• Inland navigation market observation activities are carried out by the CCNR in partnership with the EU Commission, the Danube Commission and IWT industry associations. In this context, the CCNR market observation team was tasked with the drafting of a study on the labour market in European IWT which was published in 2020. This report is therefore its second edition.
• The objective of this report is to provide a European overview and where possible a more detailed country by country analysis of the IWT labour market in Europe, based on statistical data and qualitative information. Several aspects of the European IWT labour market were also examined, such as the main legislative development related to the European IWT labour market, the passenger and freight market structures, their respective economic and employment trends, education in the sector and its attractiveness, as well as company succession.
• The years marked by the Covid-19 crisis are mostly captured within the dataset analysed in this report, enabling the assessment of the impact of the pandemic on the inland navigation labour market.
• This report is prepared at a time when an unprecedented change in the legal framework has taken place at European level: Directive (EU) 2017/2397¹ (also recommended for the implementation in the Danube shipping) started to be applied in January 2022 and the new Regulations for Rhine navigation personnel² came into force on 1 April 2023. This paradigm shift implements a mutual recognition of professional qualifications across the EU, the Rhine and the Danube. This is meant as a facilitator for the mobility of workers. The new framework introduces new career paths and modernises the acquisition of the qualification. It also facilitates the conversion from the maritime sector to the IWT sector. These innovations may impact (on mid-term and long-term) the labour market. However, it is too soon at present to analyse the concrete effects of the new legal framework on the labour market.
• In the introduction to this report, it appeared important to outline the main difficulties encountered in the drafting process of this report. In particular, no exhaustive database is currently available to monitor all the labour market aspects of the European inland navigation sector. Depending on the countries, labour markets are also organised differently, and sometimes competent authorities are decentralised, or certain tasks are transferred to specific agencies. Identifying the right contact point, depending on the type of information requested and the geographical area under study, can therefore become a real challenge.
• When many different sources for one and the same country were found, methodologies were sometimes different, making it difficult to deduce certain trends regarding the level of employment over time. Likewise, structural comparisons between different countries were not always possible, as the definition of an indicator or the exact breakdown of a variable sometimes differed from one country to another. Whenever possible, an explanation is given in the report as to the type of source chosen and the reasons for choosing one source over another. For instance, it was decided to use the Eurostat structural business statistics (SBS) dataset when providing an overview of the IWT labour market in Europe, as they allow for comparability of data between countries at the European level. However, the scope of such data is limited (i.e. employment in loading/unloading activities of goods in ports and employment in operation of transport infrastructure are not included; people working for companies with primary activities other than IWT are not counted as employed in IWW even if they work on a vessel) and can be incomplete in the case of some countries.
• Another hurdle was the lack of reliability of service record books and certificates of qualification which was identified at first as an important source of information for this report. However, as it is explained in more detail in the report, such sources do not allow to differentiate between active and non-active workers and there is a high possibility that IWT workers who are registered in databases but not yet connected to the European Crew Database (ECDB) are counted twice, or even more. In this connection, the ECDB is expected to be of great added value to enhance the monitoring of employment indicators in the European inland navigation sector. It has been operational in some countries since 2021 (and officially from 17 January 2022, simultaneously with the implementation of the Directive) but could not be used for the purpose of this report as the information available on this database will remain fragmentary until all CESNI³ Member States are fully connected to the ECDB.
• In light of the above, while all efforts were deployed to obtain as much information as possible, it was not always feasible to gather data with the same level of detail and based on the same indicators and methodology for all European countries.

• The Central Commission for the Navigation of the Rhine (CCNR), in partnership with the European Commission, publishes annual and biannual reports dealing with the European inland navigation market. Thematic reports are also published and cover certain aspects of the inland navigation market.
  The monitoring of labour market indicators in a given sector is particularly relevant to assess the situation of human capital in this sector and its future development. Human capital is one of the most important resources and a fundamental precondition for a high-quality performance and economic growth of a sector. Given that no report providing detailed data on this topic at the level of the European inland navigation sector is currently available, it was decided to draft a thematic report with the objective of improving knowledge and information about the European inland navigation sector labour market.
• When investigating all possible sources (statistical offices, employment administration, social security organisations, waterway administrations, ministries of transport and of labour, etc.), detailed data about employment and labour market conditions in inland waterway transport were identified. However, given that several sources of data sometimes exist for one and the same country, data might be more or less different for the same country depending on the source used. This is mainly due to the different methodologies used by different organisations. Whenever possible, an explanation has been given in the report as to the type of source chosen and the reasons for choosing one source over another.
• Based on quantitative data and qualitative information collected in the context of this report, the following main conclusions can be highlighted.
• According to the Eurostat SBS, the total number of persons employed in the transport of goods and passengers on inland waterways in Europe amounted to approximately 41,923 in 2020, of whom around 44% are in passenger transport and the other 56% in freight transport. This figure is not available for 2021.
• From 2011 to 2018, the number of persons employed in the passenger transport sector in Europe has continuously increased, as a result of several factors, including the increase in the number of cruise vessels in the European IWT market and the increase in demand for river cruises. However, in 2019 and 2020 almost all European countries registered a substantial decrease in workers, more marked in 2020. The outbreak of the global health crisis and the consequent containment measures established by the European Union and Member States’ governments severely affected the transport of passengers. In terms of the labour force employed in the inland passenger transport sector, Germany is the leading country. The Netherlands, Switzerland and Italy also show high proportions of employment in the sector. Figures for the labour force in 2021 increased overall and per country compared to 2020, mirroring the progressive recovery of inland waterway passenger transport after the Covid-19 crisis. In the Netherlands, the number of employed persons slightly decreased between 2020 and 2021.
• In inland waterways freight transport, the Netherlands is the leading country in terms of employed persons, followed by Germany, France, and Romania. There was a stable trend between 2008 and 2021. Unlike the passenger transport sector, the number of employed persons does not show substantial decreases in 2020. This indicates that the slowdown or the closure of the economic activities in the crucial months of the pandemic did not severely affect the employment of inland navigation freight transport.
• The majority of IWT companies in Europe are registered in the Netherlands, followed by Germany and France, which also have a high share. On average, the Netherlands has a market structure composed mainly of small companies with an average of about three workers per company, compared to Germany which has a higher number of larger companies. Concerning both passenger and freight transport, a tendency towards more consolidation is reported by banks.
• Overall, the number of passenger transport companies shows an increasing trend between 2012 and 2015, after which the number stabilised until 2020, when a slight decrease is registered. The year 2021 showed a clear increase in the number of companies.
• Concerning inland navigation freight transport, a decreasing trend in the number of companies is observed between 2014 and 2021.
• Several phenomena have affected the labour market in the inland waterway transport sector. The most noticeable are migration, the ageing process, staff shortage, climate conditions (water levels), and the macroeconomic and financial conditions. According to the Danube Commission, differences in salaries compared with the maritime sector is also a labour market influencing factor in the Danube region. Due to higher salaries in the maritime sector, a greater number of job starters/seekers decide to choose this sector when starting their training.
• In terms of regional distribution in Europe in regard to the degree of employment, the overall trend was rather negative in eastern Europe in the inland waterway freight transport sector. Potentially, one of the main reasons is the lower wage level. Compared to western Europe, wages in eastern Europe are very low. The statistical data suggest a high rate of migration of inland waterway workers from eastern Europe to western Europe. Germany is the major country of destination, in particular for Czech, Polish and Romanian IWT workers. Luxembourg welcomes a high number of IWT workers from the Czech Republic, Poland and Romania. Both Austria and Germany employ many Serbs and Hungarians.
• Another phenomenon of the IWT labour market is the ageing process which somehow is correlated with the staff shortage phenomenon. Detailed long-run data for Belgium show that ageing is particularly a problem within the group of self-employed barge owner-operators. Based on information provided by interviews, it can be assumed that many young people favour land-based jobs with regular working hours and weekends at home. This factor is highly relevant, for example in western Europe, where around 80% of IWW freight companies are independent owner-operators, whose working hours often cannot be predicted in conformity with a regular schedule.
• The factor described above leads to a certain shortage of labour in the sector both for passenger and freight inland navigation markets, which can be observed for qualified personnel at management level (boatmasters), which is even more pronounced in the liquid cargo segment. Other factors contributing to observed shortage of staff are of a technical nature. As the work required from crew members is becoming more and more technical, inland navigation companies often seek more specialised profiles than before, and which are also difficult to find.
• In terms of economic phenomena, the macro-economic context of the previous years has been severely affected by three main crises. In 2020, the Covid-19 pandemic and its consequences weighed heavily on many economic sectors. The slowdown in global production and international trade together with the restrictions on domestic and international mobility provoked a decline in both passenger and freight transport demands. Additionally, the Russian war of aggression against Ukraine caused the disruption of the supply of goods imported from Russia and Ukraine, and also led to a decrease in IWT cargo transport on the Rhine and the Danube for several goods segments.
• Furthermore, the low water periods observed in 2018 and 2022 severely affected transport volumes and freight rates. In addition to a number of other IWT factors, the overall decrease in the freight inland navigation labour market can also be explained by the financial crisis, which had a negative impact on the volumes of goods transported and therefore on the demand for nautical personnel in the cargo sector.

INTRODUCTION

• In partnership with the European Commission, the Central Commission for the Navigation of the Rhine (CCNR) carries out regular market observation reports on the development of inland navigation transport in Europe. Its publications consist of annual, semestrial and thematic reports. In the context of its market observation activities, the CCNR organised a thematic workshop on the topic “Price formation in inland waterway transport” on 8th November 2023.

PURPOSE OF THE WORKSHOP

• The workshop had several objectives:
  – to understand how price is formed and identify the different schemes of price formation in inland navigation freight transport (IWT);
  – to look into evolution of freight rates over time;
  – to address the different factors influencing price formation (supply and demand, water levels, market structure, type of contracting, etc.);
  – to assess the impacts of price formation schemes on the IWT sector and its performance;
  – to discuss the possible trends that might affect such schemes in the future and how they might have an impact on the competitivity of IWT;
  – to support policy makers in assessing the impact of their policies on IWT prices.

PARTICIPANTS

• The views of a wide range of IWT actors were sought: inland vessel operators, cargo owners, multimodal operators, policy makers, freight forwarders, brokers, cooperatives, banks, institutes publishing information about freight rates, ports, consultants.

PRICE FORMATION MODELS IN IWT

MAIN INFLUENCING FACTORS

• There are several influencing factors to price formation in IWT. During the workshop, it was specified that price formation was first and foremost a matter of supply and demand. From the perspective of the supply side, the new building rate, and the total fleet’s loading capacity were the factors that were highlighted, whereas on the demand side, the transport demand per cargo segment appeared as an important influencing factor. Within the scope of main influencing factors on price formation in IWT, market structure, water levels and operating costs (such as fuel/energy or staff costs) were also highlighted. Other factors such as type of vessel, quality of vessel, special vessel requirements, origin and destination of the voyage, duration of the voyage and waiting times (for instance in ports during loading and unloading processes), type of cargo, value of the cargo and quantity, expected empty sailing time, and rate of inflation, were also pointed out (non-exhaustive list).
• Some external factors that impact the freight rates were also addressed, such as Covid-19, economic and geopolitical conditions, as well as regulatory factors.
• It was emphasised that the number of vessels and the available loading capacity is fixed in the short term. Yet, in some cases, the availability of barge capacity can change. An example is the transfer of vessel capacity from the Rhine to the Danube region (3% of Rhine dry cargo fleet capacity) in the context of the Solidarity Lanes which contributed to reducing the Rhine fleet and its loading capacity, and therefore impacted the container and dry bulk freight rates (upward movement).
• On the other hand, demand can fluctuate strongly, as the boom in coal transport in 2022 and its impact on dry bulk freight rates has shown. Similarly, for the liquid bulk segment, fluctuation in availability of energy products or the shutdown of a large refinery can have a strong impact. Strong variation in transport prices can also occur during periods of low water and periods of rapidly changing demand conditions (for example during the outbreak of an economic crisis).
• Within tanker shipping, the oil price dynamics play an important role for transport demand and therefore also for transport prices. Also, the term structure of the oil price on the futures market (reflecting expectations on how the oil price will evolve in the future) is an influencing factor for transport prices in tanker shipping. The term structure can be characterised by higher prices for deliveries in the future compared to actual spot market prices (a situation known as ‘contango’). In this case, more liquid cargo will be transported to storage facilities, due to the expectation of selling oil products in the future at a higher price. The result of this contango situation is an upward movement of freight rates. The opposite of contango is backwardation (lower prices for the delivery of oil products in the future compared to actual prices).

 

FIGURE 1: EXAMPLE – TANKER BARGE FREIGHT RATES VERSUS MAIN INFLUENCING FACTORS


Source: Insights Global
 

• An example of how operating costs influence freight rates is shown in the following two charts. Operating costs are hereby measured by the journey time of a trip. An analysis of CITBO spot market freight rate data shows that the journey time in hours is an indication for the length of a trip and related costs. The longer the trip, the higher the costs and the higher the freight rate level.

 

FIGURE 2: FREIGHT RATES ARE INFLUENCED BY OPERATING COSTS – MEASURED BY JOURNEY TIME


Source: CCNR analysis based on CITBO data
 

• When the amount of cargo that is available on the market is low, vessels continue sailing at very low prices because those prices are mostly still higher than the variable costs (such as fuel). When the amount of cargo is high, transport capacity can only increase to a certain extent, as the supply side is more-or-less fixed. The prices therefore rise until clients (cargo owners) choose other options.
• The strong impact of water levels on freight rates was highlighted by all speakers during the workshop. As shown in Figure 3, the impact of water levels on freight rates has become even more acute in recent years. In addition, Figures 4 and 5 show the high volatility of water level surcharges on container transport, making it difficult for transport and logistics providers to anticipate their impacts on the IWT freight rates. This can ultimately influence modal choice.

 

FIGURE 3: RELATIONSHIP BETWEEN WATER LEVELS AND FREIGHT RATES


Sources: CCNR analysis based on data from Insights Global and the German Waterway Administration/Federal Office for Hydrology.
* Prices on the spot market for liquid cargo (gasoil) transport ARA-Rhine
 

FIGURES 4 AND 5: VOLATILITY (UP) AND DURATION (DOWN) OF LOW WATER SURCHARGES OVER TIME



Source: Haeger& Schmidt Logistics, Division Intermodal

GENERAL MARKET STRUCTURE

• There are six main goods segments in the WT sector. Within dry bulk, the segments of agricultural and food products, raw building materials, metals, coal and ores are found. Within liquid bulk, oil products and chemicals are mainly found. The third type of cargo is dedicated to containers.
• Five main types of contracts to operate in IWT were highlighted during the workshop: spot market, time charters, voyage charters, long-term contracts and internal contracts (transport for own account). Spot market is the first contract option for the dry bulk market segment while time charter is the preferred option for liquid bulk and container markets. Price formation is directly driven by those different types of contracts. For instance, in the spot market, there are high earning possibilities during boom times to be balanced with high volatility in income and therefore less stability. On the other hand, time-charter and long-term contracts enable income to be more predictable and more stable, therefore being more attractive for bank financing.
• The IWT sector is generally composed of the primary and secondary markets. The first market is mainly composed of shippers, brokers, shipping lines and cooperatives, while the second market is composed of vessel owners, including the number of available vessels to transport the cargo. In western Europe there are mainly small vessel owners, particularly in the dry bulk sector. Large companies exist in the liquid and container sectors. In the Danube region, the company structure is different, dominated by a few large companies which operate mainly in the dry bulk sector, whereas in western Europe this is the case to a lesser extent in the liquid bulk sector.

 

FIGURE 6: MARKET STRUCTURE IN THE IWT SECTOR


Source: Platina2, D1.5 ‘Strategy to enhance market transparency and synergistic actions’, 2015
 

• In western Europe, there are a high number of owner-operators (operational functions at vessel level). Only a very limited number of vessel owners manage the functions at the upper levels themselves such as sales, marketing and drawing up contracts directly with cargo owners. The brokers operate at fleet level, connecting the cargo owners, often represented by large forwarding companies with the highly fragmented level of the vessel owners/operators, mainly consisting of small family companies owning only one or a few vessels.
• Depending on the cargo segment, the way transport assignments are acquired varies. This also plays a role in price formation, particularly whether intermediaries play a role or not in the contract negotiations. For instance, in the liquid and container segment, transport operators rely mostly on one operator while in the dry bulk sector, transport operators rely more on multiple brokers. Only a few transport operators (generally the larger companies) rely on their own marketing or contacts to negotiate contracts directly with their clients. Cooperatives also play a role in contract assignments. Such cooperatives have added value for the clients by offering security of supply and security on costs, but also for their members, for instance by facilitating contract negotiations.
• Again with regard to the market structure, it was observed that the IWT market presents two types of agents. On the one hand, there are those agents that constantly act in a battle to acquire the lowest cargo transport price in the market (“red ocean”), and on the other hand, the more added-value-oriented actors (“blue ocean”). Currently, at least in the dry cargo segment, the “red ocean” setting seems to prevail.

 

FIGURE 7 : “RED OCEAN” VERSUS “BLUE OCEAN”


Source: NPRC

TRANSPORT RATES COMPOSITION – FORMATION OF THE PRICE

• The inland navigation sector is a capital-intensive market. Within the sector, vessels have different cost structures, cost prices and revenues, depending on a series of factors such as the method of financing, sailing area, fluctuations in water levels and global trade.
• However, it can be verified that the general cost structure of the IWT market comprises both the fixed and variable costs. Under the variable costs, expenses for the staff and fuel are important components, whereas for fixed costs, the depreciation of the vessel, interest rates for loans and insurance and maintenance represent a significant part of the operational costs structure.

 
GENERAL COST COMPOSITION

FIGURE 8: GENERAL COST COMPONENTS


Source: NPRC
 

• The costs for lock, navigation rights etc. should be added to these cost components. In the chart above, financing costs are considered under the heading “Interest”.
• With more specific regard to container transport, issues linked with inefficient container handling and congestion in seaports might also lead to additional costs (i.e. no optimisation of the use of vessel due to long stays in port, minimum call sizes which might impact total cost, all contribute to issues of staff shortages.) In order to make more profit, strategies to reduce costs are always being investigated by transport providers. For instance, strategies to optimise fuel consumption through a better training of staff or investments in greening technologies, good preventive maintenance, strategies to reduce staff cost (automation) etc.

 
GENERAL REVENUE COMPONENTS

• As previously mentioned, within the IWT sector, vessels also have different revenues, depending on the sailing area, fluctuations in water levels, market structure, etc. At the workshop, particular attention was given to the impact of low water levels on freight rates. With the surcharge on freight rates, transport prices in IWT increase.
• An example of a general revenue composition is given by adding:
  – the revenue basic multiplier which is obtained by the product of the practised freight rate and the cargo quantity transported (rate per tonne);
  – the low water surcharge (when operating on a free-flowing river and when it is a period of low water) as result of reduced loading capacity of a vessel;
  – the fuel surcharge – extra fee (paid by client) added when the current oil price exceeds a specific level;
  – the demurrage – fee (paid by client) as a result of failure to load or discharge the vessel within an agreed time period.

 

FUTURE TRENDS ON PRICE FORMATION IN THE IWT SECTOR

• During the workshop, the following future trends on price formation were raised:
  a. deindustrialisation due to high energy prices and transition costs;
  b. more severe low water levels on the Rhine in the future;
  c. degassing regulations in the field of liquid bulk (the change of liquid cargo in the cargo holds and the need for de-gassing has an influence on transport prices; the CDNI ban on degassing might also lead to more dedicated sailing and vessel capacity scarcity);
  d. decarbonisation of barge transport, specifically the need to adapt/replace the motor of the vessels in order to run on alternative fuels/new energy sources;
  e. energy transition will reduce transport demand for oil products in the long run and will lead to an increase for other types of products transported by inland vessels such as biomass and biofuels;
  f. automation: according to the experience of Novandi, automation was presented as an added value for the future of inland navigation for several reasons. Reducing costs in inland navigation (10% costs reduction on average), partly addressing the issue of staff shortage, added value for family life of crew members but difficulties with changed hierarchy on board ;
  g. staff shortage leading to higher staff costs;
  h. newly built vessels becoming more expensive;
  i. inefficient container handling in seaports/congestion, affecting more specifically container transport.

PRICE AND MODAL SHIFT: IS PRICE THE CENTRAL THEME FOR MODAL SHIFT?

• For a long time, transport service buyers were preoccupied with price. Their main concern was to buy transport at the lowest price possible. More recently, even if price remains a decisive factor, other elements have come into play in making this decision, such as sustainability issues. Some cargo owners are for instance committed to use low emission transport modes, as long as it does not lead to a (certain) increase in prices.
• Beyond price, other factors therefore play a central role when considering modal shift.

 

FIGURE 9: PARAMETERS OF MODAL SHIFT ACCORDING TO CEFIC


Source: CEFIC analysis on IWT

MODAL SHIFT: IWT MUST TAKE ADVANTAGE OF ITS STRONG POINTS

• Energy efficient and clean transport as well as innovative fleets.
• Labour extensive: the staff shortage is becoming a pressing concern in many transport sectors. However, according to the European Shippers’ Council, the labour shortage challenge in IWT might be less difficult than in other more labour-intensive transport modes.
• Ability to transport large volumes of goods.
• Low level of accidents.
• Safety of supply, additional capacity.
• Capacity on infrastructure: in practice, cargo-owners face challenges in finding alternative modes, especially the capacity for rail-paths as the rail-infrastructure on the most important corridors is already congested. Compared to rail, the situation for inland waterway transport is greatly preferred as rivers and canals provide additional capacity for freight transport. This is certainly a factor which will be considered by cargo-owners.

IMPORTANT ASPECTS TO TAKE INTO CONSIDERATION FOR MODAL SHIFT

• Developments in other modes – energy transition and automation: one should not be oblivious to the fact that the position of inland waterway transport will be influenced by external developments in other modes.
• Realistic cost structure and disadvantages: for cargo owners, the overall cost of transport and logistics is more than simply the transport costs. “Shifting from road to inland navigation transport often involves reinventing the supply chain”. For instance, it should be ensured that sufficient storage capacity is available. Cargo owners must therefore have a clear picture of the total cost of shifting from road to inland navigation before making any decisions. In addition, additional investment costs might also be required on the side of transport suppliers if vessel owners ask for greener transportation modes to be used. Cargo owners should in these circumstances understand that longer-term contracts are necessary to guarantee innovation and obtain financing from the financial sector.
• Make use of digitisation: digitisation enables the reduction of costs, in particular to facilitate information exchange among the different actors of the transport chain.
• Reliability of transport: the cost that cargo owners might be ready to pay to ensure reliability of supply should not be underestimated. Inland waterways have always had a good track record in this regard. However, the influence of water levels on the inland waterway transport freight rates can lead to extremely high costs for cargo owners. Investments in infrastructure and a more adapted fleet is required to address this challenge.
• Prepare for the future: the long-term perspective would be that the sector would have to be competitive with others on efficiency, reliability, sustainability and costs. The sector should prepare for this in the future and not only rely on its present sustainable profile.

 

RECOMMENDATIONS TO POLICY MAKERS

• As a general statement, it can be said that policies can have an impact on price. Yet policies affecting price should be limited to the minimum in free markets and be applied uniformly (not limited to certain regions for instance). In addition, such policies should be clear and unambiguous. As far as possible, regulations should not change in line with the political environment so as to provide a long-term vision for the IWT actors.
• It became clear from this workshop that policy makers will not intervene on how price is formed but rather on other factors that influence price, and ultimately the competitivity of IWT – low water surcharge, fuel surcharge, congestion charge, sustainability and how investment might impact price.
• Some examples of policies mentioned that can be implemented, and which can influence price:
  a) measures to increase the competitiveness of European base-industry;
  b) measures to reduce impact of low Rhine water levels and optimise navigation conditions;
  c) gradual implementation of decarbonisation measures in inland waterway transport;
  d) equal treatment of modes of transport (external costs and subsidies);
  – In a free market, and with regard to subsidies for modal shift, some participants indicated that funding should focus on start-up costs. Ultimately, the business case must be stand-alone. In addition, subsidies should not disturb the level-playing-field (currently, the level of subsidises for rail is higher than for IWT).
  – To ensure that cargo owners would pay a “fair price” the concept of internalising external costs – which in pricing refers to the practice of factoring in the negative externalities or indirect costs associated with a product or service into its price – is valuable. Externalities are costs or benefits that are not fully accounted for by the buyers and sellers involved in a transaction and are often imposed on society or the environment. This development has already materialised in EU proposals for an Emission Trading Scheme (ETS) applicable to road transport. Some regret that the internalisation of external costs would not apply to all modes.
  e) infrastructure investment;
  f) measures to have more market transparency;
  g) stronger funding programmes for the energy transition and terminal;
  h) measures related to fuel price taxation;
  i) measures contributing to raising awareness of cargo owners.

CONCLUSIONS

• Different types and forms of price formation exist in the inland waterway transport sector, depending on the type of transport (dry cargo / liquid cargo / container). Some of these forms of price formation lead to volatile transport prices, in particular the orientation on the spot market in dry bulk transport. This phenomenon is often an obstacle to external financing by banks. More long-term forms of price formation (e.g. time charter) would therefore be one means of stabilising the sector and enabling investment in innovation (innovative vessels, greening of vessels).
• The workshop also revealed trends that should have an influence on price formation in the future. A higher frequency of low water periods is one of those trends. In addition, automation as another trend can be an answer to staff shortage and can thereby reduce costs and prices in IWT.
  With respect to the link between price and modal shift, while cost price is an important consideration for cargo owners in their modal choices, it should be evaluated in conjunction with other factors such as environmental benefits and reliability of transport service. The suitability of a modal shift to inland waterway transport will ultimately depend on the specific circumstances of the transportation route and the types of goods being transported.
• Overall, it seems that the way such a price is formed in inland navigation is not necessarily a decisive factor to foster modal shift. Indeed, when compared to road transport for instance, the structure of prices and how they are formed are not so different.
• In addition, other modes face similar problems such as staff shortages and increase in fuel prices. A particular feature of price formation in IWT is the influence of low waters. This factor plays against modal shift as it lowers the reliability of inland waterway transport and increases the costs for cargo owners when using IWT.
• Yet, policy makers have a role to play, not in the form of policy intervention affecting price formation but rather the factors that influence price. One such policy intervention can relate for instance to internalisation of external costs or fuel tax.

• Norbert Kriedel, Administrator for Statistics and Market Observation, CCNR
  Laure Roux, Administrator for Economic Affairs, CCNR

Setting the scene: market structure and price formation in the inland waterway transport sector

• Arno Treur, CFO, NPRC

Price formation and its characteristics in the IWT dry bulk transport segment 

• Patrick Kulsen, Chief executive officer, Insights Global

Price formation and its characteristics in the IWT liquid bulk transport segment

• Johan Gemels, Director, Novandi

Price formation in container transport

• Godfried Smit, Secretary general, ESC (European Shippers’ Council)

The impact of price formation on the choice of a transport mode and the impact of shippers’ practice on price formation

PRICE FORMATION MODELS IN INLAND NAVIGATION FREIGHT TRANSPORT: EVOLUTION AND IMPACT OF FUTURE TRENDS

In partnership with the European Commission, the Central Commission for the Navigation of the Rhine (CCNR) carries out regular market observation reports about the development of inland navigation transport in Europe. Its publications consist of annual, semestrial and thematic reports. In the context of its market observation activities, the CCNR also organises thematic workshops.

The CCNR organised a thematic workshop on the topic “price formation in inland waterway transport” on 8 November 2023 in Strasbourg. The objective of this workshop was to identify the different schemes of price formation in inland navigation freight transport, their evolution over time and the possible trends that might affect such schemes in the future (low waters, energy transition).

For this purpose, the workshop addressed the different factors influencing price formation (market structure, type of contracting, acquisition of contracts, competition setting, market segment and geographical area concerned).

The views of a wide range of actors was sought: inland vessel operators, shippers, multimodal operators, freight forwarders, brokers, cooperatives, banks, institutes publishing information about freight rates, ports…

Information about price formation in other transport modes was also shared.

The workshop was held in English.

Programme