Speeches: Emanuele Grimaldi, CEO, Grimaldi Group, President ECSA, Italy

7th IRU East-West Road Transport Conference Budapest, 15-16 May 2003 Budapest Congress Centre (BCC), Alkotas u. 63-67 - 1123 Budapest, Hungary

Emanuele Grimaldi
CEO, Grimaldi Group, President ECSA, Italy

May 2004 will mark a historical era for Europe with ten new candidate countries from Eastern Europe and the Mediterranean joining the European Union. In less than a year Poland, the Czech Republic, Hungary, Slovenia, Slovakia, Estonia, Latvia, Lithuania, Cyprus and Malta will join us in our common European home, putting an end to the division of our Continent that was imposed at the end of the Second World War.

The European integration is a challenge bringing about new opportunities of economic growth and political and social stability which will benefit all Member States. In an enlarged European Union, trade flows will grow between Western Europe, Central Europe and the Mediterranean, creating the first market worldwide. Already today, the European Union is by far the most important trading partner of the 10 Accession Countries with a total trading value of € 210 billion in 1999.

The Accession Countries, mostly located in Central/Eastern Europe, but also, like Malta and Cyprus, at the very heart of the Mediterranean, and on the Baltic Sea, like Estonia, Latvia and Lithuania, represent altogether a population of 75 million people, and have an average GDP per capita of over 10.000 € that will enjoy an accelerated growth after the enlargement allowing them to share the prosperity that the current 15 Member States have been enjoying for the last 40 years.

Prosperity and the further development of trade that will be generated between the 25 members of an enlarged European Union will inevitably bring new opportunities for the transport sector. Today, the infrastructure in most Accession Countries is unable to cope with the new transport needs and is hindering the development of a sustainable transport network.

Up to the collapse of the former Soviet Union, rail was the main mode of transport for cargo in most Eastern

European countries, however, in the last decade, the transport scenario has radically changed. While railway performances deteriorated and inland waterways were disrupted due to the Balkan wars, the road infrastructure was partly upgraded and the road freight transport sector underwent a liberalisation and deregulation process which made it more competitive. This resulted in rail losing its leading position with a shift of freight from rail to road, especially in those countries located close to the EU.

According to the European Environmental Agency, while in 1993 rail represented 57% of the inland tonne-km transported in 8 Accession Countries (the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and Slovenia), in 2001 its share dropped to 43%. On the contrary, road transport rose from 40% to 54%. The role of sea transport differs from country to country, according to its geographical position. While for Central European countries it is inexistent, in the Baltic States and in Poland it plays a more relevant role while for the islands of Cyprus and Malta it is the dominant if not the only mode of transport.

Being mostly landlocked, Central European countries need integrated logistics services that can combine road, rail and sea transport as well as inland waterways. Through the enlargement, a unique opportunity will arise to further promote intermodality and especially the co-operation between road and maritime transport.

I fully agree with the Mr. Franco Fenoglio, Vice-President - Commercial Operations of IVECO who, while addressing the 6^th Euro-Med Convention From Land to Sea organised by our Group last November in Fiuggi, stressed the fact that road and sea transport are not competing modes of transport but are rather complementary. Land-based operators should see short sea shipping as an opportunity to further strengthen their competitiveness with innovative logistics solutions.

The enlargement of the EU to these countries will bring an increased need for competitive combined transport and logistics services with the Mediterranean while the Baltic States will search to strengthen their maritime links to Northern Europe and the Mediterranean. This means investing in infrastructure allowing an efficient and fast interconnection along the logistics chain of whichever combination of transport modes is most favourable. In this respect short sea shipping can play an important role in a sea/road combined logistics chain.

Our Group has seen, in an enlarged Europe, new opportunities of further developing and expanding its shipping and logistics activities. Being specialised in the transportation of cars and ro/ro cargo, we have been closely analysing the evolution of traffic flows between the Accession Countries and the ports served by our various liner services.

We are particularly studying the car manufacturing industry in these countries as well as the trend of the car market consumption. Some Accession Countries have a long tradition in car manufacturing like the Czech Republic with Skoda while others have attracted foreign investors such as Fiat and Opel-GM in Poland, Suzuki in Hungary or Renault in Slovenia. Other car manufacturers like Toyota and the PSA Group are planning to establish themselves in this part of Europe which offers skilled and cost-efficient labour with a promising internal market. In fact, the increase of the GDP per capita has increased the demand and therefore the number of cars circulating in all Accession Countries. These two phenomena will further strengthen the position of the automotive industry in these countries, creating new transport opportunities for specialised maritime and logistics operators such as Grimaldi.

In order to be ready to face this new situation and offer more integrated transport services to and from Central Europe, our Group has proceeded to extend its network of port facilities by creating, at the beginning of this year, a new dedicated terminal in Monfalcone, called CETAL (Central Europe Terminal and Logistics) for the handling of cars, ro/ro cargo and containers.

Situated in the Upper Adriatic and very close to the border with Slovenia, Monfalcone is in a strategic position to be the gateway for cargo moving between Central Europe and the Eastern and Southern Mediterranean. Moreover, it is located along the Transeuropean Intermodal Corridor No 5 of the Trans European Transport Network which, when completed, should cross the Continent from West to East, linking Barcelona to Kiev via Northern Italy.

CETAL has a 75,000 sq. metre secured and fenced operational area making it the largest terminal in the Upper Adriatic specialised in cars and ro/ro cargo. In a second phase, its size will be increased to 135,000 sq. metres.

Connected with the rail and road network, CETAL can offer competitive and efficient intermodal services by combining maritime transport with road and rail transport to and from Central Europe. Today cargo arriving from Central Europe is loaded on board the ro/ro multipurpose vessels Spes and Fides deployed on the weekly fixed-day sailings Adriatic service linking Monfalcone with Piraeus, Izmir, Ashdod, Haifa and Alexandria.

In the particular case of a road/sea combined transport, CETAL, along with the regular maritime services offered by our Group, will allow us to offer competitive logistics services, both cost wise and time wise, contributing to further boost the cargo traffic between Central Europe and the Eastern Mediterranean. Already today, cars produced in Poland or the Czech Republic with destination Greece, Turkey and Israel are handled at CETAL as well as vehicles coming out of Turkish factories and bound for Central Europe. Our Group intends to move through Monfalcone not only cars but also trailers and containers between Central Europe and the Eastern Mediterranean.

For what concerns the other Accession Countries like the Baltic States, after studying thoroughly the contents of the White Paper on Transport Policy and its suggestions, we are analysing the possibilities of cooperating with a major Baltic Operator through a strategic alliance. This will shortly enable us to realize what is pictured in the White Paper in respect of forest products traffic flows that should move from land to sea for the sake of the environment and the reduction of traffic congestion. We will then not only be able to serve Estonia, Latvia, Lithuania and Finland, which is the biggest producer of forestry products but also the Moscow area through the port of St. Petersburg, which is the ideal maritime gateway to the heart of Russia.

Against this background, the islands of Malta and Cyprus are already at the centreof our Euro Med Network, and we understand that Shippers appreciate the level of service supplied.

Within an enlarged Europe, road and sea transport will see new opportunities of expanding their businesses. Each mode of transport plays a key role in the logistics chain and only through a close co-operation can competitive transport services be offered to meet the needs of the clientele. This is in the interest not only of the transport industry but also of the enlarged European economy as a whole.

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