Market Insight
SPRING 2018

Annual report
Year 2018

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FALL 2018

Market Insight
WINTER 2018-2019

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6. Urban Logistics, a new Growth Opportunity for Inland Waterway Transport

• Most large European cities are confronted with important challenges with regards to urban logistics: increasing cargo flows, road congestion, air pollution, and demographic density.
• In this specific context, inland waterway transport can provide solutions to these challenges by absorbing the segment of urban logistics.
• The case of Paris, with the integration of inland shipping into logistical chains for large construction projects, shows that urban logistics represent a market segment with high potential.

 

HISTORICAL BACKGROUND

Inland waterways played a prominent role in the industrialisation of major European cities as they originally represented the main corridors for freight transport. The “Canal Mania” period in the late 18th century in Britain, characterised by intense canal building to transport high volumes of coal to cities and factories, reflects the importance of inland waterways during the industrial era. On the European continent, industrialisation occurred later – in the 19th century – but is also characterised by a strong link between IWT development and economic expansion of cities. The use of the Rhine as the main transport axis has significantly contributed to the industrialisation of cities such as Strasbourg or Mannheim.6 In the late 19th and theearly 20th centuries, inland waterways and ports became centres of industrial activity in many European cities.

Moreover, the use of inland waterways as main transport corridors during this period had a significant impact on the geographic distribution of big cities. Cities crossed by waterways could benefit from this resource to encourage industrialisation and urbanisation so that even today, the geographic location of major European metropolitan areas is linked to their closeness to inland waterways.

Nevertheless, the competitive pressure due to the increase in railways in the 18th century has led to the progressive shift of freight transport from rivers to rail. Progressively, rivers, canals and port spaces in urban areas were considered more for their symbolical capital and used for urban development projects than for the productive and logistic potential they represent for city centres.

 

TODAY’S ENVIRONMENTAL

AND URBAN CHALLENGES

Nowadays, large agglomerations are facing important challenges at the demographic, economic and environmental levels. Most European countries are characterised by a long-run process of urbanisation which increases demographic pressure in urban areas. In 2017, people living in cities represented 74% of the total population in Europe, and in 2050, urban population could reach 82% of the total population. This phenomenon is even more important in western European countries such as France, Belgium and the Netherlands.

 

SHARE OF URBAN AND RURAL POPULATIONS IN EUROPE BETWEEN 1950 AND 2030 (% OF TOTAL POPULATION)

Source: World urbanisation prospects – United Nations, Department of Economic and Social Affairs, Population Division (2014)

CH6 Share of urban and rural populations in Europe between 1950 and 2030

 

The densification of urban areas has generated an important increase and concentration of transport flows in large cities. Road transport is by far the dominant mode of transport and represents 76% of total freight transport in the European Union, compared with 18% for rail transport and 6% for IWT. Consequently, roads are characterised by a high degree of saturation and metropolitan areas are confronted with important road congestion. This generates negative externalities such as air pollution, increasing noise in city centres and accidents.

The transport sector is one of the most polluting sectors. In France, although greenhouse gas emissions decreased by approximately 100 million tonnes of CO2 equivalent between 1999 and 2015, the share of transport in pollutant emissions has risen from 24% to 28% over the same period.

 

STRUCTURE OF GREENHOUSE GAS EMISSIONS IN FRANCE (MILLION TONNES OF CO2 EQUIVALENT)

Source: European Environmental Agency

CH6 Structure of greenhouse gas emissions in France

 

AVERAGE CONCENTRATION OF NITROGEN DIOXIDE IN SELECTED EUROPEAN CITIES BETWEEN 1999 AND 2013 (μG/M³)

Source: Eurostat [urb_cenv]

CH6 Average concentration of nitrogen dioxide in selected European cities (1999-2013)

 

Even though in recent years air quality has been improving in European agglomerations such as Paris, London, Brussels and Amsterdam, the impact of road transport in terms of air pollution is still significant. However, energy transition is occurring in most European countries and important initiatives are being taken to mitigate climate change, namely in the sector of transport, both at the national and European levels.

In this context of green reindustrialisation, inland waterway transport can be regarded as an opportunity to restructure logistic chains to reduce environmental impact of freight transport in dense urban areas. The example of Paris shows that apart from environmental concerns, a change of the modal split in favour of IWT would constitute an important economic potential for urban logistics.

 

ADVANTAGES OF IWT IN URBAN AREAS: EXPERTS’ POINT OF VIEW

Inland waterway transport generates positive externalities which can foster the modal shift towards inland waterways in urban agglomerations. Indeed, inland shipping offers significant potential for the development of urban logistics both from economic and environmental aspects.

 

• First, the development of inland waterway transport in dense urban areas would have a positive impact on urban mobility. Contrary to road freight, inland waterway transport is an unsaturated mode of transport. It allows access to the centre of many large agglomerations without congestion issues. Besides, the ongoing process of road closures in large cities such as Paris so as to decrease pollution and noise can be regarded as an opportunity for a modal shift towards IWT.

 

• Secondly, IWT is a sustainable mode of transport, mainly for its ability to massify transport flows. The development of IWT may increase social welfare in urban areas as it is environmentally friendly, produces no noise pollution and generates fewer accidents than road transport. Road congestion and the resulting additional time of transport are important factors of air pollution and
greenhouse gas emissions in city centres. The modal shift towards IWT would alleviate the negative externalities produced by road freight. In addition, the industrial sector and public authorities, by incorporating IWT into urban logistic chains, could benefit from IWT as an eco-friendly mode of transport to strengthen their image.

 

• Moreover, IWT is a cost-effective mode of transport. It offers a high degree of competitiveness compared to road transport and allows the transport of very high volume over long distance and at low cost.

 

“The transport cost per day is identical for a 25-tonne truck or for a vessel with a capacity of 300 tonnes”

P. Maugé, SCAT fluvial

 

Besides, in many large agglomerations, the development of port infrastructures requires few investments since ports and docks already exist and are operational.

 

• One important advantage of IWT for urban logistics is its reliability compared to road transport. Contrary to road transport, which is characterised by recurrent delays on pickup and delivery schedules due to congestion, unsaturated inland waterways make it possible to deliver on time.

 

“Transport time is today the largest cost item for goods delivery”

M. Bazenet, Cluster logistique urbaine IDF

 

• The final aspect that shows the ability of IWT to be integrated into urban logistics is the innovative potential of the sector. In recent years, innovative projects – namely in Paris – have been implemented to adapt inland waterway transport to the different requirements of goods delivery in dense urban areas. For instance, on-board conveyer means have been developed to deliver goods to any dock in the city.

 

THE SECTORS OF URBAN LOGISTICS

WITH HIGH POTENTIAL FOR IWT

Building materials segment: The construction industry is a traditional IWT-related segment. The expected growth of this sector over the next few years due to the increase of housing building should have a positive impact on the IWT of building materials. Urban logistics could benefit from this trend as construction projects are mostly located in large cities. Also, IWT is particularly profitable for the transport of building materials to city centres with high volume being transported at lower cost.

 

EU GROSS OUTPUT OF THE CONSTRUCTION INDUSTRY (EU GROSS OUTPUT IN BILLION REAL US$ – 2010 US$)

Source: Oxford Economics, CCNR analysis

 

Transport of renewable waste: Since 1999, the port of Lille is engaged in waste transport by inland waterways. Household waste and renewable waste are transported in containers between a waste-to-energy processing plant located in the north of the city and an organic recovery centre in the south of the city.

 

VOLUME OF WASTE HANDLED IN THE PORT OF LILLE (IN TEU)

Source: Oxford Economics, CCNR analysis

CH6 Volume of waste handled in the port of Lille

 

Waste transport by inland waterway in Lille represents nearly 12,000 trucks avoided per year on one of the most saturated roads of the city, and a reduction of 1,500 tonnes of CO2 emissions.

 

• Shops and supermarkets delivery/ Express parcel delivery: At first, IWT may not be adapted to this segment of urban logistics which is characterised by short distances of transport, low volumes of cargo and customised goods. Nevertheless, some experiments (e.g. Distri-Seine project in Paris) have shown that, with the gathering together of different types of cargo on a same vessel, IWT could be an effective mode of transport for these sectors.

 

IMPLEMENTING INLAND WATERWAY TRANSPORT

IN URBAN LOGISTICS: THE CASE OF PARIS

The port of Paris is the largest inland port in France in terms of traffic volume and the second largest inland port in Europe after Duisburg. In 2017, the port registered a total inland waterway transport of 21 million tonnes – an increase of 4% compared to 2016.

 

TOTAL INLAND WATERWAY TRAFFIC AND BUILDING MATERIALS TRAFFIC IN THE PORT OF PARIS (IN MIO T)

Source: ports de Paris Note: Since data for 2014 is lacking, the traffic of building materials for this year has been estimated by linear interpolation.

CH6 Total inland waterway traffic and building materials traffic in the port of Paris

 

The expansion of inland waterway traffic in the ports of Paris is largely driven by the segment of building materials whose volume of transport increased by nearly 20% between 2015 and 2017. Additionally, the traffic of building materials represents 78% of the total traffic in the ports of Paris, which makes it a growth driver for IWT in this river basin.

The evolution of building materials traffic follows the same trend as the gross output of the construction industry in Europe (see the graph above). This means that, as for the gross output of the construction sector, inland waterway transport of building materials is assumed to increase in the next few years.

The expected growth of this segment of transport in the Seine basin may be explained by the involvement of the ports of Paris in the urban construction project of the Grand Paris Express. This project, which includes the construction of new metro lines, promotes the use of the Seine and the Oise to evacuate waste materials. The partnership between the ports of Paris and Grand Paris Express aims at evacuating around 30 million tonnes of waste materials on inland waterways over the next 15 years.

 

CONTAINER TRAFFIC BETWEEN THE PORT OF BONNEUIL-SUR-MARNE AND THE PORT OF PARIS LA BOURDONNAIS (IN TEU)

Source: VNF (bassin de la Seine)

CH6 Container traffic between the port of Bonneuil-sur-Marne and the port of Paris la Bourdonnais

 

A second segment which is expected to play an important role in the development of urban logistics is container traffic. Many experiments of urban logistics are conducted on the rivers Seine and Oise in Paris. The most famous example is the experiment conducted by the supermarket chain Franprix since 2012. Container traffic between the ports of Bonneuil-sur-Marne and Paris la Bourdonnais for the delivery to 300 supermarkets has been growing since 2014 to reach 34,000 TEU in 2017. The supermarket chain has successfully integrated IWT into its logistic chains by adapting progressively the multimodal organisation to make it profitable.

Many other experiments of urban logistics are conducted in Paris. Among them, a company for express parcel delivery has experimented with the multimodal delivery using self-propelled barges and bicycles. The innovative aspect of this project is that, to compensate for the loss of time related to IWT, the company used the barges as warehouses. More precisely, the employees benefited from the travel time on inland waterways to sort the goods and prepare the parcels for the final delivery.

Urban logistics in Paris are expected to grow over the next year with the dynamic activity of the construction industry and the opening of a new container line between the port of Le Havre and the inland port of Bonneuil-sur-Marne that should promote urban logistics.

More generally, national container transport in Europe is expected to grow significantly over the next few years. As seen in chapter 2 (part 5) on inland navigation container transport, national container traffic – which includes urban logistics – is growing at a higher speed than international container traffic. The strong expansion of national transport of containers is a positive sign for urban logistics.

 

“Good flows in Paris can be multiplied by 4 without adapting existing infrastructures or building new ones”

M. Bazenet, Cluster logistique urbaine IDF

 

THE FACTORS OF A SUSTAINABLE INTEGRATION OF IWT INTO URBAN LOGISTIC CHAINS: EXPERTS’ POINT OF VIEW

• The question of multimodality is crucial when it comes to urban logistics. Indeed, IWT provides consistent economic and logistic solutions only in specific areas and cannot be considered as an exclusive mode of transport in large cities. Logistical matters such as pre-and postcarriage, last kilometre and urban network development should be thought of in terms of complementarity of IWT and road transport.

 

• Besides, the improvement of IWT’s profitability is a key condition for its incorporation into logistical chains. The development of a business model that focuses on the pooling of goods, the decrease of bulk breaking and which considers the specificities of IWT is necessary for inland shipping to be profitable in the context of urban logistics.

 

• Public support is an essential tool to foster and facilitate inland shipping in dense urban areas. Public policies should be well-targeted and promote projects and experiments that aim at developing urban inland waterway transport. Besides, success stories of urban logistics should be highlighted to incentivise economic actors to integrate IWT into their logistic chain.

 

“Public actors should be ‘facilitators’ since implementing waterway logistics requires specific skills and the removal of some regulatory, administrative and technical constraints”

D. Baudry, Cerema

 

• In many large agglomerations, docks and port areas are increasingly coveted by the housing sector or even for leisure activities. Therefore, a positive image of IWT should be promoted to ensure acceptance among urban populations and an efficient articulation of the different uses of inland waterways within the city must be made.

Annual report
Year 2018

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FALL 2018

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Market Insight
WINTER 2018-2019

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