholders' point of view

Stakeholders (users of port services and certain port authorities) largely agree on the three causes of administrative burden. They estimate that the administrative complexity can be effectively addressed by improving the coordination of services and procedures inside the port.

3.2.2.     Port governance frameworks not attractive enough for investments in all TEN-T seaports

In order not to put at risk a more efficient, interconnected and sustainable TEN-T and cope with the expected traffic changes, ports need optimised port services (driver 1), but also new investments (driver 2). To attract these investments, the right governance frameworks must be in place, which does not seem to be the case for all ports.

According to projections carried out[61], the port infrastructure required to meet future demand would require 12% of total infrastructure investments (from € 150 to € 200 billion) until 2030. There are regional variations, e.g. the Baltic region shows a need for start-up investments, whilst the North Sea and Mediterranean regions require strong investments in modernisation schemes. For the period 2015-2030, the overall funding needs for maritime transport infrastructures could easily exceed € 100 billion just to maintain current capacity levels. European Port Authorities have expressed very serious concerns about the investment gap that looms in the coming years as a result of the difficult state of public funding in the Member States, the reductions of the funds allocated for transport infrastructures in the EU financial perspectives 2014-2020[62] and the consequences of the economic crisis on private funding availability.

The current context of scarce public funding imposes a higher selectivity in granting public funds to port investments[63]. It will demand more than ever a careful scrutiny to avoid waste of scarce resources and distortions of competition between ports arising from public subsidies (see report of the Court of Auditors – Annexe II).

The fact that current port governance frameworks do not provide enough incentives to attract investments in all TEN-T seaports can be explained by several "root causes": 1) inadequate infrastructure planning and poor strategic planning and ex-ante cost benefit analysis procedures (this cause is highlighted in the report of the European Court of Auditors 2013[64]), 2) market access restrictions which may deter investors (see root cause 1 above), 3) unclear financial relations between public authorities, port authorities and port services providers and 4) weak autonomy of ports to define infrastructure charges and non-transparent link with costs. The last two root causes are further explained below.

3.2.2.1.  Root cause 4: Unclear financial relations between public authorities, port authorities and providers of port services

Transparency is a necessary precondition to attract investments, even if not sufficient[65]. Transparency, together with non-discrimination and a level playing field, is one of the key policy requirements for a sound and stable investment environment offering a lower degree of uncertainties on profit returns for all. Transparent information on how port authorities use public funds is a critical determinant in the investment decision of port services providers by contributing to a better predictability. It is especially important for small and medium sized enterprises that tend to face particular challenges to entering the market.

In many occasions, the Commission and others have expressed the view that the current level of transparency in the port sector is inadequate to trace flows and uses of public funding within port entities, which are, at the same time, engaged in both port management and commercial activities within ports. The financial transparency problem appears at two different levels:

- The flow of public funding from the national, regional or local authority to the managing body of the ports: i.e. how much public funding is received;

- The use of that funding by the managing body of the port: i.e. allocation of public funds to support both statutory "public authority" functions and provision of port services, i.e. possible cross-subsidization of incumbent port service providers

Use of subsidies to ensure the viability of incumbent port service providers means a de facto market barrier for new entrants and investors. For instance cross-subsidies can artificially decrease the incumbent’s costs and allow the incumbent to undercut the newcomer’s prices.

More in general, the ability to absorb losses and cross-subsidize operations within the port impacts the balance and intensity of competition: it discourages new entrants, who have to over-invest to be present in the market, reduces the competitive pressure to improve efficiency of incumbent operators and leads to distortions in the allocation of investment resources[66].  

A Commission study on the public funding of European ports[67] concluded that, in absence of reporting and accounting obligations, it is not possible to ascertain both the volume of funds granted to ports and the use of those funds in the port for public functions and commercial operations. The problem was largely confirmed by a 2011 study carried out by the European Parliament[68].

Although Directive 2006/111/EC[69] on the transparency of financial relations between Member States and public undertakings already imposes minimum requirements in terms of transparency, it only applies to undertakings with an annual turnover higher than €40 million. According to the PwC 2013 survey, only 36% of ports analysed exceed this threshold. Even on the core network, the survey indicates that only half of them would fall in the scope of the Directive. Further analysis indicates that while 79% of TEN-T ports are involved in at least one port service, a significant share has no separate account which could allow possible distortive state aids to be identified or traced. As such, addressing the existence of state aid and its compatibility with the EU state aid rules is rather complicated. See table 8.

Table 8: TEN-T Ports accounting practices, Source DG MOVE based on PwC Survey (2013) & ESPO (2010)

Port Accounting Practice || % of ports

Ports applying the Financial Transparency Directive  (€ 40 million turn-over)* || Less than 50%[70]

Ports not keeping separate accounts from the Public Administration || Around 20%

Ports not keeping accounts according to accounting standards || More than 40%

Ports not required to audit accounting by external experts || More than 40%

Ports not publishing annual accounts || More than 40%

Port Authorities involved in the provision of port commercial services || More than 95%

Ports not applying internal analytical accounting to activities and services || More than 40%

Stakeholders’ point of view

Several stakeholders, including most port authorities, point to the lack of financial transparency. It gives rise to suspicion and recrimination between ports, be it justified or not, about unfair competition between ports encouraged by Member States public funding practices.

3.2.2.2.  Root cause 5: Weak autonomy of ports to define infrastructure charges and non-transparent link with costs

Efficient pricing is a prerequisite for making efficient infrastructure investments (Winston, 1991).

While public ports should aim to maximize user welfare, given the growth in demand, they may need to evaluate their pricing approach in order to reduce the financial burden and consider the competition with private ports.

This section highlight that current infrastructure charges cannot always be set autonomously by port authorities and that they rarely reflect real costs in an efficient way. Similarly, port dues do not always send the correct price signals which incentivise users to take into account their external costs[71].

Autonomy of port authorities in setting port infrastructure charges

There is broad academic transport research[72] suggesting that port authorities should be allowed to have autonomy in terms of obtaining revenues from their activity as port managers in order to use those resources in a more pro-active management approach. Port dues form the most important source of operating income (see table 9). A wide autonomy for setting general port dues help port authorities to design optimised pricing policies which accommodate both their own commercial and investment strategies.

In a survey carried out on behalf of the Commission in 2011, it was found that 34% of ports have no responsibility for setting ship and port infrastructure charges. This for example because port charges can be 1) unilaterally imposed by public authorities independently of the use of infrastructure, 2) retributions, or simply prices, i.e. charges for commercial ports. Only 48% set and approve the charges in a full autonomous manner ("Study of the public funding of port infrastructure", NEA, 2011). Moreover, the indicative relative weight of the port dues in the total port operation cost ranges from 5 to 10% (see table 1).

Table 9: Average operating incoming profile of European port authorities (ESPO Fact Finding report, 2011)

Income source || Average %

Income from general port dues || 49%

Income from land lease or similar || 25%

Income from services || 16%

Other income || 10%

Efficient pricing of port infrastructure

The principles of port public infrastructure pricing have been extensively discussed in transportation economics[73]. Pricing strategies, such as lowering charges (port dues or terminal handling charges or both) in order to compete against other ports, can be used to boost port’s competitive positions. Ultimately the pricing scheme should correspond to market conditions and to counter competition, stimulate market growth and improve profitability (Yap et al., 2011). There is no fundamental difference between investments in port infrastructure and other capital-intensive investments in industrial complexes. Therefore, there should be no reason for adopting a completely different approach to port investments, and consequently no reason why direct users should not bear the costs of such investments. Moreover, the introduction of market principles in infrastructure pricing would be the most effective remedy to avoid the risk of creating wasteful overcapacity and possible distortions of trade flows (except in the case of pricing maritime access and protection infrastructure).

An illustrative case: In January 2013, German port operator, Eurogate, has confirmed that it is pushing ahead with legal action against harbour dues at Wilhelmshaven’s JadeWeserPort, the port authority of Germany's newest container terminal at the country's only deep sea water port. Eurogate, complaints JadeWeserPort authority’s decision to grant allegedly up to a 70% rebate on dues for the first 18 months, followed by a 50% rebate for the following six years to Eurogate competitors. See: http://www.portfinanceinternational.com/categories/regulation-policy/item/663-eurogate-confirms-legal-battle-at-wilhelmshaven,-germany-s-newest-port

There is no uniform model, even within Member States. The most frequently used criteria in TEN-T ports for establishing port charges are (a) the type, size (gross tonnage) and/or cargo capacity of the vessel, (b) the type and volume of cargo and (c) the time in port. Other criteria are judged to be "rather complex, un-transparent and archaic"[74].

The evidence collected suggests that in many ports, the criteria used to establish charges and rebates or discounts on those charges is seen to be based on arbitrary decisions[75]. The PwC survey shows that, in many cases, port charges appear to be fixed and altered with rebates depending on market developments, according to variations in charges in competing ports. This has occasioned many debates[76] on allegedly covert subsidising, predatory pricing and possible distortion of competition between neighbouring ports and/or operators in those ports.

Lack of incentives rewarding environmental efforts[77]

The past years have seen increasing concerns on the environmental impact of maritime transport, in particular air pollution[78]. Ships that call at ports are a major source of air pollutants such as CO2, SO2 and NOx. The health effects impacting the residents surrounding major ports (respiratory diseases, cardiovascular diseases, lung cancer and premature mortality) and distorting the natural ecosystem are well documented[79]. Traffic growth means that those external costs risk increase unless there is significant change in ships’ fuels and propulsion technologies. An EU and international regulatory approach has been implemented as regards the sulphur content of fuel, the waste management[80] and more recently the provision of LNG fuel in core ports[81]. However, economic incentives, including by means of differentiated port dues, can be used to reward compliance with standards/practices not binding yet or to encourage innovative cleaner solutions.

In a voluntary manner, some European ports have set up such rewarding schemes. Discounts on port charges of up to 10% can be granted based on participation in the Environmental Ship Index scheme[82] (Belgium, France, Germany and the Netherlands), of 20% based on the Green Award certificate[83] (Latvia, Lithuania, the Netherlands and Portugal), or 50% though rebates linked to NOx/SOx emissions or via levying a sulphur fee (Sweden).

With few exceptions, such practices are limited to a number of ports. Some stakeholders put forward that, in absence of a common framework, port charges variations resulting from those schemes can entail discrimination and/or unfair commercial practices between ports. It was also argued that the environmental rebates are usually too small and that there is a lack of consistent application at regional level. As a result, environmental differentiation is more seen as part of the port marketing strategy than an effective tool to influence the fleet composition.

By contrast, port charging encouraging short sea shipping, with rebates exceeding 50% in certain ports (notably transhipment operations for which the market is highly volatile)[84] seems to be widely used in large parts. They contribute to attract a high level of feeder services which provide the fine distribution within the region. Although contributing to the White Paper objective to develop shorts-sea shipping, those schemes - which are based on the origin and the destination of the vessels - may raise legal uncertainties as to their compatibility with the TFEU, notably Article 18 which prohibits any discrimination on ground of the nationality and therefore possibly on ground of the origin or the destination of the vessel.

Stakeholders' point of view

Stakeholders, both users and providers of port services agree that greater financial autonomy of port authorities could contribute to better use of resources and more performing, customers' oriented ports.

3.2.3.     Linking the problem to its drivers and root causes

Table 10:  Links between the main problem, its drivers and root causes

General problem: Structural performance gaps in some TEN-T seaports; need to modernise ports to new transport and logistics requirements at a moment of scarce public funding. || Root causes

Driver 1: Sub-optimal port services and operations in some TEN-T seaports || Root cause 1: Weak competitive pressure in the port services market  resulting from market access restrictions

Root cause 2: Market abuses by port service providers with exclusive or special rights

Root cause 3: Users face excessive administrative burden due to a lack of coordination within ports

Driver 2:  Port governance frameworks not attractive enough for investments in all TEN-T seaports || Root cause 4: Unclear financial relations between public authorities, port authorities and providers of port services

Root cause 5: Weak autonomy of port authorities to define infrastructure charges and non-transparent link with costs

3.3.        Who is affected by the problem?

Table 11: Affected parties and their key interests

Stakeholder || Description || Key interests

Port Authorities || Public or private bodies that own and/or manage the ports || Developing the port in the context of a national, regional or local policy and/or maintaining profitability of the ports. A level playing field for inter-ports competition

Port dependent businesses & operators || Business and operators dependent on access to the port, e.g. terminal operators, stevedoring pools || Maintaining profitability and employment; legal certainty and a fair level playing field for intra-port competition

Port workers || Human resources of port authorities and port dependent business and operators || Pay and employment conditions, health and safety in the workplace, training and professional careers

Shipping sector || Shipping companies providing EU and international seaborne trade & maritime passenger services || Cost-efficient and reliable port services (cargo-handling, technical nautical services, port environmental services, passenger services)

Sector regulators || National, regional and local bodies regulating ports || Ensuring an efficient, effective and practical management framework that balances a wide range of stakeholder needs

Freight forwarders and shipping agents || Agents and logistic companies organising or facilitating freight trade exchanges intra-EU and with world markets || Availability, cost, quality and reliability of ports services

Maritime passengers || Citizens travelling by sea (ferry crossings, cruise-ships) || Availability, cost, quality and reliability of ports services

EU industries || Businesses depending on maritime transportation for their supply needs and for their exports, covering a very broad range of industrial sectors || Availability, cost, quality and reliability of ports services

Final consumer || Citizens benefiting from the choice, availability and prices of goods delivered by sea-borne trade || Availability, cost, quality and reliability of ports services

Tax payers || Citizens indirectly providing public funding to ports || Sound use of resources, economic and social returns, opportunity costs

3.4.        Application of EU horizontal instruments (Internal market and competition rules)

Over the years, the Commission has received complaints about abusive restrictions imposed to port operators by the national authorities (port regulatory regimes) and abuses of dominant position by incumbent operators. In a number of cases, the Commission has carried out an investigation to examine compliance of regulatory regimes with the EU Internal market, transport and Competition rules (acquis in the transport sector).  However, in absence of EU port legislation implementing the freedom to provide services; those complaints could not be systematically followed up. This lack of reaction could have led interested parties to desist from presenting new cases to the Commission.

Moreover, throughout the consultation process a distinct aversion by port users to declare distortions and abuses was noted. Users fear that in the future they would be discriminated and have to suffer delays and lower quality of service. Ports are full of situations of “delicate balance”, whereby problems are settled by some sort of “ad-hoc facilitation” and rarely become public. Complaints in cases of abuse require long litigation, often impossible for SMEs for which the procedure is too long and costly. Big companies with bargaining power can enter into bilateral agreements with port authorities, without concerns about possible anti-trust limitations.

The application of competition rules in the port sector was examined by the OECD in 2011[85]. The OECD report shows that many of the national competition authorities recognise the need for sector specific rules to provide legal certainty to all operators, reduce the scope for abuses, pursue complaints and redress situations more effectively.

In 2012, the Commission introduced a proposal regarding the granting of concessions by public authorities in the EU. The proposal will cover concession contracts used in the port sector. The adoption of the proposal by the European Parliament and Council and its possible impact in the sector has been taken into account in the baseline scenario (section 3.5) and in the analysis of options (section 6).

Finally, it should be noted that, in the current situation, there are a number of instruments, such as the Directive on Financial Transparency of public undertakings that just do not apply to a significant number of TEN-T ports. Similarly, the Commission's strategy on the internalisation of external costs foresees sector-specific instruments on infrastructure charging to be developed but no common EU horizontal rules. In respect of State Aid, the Commission has announced its intention to provide clarifications on the notion of State aid in the context of public financing of infrastructures. There are no sector-specific guidelines explaining the Commission's approach to the enforcement of State Aid rules in the port sector.

3.5.        How would the problem evolve, all things being equal

This section analyses future developments until 2030 in a scenario that assumes a status quo of existing policies and already planned policy reforms. The status quo involves progressive changes both at EU level and in individual Member States, resulting inter alia, from past reforms at national level and possible further reforms resulting from the Country Specific Recommendations (European Semester exercise), the impact of the Directive on Concessions in ports (entry into force year 2015) or foreseen modernisation of State aid rules. However, the status quo assumes that those possible reforms will not lead to the establishment of a level playing field for all TEN-T ports in respect of the problems identified in sections 3.1 to 3.3.

The assessment carried out demonstrates that all things being equal, the expected transport growth and changes in shipping logistics, combined with the persisting gap in the performance of ports observed today, would cause capacity problems and aggravate the un-balanced use of the network, thereby threatening the good functioning of the internal transport market.

According to the traffic projections updated by IHS-Fairplay in 2010[86] and by PwC (2013)[87], the overall volumes handled in EU27 ports will grow from 3.6 billion tonnes in 2011 to 5.8 billion tonnes in 2030 in a low growth scenario[88]. EU ports would therefore have to handle 2.2 billion tonnes more than today, which exceeds the capacity resulting from all the port expansion projects known at this stage in the EU. These results are consistent with research[89].

Table 12: EU 2030 port traffic by region of loading/unloading (PWC (2013)

Region || Container || Dry Bulk || Liquid Bulk || RoRo || Other Cargo || Total

UK/Ireland || 125.74 || 155.43 || 297.49 || 137.46 || 35.26 || 751.39

Nordic || 50.53 || 187.66 || 240.30 || 122.01 || 81.87 || 682.37

South Baltic || 19.91 || 158.09 || 88.92 || 17.68 || 39.39 || 323.98

Hamburg-France || 595.58 || 434.53 || 571.20 || 186.83 || 138.26 || 1,926.40

Iberia || 217.28 || 176.38 || 213.45 || 38.34 || 50.98 || 696.44

Italy/Malta || 179.00 || 112.67 || 261.87 || 80.05 || 64.24 || 697.83

Balkan/Aegean || 120.80 || 156.28 || 122.21 || 50.50 || 128.72 || 578.51

Black Sea || 8.22 || 69.73 || 28.90 || 1.53 || 37.81 || 146.19

Total || 1,317.06 || 1,450.77 || 1,824.34 || 634.40 || 576.53 || 5,803.11

Port Traffic in the container sector will be higher than in the bulk sectors. When taking container capacity evolution as a proxy for considering congestion risks in EU ports, it appears that, by 2030, container traffic growth will exceed 85% i.e. 3.2% year on year growth. On this basis it is plausible that capacity in EU container terminals will reach 145-155 million TEU based on existing planned developments. The changing requirements of shipping companies will also dictate that some existing capacity becomes obsolete.  With demand at 149 million TEU in 2030 and capacity also reaching 145-155 million TEU, it can be demonstrated that the supply/demand utilisation rate will reach the congestion threshold of 80% before 2030, and by 2030 the utilisation rate will exceed 95% in some regions.

Uncertainty in forecasting vs. market trends

Those projections must be taken with caution because of the multiple underlying assumptions (see Annex VII for the detailed modelling assumptions). New developments related, for example, to the introduction of new or raising trade barriers would have a direct negative impact on sea-borne transport and ports' activity in the EU. Conversely, further world trade liberalisation would entail much higher figures on demand for port services. The baseline scenario assumes that the current state of affairs will prevail: it does not consider sensitive analysis about possible trade agreements

Nevertheless, it can reasonably be concluded, in consistency with other studies and common experts’ opinion, notably the “Logistic Performance Index” (LPI) elaborated by the World Bank[90], that the trends featuring the main problem (see section 3.1) will be aggravated:

Firstly, there is a threat of port congestion in a number of areas, in particular the North Sea and Baltic Sea regions in the horizon 2020-2030. The congestion in their hinterland will cause longer delays at the access links to a number of major ports. Those delays will paradoxically increase the marginal transport costs of reaching the performing port regions. They will have a knock-on effect on higher fuel costs and road transport externalities while increasing the transport cost for and to peripheral countries[91].

Secondly, the current geographical polarisation of the EU trade flows to a limited number of major ports will be accentuated, in spite of their hinterlands already being largely saturated.

Thirdly, the congestion in the ports reaching their limit in several geographical areas and the low performance in others will undermine the shift of road freight transport to maritime links which need uncongested and performing ports at both ends. This will put at risk the broader goal of the Transport White Paper on shifting 30% of long distance road freight transport to other modes such as rail or waterborne transport by 2030.

Fourthly, achieving the goals of the proposed EU legislation[92] on LNG (deployment of alternative fuels infrastructure, adopted in 2013) will put additional investment pressure[93] in the TEN-T Core network ports. Moreover, this framework could be a missed opportunity for the economic development of certain areas. Shortcomings on ports performance have effects on prices and supply of goods,[94] particularly when the port in question is the source of a significant share of global supply. As such, this could affect the competitiveness of European industries.

3.6.        Does the EU have the right to act?

3.6.1.     Legal basis

The right to act for the EU in the field of transport is set out in the Treaty on the functioning of the European Union (TFEU). According to Article 4 TFEU, the EU has shared competence with the Member States in the area of transport (Title VI TFEU). Article 58 TFEU stipulates that the freedom to provide services in the field of transport shall be governed by the provisions of the Title relating to transport. In this respect, article 100 TFEU states that the European Parliament and the Council, acting in accordance with the ordinary legislative procedure, may lay down appropriate provisions for sea transport[95].

As far as public service obligations (PSOs) are concerned, Article 14 and Protocol 26 of the Treaty confirm the place occupied by services of general economic interest in the shared values of the Union. Article 106(2) of the Treaty lays down that undertakings entrusted with the operation of services of general economic interest are subject to the rules contained in the Treaty, in particular to the rules on competition, in so far as the application of such rules does not obstruct the performance, in law or in fact, of the particular tasks assigned to them. In this respect, the initiative presented will not go further than allowed by the Treaty and will not impinge upon Member States' right to define PSOs.

At present, the Treaty, case law of the Court of Justice and secondary multi-sectorial rules create an EU legal framework applicable to ports, even if there is no EU transport specific legislation regarding ports. Under these circumstances it is reasonable to presume that sector specific measures adequately implementing the Treaty principles in the sector and providing a more comprehensive and legally certain framework are of genuine common interest.

3.6.2.     Subsidiarity

Article 5 TFEU states that, every Union action should respect the principles of subsidiarity:

Necessity test

The legitimate rights of Member States to take actions which reflect their local, regional or national specificities, must not unduly restrict the proper functioning of the internal transport market. In the port sector, a level playing field for the provision of port services is necessary taking account that (2010 statistics) only 10% of the seaborne trade in the EU is national (trade within a member state), compared to 26% and 63% for respectively intra-EU trade (trade between member states) and extra-EU trade (trade with third countries). Moreover, the main TEN-T ports play a role that goes largely beyond national borders: 61% of the freight (tonnes) handled in EU ports has its origin or destination in another Member State[96].

It is therefore necessary to provide rules at Union level in order to ensure the functioning of the internal transport market, an efficient and sustainable use of the TEN-T and its financial instruments (CEF, Cohesion Fund). The past has proven that action at national or lower level - even when the Commission has provided guidance in the form of recommendations (cf. 2007 EU Ports Policy Communication) - has not been sufficient to tackle the identified problem. Market access restrictions and market abuses continue to exist in several European ports. Similar conclusions can be drawn for the transparency in financial relations between public authorities, port authorities and port service providers, and the autonomous setting of transparent and efficient port infrastructure charges. Also in relation to excessive administrative burden due to a lack of coordination within ports, not all Member States have managed to tackle this issue.

EU added value test

With regard to the European added value test, it is clear that the proposed action can be better achieved at Union level than at national level. The port sector is heavily exposed to international competitive pressure. Therefore, Member States have always been reluctant to induce structural changes in the functioning of their ports' system, as to avoid undesirable reactions of the maritime industry prompt to move assets at short notice. By acting at the EU level, this risk can be mitigated. Moreover, the EU has the possibility to act for achieving a true internal market for transport and an efficient TEN-T, implementing a level-playing field for ports and port services which cannot be better achieved at national level. Implementing adequately the Single Market rules in the sector would ensure fair allocation of funding resources and an open business environment promoting a dynamic of modernisation and performance based healthy competition between ports and between ports service providers.

Wide-ranging academic studies confirm that since the 1990s EU economic integration has involved a growing inter-dependence of European regions from sea-ports in distant hinterlands (see, e.g. Notteboom, 2012). The multiplication of pan-EU corridors brings about a change in the relationship between ports and their local hinterland. The inland penetration strategy is part of maritime gateways’ objective of increasing their cargo base. On the other hand, interior regions are recognizing that it is in their interest to establish efficient links to as many gateways as possible[97]. This strategy not only prevents these regions from becoming captive to one specific gateway, it also improves the location qualities of these interior economic centres. Hence, the linking up to more gateways implies more routing options and flexibility for shippers and logistics service providers who want to set up business in the region.

Other considerations on subsidiarity

Finally, a parallel can be drawn with other transport modes. The port sector is the only transport sector for which there is almost no EU legislation on issues such as the access to the market, financial transparency, infrastructure charging and coordination issues. For example, in the case of aviation and the railway sector such a European framework does already exist, and the need for EU action was recognised as being in line with the subsidiarity principle. Therefore, although the specific nature of the maritime sector and its long-lasting history and culture is recognised, because of effects of scale and the international dimension of the sector, the proposed initiative is in line with the subsidiarity principle.

Measures in the different policy packages

The measures in the different policy packages have been chosen in line with the subsidiarity principle. Section 5.2 examines those subsidiarity aspects for each set of policy measures.

3.6.3.     Proportionality

The initiative is focused on TEN-T seaports only. This will ensure proportionality insofar as the TEN-T seaports deal with 90% of the traffic[98] and by definition are essential for the international and intra-European trade exchanges, the functioning of the whole transport network and therefore for the European internal market and the cohesion within the EU. The scope has not been further limited to the core ports in order not to risk creating distortions of competition between core ports and non-core TEN-T ports. As explained in the problem definition, an efficient functioning of the network requires contribution from all TEN-T ports.

4.           Objectives

4.1.        General objective

The general objective is to improve the performance of the TEN-T seaports in order to contribute to the goal of a more efficient, interconnected and sustainable functioning of the TEN-T.

Ports must be efficient gateways and help develop short sea shipping as part of intermodal routes, hence contributing to sustainable transport, one of the key goals of the Transport White Paper and contribute to the EU 2020 strategy for a resource efficient growth to stimulate growth of trade and cargo.

4.2.        Specific objectives (SO)

SO1.    Modernise port services and operations in all TEN-T seaports: by better optimising port services and operations, a number of TEN-T ports could handle or attract more cargo and passengers with the existing infrastructure.

SO2.    Optimise port governance frameworks as to enable a more attractive investment climate: a greater financial transparency and autonomy of ports will create a level playing field, encourage more efficient charging, and eventually attract efficient investments.

4.3.        Operational objectives (OO)

              OOs linked to modernisation of port services and operations (SO1)

OO1. Clarify and facilitate access to the port services market: to reduce access restrictions for the port services market while avoiding the current legal uncertainties stemming from horizontal rules from the Treaty and on public procurement

OO2. Prevent market abuse by port service providers with exclusive or special rights: to ensure that services which enjoy exclusive or special rights are provided in a cost-efficient manner while continuing to fulfil their role and possible their mission of public service, notably in the field of safety, security and environment

OO3. To ensure the consultation of port users on the main decisions which affect the functioning of the port in all (100%) TEN-T ports by the end of the implementation date of the initiative: to facilitate trade for shippers, logistic operators and cargo-owners, reducing the time and money required for using the port. The coordination effort should also benefit operators established in the port, facilitating synergies and avoiding duplication of efforts for serving the same customers.

              OOs linked to creation of framework conditions which attract investments in ports (SO2)

OO4. To ensure the transparency in the financial relations between public authorities, port authorities and port service providers in all (100%) TEN-T ports by the end of the implementation date of the initiative: to achieve a financial transparency between public authority functions and commercial operations so that the ports and service providers do not hold unfair competitive advantages

OO5. To ensure that all (100%) TEN-T port authorities are free to autonomously set their port infrastructure charges by the end of the implementation date of the initiative, with the possibility of environmental modulation of the charges: to achieve a more efficient use of infrastructure and more economic rationality in the planning, investment, maintenance, and operation of port infrastructures, while enabling environmental price signals

The operational objectives defined above are specific and realistic. However, no concrete measurable and time-dependent targets can be set for the first two operational objectives in reason of their nature as catalysers for a more competitive maritime transport market. Moreover, its effectiveness heavily depends on the specific approach taken by the most directly concerned stakeholders. An example is the definition of public service obligations taking account of the particular circumstances of the port. Furthermore, the degree of market access will depend on the timing of new contracts that will become operational.

It is also not possible to quantify the potential for market abuse reduction for a certain time period, as the comparison with the current situation is difficult and because future action on market abuses will heavily depend on the effectiveness of the regulatory authorities.

More measurable targets such as an increase of short sea shipping have not been retained, as these are considered to be impacts of the measures (see 6.1.5) and not as true operational objectives.  The progress towards the operational objectives will be monitored according to the monitoring indicators (chapter 9).

4.4.        Linking the problem and objectives

Table 13: links between the problem and objectives

General problem: Structural performance gaps in some TEN-T seaports; need to modernise ports to new transport and logistics requirements at a moment of scarce public funding. || General objective: Improve the performance of the TEN-T seaports in order to contribute to the goal of a more efficient, interconnected and sustainable functioning of the TEN-T

Driver 1: Sub-optimal  port services and operations in some TEN-T seaports || Specific objective 1: Ensure optimal port services and operation in all TEN-T seaports

Root cause 1: Weak competitive pressure in the port services market  resulting from market access restrictions || Operational objective 1: Clarify and facilitate access to the port services market

Root cause 2: Market abuses by port service providers with exclusive or special rights || Operational objective 2: Prevent market abuse by port service providers with exclusive or special rights

Root cause 3: Users face excessive administrative burden due to a lack of coordination within ports || Operational objective 3: To ensure the consultation of port users on the main decisions which affect the functioning of the port

Driver 2: Port governance frameworks not attractive enough for investments in all TEN-T seaports || Specific objective 2: Optimise port governance frameworks as to enable a more attractive investment climate

Root cause 4: Unclear financial relations between public authorities, ports and providers of port services || Operational objective 4: To ensure the transparency in the financial relations between public authorities, port authorities and port service providers

Root cause 5: Weak autonomy of port authorities to define infrastructure charges and non-transparent link with costs || Operational objective 5: To ensure that TEN-T port authorities have a degree of autonomy to set port infrastructure charges with the possibility of environmental modulation of the charges

5.           Policy options

The stakeholder consultation, the stakeholder meetings, independent research and own analysis allowed the Commission to identify a set of individual measures having the potential to address the root causes of the problem identified in section 3. The following process was applied for establishing the policy packages that will be analysed in later parts of the present report:

· Identify the policy measures which can be discarded on the basis of a first preliminary assessment

· Identify a list of retained policy measures addressing the problems and respective root causes in full

· Combine retained measures into policy packages constituting viable and coherent policy alternatives for achieving the objectives.

5.1.        Discarded policy measures

The Commission services have identified several policy measures. Some measures were favoured by some stakeholders, yet contested by other stakeholders and in some cases contradicted by independent research. Based on a first preliminary assessment, the Commission services have therefore decided to discard some of these measures:

Reform of the port labour market

In the context of the public consultation, the main trade unions of port workers have made clear their frontal opposition to any EU action in this area as it could, according to them, create social dumping, put at risk jobs and salaries and impact negatively on working conditions. Important social tensions exist and in the current climate the Commission considers that such tensions can best be addressed through the social dialogue. The Commission has already initiated the necessary steps and a formal European Social Dialogue Committee (SDC) will start in the first months of 2013. Issues related to exclusive port/dock labour regimes and practices in some Member States should be discussed, as appropriate, in the context of this SDC. In full respect of the TFEU rules[99], the working method, priority of the discussions and possible agreements of the SDC will be discussed with due regard for the autonomy of the social partners.

The Commission will actively support the social partners, notably through the presentation of the fact finding study on the EU Port Labour Regimes[100], which includes a detailed overview of the situation in ports in each of the 22 EU maritime Member States. Progress in this field will be monitored in the context of the implementation report referred to in Section 9 of this report.

In these circumstances, legislating in this area before leaving the possibility to the Social Dialogue to address it would be inopportune (see also Annex X).

Generalisation of the self-handling

“Self-handling” entails companies employing personnel of their own choice to handle their cargo. The public consultation shows that self-handling is much less an issue for port users. It may remain an attractive option only for very specific segments like cars and other Ro-Ro traffic and special or heavy-lift cargo. In the context of the consultation, the trade unions have vigorously reacted against the Commission’s alleged intention of permitting self-handling in all ports. In practice “self-handling” is allowed in ports in several Member States[101]. In other Member States, it is not allowed (in Belgium, France, Spain or Portugal among others). In quantitative terms, ship´ “self-handling” practices are of marginal importance for (most) TEN-T ports[102]. Excluding handling of specialised cargoes (heavy lift) and of vehicles, self-handling practices would affect less than 0.01% of the operations. Obliging Member States to allow self-handling has therefore been discarded as it could be a disproportionate measure given the potentially strong opposition from stakeholders.

Prohibition of exclusive rights to operate port services, or of in-house services

Protocol n°26 attached to the TFEU on Services of General Interest emphasises the wide discretionary power left to Member States to define, organise and manage Services of General Economic Interest. Moreover according to Article 345 TFEU, the Treaties shall in no way prejudice the rules in Member States governing the system of property ownership. Measures impinging on these rights would be illegal and disproportionate.

5.2.        List of considered policy measures

The stakeholders' consultation, the targeted hearings, independent research and own analysis have allowed the Commission services to identify a broad set of individual measures having the potential to address the root causes of the problem and objectives explained above. Those measures can be seen as "market enablers", i.e. basic requirements enabling healthy competition in an open economic model. All the proposed measures exist and apply since long time in other transport sectors covered bu EU legislation – and are a normal practice in many other economic sectors.

Intervention logic

The intervention logic is that, by providing a level playing field built on those measures, market dynamics would progressively adress the main problem and its root causes. Moreover, the intervention logic assumes the parallel implementation of other EU instruments like the TEN-T and CEF, the support of the Structural Funds for the development of ports, the concessions, directive, the effective enforcement of competition law or the progress achieved on port issues through the Social Dialogue process (cf. base line scenario presented in section 3.5).

The tables below provides a mapping between the retained policy measures and the different root causes identified earlier in this impact assessment.

5.2.1.     Measures to ensure optimal port services and operation in all TEN-T seaports

Table 14: Root cause 1: Weak competitive pressure in the port services market resulting from market access restrictions

Measures || Description

1. Freedom to provide services (no restrictions on market access) for "normal services", i-e services other than those linked to Public Services or space constraints || The freedom to provide services applies and relates to the free entry of any service provider established in the EU. Operators would be authorised on the basis of transparent and non-discriminatory criteria. These criteria would be determined, published and made accessible to all by the Member States.

2.Obligation of public tendering for new contracts in the case of public service obligations or space constraints (except for small contracts[103])  || Member States and the port authorities would be allowed to impose restrictions to the freedom to provide services on the grounds of objective reason of space constraint*** or public service obligations**. But in such cases, the Member State or the port authority would need to enter into a contractual arrangement with a port service provider to be selected by means of a transparent public tendering procedure[104] (except for small contracts)*. * The maximum duration of the contracts would have to be linked to the expected economic lifetime of investments. ** Public service obligations would be accepted only for reasons related to safety, security, accessibility and/or availability. *** The lack of space refers to the fact that ports are confined to a limited geographical area and the fact that for certain services it is physically impossible or otherwise disadvantageous to users to entrust more than a limited number of operators. In such a case, the market must be subject to access regulation.

3. Explain in a Commission's Communication how existing Treaty rules apply to port services  || In contrast with other measures relying on binding provisions for Member States, this measure would entail a Commission's Communication to explain how the principles of non-discrimination and free establishment result in an obligation of transparency and equal treatment (Court of Justice Teleaustria ruling) and how they can be applied in practice to arrangements/contracts awarded to port service operators. Moreover, the Communication would also explain how horizontal instruments such as the concession directive, the transparency directive, or the future approach to state aid could be better enforced in the port sector.

4. In addition to measure 2, impose the obligation to have at least 2 operators for services linked to space constraints to be selected after a public tender for new contracts (except for small contracts) || In addition to measure 2, in the case of port services subject to space constraints the port authority or the Member State needs to ensure that there are at least 2 competing and independent operators. A public tendering obligation is imposed.

5. Obligation of public tendering in case of substantial changes of existing contracts linked to public service obligations or space constraints || This measure is the same as measure 2 but in addition the obligation of public tendering will also apply in case of substantial modification of existing contracts/arrangements. A substantial modification would entail a modification of a significant value of the contract/arrangement and/or a change of the nature of activity.

The proposed measures are in line with the subsidiarity principle, as the developments over the past years have shown that member states alone are unable to sufficiently realise the objectives of the proposed measures, and as the proposed solution can be better achieved at Union level. This because of the European dimension of the related problems (e.g. the efficient, interconnected and sustainable TEN-T), the high exposure to international competitive pressure linked to market access and market abuse, and the growing inter-dependence of European regions from sea-ports in distant hinterlands.

Table 15: Root cause 2: Market abuses by operators with exclusive/special rights

Measures || Description

6. Confinement for internal operators of port services || In the event that a port or public authority is performing (commercial) port services in-house [as a derogation to the freedom to provide service and the application of a public tendering procedure (cf measures 1,2,3 and 5)], the operation of the service shall be confined to the dedicated port, or group of ports, serviced by the port managing body or the authority, and consequently the internal provider cannot offer the service outside the port or group of ports. This will avoid cases where  operators can benefit from potential cross-subsidies or enjoy unfair competitive advantages.

7. Principles of transparency, non-discrimination and proportionality for the price of port services provided by operators in monopolistic position || Derogating from the general rule of freedom to provide service (cf measure 1) could leave the service provided by internal operators or operators with exclusive/special rights with insufficient or non existing competitive pressure. To avoid price abuses, this measure would impose basic principles on pricing, namely proportionality (cost based), transparency and non-discrimination (with possibilities to apply commercial rebates if accessible to all users). The Member State will need to designate a regulatory authority (e.g. an existing competition authority) to deal with complaints by port service users.

8. Principles of transparency, non-discrimnation and proportionality for the price of port services provided by operators in monopolistic position for which no public tender is organised || The measure will be the same as measure 7 except that it would apply only to services for which no public tender applies and therefore for which the market can not be contested at the end of the contract. If the market can not be contested at the end of the contract by means of a public tender, the competitive pressure is indeed weaker. The scope is therefore more limited than measure 7 and focuses on cases where the likelihood of absence of competive pressure is higher.

The measures linked to root cause 2 are in line with the subsidiarity principles for similar reasons as explained for the measures linked to root cause 1 (see above).

Table 16: Root cause 3: Users face excessive administrative burden due to a lack of coordination within ports

Measures || Description

9. Central Port Coordination || In a free market situation, there is a possible proliferation of port service providers. This will lead to potential conflicts between the different service providers. Therefore, the MS will be obliged to ensure a central port coordination in every port to ensure safe and efficient operations.

10. Port users' committee || A port users' committee would be set up in each port. The committee would facilitate the dialogue between all port actors (users, service providers, authorities, workers) in order to ensure a seamless logistical flow of freight (and passengers) in the port and to and from the hinterland. It would be organised by, but independent from, the port authority. Its precise competences and composition of the committee would be left over to the discretion of the MS or port authority and could include the following: · regular consultative role on the structure and level of port dues · ad-hoc consultative role (at the request of the regulatory authority of measures 7 and 8) on possible (price) abuses of port services · consultative role in the set-up of an administrative simplification plan: the plan could include performance targets (e.g. maximum duration of adminsitrative procedure) and issue recommendations on how to organise and better coordinate administrative procedures for port users. This plan should be based on existing EU legal requirements and recommendations.

The measures related to root cause 3 are in line with the subsidiarity principle as this root cause of low performance of some ports undermines the development of short sea shipping and “motorways of the sea” (connecting ports in different Member States), the functioning of the TEN and therefore the internal market.  Therefore, European action is justified. The justification for EU action in this field also follows from similar actions in the field of aviation, where also for airports; the installation of users' committee has been proposed[105] by the European Commission.

Moreover, measure 10 on a port user's committee does not go further than necessary and is therefore proportionate. By giving users a consultative role in the main decisions which affect the functioning of the port, a common practice in some of the most modern and performing ports (e.g. in the North Sea range) will be extended to other ports as well.

The aim is to stimulate best practices for better satisfying customer' needs. The European action does not intend to interfere with internal operational port coordination. The rational is to ensure that port authorities and administrations listen to the users. Port authorities will therefore be left free to define the content, objectives and work methods of the user consultation / coordination. As measure 9 (central port coordination) is more prescriptive then measure 10 (port users' committee), measure 9 is less proportionate than measure 10.

5.2.2.     Measures to optimise port governance frameworks as to enable a more attractive investment climate

Table 17: Root cause 4: Unclear financial relations between public authorities, port authorities and providers of port services

Measures || Description

11. Functional/legal separation || Ports would have to define and separate public functions from commercial functions linked to the provision of port services and attribute them to separate legal entities. Obviously, this entails also a full separation of accounts as presented in measure 12, as each of the presented activities would be in a different legal entity.

12. Separation of accounts || The measure would impose two requirements: 1. Port authorities which receive public funds (irrespective of their ownership structure -cf Art 345 TFEU) would keep an accounting system that allows the identification of any financial flow (grants, loans guarantees, equity share etc.) from public authorities to the port authority. 2. The accounting system would have to differentiate between the different types of activities carried out by the port authorities (1) port (public) functions and (2) (commercial) service activities and to differentiate between the different (commercial) services provided in order to reveal possible cross-subsidies*. The accounts will have to be kept at the disposal of the national authorities and the Commission in order to help them to ensure transparency as well as to prevent possible state aids and distortion of competion between port authorities and between port service providers. *Cross-subsidies between various services provided by a port authority would not be unauthorised but making them idenfiable would make it easier to monitor whether they lead to market distortions.

13. Financial transparency between public authorities and port authorities || This measure would impose only the first requirement of measure 12, namely that port authorities which receive public funds keep an accounting system that allows to identify any financial flow from public authorities to the port authority (similarly to Directive 2006/111/EC on the transparency of the financial relationship between public authorithies and public undertakings). The accounts will have to be kept at the disposal of the national authorities and the Commission.

The measures linked to root cause 4 are in line with the subsidiarity principle as transparent financial relations between public authorities and port authorities and providers of port services are necessary to ensure a level playing at European level. Unless in all Member States the same rules on transparent financial relations apply, it will not be possible to trace possible distortive state aids and cross-subsidisation of port services.

Practice has shown that in the current situation, without a European framework, procedures to investigate the legality of state aid in line with the TFEU rules, are complex and involve long litigation and costs. The situation is particularly difficult for SMEs which, often, depend on the port authority and/or incumbent operators with a dominant position in the port for carrying out their activity.

Therefore, the compliance with European state aid rules in order to ensure a level playing field can only be guaranteed by a European framework on financial transparency. As measure 11 (legal/functional separation) is more prescriptive then measure 12 and 13, measure 11 is less proportionate.

Table 18: Root cause 5: Weak autonomy of port authorities to define infrastructure charges and non-transparent link with costs

Measures || Description

14. Autonomy of the individual ports to set and collect dues || Each port managing body would be free to set the structure and level of the port dues (related to the use of the port infrastructure) as it feels appropriate, according to its own commercial and investment strategy.  It should be free to collect the revenues arising from port dues.

15. Transparent, cost-based and differentiated port dues || Binding rules would be introduced to ensure that infrastructure charges respect in a transparent way the principle of proportionality to cost (long term marginal cost-based). Environmental differentiation of charges will be introduced according to objective criteria left to each Member State.

16. Encouraging discounts on port dues based on  environmental performance criteria || Ports would be allowed to offer price incentives to cleaner transport (cleaner ships/propulsion/fuels, certain short sea shipping). The Commission would also establish non binding guidelines on how to apply such a variation (e.g. classificaton to be used).

17. Transparency of port due calculation || The prices and calculation methods for port infrastructure access charges related to the public access facility to a port would be made accessible to the port users and the designated authorities. The method would have to indicate the overall cost components and how the total port dues contribute to recover it.

The measures linked to root cause 5 are in line with the subsidiarity principle as the lack of autonomy of port authorities to define their port infrastructure charges can result in indirect cross-subsidisation of port investments, and can thus result in possible distortions of trade flows at European level. In order to ensure a level playing field at European level, action at Union level is therefore justified.

5.3.        Policy Packages

To address the problem and its  root causes in full, four policy packages of measures have been constructed. Each policy package is composed of a series of measures addressing the two specific objectives and all of the five operational objectives.

The logic used to construct the policy packages is to progressively introduce more competition in the port service market and more autonomy for port authorities, which would also require more transparency in flows and uses of public funding within port entities, and in port infrastructure charging to ensure a level playing field. As a result, more coordination would be needed as this would entail a mutiplication of providers and port stakeholders. The more open the port market is, the more likely port charges would reflect marginal costs if set in an autonomous way by the ports.

For the sake of clarity in the impact assessment, only a small number of policy packages has been retained. Other combination of measures have been eliminated either because they would have been minor variations of the retained policy packages without a sufficient significant difference of impact to draw policy conclusions (e.g. confinement of in-house operators in policy package PP1), or because they would have been contradictory or inconsistent (e.g. use of soft law to apply public tendering in combination with obligation to select at least two operators). Policy package PP2a has been constructed on the basis of policy package PP2 after more detailed discussions with stakeholders which revealed the need for additional measures and of this additional combination of measures to be considered.

5.3.1.     Overview of measures proposed in the policy packages

Table 19: Overview of measures and policy packages

|| PP1 || PP2 || PP2a || PP3

SO1: Ensure optimal port services and operation in all TEN-T seaports

OO1: Clarify and facilitate access to the port services market

1. Freedom to provide services: no restrictions on market access for "normal services" i-e services other than those linked to public service obligations or space constraints || || X || X || X

2. Obligation of public tendering for new contracts, except for small contracts, for services with public service obligations or linked to space constraints || || X || X || X

3. Explain in a Communication how existing Treaty rules apply to port services || X || || ||

4. In addition to measure 2, impose the obligation to have at least 2 operators selected after public tendering for services linked to space constraints (except for small contracts) || || || || X

5. Obligation of public tendering for substantial changes to existing contracts linked to public service obligations or space constraints || || || X || X

OO2: Prevent market abuses by service providers with exclusive/special rights

6. Confinement of internal (public) providers of port services || || X || X || X

7. Principles of transparency, non-discrimnation and proportionality for the price of port services if provided by operators in monopolistic position   || X || X || ||

8. Principles of transparency, non-discrimnation and proportionality for the price of port services if provided by operators in monopolistic position and for which no public tender applies || || || X || X

OO3: To ensure the consultation of port users on the main decisions which affect the functioning of the port in all (100%) TEN-T ports by the end of the implementation date of the initiative

9. Central Port Coordination || || || || X

10. Port user committee || X || X || X ||

SO2: Optimise port governance frameworks as to enable a more attractive investment climate

OO4: To ensure the transparency in the financial relations between public authorities, port authorities and port service providers in all (100%) TEN-T ports by the end of the implementation date of the initiative

11. Functional/legal separation || || || || X

12. Separation of accounts || || X || X ||

13. Financial transparency between public and port authorities || X || || ||

OO5: To ensure that all (100%) TEN-T port authorities are free to autonomously set their port infrastructure charges by the end of the implementation date of the initiative, with the possibility of environmental modulation of the charges

14. Freedom for individual ports to set dues || || || X || X

15. Transparent, cost-based and differentiated dues || || X || ||

16. Enabling variations based on environmental performance || || || X ||

17. Transparency of port due calculation || X || || X ||

5.3.2.     Policy Package 1: “Horizontal Instruments and Transparency”

Policy Package 1 (PP1) combines the use of horizontal instruments, a soft measure on market access and legally binding provisions on the financial transparency, the intra-port coordination and port infrastructure access charges. PP1 explains through a non binding Commission's Communication (measure 3), the existing TFEU rules on non-discrimination and the freedom of establishment and the enforcement of horizontal instruments such as the concession directive, the transparency directive or the future approach to state aid in the sector[106].

The Communication would recall that case law confirms that transparency and an equal treatment of potential bidders must be ensured: in the case a public authority awards a contract to a port services provider, there must be adequate publicity. PP1 would also impose some regulatory measures. Since exclusive rights may remain frequent, the price of port services, in those cases where no competition has been introduced, would need to be controlled in a transparent way (measure 7) to prevent possible abuses. The transparency and good functioning would be guaranteed and coordinated by the port managing body. The port managing body would organise the consultation and representation of all stakeholders and service providers in the port users’ committee (measure 10). This port users’ committee would, amongst others, be consulted on matters relating to the simplification of the administrative procedures in ports. To ensure the financial transparency between public and port authorithies, accounts revealing any public funds would have to be kept available to national and EU competition authorithies (measure 13). The port dues would be transparent and publicly available to all port users (measure 17).

5.3.3.     Policy Package 2: “Regulated competition”

Policy Package 2 (PP2) introduces the freedom to provide services (measure 1), while leaving to Member States a discretionary margin in deciding whether to restrict this freedom for objective and transparent reasons related to the lack of space or reasons of public interest (safety, security, accessibility and/or environment). In the latter case, the public or port authority would have to enter into a contractual arrangement with a port service via a public tendering procedure (measure 2), except in duly justified cases (e.g. small contracts and urgencies). However the obligation of public tendering would apply only to future contracts. The separation of accounts (measure 12) would enable the competition authorities to track possible distortive state aids and cross-subsidies between port services. If the service is provided by an in-house operator or an operator with exclusive/special right in monopolistic position, a price regulatory oversight and confinement obligation would avoid abuses (measures 6 and 7). Improved intra-port coordination would take place thanks to a port user committee (measure 10). The charging for using the port infrastructure will be done transparently, according to the actual costs, and will vary according to the environmental performance of ships or fuels used (measure 15).

5.3.4.     Policy Package 2a: “Reinforced regulated competition and port autonomy”

Policy Package 2a (PP2a) consists of PP2 with the following differences :

· Market access would be made slightly easier: the obligation to have recourse to public tenders in case of space restrictions of public service obligations would apply not only to new contracts but also to the substantial changes to existing contracts (measure 5).

· The regulatory oversight of service providers in monopolistic position would be more limited in scope: it would only apply to the markets which can not be contested, i-e the markets for which no public tender is organised (measure 8). 

· Greater autonomy would be given to ports: on infrastructure charging, instead of imposing common charging principles, each port would be given the right to set itself the structure and level of port dues (measures 14), provided that the charging policy remains transparent (measure 17). The initiative would also encourage a differentiation according to the environmental performance of ships or fuels (measure 16).

5.3.5.     Policy Package 3: “Full competition and port autonomy”

Policy package 3 (PP3) builds on PP2a by obliging additionally at least two competing and independent operators for every port service where the number of operators is limited as a result of space constraint (measure 4). There would be a functional/legal separation (measure 11). This separation would result in a multiplication of port actors: to ensure that the port keeps functioning, strengthening the central coordination role of the port authorities would be necessary (measure 9). As in PP2a each port authority would be made free to determine the structure and level of infrastrustructure charges (measure 14) according its own commercial practices. Transparency of the charges is not considered necessary, as the competitive environment will induce enough pressure to keep the level of the charge at an appropriate level, in line with the autonomy of the port authority.

5.3.6.     Stakeholders view on policy packages

A vast majority of stakeholders agree on the necessity of a level playing field ensuring the respect of all players of obligations concerning the transparency of accounts, a fair and transparent market access mechanism and supervision, in cases of services provided under monopolistic or oligopolistic regimes, by an independent authority (essentially, measures considered in packages PP2 and PP2a).

Stakeholders remain sceptical about the effectiveness of a new Communication recalling general principles and exhorting actors – port authorities, incumbent operators – to respect those principles on a voluntary basis (PP1).

The approach to port infrastructure charging schemes is controversial, with a significant number of stakeholders being reluctant to a uniform system imposing cost orientation. Nevertheless, users of port services strongly agree on the necessity of having charging systems that are transparent and based on economic rationality principles.

There are mixed views about the measure requiring involvement of users: while the principle of consultation is widely accepted, there are concerns by port authorities and operators about the possible nature and attributions of "users committees in ports".

Finally, there is significant opposition to measures requiring full unbundling of activities of port authorities, imposing a minimum number of operators in the port or a central coordination role for ports.

6.           Analysis of impacts

Each policy package (PP) has been analysed in terms of its economic, environmental and social impact against the baseline scenario. Where possible, quantitative estimates are given, in other cases however, because of the non-availability of statistics, this was not possible. In these cases, a qualitative assessment is provided and where relevant strengthened by the opinion of stakeholders. Because of the nature and diversity of the EU port system, the calculations and assumptions needed to be aggregated and sometimes generalised. Thus, while the quantified estimates do indicate a trend-line, caution is needed in the interpretation of the exact figures.

6.1.        Economic impacts

6.1.1.     Direct and indirect transport costs

The quantification of impacts of the different policy packages in terms of savings in total port related costs is presented in Table 20. The main assumption underlying the calculation is that open markets will reduce the price of port services. In cases of ports services provided under exclusive rigths (monopolistic situation arising when free market accees is restricted), a degree of  market contestability puts pressure on the pricing of the incumbent(s) to keep their prices at competitive levels. Information obtained from the user surveys has been analysed in order to derive assumptions about the scope for cost decreases. The calculation is explained in detail in Annex VII. It assumes a range of price decrease for each individual service ranging from 2% to 20% depending on the policy packages and the type of service as a result of the introduction of competitive pressure.   

As regards the impact of the policy packages on port charging levels, i.e. pricing of port infrastructural services established by port authorities by means of port dues, it is assumed that  PP2a will slightly reduce port dues as a result of more autonomy and more efficient management. Academic research suggests[107] that in cases where ports have a degree of autonomy in the establishment of charges, e.g. in the UK – where private ports by their own means fund their own port general infrastructures or in other ports in the Le Havre – Hamburg range, the level of port dues has actually decreased over the years. By contrast in PP2, which establishes a direct link between port dues and costs, it is assumed that the level of charge increases (however this increase is compensated by the decrease of the cost of port services). The impact on the total port cost was then calculated by extrapolating port tariffs data from Rotterdam[108].

The resulting changes of total port costs and the annual savings range from € 318.15 million per year in PP1 to € 1,245.21 million per year in PP3. Caution is warranted when interpreting the results which depend on the price assumptions. The latter have been applied in an uniform way across all ports while the impacts on prices of port services are likely to vary according to regions and the invidual ports.

Table 20: Impacts of the policy packages on total port related costs (PWC, 2013)

|| Change (%) in Total Port Related Costs || Annual Savings (€ million)

PP1 || -2.0% || 318.15

PP2 || -3.0% || 481.47

PP2a || -6.8% || 1,071.37

PP3 || -7.9% || 1,245.21

A further advantage of low entry barriers and contestability of the port services market would arise from an improved quality of service such as velocity, reliability and predictability of delays. The latter although not quantified in this impact assessment are usually considered by logistics companies as critical factors which may be ranked as important as the price.

More generally an easier access to the market will allow new entrants to implement new technologies, systems and business models and to bring business dynamism to a market when there are exogenous changes in demand. In that regard, an increase in competitive pressure in the port should lead to a dynamic of modernisation of services and improvement of performance in order to meet market needs.

The following considerations are relevant for examining the impacts of the different PPs:

· In PP1, port costs may decrease as a result of the regulatory supervision of prices which will mainly impact services usually organised in monopoly, namely pilotage, towage, waste reception to the benefit of port users. The consultation of the port user committee will introduce more customer orientations in port service providers, although it will have no impact on those TEN-T ports which have already established such committee. By means of a communication, PP1 will clarify existing rules as regards the market access, including the scope of the Concessions Directive, which will be welcomed by stakeholders. However in view of past experience (cf. 2007 Communication on Ports' Policy), such a soft approach is unlikely to effectively lift current market acess restrictions in the short term.

· In both PP2 and PP2a, the direct and indirect costs of port services will decrease. In contrast to PP1, the two PPs will ensure a fair market access in the port sector, requiring Member States to apply public tendering procedures where for objective reasons the market has to be reserved to one (or few) operators. PP2 and PP2a will also generate the positive impacts of PP1 linked to a better regulatory supervision of monopolist positions, although questions of disproportionate administrative cost may arise.

· PP3 will impose a stronger competitive pressure in the market by ensuring the presence of at least two operators. A similar approach was used in Directive 96/76/EC on groundhandling services in airports and in the Commission's proposal of 2001 and 2004 on ports. In theory, efficiency gains could be higher for services using contracts with a long term duration, typically cargo handling and passenger services. In practice, as seen in Chapter 3 (see also table 6), providers of cargo handling and passengers services are already exposed to competitive preassure in a significant number of TEN-T ports. As a result, the cost impact of PP3 is likely to be higher than in PP2 and PP2a.

Table 21: port services provided by in-house (public) operators (PWC, 2013)

· PP2, PP2a and PP3 apply confinement rules, in other words prohibit in-house operators with exclusive rights to compete on other markets. 79% of TEN-T ports provide at least one of the 8 ports services and are therefore potentially impacted. Table 21 gives an indication of the port services provided in-house (applicable mainly to waste reception, dredging and to a smaller extent passenger services, mooring and pilotage). However, it seems that only a small share of these operators provide services outside their ports or cluster of ports. It is concluded that confinement measures (which avoid undue competitive advantages stemming from possible state aids to ports and apply the reciprocity principle), will have overall a limited impact.

6.1.2.     Investments

To appreciate whether and how the policy packages contribute to attract investments, the PPs have been assessed against four criteria: (a) efficient allocation of public investment resources, (b) the risk of distortive state aids, (c) opportunities for private investments and (d) economic rationality of port charges. The main impact will stem from the measures obliging transparency in the use of public funds in ports. This requirement will contribute to a more rational selection of port investment projects (a). It will also allow the Commission to address much more effectively concerns of unfair competition between ports in reason of non-notified (unseen) state aid (b). It will lead to a better investment climate (c) by reducing uncertainties on the economic return of projects. Measures clarifying and facilitating the market access will also contribute to a better climate for private investors (c) by creating more legal certainty. Finally, measures on port infrastructure charges can result in more economic rationality (d) in charging and lead to more efficient investments by port authorities. Table 22 presents a summary.

Table 22: Impact of the policy packages on the investment climate

|| PP1 || PP2 || PP2a || PP3

Efficient allocation of public funding || + || ++ || ++ || +++

Lower risks of distortive state aid to ports || + || ++ || ++ || +++

Better climate for private investment || + || ++ || +++ || ++

Economic rationality of port charges || + || +++ || ++ || +

("+" refers to the intensity of a positive correlation: for instance in the case of "lower risks of distortive state aid to ports", a "+" means less risk on distortive state aids)

Regional distribution of impacts

Interestingly in all PPs the impacts will vary according to the regions. Opening up market entrance to investors in new facilities in reason of port expansion needs would have significant impacts in the North Sea and Baltic Regions, given the expected growth in energy trades, in particular liquefied gas, which require important investment in terms of reception, storage and distribution capacities. Further economic integration of the Baltic States in the internal market and growing exchanges with Russia would require reinforcing capacities in other port segments (Ro-Ro) in both regions.

The PPs could also have a significant impact in the Mediterranean regions, where new ports projects would be needed in the North Adriatic and where the potential for short sea shipping development (modal shift road to ports, exchanges France, Italy, Spain) is especially high (see 6.1.5). In the UK, where there is already considerable private sector involvement, the ports would not be affected. In Spain and Italy it can be expected that greater autonomy for port authorities will lead to better service provision and more targeted investments. In turn this would help to counter the competitive threat from port developments in North Africa. A more horizontal discussion of the impacts per PPs is provided below:

· In PP1 the main measures having an impact on investments concern the application of the financial transparency directive to all TEN-T ports and the requirement of transparency in respect of port charges calculation. Enforcing financial transparency will have a positive impact on both the efficient allocation of public resources and will reduce the risk of distortive state aids. This will also allow attracting more private investors as they do not risk to be confronted with unexpected surprises related to potentially illicit state aids. Transparent port charges and supervision over the specific port service charges will have a positive influence on setting these charges according to economic rationality.

· In PP2, in addition to the measures considered in PP1, the measures with an impact on investments would be the freedom to provide service or the systematic recourse to public tendering for new contracts; the obligation of keeping separate accounts for statutory functions and commercial operations of publicly owned port authorities and the requirement for cost-based and differentiated port charges. Public tendering ensures efficient allocation of public resources and avoids distortive state aids by using market procedures. Separate accounts increase the transparency and as mentioned above, transparency potentially attracts more private investments because of risk reduction. Cost based port charges will maximise their efficiency.

· PP2a, in comparison with PP2, introduces a higher recourse to public tendering (also for substantial modifications of existing contracts). It also gives a wider autonomy to port authorities to define their charging policy, while at the same time ensuring transparency, which could result in an enhanced economic rationality of port charges. A greater competitive pressure and the financial autonomy of ports will contribute to more efficient investments. Investment flows for both infrastructure and equipment in terminals will be higher in particular in the areas where port businesses are expected to grow more, i.e. North Sea / Baltic regions.

· PP3 is quite similar to PP2 and PP2a. However, the requirement of two operators for the same type of operation in every port might discourage investments in small and medium ports, where there is no market prospect for two operators. The obligation to create central port coordination and the functional/legal unbundling could also be seen as an administrative burden by private investors. However, the functional/legal unbundling could ensure a more efficient allocation of public funding and could lower the risks of distortive state aids.

6.1.3.     Administrative burden

The administrative costs generated by each PP against the baseline scenario are presented in table 23. The costs for the public sector and the costs for the businesses have been treated separately. The elements estimated include: average annual cost for awarding contracts with tendering procedures, average annual cost sustained for service tariff setting and/or reviewing, recurrent yearly costs for central port coordination, recurrent yearly costs for port users’ committee, recurrent yearly costs for port dues calculation, one off and recurrent annual costs to be incurred for functional/legal separation and the one off cost for separation of accounts.

 The underlying assumptions are based on estimates related to the number of ports; of service contracts awarded to private operators; of contracts with value above € 5 million; of port services contracts linked to PSOs, spaced constraints and normal contracts; of port services and terminal contracts awarded with public tendering procedures; of port services provided in-house or awarded with exclusive rights; and unit costs such as unit labour costs and overhead costs. The detailed calculation and assumptions are provided in annex IX.

Table 23: Additional administrative costs per policy package (PWC, 2013)

|| Recurrent (€ million / year) || One off (€ million)

|| Public sector || Businesses || Public sector || Businesses

PP1 || 9.0 || 16.2 || 9.9 || 15.7

PP2 || 7.7 || 14.0 || 32.4 || 15.7

PP2a || 2.3 || 2.2 || 24.4 || 0.8

PP3 || 33.0 || 3.9 || 121.8 || 0.8

PP2a imposes the lowest administrative burden both for the public sector and the businesses. The freedom to provide services reduces the overall need for public tendering. This introduction of public tendering and the freedom to provide services principle reduce the needs for a regulatory supervision of price. Other comparative savings can be introduced by the 'user committee' which ensures a light form of coordination which is cheaper than the central coordination currently practiced in a number of ports and proposed in PP3.

In PP2 the results are not as positive as in PP2a because in PP2 the regulatory supervision of price continues to be widely applied to all operators with exclusive rights, even if selected in the framework of public tendering procedures.

PP3 entails very significant administrative costs for the public sector (port) because of 1) the functional/legal separation which would impose to double the accounting/management systems which are currently integrated and 2) the central coordination to be ensured by the port authority which would be generalised to all ports. However, PP3 will not induce high administrative cost for undertakings as the need for a regulatory supervision of prices is reduced since the free market access will reduce their monopolistic positions.

Finally, PP1 generates a slight increase of administrative cost, in particular for businesses because of the measure related to financial transparency and the need to develop a regulatory supervision of price given the lack of free market access.

In contrast to PP2 with a lower administrative cost, the soft law approach to clarify market access rules do not suffice to generate a substantial freedom to provide services, which would have in turn avoided public tendering or approval procedures.

6.1.4.     SMEs

Providers of port services like mooring, towage, pilotage or bunkering are typically SMEs or microenterprises (30%-50%). It is therefore relevant to look in more details the impact on these types of undertakings. The introduction of free market access in PP2, PP2a and PP3 will contribute to a more business-friendly and entrepreneurial environment and is likely to facilitate the creation/establishment of SMEs and microenterprises. However, as seen in 6.1.3, PP2a is the policy package which creates the smallest additional administrative costs for SMEs and microenterprises.

Port services like towage or cargo handling are capital intensive and benefit stronger from economies of scale and consolidation. When more transparency and open market access apply, bigger entities are likely to reinforce their market position, which risks pushing out the market some SMEs or microenterprises operating today in specific markets. A level playing field based on the principles of transparency, non-discrimination and proportionality will allow other SME or microenterprises, especially operating supporting services like cleaning, catering, dedicated services related to maintenance of specialised equipment to further develop their business.

Overall, none of the PPs contains particular obligations on SMEs, i.e. public-owned SMEs are not caught by the Transparency Directive, usually, SME are not protected by exclusive or special rights, are not involved in the setting of port charges, etc.  As stated above, a better business environment will grant more opportunities for creating new SMEs in the port sector, opening up investment and job creation opportunities.

6.1.5.     Impact on transport and multimodality 

All PPs, and in particular PP2a and PP3, generate increase of maritime transport activities, notably modal shift from land to sea transport, by decreasing port costs and improving the logistic efficiency of ports. (PwC, 2013) carried out a detailed modelling exercise based on direct costs (the indirect cost savings could not be quantified) (see also table 25).

The increase of total maritime transport and port activity at EU level although modest is noticeable. A more careful look indicates an increase of up to 1.88% for short sea shipping (15.9 billion tonne-kilometres) and a corresponding decrease of up to 0.16% of road transport over 300 km (2.9 billion tonne-kilometres), which suggests a clear contribution of PP3 and, to a smaller extent, of PP2a to one of the key modal shift goals of the White Paper (Annex VII provides detailed results and an explanation of the model used).

The impact would not be uniform in all intra-EU maritime routes because of the geographical locations. Around a bay or an inland sea - where distances are long enough to make sea transport competitive or where there is no choice except to use sea transport – making short sea shipping more attractive, notably than land transport, would lead to increase of short sea shipping on certain routes to up to 6.5% (table 24 provides the potential increases for PP3).

It should be noted that on saturated land corridors even a small decrease of road freight transport generated by more efficient short sea shipping can have a proportionate higher impact on congestion reduction.

Therefore, an important conclusion is that although the additional waterborne traffic increases that can be expected from the different PPs are relatively moderate, all PPs are likely to contribute to mitigate the risk of congestion by widening modal choices, enabling more balanced spread of traffics.

Table 24: Potential changes (%) of short sea shipping tonnage (PWC, 2013)

Potential changes of short sea shipping between different coastal regions (PWC)

REGION || East Med || Cent Med || West Med / Atl || UK / IRL || North Range || Scand / Balt

East Med || 1.51 || 6.50 || 1.98 || 0.68 || 0.64 || 0.24

Cent Med || 8.39 || 6.12 || 6.43 || 0.25 || 2.68 || 1.19

West Med / Atl || 1.25 || 4.79 || 6.56 || 2.67 || 2.35 || 0.83

UK / IRL || 0.16 || 0.07 || 3.90 || 3.23 || 1.10 || 1.36

North Range || 0.51 || 4.54 || 1.80 || 1.54 || 4.34 || 2.59

Scand / Balt || 0.37 || 0.84 || 3.09 || 5.04 || 5.35 || 2.49

Categories cover: East Med (Greece, Black Sea EU, Slovenia); Cent Med (Italy, Malta, French Med); West Med/Atl (Spain, Portugal, French Atlantic); UK/IRL; North Range (Hamburg-Le Havre); Scand/Balt

Some additional considerations about the impact of the different PPs on multimodality are (see also table 25):

· PP1: The measures in this package would only have small impacts for enhancing the competitive advantage of maritime transport over road transport. The main effect would come from the transparency of port dues calculation (assuming that transparency would lead to rationalisation of dues) and from the supervision by an independent authority of prices of port services provided under exclusive rights.

· PP2: This package would have a more marked impact thanks to a more competitive provision of port services, in particular in the Baltic, Iberian Peninsula and Mediterranean regions. However, competitive pressure leading to more attractive port services for shippers and cargo-owners would be limited to new contracts, i.e. port projects carried out by new entrants.

· PP2a: Introducing competitive tendering both for new contracts and in case of substantial changes to existing contracts would lead to an increase of freight volumes for short sea shipping quite higher than in PP2.

· PP3: The measures in this package are aimed to ensure greater competitive pressure in ports. However, contrary to expectations, the results are not much higher than PP2a. The prescriptive approach of the measures, i.e. imposition of two operators per service, could interfere with the autonomy of ports to adapt quickly to market developments and changing users' needs.

6.1.6.     International competitiveness

All PPs will improve the international competitiveness of Southern European ports which today lose transhipment business to North African ports and, to a smaller extent, Baltic ports having to compete with Russian ports. Competition with non EU ports is indeed particularly fierce on transhipment which is a very specific and highly volatile market. 

Today, the TEN-T ports struggle to compete with neighbouring ports because of lower salaries in third countries. The PPs contributing to the modernisation of services and a better investment climate will help them to achieve productivity gains stemming e.g. from innovation, specialisation and/or logistics performance. When the TEN-T ports become more efficient and have their operating costs reduced, their competitive stance will improve. As already demonstrated before, the effect of PP1 will be limited. PP2, PP2a and PP3 all achieve meaningful efficiency gains allowing EU ports to offer more competitive services. However, only PP2a and PP3 allow for instance rebates of infrastructure charges for vessels used in transhipment. As already seen PP3 would however entail more administrative burden by imposing at least two operators for every service.

Another aspect related to competiveness is linked to the fact that the shipping and the port related business is global. The better investment climate generated by the PPs will attract foreign direct investments in the TEN-T ports. Caution may however be warranted to ensure that the possible further vertical integration which may result from it does not give rise to possible abuse of dominant positions[109] and more generally to loss of control of EU strategic interests. Moreover, to secure the worldwide competitive position and business and investment opportunities for EU-based global players, it may be appropriate that reciprocal access to non-EU markets (without undue restrictions) is facilitated.

6.2.        Environmental impacts

All the PPs contribute to reduce the overall environmental impact of transport insofar as they all contribute to make maritime transport more attractive in comparison to road transport and are in line with the objectives of the Transport White Paper (2011).  

Table 25 provides for each PP an overview of the increase in short sea shipping, the decrease of road transport over 300km (one of the goals of the White Paper) and the corresponding gains in external costs, based on a model by PWC (2013) who used the WORLDNET (FP6) approach to estimate multimodal routes following the methodology used in the study “Ports and their connections within the TEN-T” (DGMOVE, 2010). This model assigns flows to multimodal mode chains, thus estimating port choice, and the sensitivity between land and sea options. The calculation is made using 2010 network and flow data obtained from the ETISplus (FP7) transport information system. The input variable used is the port cost, in line with the modelling assumptions to calculate the savings in total port costs as discussed in section 6.1.1. Annex VII provides more detailed information on the assumptions and calculations.

Although all PPs would result in a reduction of external costs, the benefits are the largest for PP3, closely followed by PP2a. Road transport over 300 km would decrease by 0.16% in PP3 and by 0.14% in PP2a. This would generate savings of external costs of the order of respectively € 76 and 69 million per year.

Moreover, PP2a encourages port authorities to introduce port dues which vary according to the environmental performance of ships. The impact of such differentiation on the greening of the fleet calling at EU ports will widely depend on the amplitude of the variation and the classification used and the degree of coordination at regional level. A wide geographical scope of environmental charges would be much more effective, which is an argument for regional or EU wide coordination.  

Table 25: impact on short-sea shipping, modal shift and external costs (PwC, 2013)

|| Increase in Short Sea Shipping (%) || Change in road>300km (in billion Tonne-Km) || Change in road>300km % || External Costs (€m/pa) || Change in maritime Tonne-Km

|| Short sea shipping Increases || Long distance road decreases || External costs fall || billion tonne km

PP1 || 0.49% || -0.833 || -0.04% || -23 || 3.603

PP2 || 0.73% || -1.249 || -0.07% || -34 || 5.404

PP2a || 1.63% || -2.634 || -0.14% || -69 || 13.311

PP3 || 1.88% || -2.972 || -0.16% || -76 || 15.942

Environmental impacts are in general for the better of the whole society, though for some economic or social actors these impacts come at a specific cost. In the case of PP2 and PP2a, shipping companies risk paying increased port charges in the event port authorities decide to apply environmental differentiated charges.

This has a specific short term effect, as on the long term this will create a level-playing field in line with the application of the polluter pays principle and as all ship operators will follow the incentive to operate cleaner ships. So, while all stakeholders in the end benefit from a better environmental performance, some will have to face specific challenges, especially when internalising the external costs.

Overall, PP2 will contribute to better environmental services in ports, including services aimed to reduce ship waste, air and water pollution, by contributing to the correct functioning of the market and by providing supervision by an authority in cases of complaints related to prices and/or quality of the services. 

6.3.        Social impacts

In all PPs the possible productivity gains usually associated with technological changes generated by the policy packages could mean that job profiles need to change and labour practices to be adapted. In the short term it may eventually lead to a reduction of the number of jobs in some ports that, today, remain labour intensive. But in the medium and long term, all PPs would generate additional port activities and have a net positive impact on the creation of jobs. Long standing statistical evidence shows that maritime traffic increases are indeed associated with new jobs creation.

According to the so-called "Antwerp rule"[110], every additional million tonnes of port throughput creates roughly 90 new cargo handling jobs. Cargo handling jobs are approximately 10% of total direct employment including non-maritime employment, and 20% of direct maritime employment. The impact of the different PPs has been accordingly estimated by PwC, 2013 assuming conservative multipliers disaggregated by type of cargo (e.g. handling energy is less labour intensive than containers) and productivity gains resulting from the market opening and transparency measures in the different packages. The results reveal that the number of port workers will increase from the present day figure of around 110,000 to 163,000 jobs generated by the traffic growth until 2030 in the baseline scenario[111]. On top of that (see table 26), 2.537 new jobs would be created in PP3 and 658 in PP1. All PPs have therefore a net positive impact on the creation of jobs, though modest. The detailed calculation and assumptions are provided in annex VII.

Table 26: Additional jobs compared to baseline scenario (110 000 to 163 000 new jobs by 2030) (PWC, 2013)

2030 || New jobs

                  PP1 || 658

                  PP2 || 987

                  PP2a || 2,199

                  PP3 || 2,537

It should be noted that according to OECD research (2012), higher multipliers could be used, according to which an increase of one million tons could generate 300 jobs and in the long run 7.500 jobs, which suggests potentially much more significant job creations. The figures would however change depending on the multipliers of each individual port region (in the case of, e.g. Hamburg, the multiplier is 1.71; for Rotterdam 1.13 and for Le Havre/Rouen there are estimates of 1.57)[112], and an extrapolation at EU level is therefore difficult.

The measures regulating the market access for cargo handling services in PP2, PP2a and PP3 could be contested by the unions of dockers in a number of Member States and  deteriorate the social climate in ports. It should be noted that the cost of strikes and blockades can be very high because of typical daily multi-million euro losses (in large ports) but also because of the risk for the image of the port.

"Costs of strike in port of Antwerp 1 million euro per hour" – February 2012: As a result of the strike in the port of Antwerp expenses increased during the last few days. "Roughly estimated this is about one million per hour for the port of Antwerp" Johan Claes of the Belgian New Fruit Wharf tells. "Then we talk about a direct loss and not about any consequential one." The 1 million euro per hour cost for a strike in the port of Antwerp was confirmed by the spokesperson of the Port of Antwerp, who also emphasised the damage to the ports' reputation, following a strike end January 2012.

Proper change management to accommodate the transition and avoid destructive industrial disputes can therefore be particularly useful. In this respect, it needs to be emphasised, that in case of changes of operator after a public tender procedure (foreseen in PP2, PP2A and PP3), Member States could be allowed to extend Directive 2001/23/EC to the employees involved in order to safeguards their rights. The Directive specifies the rights and obligations of employers and employees affected. It establishes that the transfer of an undertaking is not a ground for dismissal. This Directive applies to all types of employment relationships, without distinction in relation to the number of working hours and the type of employment contract (undetermined, fixed-duration, or temporary).

At various stages of the impact assessment process, the unions called for protest actions in EU ports and adopted a declaration announcing strikes[113]. The public hearing of 18 January 2013 could however clarify the scope of the Commission's work on the ports policy review, of which the establishment of an EU Social Dialogue Committee for the port sector is a corner stone (see section 5.1). Following the hearing, the unions adopted a unitary resolution welcoming the Commission's willingness to support the Social Dialogue process and calling off the announced strikes[114].

Taking account that measures touching on labour regimes have been discarded and that the envisages measures take a very careful approach regarding cargo-handling activities in ports, no particular impact[115] in terms of wages, labour relations and labour conditions is expected.

6.4.        Mapping of impacts per stakeholder

One needs to be aware that the impacts will be different for the distinct categories of stakeholders. In table 27, a qualitative assessment is given.

Table 27: Mapping of impacts per stakeholder

Stakeholder || PP1 || PP2 || PP2a || PP3

Port Authorities || Benefits from the (modest) increased traffic while confronted with a specific and relatively limited additional administrative burden || Benefits from the increased traffic and investments while confronted with a specific and relatively limited additional administrative burden || Benefits from the increased traffic and investments while confronted with a specific and relatively limited additional administrative burden || More competition presents business opportunities. Though, the competitive framework presents significant administrative burden

Port dependent businesses & operators || Benefits from the (modest) increased traffic and investment opportunities || Benefits from the increased traffic and investment opportunities || Benefits from the increased traffic and investment opportunities || More competition creates more business and investment opportunities

Port workers || Benefits from the (modest) increased traffic though specific transitions in the kind of jobs and the nature of the port work needs to be accounted for || Benefits from the increased traffic though specific transitions in the kind of jobs and the nature of the port work needs to be accounted for || Benefits from the increased traffic though specific transitions in the kind of jobs and the nature of the port work needs to be accounted for || Benefits from the increased traffic though specific transitions in the kind of jobs and the nature of the port work needs to be accounted for

Shipping sector || Modest benefits from the long term changes in price and service levels || Benefits from the transparency and changes in price and service levels || Benefits from the transparency and changes in price and service levels || Benefits from the competitive pressure and resulting changes in price and service levels

Sector regulators || Limited impact || Modest, but specific and additional administrative tasks || Specific and additional administrative tasks || More specific and additional administrative tasks

Freight forwarders and shipping agents || Benefits from the (longer term) better functioning of the ports and related business opportunities || Benefits from the better functioning of the ports and related business opportunities || Benefits from the better functioning of the ports and related business opportunities || Benefits from the better functioning of the ports and related business opportunities

Maritime passengers || Benefits from the (longer term) better functioning of the ports and related business opportunities || Benefits from the better functioning of the ports and related business opportunities || Benefits from the better functioning of the ports and related business opportunities || Benefits from the better functioning of the ports and related business opportunities

EU industries || Benefits from the (modest) increased performance (on the longer term) of the ports (cheaper and more reliable service) || Benefits from the increased performance of the ports (cheaper and more reliable service) || Benefits from the increased performance of the ports (cheaper and more reliable service) || Benefits strongly from the increased performance of the ports (cheaper and more reliable service)

SME (in particular those active in the port) || Opportunities for supporting and secondary SME's – risks for the more capital intensive ones || Opportunities for supporting and secondary SME's – risks for the more capital intensive ones || Opportunities for supporting and secondary SME's – risks for the more capital intensive ones || Opportunities for supporting and secondary SME's – risks for the more capital intensive ones

Final consumer || Better ports lead to cheaper transport and cheaper products (longer term effect) || Better ports lead to cheaper transport and cheaper products (modest to high effect) || Better ports lead to cheaper transport and cheaper products (modest to high effect) || Better ports lead to cheaper transport and cheaper products (high effect)

Tax payers || Transparency leads to more efficient public investments || Better use of capacities and climate for investors reduce needs for, and encourage efficient, public funding || Better use of capacities and climate for investors reduce needs for, and encourage efficient, public funding || Better use of capacities and climate for investors reduce needs for, and encourage efficient, public funding

6.5.        Summary of the economic, environmental and social impacts

Table 28: Summary of the aggregate economic, environmental and social impacts.

Impact compared to the baseline || Baseline Scenario || PP1 || PP2 || PP2a || PP3

Direct and indirect transport costs || Risk of degradation of port services Congestion costs and associated externalities [€ 0 million savings] || Small reduction of port costs [€ 318 million annual savings] But indirect costs remain (poor reliability/ efficiency of some TEN-T ports, congestion costs and associated externalities,) || Small reduction of port costs [€ 481 million annual savings] Small reduction of indirect transport costs (including road congestion) and modest increase of SSS modal shift and reduced congestion || Significant reduction of port costs[€ 1.071 annual million savings], improved reliability of ports and reduction of other indirect costs due to increase of SSS,  modal shift and reduced congestion || Significant reduction of port costs[€ 1.245 annual million savings], improved reliability of ports and reduction of other indirect costs due to increase of SSS,  modal shift and reduced congestion

Investments || Loss of investment opportunities. Issues regarding sound use of public funds  || Loss of investment opportunities. Some improvement regarding use of public funds || Opening up of market opportunities in ports; || Opening up of market opportunities in ports || Opening up of market opportunities in ports

Administrative burden || Increase of complexity due to most demanding logistic procedures || Possible improvements in ports following voluntary recommendations || Burden created by price supervision but possible improvement in  coordination and adaptation of ports to users' needs || Possible improvement in  coordination and adaptation of ports to users' needs || Burden for smaller ports created by central coordination and heavier tendering procedures

SMEs || Market foreclosure and legal uncertainty for a significant number of SME || Improvements in ports adopting thanks to voluntary action || Possibility of creation of new SMEs and jobs  in ports || Possibility of creation of new SMEs and jobs  in ports || Possibility of creation of new SMEs and jobs  in ports

Multimodality[116] || Improvements only in ports tackling road transport concerns in a voluntary basis || Some additional ports will adopt "best practices" promoting rail and inland waterways || Some additional ports will adopt "best practices" promoting rail and inland waterways || Incentives and taking account of users' needs enable ports to better contribute to multi-modal objectives || Incentives and taking account of users' needs  enable ports to better contribute to multi-modal objectives

Environmental impact[117] || Improvements only in ports applying environmental rewarding schemes on a voluntary basis || Small potential of improvements in ports because of the lack of incentives and guidance. Transparency will most likely not have a big effect on the internalisation. || Obligatory internalisation will lead to positive environmental performance || Improvement in the provision of cost-efficient environmental services in ports, based on best practices and a voluntary reward scheme. Linked to market incentives and green marketing, internalisation will penetrate the port business. || Less potential of improvement in the provision of cost-efficient environmental services in ports, because of the lack of guidance, though market potential remains significant.

Social Impact || Structural losses of jobs in ports in decline [0 additional jobs] || Structural losses of jobs in ports in decline [658 direct jobs + indirect jobs] || Potential of new jobs linked to new investments and creation of business in ports [987 direct jobs +  indirect jobs] || Potential of new jobs linked to new investments and creation of business in ports. Stability of employment and good social climate (provided that the Social Dialogue works) [2,199 additional jobs+ indirect jobs], || Potential of new jobs linked to new investments and creation of business in ports. Stability of employment and good social climate (provided that the Social Dialogue works) [2,537 additional jobs+ indirect jobs]

(+ refers to a positive correlation: for instance in the case of administrative burden, more + means less burden, in the case of environmental impacts, more + means better taking environmental considerations into account)

7.           Comparing the options

The policy packages were assessed against the following criteria:

- Effectiveness: the extent to which policy packages achieve the operational objectives

- Efficiency: the extent to which policy packages can achieve the operational objectives at least cost

- Coherence: the extent to which policy packages are coherent with the overarching objectives of EU policy, and the extent to which policy options are likely to limit trade-offs across the economic, social, and environmental domain

7.1.        Effectiveness

PP1 will be effective in achieving OO1, but only on a longer term. The regulatory supervision of price of port services (OO2) in monopolistic cases should be effective although it may entail, given the lack of free market access, a too heavy task for national administrations. The port users' committee (OO3) will bring all the users of specific ports together in order to avoid serious conflicts and a good operation of the port. The financial transparency (OO4) will allow responsible authorities to verify if state-aid is involved and on the basis of that decide if corrective intervention is required. Transparent port dues (OO5) will not directly change the level or application of the dues but will allow a transparent dialogue between authorities and users, paying the dues. This can lead to more appropriate charging practices in the long term.

PP2 is effective in creating a clear regulated market access framework (OO1) for all actors in the ports by imposing the freedom to provide services and/or introducing public tendering procedures. The confinement of internal operators (OO2) will prevent public funded services to compete with privately funded services, avoiding market distortions by public entities. Market abuses will be tackled even further by price supervision (OO2). The port users' committee (OO3) will bring all the users of specific ports together in order to avoid serious conflicts and a good operation of the port. The separation of accounts (OO4) will introduce transparency in the different operations. Binding rules on port charges will ensure an EU-wide application of cost-based charging and the internalisation of environmental costs (OO5).

By also introducing public tendering for substantial changes to existing contracts (OO1) PP2a will achieve an even higher effectiveness. In PP2a, the effectiveness related to OO2 is similar to PP2. The extended public tendering obligations should ensure correct market prices without having to have recourse to price supervision, except in those cases where no public tendering is applied. The freedom for port authorities to set port infrastructure charges in combination with transparency requirements for port infrastructure charges calculations and the possibility to differentiate for environmental performance of ships, further increases the effectiveness (005).

PP3 will also be effective in realising OO1: by setting clear rules and introducing minimal 2 operators for every service provision, all ports and operators will be faced with a minimal level of competition. The general principle of public tendering and the confinement concept, together with a price control in those cases where public tendering was not applied will ensure the effective implementation of OO2. Central port coordination (OO3) will ensure effective coordination inside the port. The functional/legal separation will install firewalls and introduce individual entities for every service provision. This will ensure the effective implementation of OO4. Though, the freedom for ports to set their own dues without further guidance or rules could entail a lower effectiveness than PP2a (OO5).

7.2.        Efficiency

The efficiency of the policy packages, i.e. the extent to which policy packages can be achieved at least cost, is assessed taking into account the potential annual savings in total port costs, external costs and the administrative costs. As already indicated before, because of the nature and diversity of the EU port system, the calculations and assumptions needed to be aggregated and sometimes generalised. Therefore, while the quantified estimates do indicate a trend-line, one needs to be prudent in the interpretation of the exact figures. A summary is in table 29.

Table 29: Net annual efficiency gains and one off administrative costs (€ million) (PWC, 2013)

|| Annual savings in total port costs (1) || Annual savings in external costs (2) || Total annual savings (3) = (1) + (2) || Annual administrative costs || Net annual efficiency gains (7) = (3) – (6) || One off administrative costs

Cost for public sector (4) || Cost for businesses (5) || Total annual cost (6) = (4) + (5) || Cost for public sector (8) || Cost for businesses (9) || Total one off costs (10)

PP1 || 318,15 || 23 || 341.15 || 9,0 || 16,2 || 25.2 || 315,95 || 9,9 || 15,7 || 25.6

PP2 || 481,47 || 34 || 515.47 || 7,7 || 14,0 || 21.7 || 493,77 || 32,4 || 15,7 || 48.1

PP2a || 1071,37 || 69 || 1140.37 || 2,3 || 2,2 || 4.5 || 1135,87 || 24,4 || 0,8 || 25.2

PP3 || 1245,21 || 76 || 1321.21 || 33,0 || 3,9 || 36.9 || 1284,31 || 121,8 || 0,8 || 122.6

· Total annual savings (column 3 in table 29): PP1 has the lowest effect on total annual savings in total port costs and external costs. PP2 performs marginally better in this respect. PP2a more than doubles the total annual savings from PP2 and PP1. PP3 even scores marginally better than PP2a in this respect.

· Total annual administrative costs (column 6 in table 29): PP2a imposes the lowest administrative burden compared to the other policy packages, both for the public sector and the businesses. In this respect it is followed respectively by PP2, PP1 and PP3. PP3 imposes the highest administrative burden. This is mainly because of the burden for the public sector, as for businesses PP3 scores better than PP1 and PP2.

· Net annual efficiency gains (column 7 in table 29): PP3 has the highest net annual efficiency gains, calculated by summing up the total annual savings in port costs and external costs, after deduction of the annual administrative costs. It is closely followed by PP2a. PP2 and PP1 are in this respect much less effective than PP2a and PP3, as their net annual efficiency gains are more than halved compared to PP2a and PP3.

· One off administrative costs (column 10 in table 29): The one off administrative costs are the lowest for PP2a, closely followed by PP1. PP2 and PP3 are respectively almost double or five times as costly as PP2a in this respect.

It can be concluded that with regard to net annual efficiency gains PP3 scores the best, but is very closely followed by PP2a, for which the total one off administrative cost is almost five times as low as for PP3. PP1 and PP2 score much worse than both PP2a and PP3.

7.3.        Coherence

All policy packages are from the individual perspective in line with the completion of the internal transport market and are coherent with the EU policy objectives reflected in the Single Market Act, the White Paper on Transport and Europe's 2020 growth strategy.

In order to be able to respond appropriately to all the objectives, the policy packages were built with a balance of economic, environmental and social measures, to avoid that action on one pillar would imply very negative consequences on the other. Consequently, the different policy packages are overall built to be coherent, each one containing measures to ensure that the social, environmental and economic impacts are mutually counterbalanced in each package.

However, because of the nature of the policy measures related to market opening of the port services market, a certain degree of trade-off between economic and social impacts could not be avoided. The analysis indicates that all policy packages present a trade-off between economic and social impacts. In PP2, PP2a and PP3 the risk of social tension in relation with the lifting of restrictons to the market access, and more specifically for cargo handling, cannot be neglected. In PP3 this risk is the biggest as the degree of market opening is the highest in this policy package. In PP1 this risk is the lowest. For PP2 and PP2a this risk can also not be neglected, especially not for cargo-handling services.

7.4.        Summary on the comparison of policy packages

Table 30: Effectiveness, efficiency and coherence of the policy packages

|| PP1 || PP2 || PP2a || PP3

Effectiveness || + || ++ || +++ || +++

001 clarify & facilitate access to the port services market || + || ++ || +++ || +++

002 Prevent market abuse by port service providers with exclusive or special rights || + || ++ || ++ || ++

003 To ensure the consultation of port users on the main decisions which affect the functioning of the port in all (100%) TEN-T ports by the end of the implementation date of the initiative || + || + || + || ++

004 To ensure the transparency in the financial relations between public authorities, port authorities and port service providers in all (100%) TEN-T ports by the end of the implementation date of the initiative || + || ++ || ++ || +++

005 To ensure that all (100%) TEN-T port authorities are free to autonomously set their port infrastructure charges by the end of the implementation date of the initiative, with the possibility of environmental modulation of the charges || + || ++ || +++ || ++

Efficiency || + || + || +++ || +++

Coherence || Minor trade-off || Limited trade-off except for cargo handling (important trade-off) || Limited trade-off except for cargo handling (important trade-off) || Important trade-off

("+" refers to the intensity of a positive correlation, no negative or neutral correlations have been identified)

8.           Conclusion: preferred option

PP2a and PP3 appear to be the most efficient and effective options, with net annual efficiency gains over € 1 billion created by more efficient transport services, and with a better investment and business climate for ports. However, given the important trade-offs between social and economic impacts in PP3, PP3 is less coherent than PP2a. Therefore, based on the analysis performed in this report, PP2a is the preferred policy option.

PP2a will generate additional short sea shipping traffic of around 13.3 billion tonne kilometres, which will represent a significant increase of short sea shipping on a number of routes. This will lead to increased port activities which, according to conservative estimates, could create more than 2000 direct extra port related jobs plus indirect jobs.

However, caution is required in connection with the measures related to market access and cargo handling[118], because of three aspects:

- There is an important trade-off with social issues. Social tensions in the cargo handling sector are still high and therefore a step by step approach for this sector could be more appropriate. Opening the market of cargo handling in PP2a could trigger a sudden degradation of the social climate at a time when important progress is being made through the creation of the European Social Dialogue. In the future this European Social Dialogue could pave the way for further legislative action.

- Cargo handling services are already exposed to some competitive pressure in many ports (intra or inter port competition between terminal operators, see table 6).

- Thirdly, a large part of cargo handling services are undertaken typically by means of concession contracts transferring the operational risk of operating a terminal to a private operator and are therefore falling within the scope of the future concession Directive. Until the time the concession Directive is adopted, the scope of the Directive will not be fully determined.

Therefore, as regards the application of the measures related to clarification and facilitation of market access to cargo handling services[119] the approach of PP1 (non-binding Commission's Communication) could be equally warranted due to important trade-offs between economic and social objectives. Indeed, it is to be noted that PP1 scores better than PP2a in terms of trade-offs. In this respect PP2 is not recommended as an alternative to PP2a as it entails the same risk as PP2a.

If this variant of PP2a[120] is eventually decided, the impacts initially estimated for PP2a would slightly decrease in intensity but would remain overall similar in tendency. The administrative costs would slightly decrease. A calculation using the methodology in Annex VII was done for this 'PP2a variant' and yielded the results presented in table 31.

Table 31: Comparison PP2a and PP2a variant (excluding market access measures for cargo handling) (PwC, 2013)

|| PP2a || PP2a variant

Change (%) in total port costs || -6.8 || -4

Annual savings in total port costs (€ million) || 1071.37 || 635

Increase of Short Sea Shipping (%) || 1.63 || 0.97

Induced tonnes Km  (billion) in EU ports || 13.311 || 7.205

Administrative costs (recurrent – public) (€ million) || 2.3 || 2.1

Administrative costs (recurrent - business) (€ million) || 2.2 || 1.7

Annual savings of external costs  (€ million) ||  69 || 46

The same reasoning may hold for passenger services and a similar approach could therefore also be envisaged. However due to unavailability of data a separate impact calculation could not be made.

9.           Monitoring and evaluation

The Commission services will monitor the implementation and effectiveness of this initiative through a set of core progress indicators, listed in table 32. The data will be gathered by means of the outcome of the PPRISM[121] project and in the form of a fact-finding survey. The Commission has also launched a research project under FP7 to look into the practical and operational requirements for setting up a port observatory which aims to provide data on a continuous basis.

Regarding evaluation, it is foreseen that three years after the end of the implementation date of the proposed legislation, the Commission services will carry out an implementation report to verify whether the objectives of the initiative have been reached. This evaluation will be carried out inter alia based on the core progress indicators mentioned below, and will be in line with the Commission requirements on evaluation.

Table 32: Core progress indicators for monitoring purposes in the TEN-T ports

Operational objective || Core progress indicators || Source of data

OO1: Clarify and facilitate access to port services market || - the number of service providers in ports for the different categories of port services - market shares of port service providers || - fact finding survey

OO2: Prevent market abuse by port service providers with exclusive or special rights || - number of new Commission infringement procedures linked to market abuse || - Commission data on infringements procedures / complaints received

003:  Ensure the consultation of port users on the main decisions which affect the functioning of the port in all (100%) TEN-T ports by the end of the implementation date of the initiative || - average number of procedures needed to enter/operate in a port - the number of newly installed port user committees in TEN-T ports || - fact finding survey

004: To ensure the transparency in the financial relations between public authorities, port authorities and port service providers in all (100%) TEN-T ports by the end of the implementation date of the initiative || - number of new Commission infringement procedures linked to transparent financial relations between public authorities, port authorities and providers of port services || - Commission data on infringements procedures / complaints received

005 To ensure that all (100%) TEN-T port authorities are free to autonomously set their port infrastructure charges by the end of the implementation date of the initiative, with the possibility of environmental modulation of the charges || - number of ports with autonomous port infrastructure charging -  the number of new Commission infringement procedures linked to port infrastructure charges in TEN-T ports - the number of newly installed methods for environmental modulation of port infrastructure charges in TEN-T ports || - fact finding survey

[1] Single Market Act II, together for new growth COM(2012)573

[2] White Paper on Transport: roadmap to a Single European Transport Area – Towards a competitive and resource efficient transport system  COM/2011/144

[3] COM(2011) 650 final/2

[4] COM(2011) 665 final

[5] See website of the conference: http://www.portsconference2012.eu/home.html

[6] The public consultation process is presented in Annex VII. The critical views and final position of IDC and ETF were fully taken into account during the IA process. The links to the communications of both organisations are given in the annex.

[7] All main port industry associations, port workers unions and transport authorities in charge of ports' policy in the Member States were invited.

[8] The detailed results of the consultation are provided in Annex V. Moreover, the more detailed views of stakeholders are - where relevant - reflected in the other sections of this report.

[9] More information is provided in Annex II. Technical terms are further explained in the glossary (Annex XIII).

[10] The TEN-T network consists of two layers: 1) the comprehensive network will ensure full coverage of the EU and accessibility of all regions, to be completed by 2030, and 2) the core network that will feed into the comprehensive network and will prioritize the most important nodes of the TEN-T, and is to be completed by 2050. Detailed TEN-T port selection criteria can be found in the TEN-T proposal (COM (2011) 650 final/2). The final number of TEN-T ports will depend on the final outcome of the on-going ordinary legislative procedure.

[11] See Eurostat, 2010-2011 data – Statistics in Focus series

[12]  See, e.g. Notteboom, Rodrigue and De Monie (2010), "The organisational and geographical ramifications of the 2008-09 financial crisis on the maritime shipping and port industries" or HPC Hamburg Port Consulting GMBH, "The role of ports in international transport chains" (2011)

[13] http://pprism.espo.be/

[14] A more detailed description of the chain of services in ports can be found in Annex II.

[15] Goss, R. Economic Policies and Seaports: 1. The Economic Functions of Seaports. “Maritime Policy and Management” 17(3): pp.207-219. (1990).

[16] See e.g. International Handbook of Maritime Economics, Cullinane and others (2010)

[17] The table is indicative only since the heterogeneity of ports and cargo-handling operations makes it extremely difficult to present values "valid for all".

[18] For a detailed presentation of the relative weight of port operation costs see Haralambides et al (2001), “Port Financing and Pricing in the EU: Theory, Politics and Reality and Haralambides H. (2012) "Ports: Engines of Growth and Employment". There are huge variations in the composition of costs from one port to another. ”

[19] Directive 2000/59/EC on port reception facilities for ship-generated waste and cargo residues

[20] For instance, specific legislation exists for airport charging, allocation of slots, and ground handling services.

[21] See COM(2007)616 final

[22] See Annex IV for more detailed information

[23] See http://ec.europa.eu/transport/modes/maritime/ports_en.htm

[24] COM(2011)987final of 20 December 2011

[25] See http://eca.europa.eu/portal/pls/portal/docs/1/14050737.PDF

[26] The Commission is currently updating the Cost Benefit Analysis Guide (2008).

[27] See Annex II – point 10 "Overview of recent and on-going port reforms and re-organisations in selected European countries"

[28] This is an on-going process - See http://ec.europa.eu/economy_finance/assistance_eu_ms/index_en.htm

[29] A detailed description of the situation in different Member States is given Annex II

[30]See ESPO (2010) Report "European Port Governance" – http://www.espo.be/images/stories/Publications/studies_reports_surveys/espofactfindingreport2010.pdf#. A more detailed analysis of Europe's port heterogeneity is to be found in Annex II.

[31] See, e.g. Verhoeven (2009, 2010, 2011) – European Sea Ports Organisation, Fact Finding Reports

[32] The categorisation made by ESPO, the "typology of regions" includes the following Member States: 1) "Hanse Region": Belgium, Denmark, Finland, Germany, The Netherlands and Sweden, 2) "New Hanse": Estonia, Latvia, Lithuania and Poland, 3) "Anglo-Saxon": Ireland and UK, 4)"Latin": Cyprus, France, Greece, Italy, Malta, Portugal and Spain and 5) "New Latin": Bulgaria, Romania and Slovenia.

[33] For a broader presentation, see the Transport White Paper 2011 "Roadmap to a Single European Transport Area – Towards a competitive and resource efficient transport system"

[34] See latest synthesis reports, 4 March 2013,  http://register.consilium.europa.eu/pdf/en/13/st06/st06754.en13.pdf

[35] The port sector is mentioned in the Commission's Staff Working Documents (SWD) on the following Member States:  BE, CY, DE, DK, EST, SP, FIN, FR, IT, MT, NL, SLO and UK

[36]  The model used for the purposes of the IA benchmarks the relative performance of the ports included in the sample. However, it has to be stressed that, like most other rankings in business, the ranking methodology is not perfect and the results have to be interpreted with all necessary precaution. For one, the index cannot reflect all the complexity of ports, ports services and types of cargoes. Moreover, the data refers to a given period of time (The 2012-2013 Global Competitiveness Report of the World Economic Forum (WEF) and the more recent Eurostat port statistics. Those differences are not necessarily linked to the availability and/or quality of physical infrastructures: in a number of cases, well-equipped ports perform below average (cf PwC, 2013 / annex VII).

[37] Because of potential commercial impacts on specific ports, the Commission does not disclose the names of the ports in the different categories; a list of the considered ports can be found in Annex VI.

[38] See, e.g. Ducruet and van der Horst (2009) "Transport Integration at European Ports: measuring the role and position of intermediaries" or de Langen, van Meijeren and Tavasszy (2012) "Combining Models and Commodity Chain Research for Making Long-Term Projections of Port Throughput: an Application to the Hamburg-Le Havre Range.

[39] White Paper – Roadmap to a Single European Transport Area / Christidis, Ibanez Rivas, Measuring road congestion, JRC Technical Notes, 2012 / CE Delft, INFRAS, Frauenhofer ISI, External Costs of Transport in Europe, Delft, November 2011.

[40] See research on congestion; e.g. EFFORT RTD Project http://www.transport-research.info/web/projects/project_details.cfm?ID=28076, International Transport Forum “The Extent of and Outlook for Congestion, in Inland, Maritime and Air Transport (2007)

[41] A capacity utilisation >80% entails overtime and incapacity to absorb traffic peaks, while an index > 90% entails heavy congestion in the port and its hinterland).

[42] http://www.portofrotterdam.com/en/Business/about-the-port/connections/Pages/Intermodaltransport.aspx

[43] "hub-and-spoke" organisations are increasingly used in modern logistics and consist in the reception, transhipment and redistribution of cargoes to/from deep-sea exchanges to/from short-sea exchanges. In a survey at global level, it was found that only 16% of all country pairs are directly connected, while 62% of all country pairs require at least one transhipment and 18.6% of all pairs require two transhipments (International Maritime Forum 2010, Maritime Transportation: drivers for the shipping and port industries)

[44]This problem will be tackled by an upcoming Commission initiative on "Blue Belt". Customs simplifiations already exist for martime transport but further simplfications will be envisaged.

[45] http://www.consilium.europa.eu/ueDocs/cms_Data/docs/pressData/en/trans/92120.pdf

[46] Cold ironing or shore side electricity supply: where vessels connect to share for energy supply instead of having to use their on board generators.

[47] Considering the recession and recent port developments in the range Le Havre – Hamburg (Maasvlakte-2 in Rotterdam, London DP World Gateway, Hamburg Eurogate or Jade Weser Port in Wilhelmshaven) some analysts predict overcapacity until 2020.

[48] Examples are based on concrete data affecting particular ports and/or undertakings in the sector. Due to the (commercial, legal, etc.) interests involved, names of ports, undertakings and Member States were those practices are notorious are voluntarily omitted in this report.

[49]             Another frequently mentioned issue is the vertical integration between terminal operators and shipping lines which may give rise to abuse and distortion of competition on the shipping market (see Annex II for a more detailed discussion)

[50]             See OECD "Competition in Ports and Port Services 2011

http://www.oecd.org/regreform/liberalisationandcompetitioninterventioninregulatedsectors/48837794.pdf

[51]             See Competition concerns in ports and port services, OECD / DG COMP (2011)

http://ec.europa.eu/competition/international/multilateral/2011_jun_ports.pdf

[52] Judgement of the EU Court of 10 December 1991, case C-179/90

[53] Case of the Port of Fos is COMP/39.316 – Gaz de France, decision du 3.12.2009 (case related to the LNG Terminal)

[54] Decision of the German competition authority - Bundeskartellamt (2010), ‘Bundeskartellamt opens up the Puttgarden-Rødby ferry route to competition’, January

[55] Commission decision of 2004 - ‘Scandlines Sverige AB v Port of Helsingborg’, Case COMP/A.36.568/D3.

[56] Decision of Portuguese competition authority of 2007 - Autoridade da Concorrência (2007), ‘CA detect cartel operating in the Port of Setúbal and imposes fine of €185,000’, April

[57] See: Port Procedures Survey, FONASBA, December 2012, http://www.fonasba.com/author/fonasba_admin

[58] http://europa.eu/rapid/press-release_SPEECH-12-425_en.htm

[59] http://ec.europa.eu/transport/modes/maritime/e-maritime_en.htm

[60] Directive on airports ground-handling.

[61] See preparatory work for the Transport White Paper by  the Joint Research Centre (2011): http://ec.europa.eu/transport/themes/strategies/2011_white_paper_en.htm

[62]See: "Ports urge European leaders not to cut in Transport Infrastructure budget" http://www.espo.be/index.php?option=com_content&view=article&id=356:ports-urge-european-leaders-not-to-cut-in-transport-infrastructure-budget&catid=34:espo-news&Itemid=109 (February 2013)

[63] http://www.port-investor.com/espo-presentation/ reference

[64] Strategic planning and sound economic assessment of port infrastructural projects will be tackled by the new Regulation on TEN-T Guidelines and by the new approach to Structural Funds

[65] OECD report, A framework for investment policy transparency (2003),

http://www.oecd.org/daf/internationalinvestment/investmentpolicy/16793978.pdf

[66] for an economic review on this question, see World Bank "The Evolution of Ports in a competitive world, 2007", , http://www.ppiaf.org/sites/ppiaf.org/files/documents/toolkits/Portoolkit/Toolkit/pdf/modules/02_TOOLKIT_Module2.pdf–

[67] By ISL Bremen, see http://ec.europa.eu/transport/modes/maritime/studies/doc/2006_06_eu_seaports_study.pdf

[68] http://www.europarl.europa.eu/committees/en/tran/studiesdownload.html?file=66171

[69] Commission Directive 2006/111/EC on the transparency of financial relations between Member States and public undertakings as well as on financial transparency within certain undertakings" ("Transparency Directive")

[70]In around 11% of TEN-T core ports (PwC, 2013), establishing the turn-over threshold from the Transparency Directive is problematic, precisely because of the (lack of) port accounting practices.

[71] In the specific case of waste reception facilities, basic principles on pricing have been introduced. Though, it has been acknowledged that transparency remains a challenge in order to ensure a cost-based approach in line with the polluter pays principle.

[72] See, e.g. Haralambides, (2002, 2012) “Port Financing and Pricing in the European Union”

[73] See, e.g. http://www.ukessays.com/essays/geography/port-pricing.php#ixzz2Ef5PGRiQ

e.g: http://www.ppiaf.org/sites/ppiaf.org/files/documents/toolkits/Portoolkit/Toolkit/index.html

[74] See, e.g. Haralambides, Erasmus University Rotterdam, presentation at the EU ports conference September 2012 “it is no longer acceptable to expend public resources on the development of, principally private, infrastructure intended to ‘steal’ cargo from each other among members of a Union”. See: http://www.academia.edu/2096342/Ports_Engines_for_Growth_and_Employment or see also H. Meersman, E. Van de Voorde and T. Vanelslander (Antwerp, 2002)

[75] The perceptions of users of services appear in cases of non-transparent (or very difficult to understand) charging systems.

[76] E.g. in 2012, Germany’s State Ministry of Economic Affairs, the Hamburg Port Authority and port service providers agreed to significantly reduce the Port of Hamburg’s calling costs for large ships in order to strengthen the port’s competitiveness, in response to the continuing delay in deepening the channel of the River Elbe.

[77] See Notteboom and others, www.porteconomics.eu/.../501-2012-iame-the-green-port-toolbox

[78] The Commission is working on monitoring the emission of greenhouse gasses from ships. For ship generated waste, agreements have been made under MARPOL.

[79] Lashof and Ahuja (1990), Bailey and Solomon (2004), Tzannatos (2010), Villalba and Gemechu (2011), others.

[80] In addition, Directive 2000/59/EC on port reception facilities for ship-generated waste and cargo residues, requires ports to provide waste reception facilities and vessels are, against a waste charge, obligated to make use of these facilities. The charges are always differentiated based on the certain characteristics of the ship, such as gross or net tonnage, engine power, or volume

[81] Next to the proposed requirement for TEN-T ports, the Commission has proposed a Clean Power for Transport legislation, obliging all core TEN-T ports to have LNG bunkering facilities at the disposal of ships by 2020.

[82] The Environmental Ship Index is based on ship emissions of local pollutants, such as NOx, SOx, particulate matter, and GHG. Source: http://www.wpci.nl/projects/environmental_ship_index.php

[83] The Green Award certification scheme focuses on crew, operational, environmental and managerial elements. Source: http://www.greenaward.org/greenaward/

[84]  See, e.g. http://news.portdebarcelona.cat/eng/noticia.php?id=42&p=1

[85] http://www.oecd.org/daf/competition/48837794.pdf

[86] Optimar Study – see http://ec.europa.eu/transport/modes/maritime/studies/doc/2010_optimar_study.pdf

[87] PwC, 2013 (Trans-tool bases estimated) – See also: De Langen, van Meijeren, and Tavaszzy (2012) 2http://www.ejtir.tudelft.nl/issues/2012_03/pdf/2012_03_03.pdf

[88] Long term average GDP growth rates in the EU of 1.4%

[89]             OECD 2012, IHS Fairplay 2010, ITF 2011

[90] See World Bank “Connecting to Compete 2012 – Trade Logistics in the Global Economy

[91] See, in this regard, http://www.oecd.org/env/transportandenvironment/41612575.pdf

OECD (2008) Policy Instruments to limit negative environmental impacts from increased international transport.

[92] http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2013:0018:FIN:EN:PDF

[93] The Commission is proposing that LNG refuelling stations be installed in all maritime ports of the TEN-T core network by 2020.The total estimated cost for the proposed development of LNG refuelling stations for waterborne transport the EU will be approximately € 2.1 billion

[94] Cf Bichou (2012) Linking theory with practice in port performance and benchmarking, International Journal of Ocean Systems Management 2012

[95] Ports perform a land-sea interface functions. Some activities in ports are clearly linked to maritime transport, while some other (e.g. land-related logistic added value functions or activities of industrial firms installed in the port area) are clearly related to land transport needs.

[96] See Annex VII

[97] For example, the Czech Republic is upgrading its trans-European travel corridors intensively (in particular, the corridor four connecting Germany with South-Eastern Europe).

[98] See  TEN-T ports: http://ec.europa.eu/transport/themes/infrastructure/ten-t-policy/transport-mode/ports_en.htm

[99] Article 155 (2) TFEU provides two ways to implement EU social dialogue agreements: either by implementation via Council Directive, or ‘in accordance with the procedures and practices specific to management and labour and the Member States’, the so-called ‘voluntary route’.

[100] Study of Prof Van Hooydonk, University of Ghent, College of Europe, for DG MOVE (2013) – See Annex VII

[101] For example, in 2009 Italian judges confirmed the right of self-handling on quays for ship operators; in ports in the UK, NL, DE, DK, PL or GR, self-handling can take place under the conditions established by Port Authorities 

[102] Less than 3% of (small) TEN-T ports would be concerned; self-handling is an option only for general cargoes (a declining category) in ports that are not sufficiently equipped. Modern ships are not fitted with gear/equipment for self-handling. An exception concerns car-carriers, where cargo-owners (car industry) express preoccupation about the quality of service provided by dock workers in some ports.

[103] Small contracts are those contracts below a threshold of 5 million € (over the whole contract duration). This threshold is in line with EU and international agreements in the field of public procurement and concessions. Given the international nature of the shipping and port business this is considered the appropriate approach.

[105] See COM(2011) 824 final

[106] Cf. Modernisation exercise of State Aid rules announced by the Commission in 2012.

[107] Cf. World Bank studies on port development. See also Clark, David Dollar, Alejandro Micco (2004) "Port efficiency, maritime transport costs and bilateral trade", Haralambides et al.

[108] In the PwC methodology, the Port of Rotterdam (PoR) is taken as a reference for the benchmarking exercise because of the good results obtained by the port in international benchmarking exercises over the years. Data on costs and costs structures of the PoR have been extensively examined by academic research.  In quantitative terns, the PoR represents by itself 10% of the total EU port traffic

[109] Vertical integration refers to the fact that shipping companies also own and operate dedicated terminals: e.g. COSCO, APMT and Maersk, Terminal Links and CMA CGM or that terminal operators are also getting more control over the hinterland connections: e.g. Hutchison. Annex II provides more information on this issue.

[110] Dock labour and port-related employment, T. Notteboom, 2010

[111] The baseline scenario assumes EU measures to enhance port capacity, i.a. TEN-T.

[112] See OECD (2012) papers on "The Competitiveness of Global Port Cities"

[113] See  http://www.idcdockworkers.org/index.php?option=com_content&task=view&id=216&Itemid=

[114]  See: http://www.idcdockworkers.org/index.php?option=com_content&task=view&id=222&Itemid=1

[115] Market dynamics involve that a growing activity in ports will lead to a growing demand for workers; however, the types of jobs and retributions will be determined for the particular circumstances of each type of trade, business, port, etc.

[116] In addition to the modal shift impacts described in the first row on transport costs

[117] Idem

[118] Measures 1, 2 and 5

[119] Operational Objective OO1 – policy measures 1, 2 and 5

[120] PP2a variant = PP2a with the only difference: an explanatory Commission communication on how existing rules apply to cargo handling services (measure 3) instead of proposing new legislation in this respect (measures 1,2,5)

[121] http://pprism.espo.be 

Table of contents

ANNEX I: Schematic presentation of PP2a   2

ANNEX II: General context: Features of the EU Ports system   3

ANNEX III: Maritime ports freight and passenger statistics  25

ANNEX IV: The EU Ports Policy: an ex-post evaluation   44

ANNEX V: Public Consultation - Summary of stakeholders' positions  49

ANNEX VI: Relative performance of TEN-T Core: efficiency vs. competitive pressure  57

ANNEX VII:  Modelling of impacts  64

ANNEX VIII: Reference forecast – NEAC Trade Model  89

ANNEX I: Schematic presentation of PP2a

Measures contributing to market access (OO1) and preventing market abuses (OO2)

* Public Service Obligation

ANNEX II: General context: Features of the EU Ports system

EU – Ports – ITMMA Antwerp University – the EU Port System

"To accommodate maritime extra-EU and intra-EU trade flows, Europe is blessed with a long coastline reaching from the Baltic all the way to the Med and the Black Sea.

The European port system cannot be considered as a homogenous set of ports. It features established large ports as well as a whole series of medium-sized to smaller ports each with specific characteristics in terms of hinterland markets served, commodities handled and location qualities.

This unique blend of different port types and sizes combined with a vast economic hinterland shapes port competition in the region".

1. Statistics

Eurostat produces extensive port statistics based on data collected within the framework of the EU maritime transport statistics Directive (Directive 2009/42/EC) on statistical returns in respect of carriage of goods and passengers by sea.

EU-27 aggregates refer to the total of 22 maritime Member States. The Czech Republic, Luxembourg, Hungary, Austria and Slovakia have no maritime ports. “Main ports” are ports handling more than 1 million tonnes of goods annually (however, data for some smaller ports may be included in the published results). Data are presented at level of “statistical ports”. A statistical port consists of one or more ports, normally controlled by a single port authority, able to record ship and cargo movements. The table below provides an overview of some main indicators (source: Eurostat):

Seaports handle, in volume, 74% of the goods exported or imported to the EU and from the rest of the world. The table below gives an overview of the relative importance of seaports in comparison to the other transport modes in terms of external trade.

EU -27 External Trade by Mode of Transport 2010 – Weight (million tonnes) (source: Eurostat)

|| Export || Import || Export + Import

Sea || 424.8 || 77.0% || 1202.2 || 73.8% || 1627.0 || 74.6%

Road || 79.8 || 14.5% || 58.0 || 3.6% || 137.7 || 6.3%

Rail || 19.8 || 3.6% || 64.1 || 3.9% || 83.9 || 3.8%

Inland Waterway || 9.6 || 1.7% || 12.1 || 0.7% || 21.7 || 1.0%

Pipeline || 3.7 || 0.7% || 240.3 || 14.8% || 244.0 || 11.2%

Air || 10.2 || 1.9% || 3.9 || 0.2% || 14.1 || 0.6%

Self Propulsion || 1.3 || 0.2% || 1.5 || 0.1% || 2.8 || 0.1%

Post || 0.0 || 0.0% || 0.0 || 0.0% || 0.0 || 0.0%

Unknown || 2.6 || 0.5% || 46.2 || 2.8% || 48.7 || 2.2%

TOTAL || 551.7 || 100.0% || 1628.3 || 100.0% || 2180.0 || 100.0%

Sea-borne freight trade

In terms of cargo flows in the European seaport system, five main markets can be distinguished: the container market, the RoRo market, the market for conventional general cargo, the liquid bulk market and the dry bulk market. Each market has its own dynamics: the routing of different types of maritime freight through European ports to the hinterland is guided by complex interactions between a large set of factors and actors. However, there are two underlying common factors to all ports and types of trade that influence the routing to the hinterland: the connectivity of the port to the hinterland and the level of performance of the port itself.

The following graph[1] summarizes sea-borne trade trends in the EU since 2005:

The number of ports active in Ro-Ro, general cargo, liquid bulk and or dry bulk handling is in excess of 300. There are about 130 seaports handling containers of which around 40 accommodate intercontinental container services. The normalized HH-index for the European container port system is decreasing which means an increasing number of European ports are present on the competitive scene. While the European container port scene becoming more diverse in terms of number of ports involved, a lot of cargo is concentrated in a limited number of ports. Moreover, large differences in growth patterns can be observed among the multi-port gateways regions.

Distribution of cargo flows

For the purpose of examining sea-trade flows, the EU is often divided into 6 maritime regions (North West Continent region, Mediterranean Sea region, Baltic Sea region, UK & Ireland region, Atlantic Ocean region, Black Sea region).

The biggest share in total EU seaborne freight traffic is held by North West Continent region ports (31.7%). The "Le Havre-Hamburg" range remains volume-wise a strong port range in Europe. However, its market share in total European volumes differs depending on the market segment considered:

• 48.4% or 40.3 million TEU in the container business

• 26.8% or 269 million tons for dry bulk

• 24.6% or 391 million tons for liquid bulk

• 19.5% or 62 million tons for conventional general cargo

• 18.3% or 82 million tons for Ro-Ro

The second biggest region is the Mediterranean Sea region (only EU ports) with a share of 28.2%. Baltic Sea ports (excluding Russian ports) account for 17.3% of the total throughput in EU ports, followed by UK & Irish ports (15.3%). The smallest share is held by EU ports along the Atlantic Ocean coast (5.9%) and EU ports along the Black Sea coast (1.7%).

The group of seaports included into the TEN-T core network handle approximately 70% of the cargo passing through all EU seaports. The greatest number of core seaports (24) is concentrated within the Mediterranean Sea region. These seaports account for 58.4% of the throughput of all seaports within the EU Mediterranean Sea region.

Half of those ports are located along the coastline of Italy. This can be explained by taking into consideration the fact that Italian seaports handle the greatest volume of cargo within the Mediterranean Sea region (494.1 million tonnes) which accounts for about 48.3% of the total seaports’ turnover in the region.

Additionally, Italy has the largest number of seaports that handle at least 1 million tonnes of cargo. Spain has also a large number of core seaports along its Mediterranean coast (7). The rest of the core seaports are located in Greece (4), France (1) and Slovenia (1). The figures below provide an overview of the main ports connections (the main intra-EU sea borne trade):

Ports connections - Main intra-EU sea-borne trade

The following figure compares the five cargo handling segments on the basis of a cumulative market share curve for the 50 largest ports in each of the segments. It can be observed that the concentration is the lowest in the conventional general cargo segment and the highest in the container market.

Cumulative market share of the top 75 ports in each cargo segment

 (Source: ITMMA Universiteit Antwerpen and ESPO (2009)

Passenger in EU ports

Eurostat statistics shows that ports in the EU-27 handled almost 400 million maritime passengers (ferry crossings and cruise-ships) in 2010; this marked the third successive annual decline in passenger numbers, decreased 2.0 % in comparison with 2009, after falls of 2.2 % in 2009 and 0.3 % in 2008.

Italian and Greek ports each handled more than twice as many passengers in 2010 than in any other Member State (accounting for 22.2 % and 21.2 % of the EU-27 total respectively). The next busiest ports in terms of passenger numbers were in Denmark (42 million passengers), followed by ports in Sweden, the United Kingdom, Germany and France which each handled between 27 million and 30 million passengers in 2010; ports in Croatia handled 25 million passengers.

Relative to national population, the importance of maritime passenger transport was particularly high in Malta (19.5 passengers per inhabitant), followed by Denmark (7.6), Greece (7.4) and Estonia (7.1); other than Finland, Sweden and Italy, the number of maritime passengers per inhabitant in 2010 averaged less than 1.0 in each of the remaining EU Member States. The table below provides an overview of the main passenger data (source: Eurostat):

2. Functioning of the port: a chain of services  

A port is generally regarded as a gateway through which goods and passengers are transferred between ships and the shore[2]. Different activities take place in a port such as ship arrivals and mooring, (un)loading on docks and transit warehousing. While the port as a whole can be seen as a link in a global logistics chain, the port product is itself a chain of consecutive links[3]. According to a commonly accepted presentation[4], the functioning of a port requires the combination of a number of services organised as follows:

(a)        Provision of general transport infrastructure whose planning, construction, maintenance, operation and funding are in most cases the responsibility of local, regional or national authorities. The only notable exception is the UK case where port general infrastructure investments are privately financed on a commercial basis. The general infrastructure includes:

●     Maritime transport infrastructure, i.e., maritime access channels, lights, buoys and navigational aids, dikes and quays, etc.

●     Ancillary infrastructure equipment, including, inter alia, equipment for ice-breaking, hydrological surveys, dredging and maintenance of the port and port approaches

●     Land transport infrastructure, i.e. road, railways and/or waterways infrastructures ensuring the hinterland connection of the port.

(b)       Provision of port "technical-nautical" services, including pilotage, towage and mooring: pilotage is a compulsory service required under national and international regulations for ensuring maritime safety conditions. Usually, pilotage fees are fixed by the administration and/or by the corporative body of maritime pilots. Towage and mooring services are commercial services in many ports, i.e. with prices fixed under market conditions.

 (c)       Provision of operational infrastructure and equipment, i.e. elements required for the operation of specific facilities, such as berths, cranes, generally linked to the provision of cargo handling and/or passenger services: these facilities and equipment are usually provided by terminal operators (see below). Their use is most of the time charged as a part of the service provided to customers (shipping companies, cargo owners, logistic operators).

(d)       Provision of cargo handling and passenger handling services: these services involve marshalling services (receipt, storage, assembly and sorting of cargo in preparation for delivery to a ship's berth) and stevedoring services (loading and unloading of cargo from ships). Each type of cargo requires specialised equipment and berthing facilities (passenger berths, oil, coal, ore, grain, timber, roll-on/roll-off, containers, chemical and gas, etc.). Cargo-handling services are mainly, but not exclusively, provided in Europe by privately owned terminal operators. For historical reasons, in many EU ports, there is at least one cargo-handling operator owned and/or managed by the national, regional or local authority. Where there is a degree of competitive pressure, prices and quality of cargo-handling services are establish by the market. The competitive pressure is especially present in container services; for other segments, like bulk, the cargo handling is often related to local demand, linked to localised production facilities (steel mills, chemical plants or electricity production).

(e)        Ancillary (or general) services provided in many ports include bunkering, chandlering, ship repair, container maintenance, marine appraisals, insurance claims inspections, banking, etc.

(f)        Waste reception facilities: waste reception services are mandatory by virtue of international law and have to be provided under the conditions of Directive 2000/59/EC, which amongst other establish common rules on charging.

Below, a more detailed description is given for some core port services:

Cargo handling operations form the core of the raison d'être of ports. The efficiency and effectiveness with which loading and discharging activities take place in a port are important cornerstones for the port competitiveness and its ability to generate wider economic effects in terms of employment and value-added creation. In terms of services, cargo handling involves marshalling services (receipt, storage, assembly and sorting of cargo in preparation for delivery to a ship's berth) and stevedoring services (loading and unloading of cargo from ships).

Pilotage is a service provided by a pilot with local knowledge and skills which enable him to conduct the navigation and manoeuvring of the vessel in and approaching the harbour. Usually, pilotage services are provided by the State itself or by a corporation entrusted with exclusive rights for the provision of the service.

Towage is a service provided by tug boats which move larger ships that either should not or cannot power themselves. Usually, towage companies are private companies that operate in the port by means of an authorisation of the port authority. In some cases, towage operators are owned by the State.

Mooring is a service provided by specialised boatmen companies securing or confining a vessel in a particular station, as by cables and anchors or by a line or chain run to the wharf.

Dredging involves collecting and bringing up, fishing up or clearing away or out material and / or any object from the bed of a river, sea, etc.; transporting it to the relocation site and unloading the material or object. The purpose for dredging can be maintenance of the depth or the deepening of navigation accesses or channels; it can also be land reclamation, coastal protection, seabed stabilisation for the offshore energy installations or the removal of contaminated sediments

Waste reception services: in the EU, the provision of ship waste reception facilities in ports is an obligation stemming from Directive 2000/59/EC; waste reception facilities can be operated as a commercial service or as a public service provided by the port

Passenger services: services provided in passenger terminals in ports, of particular importance for ferry crossings (islands' traffic, Channel and straits crossings, North and Baltic Sea inter-city connections)

Other Ancillary (or general) services provided in many ports include bunkering, chandlering, ship repair, container maintenance, marine appraisals, insurance claims inspections, banking, etc.

The figure[5] below provides an overview of the maritime value chain: 

3. Competition issues in ports

The following forms of competitive pressures can be distinguished:

a) Inter-port competition: The degree of substitutability between ports, able to serve the same hinterland efficiently, determines the extent of competition between ports. Ports may also compete for transhipment traffic, whereby larger ocean-going vessels use a port hub to transfer cargo to smaller feeder vessels: in such a circumstance the relevant geographic market is likely to be wider than in the case where ports compete for hinterland traffic only. Rivalry between ports is influenced by the availability of public funds to offset losses, blurring the role of commercial forces.  The issue is of particular relevance for trades involving containers. The choice of a major container shipping company or of a major terminal operator for a particular port as its base for operation has huge economic implications for the port and the port region in question. In the EU, "fair competition" (or the lack of it) between ports serving the same hinterlands (North Sea range) and between ports with similar features to serve as "transhipment" points (Mediterranean Sea) has been an issue of debate for many years.

b) Intra-port competition: This concerns competition between operators established in the same port, or in close vicinity, offering the same service to the ports' customer. Often, it is up to the port authority to establish a level playing field for all competitors. In terms of economic importance, the issue of intra-port competition is particularly relevant for terminal operator companies providing cargo-handling and other cargo-related added value services. In the case of container terminals, many ports have more than one terminal operator, but even in those ports that do not, the terminal operators compete fiercely with rivals in neighbouring ports for the same hinterland.  For cargo handling and terminal operators established in ports in the same maritime façade, there may be little difference between intra-port and inter-port competition insofar as they offer similar competing alternatives for worldwide logistic integrator and shipping lines – they battle for the same hinterland.   

The table below gives an example of the number of operators in key major ports:

Number of service providers in major European ports[6]

Port || Pilotage || Towage || Mooring || Container || Dry bulk || Liquid bulk

Algeciras || 1 || 1 || 1 || 3 || 2 || 2

Antwerp || 1 || 1 || 1 || 3 || 11 || 11

Genoa || 1 || 1 || 1 || 6 || 1 || 3

Goteborg || 1 || 1 || 1 || 1 || 5 || 2

Hamburg || 1 || 3 || 3 || 12 || NA || NA

Le Havre || 1 || 1 || 1 || 6 || 10 || 8

Rotterdam || 1 || 9 || 1 || 35 || 15 || NA

Tallinn || 1 || 3 || 1/2[7] || 2 || 10 || 8

c) Competition for entering into the market: Intra-port competition takes place only when there is more than one service provider in the port. Where there are reasons to restrict the number of operators, like the scarcity of land or public service considerations, the market access to the port can be granted by means of concessions, lease contracts, administrative authorisations, licenses and other instruments. The award of such contracts is (usually) a prerogative of port authority and the degree of competition to enter into the market depends on the extent to which the tender is open and transparent.

4. Consolidation of the market for handling containers

In Europe, the top five leading operators (HPH, PSA, APM Terminals, Eurogate and DP World) handled an estimated 75% of the total European container throughput in 2008 compared to less than 50% in 1998, illustrating the mature and consolidated nature of this market. The consolidation trend in European container handling leads to some controversy: the industry structure has become sufficiently concentrated to raise a fundamental question about whether market forces are sufficient to prevent the abuse of market power[8].

Cargo-handling of containers: Global Operators – Deep Sea Trade

Since 2002, global container port throughput has more than doubled, whilst the share accounted for by Chinese ports has reached 30%. Almost one in three TEU handled worldwide is handled in a Chinese port today. Meanwhile, on a total TEU basis, global/international terminal operators now account for over 75% of world throughput compared with 58% in 2002. The largest container ship in service in 2002 was just 7,000 TEU whilst today it is in excess of 15,000 TEU with 18,000 TEU ships on the way.

In 2011 the big four global container operators collectively accounted for 26.5% of world container port throughput, slightly down compared to the previous year due to the emergence of other large players, both international and local.

Top 10 global/international terminal operators throughput, 2011

Operator                               Million TEU          % share of world throughput

1   PSA International                          47.6                     8.1%

2   Hutchison Port Holdings                43.4                     7.4%

3   DP World                                     33.1                     5.6%

4   APM Terminals                            32.0                     5.4%

5   COSCO Group                            15.4                     2.6%

6   Terminal Invest Limited (TIL)        12.1                     2.1%

7   China Shipping Terminal                7.8                       1.3%

8   Evergreen                                     6.9                       1.2%

9   Eurogate                                       6.6                       1.1%

10  HHLA                                         6.4                       1.1%

Source: Drewry Maritime Research

Examples of terminal providers operating in core ports across the European Union[9]

Terminal operator || Core ports

HPH || Taranto, Gdynia, Barcelona, Stockholm, Amsterdam,  Rotterdam, Felixstowe, London

APTM || Zeebrugge, Aarhus, Le Havre, Bremerhaven, Gioia Tauro, Algeciras, Rotterdam

PSA || Zeebrugge, Antwerp, Genoa, Venice, Sines, Rotterdam

DP World || Antwerp, Le Havre, Constanta, Tarragona, Rotterdam, Southampton

Cosco Pacific || Antwerp, Hamburg, Bremerhaven, Piraeus, Genoa, Naples, Livorno, La Spezia, Ancona, Algeciras, Barcelona, Valencia, Tarragona, Rotterdam

MSC || Antwerp, Aarhus, Le Havre, Bremerhaven, Hamburg, all Italian ports, all Dutch ports

Eurogate || Bremerhaven, Wilhelmshaven, Gioia Tauro, La Spezia, Ravenna, Lisbon

Vertical Integration

Incumbent terminal operators are confronted more often with a strong competition coming from new entrants (railways companies, investment groups, etc.). In particular, container shipping lines have adopted vertical integration strategies in order to increase their terminal capacity in strategic ports. While pure terminal operators manage multi-user facilities, container shipping lines handle vessels in terms of berthing and crane density in view of an efficient synchronization of liner services (e.g. hub-feeder operations) and high schedule reliability. This phenomenon of vertical integration is highly experienced by EU ports as shown by the following examples[10]:

· MSC and CMA CGM, the world's second and third largest container shipping lines, are involved in 15 and 10 container terminals respectively within the EU.

· Maersk Line's parent company, AP Moller-Maersk, operates a large number of container terminals through its subsidiary APM Terminals: "although this Netherlands-headquartered company advertises itself as an independent company within the AP Moller-Maersk Group, with an independent board and operating common user terminals for all container ship lines in Europe, it currently still mainly handles traffic of sister company Maersk Line"[11].

· Other shipping lines with a strong presence in the terminal operator industry include Evergreen, Cosco (directly or via sister company Cosco Pacific), Hanjin, APL, NYK, K-Line, Yang Ming and Hyundai.

Terminal operators usually tend to expand their network of facilities across several TEN-T ports to maximise network's effects, optimise their hub-and-spoke operation and widen their customers' base.

5. Relative cost of port services in the logistic chain

Total port costs can account for a significant fraction of the total costs associated with the logistics chain. In traditional ports, handling general cargo, costs of ports and ports terminal operation may exceed 30% of the total door-to-door logistic costs. Typically, the situation concerns short sea shipping and intra-EU maritime trade exchanges in particular. In moderns' ports for deep-sea containers trades, using capital-intensive cargo-handling equipment and advanced IT systems, the equivalent cost can be reduced to less than 4-5% of the total logistic costs.

European labour costs typically represent between 40% and 75% of a general cargo terminal’s operating costs and, even in the capital-intensive container handling industry, they can be as high as 50% of total operating costs[12]. 

In many EU ports, terminal operators rely heavily on the so-called "pools" of dock workers for loading/unloading ships and moving cargoes around the port. These pools have been put in place in order to cope with the irregularity of port traffic and the ensuing fluctuations in labour demand. Temporary labour is thus reserved for a steadily available complement ('pool') of registered workers who enjoy unemployment benefit or similar pay when there is no work available. Even if these arrangements take on very different shapes, today, in 16 out of 22 Member States, access to the port labour market is thus subject to sector-specific rules which depart from general labour law.

The total EU port cost to the shipping industry is estimated at around €11-17 billion in 2010 (PWC/NEA). An indicative repartition of the relative weight of the different costs items of the total cost port operation is presented in the following table:

Relative weight of port services costs[13]

|| % of total costs, confidence interval || Charging criteria

Port dues (charges for using port general infrastructure) || 5%-10% || Historic criteria, not necessarily linked to costs; rebates for attracting vessels in case of low activity are usual practice

Vessel technical services (pilotage, towage, mooring) Of which pilotage || 10% - 15% 5% - 6% || Pilotage prices are unilaterally fixed, with supervision by an independent authority in some cases only. Towage and mooring services prices fixed in commercial terms in most cases

Charges for using operational infrastructure ("berthing costs") || 5%-15% || Depending on type and size of vessels and nature and volume of cargo; unilateral rebates for attracting vessels and congestion charges in case of tight demand 

Cargo handling prices || 45%-60%* || Usually fixed under competitive market conditions; concerns of conflict of interests in cases where terminals are owned by major shipping lines

Prices for other port ancillary services || 5%-10% || Usually fixed under market conditions

Waste reception fees || 1%-5%- || Charges fixed by the Authority, in principle cost-oriented (see Directive )

The table is indicative only since the heterogeneity of ports and cargo-handling operations makes it extremely difficult to present values "valid for all". According to research, the cost of cargo-handling can represent between 70%-80% in some traditional, labour intensive ports.

6. Deep sea vs. Short sea shipping

Deep sea shipping refers to the maritime transport of goods on intercontinental routes, crossing oceans; as opposed to short sea shipping over relatively short distances, for instance within the EU.

In the EU, inter-continental sea trade of containers is concentrated in a relatively limited number of major ports, e.g. Rotterdam, Hamburg, Antwerp, Le Havre or Felixstowe. Those ports are equipped with advanced, capital intensive cargo-handling installations, able to serve very large container-ships. Large container ships and huge cargo-handling capacities in ports lead to economies of scale resulting in very low transportation costs per unit.

Short-sea-shipping includes traffic from "hub" ports and also freight exchanges between European maritime regions. For long intra-EU distances, e.g. Iberian Peninsula to the North Sea and Baltic regions, short sea is, in principle, an alternative to land transport solutions. Low cargo volumes, smaller ships and much more frequent port calls have a negative impact on the cost and competitiveness of short sea services.

7. Heterogeneity of ports in the EU

There are various ways of classifying European ports. On a geographical basis, the most common classification is based on the maritime coastlines of the continent (Baltic, North Sea, Atlantic, Mediterranean, and Black Sea) or ranges of neighbouring, competing ports (e.g. Hamburg-Le Havre range). A functional classification[14] distinguishes large gateway ports, hub ports as well as a whole series of medium-sized to smaller ports each with specific characteristics in terms of hinterland markets served, commodities handled and location qualities. In terms of ownership and operational structures, at the one end there is a significant number of ports where the local government both owns the land, the infrastructure and the equipment, and runs the entire operation of all the services provided in the port. At the other end of the spectrum there are a number of ports with a private landlord owner and a number of private interests that provide the services, some of them in competition with each other. The table below provides an overview of the ownership structure in the different regions.

This diversity in governance seems to have an impact on the financial autonomy of ports and their capacity to decide the investments and pricing policies according to their own commercial strategy. In contrast with the ports of the Hanse and Anglo-Saxon, the ports of the Latin and New Latin often have limited or no financial autonomy. They receive funds from the general State budget and the State regulates, sets port charges and/or collects other port revenues.

Ownership of port authorities (European Port Governance report 2010, ESPO[15])[16]

|| Hanse || New Hanse || Anglo-Saxon || Latin || New Latin

Publicly owned ports || 96.0% || 84.1% || 47.1% || 75.0% || 90.6%

National Authority || 6.5% || 71.3% || 35.3% || 64.4% || 87.3%

Region || 2.5% || 0.0% || 0.0% || 7.9% || 0.0%

Province || 4.3% || 0.0% || 0.0% || 2.7% || 0.0%

Municipality || 82.7% || 12.8% || 11.8% || 0.0% || 3.3%

Privately owned ports || 4.0% || 0.0% || 8.8% || 0.7% || 0.0%

Other || 0.0% || 15.9% || 44.1% || 24.3% || 9.4%

Total || 100.0% || 100.0% || 100.0% || 100.0% || 100.0%

Port authorities' dual nature of functions

The extent, scope and mandate of "port authorities" vary greatly from one Member State to another. The association of European Port Authorities Port Governance report (ESPO, 2010) concluded as follows: "Most port authorities in the EU have formalised objectives, but these show a great diversity of economic and non-economic ones, which are often even mixed. The pure economic objectives are varied as well. Maximisation of handled tonnage, maximisation of added value and maximisation of the profit of the port authority stand out as the most important ones. The first is more common for port authorities from the New Hanse and New Latin regions, whereas added value occurs more often in the Hanse and Latin regions. Profit maximisation is more common for port authorities from the Anglo-Saxon region".

The ESPO Fact Finding Report further examines the dual nature of nearly all port authorities in the EU, both as (a) regulatory bodies, administering the port and providing a level playing field for port operators established in the ports and (b) operators directly and indirectly involved in the provision of commercial services in the port, often competing with other operators.

Port governance and funding

In terms of public vs private sector involvement, the structures for provision of port services in the EU underwent significant changes in recent years. Private operators took an extremely solid and strategic role for the development of ports. Some public authorities governing the port became more commercial oriented. Although port authorities run a rather restrictive information policy on the funding of port infrastructure[17],it can be said that ports substantially rely on public funding. Except in the case of UK, general port access infrastructures are always funded by public resources. Funding of commercial operational infrastructures (dedicated quays and berths, cargo-handling facilities, ancillary cargo services, etc.) is shared both by public authorities and private operators.

Port management models – Source, World Bank

Type || General port Infrastructure || Superstructure (infrastructure required for the provision of cargo-handling operations) || Cargo-handling Operations || Other functions

Publicly owned, managed and operated Port || Public || Public || Public || Mainly public

Public Owned Port open to private operators || Public || Public || Private || Mainly public

Public Owned Port with operations privately managed || Public || Private || Private || Mainly private

Privately owned and operated ports || Private || Private || Private || Mainly private

8. Impact of ports on local economies and jobs

The impact of seaport efficiency and productivity on economic growth and jobs is well documented in transport economics. Some studies suggest[18] that there are about 800,000 enterprises directly linked to ports' activities in the EU which generate, directly and indirectly, approximately 3 million jobs. Port throughput is positively correlated to employment in port regions. OECD studies[19] indicate that an increase of one million tonnes of port throughput is associated with an increase in employment in the port region of 0.03%. This means that in a region with one million employees, employment would increase by 300 units; in the long run this increase would be 7500 units.

9. Port development stages[20]

|| First generation || Second generation || Third generation || Fourth generation

|| Before 1960 || 1960s to 1980s || 1980s to 1990s || As of 2000s

The port development position and development strategy || Conservative junction point of the sea and inland transportation || Expansionism transportation and production centre || Industrial principle international trade base chain connecting transportation system || Nodal point / key gate of sustainable transport chains, combining ocean trades and intra-EU redistribution of cargoes

Activity scope || (1) Cargo handling, storage, navigation assistance-pier and || (1) + (2) Cargo type change: container handling and distribution, ship related industry - enlargement of port regions || (1)+ (2) + Cargo information, logistics integration, ferry, Ro-Ro, lo-lo deployment,  Formation of the terminal and distribution centres || (1)+(2)+(3) High end activities in the port and adjacent region(s); attraction of industrial and commercial firms to the port

Structure formation and specifics || Ø Everybody acts individually in the port Ø Port and its users maintain informal relations. || Ø Relations between port and its users become more close Ø Emergence of the slight correlation among port activities Ø Absent / negative cooperation relations between port authority and users community || Ø Formation of the port cooperation system Ø Trade and transportation chain concentration in the port Ø Relations between port and self-governing community become more closer Ø Planning of the port adapted to business needs || Ø Develop the EU hinterland network in cooperation with other European sea and inland ports Ø Optimization  of internal port logistics Ø Efficient coordination between shippers, terminals, service providers, harbourmasters and transport companies.

Character of the productivity || Ø Loading - Unloading Ø Individual supply of the simple services Ø Low value added || Ø Cargo distribution Ø Cargo processing Ø Increase of the value-added activities in the port || Ø Distribution of the cargo and information Ø Combination of the diversified services and distribution Ø Broad range of value added activities || Ø Integrated logistics Ø Reducing ecological footprint of overall logistic chain Ø Attraction of high end activities to the region.

Core factors || Labour/capital || Capital || Technology and know-how || ICTs and network integration

10. Overview of recent and on-going port reforms and re-organisations in selected European countries[21]

Belgium (Flanders)

The legal form of port authorities is laid down in the 1999 ‘Havendecreet’ (Ports Decree) of the Flemish government. A few years ago, government introduced the concept of ‘Flanders Port Area’ to stimulate more intensive co-operation between port authorities. Here, priority will be given to common initiatives with a clear value added, without questioning the decision-making of individual port authorities.

Activities with respect to (1) strengthening the social support for ports, (2) acknowledging the importance of ports in logistics networks and (3) greening of port activities will be emphasised. In order to ensure the realisation of three sea locks in three Flemish ports, the Flemish government created the ‘NV Vlaamse Havens’ (SA Flemish Ports). For each sea lock the ‘NV Vlaamse Havens’ will establish a subsidiary in which the NV and the involved port authority or a selected private partner will participate. Notwithstanding the stipulations of the Ports Decree, the Flemish government requests that port authorities concerned make a financial contribution for the construction of these sea locks.

Bulgaria

Since Bulgaria became an open market economy, a successive series of port reforms have occurred which basically intend to privatise operations in the country’s two main ports, Bourgas and Varna. Port authority responsibilities are centralised at national level and have shifted back and forth between an ‘executive agency’ for maritime administration and an ‘infrastructure company’. The latest change (2010) concentrates all port authority responsibilities, including nautical responsibility, with the Bulgarian Port Infrastructure Company.

Denmark

In 2010, Danish government started up discussion on reform of the country’s ports which are mostly owned by municipalities but governed by a national Ports Act. A governmental commission is evaluating the current legislative framework from the perspective of efficiency and competitiveness, making recommendations to modify the Port Act where necessary. A particular question is whether certain ports need to have a ‘national interest’ status.

Finland

A 2007 decision of the European Commission regarding the existence of state aid in a Finnish so-called ‘state enterprise’ has led Finnish government to legislate that government-owned entities must be corporatized by the beginning of 2014. This also affects Finnish port authorities, which are mostly owned by municipalities. Furthermore, some Finnish ports are in the process of merging, the most concrete example being the Ports of Hamina and Kotka which merged into one limited company on 1 May 2011.

France

President Sarkozy initiated in 2008 a major reform of French ports of which the most visible part is the completion of the port labour reform, notably the privatisation of handling equipment and staff. The reform programme however also modified the governance of the major ports in France, the former ‘ports autonomes’ (autonomous ports) which have now become ‘Grands Ports Maritimes’. The reform will be effective before the end of June 2011. The reform of the major ports succeeds the reform of smaller national ports which has been launched in 2004 and has put those ports mainly under regional control.

Germany

In close co-operation with the ‘Bundesländer’ (Federal states), the German government published in 2009 a ‘Nationales Hafenkonzept’ which is currently in the process of implementation. This approach is innovative and significant, because it is the first time that the German government develops an elaborate view on ports policy, which addresses – inter alia – capacity development and aims to stimulate co-operation between ports. Governance of German seaports however remains within the competence of each ‘Bundesland’.

Various forms of co-operation exist between these states and the ports themselves. One example is the co-operation between the seaports of the Lower Elbe river (Hamburg, Brunsbüttel, Cuxhaven, Stade) agreed in 2009 which aims to attract business ventures, exchange know-how and develop joint marketing. The ‘Länder’ also want to establish joint PR activities under the common label ‘German Ports’. In addition, the regional governments of Hamburg and Bremen started in 2011 an investigation into a more profound co-operation between their port authorities. The results of this exercise have not yet been published.

Ireland

Irish government started in September 2010 a consultation on a reform of Irish ports. Most of the commercial ports are currently state-owned corporations. The consultation addresses four aspects: governance (including corporate governance but also ownership and the option of privatisation), capacity development, planning and funding, exploiting the use of short-sea shipping, benchmarking competitiveness and stimulating cooperation between ports.

Italy

The fundamentals of Italian port governance are laid down in a 1994 Law which established port authorities for the main Italian ports and liberalised cargo-handling services. In recent years several proposals to amend the Law have been discussed but without major changes so far. In September 2010 government proposed a bill which introduces a classification of ports, deals with competences of port authorities and harbour masters offices, faster approval procedures for port regulatory plans and a review of concession procedures. The main wish of the sector, i.e. to establish financial autonomy for port authorities, has however not been realised yet. In 2009 and 2010 neighbouring port authorities in several regions (North Adriatic, Liguria, Tuscany, Calabria) set up regional port associations to stimulate more intensive co-operation.

Malta

During the last 10 years the operation of the ports in Malta has undergone a whole reform process whereby all port services have passed from the port authority to the private industry either through concession contracts or service level agreements. All port related legislation was amended to reflect these changes and allow for more flexibility in responding to market needs and efficiency in port operations. Likewise, new legislation establishing the port authority was adopted in 2009 to clearly reflect the change whereby its functions have changed from being an operator of port facilities and a provider of port services to one where it has become the regulator of port services and the facilitator of port business.

Netherlands

Reforms of Dutch ports have taken place on individual basis. The most significant reform in the recent past was the corporatisation of the Port of Rotterdam in 2004, which was probably the most advanced corporatisation of any European, publicly-owned port authority. With the reform, the Dutch state became co-shareholder in the otherwise municipally-owned port authority. Zeeland Seaports, the port authority that manages the ports of Vlissingen and Terneuzen, was corporatized early 2011.

The main difference with Rotterdam is that the only shareholder here is the Joint Agreement Zeeland Seaports, in which the Province of Zeeland and the municipalities of Terneuzen, Vlissingen and Borsele participate. The Dutch state is no shareholder. The Port of Amsterdam and Groningen Seaports, the port authority that manages the ports of Delfzijl and Eemshaven, are both going through similar corporatisation process at the moment. On national level, government has de facto followed a ‘mainport’ approach to the advantage of Rotterdam. Recently, an advisory body to the government suggested to set up a port holding between Rotterdam and Amsterdam. This has thus far not led to any concrete initiative however.

Poland

The 1996 ‘Act on Seaports and Harbours’ was the basis to create three port authorities in the ports of major importance for the national economy, i.e. the ports of Gdansk, Gdynia and Szczecin-Swinoujscie. Since then the Act has been a few times amended and an obligation to sell shares in port operation companies was imposed on port authorities. Currently, there is no legislative procedure active in this respect. The execution of certain stipulations of the Act is still in progress, such as privatisation of port authorities’ daughter companies involved in stevedoring.

Romania

In July 2010 the government of Romania has reviewed the legal framework for the administration of Romanian ports and the use of public port infrastructure (review of the Governmental Ordinance 22/1999). This has concretely allowed the sub-concession of the port domain to interested private companies and operators.

Spain

In August 2010 Spanish government adopted a new Law which contains a major amendment to the 2003 ‘Law on the Economic Regime and the Provision of Services in Ports of General Interest’. The new Law seeks to enhance the efficiency and competitiveness of Spanish ports and specifically regulates the financial autonomy of ports and the provision of port services. To this end, it contains detailed provisions on various types of port dues and port services, on the delimitation of port areas and on port labour.

Sweden

In spring 2009, Gothenburg City Council decided to divide the Port of Gothenburg into a municipal company – Gothenburg Port Authority - and three terminal companies to be run by external operators. The Port of Gothenburg will still operate as an open, multi-user port and new shipping companies and cargo owners are welcome to establish their activities. These would be overseen by the port authority through concession agreements with new terminal operators.

In April 2011, the Swedish logistics company Logent took over operations at the car terminal. In October 2010, an agreement was reached with DFDS and C.Ports which will be the new,joint operator of the roro-terminal. The transfer is subject to approval by the Swedish Competition Authority, which is standard practice for major transfers. The process of transferring the container terminal is underway. An agreement with a new operator is expected to be in place during autumn 2011. A similar process of privatisating cargo handling activities took place earlier in the Ports of Stockholm.

United Kingdom

A number of the largest ports in the UK were privatised in the late 1980s and early 1990s. Other ports remained in the hands of independent trusts or municipalities. The installation of a conservative / liberal democrat coalition government in 2010 has again sparked the debate about privatising the remaining major trust ports. This debate is highly controversial as the on-going privatisation of Dover, a process which was initiated before the government changeover, demonstrates

11. Sea port dues in EU ports (excerpt from infrastructure charging study, 2012[22])

Charges applied by maritime ports for ships are the fundamental way not only to obtain payment for services provided but also to internalise costs related to local externalities. Accordingly, all 29 ports considered in the study use port dues.

Gross tonnage is overwhelmingly common as basis for setting the charges. While some ports use volume as proxy for capacity, there are only two ports in the sample whose charges are not tonnage or volume based.

Environmental considerations are taken into account by 13 ports, which grant discounts based on participation in the Environmental Ship Index scheme[1] (7 ports in Belgium, France, Germany and the Netherlands), and/or based on the Green Award certificate[2] (5 ports in Latvia, Lithuania, the Netherlands and Portugal), or directly though rebates linked to NOx/SOx emissions (Port of Stockholm and Trelleborg in Sweden) or via levying a sulphur fee (Port of Gothenburg, Sweden)[3].

The resulting variation in port dues is shown on the following table for four types of vessel. The study found that sea port dues diverge the greatest for Roll-On-Roll-Off-Passenger (RoPax) vessels, because of the dissimilar charging for passengers and passenger cars across the ports.

Table 5 Sea port dues (in €) calculated for exemplary vessels (2012)[23]

Port || Aframax liquid bulk carrier || Panamax bulk carrier || Handy container vessel || RoPax vessel

Port of Antwerp, Belgium || 41,500 || 24,700 || 8,800 || 18,700

Port of Zeebrugge, Belgium || 19,800 || 14,000 || 4,900 || 5,800

Port of Bourgas, Bulgaria || 30,400 || 24,500 || 9,200 || 14,400

Port of Lemesos, Cyprus || 43,500 || 17,100 || 9,200 || 16,300

Port of Copenhagen-Malmö, Denmark || 68,100 || 25,200 || 9,700 || 19,400

Port of Tallinn, Estonia || 99,000 || 32,000 || 11,900 || 11,000

Helsinki Port, Finland || 37,800 || 23,000 || 6,000 || 9,800

Grand Port Le Havre, France || 44,100 || 25,800 || 3,100 || 5,900

Grand Port Maritime de Marseille, France || 35,300 || 28,500 || 3,400 || 9,500

Ports of Bremen/Bremerhaven, Germany || 24,600 || 11,000 || 6,000 || 9,500

Port of Hamburg, Germany || 24,200 || 16,600 || 3,200 || 2,300

Port of Riga, Latvia || 54,200 || 35,800 || 7,000 || 8,800

Port of Klaipeda, Lithuania || 31,900 || 23,500 || 8,700 || 24,400

Grand Harbour of Valletta, Malta || 50,800 || 24,600 || 9,300 || 3,900

Port of Amsterdam, The Netherlands || 29,500 || 17,500 || 3,600 || 16,300

Port of Rotterdam, The Netherlands || 31,700 || 17,600 || 5,500 || 5,200

Port of Gdansk, Poland || 30,300 || 22,300 || 4,100 || 4,800

Port of Sines, Portugal || 17,000 || 11,300 || 2,700 || 8,100

Port of Constanza, Romania || 17,000 || 7,700 || 3,800 || 8,100

Port of Koper, Slovenia || 10,700 || 6,800 || 2,800 || 2,900

Port of Barcelona, Spain || 21,000 || 21,400 || 6,500 || 18,200

Port of Valencia, Spain || 21,500 || 21,800 || 6,300 || 18,400

Port of Gothenburg, Sweden || 22,800 || 16,800 || 6,200 || 5,800

Port of Stockholm, Sweden || 86,900 || 27,300 || 10,300 || 20,300

Port of Trelleborg, Sweden || 36,500 || 12,700 || 5,700 || 3,100

Ports of Grimsby & Immingham, UK || 237,600 || 140,000 || 14,300 || 159,300

Port of London, UK || 33,000 || 21,900 || 7,700 || 15,200

Ports of Tees & Hartlepool, UK || 92,200 || 67,900 || 25,100 || 67,000

12. Findings of the European Court of Auditors on the use of Structural Funds for ports projects

The Court pointed out as a serious problem for the allocation of funding to ports the absence of long-term port development plans and the fact that, in the cases of ports projects audited, no needs assessment had been carried out.

Excerpts from the report of the European Court of Auditors on performance of sea-ports (2012)[24]

"Between 2000 and 2006, 2.8 billion euro from the Structural and Cohesion Funds was allocated to seaport infrastructures." "A lot of the investments made [N.B. supported by the EU Funds] suffer from either ineffective links to their hinterland (‘Port 2000’ in Le Havre) or missing links (Bari, Brindisi, Langosteira and Ferrol). Even though ‘Port 2000’, Bari and Ferrol were considered as being effective, these five projects, representing 47,7 % of the co-financed amounts audited, are likely to need significant further investments to become linked to their hinterlands and operate to their capacity."

"In Italy, there was neither a national nor a regional planning strategy for seaport investments at the beginning of the 2000-06 period. A general plan for transport and logistics was approved in December 2002 and this remains in place as no subsequent plan has been established. In 2003, a working group came together to synchronise investments at national and regional levels."

"In France, decisions on co-funding port infrastructures were embedded in a decision of the Transport Minister. In 2010, the Schéma National Infrastructures de Transport was proposed in order to develop alternatives to road transport, linking investments to their impact on global warming, but this proposal had not yet been adopted at the time of the audit. "

"This audit also showed that none of the regions visited had a long-term port development plan in place and needs assessments to support the selection of seaport infrastructure projects had not been carried out”.

ANNEX III: Maritime ports freight and passenger statistics

From EUROSTAT Statistics Explained

This annex reproduces the latest statistical data (20 March 2013) on freight handling and passenger traffic in ports in the European Union. For more detailed EUROSTAT information / updates see: Statistics Explained article "Maritime transport of goods - quarterly data"

http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Maritime_transport_of_goods_-_quarterly_data

Maritime port activity in the EU27

After growing steadily between 2002 and 2007, the total weight of goods handled1 in maritime ports in the EU27 remained nearly stable at 3.9 billion tonnes in 2008. It then fell by 12% to 3.4 bn tonnes in 2009 as the result of the economic crisis. From 2010 the weight of goods handled increased again, to reach 3.7 bn tonnes in 2011, still below the level recorded in 2008. Compared with 2010, the weight of goods handled increased by 2% in 2011.

For sea transport of passengers, the number of passengers embarking or disembarking1 in maritime ports in the EU27 has fallen steadily from a peak of 414 million passengers in 2007, to reach 385 mn in 2011. Compared with 2010, the number of passengers decreased by 4% in 2011.

These figures are published in a report2 from Eurostat, the statistical office of the European Union, on port activity for goods and passengers in the EU3, as well as Norway, Croatia and Turkey.

The United Kingdom, Italy, the Netherlands, Spain, France and Germany represent just over two-thirds of the total weight of goods handled

The Member States with the largest total weight of goods handled in maritime ports in 2011 were the United Kingdom (520 mn tonnes, +2% compared with 2010), Italy (500 mn tonnes, +1%), the Netherlands (492 mn tonnes, -9%), Spain (398 mn tonnes, +6%), France (322 mn tonnes, +3%) and Germany (296 mn tonnes, +7%).

Italy, Greece, Denmark, Sweden and Germany account for just over two-thirds of the total number of passengers handled

In 2011, the highest numbers of passengers embarking or disembarking in maritime ports were recorded in Italy (82 mn passengers, -7% compared with 2010), Greece (79 mn, -8%), Denmark (42 mn, -1%), Sweden (30 mn, 0%), Germany (29 mn, +2%), the United Kingdom (28 mn, -3%), France (26 mn, -6%) and Spain (22 mn, +3%).

Rotterdam largest port for goods handling, Dover for passengers

Among the top ten cargo ports in terms of tonnes of goods handled, Rotterdam (370 mn tonnes weight of goods handled, -6% compared with 2010) was the largest port in 2011, followed by Antwerp (169 mn tonnes, +5%), Hamburg (114 mn tonnes, +9%), Marseille (85 mn tonnes, +3%) and Algeciras (69 mn tonnes, +17%).

Dover (13 mn passengers, -3% compared with 2010) was the busiest port in terms of the number of passengers disembarking or embarking in 2011, followed by Paloukia Salaminas and Perama (both 12 mn, -8%), Helsinki (10 mn, +5%) and Calais (10 mn, -2%).

|| Weight of goods handled, in million tonnes || Number of passengers embarked or disembarked, in thousands

2010 || 2011 || Growth rate 2011/2010, % || 2010 || 2011 || Growth rate 2011/2010, %

EU273 || 3 645.6 || 3 706.4 || 1.7 || 399 465 || 385 402 || -3.5

Belgium || 228.2 || 232.8 || 2.0 || 829 || 824 || -0.6

Bulgaria || 22.9 || 25.2 || 9.8 || - || - || -

Czech Republic || - || - || - || - || - || -

Denmark || 87.1 || 92.6 || 6.4 || 41 993 || 41 527 || -1.1

Germany || 276.0 || 296.0 || 7.3 || 28 780 || 29 233 || 1.6

Estonia || 46.0 || 48.5 || 5.3 || 11 186 || 11 840 || 5.9

Ireland || 45.1 || 45.1 || 0.0 || 3 089 || 2 906 || -5.9

Greece || 129.1 || 135.3 || 4.8 || 86 189 || 79 183 || -8.1

Spain* || 376.4 || 398.3 || 5.8 || 21 215 || 21 868 || 3.1

France || 313.6 || 322.3 || 2.8 || 27 218 || 25 552 || -6.1

Italy || 494.1 || 499.9 || 1.2 || 87 658 || 81 895 || -6.6

Cyprus || 7.0 || 6.6 || -5.6 || 107 || 92 || -14.2

Latvia || 58.7 || 67.0 || 14.2 || 676 || 786 || 16.4

Lithuania || 37.9 || 42.7 || 12.7 || 251 || 281 || 12.1

Luxembourg || - || - || - || - || - || -

Hungary || - || - || - || - || - || -

Malta || 6.0 || 5.6 || -7.1 || 8 063 || 8 250 || 2.3

Netherlands** || 538.7 || 491.7 || -8.7 || 1 994 || 1 770 || -11.2

Austria || - || - || - || - || - || -

Poland || 59.5 || 57.7 || -3.0 || 2 601 || 2 528 || -2.8

Portugal** || 66.0 || 67.5 || 2.3 || 701 || 659 || -5.9

Romania || 38.1 || 38.9 || 2.1 || - || - || -

Slovenia || 14.6 || 16.2 || 11.0 || 39 || 36 || -8.9

Slovakia || - || - || - || - || - || -

Finland || 109.3 || 115.5 || 5.6 || 17 867 || 18 074 || 1.2

Sweden || 179.6 || 181.6 || 1.1 || 30 185 || 30 094 || -0.3

United Kingdom || 511.9 || 519.5 || 1.5 || 28 824 || 28 002 || -2.9

Norway*** || 195.1 || 199.0 || 2.0 || 5 876 || 6 130 || 4.3

Croatia || 24.3 || 21.9 || -10.1 || 25 124 || 26 947 || 7.3

Turkey || 338.1 || 359.1 || 6.2 || 1 577 || 1 842 || 16.8

Top ten EU27 cargo ports and passenger ports, 2011

Rank || Cargo ports || Weight of goods handled || Passenger ports || Number of passengers embarked or disembarked

Millions of tonnes || Growth rate 2011/2010 (%) || Thousands || Growth rate 2011/2010 (%)

1 || NL || Rotterdam || 370.3 || -6.4 || UK || Dover || 12 918 || -3.3

2 || BE || Antwerpen || 168.5 || 5.3 || EL || Paloukia Salaminas || 11 662 || -8.2

3 || DE || Hamburg || 114.4 || 9.4 || EL || Perama || 11 662 || -8.2

4 || FR || Marseille || 84.5 || 2.5 || FI || Helsinki || 10 326 || +4.8

5 || ES || Algeciras || 68.8 || 17.4 || FR || Calais || 10 063 || -1.7

6 || FR || Le Havre || 63.4 || -3.6 || SE || Stockholm || 9 184 || +0.4

7 || NL || Amsterdam || 59.6 || -18.1 || EL || Piraeus || 9 182 || -16.1

8 || UK || Immingham || 57.2 || 5.9 || SE || Helsingborg || 8 339 || -2.4

9 || DE || Bremerhaven || 55.9 || 21.6 || DK || Helsingør (Elsinore) || 8 324 || -2.5

10 || ES || Valencia || 54.2 || 2.1 || IT || Messina || 8 060 || -25.1

1.   It should be noted that these statistics are primarily designed to measure port activity and not the sea transport of goods and passengers. Goods and passengers travelling within the EU are counted twice, once in the port of loading/embarkation and once in the port of unloading/disembarkation, whether these ports are in the same or in two different Member States.

2.   Eurostat, Statistics in Focus 7/2013, "Continued recovery in volume of goods handled in EU ports". The publication is available free of charge in PDF format on the Eurostat website.

3.   Excludes the Czech Republic, Luxembourg, Hungary, Austria and Slovakia which have no maritime ports.

Main statistical findings – March 2013

Continued recovery in volume of goods handled in EU ports

There were continued year-on-year increases in EU port activity in the first three quarters of 2011. However, this recovery came to an end in the fourth quarter of 2011, interrupting a pattern of growth which goes back to the first quarter of 2010 (Figure 1).

The growth in EU port activity in 2011 was mainly due to increased volumes in inward movement of goods. Despite the annual increases in the gross weight of goods handled in EU ports following the economic downturn, overall port activity in the EU was still lower in 2011 than the level recorded 6 years earlier, in 2005 (Table 1).

Rotterdam, Antwerpen and Hamburg maintained their positions as the three largest EU ports in 2011, both in terms of the gross weight of goods and the volume of containers handled in the ports. The 20 largest ports accounted for 37.0 % of the total tonnage of goods handled in the countries reporting data in 2011. Rotterdam on its own accounted for 8.6 % of the total tonnage (Table 3).

The number of passengers passing through EU ports is estimated at more than 385 million in 2011, a decrease of 3.5 % compared with 2010. The main reason for this fall is a reduction in the numbers of passengers embarking and disembarking in Italy and Greece, the EU’s two leading countries for seaborne passenger transport (Table 6).

UK: largest maritime freight transport country in Europe

Port activity grew in most European countries in 2011. The largest increases were recorded in Latvia, Lithuania and Slovenia, all with rises of more than 10.0 % in the tonnage of goods handled in their ports compared with 2010 (from relatively low levels). In contrast, decreases in port activity were recorded in the Netherlands (-8.7 %), Malta (-7.1 %), Cyprus (-5.6 %) and Poland (-3.0 %). Port activity in the acceding state of Croatia also decreased from 2010 to 2011 (-10.1 %).

At 519 million tonnes, the United Kingdom (UK) handled the largest volumes of seaborne goods in 2011, reclaiming its position as the largest maritime freight transport country in Europe. The volume of seaborne goods handled in UK ports in 2011 represented 14.0 % of the EU-27 total. The UK was followed by Italy and the Netherlands, with shares of 13.5 % and 13.3 %, respectively. Spain remained the fourth largest maritime freight transport country in the EU in 2011 and France the fifth largest. Ports in the candidate country Turkey handled 359 million tonnes of goods in 2011, placing it between France and Spain.

Inward movement of goods increased by 2.8 % in 2011 and accounted for over 62 % of the total tonnage of goods handled in EU-27 ports. Considerable inward volumes of liquid bulk goods, such as crude oil and oil products, account for much of this inward tonnage.

In general, more seaborne goods are unloaded than loaded in the majority of EU countries. Cyprus had the highest share of total tonnage unloaded in 2011, followed by the Netherlands and Malta. However, for Romania (agricultural products), the three Baltic countries (oil products) and the EEA country Norway (crude oil), outward movement of goods prevailed.

Liquid bulk accounted for 39 % of total tonnage

Liquid bulk goods accounted for 39.0 % of the total tonnage of cargo handled in the main EU-27 ports in 2011, followed by dry bulk goods, containerised goods and Ro-Ro mobile units (Table 2). The largest tonnage of liquid bulk goods was handled in UK ports (230 million tonnes), followed by the Netherlands (223 million tonnes) and Italy (210 million tonnes). Estonia recorded the highest share of liquid bulk goods as a percentage of the total tonnage of goods handled in the main ports (reflecting large volumes of outward movements of oil products from Russia). Dutch ports’ handling of dry bulk goods was by far the largest in the EU in 2011 (140 million tonnes), but only a little higher than the candidate country Turkey (137 million tonnes).

Container transport was the dominant type of cargo in Germany (44.0 %) and Belgium (41.0 %), while the largest volumes of goods in containers were handled in Germany (126 million tonnes) and Spain (128 million tonnes). The share of Ro-Ro units in the total tonnage of goods was highest for Denmark, Ireland and Sweden (all 27.0 %). However, in tonnage terms, the United Kingdom (97 million tonnes) and Italy (93 million tonnes) had the largest quantities of goods transported on Ro-Ro mobile units in 2011.

Rotterdam, Antwerpen and Hamburg remain top ports

Rotterdam, Antwerpen and Hamburg, all located on the North Sea coast, consolidated their positions as Europe's top three ports in 2010, both for the gross weight of goods (Table 3) and the volume of containers handled (Table 4). Europe’s largest port, Rotterdam, saw a fall of 6.4 % in the gross weight of goods handled from 2010 to 2011 (mainly due to reduced volumes of liquid bulk goods), while Antwerpen and Hamburg both reported increases in the total volume of goods handled in the same period. Most of the cargo handling in Rotterdam involves liquid and dry bulk goods such as oil, chemicals, coal and ores. However, Rotterdam is also Europe’s largest container port, handling almost 15 million twenty-foot equivalent units (TEUs) in 2011, a substantial increase compared with 2010 (Table 4).

Container cargo accounted for more than half of the total tonnage of cargo handled in the more specialised ports of Antwerpen and Hamburg. The port of Hamburg handled a total of 9 million TEUs in 2011, overtaking Antwerpen as the second largest container port in Europe measured by the number of TEUs handled. After a gradual recovery in the last years, the port of Piraeus in Greece handled more TEUs in 2011 than before the economic downturn (Table 4).

Among the top 20 cargo ports, Bremerhaven in Germany reported the largest growth in gross weight of goods handled in 2011 (+21.6 %), followed by Taranto in Italy (+20.5 %) and Algeciras in Spain (+17.4 %). On the other hand, Amsterdam saw a substantial decrease in port activity in 2011 (-18.1 %), due to reduced tonnages of dry and liquid bulk goods (Table 3).

The most specialised among the top 20 cargo ports are Milford Haven in the UK, Bergen in Norway and Botas in Turkey (mostly liquid bulk goods), as well as Bremerhaven in Germany (mostly containers). While inward activity is prevalent in most of the top 20 ports, the ports of Bergen and Botas both handle substantial outward movements of crude oil. Bremerhaven also handles slightly more outwards movements of containerised goods than inwards movements.

The 20 largest ports accounted for 37.0 % of the total tonnage of goods handled in the countries reporting data in 2011 (EU-27, Croatia, Norway and Turkey), about the same as in 2010. Rotterdam alone accounted for 8.6 % of the total port activity in the reporting countries in 2011. Nine of the 20 top ports in 2011 are located on the North Sea coast, while eight are Mediterranean ports (Map 1). The remaining three are located on the Atlantic coast (two of which are on the Channel).

The composition of the port infrastructure will sometimes determine if a country is represented on the top 20 list of cargo ports or not. Denmark and Greece, for instance, are two countries with a high number of medium size ports (handling between 1 and 25 million tonnes of goods per year). However, there are no ports in these two countries above a 25 million tonnes threshold.

Increase in seaborne transport with extra-EU partners

Unlike statistics presented earlier in this article, the figures in Table 5 do not present the total handling of goods in ports (inwards movements plus outwards movements), but estimate the seaborne transport of goods between main ports and their partner ports (see data sources and availability). In 2011, 64.0 % of the EU-27 seaborne goods were transported to or from ports outside the EU, making maritime transport by far the most important mode for long distance transport of goods for the EU, in tonnage terms.

Map 2 illustrates the eight largest maritime transport flows to or from the EU. As shown in the map, all of the top eight transport flows were inward flows of goods, from the Baltic Sea region of Russia, Brazil, Norway, the East Coast of the United States of America (USA), Egypt, the Black Sea region of Russia, China and Turkey, respectively. In comparison, the ninth largest seaborne transport flow in 2011 was the outwards flow of goods from the EU to the East Coast of the USA.

In total, EU seaborne transport grew by 1.7 % from 2010 to 2011. International extra-EU transport grew by 3.5 % in the same period, while international intra-EU transport decreased by 3.3 %, reversing some of the growth in intra-EU transport seen between 2009 and 2010. National seaborne transport grew by 4.1 %.

In countries with a geography characterised by well-populated islands or long shorelines, like Greece, Italy, Denmark and Norway, the share of national seaborne transport is naturally high (20-30.0 %). Countries, like Ireland, Latvia, Malta, Poland, Finland and Sweden, on the other hand, have the highest shares of international intra-EU transport (more than 60.0 %), because their main transport partners are found within the EU. Other countries, like Bulgaria, Romania, Slovenia, Spain and the Netherlands, have high shares of extra-EU transport (above 70.0 %), based either on their geographical position or the "deep sea" nature of the transport activities prevailing in their main ports.

Continued decrease in maritime passenger transport

In contrast to the recent developments in maritime transport of goods, seaborne transport of passengers continued to decline in 2011 (Table 6). The total number of passengers passing through EU-27 ports is estimated at 385 million in 2011 (inwards movements plus outwards movements), a drop of 3.5 % compared to the previous year.

Unlike goods movements (where broadly 2/3 of goods are unloaded and 1/3 loaded), the difference between the numbers of passengers embarking ("outwards") and disembarking ("inwards") in European ports is small. This reflects the fact that seaborne passenger transport in Europe is mainly done by national or intra-EU ferry connections, causing the same passengers to be counted twice in the statistics (when they embark and when they disembark).

Close to 82 million passengers were embarked and disembarked in Italian ports in 2011, confirming Italy as the leading seaborne passenger transport country in Europe. Italy was followed by Greece, with 79 million passengers. However, both the main maritime passenger countries recorded quite considerable decreases in the number of passengers passing through their ports in 2011.

While cruise passengers represented 3.0 % of the total number of passengers in EU-27 ports, they are important to the ports they visit. Three countries, Italy, Spain and the UK, accounted for over 70.0 % of the total cruise passengers reported by countries.

The top 20 passenger ports accounted for 38.0 % of the total number of passengers embarking and disembarking in the countries reporting data in 2011 (Table 7). Dover in the UK, situated on the Channel, remained the largest passenger port in Europe, with close to 13 million seaborne passengers passing through the port facilities in 2011. The Italian ports of Reggio Di Calabria and Messina and the Greek port of Piraeus recorded the largest decreases in number of passengers in 2011, while the Spanish port of Santa Cruz de Tenerife recorded the largest increase.

The figures in Table 7 show that some ports have experienced quite substantial decreases in the number of seaborne passengers over time. These changes are typically caused by openings of new bridge connections and subsequent closure of ferry links. Increased use of the Channel tunnel and rapid growth in low cost flights are other factors having effects on the number of seaborne passengers.

Most passengers are ferried in Italy and Greece

Table 8 shows the breakdown of seaborne passenger transport (excluding cruise passengers) between national, international intra-EU and international extra-EU transport for each reporting country. As in Table 5, these figures are calculated on the basis of the statistics declared by main ports vis-à-vis their partner ports. Unlike the statistics shown in tables 6 and 7, however, these figures do not reflect the total embarkation and disembarkation of passengers in ports, but estimate the transport of passengers between ports (see also data sources and availability).

The volume of seaborne passenger transport in main EU-27 ports decreased by 4.7 % from 2010 to 2011, which was about the same as between 2009 and 2010. The sustained fall in European maritime transport of passengers in recent years has mainly been caused by decreased transport to or from ports in a number of the largest maritime transport countries, such as Italy, Greece, the UK and France.

The number of seaborne passengers transported to or from the main ports of Italy fell by 8.0 % to 41 million passengers in 2011, while the volume of seaborne passenger transport with Greek ports fell by 7.1 % to 39 million passengers. The corresponding decreases were -5.9 % in France (to about 23 million passengers) and -3.2 % in the United Kingdom (to about 24 million passengers). In contrast, the volume of seaborne passengers recorded in the main ports of several other of the large maritime passenger countries increased or was relatively stable in 2011.

More than half of the seaborne passenger transport in the EU countries is carried out between national ports. In general, countries with busy ferry connections and well-populated islands tend to have both a large volume of maritime passenger transport and a high share of national passenger transport by sea.

This applies to the two leading maritime passenger transport countries, Italy and Greece, as well as countries like Malta and Portugal. On the other hand, countries with major regular ferry connections to other EU countries, like Ireland, the Netherlands, Poland, Sweden, Finland and the UK, naturally have high shares of international intra-EU transport.

As in previous years, Spain and Denmark recorded the highest shares of extra-EU passenger transport in 2011. This is mainly due to the geographical position of the countries, with Spain having links with Morocco and Denmark with Norway.

Increased average size of vessels calling in main EU ports

The number of vessel calls in the main EU-27 ports (excluding French ports) was just above 2 million in 2011, about the same as in 2010 (Table 9). The corresponding gross vessel tonnage (GT) increased by 3.0 %, however, confirming the trend towards larger average size of vessels making port calls in recent years. The average size of vessels calling in EU ports in 2011 was just above 7 300 GT

Top 20 cargo ports in 2010 - on the basis of gross weight of goods handled (in million tonnes)

Source: Eurostat

Gross weight of seaborne goods handled in all ports (in million tonnes) 1997-2011

Source: Eurostat

Main European cargo ports in 2011 by gross weight of goods handled

Source: Eurostat

Top-20 container ports in 2010 - on the basis of volume of containers handled in (1 000 TEUs)

Source: Eurostat

Main Extra-EU 27 partner regions in 2011 by gross weight of goods handled

EU-27 Performance by mode for freight transport: 1995-2010 (source: European Commission, EU transport in figures, statistical pocketbook 2012)

Modal split (%): 1995-2010 (source: European Commission, EU transport in figures, statistical pocketbook 2012)[25]

|| Road || Rail || Inland Water- ways || Pipe- lines || Sea || Air

1995 || 42.1 || 12.6 || 4.0 || 3.8 || 37.5 || 0.1

1996 || 42.1 || 12.7 || 3.9 || 3.9 || 37.5 || 0.1

1997 || 42.2 || 12.8 || 4.0 || 3.7 || 37.3 || 0.1

1998 || 42.9 || 11.9 || 4.0 || 3.8 || 37.4 || 0.1

1999 || 43.5 || 11.4 || 3.8 || 3.7 || 37.6 || 0.1

2000 || 43.4 || 11.5 || 3.8 || 3.6 || 37.5 || 0.1

2001 || 43.9 || 10.9 || 3.7 || 3.8 || 37.6 || 0.1

2002 || 44.5 || 10.6 || 3.7 || 3.6 || 37.6 || 0.1

2003 || 44.5 || 10.7 || 3.4 || 3.6 || 37.7 || 0.1

2004 || 45.2 || 10.8 || 3.5 || 3.4 || 37.0 || 0.1

2005 || 45.5 || 10.5 || 3.5 || 3.5 || 37.0 || 0.1

2006 || 45.5 || 10.7 || 3.4 || 3.3 || 37.0 || 0.1

2007 || 45.9 || 10.7 || 3.5 || 3.1 || 36.7 || 0.1

2008 || 46.0 || 10.7 || 3.6 || 3.1 || 36.6 || 0.1

2009 || 46.5 || 9.9 || 3.6 || 3.3 || 36.7 || 0.1

2010 || 45.8 || 10.2 || 3.8 || 3.1 || 36.9 || 0.1

Relevance of intra-EU transport in total maritime transport by EU country[26] - 2010 (source: European Commission, EU transport in figures, statistical pocketbook 2012)

|| INWARDS || OUTWARDS || TOTAL ||

|| Total inwards || of which: from EU || Share of EU in total || Total outwards || of which: to EU || Share of EU in total || TOTAL goods transported* || of which: to/from EU || Share of EU in total ||

|| million tonnes || (%) || million tonnes || (%) || million tonnes || (%) ||

BE || 125.561 || 43.266 || 34.5% || 100.798 || 33.454 || 33.2% || 226.333 || 76.695 || 33.9% || BE

BG || 11.847 || 0.832 || 7.0% || 11.099 || 3.610 || 32.5% || 22.946 || 4.442 || 19.4% || BG

DK || 42.919 || 30.707 || 71.5% || 35.772 || 30.711 || 85.9% || 73.648 || 56.375 || 76.5% || DK

DE || 165.630 || 67.392 || 40.7% || 102.985 || 43.640 || 42.4% || 267.223 || 109.639 || 41.0% || DE

EE || 10.364 || 6.956 || 67.1% || 33.257 || 18.044 || 54.3% || 43.599 || 24.979 || 57.3% || EE

IE || 29.756 || 21.178 || 71.2% || 14.186 || 12.572 || 88.6% || 43.154 || 32.962 || 76.4% || IE

EL || 59.741 || 26.588 || 44.5% || 41.556 || 28.267 || 68.0% || 88.284 || 41.842 || 47.4% || EL

ES || 252.498 || 78.339 || 31.0% || 123.893 || 59.067 || 47.7% || 352.230 || 113.245 || 32.2% || ES

FR || 211.197 || 63.407 || 30.0% || 97.042 || 54.028 || 55.7% || 301.175 || 110.372 || 36.6% || FR

IT || 316.683 || 110.122 || 34.8% || 165.559 || 109.812 || 66.3% || 403.995 || 141.686 || 35.1% || IT

CY** || 6.048 || 1.017 || 16.8% || 0.906 || 0.284 || 31.3% || 6.954 || 1.301 || 18.7% || CY

LV || 5.060 || 3.690 || 72.9% || 52.166 || 38.899 || 74.6% || 57.060 || 42.423 || 74.3% || LV

LT || 15.447 || 4.663 || 30.2% || 22.422 || 13.718 || 61.2% || 37.869 || 18.382 || 48.5% || LT

MT || 3.601 || 2.588 || 71.9% || 0.193 || 0.100 || 51.9% || 3.795 || 2.689 || 70.9% || MT

NL || 385.684 || 101.191 || 26.2% || 152.031 || 74.173 || 48.8% || 537.715 || 175.364 || 32.6% || NL

PL || 28.459 || 15.689 || 55.1% || 30.789 || 24.890 || 80.8% || 58.881 || 40.212 || 68.3% || PL

PT || 41.367 || 17.288 || 41.8% || 22.603 || 13.865 || 61.3% || 58.197 || 25.381 || 43.6% || PT

RO** || 16.191 || 1.392 || 8.6% || 20.337 || 6.447 || 31.7% || 36.528 || 7.840 || 21.5% || RO

SI || 10.341 || 2.835 || 27.4% || 4.250 || 1.325 || 31.2% || 14.591 || 4.160 || 28.5% || SI

FI || 56.056 || 36.571 || 65.2% || 48.465 || 42.226 || 87.1% || 98.579 || 72.854 || 73.9% || FI

SE || 87.679 || 62.508 || 71.3% || 77.510 || 65.972 || 85.1% || 161.007 || 124.297 || 77.2% || SE

UK || 304.418 || 166.532 || 54.7% || 194.070 || 149.069 || 76.8% || 454.743 || 271.855 || 59.8% || UK

*: The total goods transported data may be less than the sum of inward and outward traffic due to the double counting of tonnes moved within the same country.

**: The share of intra-EU in total maritime transport may be underestimated in this table for CY and RO because a significant share of partner ports are "unknown" and hence cannot be attributed to any geographical area.

Main Routes in Intra-EU Maritime Transport[27] - 2010

(source: European Commission, EU transport in figures, statistical pocketbook 2012)

|| Country of loading port || Country of unloading port || million tonnes transported

|| 1 || ITALY || || ITALY || 87.227

|| 2 || UNITED KINGDOM || || UNITED KINGDOM || 71.324

|| 3 || UNITED KINGDOM || || NETHERLANDS || 46.347

|| 4 || SPAIN || || SPAIN || 40.862

|| 5 || NETHERLANDS || || UNITED KINGDOM || 30.983

|| 6 || FRANCE || || UNITED KINGDOM || 25.700

|| 7 || UNITED KINGDOM || || FRANCE || 25.697

|| 8 || SWEDEN || || GERMANY || 22.318

|| 9 || GREECE || || GREECE || 22.243

|| 10 || GERMANY || || SWEDEN || 20.021

|| 11 || SWEDEN || || SWEDEN || 18.336

|| 12 || FRANCE || || FRANCE || 18.071

|| 13 || DENMARK || || DENMARK || 14.831

|| 14 || BELGIUM || || UNITED KINGDOM || 14.654

|| 15 || DENMARK || || SWEDEN || 13.292

|| 16 || UNITED KINGDOM || || BELGIUM || 12.968

|| 17 || UNITED KINGDOM || || GERMANY || 12.698

|| 18 || SWEDEN || || UNITED KINGDOM || 12.287

|| 19 || ITALY || || SPAIN || 12.210

|| 20 || UNITED KINGDOM || || IRELAND || 11.560

|| 21 || LATVIA || || NETHERLANDS || 11.224

|| 22 || SWEDEN || || FINLAND || 10.847

|| 23 || NORWAY || || UNITED KINGDOM || 10.720

|| 24 || FINLAND || || GERMANY || 9.395

|| 25 || SPAIN || || ITALY || 8.180

|| 26 || FINLAND || || FINLAND || 8.005

|| 27 || NETHERLANDS || || GERMANY || 7.779

|| 28 || SWEDEN || || DENMARK || 7.768

|| 29 || FRANCE || || SPAIN || 7.218

|| 30 || FINLAND || || SWEDEN || 7.091

The Maritime Statistics Directive is a piece of European Union legislation passed in December 1995 Council Directive 96/64/EC which requires Member States to supply to the Statistical Office of the European Communities (Eurostat) information relating to freight traffic, vessels and passenger traffic through ports throughout the European Union. The data collected under the directive are used by the European Commission to assist in policy development at a European level and to monitor the impact of European policy measures. The Annexes to this Directive specify the data to be gathered with regard to goods, passengers, vessels and ports. The Directive also provides the cargo classification (see below), the statistical transport nomenclature and the geo-nomenclature to be used to identify the maritime coastal areas and the nationality, type and size of vessels. The data collected allows Eurostat to examine periodically the latest trends in freight and passenger transport in European Union (EU) ports. The work is closely related to the monitoring the EU external trade of goods, intra-EU freight exchanges and transport services for sea passengers.

Classification of port freight traffic for the EC Directive on statistical returns in respect of the carriage of goods and passengers by sea (2009/42/EC)

ANNEX IV: The EU Ports Policy: an ex-post evaluation

Communication on a European Ports Policy, COM/2007/0616 final of 18 October

1. Declared objectives and progress achieved

In 2007, after extensive consultation with stakeholders, the Commission adopted a Communication defining its ports policy[28].  The problems identified by the Commission at the time related to

a) threats on port performance and hinterland connections,

b) expanding capacity while respecting the environment,

c) modernisation of ports,

d) absence of clarity for investors, operators and users and

e) port labour issues.

One of the main objectives of the Communication was to announce that the obstacles to the modernisation of ports to improve their performance would be addressed by means of "soft" measures, namely guidelines, and close cooperation and dialogue with stakeholders. The Communication presented the action plan for the Commission in that regard.

In summary, the evaluation of the Commission on the progress achieved in the last six years (2007-2013) can be summarised as follows:

The problems last identified in 2007[29] remain largely unsolved. Very few of the envisaged measures were adopted. The main development has been the adoption of the proposal for the new TEN-T Guidelines and Connecting Europe Facility, both of which foresee substantial funding support for ports.

The Commission has not delivered two key announced measures: State Aid Guidelines for ports (see point 3 below) and application of the Public Funding Financial Transparency Directive to ports.

The Commission has adopted a draft Directive on Concessions, which would apply to different economic sectors, including ports. In the particular case of ports, the draft directive deviates from the line announced in the 2007 Communication (see point 2 below).

The European Court of Auditors (2012) has revealed systemic problems regarding strategic planning and allocation of public resources for ports infrastructural projects.

Substantial reforms in the port sector have required in Member States under the Conditional Assistance Programmes (Greece, Portugal and Ireland)[30]. 

At the same time, reduction of budgetary deficits, austerity measures and consequential constraints in public funding possibilities have reduced significantly resources for maintaining, operating an/or expanding port facilities in many Member States. Attracting private investment to sustain the operational capacity of the European port system is already a crucial necessity.

Contrary to expectations, the development of intra-EU maritime transport connections supporting internal market exchanges has stagnated. Inter-modality objectives have been largely missed. This mainly due to a lack of efficiency, high costs and excess of bureaucracy in too many EU ports.

2. The issue of concession rules in the European port sector

The relevant case-law of the Court of Justice ("Telaustria", Case C-324/98) has pointed out that, when Member States grant service concessions, public authorities are bound by an obligation of transparency implying that their initiative is adequately advertised, that the procedure is fair and non-discriminatory and that it can be reviewed.

Such obligation of transparency consists in ensuring, for the benefit of any potential tenderer, a degree of advertising sufficient to enable the concession to be opened up to competition and the impartiality of the selection procedure to be reviewed  .

The obligation fully applies to the port sector. However, as in many other sectors, concession award regimes in the EU Port Sector are often unclear or – in case of services concession - non-existent.

In 2012, the Commission proposed a draft directive on concessions covering all sectors, including the port sector. The draft Directive will impose the recourse to public tendering procedure to select companies operating work or service concessions.

The draft is still being examined in the normal legislative procedure by the European Parliament and Council. According to the assessment made by the Commission when preparing the proposal[31], the absence of clear rules at EU level and in many cases at national level governing the award of concession contracts gives rise to obstacles to the free provision of services and causes distortions in the functioning of the Internal Market.

As a result, EU citizens do not benefit from quality services at best prices, economic operators (in particular SMEs) are being deprived of their rights within the Internal Market and miss out on important business opportunities, and contracting authorities and entities may fail to manage public resources on a sound financial basis.

In the 2007 Ports Policy Communication, the Commission considered that the obligation of transparency applies when Member States' authorities decide to entrust a third party with a portion of port land for the provision of cargo-handling services, i.e. public authorities should respect it when granting lease-land contracts to commercial operators.

However, the draft Directive on concessions would exclude lease-land contracts from its scope, creating a de-facto legal vacuum for this type of arrangements in European ports: public lease-land contracts in favour of particular operators in some ports will not be affected the obligation of transparency.

In fact, the draft Directive on concessions would apply only to concessions whereby the substantial operating risk is transferred to the concessionaire. It covers just one particular type of concession used in European Ports. Other types of acts, such as authorisations, licences or lease agreements of port land and installations often practised in ports will fall outside the scope of the Directive[32] (see recital 6 of the draft proposal). This situation threatens to create a double standard for European ports: certain Ports will have to use a public tendering procedure to select port service operators while others will not and will stay free to foreclose the market.

Stakeholders expressed criticisms against the proposal arguing that it would aggravate legal uncertainty instead of solving it. It should be noted that similar criticisms were expressed in 2001 and 2004 at the occasion of the "port packages" I and II which included provisions requiring public authorities to follow a public tendering procedure when granting authorisations, by means of concessions or any other type of contracts" to port operators. Another criticism is that following a tendering procedure when granting a contract to an operator leads to increased bureaucracy.

3. The issue of State Aid rules in the port sector

The first complaints about unfair competition between European ports because of State funding appeared[33] in the late 1970s. Since then, the request for clarification on how the Commission applies the State Aid rules to the public funding of port infrastructures (request for publishing State Aid Guidelines) has been a constant request of the sector.

The problem of distortion of competition because of State Aid has been largely recognised by the Commission, in 1997 (Green Paper on seaports and maritime infrastructure), in 2001 and 2005 (proposals for a Directive on market access to port services) and 2007 (latest Communication on Ports Policy). In all those occasions, the Commission declared its intention to adopt State Aid Guidelines. To date, this commitment has not been fulfilled.

For many years, the Commission position was that public funding of general transport infrastructures did not involve State Aid. In fact, significant funding support to the developments of ports has been provided by the Commission itself by means of the Structural and Cohesion Funds and by the TEN-T funds. The Connecting Europe Facility foresees further substantial support to ports and port connections in Europe.

In 2007, the Commission stated that "Although it cannot be said that there is competition between all ports in all cases, competition between some of them, and competition inside ports can be significant and calls for a level-playing field. In this respect, one of the issues to be addressed is public financing to ports. The Commission will establish a general legal framework as port stakeholders are requesting. Clarity in financing will also be an incentive for port investment"[34]

Since then, the Commission’s position has evolved and, confirmed by the Court of Justice, it is now of the view that State aid distorting or threatening to distort competition in the internal market, is involved in the public funding of general transport infrastructures, including airports and seaports.

For the time being, the Commission does not intend to adopt particular guidelines for State Aid to ports. The case law from the Court of Justice on state aid to infrastructure has recently clarified certain issues (the case T-443/08 "Leipzig-Halle"), in particular that public financing of the construction of (airport) infrastructure constitutes State aid. The only exception concerns certain activities that are part of the exercise of public powers (security, police, etc). This judgement requires careful reflections for all sectors with heavy infrastructures like transport and which go beyond ports.

The Commission is now working on the modernisation of State Aid rules for all economic sectors. It will streamline procedures and better explain rules and concepts, including a clarification of the notion of state aid for infrastructures, later on in 2013.

The 2012 public consultation has confirmed that the current state of play is unsatisfactory for the Member States Transport administrations, port authorities and other stakeholders. All of them require to the Commission to provide legal certainty and a playing level field ensuring fair competition for ports in Europe.

4. Historical evolution of the EU ports' policy: from 1997 Green Paper to 2012 Single Market Act II Priority

The first attempt by the Commission to move towards a coherent policy on ports and maritime infrastructures was made in 1997, with the publication of a Green paper on that subject.

In 2001, following the Green Paper consultation the Commission issued a Communication on reinforcing quality service in sea-ports and proposed a Directive on market access to port services (port package I). The Commission proposal was rejected by the European Parliament in 2003.

In 2004, the Commission adopted a second proposal for a directive on market access to port services (port package II). The proposal was withdrawn by the Commission in 2006.

In 2007, after two years of consultation with stakeholders, the Commission adopted a Communication on ports policy, announcing a number of "soft" measures in the form of guidelines (state aids, environment), best practices (benchmarking, indicators) and close cooperation and dialogue with stakeholders.

Between 2001 and 2008, the situation of port labour in the EU Member States changed substantially: Some Member States like Germany, Finland, France or Spain have undertaken reforms of their respective port labour sectors (of different degree and scope though).

In 2011, in the context of the structural adjustments required by the Conditional Assistance Programme to Member States in financial difficulties, a radical reform of the ports regulatory regimes, inter alia of the port labour regimes, has been implemented in Greece and Portugal.

In 2012, in the context of the measures proposed in the Single Market Act II, the Commission identified the need to act in ports as follows:

"The Commission therefore also works on enhancing the efficiency and overall quality of port services, addressing questions of the obligations of Member States regarding the sound planning of ports and hinterland connections, transparency of public funding and port charges, and administrative simplification efforts in ports, and reviewing restrictions on the provision of services at ports"

ANNEX V: Public Consultation - Summary of stakeholders' positions

This annex explains the public consultation procedure and summarises the results of the 1st and 2nd phase of the targeted stakeholder surveys together with the input received during bilateral meetings DG MOVE has had with the individual stakeholders.

Due to the technical nature of the file (inter alia, issues related to performance of ports, port technical services, hinterland connectivity, governance structures, port infrastructure charges, funding of port investments or public service obligations in ports), DG MOVE decided to carry out an intensive targeted sectoral public consultation, and not a full public consultation open to the wider public. Indeed, in first instance only workers and businesses active in the port sector would be affected by this initiative, and the broader public would only be indirectly affected, as port economics are of a derived nature. By performing an intensive targeted consultation, the policy discussion could be more technical in nature, and has nevertheless in no way excluded or prevented any party concerned from participating.

A.      Public consultation procedure

The milestones of the public consultation procedure were:

3rd quarter 2011 || Informal meeting of DG MOVE with the authorities in charge of ports policy in the 22 maritime Member States: discussion of the Transport White Paper measures and possible follow-up in the port sector CommissionVice-president Siim Kallas public announcement of the COM intention to review the EU Ports Policy in 2013.

4th quarter 2011 || First round of bilateral contacts with main EU associations in the port sector

1st quarter 2012 || Launching of the procedure for the establishment of the European social dialogue committee in the port sector (ESPO, ETF Dockers, FEPORT and IDC) Launching of the Study on EU Port Labour Regimes (Porf Van Hoydoonk, University of Ghent, College of Europe) – Start of the survey addressed to the 22 EU Member States, labour unions and industry associations regarding port labour, health and safety and training and qualifications of dockers in the EU. Launching of the study supporting the impact assessment on "measures to enhance the efficiency and quality of port services in the EU (PricewaterhouseCoopers in partnership with Panteia). Start of the first public on-line survey.

2nd quarter 2012 || Data collection for the port labour study and conduct of the on-line survey on the efficiency and quality of TEN-T port services. Preparation of the conference on the future of the EU Ports Policy.  Round of visits to major EU Ports and discussions with port authorities

3rd quarter 2012 || EU conference on the future of the EU Ports Policy. Presentation of results of the first survey on quality and efficiency of EU ports and of the preliminary conclusions of the Port Labour Study See: http://www.portsconference2012.eu/home.html

4rd quarter 2012 || Reception and review of comments and position papers from stakeholders Second round of bilateral contacts with EU associations in the port sector Follow up of the procedure for the establishment of the social dialogue committee Launching of the second public on-line survey for evaluation of possible policy measures and likely impacts of those measures

1st quarter 2013 || Public hearing in Brussels, with all interested parties, presenting the results of the on-line surveys and of DG MOVE preliminary views on possible policy measures. Informal contacts with social partners, industry, Member States administrations and port authorities. Finalisation of the study on port labour

Pending || Presentation and discussion of the study on port labour with social partners Publication of impact assessment study

Criticisms on the on-line survey and position papers by the trade unions

The preparation of the on-line survey has involved contacts with stakeholders, including the representatives of the trade unions. They have expressed criticism about the questions - drafted by PwC / Panteia in collaboration with the Commission services - regarding aspects of quality and efficiency of ports connected (directly or indirectly) with port work issues.

The participation of national trade unions in the two on-line surveys has been low (the trade unions rejected the approach chosen by the consultants and the Commission). Instead of answering the questions in the survey, the trade unions at European level (IDC and ETF dockers) have expressed their views in position papers and manifests adopted in different ports. Both IDC and ETF participated actively in the Ports Conference (Sept 2012) and in the Public Hearing (January 2013). The joint press release of IDC and ETF in the consultation process can be retrieved at: http://www.itfglobal.org/etf/etf-press-area.cfm/pressdetail/8457

B.      Summary of stakeholders' positions

The following presentation follows the order of the issues proposed for discussion at the Public Hearing (January 2013) that closed the public consultation exercise.

1. Challenges

The Commission concludes the following for what concerns the challenges to be tackled:

1. All stakeholders stressed the need for a stable and fair level playing field both for inter-ports (competition between ports) and intra-port (competition between providers of a same port service within a port) competition in the EU. The need for legal certainty and a business friendly environment with as less administrative burden as possible is a priority for all stakeholders, such as Member States, port authorities, terminal operators or the shipping sector, logistic operators and cargo interests.

2. There is a major concern about unfair competition between ports linked to public funding practices of port infrastructures. Member States and port authorities request a tight control of state aid through the adoption of state aid guidelines for the port sector and highlight that the public funding transparency requirements of the existing Commission Directive 2006/111/EC is not sufficient as it does not apply necessarily in the sector.

3. The European Court of Auditors has revealed in 2012 serious problems in the use and effectiveness of EU Regional funds for funding port infrastructures. The root causes are systemic: lack of strategic planning and of economic rationality criteria in the allocation of resources.

4. A majority of the users of port services, shipping companies and export-import industries, consider that port services in many EU ports are not satisfactory in terms of price, quality and administrative burden. In the ports of the core TEN-T network, around half of the users surveyed (shipping lines) consider that there are specific challenges in terms of price or quality with cargo handling (48% complain), pilotage (54% complain) and towage (49% complain). A smaller percentage ranging from 17% to 25% sees similar problems for other services such as mooring, bunkering, dredging, passenger services or waste management.

5. 30% of European port authorities do not consider that the current situation is satisfactory. However, the majority of them oppose the introduction of EU procedures limiting the capacities of public authorities for granting contracts and permissions through direct award to operators of port services. Applying detailed concession rules to certain contracts granted by public authorities in ports is highly controversial in certain Member States.

6. Port workers trade unions extremely oppose any EU provision touching on the existing port labour regimes in certain Member States, in particular in Mediterranean Member States.

7. Representatives of pilotage services argue that pilotage, although provided against remuneration, is not an economic service and should be excluded from competitive pressure.

8. All stakeholders agree that the EU port system has to evolve and adapt to significant challenges in terms of scarce funding resources, competitiveness in respect of ports in neighbouring third countries and other world regions, creation of added value and jobs and environmental impacts.

9. All stakeholders agree on the importance to secure and, if possible, increase, EU funding expenditure for supporting ports and maritime transport.

2. Results per service (quantitative results of the questionnaire)

10. The survey shows that a large proportion of the users of port services (shipping companies, terminal operators and port authorities) consider that port services in many EU ports are not satisfactory in terms of price, quality and administrative burden. In the ports of the core TEN-T network, around half of the users surveyed (shipping lines) consider that there are specific challenges (especially in terms of price) with cargo handling (48% complain), pilotage (54% complain) and towage (49% complain). A smaller percentage ranging from 17% to 25% sees similar problems for other services such as mooring, bunkering, dredging, passenger services or waste management.

Overview of respondents (USERS) that indicate there is a problem with a given service:

CORE || Port Auth. || Terminals || Shipping L. || COMPREH || Port Auth. || Terminals || Shipping L.

Pilotage || 45% || 48% || 54% || Pilotage || 21% || 17% || 25%

Towage || 35% || 43% || 49% || Towage || 31% || 67% || 0%

Mooring || 19% || 23% || 27% || Mooring || 21% || 17% || 0%

Dredging || 29% || 29% || 24% || Dredging || 33% || 33% || 0%

Bunkering || 14% || 17% || 28% || Bunkering || 25% || 17% || 25%

Cargo || 20% || N/A || 48% || Cargo || 46% || N/A || 33%

Passengers || 16% || N/A || 38% || Passengers || 17% || N/A || 67%

Waste rec. || 18% || 18% || 15% || Waste rec. || 9% || 17% || 25%

|| Pilotage || Towage || Mooring || Dredging || Bunkering || Cargo || Passengers || Waste reception

Core || 50% || 44% || 24% || 27% || 22% || 30% || 23% || 17%

Comprehensive || 21% || 35% || 17% || 27% || 23% || 42% || 30% || 14%

Total || 45% || 42% || 22% || 29% || 22% || 29% || 25% || 17%

3. Objectives

On the basis of the 2nd phase of the targeted stakeholder consultation and the public hearing, the Commission concludes that a majority of stakeholders did not question the Commission's analysis of the challenges that EU ports have to face with related to the objectives of the port initiative. These objectives have been identified as the following:

Scenario 2020-2030

11. Maritime trade and port activities are likely to remain weak in the medium term (2014-2018), with a possible overcapacity on certain segments. Forecasts predict return to steady port traffic growth towards 2020, but with changes in volumes and types of cargoes, size, design and propulsion systems of ships, cargo-handling and logistic technologies and ICT developments having huge impact on ports. Ports failing to modernise could be left behind.

12. Sea-trade growth is a necessity for Europe’s economic recovery and the development of short-sea-shipping is needed as part of intermodal transport solutions offering alternatives to road transport and contributing to sustainable transport. However, ports risk not fully playing their role in the supply chain because of poor network integration, problems of congestion and decline of short sea shipping in face of strong competition from road transport (leading to congestion and saturated intra-EU land corridors).

13. Further developing the efficiency of the gateway function of ports will require: (a) better connections with the hinterland; (b) improvement of the use of existing capacities by increasing port performance and (c) provision of new port infrastructure.

14. In respect to (a), the new EU guidelines for developing the TEN-T and the Connecting Europe Facility will help Member States to improve the connections with the hinterland. Addressing the two other challenges (b) and (c) would require a framework that encourages the modernisation of ports procedures and services and can better attract capital investments and human resources to ports.

European dimension

15. Those challenges are a matter of concern for national regional and local authorities. But they are also transnational by nature when it comes down to TEN-T ports, both the core network ports and the comprehensive ports, as part of an efficient hub-and-spoke system. Unfair practices in a port may harm neighbouring competing ports and/or the business opportunities of port service operators of other Member States. Better port performance in other Member States can further facilitate intra-EU trade with them and reduce the negative externalities on its own network (e.g. congestion).

Modernisation of ports, attracting investments

16. By optimising business processes and simplifying administrative procedures, TEN-T ports could handle more ships, cargo and/or passengers with the same infrastructure. By further improving the reliability, flexibility and efficiency of port services, they could also accommodate more short-sea shipping traffic. The completion of the Single Market for ports will provide a fair level playing field thus unleashing port modernisation dynamics.

17. This however cannot happen with unjustified market entry barriers, unnecessary administrative burden and unclear rules governing the provision of services, in particular those provided under exclusive or special rights granted to particular operators. Legal uncertainties are a source of discomfort both for incumbent operators and for new operators willing to enter their markets. Modernisation of ports, investment flows and creation of new businesses and employment are therefore handicapped.

18. Investments in port infrastructure, terminal operations and connectivity of ports are of crucial importance to maintain EU port performance levels. Overall funding needs for ports (infrastructures, equipment and connections) could easily exceed € 100 billion in the next 20 years. Meanwhile, public funding is drying up. Inevitably public investments will have to be better optimised (see the report of the European Court of Auditors 2012[35]) and private investments encouraged (ports are part of a long-term growth sector).

19. Transparency in the use of public funds and the need for a level playing field for inter-port competition is a repeated concern for all stakeholders. They seem to see transparency as a way to ensure the correct allocation of public resources and reduce the risk of State aid incompatible with the internal market. This is not surprising since some 30-40% of the ports of the core network do not fall in the scope of Directive 2006/111 on the transparency of the financial relations between public authorities and public undertakings. Moreover, without separation of accounts (statutory vs. commercial activities) port authorities operating specific port services can cross-subsidise the activities related to port services in a non-transparent way and thus disrupt the level playing field.

20. Furthermore, ports are not always allowed to define their own infrastructure charging policy. Charges for the use of infrastructure are not always linked to real costs and may not contribute to an efficient allocation of resources to finance the maintenance and/or construction of infrastructure. Lack of transparency in the setting of charges may lead to unjustified discrimination. Price signals rarely incentivise users to take into account their external costs (e.g. environmental costs). Moreover, in a period of faltering economy and overcapacity in certain market segments, there is an increased risk of unfair inter-port and intra-port competition.

21. In addition, lack of coordination of public investments in port capacities, even within the same Member State, may lead to duplication of facilities, waste of funding resources or higher uncertainties related to the social and economic returns of investments. Such situation is also detrimental for encouraging Public-Private Partnerships agreements.

Creating new jobs

22. Finally, port growth, investments and jobs come together. European ports represent an opportunity to generate employment and create new, quality jobs, both inside and outside the port, ranging from vehicle drivers and crane operators to ICT specialists and commercial executives. Successful ports attract industrial and commercial firms; marine services generate high-end employment. The quality of the social relationships, of the working environment and of the human resources policies are key factors for the development of TEN-T ports.

4. Measures

On the basis of the 2nd phase of the targeted stakeholder consultation and the public hearing, the Commission draws the following conclusions related to possible interventions:

Fair market access

23. Apart from the net position of port service providers, which is strongly adverse, stakeholders’ responses denote a shared approval towards the possibility to opening the market up for greater competition. At least 80% of port users seem very keen to support this measure. 40% of MSs and port authorities understand the need for assuring that their operations are transparent and in line with the need for port services to be provided efficiently and effectively, but are less interested in further regulation going beyond transparency.

Avoid abuses arising from exclusive /special rights

24. Wide consensus is found with regard to the need for port authorities to set transparent, non-discriminatory and proportionate charges for the provided services, when acting as service providers.

25. Stakeholders express concerns when port services are provided in a monopolistic regime (direct award or in-house operation). The need to set charges following non-discrimination, proportionality and transparency principles was recognised by all stakeholder groups as a core element for the port service market to be enhanced. A soft approach is much preferred, as it is considered essential to adapt the measure to local specificities and contexts.

Administrative simplification and intra-port coordination

26. An administrative simplification action plan would comprise the centralisation of coordination activities by port managing bodies. Port authorities/port managers (77%) support this measure much more than port service providers (23%), who would like to be more involved in port coordination activities; 91% of port users also find this a good idea.

27. Coordination mechanisms could be regarded as a weakness across EU ports. Respondents showed strong interest in having such mechanisms improved. In particular, port users and port service providers claim it is a core element that needs to be regulated. Synthetically, having an entity coordinating various service providers is required by most respondents, with the exception of terminal operators (only 36%), who show little interest.

28. When considering the possibility to introduce a port users’ committee, port service providers (95%) and port users (88%) are very supportive, while MSs and ports are less supportive (23%). It seems that port service providers would like to have a role in coordinating activities – together with authorities, while others (mainly port authorities and port managers) are less keen to see coordination activities delegated, as they see these activities as being their responsibility.

Financial Transparency of public funding

29. Port users are almost unanimous in supporting whatever measure increases financial transparency. On the contrary, the other stakeholders are much more sensitive and express their distinct support or concern depending on the way transparency is to be achieved.

30. When considering the unbundling of the port authority dimensions – managing body and service provider – port service providers (89%), terminal operators (71%)  and port users (94%) are very supportive. In line with expectations, only 34% of MSs and port authorities are much less supportive, since port authorities/port managers would be forced to limit their presence in the market, even in natural monopolistic situations, where competition would be inefficient or cannot be guaranteed.

Port Infrastructure Charging

31. While stakeholders where not explicitly asked about this, this is part of the Commission's horizontal strategy on infrastructure charging, adopted since 2008. The strategy is designed in order to have fair intermodal competition and to ensure that all infrastructure users are paying the correct price (at least the marginal cost – with a possibility to also contribute to the total investment costs). This strategy also foresees in the advice to differentiate the charge according to environmental performance of the vehicle/vessel in line with the polluter pays strategy.

32. Respondents have expressed wide support for the freedom to set the price of these charges and the need to make sure that these charges can take into account local circumstances and considerations.

33. Respondents have expressed their concerns about the rise of administrative costs related to the setting up of new and more complex procedures for the calculation of charges in line with transparency, proportionality, etc. principles. Moreover the publication of prices and calculation methods for port access infrastructure charges needs a certain amount of work to be done by administrative personnel, contributing to increased administrative costs.

ANNEX VI: Relative performance of TEN-T Core: efficiency vs. competitive pressure

(a proxy model by PWC/NEA, 2013)

There are no universally accepted benchmarks or formulae to define port or port system performance or its attractiveness to users.  Nevertheless performance gaps are perceived by users, so this section sets out some empirical findings.  In certain contexts, performance tends to be equated with throughput or turnover, in other cases with operational efficiency, but in a policy context it is more appropriate to consider the relationships between investment, management, market forces and institutional factors, analysing the extent to which any given port is achieving its full potential.

1. WEF Global Competitiveness Survey

One indication is given by the World Economic Forum Global Competitiveness Report 2012-2013 which surveys executive opinions on a range of economic development topics including infrastructure. 

Survey respondents were asked to assess port facilities in their country according to a 1-7 scale, where 1 is extremely underdeveloped and 7 is well developed and efficient by international standards.  The global mean score is 4.3, which coincides with the scores achieved by Greece and Turkey in 2012.

At the top of the list, scoring 6.8 are the Netherlands and Singapore.  Other high scoring countries are Hong Kong, Panama and the United Arab Emirates.  There are clear similarities between the countries in this leading cluster, in relation to their abundance of port infrastructure and international maritime connections relative to their own size.

Looking at high scoring countries in Europe, Belgium and Finland score 6.3, followed closely by Germany, Sweden, UK, Denmark, Spain, Malta and Estonia.  The latter all score higher than 5.5.

The lowest scoring countries, excluding the landlocked countries who were asked to rate accessibility rather than quality, were Bosnia and Haiti with 1.7 and 1.9 respectively.  In the EU, the lowest scorers were Romania with 2.6, Poland with 3.5 and Bulgaria with 3.7, similar to countries such as Nigeria, Indonesia and Argentina.  The majority of EU countries however score more than the global average.

Overall there is a positive relationship between GDP and infrastructure. The following graph shows the results of a regression analysis relating the WEF score to GDP per capita, in order to show the extent of port performance gaps that cannot be explained by income gaps.

Source: World Economic Forum, Global Competitiveness Report 2012-2013.

The solid blue trend line indicates the score that would be expected per country based on GDP per capita alone.  The dotted lines indicate a 10% margin.  Many countries are clustered along these 10% boundaries.

Countries above the higher dotted line perform relatively well compared to their GDP/capita and countries below the line relatively badly.  The three Baltic States of Latvia (LT), Lithuania (LI) and Estonia (EE) receive relatively high ratings, together with Spain (ES) and the Netherlands (NL).  Romania (RO), Poland (PL) and Italy (IT) receive relatively low ratings, with Bulgaria (BG), Greece (GR), France (FR) and Denmark (DK) all borderline.

2. PwC/Panteia Survey 2012

During the stakeholder consultation taking place during the summer of 2012, port stakeholders were asked to identify problems in relation to the performance of European ports.  Port users were asked to rate the ports they use. Ports and port operators were asked to identify challenges they face in their own businesses.  This contrasts with the WEF analysis in which opinions were stated by businesses from all sectors in the respective countries, and not necessarily by direct users.

Quality service levels: physical attributes of ports

The responses on issues concerning infrastructure and equipment are broadly comparable with the WEF results. There is a high instance of port infrastructure related problems in the Black Sea (79% of respondents find problems) and in the Central Mediterranean (64%). Spain, France, Belgium, Netherlands and Germany have low problem counts (around 20%).  The UK and the Nordic area are slightly higher.

Quality service levels: matters related to organisation

 The PwC/Panteia 2012 survey also considered organisational factors.  There is some degree of correlation between the likelihood of infrastructure issues and the likelihood of management and IT related issues.  The highest problem count for management and ICT is in the Black Sea (112%[36]), again followed by the Central Mediterranean area (60%).  However, in case, most regions have scores higher than 40%, so the gap is not as evident.

3. Relative Performance (RPI)

The object has been to use available data to make a performance ranking of the major European ports. The calculation has been done for a sample of 115 ports TEN-T ports. The term “port performance” has no universally accepted meaning – in some contexts it means operational efficiency, in others a user rating, in others market share or competitiveness, and in others it means growth.

Definitions

The ranking applied here is based on a national user rating, combined with indicators on competitiveness and market share.  Thus a “well-performing” port under these definitions is one that is located in a country where there is high infrastructure rating, and which achieves a high market share in circumstances where there is a high degree of inter-port rivalry.

The ranking is based upon three main criteria:

· The WEF (World Economic Forum) Global Competitiveness Report[37], 2012-2013, which provides a rating of port infrastructure in a given country by businesses in the same country.  Each country is allocated one score.

· A proximity measure, showing per port, the presence or absence of close competitors.  This is calculated with a gravity model, weighting port throughput and distance.  Thus if a port has nearby rivals carrying significant throughput volumes, the proximity index is high.  It will be low if there are fewer or smaller nearby competitors.

· A market share index per traffic mode of appearance, showing the performance of each port relative to the total market in a specific coastal range.  Coastal ranges are listed below (Table 1).  Modes of appearance are container, ro-ro, dry bulk, and liquid bulk.  A share is also calculated for total tonnes.

Table 1: Set of Coastal Ranges

1 || IRELAND

2 || CYPRUS

3 || MALTA

4 || UNITED KINGDOM

5 || SPAIN, SW FRANCE, PORTUGAL

6 || DENMARK, NORWAY, SWEDEN

7 || ESTONIA, FINLAND, LITHUANIA, LATVIA, BALTIC RUSSIA

8 || BALTIC GERMANY, POLAND

9 || HAMBURG-LE HAVRE RANGE

10 || CENTRAL AND SOUTHERN ITALY

11 || ADRIATIC INCL NE ITALY

12 || GREECE, BULGARIA, ROMANIA

13 || NW ITALY

Island nations are separated from the continental area, since there is a specific context, in terms of which ports can be used to serve the hinterland.  Cyprus and Malta have one main port each for example.  Island regions (of larger countries) such as Mallorca or Corsica are not included in the analysis, as neither the national WEF, nor the market share aspects are relevant.

Scoring

Scores are calculated according to the following variables:

VAR || Description || Weight

A || WEF Rating.  Converted from a 0-7 scale to a 0-1 scale. || 10

B || Rivalry: Where: Rp = Rivalry Score for Port p. Tq = Throughput of Port q. d = Distance between port p and port q. These scores are converted into a ranking, and then into a 0-1 scale. || 1

C1 || Market share of Port P in Coastline Range, Dry Bulk Tonnes (0-1 scale) || 1

C2 || Market share of Port P in Coastline Range, Liquid Bulk Tonnes (0-1 scale) || 1

C3 || Market share of Port P in Coastline Range, Container Tonnes (0-1 scale) || 5

C4 || Market share of Port P in Coastline Range, RORO Tonnes (0-1 scale) || 3

C5 || Market share of Port P in Coastline Range, Total Tonnes (0-1 scale) || 5

The score is a weighted average, using the weights calculated above.

Island ports in Cyprus, Malta and Ireland are calculated without such a strong weighting for market share.  Essentially, these ports are not directly comparable with the others as far as market share performance is concerned.  However they each receive WEF scores greater than 5 out of 7, indicating a high degree of satisfaction from local businesses.

The resulting distribution is as follows:

Figure 1: Port Ranking- Distribution

The distribution fits an order 3 polynomial function, superimposed on the scores in Figure 1.  We can discern that most ports are clustered between 0.4 and 0.5, with sets of well-performing and less-well performing at either end of the distribution.

The Commission decided not to disclose the final calculations for the list of individual ports but only the list of ports considered in the calculations. This is done because the calculation is done to show the existing performance gaps between European ports without wishing to shame or blame individual ports. The Commission is also aware that this could have potential commercial impacts on the mentioned ports.

Table 2: List of ports

ALGECIRAS || DUBLIN || KAVALA || NAPLES || SOUTHAMPTON

AARHUS || DUNKIRK || KLAIPEDA || NARVIK || SPLIT

AGIOI THEORDORO || ELEUSIS || KOPER || OLBIA || STOCKHOLM

AMSTERDAM || FELIXSTOWE || KOTKA || OPORTO - LEIXOE || SZCZECIN

ANTWERP || FORTH || LA CORUNA || OSLO || TALLINN

AUGUSTA || FREDERICIA || LA ROCHELLE-PAL || OSTEND || TARANTO

BARCELONA || FREDERIKSHAVN || LA SPEZIA || PATRAS || TARRAGONA

BELFAST || GDANSK || LARNACA || PIOMBINO || TEESPORT

BERGEN || GDYNIA || LE HAVRE || PIRAEUS || THESSALONIKI

BILBAO || GENOA || LIMASSOL || PLOCE || TRELLEBORG

BORDEAUX || GHENT || LISBON || PORTSMOUTH || TRIESTE

BOURGAS || GIJON || LIVERPOOL || RAAHE || TURKU

BREMERHAVEN || GIOIA TAURO || LIVORNO || RAFINA || VALENCIA

BRINDISI || GLASGOW || LONDON || RAUMA || VARNA

BRISTOL || GOTHENBURG || LUBECK || RAVENNA || VENICE

CAGLIARI || HAMBURG || MALMO || RIGA || VENTSPILS

CALAIS || HELSINGBORG || MARIEHAMN || RIJEKA || VLISSINGEN

CARTAGENA || HELSINGOR || MARSAXLOKK || ROSTOCK || WILHELMSHAVEN

CASTELLON || HELSINKI || MARSEILLES || ROTTERDAM || ZEEBRUGE

CIVITAVECCHIA || HOLYHEAD || MESSINA || ROUEN ||

CONSTANTZA || HUELVA || MILAZZO || SAVONA-VADO ||

CORK || HULL || MILFORD HAVEN || SHEERNESS ||

DELFZIJL || IGOUMENITSA || NAANTALI || SINES ||

DOVER || IMMINGHAM || NANTES-ST-NAZAI || SORRENTO ||

ANNEX VII: Modelling of impacts  

main assumptions[38]

Quantification of Impacts

This note sets out the methods used to estimate certain quantified impacts associated with the proposed policy packages.

Five policy packages have been considered; PP1, PP2, PP2a, PP3, and PP2a-variant.

Three main areas have been considered:

· The relationship between the policy packages and user costs (freight).

· The impact of alternative user costs on freight traffic, including modal shift.

· The impact of alternative freight traffic patterns on externalities of transport.

Step 1:

The first step is to relate the individual policy measures contained in a policy package to specific port services.  Different measures tend to target specific elements of the value chain e.g. infrastructure provision, technical nautical services, etc. 

All the measures were enumerated and allocated to policy packages.  Each of the main port services has been considered in turn, and a linkage has been derived between the measure and the service.  Thus, for example a measure aimed at port infrastructure is not deemed to have an impact on a technical nautical service. 

Where linkages are deemed to exist, it is necessary then to assess what kind of impact is likely to be negative, positive or neutral on efficiency. It is not known which ports have the potential to improve their performance in a specific area, nor the level of improvement: in general, each impact is only assumed to have a modest effect e.g. a single percentage point per measure. The main objective is therefore to identify which particular services might react to which measures, and to ensure that combined measures are working in a cohesive way.

Port User Costs: assumptions

One of objectives for improving the efficiency of port services is to remove bottlenecks and ultimately to save cost. For the impact assessment it has been necessary to consider how the policy packages might contribute on transport costs.

During the conduct of the study, stakeholder discussions have tended to present a view of port operations in which a range of separate services, with varying levels of co-ordination and efficiency, also varying by port, are consumed by users.  In many cases, users pay separate fees according to different tariffs to the port service providers, and not an “all-in” price.  For cargo ships, the largest items will be port dues, cargo handling, pilotage, towage and mooring.  Part of the cargo handling fee paid to terminal operators also covers land rents which will be paid by terminal operators to port authorities.

Although it is very difficult to generalise about port costs and tariff structures, it is possible using published tariffs, port accounts and stakeholder responses to make an approximate subdivision of user costs amongst the different services. When this cost information is combined with a set of maritime flows, it is possible to make an estimate of total turnover in the port sector. By segmenting the analysis into cargo types (e.g. container, ro-ro, bulk) and by geographical areas (short sea, near sea, deep sea) it is possible to refine this estimation somewhat.

User costs, expressed in Euros per tonne, have been applied to the maritime traffic matrices.  Port costs have been estimated using existing Port of Rotterdam tariffs. 

Table Error! No text of specified style in document.‑2: Assumed Port Costs, 2012

Port Costs || || || || || || ||

Euros per tonne || || || || || || ||

|| Port Dues || Handling || Pilotage || Towage || Mooring || Others || Total

Containers || 0.70 || 7.00 || 0.30 || 0.30 || 0.10 || 0.05 || 8.45

Dry Bulk || 0.60 || 2.00 || 0.25 || 0.25 || 0.10 || 0.05 || 3.25

Liquid Bulk || 0.75 || 2.00 || 0.30 || 0.25 || 0.10 || 0.05 || 3.45

RORO || 0.85 || 0.50 || 0.00 || 0.00 || 0.00 || 0.05 || 1.40

Other || 0.60 || 5.00 || 0.50 || 0.30 || 0.10 || 0.05 || 6.55

Using the traffic forecast, PwC / Panteia has therefore estimated that aggregate port costs at today’s prices, but with future volumes, for EU ports would be €15,837 million in 2030.  This forecast takes into consideration differential growth by traffic type and by O/D.  Table one provides forecasts of throughput and revenue for the forecast year 2030.  Note that in this table, tonnage is the volume of maritime traffic moved.  Most European maritime traffic calls at more than one European port, and sea-to sea transshipment involves double handling, counted as two separate cargo movements, so these forecasts translate into port throughputs of 5.8 billion tonnes, compared to around 4 billion tonnes today.

Table Error! No text of specified style in document.‑3: Estimated Aggregate Port Costs, 2030

2030 || Tonnage (million) || Port Revenue (€ million)

|| ||

Containers || 606.00 || 5,437.49

Dry Bulk || 844.27 || 4,151.46

Liquid Bulk || 749.78 || 4,060.60

RORO || 218.26 || 461.73

Other || 183.27 || 1,725.95

|| ||

TOTAL || 2,601.57 || 15,837.23

Policy Packages

During consultation, stakeholders have indicated that problems of both quality and price can be found in European seaports – there is not a uniform level of performance. Both physical (access and infrastructure) and organisational factors are considered to play a part, and one of the important root causes identified are instances of weak competition.  Essentially the port packages aim to address infrastructure requirements though measures to attract private investment, as well as structural requirements by creating the right conditions for enhancing competition, and creating a more business-friendly environment.

For the impact assessment it is necessary to consider how the different policy packages contribute. A priori, it is not possible to know in detail which ports and which services will be affected, and the margin for improvement that can be realised. However, the packages are structured so that it is possible to infer the relative strength of the measures contained, and to allow some indication of which services might respond to a greater or lesser extent. For example, because of inter-port competition, cargo handling costs are less likely to respond to measures that open up market access. Technical nautical services on the other hand are less exposed to inter-port competition, and in many cases there is only limited intra-port competition for these.

The approach has therefore been to apply conservative estimates of cost changes, differentiated per package and per service in order to permit comparison. These are assumptions made by relating policy package descriptions to changes in user cost. By scaling the costs up to the level of the industry it is possible to indicate the importance of port services at the European scale for consumers and businesses. Based on the above assumptions, the information obtained from the user surveys has been analysed in order to derive the following parameters for estimating the scope for cost decreases.

|| Port Dues || Handling || Pilotage || Towage || Mooring || Others

PP1 || 1.00 || 0.98 || 0.97 || 0.95 || 0.95 || 0.95

PP2 || 1.10 || 0.95 || 0.95 || 0.90 || 0.90 || 0.90

PP2a || 0.95 || 0.94 || 0.92 || 0.85 || 0.85 || 0.85

PP3 || 0.96 || 0.93 || 0.90 || 0.80 || 0.80 || 0.80

PP2a VARIANT || 0.95 || 0.98 || 0.92 || 0.85 || 0.85 || 0.85

Step 2:

In the second step, the cost variations have been applied in a model of European maritime traffic.  Maritime flows have been analysed as O/D traffic between coastline areas e.g. Britain to the Iberian Peninsula. Seventeen coastline areas have been used, of which thirteen are in the EU, and four outside. Traffics are broken down into five categories, including container, dry bulk, liquid bulk, roll-on roll-off and other general cargo. They are forecast using the TRANSTOOLS trade model (v2.6) to 2030.

Maritime costs, including port costs, have been estimated for this traffic set.  Within the port cost estimate, separate amounts have been estimated for the main port services, including infrastructure, cargo handling, technical nautical services (analysed separately) and other services. Inputs for port costs are primarily based on 2011 Port of Rotterdam port tariffs. Port of Rotterdam figures have been used partly because they cover almost 10% of European traffic, implying that they have influence on competing ports, but also because tariffs for all services are published.

By combining forecast traffic flows with estimated charges, it is possible to arrive at an estimate of aggregate port costs in the EU. These can be expressed in percentage terms or absolute changes. For example, in PP1, where it is assumed that savings ranging from zero up to 5%, the net cost saving is estimated at 2.0%.

(2030) Change (%) in Total Port Related Costs || Annual Savings (€ million)

PP1 || -2.0% || -318.15

PP2 || -3.0% || -481.47

PP2a || -6.8% || -1,071.37

PP3 || -7.9% || -1,245.21

PP2a VARIANT || -4.0% || -635.55

Step 3:

Lower user costs act as an incentive to use maritime options in cases where sea is in competition with land transport. For the majority of traffic flows this is not the case; either the flows are captive for land transport or for sea, so the relative traffic shifts are expected to be small.  Nevertheless, they can be estimated using a multimodal model.  In the third step, therefore we have used the WORLDNET (FP6) approach to estimate multimodal route, following the methodology used in the study “Ports and their connections within the TEN-T”, (DG-MOVE, 2010). This model assigns flows to multi-modal mode chains, thus estimating port choice, and the sensitivity between land and sea options. The calculation is made using 2010 network and flow data obtained from the ETISplus (FP7) transport information system.

The only variable used in this modelling step is port cost, with the inputs coming from the outcome of Step 2.  Only EU ports are affected. 

|| Inland Tonne-Kms(m) || Maritime Tonne-Kms(m) || Maritime Tonnes || Change in Short Sea Shipping (%) || Change in Road transport over 300Km

PP1 || -1,929 || 3,603 || 4,951,830 || 0.49% || -833

PP2 || -2,894 || 5,404 || 7,427,745 || 0.73% || -1,249

PP2a || -5,996 || 13,311 || 16,550,502 || 1.63% || -2,634

PP3 || -6,713 || 15,942 || 19,099,402 || 1.88% || -2,972

PP2a variant || -3,858 || 7,205 || 9,903,660 || 0.97% || -1,666

Model results show that inland traffic volumes fall by between 1.9 to 6.7 billion tonne kilometres, with a corresponding shift of between 3.6 billion and 15.9 billion tonne kilometres towards maritime transport. These figures imply an increase in maritime tonnes of between 4.9 million and 19.1 million. Since the shifted flows are between European ports, the increase in European seaport traffic will be double, i.e. up to almost 40 million tonnes under PP3 assumptions.

The impact on short sea shipping volumes ranges from a 0.49% increase in PP1 to a 1.88% increase in PP3.

For inland transport, the shift causes a decrease in road and rail modes. There is a modest increase in inland waterway traffic because this mode is frequently used in combination with maritime traffic. For road transport, the decrease is mainly found in longer distance bands.  For example, PP2a reduces total inland transport by 5,996 million tonne kilometres, of which 2,634 million are shifted from road haulage trips over 300km long.

Step 4:

As explained earlier, lower user' costs act as an incentive to use maritime options in cases where sea is in competition with land transport. The maritime traffic increase is expected to result in new job creation.

According to our analysis every additional million tonnes (adjusted) of throughput creates roughly 90 new cargo handling jobs. Cargo handling jobs are approximately 10% of total direct employment including non-maritime employment, and 20% of direct maritime employment.

Therefore, taking into consideration only the direct employment categories, we obtain the following estimation for the baseline scenario:

Table 4: Estimated Employment Impacts, 2010 to 2030, Reference Scenario

Throughput || 2010 || 2030 || Growth 30/10 || Gr% YoY

EU Port Throughput (T. mln) || 3,622.43 || 5,204.44 || 44% || 1.8%

Adjusted Throughput (T.mln) || 1,107.94 || 1,801.43 || 63% || 2.5%

|| || || ||

Employment || || || ||

Port Workers (000s) || 111.18 || 163.57 || 47% || 1.9%

Other Maritime Port FTE (000s) || 101.19 || 117.27 || 16% || 0.7%

Non Maritime Direct FTE (000s) || 256.45 || 256.45 || 0% || 0.0%

Total Direct Employment (000s) || 468.83 || 537.29 || 15% || 0.7%

It is assumed that through a combination of public and private sector actions, including the EC measures to enhance port capacity, that volume will increase of 44% in EU ports by 2030.  As a consequence, we estimate that the number of port workers will increase from the present day figure of around 110,000 to around 163,000 by 2030. 

The ratio of other maritime port FTEs to port workers is based on the Flemish ports ratios.  Over time it is expected that the ratio falls in line with increasing productivity rates.  Non-maritime direct employment in ports is not expected to react to traffic volume.

Total direct employment is therefore estimated to grow by 15%, or approximately 70,000.

In the policy scenario (high case PP3), additional port volume would help to generate around 2,500 additional jobs.  See below.

Table 5: Estimated Employment Impacts, 2010 to 2030, Policy Scenario

Throughput || 2010 || 2030 || Growth 30/10 || Gr% YoY

EU Port Throughput (T. mln) || 3,622.43 || 5,251.46 || 45% || 1.9%

Adjusted Throughput (T.mln) || 1,107.94 || 1,817.71 || 64% || 2.5%

|| || || ||

Employment || || || ||

Port Workers (000s) || 111.18 || 165.05 || 48% || 2.0%

Other Maritime Port FTE (000s) || 101.19 || 118.33 || 17% || 0.8%

Non Maritime Direct FTE (000s) || 256.45 || 256.45 || 0% || 0.0%

Total Direct Employment (000s) || 468.83 || 539.83 || 15% || 0.7%

Difference, Policy-Reference || || +2.54 || ||

The major employment impact comes from the exogenous effect of traffic growth. As shown in table 1 total direct employment in the baseline is estimated to grow by 15%, or approximately 70,000 from 2010 to 2030.

Policy measures contribute to this impact by setting out a more favourable structural framework for attracting investment.  In addition they directly contribute to maritime and port employment through modal shift.

Table below summarises the number (unit) of additional jobs against the reference scenario expected in 2030 under different PPs.

2030 || EU Port Throughput  (Ton million) || Adjusted Throughput (Ton million) || New jobs

PP1 || 5,216.63 || 1,805.65 || 658

PP2 || 5,222.73 || 1,807.76 || 987

PP2a || 5,245.19 || 1,815.54 || 2,199

PP3 || 5,251.46 || 1,817.71 || 2,537

PP2a VARIANT || 5,228.82 || 1,809.87 || 1,316

Step 5:

In the final step, the inland traffic reductions and the maritime traffic gains are evaluated in terms of their externalities.  The following average rates are used per unit (a 12m lorry or a forty foot container load), covering noise, accidents and emissions.

|| RAIL || ROAD || WWAY || SEA

Externalities € per Unit/Km || 0.161 || 0.3893 || 0.1984 || 0.0311

Valuations are based on a number of studies including:

1. IMPACT, Handbook on estimation of external costs in the transport sector.  Produced within the study “Internalisation Measures and Policies for All external Cost of Transport”, IMPACT, 2008, Maibach et al. (INFRAS, CE-Delft).

2. Vergelijkingskader Modaliteiten 1.4b, NEA in association with STERC, TransCare, 2001 to 2004. A study for the Ministerie van Verkeer en Waterstaat (DGG/AVV).

3. ASSET, Assessing Sensitiveness to Transport, Alpine Crossing, ECOPLAN, 2009. This study, in turn, uses inputs from ECOPLAN and INFRAS (2208), Externe Kosten des Verkehrs in der Schweiz. On behalf of Swiss Federal Office for Spatial Development and Federal Office of the Environment, Bern.

By applying these rates to the net shifts per mode, we obtain the following estimates:

|| External Costs (€m/pa)

PP1 || -23

PP2 || -34

PP2a || -69

PP3 || -76

PP2a VARIANT || -46

Port Employment

European port employment data is described by the recent study by Dr Eric Van Hooydonk, “Port Labour in the EU"[39] as “scattered, indeed hardly comparable”, and of “uneven quality and reliability”.  It is therefore difficult to present an accurate overview of port employment at a European level.  The Van Hooydonk study concentrates on the number of port workers or dockers engaged in cargo handling, as well as a few related activities including warehousing.  According to this definition, the study estimates that there are around 110,000 port workers in the EU.

At national level or port level it is possible to extend these definitions.  In the study by ITMMA “Dock labour and port related employment[40]” certain national case studies are presented.  In the Flemish ports of Antwerp, Zeebrugge, Ghent and Oostende, total direct port employment was recorded as 108,818 full time equivalents (FTE).  However, only approximately between one third and one half of these direct employees work in the ‘maritime cluster’.  The rest work mainly in industry located at the port complexes.  In Antwerp for example, there were 60,509 direct FTE employees in 2010[41], of which 27,410 were employed in the maritime cluster. Of those, 14,350 were working in cargo handling activities in 2010.  By comparison, the Van Hooydonk study shows that the number of dockers in Belgium as a whole was only 10,300, so the categorisation offered by official statistics could be difficult to interpret.

Table 6: Employment at the port of Antwerp (number of FTEs)

|| 2005 || 2008 || 2009 || 2010

Cargo Handling || 14,079 || 15,249 || 14,858 || 14,350

Shipping agents and forwarders || 6,457 || 6,940 || 6,805 || 6,808

Port Authority || 1,646 || 1,631 || 1,659 || 1,680

Other || 4,091 || 4,678 || 4,884 || 4,572

Total Maritime Cluster || 26,273 || 28,498 || 28,206 || 27,410

|| || || ||

Total Non-Maritime Cluster || 35,443 || 35,256 || 34,376 || 33,099

|| || || ||

Total Direct FTE || 61,716 || 63,754 || 62,582 || 60,509

|| || || ||

Antwerp throughput (mln. Tonnes) || 160,1 || 189,4 || 157,8 || 178,2

                        Source: National Bank of Belgium, 2012

Comparing employment trends and throughput trends over this period (2005-2010), it can be seen that throughput grows faster than employment.  From 2005 to 2010, throughput increased by 11%.  Non-maritime employment fell, whereas the main maritime categories increased between 2% and 5%.  ITMMA 2010 considers a longer time period between 2002 and 2007, and shows that while cargo in Flemish ports increased by 32%, employment in the maritime cluster increased by 18%. 

During the growth period 2002-2007, ITMMA shows that non-maritime employment fell by 1%.  They argue that this is related to a process of “de-maritimisation”, implying that there is a shift in non-cargo handling activity from port complexes towards the hinterland.  Growth in throughput, without an equivalent expansion of port land, implies that a higher proportion of activity within the port will become directly related to the movement (rather than the processing) of goods.  Thus, direct port related employment may be substituted by indirect employment in the hinterland.

Over the period 2005 to 2010, the trends in throughput and maritime employment, including cargo handling are somewhat erratic.  Non-maritime direct employment continues to fall.

Figure 2- Port Throughput and Employment in Antwerp

Source: NBB, 2012

In Rotterdam, traffic grew by 16% in total tonnage between 2005 and 2010.  Over the same period total direct employment[42] grew from 85,844 to 87,111 (+1.5%).  Industrial employment which accounts for around 20,000 of these employees, fell during this period but that was compensated in other areas such as road haulage, which grew from 21,930 to 25,357, and logistics services, which grew from 10,598 to 11,449.   Employment in the activities most closely associated with cargo movement, described as ‘transhipment and warehousing’ rose from 9,021 in 2005 to a peak of 9,605 in 2008 and then fell steadily to 8,898 in 2010.  It is difficult to directly compare Rotterdam and Antwerp statistics, but the general picture of moderate growth and static employment seems consistent.

Higher employment levels in Antwerp relative to cargo throughput (14,350 cargo handling employees for 178 million tonnes) compared to Rotterdam (8,898 transhipment and warehousing employees for 430 million tonnes) can be partially explained by the relative importance of more capital intensive sectors in Rotterdam, especially liquid bulk.

Employment impacts of traffic growth in ports, Hamburg-Le Havre Range

Both Notteboom and Van Hooydonk emphasise caution in the comparison and use of port employment statistics. However, we can derive a few tentative conclusions from those studies.

· Port workers, or dockers, as defined by Van Hooydonk may represent some 10% of total direct employment in ports.

· Employment in cargo handling and warehousing tends to follow the economic cycle, but does not grow in direct proportion to throughput.

· Throughput has been growing faster than employment in the reviewed cases.

· Employment in non-maritime activities in ports does not correlate well with throughput and a long term decline seems to occur in this category.

Using the Van Hooydonk employment data, it is possible to make a scatter plot relating port employment per country to throughput.  We have applied the ‘Antwerp rule’ as a way of normalising the mix of traffic, given that certain traffic types e.g. break bulk, are more labour intensive per tonne than others such as crude petroleum.  Following the review of value added methods in ITMMA (2010), we apply the rule that 1 tonne of conventional cargo = 1 tonne of roll on roll off = 18 tonnes of crude oil = 2 tonnes of liquid bulk (except crude oil) = 3 tonnes of containers = 5 tonnes of dry bulk.

Table 7: Assumptions for Port Traffic Value Added, the 'Antwerp Rule'

|| Conventional Cargo || RoRo || Crude petroleum || Other Liquid Bulk || Containers || Dry Bulk

Antwerp Rule || 1 || 1 || 18 || 2 || 3 || 5

Source: ITMMA 2010.

However, if we convert all the traffic in the Hamburg-Le Havre range according to these factors into “conventional cargo equivalent” tonnes, the trend is broadly similar to the overall trend in tonnes.

Figure 3: Growth in "Conventional Cargo Equivalent”  Tonnes according to the Antwerp Rule

Over the fifteen year term, throughput (expressed with these adjustments) has risen by 73%.  During the period 2002 to 2007, it grew by 37%.  Comparing this growth phase with the employment statistics, relating to maritime clusters, in the ITMMA (2010) study, it appears that there is approximately a 2:1 ratio between adjusted traffic growth and employment growth.

Employment Impacts, Italy

Data produced by Assoporti in 2008[43] shows that Italian ports accounted for 56,682 jobs in 2007, of which 27,899 were categorised as direct FTE.  This compares with the employment figures quoted by Van Hooydonk, showing that there were up to 18,000 dockers employed in Italy.

Table 8: Traffic and Employment in Italian Ports

|| 2004 || 2007 || Growth 2007/2004

Employment (nr jobs) || 27,500 || 27,899 || +1.4%

Annual Traffic (tonnes) || 484,877 || 537,300 || +10.8%

The figures suggest that direct employment rates per tonne of cargo moved are generally lower than in the North European examples.  Given that Italian ports collectively handle approximately double the volume carried via Flemish ports, direct employment levels are close to the quoted Flemish figures for the maritime cluster, at around 30,000 FTE.  This suggests that a higher proportion of Italian direct employees are indeed dockers.  The ratio of traffic growth and employment growth is also higher, at around 8:1.

In Genoa, which carries around 50 million tonnes per annum, or around 10% of the Italian market, the port authority shows employment levels at 37,073.  However, only 4,274 are classified as working in the commercial port, with a further 6,500 in ship-building and ship-repair, and 26,299 in port logistics and auxiliary services.

Table 9: Traffic and Employment in Italian Ports

|| 2004 || 2010

Employment (nr jobs) || || 37,073

- Commercial Port || || 4,274

- Shipyard || || 6,500

- Port Logistics and Auxiliary || || 26,299

Annual Traffic (tonnes) || 57,033 || 51,952

                                                Source: Genoa Port Authority

This suggests, as in the cases of Antwerp and Rotterdam that employees fitting the narrower definitions of port workers, i.e. those engaged in the operation of a port, are in the minority, and around 10% of total port employment in these examples.

Employment Impacts, EU27

For the wider European picture, we rely upon the surveys conducted by Van Hooydonk (2013), covering a narrower definition of port labour.

Here we have made a scatter plot relating converted throughput[44] (in millions) against the number of port workers (in thousands).

Figure 4: EU Port Employment as a function of throughput

The slope of the function implies that every additional million tonnes (adjusted) of throughput creates roughly 90 new cargo handling jobs. 

Given the previous analysis showing that cargo handling jobs are approximately 10% of total direct employment including non-maritime employment, and 20% of direct maritime employment.

Estimate of Employment Impacts

Therefore, taking into consideration only the direct employment categories, we obtain the following estimation:

Table 10: Estimated Employment Impacts, 2010 to 2030, Reference Scenario

Throughput || 2010 || 2030 || Growth 30/10 || Gr% YoY

EU Port Throughput (T. mln) || 3,622.43 || 5,204.44 || 44% || 1.8%

Adjusted Throughput (T.mln) || 1,107.94 || 1,801.43 || 63% || 2.5%

|| || || ||

Employment || || || ||

Port Workers (000s) || 111.18 || 163.57 || 47% || 1.9%

Other Maritime Port FTE (000s) || 101.19 || 117.27 || 16% || 0.7%

Non Maritime Direct FTE (000s) || 256.45 || 256.45 || 0% || 0.0%

Total Direct Employment (000s) || 468.83 || 537.29 || 15% || 0.7%

It is assumed that through a combination of public and private sector actions, including the EC measures to enhance port capacity, that there is a volume increase of 44% in EU ports by 2030.  As a consequence we estimate that the number of port workers will increase from the present day figure of around 110,000 to around 163,000 by 2030. 

The ratio of other maritime port FTEs to port workers is based on the Flemish ports ratios.  Over time it is expected that the ratio falls in line with increasing productivity rates.  Non maritime direct employment in ports is not expected to react to traffic volume.

Total direct employment is therefore estimated to grow by 15%, or approximately 70,000.

In the policy scenario (high case PP3), additional port volume would help to generate around 2,500 additional jobs.  See below.

Table 11: Estimated Employment Impacts, 2010 to 2030, Policy Scenario

Throughput || 2010 || 2030 || Growth 30/10 || Gr% YoY

EU Port Throughput (T. mln) || 3,622.43 || 5,251.46 || 45% || 1.9%

Adjusted Throughput (T.mln) || 1,107.94 || 1,817.71 || 64% || 2.5%

|| || || ||

Employment || || || ||

Port Workers (000s) || 111.18 || 165.05 || 48% || 2.0%

Other Maritime Port FTE (000s) || 101.19 || 118.33 || 17% || 0.8%

Non Maritime Direct FTE (000s) || 256.45 || 256.45 || 0% || 0.0%

Total Direct Employment (000s) || 468.83 || 539.83 || 15% || 0.7%

Difference, Policy-Reference || || +2.54 || ||

Summary outcome

The major employment impact comes from the exogenous effect of traffic growth. As shown in table 5 total direct employment in the baseline is estimated to grow by 15%, or approximately 70,000 from 2010 to 2030.

Policy measures contribute to this impact by setting out a more favourable structural framework for attracting investment.  In addition they directly contribute to maritime and port employment through modal shift.

Table below summarises the number (unit) of additional jobs against the reference scenario expected in 2030 under different PPs.

2030 || EU Port Throughput (T. mln) || Adjusted Throughput (T.mln) || New jobs

PP1 || 5.216,63 || 1.805,65 || 658

PP2 || 5.222,73 || 1.807,76 || 987

PP2a || 5.245,19 || 1.815,54 || 2,199

PP3 || 5.251,46 || 1.817,71 || 2,537

PP2a VARIANT || 5.228,82 || 1.809,87 || 1,316

Reference Forecast – Overview of Methodology and Assumptions

The forecast is based upon applying a trade growth model to a disaggregated set of traffic flows, in which long distance trade flows are related to port traffic.  This approach uses the NEAC[45] trade model methodology applied to a WORLDNET[46] freight-chain matrix derived from ETISplus[47] freight statistics.  It has been updated during 2012 as a task of the Trans-Scenario[48] project, to integrate the methodology into the newest (v2.6) TRANS-TOOLS[49] model.

Structure of NEAC Trade Model (Source: Panteia/NEA)

In order to estimate port traffic, assumptions of economic growth up to 2030 and 2050 have been applied to a base year traffic matrix, containing maritime flows.  Assumptions of economic growth use current (2012) estimates from PRIMES[50]/TREMOVE[51].

WORLDNET  - Mode Chain estimation Origin->Port1 Port1 -> Port2 Port2 -> Destination

ETISplus Database - Trade Data - Port Data - Inland Transport Data

NEAC Trade Model - Forecasting - Per product - Per origin/destination

The results of the model, namely the matrixes of port to port flows of maritime traffic (estimations 2005-2030) are given in Annex VIII.

Key points:

· The model builds up a picture of port-related traffic using trade data and port throughput data.

· The only assumptions entered into the forecasting model are economic growth rates, based on current expectations (Trans-Scenario, 2012);

· The model does not shift traffic between ports – it is competition neutral;

· Differential growth rates according to coastline areas arise only from variations in regional economic growth and the mix of commodities; and

· The model calculates unconstrained demand – without capacity ceilings for transport infrastructure.

Balance of Demand and Supply in European Ports, up to 2030

4.1       Demand

The following forecasts are calculated using the TRANSTOOLS v2.6[52] model, based on economic assumptions (GDP and GVA) obtained from the PRIMES[53] model.  Average growth in GDP for the EU27 as a whole is expected to be 1.4% per annum up to 2030.  Different growth rates are assumed for each EU member State and for each trading partner.

It implies that growth will be close to 50% by 2030, with an average annual growth rate of 1.9% per annum.

Table 12 - 2010 port traffic by region of loading/unloading

Region || Container || Dry Bulk || Liquid Bulk || RoRo || Other Cargo || Total

UK/Ireland || 65.46 || 137.58 || 265.57 || 123.12 || 18.70 || 616.60

Nordic || 32.71 || 134.00 || 204.03 || 89.08 || 46.57 || 517.08

South Baltic || 14.61 || 68.86 || 83.81 || 13.74 || 13.86 || 194.90

Hamburg-France || 323.35 || 329.79 || 529.26 || 92.36 || 80.63 || 1,357.59

Iberia || 124.48 || 90.50 || 175.37 || 15.45 || 25.32 || 431.12

Italy/Malta || 83.22 || 67.76 || 207.01 || 85.72 || 33.45 || 482.92

Balkan/Aegean || 54.48 || 74.47 || 80.81 || 24.69 || 56.12 || 313.36

Black Sea || 6.26 || 27.42 || 20.03 || 0.30 || 6.18 || 60.19

Total || 704.56 || 930.40 || 1,565.88 || 444.46 || 280.83 || 3,973.76

Source: Eurostat/ETISplus.

Table 13 - 2030 port traffic by region of loading/unloading

Region || Container || Dry Bulk || Liquid Bulk || RoRo || Other Cargo || Total

UK/Ireland || 125.74 || 155.43 || 297.49 || 137.46 || 35.26 || 751.39

Nordic || 50.53 || 187.66 || 240.30 || 122.01 || 81.87 || 682.37

South Baltic || 19.91 || 158.09 || 88.92 || 17.68 || 39.39 || 323.98

Hamburg-France || 595.58 || 434.53 || 571.20 || 186.83 || 138.26 || 1,926.40

Iberia || 217.28 || 176.38 || 213.45 || 38.34 || 50.98 || 696.44

Italy/Malta || 179.00 || 112.67 || 261.87 || 80.05 || 64.24 || 697.83

Balkan/Aegean || 120.80 || 156.28 || 122.21 || 50.50 || 128.72 || 578.51

Black Sea || 8.22 || 69.73 || 28.90 || 1.53 || 37.81 || 146.19

Total || 1,317.06 || 1,450.77 || 1,824.34 || 634.40 || 576.53 || 5,803.11

Port Traffic in the container sector will be higher than in the bulk sectors.  By 2030, container traffic growth will exceed  85% i.e. 3.2% year on year growth.   

These results can be compared with other market research studies:

ISL Port Traffic Forecasts up to 2025

In the 2010 study by ISL, “Prognose des Umschlagpotenzials des Hamburger Hafens fur die Jahre 2015, 2020 und 2025”, they show in the neutral economic forecast that container traffic in the Hamburg-Le Havre range might increase from 39.2 million TEU in 2008 to 70.9 million by 2025 (basis-scenario, p92).  That suggests an annual rate of growth of 4.8% per annum for container traffic.  For bulk cargo they indicate a rather static picture, with volumes remaining close to current levels.

Port of Rotterdam, Port Vision 2030

Port of Rotterdam’s Port Vision 2030 sets out a long term strategy in which they cite factors such as global shifts and changes in the patterns of energy demand and supply as the driving forces for continued port traffic growth, particularly in the inter-continental trades.  When this is combined with expected changes in the organisation of these traffic flows, and with cost and fuel savings offered by scale economies the port expects that there will be greater specialisation and clustering.

They apply four scenarios:

· Low Growth: with low economic growth and moderate environmental policy;

· European Trend: based on current trends and policy measures;

· Global Economy: with high economic growth, low fuel prices, and a low degree of environmental policy; and

· High Oil Price:  with moderate economic growth, high oil prices, and a higher degree of environmental policy.

From a 2010 volume of 430 million tonnes, Rotterdam forecasts increases in volume up to 750 million tonnes in 2030.

Table 14 - Port of Rotterdam, Port Vision 2030

1. Scenario || 2. 2030 prediction (tonnes) || 3. Annual growth rate 2010-2030

4. Low Growth || 5. 475 million || 6. 0.5% per annum

7. High Oil Price || 8. 575 million || 9. 1.5% per annum

10. European Trend || 11. 650 million || 12. 2.1% per annum

13. Global Economy || 14. 750 million || 15. 2.8% per annum

In the European port forecast estimated by PwC/Panteia in this document, annual average growth rates up to 2030 are 1.9%.  This lies in between the range of the two central Rotterdam scenarios (High Oil Price and European Trend).

OPTIMAR, IHS-Fairplay, Benchmarking Strategic Options for European Shipping and for the European Maritime Transport System in the Horizon 2008-2018, 2010 Update

OPTIMAR makes medium term forecasts for the European shipping sector.  A post-crisis revision was published in 2010.  It explains the expansion in the capacity of the world shipping fleet, and how this continued to grow throughout the period following the first economic crisis in 2008.  Port volumes are shown to have fallen in many European coastal regions after 2008, but the report concludes that its strategic outlook or “signals of future change” were unchanged.  The study had demonstrated that shipping-line capacity was capable of accommodating growth, but that in some port sectors, notably containers, there would be space constraints.  One important driver in this market would be the growth of Russian containerized volumes, and the opportunity this creates for transshipment at EU hub ports.

In the OPTIMAR SWOT analysis of the European port system (see Annex), weaknesses are cited in relation to capacity shortages e.g. in East Baltic dry cargo sector, and in the container sector for most regions.  Efficiency and unstable labour relations are also highlighted.

Opportunities include the development of Motorways of the Sea, new container feedering patterns, and the growth of Russian markets.  The authors foresee a situation where excess capacity in the shipping fleet will drive the sector forward to seek new opportunities, especially in emerging markets. 

4.2       Demand/Supply Balance

Because of the relatively high growth in the container sector, and the heavy investment required to build modern container terminals capable of handling the largest container vessels, the question of port capacity and imbalances between demand and supply is particularly important for European container flows. 

OECD, Strategic Transport Infrastructure Needs to 2030

In 2011, the OECD study “Strategic Transport Infrastructure Needs to 2030” pointed towards “modest but sustained” growth in developed countries and “significantly higher growth” in developing countries.  Worldwide the study expected that the volume of container transport would quadruple by 2030. 

Much of that growth will be stimulated by economic and logistical changes taking place outside Europe, but it can still be expected that the volumes in major inter-continental gateways will increase.

In the same study, the OECD indicated that infrastructure capacity is not able to handle even a 50% increase in demand, and therefore that the supply side will become congested. 

CLECAT (International Transport Forum, 2007)

CLECAT (European Association for Forwarding, Logistics and Customs Services) provided examples of port congestion in Europe in 2004.  These occurred during a period of rapid growth, and they show that periods of unexpected growth can create short to medium term capacity shortages, resulting in additional cost and delay for shippers.  It is estimated that when the supply demand ratio reaches 80%, the user will experience congestion because there will be very limited scope to handle peaks in demand.

North European Deep Sea Ports Utilisation 2004 – Source Drewry Shipping Consultants & European Association for forwarding, transport, logistics and custom services (CLECAT)

Port || Capacity Utilisation

Le Havre || 89.6%

Antwerp || 92.9%

Rotterdam || 92.5%

Bremerhaven || 95.5%

Hamburg || 93.2%

Southampton || 99.3%

Felixstowe || 77.1%

Others || 41.9%

Total average || 86.6%

Ocean Shipping Consultants, (2006) Forecast Container Handling Supply/demand Balance up to 2015

OSC’s 2006 publication showed that by 2015, even with large increases in capacity in many regions, utilisation rates would reach in excess of 80%, the point at which congestion would start to be felt by users.

Supply/Demand balance by Coastal Region

Source: Ocean Shipping Consultants, 2006

Ocean Shipping Consultants (2012), North European Container Ports Market

In the update study in 2012 (post crisis) OSC show that capacity utilisation in the European North Continent , despite lower demand between 2010 and 2015, is still likely to reach 70% by 2020 in their base case forecast.

Source: North European Container Ports Market, Ocean Shipping Consultants, 2012

The time-series shows how the capacity utilisation has stabilised at around 65% in 2012-2013, which coincides with the impression derived from the impact assessment consultation that European ports have sufficient maritime capacity today.   However, the outlook shows that after a period of rapid capacity expansion lasting until around 2018, utilisation rates will start to reach 70% again by 2020.

4.3       Demand/Supply Balance – Conclusions

Market research studies (as shown above) indicate that the supply/demand balance for container transport in Europe has shifted from the range 70-90% in 2005, to around 60-70% in 2010, since growth has slowed sharply between 2008 and 2010.  On the supply side, many major container investments such as the Maasvlakte II terminal in Rotterdam and the Jade-Weser terminal in Northern Germany are starting to become operational.  While this alleviates capacity shortages today, the planning horizon needs to be longer.

Demand levels can be restored steadily, and shipping capacity can be added at short notice, but adding port capacity is more difficult.  A.A. Pallis[54] demonstrated that port developments in Europe have faced lengthy delays, both in the initial planning and in the implementation.  Several approved plans have never been realised, and many others have failed to win approval.  Maasvlakte II has taken over twenty years from initial plans to realisation. 

Existing port terminals may also face setbacks.  In Hamburg, for example, capacity development has been hindered by disagreements over plans to dredge the River Elbe for the first time since 1999[55].  Without dredging, the port would become less attractive for some carriers particularly on Far East routes, potentially reducing choice and creating bottlenecks elsewhere. 

On balance, however, the OSC (2012) study shows that these North European developments will stabilise between 2015 and 2020, leaving utilisation rates at around 70%.  By 2020 the market is predicted to be experiencing growth in demand, but the foreseeable investment projects will have been realised.

In 2010 European container port throughput is at a level of 81m TEU (Source ESPO).  With 85% growth as predicted for 2030, container throughput demand will increase to 149m TEU in Europe.  Current utilisation rates imply that total capacity today is around 115m TEU. 

Including the Maasvlakte II, development in Rotterdam, OSC predict that North European supply will increase by around 20m TEU.  A further 10m TEU increase in other regions is likely, but not at the same scale.  For example, more typically, Barcelona is adding 2.65m TEU at the BEST terminal. 

On this basis it is plausible that capacity in EU container terminals will reach 145-155 million TEU based on existing planned developments.  The changing requirements of shipping companies will also dictate that some existing capacity becomes obsolete. 

With demand at 149m TEU in 2030 and capacity also reaching 145-155m TEU, it can be demonstrated that the supply/demand utilisation rate will reach the congestion threshold of 80% before 2030, and by 2030 the utilisation rate will exceed 95% in some regions.

ANNEX: OPTIMAR (2010) SWOT ANALYSIS OF THE EU PORT SYTEM

See: http://ec.europa.eu/transport/modes/maritime/studies/maritime_en.htm

ANNEX VIII: Reference forecast – NEAC Trade Model

(see also Annex VII, Section III)

Port to port flows of maritime traffic (estimations 2005-2030)

Table ‑15: Maritime O/D, 2005, Millions of Tonnes per annum

Table ‑16: maritime O/D, 2030, Millions of Tonnes per annum

[1] Source: Statistics Explained article "Maritime transport of goods - quarterly data" updated with figures for 2012 Q1:

http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Maritime_transport_of_goods_-_quarterly_data.

[2]     Button, K. Transport Economics. Edward Elgar, Aldershot. (1993).

[3]     Goss, R. Economic Policies and Seaports: 1. The Economic Functions of Seaports. “Maritime Policy and Management” 17(3): pp.207-219. (1990).

[4]     See, e.g. International Handbook of Maritime Economics, Cullinane and others (2010)

[5] Source Oxera (taken from the ECD (2011) Report "Competition in Ports and Port Services"

[6] Based on the market analysis  of the sector (DG MOVE 2012).

[7] In the port of Tallinn one mooring service provider is present in one harbour while two others operators provide mooring services in another harbour.

[8] See  NOTTEBOOM, T., 2002, Consolidation and contestability in the European container handling industry. Maritime Policy and Management, 29, 257-269

[9] Based on our analysis of terminal providers in core ports across the EU (DG MOVE (2012).

[10] See Notteboom T., Rodrigue J., The Corporate Geography of Global Container Terminal Operators, "Maritime Policy & Management: The flagship journal of international shipping and port research", v. 39, i. 3, 2012.

[11] Ibidem.

[12] Source: ‘Dock labour and port-related employment in the European seaport system’, Prof Theo Notteboom, June 2011.

[13] Source: Haralambides H. (2012) "Ports: Engines of Growth and Employment". There are huge variations in the composition of costs from one port to another. For an academic review on port pricing issues see also Haralambides et al (2001), “Port Financing and Pricing in the EU: Theory, Politics and Reality”

[14]See OECD (2011) Report "Competition in Ports and Port Services"

http://www.oecd.org/regreform/liberalisationandcompetitioninterventioninregulatedsectors/48837794.pdf.

[15] See  ESPO (2010) Report "European Port Governance":

http://www.espo.be/images/stories/Publications/studies_reports_surveys/espofactfindingreport2010.pdf#.

[16] The categorisation made by ESPO, the "typology of regions" includes the following Member States: 1) "Hanse Region":Belgium, Denmark, Finland, Germany, The Netherlands and Sweden, 2) "New Hanse": Estonia, Latvia, Lithuania and Poland, 3) "Anglo-Saxon":Ireland and UK, 4)"Latin":Cyprus, France, Greece, Italy, Malta, Portugal and Spain and 5) "New Latin":Bulgaria, Romania and Slovenia.

[17] In 2012, the European Parliament has conducted a study on this issue, which includes a number of recommendations related to transparency and state aid rules in the port sector. The study is at : http://www.europarl.europa.eu/committees/en/tran/studiesdownload.html?languageDocument=EN&file=66171.

[18] ITMMA Report: Socio-Economic Impacts of EU Ports.

[19]Ferrari, C., Merk, O., Bottasso, A., Conti, M., Tei, A. (2012), “Ports and Regional Development: a European Perspective”, OECD Regional Development Working Papers.

[20] Haralambides et al. (2003) Erasmus University Rotterdam.

[21] Source: ESPO Fact Finding Report (2011)

[22] http://ec.europa.eu/transport/themes/sustainable/studies/doc/2012-11-inventory-measures-internalising-external-costs.pdf

[1] The Environmental Ship Index is based on ship emissions of local pollutants, such as NOx, SOx, particulate matter, and GHG. Source: http://www.wpci.nl/projects/environmental_ship_index.php.

[2] The Green Award certification scheme focuses on crew, operational, environmental and managerial elements. Source: http://www.greenaward.org/greenaward/.

[3] In addition, Directive 2000/59/EC on port reception facilities for ship-generated waste and cargo residues, requires ports to provide waste reception facilities and vessels are, against a waste charge, obligated to make use of these facilities. The charges are always differentiated based on the certain characteristics of the ship, such as gross or net tonnage, engine power, or volume.

[23] Source: DG MOVE Study (2012) "An inventory of measures for internalising external costs in transport", chapter 5 Maritime Shipping – see footnote 22

[24] http://eca.europa.eu/portal/pls/portal/docs/1/14050737.PDF

[25] Air and Sea: only domestic and intra-EU-27 transport; provisional estimates;

Road: national and international haulage by vehicles registered in the EU-27

[26] Data from main ports only (ports handling more than 1 million tonnes per year).

[27] Data from main ports only (ports handling more than 1 million tonnes per year); the tonnes have been calculated by taking the declarations of the unloading ports (inward declarations) and adding those outward declarations of partner ports for which the inward declarations were missing.

[28] http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52007DC0616:EN:HTML:NOT

[29]  Cf. last revision of the EU Ports Policy, COM(2007)

[30] See DG ECFIN web-site and IMF reports on the Conditional Assistance Programmes

[31] See http://ec.europa.eu/internal_market/publicprocurement/docs/concessions/SEC2011_1588_en.pdf

[32] A "whereas" in the draft Directive clarifies this point

[33] An illustrative example appears in the written question nr 1075/79 by Mr Gendebien to the Commission: coordination of the development of North Sea Ports, OJ C 105, 28.4.1980, p. 11

[34] COM(2007)616 Communication on a European Ports Policy

[35]See http://eca.europa.eu/portal/pls/portal/docs/1/14050737.PDF

[36] The count can be greater than 100% because more than one problem can be identified per port.  The heading “Management and ICT” covers a range of questions, including management autonomy, coordination of services, control and monitoring, etc.

[37] http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2012-13.pdf

[38] For a detailed presentation, see the final report of the PwC/Panteia 2013 "Study aimed at supporting an impact assessment to enhance the efficiency and quality of port services in the EU"

[39] Dr Eric Van Hooydonk, 2013, “Port Labour in the EU”, a study commissioned by the European Commission.

[40] T. Notteboom, ITMMA, 2010, “Dock labour and port related employment”.

[41] Claude Mathys, National Bank of Belgium, 2012, “Economic Importance of the Belgian Ports”.

[42] Port of Rotterdam Statistics. Source: Erasmus University, Rotterdam.

[43] Assoporti, 2008, “La Portualità come Fattore di Sviluppo e Modernizzazione.” Fondazione Censis.

[44] According to Antwerp Rule as before.

[45] See for example: NEA, 1999, Final Report, European Transport Forecast 2020, Freight Transport.

[46] WORLDNET Project, 2009, DG-MOVE, FP6, NEA, KIT, MKmetric, OSC, DEMIS, TINA.

[47] ETISplus project, 2012, DG-MOVE, Panteia/NEA(NL) et al.

[48] TransScenario, 2012, DG-MOVE, Tetraplan(DK) et al.

[49] TRANS-TOOLS, DG-MOVE reference transport model, JRC-IPTS, Spain.

[50] PRIMES model, NTUA, Greece.

[51] TREMOVE model, TM-Leuven, Belgium.

[52] DG-MOVE reference transport model.

[53] NTUA, Athens.  Reference model for EC forecasting.

[54] Pallis, A.A., (2009). “Port developments in Europe: Trends and policies”. ODU Maritime Institute Speaker Series at the Nauticus National Maritime Center, Norfolk Virginia, USA, March 2009

[55] De Spiegel, December 2012

Table of contents

ANNEX IX:  Administrative cost calculation (PWC, 2013) 3

ANNEX X:  Labour issues in EU ports  37

ANNEX XI: Ports in the new TEN-T Strategy   47

ANNEX XII: References  54

ANNEX XIII: Glossary   59

ANNEX IX: Administrative cost calculation (PWC, 2013)

The first section of this Annex explains the general assumptions in line with the IA Guidelines for determining the potential administrative impact. In section two, one can find the general appreciation related to administrative costs for the different policy measures. Section three explains the baseline and in section four the overall assessment is made for the different policy packages.

The final and detailed results of the administrative cost calculation comparing each of the policy packages to the baseline can be found at the end of this annex, in tables 27 and 28, pages 29-30.

General assumptions for administrative cost calculation

From an administrative cost point of view, the situation of ports is different between Member States. This means that reasonable assumptions on the number of stakeholders and frequency with which they will potentially be affected need to be constructed.

Number of ports

The considered policies will apply to TEN-T ports which include Comprehensive[1] TEN-T ports and Core TEN-T ports. Based on most recent available documents (still under negotiation) there are 319 TEN-T ports in Europe. These include 94 Core TEN-T ports and 225 Comprehensive TEN-T ports.

Nature of ports

The large majority of European ports are publicly owned. Hence administrative burden to the port managing body is assumed to result in administrative cost to the public sector.

Number of service providers

Table 1 presents the outcome of the Survey Phase 1 on the type of operators which are responsible for providing different port services in European ports.

In case the port service is awarded to more than one private operator, it is actually unknown the total number of awarded contracts. However it can be reasonably assumed that in the large majority of case the contracts are actually awarded to two operators. In case of “Cargo handling ship-shore/stevedoring” and “Cargo handling shore-inland transport”, we assume that the contracts are awarded to 10 operators; finally in the case of “passenger services” it is assumed that the number of private providers is 3. Table 2 provides an estimation of the number of service providers by category in all the TEN-T ports.

Table 1 – Port services providers by category in TEN-T ports – Survey Phase 1

Port service || Port authorities || Other Public || One private || Two or more || Other/Not specified || Total number of ports

Pilotage inside port area || 39 || 39 || 86 || 11 || 26 || 197

Pilotage outside port area || 20 || 48 || 49 || 16 || 50 || 179

Towage inside port area || 19 || 1 || 77 || 68 || 7 || 172

Towage outside port area || 7 || 0 || 49 || 71 || 37 || 164

Mooring || 22 || 5 || 104 || 57 || 10 || 198

Dredging inside port area || 58 || 8 || 16 || 45 || 48 || 175

Provision of waste reception facilities || 38 || 9 || 44 || 62 || 33 || 185

Cargo handling ship-shore/stevedoring || 14 || 7 || 24 || 117 || 18 || 179

Cargo handling shore-inland transport || 7 || 5 || 20 || 122 || 27 || 181

Warehousing || 14 || 4 || 15 || 128 || 22 || 182

Passenger services || 11 || 2 || 8 || 26 || 1 || 48

Rail terminal operations || 10 || 20 || 25 || 77 || 48 || 180

Port security services || 79 || 19 || 13 || 67 || 7 || 184

Bunkering || 1 || 2 || 25 || 105 || 28 || 161

Ice-breaking || 14 || 5 || 3 || 18 || 127 || 167

Table 2 – Assumption: Number of port services contracts by category in all TEN-T ports

Port service || Port authorities || Other Public || One private || Two or more || Total number of port service contracts || Total number of ports

Pilotage inside port area || 73 || 73 || 160 || 41 || 346 || 319

Pilotage outside port area || 49 || 118 || 120 || 78 || 365 || 319

Towage inside port area || 37 || 2 || 149 || 263 || 450 || 319

Towage outside port area || 18 || 0 || 123 || 357 || 497 || 319

Mooring || 37 || 8 || 176 || 193 || 416 || 319

Dredging inside port area || 146 || 20 || 40 || 226 || 432 || 319

Provision of waste reception facilities || 80 || 19 || 92 || 260 || 451 || 319

Cargo handling ship-shore/stevedoring || 28 || 14 || 48 || 2317 || 2406 || 319

Cargo handling shore-inland transport || 15 || 10 || 41 || 2527 || 2593 || 319

Warehousing || 28 || 8 || 30 || 2550 || 2616 || 319

Passenger services || 75 || 14 || 54 || 529 || 672 || 319

Rail terminal operations || 24 || 48 || 60 || 372 || 505 || 319

Number of awarded services contracts with value above 5 Million euro

For the purpose of this analysis the following assumptions are made:

· 70% of the service contracts present a value above 5 million Euro

· Contracts are assumed to have different average duration according to the type of port services (see table below).

Total number of awarded contracts in EU is assumed to be the number of contracts which have been currently awarded to private operators.

Table 3 – Service contracts above 5 million Euro threshold

Port service || Estimation: total number of awarded contracts in EU || Estimation: number of awarded contracts in EU > 5 million Euro || Assumption: duration of contracts (years)

Pilotage inside port area || 201 || 141 || 10

Pilotage outside port area || 199 || 139 || 10

Towage inside port area || 412 || 288 || 10

Towage outside port area || 480 || 336 || 10

Mooring || 370 || 259 || 5

Dredging inside port area || 266 || 186 || 5

Provision of waste reception facilities || 352 || 247 || 20

Cargo handling ship-shore/stevedoring || 2364 || 1655 || 25

Cargo handling shore-inland transport || 2569 || 1798 || 25

Warehousing || 2580 || 1806 || 25

Passenger services || 584 || 409 || 25

Rail terminal operations || 433 || 303 || 25

Port security services || 265 || 185 || 5

Bunkering || 564 || 395 || 15

Ice-breaking || 311 || 218 || 10

Services linked to PSO, space constraints and “normal services”

The definition of what is a port services contracts linked to space constraints or a “normal service” should be done port by port. However since this is not possible, table 3 provides an estimation based on reasonable assumptions.

Table 4 – Estimation of number of port services contracts linked to PSO, space constraints and “normal services”

Port service || Assumptions || Estimation

PSO || Space constraints || Normal || PSO || Space constraints || Normal

Pilotage inside port area || 100% || 0% || 0% || 346 || 0 || 0

Pilotage outside port area || 100% || 0% || 0% || 365 || 0 || 0

Towage inside port area || 70% || 0% || 30% || 315 || 0 || 135

Towage outside port area || 70% || 0% || 30% || 348 || 0 || 149

Mooring || 20% || 0% || 80% || 83 || 0 || 333

Dredging inside port area || 0% || 100% || 0% || 0 || 432 || 0

Provision of waste reception facilities || 50% || 50% || 0% || 225 || 225 || 0

Cargo handling ship-shore/stevedoring || 20% || 70% || 10% || 481 || 1684 || 241

Cargo handling shore-inland transport || 20% || 70% || 10% || 519 || 1815 || 259

Warehousing || 20% || 70% || 10% || 523 || 1831 || 262

Passenger services || 20% || 70% || 10% || 134 || 470 || 67

Rail terminal operations || 0% || 100% || 0% || 0 || 505 || 0

Port security services || 0% || 100% || 0% || 0 || 441 || 0

Bunkering || 20% || 0% || 80% || 114 || 0 || 457

Ice-breaking || 90% || 0% || 10% || 416 || 0 || 46

Terminal and port services awarded with public tendering procedures

As shown in figure 1, respondents to Survey Phase 1 reported that public tendering or competitive bidding is widely used in ports. More precisely it can be used for awarding or renewing a contract in the large majority of ports (86%) when a port service contract is awarded and in almost 3 out of 4 ports (71%) when a terminal contract is awarded. This way, an assumption on the overall number of contracts that are currently awarded with tendering procedures and the number of contracts that potentially will be awarded with tendering procedures in the future can be made.

Figure 1 - type of awarding or renewal process for main terminals and port service contracts

Table 5 – Estimation of number of port services contracts currently awarded with public tendering procedures

Port service || Estimation: contracts awarded with public tendering

PSO || Space constraints || Normal

Pilotage inside port area || 298 || 0 || 0

Pilotage outside port area || 314 || 0 || 0

Towage inside port area || 271 || 0 || 116

Towage outside port area || 299 || 0 || 128

Mooring || 72 || 0 || 286

Dredging inside port area || 0 || 372 || 0

Provision of waste reception facilities || 194 || 194 || 0

Cargo handling ship-shore/stevedoring || 342 || 1196 || 171

Cargo handling shore-inland transport || 368 || 1289 || 184

Warehousing || 371 || 1300 || 186

Passenger services || 95 || 334 || 48

Rail terminal operations || 0 || 359 || 0

Port security services || 0 || 380 || 0

Bunkering || 98 || 0 || 393

Ice-breaking || 358 || 0 || 40

Port services provided in house and port services awarded with exclusive rights

Table 6 presents the number of port service provided in house by the port managing body in European ports according to respondents of Survey Phase 1. Table 6 also provides the number of port services awarded with exclusive rights to either a private or public operator other than the port authority.

In the case of cargo handling and passenger services, it is assumed that the services directly awarded with exclusively right are given by the total number of services provided by private operators multiplied by the share of services not awarded with public tendering.

Unit labour cost and overhead cost

The PwC study on Public procurement in Europe[2] provides an estimation of the typical man-day cost for carrying out administrative activities: the study suggests an inclusive man-day cost of 250 Euro for authorities and of 193 Euro for firms. The cost includes labour cost and typical overhead costs.

Unit cost for public tendering

Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 define the procurement procedures of entities operating in the transport and other services sectors of public interest. A recent PwC study on Public procurement in Europe[3] provides information on efforts and costs by authorities and firms in managing and taking part to tendering process. A typical tender process effort by an administration in the port sector is 24 man-days. Firms that will take part to the tender will incur in one off costs for the submission of document(s) related to selection criteria and exclusion criteria. Their effort is estimated to be 16 man-days per firm. Considering that on average 5.9 firms take part at each competition in the port sector, it can be assumed that each procurement will involve an effort of 94.4 man-days by the private sector. Hence it can be assumed that each service contract to be procured will generate one off costs to the port managing body or other relevant administration of 6,000 Euro. The overall cost to the business is estimated at 18,219 Euro.

Table 6 – Estimation of number of port services provided in house and awarded with exclusive rights

Port service || Survey findings || Overall estimation

Provided in house || Provided by other public entity || Provided in house || Provided by other public entity || Provided by other operator

Pilotage inside port area || 39 || 39 || 73 || 73 || 201

Pilotage outside port area || 20 || 48 || 49 || 118 || 199

Towage inside port area || 19 || 1 || 37 || 2 || 412

Towage outside port area || 7 || 0 || 18 || 0 || 480

Mooring || 22 || 5 || 37 || 8 || 37

Dredging inside port area || 58 || 8 || 146 || 20 || 266

Provision of waste reception facilities || 38 || 9 || 80 || 19 || 352

Cargo handling ship-shore/stevedoring || 14 || 7 || 28 || 14 || 2124

Cargo handling shore-inland transport || 7 || 5 || 15 || 10 || 2309

Warehousing || 14 || 4 || 28 || 8 || 2318

Passenger services || 11 || 2 || 75 || 14 || 517

Rail terminal operations || 10 || 20 || 24 || 48 || 433

Port security services || 79 || 19 || 142 || 34 || 265

Bunkering || 1 || 2 || 2 || 5 || 564

Ice-breaking || 14 || 5 || 112 || 40 || 265

Unit cost for public tendering in case of imposition of two operators

For services linked to space constraints, it has been considered to impose the obligation to have at least 2 operators and the obligation of public tendering for new contracts except below a certain threshold (for small contracts).

In case of occurrence of such circumstances the cost for public tendering will be doubled.

Unit cost for public tendering in case of major contract changes

For the aim of the analysis it is assumed that 1 out of 20 contracts will be re-tendered following major changes to be considered on the value of the contracts or on the services to be provided. On average this is expected to happen at half of the initially stipulated duration of the contract.

Hence under this measure it is expected that both the public sector and the business will anticipate part of the tendering procedures. On annual average this is expected to result in an increase of 2.5% of the tendering costs for both parties.

Unit cost for port service tariff definition

The process for the price setting of each regulated service potentially involves one or more national authorities, the port managing body, the port service provider and the industry and users representatives.

For the aim of this analysis we consider three different situations:

· Services directly awarded to a private port service provider

· Services carried out in house by the port managing body

· Services carried out by another public body/entity

In all cases it is assumed that every 2 years a report which summarises the prospect of the costs and revenues of the activity will be produced. Port managing body and other authority are responsible for auditing these reports. Also the industry associations are involved in the auditing of the report. All the mentioned parties are required to attend a couple of meetings to negotiate the service tariff.

For the aim of the analysis the recurrent effort to be sustained by who provides the service is assumed to be 10 man-days for the preparation of the report and 2 man-days for attending 2 meetings.

The port managing body is assumed to allocate 5 man-days as for other public authorities.

Finally industry associations and users’ representative are assumed to allocate 12 man-days for auditing the report and attending the meetings.

Hence, in the case of direct award, the cost for occurrence to the public sector can be quantified at 2,500 Euro (recurrent every about 2 years). The overall recurrent cost to the business is quantifiable at 4,632 Euro (recurrent every about 2 years).

In case of services provided in house or by another public entity, the cost for occurrence to the public sector can be quantified at 5,500 Euro (recurrent every about 2 years). The overall recurrent cost to the business is quantifiable at 2,316 Euro (recurrent every about 2 years).

In addition a one off cost should be considered for the first year of application or modification of the procedure for tariff definition. The one off effort is expected to be as high as 50% of the recurrent effort sustained by all parties each time the tariff is reviewed.

Unit cost of separation of accounts

The separation of accounts involve one off costs to the managing body for the definition of the new accounting system and for updating the accounting IT system. These costs will vary according to the size of the company and the number of accounting operations to be performed. Typical cost can be assumed to be in the region of 60,000 – 90,000 Euro; on average 75,000 Euro.

Recurrent costs for the preparation of separate accounts are small or not relevant.

Unit cost of functional separation

Legal separation of public functions from commercial functions linked to the provision of port services into independent entities will generate new administrative costs to the port managing bodies.

Expected administrative costs mainly concern the provision set out by three different Council directives:

· “Second Directive”: Incorporation of public limited liability companies and the maintenance and alteration of their capital.

· “Sixth Directive”: Division of public limited liability companies.

· “Seventh Directive”: Consolidated accounts of limited liability companies.

Indeed, the port managing body will incur one off costs for the division of its activities and the incorporation of the new legal entities. In addition the port managing body will incur recurrent costs for the preparation of consolidated accounts.

Findings from the EU Project on Baseline Measurement and Reduction of Administrative Costs[4] provide for average figures on administrative costs incurred by European firms in responding to requirements set by the above mentioned directives.

The average administrative cost met by firms in case of division is assumed to be 36,093 Euro per occurrence. The incorporation of each new legal entity will result in one off costs of 11,045 Euro.

The functional separation will also involve the preparation of dedicated accounts for the new business unit. The one off cost for the definition of the new system is assumed to be equal as for the separation of accounts (i.e. 75,000 Euro). Recurrent costs are not expected with this regard.

In addition each managing body will incur recurrent costs for the preparation of consolidated accounts. The recurrent average expense per port is assumed to be 3,816 Euro per year.

Finally the implementation of a new structure of governance and management for each new legal entity will generate substantial costs. The costs will depend on the size of the new company and might include the appointment of an administrator and of a board of directors. Statistics on additional cost of governance for a new company resulting from a legal separation are not available; however these are reasonable assumed to be on the region of 130,000 – 150,000 Euro per year.

In summary each functional separation will generate recurrent costs that for the port managing body are quantifiable at 215,000 Euro/year. The one off costs per occurrence are expected to be 50,954 Euro.

Financial transparency between public and port authorities

The preparation of accounts which allow for identifying any financial flow (grants, loans guarantees, equity share etc.) from public authorities to the port authority do not imply the adoption of a new accounting system. It is assumed that port managing staff will allocate an extra effort of 10 man-days for comply with the new transparency requirements. Hence the average annual cost per port is assumed to be 2,500 Euro.

Unit cost for port dues definition

The process for the definition of port infrastructure charges or dues can involve one or more national authority and the port managing body. Optionally, the process could involve also port users’ representatives, nevertheless this has not been considered in this analysis.

For the aim of this analysis we consider three different situations:

· 33% of ports where dues are defined by the port managing body but where the competent authority is responsible for auditing, reviewing and finally approving the dues.

· 33% of ports where dues are defined by the competent authority; however a relevant effort by the port managing bodies is also expected.

· 33% of ports where dues are defined by port managing bodies with not relevant involvement of other parties.

Under the first case, the port managing body is required to produce every 5 years a report which summarises the prospect of the costs and revenues of the port activity. Local or national authorities are responsible for auditing the report provided by the port managing body. All the mentioned parties are required to attend a number of meetings to negotiate the port dues or charges.

For the aim of the analysis, it is assumed that the port managing body allocate 20 man-days for the preparation of the report. The local and national authorities allocate further 20 man-days for the auditing of the report. Finally all parties are expected to allocate 20 man-days for attending different meetings.

Hence the cost for occurrence to the public sector can be quantified at 15,000 Euro (recurrent every about 5 years).

Under the second case it is assumed that the effort will be shared in different ways between the parties involved. Nevertheless the overall effort in terms of man-days and costs is as for the first case.

Finally under the third case, the port managing body defines the port dues in autonomy. The effort is expected to be lower if compared to the previous cases, but probably more frequent. It is assumed that 5 man-days are allocated annually to this activity. The recurrent cost to the public sector is thus estimated at 1,250 Euros per year.

In case of modification of the rules for the definition of the port dues it is assumed that the cost is one-off doubled.

Unit cost of central port coordination

This activity involves regular exchange of information between port service providers and public authorities and the attendance to a couple of meetings per year. It is assumed that this activity is already carried out in one way or the other in all TEN-T ports. For the aim of the analysis it is assumed that public authorities (including the port managing body) dedicate 40 man-days per year to coordination of port services. The private business and in particular port service providers are assumed to allocate 2 man-days per each year. Assuming that on overage there are 20 service providers in each port, the overall effort is expected to be 40 man-days per year.

The unit cost per port to the public sector is expected to be 10,000 Euro/year. The unit cost per port to the private businesses is estimated to be 7,200 Euro/year.

Following the formal appointment of the port managing body as the coordinator of the port services in each port, it is expected that its administrative burden is slightly increased. It is assumed that all Member States and ports have already similar instruments in place, however, in a relevant number of cases it is expected that the practice in use need substantial further development. For the aim of this analysis it is assumed that on average the annual cost to the port managing body will increase by 40%. Hence the recurrent additional administrative cost to the public sector is expected to be 4,000 Euro per year.

The businesses are assumed not to experience any additional administrative cost compared to the baseline scenario.

Unit cost of port users’ committee

A port users’ committee involves the participation of port service providers, shipping companies and land transport operators. In addition also the port managing body and other maritime authorities are involved. The activity is assumed to include the organisation of a couple of meetings per year.

It is assumed that this activity is already currently carried out in about 50% of all TEN-T ports. For the aim of the analysis it is assumed that public authorities (including the port managing body) dedicate 10 man-days per year to collect claims and suggestions from port services providers and to organise meetings. The private business and in particular port service providers but also port users are assumed to allocate 2 man-days per each year. Assuming that on overage there are 20 service providers and 20 port users in each port willing to actively participate to the works of the committee, the overall effort is expected to be 80 man-days per year.

Hence the unit cost of a port committee to the public sector is assumed to be 5,000 Euro per year. The cost to the businesses is estimated to be 15,440 Euro per year.

Policy measures which imply variations of administrative costs

Relevant policy measures are the following:

Table 7 – Preliminary assessment of administrative burden

Measures || Description || Relevance of administrative costs

1. Freedom to provide services (no restrictions on market access) for "normal services", i-e services other than those linked to public service obligations or space constraints || The freedom to provide service applies and relates to the free entry of any service provider established in the EU. Operators would be authorised on the basis of transparent and non-discriminatory criteria. These criteria would be determined, published and made accessible to all by the Member States. || Small: new contracts will be awarded without public tendering. Overall administrative costs are expected to decrease for this measure.

2.  Obligation of public tendering for new contracts in the case of public service obligations or space constraints (except for small contracts or urgencies)  || Member States and the port authorithies would be allowed to impose restrictions to the freedom to provide service on the ground of objectives  reason of space constraint *** or public service obligations**. But in such case, the Member State or the port authority would need to enter into a contractual arrangement with a port service provider to be selected by means of a transparent public tendering procedure (except for small contracts or urgencies)* || Moderate: a relevant number of contracts will be awarded with public tendering. This will involve new costs for both the ports and the port service providers.

3. Explain in a Communication from the  Commission how existing Treaty rules apply in the case of port services public service obligations or with space constraints || By contrast with other measures relying on binding provisions for Member States, this measure would entail a Communication from the Commission to explain how the principle of non-discrimination and free establishment result in an obligation of transparency and equual treatment (teleaustria ruling) and how it can be applied in practices to arrangements/contracts awarded to port service operators. || Small: this is expected to affect a minority of ports.

4. Impose the obligation to have at least 2 operators for services linked to space constraints to be selected after a public tender for new contracts (except for small contracts or urgencies) || In the case of port services subject to space constraints the port authority or the Member State needs to assure that there are at least 2 competing and independent operators. A public tendering obligations is imposed. || Small / moderate: as for measure 2, public tendering involve new administrative costs. Nevertheless this should apply to a restricted number of cases.

5. Obligation of public tendering in case of substantial changes of existing contracts linked to public service obligations or space constraints || Same as measure 2 but in addition the obligation of public tendering in will apply also in case of substantial modification of existing contracts/arrangements. A substantial modification would entail a modification of at least e.g. 30% of the value of the contract/arrangement and/or a change of the nature of activity. || Small: as for measure 2, public tendering involve new administrative costs. Nevertheless this cost is only anticipated and it will apply to a limited number of cases.

6.Confinement for internal operators of port services || In the event that a port or public authority is performing (commercial) port services in-house [as a derogation to the freedom to provide service and the application of a public tendering procedure (cf measures 1,2,3 and 5)], the operation of the service shall be confined to the dedicated port, or group of ports, serviced by the port managing body or the authority, and consequently the internal provider cannot offer the service outside of the port or group of ports. This will avoid that operators which can benefit from potential cross-subsidies enjoy unfair competitive advantages. || Not relvant: no new administrative costs are envisaged

7. Rules on the price of port services provided by operators in monopolistic position || Derogating from the general rule of freedom to provide service (cf measure 1) could leave the service provided by internal operators or operators with exclusive/special rights with an insufficient (or non existing) competitive pressure. To avoid price abuses, this measure would impose basic principles on pricing, namely proportionality (cost based), transparency and non-discrimination (with possibilities to apply commercial rebates if accessible to all users). The Member State will need to designate a regulatory authority (eg an existing competition authority) to deal with the oversight and complaints by port service users. || Moderate: in all or in the large majority of ports the prices of port services are defined according to national or local rules. Redefining the prices according to common European priciples will involve minor additional costs.

8. Rules on the price of port services provided by operators in monopolistic position for which no public tender is organised || The measure will be the same as measure 7 except that it would apply only to services for which no public tender applies and therefore for which the market cannot be contested at the end of the contract. If the market cannot be contested at the end of the contract by means of a public tender, the competitive pressure is indeed weaker. The scope is therefore more limited than measure 7 and focus where the likelihood of absence of competitive pressure is higher || Small: as for measure 7, but a smaller number of cases will be considered.

9. Central Port Coordination || In a free market situation, there is a possible proliferation of port service providers. This will lead to potential conflicts between the different service providers. Therefore, the MS will be obliged to ensure a central port coordination in every port to ensure the seamless and safe operation during entry and exit of the port and inside the port. || Small/moderate: central port coordination is one of the typical functions of the port managing body. Having this measure in place will involve an higher efort on this matter for some ports.

10. Port users' committee || A port users' committee would be set up in each port. The committee would facilitate the dialogue between all port actors (users, service providers, authorities) in order to ensure a seamless logistical flow of freight (and passengers) in the port and to and from the hinterland. It would be organised by, but independent from, the port authority (ies). Its precise competences and composition of the committee would be left over to the discretion of the MS or port authority and will include at least the following: • regular consultative role on the structure and level of port dues • ad-hoc consultative role (at the request of the regulatory authority of measures 7 and 8) on possible (price) abuses of port services • recommend an administrative simplification plan. The plan would include performance targets (eg maximum duration of adminsitrative procedure) and issue recommendations on how to organise the  sharing and management of data flows related to cargo for intra-port freight movements, allowing shipping lines, terminal oparators, freigth forwarders, shippers and hinterland providers (rail, truck, barge) to organise the movement of cargo (main focus on containers) in the most efficient way. || Small / moderate: a large number of ports are expected to have already a port users’ committe or similar entities. Thus the cost which is not believed to be high will actually impact a minority of ports.

11. Functional separation || Ports would have to legally separate public functions from commercial functions linked to the provision of port services into independent entities. Obviously, this entails also a full separation of accounts as presented in measure 12, as each of the presented activities would be subject of a different legal entity. || High: the cost for legal separation of business functions involve relevant administrative costs. The cost will be incurred by a relevant number of ports.

12. Separation of accounts || Port authorities which receive public funds * would keep an accounting system that allows to identify any financial flow from public authorities to the port authority. The accounting system would also differentiate between the different types of activities carried out by the port authorities (1) port (public) functions and (2) (commercial) service activities and to differentiate between the different (commercial) services provided in order to reveal possible cross-subsidies**. The accounts will have to kept at the disposal of the national and EU competition authorithies in order to help them to identify more easily possible state aids and distorsion of competion between ports and between port service providers. || Moderate / high: the cost will be significantly lower if compared to measure 11 but still relvant since it will involve a large number of ports.

13. Financial transparency between public and port authorities             || Port authorities which receive public funds * would keep an accounting system that allows to identify any financial flow (grants, loans guarantees, equity share etc.) from public authorities to the port authority. The accounts will have to kept at the disposal of the national and EU competition authorities in order to help them to identify more easily possible distortive state aids. || Small: cost will be lower if compared to measure 12.

13. Autonomy of the individual ports to set dues || Each port managing body shall be free to set the structure and level of the port dues (related to the use of the port access infrastructure) as it feels appropriate, provided that the rules applicable below are respected. || Small: ports will save on the cost for setting prices according to national/local rules but will incurr new costs to define prices according to commercial rules.

14. Cost-based and differentiated port dues || Binding rules will be introduced to ensure that infrastructure charges respect the principle of proportionality to cost (long term marginal cost-based),. Environmental differentiation of charges will be introduced according to objective criteria left to the Member State. || Small: in all or in the large majority of ports the port dues are defined according to national or local rules. Redefining the port dues according to common European rules will involve small costs.

15. Enabling variations of port dues based on the environmental performance || The measure will allow price discrimination if it provides incentives to cleaner transport (cleaner ships/propulsion/fuels, certain short sea shipping). The Commission will also establish non-binding guidelines on how to apply such a variation (e.g. classification to be used). || Not relvant: this measure does not involve additional costs compared to measure 14

16. Transparency of port due calculation || The prices and calculation method for port infrastructure access charges related to the public access facility to a port will be made accessible to the port users and the authorities. The method will have to indicate the overall cost components and how the total port dues contribute to recoup it. || Not relvant: the publication of the principles for charging does not involve relevant costs.

Measures which present small, moderate or high administrative costs are to be compared against the base line scenario.

Assessment of the administrative burden in the baseline scenario

The considered policy measures are likely to generate additional administrative costs on both the public sector and businesses. However, these costs are likely to increase administrative costs which already incurred by the parties.

There are no one-off costs to be considered under the baseline scenario.

Freedom to provide service for "normal services" - no public tendering

Currently there are contracts for “normal services” which are awarded with tendering procedures. Under this measure the costs that currently are incurred for these tendering procedure will be potentially saved.

Table 8 provides an estimation of the number of “normal contracts” which are currently awarded with public tendering procedures. Furthermore, we provide a calculation of the average annual costs that will be incurred to renew these contracts with public tendering process.

Table 8 – Estimation of the average annual cost currently sustained for awarding “normal service” contracts with tendering procedures

Port service || Assumptions: Number of normal contracts awarded with public tendering || Cost per occurrence (Euro) || Recurrent average cost (Euro / year)

|| Share of normal services to the total || Normal services || Average duration (year) || Public sector || Businesses || Public sector || Businesses

Pilotage inside port area || 0% || 0 || 10 || 0 || 0 || 0 || 0

Pilotage outside port area || 0% || 0 || 10 || 0 || 0 || 0 || 0

Towage inside port area || 30% || 116 || 10 || 697.322 || 2.117.443 || 69.732 || 211.744

Towage outside port area || 30% || 128 || 10 || 769.880 || 2.337.767 || 76.988 || 233.777

Mooring || 80% || 286 || 5 || 1.716.084 || 5.210.947 || 343.217 || 1.042.189

Dredging inside port area || 0% || 0 || 5 || 0 || 0 || 0 || 0

Provision of waste reception facilities || 0% || 0 || 20 || 0 || 0 || 0 || 0

Cargo handling ship-shore/stevedoring || 10% || 171 || 25 || 1.024.899 || 3.112.140 || 40.996 || 124.486

Cargo handling shore-inland transport || 10% || 184 || 25 || 1.104.801 || 3.354.764 || 44.192 || 134.191

Passenger services || 10% || 48 || 25 || 286.245 || 869.192 || 11.450 || 34.768

Bunkering || 80% || 393 || 15 || 2.356.436 || 7.155.397 || 157.096 || 477.026

TOTAL || || || || || || 743.671 || 2.258.181

Public tendering for services with a PSO or space constraints

Table 9 reports the estimation of number of relevant port services that have been awarded with public tendering. It is assumed that the tendering cost is to be incurred every time a contract will be renewed.

It is assumed that each service contract to be procured will generate one off costs to the port managing body or other relevant administration of 6,000 Euro. The overall cost to the business is estimated at 18,219 Euro.

However, given different assumptions on the durations of contracts, the table provides an estimation of the annual average recurrent cost to be incurred by different parties for the tendering procedures.

Table 9 – Estimation of the average annual cost currently sustained for awarding service contracts involving PSO and/or Space constraints

Port service || Assumption: Number of PSO and S.C. contracts awarded with public tendering || Cost per occurance (Euro) || Recurrent average cost (Euro / year)

PSO and Space constraints >5 M€ || Share of tendered contracts || Average duration (years) || Public sector || Businesses || Public sector || Businesses

Pilotage inside port area || 121 || 86% || 10 || 730.688 || 2.218.757 || 73.069 || 221.876

Pilotage outside port area || 120 || 86% || 10 || 722.574 || 2.194.120 || 72.257 || 219.412

Towage inside port area || 167 || 86% || 10 || 1.004.456 || 3.050.064 || 100.446 || 305.006

Towage outside port area || 199 || 86% || 10 || 1.199.122 || 3.641.175 || 119.912 || 364.117

Mooring || 22 || 86% || 5 || 139.995 || 425.100 || 27.999 || 85.020

Dredging inside port area || 160 || 86% || 5 || 966.862 || 2.935.909 || 193.372 || 587.182

Provision of waste reception facilities || 212 || 86% || 20 || 1.277.190 || 3.878.231 || 63.860 || 193.912

Cargo handling ship-shore/stevedoring || 1055 || 71% || 25 || 6.337.123 || 19.242.885 || 253.485 || 769.715

Cargo handling shore-inland transport || 1148 || 71% || 25 || 6.890.380 || 20.922.867 || 275.615 || 836.915

Passenger services || 257 || 71% || 25 || 1.544.488 || 4.689.890 || 61.780 || 187.596

Bunkering || 64 || 86% || 15 || 391.546 || 1.188.943 || 26.103 || 79.263

TOTAL || || || || || || 1.267.898 || 3.850.014

Rules on the price of port services provided in monopolistic position

Table 10 provides an estimation of the number of contracts awarded with exclusive or special rights. Among these contracts, it is assumed that currently only 70% of contracts for technical nautical services include provisions on price setting and review. 100% of contracts for waste reception facilities are assumed to be price regulated in compliance with provisions set by art. 8 of Directive 2000/59/EC[5]. All other types of service are assumed not to be price regulated.

Furthermore assuming that the service tariffs are reviewed every two years, table 9 provides for an estimation of the annual average cost currently incurred by the public sector and the business.

Table 10 – Estimation of the average annual cost currently sustained for service tariff setting and or reviewing

Port service || Assumption: number of contracts with exclusive or special rights || Assumptions: port services which are price regulated || Recurrent average cost (Euro / year)

Provided in house || Provided by other public entity || Provided by other operator || Provided in house || Provided by other public entity || Provided by other operator || Public || Businesses

Pilotage inside port area || 73 || 73 || 201 || 51 || 51 || 141 || 455.017 || 443.237

Pilotage outside port area || 49 || 118 || 199 || 34 || 82 || 139 || 494.771 || 457.163

Towage inside port area || 37 || 2 || 277 || 26 || 1 || 194 || 316.511 || 479.864

Towage outside port area || 18 || 0 || 331 || 12 || 0 || 231 || 323.082 || 550.147

Mooring || 37 || 8 || 37 || 26 || 6 || 26 || 120.855 || 97.656

Dredging inside port area || 146 || 20 || 266 || 0 || 0 || 0 || 0 || 0

Provision of waste reception facilities || 80 || 19 || 352 || 80 || 19 || 352 || 711.149 || 929.711

Cargo handling ship-shore/stevedoring || 28 || 14 || 2124 || 0 || 0 || 0 || 0 || 0

Cargo handling shore-inland transport || 15 || 10 || 2309 || 0 || 0 || 0 || 0 || 0

Passenger services || 75 || 14 || 517 || 0 || 0 || 0 || 0 || 0

Bunkering || 2 || 5 || 107 || 0 || 0 || 0 || 0 || 0

TOTAL || || || || || || || 2.421.385 || 2.957.779

Central Port Coordination

The unit cost per port to the public sector is expected to be 10,000 Euro / year. The unit cost per port to the private businesses is estimated to be 7,720 Euro / year.

Table 11 – Estimation of the recurrent yearly costs for central port coordination

|| N. of ports || Cost to the Public sector (Euro) || Cost to the Businesses (Euro)

Central port coordination || 319 || 3.190.000 || 2.462.680

Port users' committee

It is expected that this activity is already currently carried out in about 50% of all TEN-T ports. The unit cost of a port committee to the public sector is assumed to be 5,000 Euro per year. The cost to the businesses is estimated to be 15,440 Euro per year.

Table 12 – Estimation of the recurrent yearly costs for port users’ committee

|| N. of ports || Cost to the Public sector (Euro) || Cost to the Businesses (Euro)

Port users’ committee || 160 || 400.000 || 2.470.400

Cost-based and differentiated port dues

As explained earlier, three different cases are assumed for the calculation of the cost involved in the definition of port dues. Table 13 provides the outcome of the calculation based on provided assumptions.

Table 13– Estimation of the recurrent yearly costs for port dues calculation

|| N. of ports || Cost to the Public sector (Euro) || Cost to the Businesses (Euro)

Dues are defined by the port managing body with Government approval || 106 || 319.000 || 0

Dues are defined by the Government || 106 || 319.000 || 0

Dues are autonomously defined by the port managing body || 106 || 132.917 || 0

Total || 319 || 770.917 || 0

Summary of administrative costs under the baseline scenario

Table 14 provides a summary of the recurrent administrative costs incurred by the public sector and the businesses under the baseline scenario.

Table 14– Estimation of the recurrent yearly administrative costs – baseline scenario (Euro / year)

Measure || Cost to the Public sector (Euro) || Cost to the Businesses (Euro)

1. Freedom to provide service for "normal services" - no public tendering || 743.671 || 2.258.181

2. Public tendering for service contracts with a PSO or space constraints > 5 M€ || 1.267.898 || 3.850.014

3. Communication from the Commission on how existing Treaty rules apply in the case of port services || N/A || N/A

4. Obligation to have at least 2 operators in case of space constraints - public tendering || N/A || N/A

5. Public tendering in case of major contract changes || N/A || N/A

6. Confinement of internal (public) providers of port services || N/A || N/A

7. Rules on the price of port services provided by operators in monopolistic position || 2.421.385 || 2.957.779

8. Rules on the price of port services awarded directly to operators in monopolistic position || as M7 above || as M7 above

9. Central Port Coordination || 3.190.000 || 2.462.680

10. Port users committee || 400.000 || 2.470.400

11. Functional separation || N/A || N/A

12. Separation of accounts || N/A || N/A

13. Financial transparency between public and port authorities || N/A || N/A

14. Freedom for individual ports to set dues || as M15 below || 0

15. Cost-based and differentiated dues || 770.917 || 0

16. Enabling variations based on environmental performance || N/A || N/A

17. Transparency of port due calculation || small || small

TOTAL || 8.793.870 || 13.999.053

In the baseline scenario the cost annually incurred by the businesses are about 13.4 million Euros. The public sector and in particular the port managing bodies face 8 million Euro of administrative costs per year. Hence, on average every year, each port generates slightly more than 200,000 Euro of administrative costs to the public sector.

Comparison of the administrative burden for the baseline and policy packages

According to the preliminary assessment provided in table 6 there are 16 policy measures which imply variation of the administrative burden compared to the baseline scenario.

There are both recurrent and one off costs to be considered under the different policy packages.

Freedom to provide service for "normal services" - no public tendering

Currently there are contracts for “normal services” which are awarded with tendering procedures. Under this measure the costs that currently are incurred for these tendering procedure will be saved.

Hence costs assumed under the baseline scenario will not be incurred in case of application of measure 1.

Public tendering for services contracts with a PSO or space constraints > 5 M€

Table 15 reports the estimation of number of relevant port services that should be awarded with public tendering. It is assumed that the tendering cost is to be incurred every time a contract will be renewed.

It is assumed that each service contract to be procured will generate one off cost to the port managing body or other relevant administration of 6,000 Euro. The overall cost to the business is estimated at 18,219 Euro.

However, given different assumptions on the durations of contracts, table 14 provides an estimation of the annual average cost to be recurrently incurred by different parties for the tendering procedures.

Table 15 – Estimation of the average annual cost to be incurred for awarding service contracts involving PSO and/or space constraints

Port service || Number of contracts awarded with public tendering || Cost per occurance (Euro) || Recurrent average cost (Euro / year)

PSO and S. C. contracts || Average duration || Public sector || Businesses || Public sector || Businesses

Pilotage inside port area || 141 || 10 || 843.637 || 2.561.731 || 84.364 || 256.173

Pilotage outside port area || 139 || 10 || 834.202 || 2.533.083 || 83.420 || 253.308

Towage inside port area || 194 || 10 || 1.161.972 || 3.528.367 || 116.197 || 352.837

Towage outside port area || 231 || 10 || 1.388.328 || 4.215.705 || 138.833 || 421.570

Mooring || 26 || 5 || 156.785 || 476.083 || 31.357 || 95.217

Dredging inside port area || 186 || 5 || 1.118.258 || 3.395.629 || 223.652 || 679.126

Provision of waste reception facilities || 247 || 20 || 1.479.105 || 4.491.352 || 73.955 || 224.568

Cargo handling ship-shore/stevedoring || 1487 || 25 || 8.919.525 || 27.084.435 || 356.781 || 1.083.377

Cargo handling shore-inland transport || 1616 || 25 || 9.698.760 || 29.450.608 || 387.950 || 1.178.024

Passenger services || 362 || 25 || 2.169.336 || 6.587.260 || 86.773 || 263.490

Bunkering || 75 || 15 || 449.286 || 1.364.273 || 29.952 || 90.952

TOTAL || || || || || 1.613.235 || 4.898.642

Communication from the Commission on how existing Treaty rules apply in the case of port services

For the aim of the analysis it is assumed that 20% of ports and Member States will on voluntary basis adopt managing practice in line with the provisions set by measures 1 and 2. Thus it is assumed that the administrative costs to be incurred are 20% of these expected in case of adoption of measure 1 and 2.

Obligation to have at least 2 operators in case of space constraints - public tendering

It has been estimated that there are 2,826 port services involving space constraints, having a value higher than 5 million euro. Under this option it is envisaged that in the case of port services subject to space constraints the port managing body or the MS needs to assure that there are at least 2 competing and independent operators. Hence, 2,826 contracts will need to be tendered in addition to these considered under measure 2.

Both the public sector and the business will face administrative costs for the tendering procedures connected with the contracts to be awarded. Table 16 provides for an estimation of the recurrent average annual costs to be incurred by the parties to award two contracts per each port service presenting space constraints.

Table 16 – Estimation of the average annual cost to be incurred for awarding a second service contract in case of services with space constraints

Port service || Number of additional contracts to be awarded with public tendering || Cost per occurance (Euro) || Recurrent average cost (Euro / year)

Space constraints || Average duration (years) || Public sector || Businesses || Public sector || Businesses

Pilotage inside port area || 0 || 10 || 0 || 0 || 0 || 0

Pilotage outside port area || 0 || 10 || 0 || 0 || 0 || 0

Towage inside port area || 0 || 10 || 0 || 0 || 0 || 0

Towage outside port area || 0 || 10 || 0 || 0 || 0 || 0

Mooring || 0 || 5 || 0 || 0 || 0 || 0

Dredging inside port area || 0 || 5 || 0 || 0 || 0 || 0

Provision of waste reception facilities || 123 || 20 || 1.479.105 || 4.491.352 || 73.955 || 224.568

Cargo handling ship-shore/stevedoring || 1158 || 25 || 13.901.984 || 42.213.839 || 556.079 || 1.688.554

Cargo handling shore-inland transport || 1259 || 25 || 15.103.200 || 45.861.370 || 604.128 || 1.834.455

Passenger services || 286 || 25 || 3.432.169 || 10.421.894 || 137.287 || 416.876

Bunkering || 0 || 15 || 0 || 0 || 0 || 0

TOTAL || || || || || 1.371.449 || 4.164.452

Public tendering in case of major contract changes

Under this measure it is expected that both the public sector and the business will anticipate the costs for part of the tendering procedures.

For the aim of the analysis it is assumed that 1 out of 20 service contracts will need to be retendered before the end of the contract; furthermore it is assumed that the retendering will take place on average after 50% of time duration is elapsed.

Under this assumption the administrative costs will increase by 2.5% of the cost for tendering assumed under measure 2.

Confinement for internal operators of port services

No administrative costs are expected under this measure.

Rules on the price of port services provided in monopolistic position

Table 17 provides an estimation of the number of contracts with exclusive and special rights awarded to private operators or carried out internally by the port manger or other public entity.

The process for defining and reviewing the tariffs involves administrative costs to both the public and the private sector (see par. 1.1).

Assuming that the service tariffs are reviewed every two years, table 16 provides for an estimation of the annual average cost and the one off costs to be incurred by the parties. Furthermore it is assumed that one off administrative cost will be incurred in the first year of application of new rules for the implementation of the new practice.

Table 17 – Estimation of the one off and recurrent annual cost to be incurred for service tariff setting and or reviewing

Port service || Assumption: number of contracts with exclusive or special rights || Recurrent average cost (Euro / year) || One off cost (Euro)

|| Provided in house || Provided by other public entity || Provided by other operator || Public || Business || Public || Business

Pilotage inside port area || 73 || 73 || 201 || 650.024 || 633.196 || 650.024 || 633.196

Pilotage outside port area || 49 || 118 || 199 || 706.816 || 653.091 || 706.816 || 653.091

Towage inside port area || 37 || 2 || 277 || 452.158 || 685.521 || 452.158 || 685.521

Towage outside port area || 18 || 0 || 331 || 461.545 || 785.925 || 461.545 || 785.925

Mooring || 37 || 8 || 37 || 172.650 || 139.508 || 172.650 || 139.508

Dredging inside port area || || || || N/A || N/A || N/A || N/A

Provision of waste reception facilities || 80 || 19 || 352 || 711.149 || 929.711 || 711.149 || 929.711

Cargo handling ship-shore/stevedoring || 28 || 14 || 2124 || 2.768.973 || 4.966.634 || 2.768.973 || 4.966.634

Cargo handling shore-inland transport || 15 || 10 || 2309 || 2.954.893 || 5.376.958 || 2.954.893 || 5.376.958

Passenger services || 75 || 14 || 517 || 888.279 || 1.298.409 || 888.279 || 1.298.409

Bunkering || 2 || 5 || 107 || 153.504 || 256.082 || 153.504 || 256.082

TOTAL || || || || 9.919.992 || 15.725.033 || 9.919.992 || 15.725.033

Rules on the price of port services awarded directly to operators in monopolistic position

Table 17 provides an estimation of the number of services with exclusive and special rights carried out internally by the port manger or other public entity.

The process for defining and reviewing the tariffs involves administrative costs to both the public and the private sector (see par.1.1).

Assuming that the service tariffs are reviewed every two years, table 18 provides for an estimation of the annual average cost and the one off cost to be incurred by the parties. Furthermore it is assumed that one off administrative costs will be incurred in the first year of application of new rules for the implementation of the new practice.

Table 18 – Estimation of the one off and recurrent annual cost to be incurred for service tariff setting and or reviewing

Port service || Services provided internaly or by other public entity || Recurrent average cost (Euro / year) || One off costs (Euro)

|| Public || Business || Public || Business

Pilotage inside port area || 145 || 398.942 || 167.991 || 398.942 || 167.991

Pilotage outside port area || 167 || 458.542 || 193.088 || 458.542 || 193.088

Towage inside port area || 39 || 106.333 || 44.776 || 106.333 || 44.776

Towage outside port area || 18 || 48.352 || 20.361 || 48.352 || 20.361

Mooring || 46 || 125.988 || 53.052 || 125.988 || 53.052

Dredging inside port area || || N/A || N/A || N/A || N/A

Provision of waste reception facilities || 99 || 270.939 || 114.090 || 270.939 || 114.090

Cargo handling ship-shore/stevedoring || 42 || 114.353 || 48.153 || 114.353 || 48.153

Cargo handling shore-inland transport || 25 || 68.357 || 28.785 || 68.357 || 28.785

Passenger services || 88 || 242.644 || 102.175 || 242.644 || 102.175

Bunkering || 7 || 19.788 || 8.332 || 19.788 || 8.332

TOTAL || || 1.854.237 || 780.802 || 1.854.237 || 780.802

Central Port Coordination

The unit cost per port to the public sector is expected to be 14,000 Euro / year. The unit cost per port to the private businesses is estimated to be 7,720 Euro / year.

Table 19 – Estimation of the recurrent yearly costs for central port coordination

|| N. of ports || Cost to the Public sector (Euro) || Cost to the Businesses (Euro)

Central port coordination || 319 || 4.466.000 || 2.462.680

Port users' committee

The unit cost of a port committee to the public sector is assumed to be 5,000 Euro per year. The cost to the businesses is estimated to be 15,440 Euro per year.

Table 20 – Estimation of the recurrent yearly costs for port users’ committee

|| N. of ports || Cost to the Public sector (Euro) || Cost to the Businesses (Euro)

Port users’ committee || 319 || 797.500 || 4.925.360

Functional separation

Table 21 provides an estimation of the number of services which are carried out internally by the port managing bodies.  Under this measure, these activities are supposed to be legally separated by the port managing body.

All the costs will be incurred by the port managing body and the newly created legally separated entities which would be under the economic control of the port managing body. The recurrent cost to the public sector is assumed to be 50,954 Euro per occurrence; the one off cost is assumed to be 215,000 Euro.

Table 21 – Estimation of the one off and recurrent annual cost to be incurred for functional separation of in house activities

Port service || Provided in house || Recurrent average cost (Euro / year) || One off cost (Euro)

|| Public sector || Businesses || Public sector || Businesses

Pilotage inside port area || 73 || 3.695.944 || 0 || 15.595.006 || 0

Pilotage outside port area || 49 || 2.498.880 || 0 || 10.544.004 || 0

Towage inside port area || 37 || 1.871.710 || 0 || 7.897.667 || 0

Towage outside port area || 18 || 895.908 || 0 || 3.780.276 || 0

Mooring || 37 || 1.902.102 || 0 || 8.025.904 || 0

Dredging inside port area || 146 || 7.423.235 || 0 || 31.322.283 || 0

Provision of waste reception facilities || 80 || 4.058.844 || 0 || 17.126.260 || 0

Cargo handling ship-shore/stevedoring || 28 || 1.412.542 || 0 || 5.960.211 || 0

Cargo handling shore-inland transport || 15 || 738.833 || 0 || 3.117.500 || 0

Passenger services || 75 || 3.804.204 || 0 || 16.051.809 || 0

Bunkering || 2 || 122.213 || 0 || 515.677 || 0

TOTAL || || 28.424.415 || 0 || 119.936.595 || 0

Separation of accounts

The one off unit cost to the public sector for separation of accounts is assumed to be 75,000 Euro. It is assumed that the large majority of ports will be required to comply with the new accounting provisions (i.e. 300 out of 319 ports). The businesses will not incur in any cost.

Table 22 – Estimation of the one off cost for separation of accounts

|| N. of ports || Cost to the Public sector (Euro) || Cost to the Businesses (Euro)

Separation of accounts || 300 || 22.500.000 || 0

Financial transparency between public and port authorities

The unit cost to the public sector per port is expected to be 2,500 Euro / year. The businesses will not incur in any cost. As for measure 12, 300 ports are assumed to be required to comply with the new provisions.

Table 23 – Estimation of the recurrent yearly costs for financial transparency

|| N. of ports || Cost to the Public sector (Euro / year) || Cost to the Businesses (Euro / year)

Financial transparency || 300 || 750.000 || 0

Freedom for individual ports to set dues

The unit cost to the public sector per port is expected to be 1,250 Euro / year. The businesses will not incur in any cost. All ports are assumed to be covered by the new provisions.

Table 24 – Estimation of the recurrent yearly costs for freedom to set port dues

|| N. of ports || Cost to the Public sector (Euro / year) || Cost to the Businesses (Euro / year)

Freedom to set port dues || 319 || 398.750 || 0

Cost-based and differentiated dues

The unit cost to the public sector per port is expected to be 15,000 Euro every 5 year. The businesses will not incur in any cost. All ports are assumed to be covered by the new provisions.

Table 25 – Estimation of the recurrent yearly costs for port dues definition according to cost based rules

|| N. of ports || Cost to the Public sector (Euro / year) || Cost to the Businesses (Euro / year)

Cost-based and differentiated dues || 319 || 957.000 || 0

Enabling variations based on environmental performance

This measure does not involve additional administrative costs if implemented in conjunction with measure 14 or 15.

Summary of administrative costs under the baseline scenario

Table 26 provides a comparison of the recurrent administrative costs incurred by the public sector and the businesses under the baseline scenario and the different policy scenarios.

Table 26 – Estimation of the administrative costs by measure

Measure || Recurrent (Euro / year) || One off (Euro)

Public sector || Businesses || Public sector || Businesses

1. Freedom to provide service for "normal services" - no public tendering || -743.671 || -2.258.181 || 0 || 0

1variant. As for M1, but excluding handling operations || -647.033 || -1.964.737 || 0 || 0

2. Public tendering for service contracts with a PSO or space constraints > 5 M€ || 345.337 || 1.048.629 || 0 || 0

2variant. As for M2, but excluding handling operations || 104.712 || 317.962 || 0 || 0

3. Communication from the Commission on how existing Treaty rules apply in the case of port services || 322.647 || 979.728 || 0 || 0

4. Obligation to have at least 2 operators in case of space constraints - public tendering || 1.371.449 || 4.164.452 || 0 || 0

5. Public tendering in case of major contract changes || 40.331 || 122.466 || 0 || 0

5variant. As for M5, but excluding handling operations || 19.543 || 59.344 || 0 || 0

6. Confinement of internal (public) providers of port services || 0 || 0 || 0 || 0

7. Rules on the price of port services provided by operators in monopolistic position || 7.498.608 || 12.767.254 || 9.919.992 || 15.725.033

8. Rules on the price of port services awarded directly to operators in monopolistic position || 1.854.237 || 780.802 || 1.854.237 || 780.802

9. Central Port Coordination || 1.276.000 || 0 || 0 || 0

10. Port users committee || 397.500 || 2.454.960 || 0 || 0

11. Functional separation || 28.424.415 || 0 || 119.936.595 || 0

12. Separation of accounts || 0 || 0 || 22.500.000 || 0

13. Financial transparency between public and port authorities || 750.000 || 0 || 0 || 0

14. Freedom for individual ports to set dues || 398.750 || 0 || 0 || 0

15. Cost-based and differentiated dues || 186.083 || 0 || 0 || 0

16. Enabling variations based on environmental performance || 0 || 0 || 0 || 0

17. Transparency of port due calculation || 0 || 0 || 0 || 0

TOTAL || 41.598.910 || 18.472.680 || 154.210.825 || 16.505.836

Different policy packages consider different measures which results in different administrative costs to be incurred.

Table 27 and 28 present the estimations of the additional administrative costs (both recurrent and one-off) to be incurred respectively by the public sector and the businesses. These costs incorporate also the costs that would be incurred in case of no action by the EU.

Table 27 – Estimation of the administrative costs to be incurred under different PPs against the baseline scenario - Recurrent administrative costs (Euro/year)

Measure || PP1 || PP2 || PP2a || PP3 || PP2a variant

Public sector || Businesses || Public sector || Businesses || Public sector || Businesses || Public sector || Businesses || Public sector || Businesses

1. Freedom to provide service for "normal services" - no public tendering || 0 || 0 || -743.671 || -2.258.181 || -743.671 || -2.258.181 || -743.671 || -2.258.181 || -647.033 || -1.964.737

2. Public tendering for service contracts with a PSO or space constraints > 5 M€ || 0 || 0 || 345.337 || 1.048.629 || 345.337 || 1.048.629 || 345.337 || 1.048.629 || 104.712 || 317.962

3. Communication from the Commission on how existing Treaty rules apply in the case of port services || 322.647 || 979.728 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

4. Obligation to have at least 2 operators in case of space constraints - public tendering || 0 || 0 || 0 || 0 || 0 || 0 || 1.371.449 || 4.164.452 || 0 || 0

5. Public tendering in case of major contract changes || 0 || 0 || 0 || 0 || 40.331 || 122.466 || 40.331 || 122.466 || 19.543 || 59.344

6. Confinement of internal (public) providers of port services || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

7. Rules on the price of port services provided by operators in monopolistic position || 7.498.608 || 12.767.254 || 7.498.608 || 12.767.254 || 0 || 0 || 0 || 0 || 0 || 0

8. Rules on the price of port services awarded directly to operators in monopolistic position || 0 || 0 || 0 || 0 || 1.854.237 || 780.802 || 1.854.237 || 780.802 || 1.854.237 || 780.802

9. Central Port Coordination || 0 || 0 || 0 || 0 || 0 || 0 || 1.276.000 || 0 || 0 || 0

10. Port users committee || 397.500 || 2.454.960 || 397.500 || 2.454.960 || 397.500 || 2.454.960 || 0 || 0 || 397.500 || 2.454.960

11. Functional separation || 0 || 0 || 0 || 0 || 0 || 0 || 28.424.415 || 0 || 0 || 0

12. Separation of accounts || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

13. Financial transparency between public and port authorities || 750.000 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

14. Freedom for individual ports to set dues || 0 || 0 || 0 || 0 || 398.750 || 0 || 398.750 || 0 || 398.750 || 0

15. Cost-based and differentiated dues || 0 || 0 || 186.083 || 0 || 0 || 0 || 0 || 0 || 0 || 0

16. Enabling variations based on environmental performance || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

17. Transparency of port due calculation || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

TOTAL || 8.968.755 || 16.201.943 || 7.683.858 || 14.012.662 || 2.292.485 || 2.148.677 || 32.966.850 || 3.858.168 || 2.127.710 || 1.648.332

Expected one off costs for PP2a and PP2a variant are the same.

Table 28 – Estimation of the administrative costs to be incurred under different PPs against the baseline scenario – One off administrative costs (Euro)

Measure || PP1 || PP2 || PP2a / PP2a variant || PP3

Public sector || Businesses || Public sector || Businesses || Public sector || Businesses || Public sector || Businesses

1. Freedom to provide service for "normal services" - no public tendering || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

2. Public tendering for service contracts with a PSO or space constraints > 5 M€ || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

3. Communication from the Commission on how existing Treaty rules apply in the case of port services || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

4. Obligation to have at least 2 operators in case of space constraints - public tendering || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

5. Public tendering in case of major contract changes || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

6. Confinement of internal (public) providers of port services || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

7. Rules on the price of port services provided by operators in monopolistic position || 9.919.992 || 15.725.033 || 9.919.992 || 15.725.033 || 0 || 0 || 0 || 0

8. Rules on the price of port services awarded directly to operators in monopolistic position || 0 || 0 || 0 || 0 || 1.854.237 || 780.802 || 1.854.237 || 780.802

9. Central Port Coordination || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

10. Port users committee || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

11. Functional separation || 0 || 0 || 0 || 0 || 0 || 0 || 119.936.595 || 0

12. Separation of accounts || 0 || 0 || 22.500.000 || 0 || 22.500.000 || 0 || 0 || 0

13. Financial transparency between public and port authorities || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

14. Freedom for individual ports to set dues || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

15. Cost-based and differentiated dues || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

16. Enabling variations based on environmental performance || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

17. Transparency of port due calculation || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

TOTAL || 9.919.992 || 15.725.033 || 32.419.992 || 15.725.033 || 24.354.237 || 780.802 || 121.790.832 || 780.802

ANNEX X: Labour issues in EU ports

(Excerpts from the Study on Port Labour in the EU, Prof Dr Eric Van Hooydonk, 2013)

(Excerpts from the OECD Study Ports and Regional Development: A European Perspective, 2013)

1. Job categories and employment figures in EU ports

Dock workers

1. In the narrow sense, port labour can be considered narrowly as the loading or unloading of ships, or broadly, as all forms of cargo handling in a port zone, including the stuffing and stripping of containers, the loading and unloading of inland waterway vessels, lorries and railway wagons, the storage and semi-industrial processing of goods in warehouses and logistics areas, etc. In ports where port labour is governed by specific regulations or agreements, employee organisations traditionally try to extend the notion as widely as possible, while employers' organisations aim to restrict it.

Number of port employers and port workers in the EU by Member State, 2012

Member State || Number of employers || Number of port workers

Belgium || Between 50 and 190 || 10,300

Bulgaria || 54 || 4,000

Cyprus || 58 || 342

Denmark || 100 || Between 2,000 and 5,600

Estonia || 17 || 950

Finland || 40 || 2,750

France || 100 || 4,370

Germany || Between 150 and 300 || 15,000

Greece || 30 || 2,500

Ireland || 20 || 677

Italy || Between 214 and400 || Between 11,615 and 18,000

Latvia || 58 || 1,500

Lithuania || 15 || 2,000

Malta || 8 || 1,100

Netherlands || Between 85 and 105 || 7,275

Poland || 423 || 6,000

Portugal || 21 || 796

Romania || 35 || 4,187

Slovenia || 42 || Between 758 and 902

Spain || 159 || 6,500

Sweden || 72 || Between 3,000 and 4,000

United Kingdom || Between 150 and195 || 18,000

Total EU || 1,901-2,442 || 105,620-116,749

2. The term port worker is generally used to designate blue collar workers engaged in the handling of goods at docks, quays, wharves or warehouses in ports.

It is a generic term which includes:

· general workers (operatives) working on board ship as well as those on land, and

· specialised workers such as operators (or drivers) of various types of machinery (also called winchmen); signalmen (hatchmen, hatch tenders or deck hands); lashers; tallymen (also called tally clerks or checkers); (gang) foremen, chief tallymen and chief foremen (supervisors).

In the seaports of the 22 maritime Member States of the European Union, some 2,200 port operators currently employ around 110,000 port workers or 'dockers' who are engaged in the loading and unloading of ships and a number of ancillary port-based services such as warehousing and logistics.

White collar port workers

2. In a more broad sense, since port labour is by definition carried out within a 'port' or a 'port area', the definition of port labour has an important geographical dimension. In some ports, all workers in the port area, including office staff involved in administration, sales, marketing, information technology, legal matters, etc. (white collar employees) are considered as being "port workers".

Those workers work for a broad range of companies established in the port for providing shipping ancillary services, cargo-related services or logistic related services. The employment generated by those port activities would total some 284,000 and 300,000 jobs in the 22 maritime EU Member States (Ecotec study[6], 2006).

Workers in industries located in ports

3. In the broadest sense, the concept covers all workers employed in companies established in the port but not necessarily belonging to the "transport sector". Many European ports are industrial and logistic centres gathering a broad range of industries, including petro-chemical, automotive, steel, energy production and distribution, paper mills, food production companies, firms producing building materials, etc.

According to the European Sea Ports Organisation, the European port sector would represent more than 10 million jobs in total.

2. Port activity as job generator

The economic significance of ports is defined in terms of added value, employment, business establishments, business dynamics and private investments.

Academic research shows that improvement in port performance generates new jobs and attracts industrial and commercial firms to the port, creating higher added value and indirect jobs. Port throughput is positively correlated to employment in port regions.

For example, OECD studies (2012) indicate that an increase of one million tons of port throughput is associated with an increase in employment in the port region of 0.0003%. This means that in a region with one million employees, employment would increase by 300 units; in the long run this increase would be 7500 units[7]. The figures for indirect and induced port-related employment would be higher, depending on the multipliers of each individual port region (in the case of e.g. Hamburg, the multiplier is 1.71, for Rotterdam is 1.13 and for Le Havre / Rouen has been estimated at 1.57)[8].

This impact is slightly larger on industry than on service employment. These conclusions are based an evaluation of the impact of port activity on regional employment in a sample of 560 regions in 10 European countries, 100 of which home to one or more port, from 2000-06.

Liquid bulk has lower employment impacts than the other cargo categories (dry bulk, containers, general cargo). If liquid bulk is not included in port throughput numbers, the employment impact in the region doubles: an increase of one million tonnes port throughput is then associated with a regional employment increase of 600 units. This finding confirms the fact that only a few jobs are needed to handle liquid bulk, due to loading and unloading of a large part of this bulk by pipelines.

The number of passengers in a port is not correlated to employment in port regions. It has a positive but not statistically significant effect on regional employment. This is probably due to the fact that ferry industries handle large numbers of transit passengers.

Private ports have the largest employment impacts in regions. Their impact per one million additional tonnes of port throughput is 1000 jobs; this is 550 for European ports with the “Latin” governance model and 170 for “Hanseatic” ports. This is rationalised to some extent by the fact that some of these private ports are located close to the main UK cities or are functional to some local industries; therefore the results might be influenced by local situations rather than caused by its governance structure

3. Labour and cargo-handling

It is widely accepted that both the day-to-day efficiency and the medium and long-term dynamics of port competition are strongly influenced by the regime of port labour. Depending on the type of terminal, port labour represents between 15 and 75 per cent of the operational terminal costs for terminal operators (15 to 20 per cent at dry bulk terminals; between 40 and 75 per cent at general cargo terminals).

Even in the capital intensive container sector this percentage is believed to reach 50 or even 70 per cent, which explains that the labour factor also determines, for example, investment decisions on terminal lay-out and equipment. Research (Notteboom et al, 2010) confirms that labour arrangements can have a tremendous impact on the proper functioning of ports and on trade flows.

Source: ITMMA 2010 – Dock Labour and port related employment in the EU Seaport System

4. Sector specific labour rules for Dockers

Traditionally, port work has been regarded as a low-skilled manual profession. In order to cope with the irregularity of port traffic and the ensuing fluctuations in labour demand, the port labour market has in many places been subject to specific laws, regulations and collective agreements.

In most cases, these rules entail the reservation of temporary labour for a steadily available complement ('pool') of registered workers who enjoy unemployment benefit or similar pay when no work is available.

Even if these arrangements take on very different shapes, in 16 out of 22 Member States (i.e. 73 per cent) access to the port labour market is restricted under rules which depart from general labour law.

In a considerable number of ports, the specific employment rules are characterised by restrictions on employment (including priority for registered workers or recognised workforce suppliers, closed shop situations, strict job demarcations, mandatory manning scales, restrictions on temporary agency work and on self-handling) and restrictive working practices.

These restrictions impact negatively on trade, competition and/or employment. However, the problems do not occur in every Member State or with the same intensity in all ports. Several States have reformed port labour, while some ports are completely restriction-free. Moreover, not every registration or pool system is per se inefficient, and not every restriction goes per se against EU law.

However, in many cases serious doubts about the compatibility of the national or local port labour regime with EU law are warranted in the light of available EU and national case law on internal market and competition rules.

In sum, restrictive pool or registration systems can only be justified under EU rules if the general interest and especially the social protection of workers demonstrably require such an exceptional labour market set-up, if the system is non-discriminatory and fully compatible with human rights, if restrictions on access to the market for the provision of workforce are proportionate and do no got beyond what is necessary in order to attain the public interest objective concerned, and, more specifically, if the system is kept free of any additional restrictions on employment, restrictive working practices and abuses.

Vague references to social protection or safety objectives which do not explain why applicable restrictions are indeed necessary will not suffice. EU law allows Member States and social partners to choose between a free and open port labour market or an efficient and sustainable registration or pool system which is not affected by restrictive excesses, either in the law or in practice.

5. Training, Health and Safety in ports

Qualification and training arrangements are very diverse across the EU. A growing number of ports and terminals organise sophisticated training programmes but elsewhere workers are still poorly trained. In a large number of Member States, certification systems for port workers are in place, even if these are not always fully operational. A number of recent best practices are available.

A majority of States have enacted specific laws and regulations on health and safety in port work. Despite signs of considerable improvement in the past decades, scattered data suggest that the port worker continues to have one of the most dangerous occupations in the entire EU economy. However, specific national accident statistics on port labour are only available in a minority of Member States.

6. Prospects

Seen from an EU perspective, the port labour market can be described as a market in transition, with a trend towards the application of general labour law rather than specific laws and regulations. Opinions on the need to maintain specific laws and regulations for port labour diverge widely.

The current economic and financial crisis notwithstanding, expectations are that the coming decades will see further growth in trade and port throughput, together with a far-reaching innovation in handling technologies and a growing demand for well-trained and versatile port workers.

The port industry will continue to function as one of the European Union's most powerful prosperity and job generators. A summary of the employment impact of ports is presented below, based on the Dutch ports example during 2002 – 2007.

Source: ITMMA 2010 – Dock Labour and port related employment in the EU Seaport System

 Synopsis of port labour regimes in the EU (source: Van Hooydonk, 2013)

SYNOPSIS OF PORT LABOUR IN EU MEMBER STATES

|| Prevailing port management model || Seaborne cargo in 2011 in million tonnes || No. of employers of port workers || No. of port workers || Party to ILO C137 || Party to ILO C152 || Lex specialis on employ-ment || Level of port labour- specific CBAs || Registration of port workers || Priority for pool workers || Restrictions on temporary agency work || National qualification system || Lex specialis on OHS || Availability of specific national OHS statistics

BE || Landlord || 265 || 50-190 || 1,300 || No || No || Yes || National, port || Yes || Yes || Yes || Yes || Yes || Yes

BG || Landlord || 26 || 54 || 4,000 || No || No || Yes || National, company || Yes || No || Yes || Yes || Yes || No

CY || Tool || 7 || 58 || 342 || No || Yes || Yes || National || Yes || Yes || Yes || No || Yes || Yes

DK || Landlord || 92 || 100 || 2,000-5,600 || No || Yes || No || National, port || No || Yes || Yes || Yes || Yes || No

EE || Landlord || 47 || 17 || 950 || No || No || No || None || No || No || No || Yes || No || Yes

|| Prevailing port management model || Seaborne cargo in 2011 in million tonnes || No. of employers of port workers || No. of port workers || Party to ILO C137 || Party to ILO C152 || Lex specialis on employ-ment || Level of port labour- specific CBAs || Registration of port workers || Priority for pool workers || Restrictions on temporary agency work || National qualification system || Lex specialis on OHS || Availability of specific national OHS statistics

FI || Mixed || 110 || 40 || 2,750 || Yes || Yes || No || National, company || Yes || No || Yes || No || Yes || Yes

FR || Landlord || 354 || 100 || 4,370 || Yes || Yes || Yes || National, port, company || Yes || Yes || Yes || Yes || No || Yes

DE || Landlord || 296 || 150-300 || 15,000 || No || Yes || Yes || National, port, company || Yes || Yes || Yes || Yes || Yes || Yes

EL || Mixed || 124 || 30 || 2,500 || No || No || Yes || Company || Yes || Yes || Yes || No || No || No

IE || Mixed || 45 || 20 || 677 || No || No || No || Company || No || No || No || No || Yes || Yes

IT || Landlord || 478 || 214-400 || 11,615-18,000 || Yes || Yes || Yes || National, company || Yes || Yes || Yes || No || Yes || No

LV || Landlord || 69 || 58 || 1,500 || No || No || No || Company || No || No || Yes || No || No || No

|| Prevailing port management model || Seaborne cargo in 2011 in million tonnes || No. of employers of port workers || No. of port workers || Party to ILO C137 || Party to ILO C152 || Lex specialis on employ-ment || Level of port labour- specific CBAs || Registration of port workers || Priority for pool workers || Restrictions on temporary agency work || National qualification system || Lex specialis on OHS || Availability of specific national OHS statistics

LT || Landlord || 45 || 15 || 2,000 || No || No || No || Company || No || No || No || No || Yes || No

MT || Landlord || 32 || 8 || 1,100 || No || No || Yes || National, company || Yes || Yes || Yes || No || Yes || No

NL || Landlord || 538 || 85-105 || 7,275 || Nor || Yes || No || Company || No || Yes || Yes || No || No || No

PL || Landlord || 65 || 423 || 6,000 || Yes || No || No || Company || Yes || No || No || No || No || No

PT || Landlord || 67 || 21 || 796 || Yes || No || Yes) || Port || Yes || Yes || Yes || No || No || No

RO || Landlord || 40 || 35 || 4,187 || Yes || No || Yes || Company || Yes || No || Yes || Yes || No || No

SI || Service || 17 || 42 || 758-902 || No || No || No || Company || No || No || No || No || No || Yes

|| Prevailing port management model || Seaborne cargo in 2011 in million tonnes || No. of employers of port workers || No. of port workers || Party to ILO C137 || Party to ILO C152 || Lex specialis on employ-ment || Level of port labour- specific CBAs || Registration of port workers || Priority for pool workers || Restrictions on temporary agency work || National qualification system || Lex specialis on OHS || Availability of specific national OHS statistics

ES || Landlord || 476 || 159 || 6,500 || Yes || Yes || Yes || National, port || Yes || Yes || Yes || Yes || No || No

SE || Mixed || 145 || 72 || 3,000-4,000 || Yes || Yes || No || National, company || No || NO || Yes || No || Yes || Yes

UK || Mixed || 519 || 150-195 || 18,000 || No || No || No || Company || No || No || No || Yes || No || No

ANNEX XI: Ports in the new TEN-T Strategy

1. New TEN-T proposal – a multimodal corridor concept

The basic aim of the Trans-European Networks Policy is to remove the bottlenecks, upgrade infrastructure and streamline cross border transport operations for passengers and businesses throughout the EU. Its realization will contribute to improving connections between different modes of transport and to realize the EU's climate change objectives.

On 19th of October 2011 the Commission adopted[9] a new proposal for the development of the Trans-European Transport Network (TEN-T). The aim of the new proposal is to transform the existing patchwork of European roads, railways, airports and canals into a unified transport network (TEN-T). The new policy concentrates on a much smaller and more tightly defined transport network for Europe.

The aim is to focus spending on a smaller number of projects where real EU added value can be realised. The new policy followed by a two-year consultation process assumes that the TEN-T will be developed gradually by implementing a dual-layer approach. It means that two layers of the TEN-T are established: a core network and a comprehensive network. Both layers include all transport modes: road, rail, inland waterways, air and maritime transport, as well as intermodal platforms.

The comprehensive network constitutes the basic layer of the TEN-T. It consists of all existing and planned infrastructure of the TEN-T. The complete comprehensive network is planned to be in place by 31 December 2050 at the latest. It will ensure full coverage of the EU and accessibility of all regions in the Union, including remote and the outermost regions.

The core network overlays the comprehensive network and consists of the strategically most important parts of the TEN-T. It constitutes the backbone of the development of a multimodal transport network. It concentrates on those components of the TEN-T with the highest European added value: cross border missing links, key bottlenecks and multimodal nodes. The core network is planned to be completed by 31 December 2030 at the latest.

The core network design process included two steps:

- In the first step main nodes were identified: urban main nodes, comprising all Member States' capitals and all other large urban areas or conurbations, including the ports and airports directly belonging to the urban node. Outside these urban main nodes, ports which exceed a certain volume threshold or fulfil certain geographical criteria. The most relevant border crossing points: one per mode between each Member State and each neighbouring country.

- The second step involved connecting these main nodes via multimodal links (road, rail, inland waterway). Some links already exist while in some cases the problems are bottlenecks or lack of links.

2. The TEN-T "core network"

The future core network proposed by the EC will comprise of 83 main European ports with rail and road links, 37 key airports with rail connections into major cities, 15,000 km of railway line upgraded to high speed, 35 cross border projects to reduce bottlenecks. Rail, road and inland waterway connections between these nodes will carry traffic flows of the highest strategic importance.

In order to facilitate the implementation of the core network, the ‘corridor approach’ will be used. This instrument will help to coordinate and synchronise different projects on a transnational basis. Within the core network, 10 corridors have been established. Core network corridors shall involve at least three transport modes and at least three Member States. Each Member State participates in at least one corridor. They cover the most important cross-border long-distance flows in the core network. In duly justified cases the core network corridor may involve only two transport modes.

If possible, core network corridors should be connected with a maritime port. Core network corridors should facilitate modal integration and interoperability and lead to coordinated development and management of infrastructure. Multimodal infrastructure within core network corridors shall be built and coordinated, wherever needed, in a way that optimises the use of each transport mode and their cooperation. The core network corridors shall support the comprehensive deployment of interoperable traffic management systems.

European Coordinators will chair the corridor platforms. The European Coordinator will be designated by the Commission, after consultation with the Member States concerned and the European Parliament. The European Coordinator will lead the coordinated implementation of the core network corridor.

3. Connecting Europe Facility: the EC’s instrument to finance the TEN-T

The ‘Connecting Europe Facility’ (CEF) is a financing tool for investing in transport, energy and ICT infrastructure proposed by the European Commission for the budgetary period 2014-2020. For the first time, the Commission is proposing a single funding instrument for the three network sectors. The ‘Connecting Europe Facility’ is to finance projects which fill the missing links in Europe's energy, transport and digital backbone.

The total budget of the Connecting Europe Facility is EUR 50 billion. EUR 31.7 billion is dedicated to the transport sector, the digital services sector will receive EUR 9.2 billion and the energy sector will receive EUR 9.1 billion. The funds allocated to the transport sector include EUR 10 billion from the Cohesion Fund, set aside for transport projects in cohesion countries; the remaining EUR 21.7 billion will be available to all Member States for transport infrastructure investments.

80% of the money allocated to the transport sector under the Connecting Europe Facility will be used to support two categories of projects: core network projects and horizontal projects. The remaining funding may be made available for ‘ad hoc’ projects, including projects on the comprehensive network. Core network projects include priority projects along the 10 multimodal corridors on the core network. Funding will also be available for some other projects of high European added value on the core network.

It will be up to Member States to submit detailed proposals of investment to the Commission and the precise level of EU funding will depend on the details of the national proposals. No road projects will be financed by the CEF budget with the exception of projects that create safe parking areas and road traffic management systems.

4. Core and comprehensive TEN-T Ports

In the new strategy for a European TEN-T core network, seaports constitute a strategic access point for multimodal networks. Together with other nodal points such as inland ports and airports, seaports are put in a central position of the Trans-European Transport Network. Seaports have a vital role to play within the TEN-T, by increasing the efficiency of the whole European transport system.

Seaports together with adequate infrastructure connections are vital for European industry and inland and external trade development. Furthermore, seaports’ good connections with rail and road infrastructure can contribute to the elimination of bottlenecks along the main transport corridors.

Seaports as a connection point for the shipment of goods and passengers between land and maritime means of transport also play crucial a role in the development of intermodal transport, which is an essential component of a common policy on sustainable mobility.

In sum, the new strategy aims at the sustainable development of European seaports by promoting industry efficiency, the reduction of the negative impact on the environment and the integration of seaports within the entire chain of transports.

The current TEN-T proposal includes 83 ports in the core network and 236 ports in the comprehensive network (319 ports in total). Nearly all multimodal corridors feature connections with maritime ports.

Ports which are part of the comprehensive network shall meet at least one of the following criteria:

- The total annual passenger traffic volume exceeds 0.1% of the total annual passenger traffic volume of all maritime ports of the Union. The reference amount for this total volume is the latest available three-year average, based on the statistics published by Eurostat.

- The total annual cargo throughput – either for bulk or for non-bulk cargo handling – exceeds 0.1% of EU total. The reference amount for this total volume is the latest available three-year average, based on the statistics published by Eurostat.

- The maritime port is located on an island and provides the sole point of access to a NUTS 3 region in the comprehensive network.

- The maritime port is located in an outermost region or a peripheral area, outside a radius of 200 km from the nearest other port in the comprehensive network.

As far as the core network is concerned, the following seaports should be included:

a. Seaports belonging to a primary city node (e.g.: Lisbon, Naples, and Bordeaux).

b. Other seaports with an annual throughput > 1% of the EU total.

c. The largest seaport per each NUTS 1 region with access to the sea, for each continuous coastline.

The list of the 83 "core ports" (Annex II.2 of the Commission's proposal COM(2011)650 final/2 of 19.12.2011) is given in annex.

Seaports included in the comprehensive network should be connected by railway lines, road and if possible barge; they should offer at least one terminal open to all operators in a non-discriminatory way and have equipment to ensure environmental performance of ships in ports (in particular port reception facilities).

With respect to seaports, attention should be paid to three vital projects: promoting short sea shipping, including Motorways of the Sea, interconnection of seaports with inland waterways, implementation of VTMIS and e-Maritime services.

5. TEN-T port statistics

The 83 seaports included into the TEN-T core network handle approximately 70% of the cargo passing through all EU seaports. The greatest number of core seaports (24) is concentrated within the Mediterranean Sea region.

These seaports account for 58.4% of the throughput of all seaports within the EU Mediterranean Sea region. Half of those ports are located along the coastline of Italy. This can be explained by taking into consideration the fact that Italian seaports handle the greatest volume of cargo within the Mediterranean Sea region (494.1 million tonnes) which accounts for about 48.3% of the total seaports’ turnover in the region. Additionally, Italy has the largest number of seaports handling at least 1 million tonnes of cargo. Spain has also a large number of core seaports along its Mediterranean coast (7). The rest of the core seaports are located in Greece (4), France (1) and Slovenia (1).

Along the UK and Irish coast 17 seaports/group of seaports are included in the TEN-T core network (3 in Ireland and 14 in the UK). All of these seaports are responsible for 64% of the cargo handled in UK and Irish seaports.

In the North West Continent region (i.e. North Sea part of Germany, the Netherlands, Belgium, North Sea part of France) core seaports are distributed quite equally.

The table below shows the total seaports' throughput and of core seaports by EU region:[10]

Region || EU countries included || Total seaports throughput [mln tonnes] || Share in total EU ports throughput || Number of core seaports* || Share of core seaports in total throughput of the seaports in the region

North West continent region || North Sea part of Germany, the Netherlands, Belgium, North Sea part of France || 1151.5 || 31.7% || 13 || 89.7%

Mediterranean Sea region || Greece, Slovenia, Italy, Malta, Cyprus, Mediterranean parts of France and Spain || 1023.9 || 28.2% || 24 || 58.4%

Baltic Sea region || Baltic Sea part of Germany, Poland, Latvia, Lithuania, Estonia, Finland, Denmark, Sweden || 629.4 || 17.3% || 18 || 57.8%

UK & Ireland || UK and Ireland || 557.0 || 15.3% || 17 || 64.0%

Atlantic Ocean region || Atlantic parts of France and Spain, Portugal || 208.3 || 5.8% || 9 || 79.3%

Black Sea region || Bulgaria, Romania || 61.0 || 1.7% || 2 || 70.8%

Total || All || 3631.1 || 100% || 83 || 70.5%

* COM proposal Oct 2011 (Group of seaports under a single port authority are treated as one sea port)

Each country has 3 to 4 core seaports/group of seaports. All of these seaports together account for almost 90% of the total throughput of seaports in this region. Along the EU Atlantic coast, 9 seaports are included in the TEN-T core network (4 in Spain, 3 in Portugal, 2 in France). These ports handle approximately 79% of the cargo passing through EU Atlantic seaports.

List of nodes of the core network: Maritime ports

COM(2011)650 of 19.10.2011

BELGIUM Antwerpen Gent Oostende, Zeebrugge BULGARIA Burgas DENMARK Århus Københavns Havn GERMANY Bremerhaven, Bremen Hamburg Lübeck Rostock Wilhelmshaven ESTONIA Tallinn IRELAND Cork Dublin Limerick GREECE Igoumenitsa Patras Pireus Thessaloniki SPAIN Algeciras Barcelona Bilbao Cartagena Gijón A Coruña Las Palmas Palma de Mallorca Sevilla Tarragona || Valencia FRANCE Bordeaux Calais, Dunkerque Le Havre Marseille Nantes Saint-Nazaire Rouen ITALY Ancona Bari Genova Gioia Tauro La Spezia Livorno Napoli Palermo Ravenna Taranto Trieste Venezia CYPRUS Lemesos LATVIA Rīga Ventspils LITHUANIA Klaipėda MALTA Valletta, Marsaxlokk THE NETHERLANDS Amsterdam Rotterdam Terneuzen, Vlissingen POLAND Gdánsk, Gdynia Świnoujście, Szczecin || PORTUGAL Leixões (Porto) Lisboa Sines ROMANIA Constanța SLOVENIA Koper FINLAND Helsinki Kotka, Hamina Turku SWEDEN Göteborg Luleå Malmö Stockholm Trelleborg UNITED KINGDOM Belfast Bristol Cardiff, Newport Dover Felixstowe Forth (Edinburgh) Glasgow Grimsby, Immingham Liverpool London Southampton, Portsmouth Tees and Hartlepool

ANNEX XII: References

EU acquis

Council regulation (EEC) No 95/93 of 18 January 1993 on common rules for the allocation of slots at Community airports.

Council directive 96/67/EC of 15 October 1996 on access to the ground-handling market at Community airports.

Directive 2009/12/EC of the European Parliament and of the Council of 11 March 2009 on airport charges.

Directive 2000/59/EC of the European Parliament and of the Council of 27 November 2000 on port reception facilities for ship-generated waste and cargo residues.

European Commission, Directive 2006/111/EC of 16 November 2006 on the transparency of financial relations between Member States and public undertakings as well as on financial transparency within certain undertaking.

European Commission, Communication on a European Ports Policy, COM(2007)616.

European Commission, White Paper on Transport: roadmap to a Single European Transport Area – Towards a competitive and resource efficient transport system, COM(2011) 144.

European Commission, Proposal for a Regulation of the European Parliament and of the Council on Union Guidelines for the development of the trans-European transport network, COM(2011) 650.

European Commission, Single Market Act II Together for new growth, COM(2012) 573.

European Commission, Proposal for a directive of the European parliament and of the Council on the deployment of alternative fuels infrastructure, COM(2013) 18 final.

European Commission, Ports: Reasoned opinion addressed to Spain for non-compliance with the EU Treaty of the regime organising the recruitment of port workers (dockers), IP/12/1022.

European Commission, Decision on Case COMP/39.316 – Gaz de France.

European Commission, Decision on case COMP/A.36.568/D3 – Scandlines Sverige AB v Port of Helsingborg.

Academic literature

Bichou, K.,"Linking theory with practice in port performance and benchmarking", in International Journal Ocean Systems Management, 1(3-4), pp. 316-338, 2012.

Button K., Transport Economics, Edward Elgar, Aldershot, 1993.

Cullinane K. et al., International Handbook of Maritime Economics, Edward Elgar, Ashton, 2010.

Ferrari C., Merk O., Bottasso A., Conti M. Tei A., in “Ports and Regional Development: a European Perspective”, OECD Regional Development Working Papers, 2012/07, OECD Publishing, 2012.

Goss R., "Economic Policies and Seaports: 1. The Economic Functions of Seaports", in Maritime Policy and Management, 17(3), pp.207-219, (1990).

Haralambides H.E. et al., "Port Financing and Pricing in the EU: Theory, Politics and Reality", in Lee T-W. & Cullinane K.  (Eds.), World Shipping and Port Development, Palgrave Macmillan, Basingstoke, pp. 199-216, 2005.

Notteboom T., "Consolidation and contestability in the European container handling industry", in Maritime Policy and Management, 29, 257-269, 2002.

Notteboom T.,  Rodrigue J. P. and De Monie G., "The Organizational and Geographical Ramifications of the 2008-09 Financial Crisis on the Maritime Shipping and Port Industries", in P.V. Hall P.V., B. McCalla C., Comtois C. and Slack B.  (eds) Integrating Seaports and Trade Corridors, Ashgate, pp. 31-45,2011.

Online publications

De Langen, van Meijeren, and Tavaszzy, Combining Models and Commodity Chain Research for Making Long-Term Projections of Port Throughput: an Application to the Hamburg-Le Havre Range available at: http://www.ejtir.tudelft.nl/issues/2012_03/pdf/2012_03_03.pdf.

Ducruet, van der Horst, Transport Integration at European Ports: measuring the role and position of intermediaries available at: http://www.ejtir.tbm.tudelft.nl/issues/2009_02/pdf/2009_02_03.pdf

ECOTEC, An exhaustive analysis of employment trends in all sectors related to sea or using sea resources Summary report for the European Commission, DG Fisheries and Maritime Affairs, available at:

http://ec.europa.eu/maritimeaffairs/documentation/studies/documents/summary_report_en.pdf

ESPO, Fact Finding Report 2010,

http://www.espo.be/images/stories/Publications/studies_surveys/espofactfindingreport2010.pdf

European Commission, Administrative Burden Reduction Potential at EU level. Sectoral Overview (in million €), available at:

http://ec.europa.eu/dgs/secretariat_general/admin_burden/docs/sectoral_overview_july_11.pdf

European Parliament, Study: State Aids to EU Ports, available at:

http://www.europarl.europa.eu/committees/en/tran/studiesdownload.html?languageDocument=EN&file=66171.

Haralambides H. E., Ports: Engines of Growth and Employment, available at:

http://www.portsconference2012.eu/conference-documents.htm.

International Transport Forum, The Extent of and Outlook for Congestion, in Inland, Maritime and Air Transport, available at:

http://www.internationaltransportforum.org/sofia/pdf/KeyMessages/ITF200701e.pdf.

ISL Bremen, Public financing and charging practices of seaports in the EU, available at:

http://ec.europa.eu/transport/modes/maritime/studies/doc/2006_06_eu_seaports_study.pdf.

Notteboom T., Rodrigue J., The Corporate Geography of Global Container Terminal Operators, available at:

http://people.hofstra.edu/jean-paul_rodrigue/downloads/book%20Gdansk-final.pdf.

OECD report, A framework for investment policy transparency,

http://www.oecd.org/daf/internationalinvestment/investmentpolicy/16793978.pdf.

OECD, Competition concerns in ports and port services, available at:

http://ec.europa.eu/competition/international/multilateral/2011_jun_ports.pdf.

OECD, Policy Instruments to limit negative environmental impacts from increased international transport, available at:

http://www.oecd.org/env/transportandenvironment/41612575.pdf.

OECD, "Ports and Regional Development: a European Perspective", available at:

http://www.oecd-ilibrary.org/.

OECD, "The Competitiveness of Global Port Cities: the case of Hamburg-Germany", available at:

http://www.oecd-ilibrary.org/.

Trujillo and Nombela, Regulation and privatisation of the seaport industry, available at:

http://elibrary.worldbank.org/content/workingpaper/10.1596/1813-9450-2181.

World Bank, Connecting to Compete 2012: Trade Logistics in the Global Economy, available at:

http://siteresources.worldbank.org/TRADE/Resources/239070-1336654966193/LPI_2012_final.pdf.

World Bank, The Evolution of Ports in a competitive world, 2007, available at:

http://rru.worldbank.org/Documents/Toolkits/ports_mod2.pdf .

Case law

European Court of Justice, 10 December 1991, case C-179/90.

European Court of Justice, Case C-324/98 "Teleaustria".

European Court of Justice, Joined Cases T-443/08 and T-455/08.

Others

Decision of Portuguese competition authority of 2007 - Autoridade da Concorrência (2007), ‘CA detect cartel operating in the Port of Setúbal and imposes fine of €185,000’, April.

Decision of the German competition authority - Bundeskartellamt (2010), ‘Bundeskartellamt opens up the Puttgarden-Rødby ferry route to competition’, January.

European Court of Auditors (2013), Using structural and cohesion funds to co-finance transport infrastructures in seaports: an effective investment? Available at:

http://eca.europa.eu/portal/pls/portal/docs/1/14050737.PDF.

PWC/NEA (2013), Study aimed at supporting an impact assessment on: "Measures to enhance the efficiency and quality of port services in the EU", (not yet published).

PwC/NEA (2012) Study on Public financing of European seaports

Van Hooydonk E. (2013), "Port Labour in the EU: Labour market, Qualifications & Training, Health and Safety".

Written question 1075/79 by Mr Gendebien to the Commission: coordination of the development of North Sea Ports, OJ C 105, 28.4.1980, p. 11.

ANNEX XIII: Glossary

Cargo handling operations involve marshalling services (receipt, storage, assembly and sorting of cargo in preparation for delivery to a ship's berth) and stevedoring services (loading and unloading of cargo from ships).

Confinement means that a port authority that decides to operate a specific service themselves (in-house) is not allowed to offer this service outside its own port. The port authority service provision is thus confined (limited) to the own port under its control.

Deep sea shipping refers to the maritime transport of goods in intercontinental routes, crossing oceans;

Dredging involves collecting and bringing up, fishing up or clearing away or out material and/or any object from the bed of a river, sea, etc.; transporting it to the relocation site and unloading the material or object. The purpose for dredging can be maintenance of the depth or the deepening of navigation accesses or channels; it can also be land reclamation, coastal protection, seabed stabilisation for the offshore energy installations or the removal of contaminated sediments;

Feeder Services are transport operations in which cargoes are shipped by water in smaller vessels to/from a load-centre port for loading to or unloading from larger ocean-going vessels. Feeder services are usually linked to the "hub and spoke" logistic distribution model.

Hub-and-Spoke is a cargo distribution model which drives shipping companies to consolidate shipments on the large scale at major terminals (i.e., hub) and to redistribute the smaller scale of shipments to their respective destinations via radial links (i.e., spoke). The model is of particular importance for containers trades.

Managing body of the port or port authority means a body which administer and manage the port infrastructures, and the coordination and, where appropriate, the control of the activities of the operators present in the port or port system concerned. It may consist of several separate bodies or be responsible for more than one port;

Mooring is a service provided by specialised boatmen companies securing or confining a vessel in a particular station, as by cables and anchors or by a line or chain run to the wharf.

Other Ancillary (or general) services provided in many ports include bunkering, chandlering, ship repair, container maintenance, marine appraisals, insurance claims inspections, banking, etc.;

Passenger services: services provided in passenger terminals in ports, of particular importance for ferry crossings (islands' traffic, Channel and straits crossings, North and Baltic Sea inter-city connections);

Pilotage services means services to ships offered by a maritime pilot. Such services include but are not restricted to: deep-sea pilotage; coastal pilotage; sea pilotage (from sea to port or vice versa); shore-based pilotage; river, canal, docking and harbour pilotage. A maritime pilot is either a deep-sea pilot or any other maritime pilot who is authorized by the competent authority to carry out pilotage services in a designated area, and who holds appropriate documentation issued by the competent authority.

Port dues (also referred to as port infrastructure charges) are charges by a port authority to a vessel for each harbour entry, usually on a per gross tonnage basis. The usual justification of port dues is the need to cover the costs of basic port infrastructure and marine facilities including equipment such as buoys, beacons, and vessel traffic management system.

Port system means two or more ports in the same geographical area and managed by a single managing body;

Ro-Ro means Roll-on Roll-off vessels: these are the typical ferry vessels where cars and truck drive on and off by means of a ramp. This is also uses for car carriers, to avoid wasting time by having to hoist the cars, trucks, busses or other vehicles in the sips.

Seaport or port means an area of land and water made up of such works and equipment as to permit, principally, the reception of ships, their loading and unloading, the storage of goods, the receipt and delivery of these goods, and the embarkation and disembarkation of passengers;

Self-handling entails companies employing personnel of their own choice for handling cargoes in ports. In several EU Member States, handling of cargoes in ports can be done only by registered dock workers, usually working as autonomous "pools" within the port;

Short-sea shipping means the movement of cargo and passengers by sea between ports situated in geographical Europe or between those ports and ports situated in non-European countries having a coastline on the enclosed seas bordering Europe.

Towage is a service provided by tug boats which move larger ships that either should not or cannot power themselves. Usually, towage companies are private companies that operate in the port by means of an authorisation of the port authority. In some cases, towage operators are owned by the State;

Waste reception services: in the EU, the provision of ship waste reception facilities in ports is an obligation stemming from Directive 2000/59/EC; waste reception facilities can be operated as a commercial service or as a public service provided by the port.

[1] Comprehensive TEN-T: The total annual passenger traffic volume exceeds 0,1 % of the total annual passenger traffic volume of all maritime ports of the Union and/or The total annual cargo volume – either for bulk or for non-bulk cargo handling – exceeds 0,1% of the corresponding total annual cargo volume handled in all maritime ports of the Union. The reference amount for this total volume is the three-year average2008-2009-2010 based on the statistics published by Eurostat.

[2] PwC, London Economics and Ecorys, Public procurement in Europe, Cost and effectiveness, Prepared for the European Commission, March 2011

[3] Ibidem.

[4] Measurement data and analysis, Priority Area Annual Accounts/Company Law, EU Project On Baseline Measurement and Reduction of Administrative Costs, February 2009

[5] Directive 2000/59/EC of the European Parliament and of the Council of 27 November 2000 on port reception facilities for ship-generated waste and cargo residues.

[6] http://ec.europa.eu/maritimeaffairs/documentation/studies/documents/summary_report_en.pdf

[7] See OECD (2012) Report "Ports and Regional Development: a European Perspective"

http://dx.doi.org/10.1787/5k92z71jsrs6-en

[8] See OECD (2012) papers on "The Competitiveness of Global Port Cities"

[9] For a detailed presentation of the TEN-T & Connecting Europe, see http://ec.europe.eu/transport

[10] Source: Baltic Ports Organization Secretariat (2012) in the context of the TransBaltic project. See:

http://www.transbaltic.eu/wp-content/uploads/2012/05/New-TEN-T-guidelines-proposal-implications-for-the-port-sector-in-the-Baltic-Sea-region.pdf