The Annual Dinner Debate of ECG was held on Tuesday 19th March 2013 in the European Parliament and was hosted by Mr Brian Simpson MEP, Chairman of the Transport and Tourism Committee.
Click here to download the list of participants.
ECG wishes to thank its service providers from Dods EU Monitoring (www.dodsmonitoring.eu) for the report on the ECG Dinner Debate 2013 that you can find below:
On 19 March 2013, ECG organised its Annual Dinner Debate in the European Parliament, hosted by MEP Brian Simpson (Chairman of the Transport & Tourism Committee). The topics discussed included the need for investment in multimodal solutions and making sure stakeholders are proactive in terms of upcoming legislation and investment needs for infrastructure projects. Other issues raised included weights and dimensions (especially the Nr. 1 wish of ECG members to be able to cross borders with a loaded length of 20.75m while currently the EU restricts this to 18.75m), the directive on sulphur in marine fuels and the balance between road and rail projects, with stakeholders calling for a fairer focus by the Commission.
ECG President Costantino Baldissara welcomed close to 100 guests and gave a brief presentation of the association and its membership. He then spoke about the automotive industry which can be considered the backbone of the European economy. It led economic growth in the past decades and will no doubt maintain its importance in the decades ahead.
The Finished Vehicle Logistics (FVL) sector is part of the transport industry which accounts for about 10 million jobs and some 5% of the EU’s GDP (twice that if related industries are included). It is also part of the wider automotive industry. He stressed that the burning issue at hand was that if FVL companies fail to invest in the delivery of the vehicles across the European continent, the FVL sector risks becoming the bottleneck of the automotive industry, constraining the European engine of growth. Unfortunately, low and decreasing profit margins, mainly shrunk by increasing costs, are the trend now. This risks driving many firms to bankruptcy.
In this respect, the ECG President pointed out the necessity as well as the opportunity of scrapping schemes for old cars and trucks. They are a tool to drive the industry, as well as the whole economy, out of the tunnel. They would be very appropriate in a market where it is estimated that about 55 million cars are old and suitable for scrap. In the past, scrapping schemes introduced in the Member States have pushed up sales and created additional fiscal income for governments. EU support for scrapping could be granted in many forms, so it is key to choose a smart scheme which would benefit the environment as well.
He then concentrated on the EU being a unique market faced with a weak period. However, even faced with such problems, there are opportunities in these times. As an example, he mentioned Germany’s car production which had been 6 million units in 2011. Worldwide car sales also keep on growing. It is the right time to incentivise carmakers and maximise the production of car plants which are underused today. In 2011, the EU produced more than 24% of the world’s total car production and is still the leader in this sector. Therefore, exports from Europe to other continents are important.
Last, but not least, ECG wishes for a unified industrial policy at European level. The industrial policy of some EU countries diverts from the others, penalising the import/export businesses and the domestic automotive industry. This makes the EU a single market but with different speeds.
UK MEP Brian Simpson began his speech by commenting on the budget debate currently taking place between the European Parliament and the Council of Ministers, and questioned whether the proposed budget for 2014-2020 is sufficiently geared towards the growth agenda, considering that there has been lots of talk about cuts. He thought the real question was where the cuts are being performed because they might be in the very areas that would stimulate growth, such as the EU logistics sector.
Perhaps more importantly, even if the financing is there the question is whether there is political will to work towards a more European transport union. He reminded the audience that the Parliament had given its strong backing to the Commission’s initial proposal of €31.7bn for the Connecting Europe Facility, and even if the original figure had now been reduced by the ministers (to €23.2bn), the end sum was not as bad as the Parliament had feared. Simply put, logistics would not happen if the basic transport infrastructure was not in place. Coming from a country where the EU is accused of red tape, this is one area where EU funding could lead to success. For example, linking sea ports and inland waterways and promoting a seamless railway network are a part of the strategy to create a truly Trans-European Transport Network (TEN-T). However, a joint position with other areas is needed. Moreover, there are remaining legal and technical barriers in the creation of the single market that have to be solved. There are also administrative problems that need to be addressed in the coming year. For example, the European Railway Agency (ERA) is struggling with no less than 11,000 national rules in the rail sector already.
Johannes Hödlmayr, CEO Hödlmayr International AG, spoke about the EU Transport White Paper and explained what his company was doing to tackle the future challenges identified therein. What is interesting in the future, he said, is that to the east of Vienna there are 19 new car plants. If they would have three shifts they could produce 10 million cars. What is for sure is that there will be more transport between the Eastern and Western parts of Europe.
He then gave a short presentation of his company and said that in the future the “tri-modal partnership” (road-rail-sea) should be valued and developed. This solution would bring about less traffic loads as well as environmental benefits. He also highlighted the advantages of GPS tracking of their trucks, for example, having less empty runs, surveillance of the trucks and the drivers being able to communicate with each other. Moreover, in Austria, there are blocked roads. Freight traffic will grow by 30% by 2030 and 50% by 2050. There is a huge positive development if empty roads can be used during the night. Concerning rail and how more freight can be handled thereon, one solution could be faster freight wagons, he said.
Overall, the future situation should be an improved transport infrastructure in Europe. He gave the example of the Rhein-Main-Danube inland waterway canal which could transport much more freight than it currently does. He summed up by saying that “success is only possible through the linkage of truck, inland waterway and rail”.
Luc Billiet, Head of Supply Chain Management EMEA Region, Fiat Group, began his presentation by saying that they were worried about the currency which is too strong at the moment for exports. He then gave a presentation on the Fiat group. He explained that the Fiat Chrysler group, who had founded their own car transport company ‘i-Fast Automotive Logistics’ with 50 trucks, had decided to concentrate on sustainability. This is because Fiat wanted to sell cars (and sustainability appeals to consumers), which is the first egoistic reason, and secondly, by working on sustainability, the right mind set for the employees is created. He added that they had convinced their American counterparts to invest in sustainability.
He then went on to speak about their car transportation which is done mainly by road (around 43%) though they use a lot of maritime transport as well while they are doing more and more by rail (22%). A one mode system just does not work anymore. Concerning the bottlenecks for their business, he mentioned an integrated telematic system for traffic flows as the solution and called for legislation that goes in line with this. Moreover, other problems included problems with different taxation (e.g. excise duties), road congestion around the cities and the lack of homogeneity for highway tolls. There is also a serious shortage of qualified truck drivers which brings about its own set of problems.
Concerning EU initiatives, he called for adequate legislation for the (loaded) length of vehicle transporters. Concerning sea transport, the last mile is always the one not working that well. Even within the TEN-T there is too much focus on big movements when all is needed is detail. He then gave an example of poor EU legislation hindering the logistics business by naming the sulphur in marine fuels directive. Overall, bureaucracy and blocked trains at the borders of every country are not helping the EU to become more competitive. He stressed that the EU could not survive without exports and therefore “we need employment in our plants”.
Max Strotmann, Member of the Cabinet of Commission Vice-President Siim Kallas, Responsible for Logistics, Co-Modality & Marco Polo, commented on the importance of logistics and confirmed what had been mentioned before: “this is the backbone of our economy although freight does not vote, in the words of Brian Simpson”. He criticised the stiffness and traditional approach of working mode by mode which is a barrier for multimodal co-operation. He called for a move from the modal approach by breaking it politically.
Clients today attach little importance to how goods have been transported as long as it has been done according to the (popular) criteria of safety and protecting the environment. Therefore, the traditional limitations have to be broken up. Concerning the linking and creating the connections between the transport modes and countries, data and telematics (Intelligent Transport Systems – ITS) is the next important thing.
However, there is no other option than using the existing infrastructure. Every individual transport mode has its own information system such as the ERTMS for rail, River Information Systems, etc. They need to be connected. The knowledge and technology exist in the big companies. There should be linkage to the small companies out there. A centralised European system for traffic management is not possible, therefore the attention must be on the regional and city level. A linkage needs to be created between their information systems. This is the idea of e-freight. He then called for the logistics companies present to contact the national level authorities and lobby them within the Member States.
Following the presentations and speeches, a lively debate took place during the Q&A session, of which some highlights are provided below:
Jerry Kiersey, Green Tiger Ltd, made a statement on the rules on cabotage and said this legislation had caused much damage to the business in Ireland (which has a particular context regarding new vehicle registrations, together with the UK).
Brian Simpson answered that there had been discussions in the Parliament on road cabotage at the senior level and the general feeling is that there should not be more legislation on this topic. In other words, there is sympathy in the European Parliament for not re-opening the cabotage legislation. Timing is everything. He mentioned a meeting on cabotage that had taken place the previous week between the Parliament and the Commission and said they had been working to “warn the Commission not to go there”.
Marek Nowicki, Pw Wega A, said he represented a trucking company from Poland and made a comment on the maximum lengths of trucks. If they are longer there is less congestion and fewer trucks. He wanted to know the Commission’s approach about the harmonisation of the truck measures.
Max Strotmann said the Commission aims to make things easier but the cross-border difficulties should be overcome. Harmonisation makes cross-border traffic easier. “The sympathy is there”, he said. He also commented on the suggestion that the Commission was making rail competitive at the expense of road and said there would always be trucks on roads. Forcing someone onto rail cannot be possible. However, the Commission needs to hear the voice of the industry on matters like these.
Mike Sturgeon, ECG Executive Director (and moderating the Q&A) made a comment on the so-called ‘tool box’ for the sulphur directive and said there are no alternatives at the moment.
Max Strotmann said the EU did not invent the sulphur legislation which was initiated by the IMO. From the point of view of the tool box being “full or empty”, he said it was half empty. The Commission had been busy for two years examining and making sure that a decision taken in the IMO cannot be overtaken. The EU lost two years on this, whereas they could have concentrated on LNG. For short sea shipping LNG is an option. The Commission has recently released the “Clean power for transport package” whereby future core TEN-T ports can be equipped with the possibilities of bunkering stations. This creates the certainty that shipping companies know there will be bunkering facilities in various ports.
Concerning measures on the tool box, there will soon be an update on the tool box from DG ENVI and DG MOVE: “this is to see where the screws can be turned”, he hinted. For example, those who have invested in a scrubber have no guarantees for its delivery. This is the sort of legal and technical issue that the Commission wants to concentrate on in the next two months. There will also be talk on residual cleaning facilities.
Finally, concerning the IMO, the next “big elephant” looming in there is CO2 legislation. Therefore, he insisted that instead of industry and Member States trying to delete legislation originating from international organisations, they should get involved at an earlier stage and try to influence the actual text.
Brian Simpson admitted the legislation had taken a wrong turn and the reduction of sulphur should have happened in longer stages. Of all the governments he had spoken to, only Finland had told him they had “got it wrong”. He pointed that the EU had thought of the IMO was a slow organisation but on this matter they had moved forward very quickly. The infrastructure provision within the ports also has to be done quickly for the shipping industry to fulfil its obligations. However, the ports have not taken up the challenge fast enough to help the shipping industry.
Johannes Hödlmayr added that he was worried about the fact that there are less and less truck drivers being attracted and properly trained.
In his closing remarks, Brian Simpson said that there are success stories in transport that need to be highlighted. The industry has to step up to inform people how important the logistics chain is. The infrastructure has to be planned on needs and what has to be covered in reality. That does not mean governments should be going for the cheapest TEN-T project call.
Costantino Baldissara concluded by saying that in reality, their industry was struggling to survive. What is important today is to act with a sense of urgency. Companies are disappearing and Europe will lose its competence. He finished by highlighting the role of trade agreements with, for example, Turkey and called for faster reaction from the EU institutions when the sector raises urgent issues.
ECG holds its annual dinner debate in the European Parliament each March to debate subjects of current interest to the sector.