Original publication: November 2016
Authors: TRT Trasporti e Territorio: Marco Brambilla, Angelo Martino

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This study analyses the specificities of the ferry industry in the light of European Union (EU) environmental, safety and services provisions in force. Future developments are discussed by addressing key issues such as technological uptakes, congestion reduction possibilities, safety and competition with other infrastructures and services.

 

The analysis shows that EU maritime passengers are mainly carried by domestic or intra-EU ferry services that are concentrated in three regions: the Baltic, the North Sea and the Mediterranean. The routes operated have remained relatively unchanged over the years; more than half are in the Mediterranean, whose fleet outnumbers the other two regions in terms of both size and capacity, although the ferries are older.

Since 2000, the ferry industry has been undergoing a gradual consolidation and operators have concentrated on their own region only, optimising routes, fleet and exploiting vessels’ economies of scale. Overall mediocre performance has been influenced by the abolition of the duty-free regime, competition in the form of fixed links and low-cost airline carriers, and variations in fuel cost. The economic recession hit the ferry industry too, and the current operators’ performance usually reflects the situation of the economy of the region where their core business is located. The overall contraction of fleet size and capacity confirms that the industry’s development lacks dynamism: newbuilding activities concentrate on fleet renovation, and both the second-hand market and chartering are on the decline.

With regards to technological developments, retrofitting work is experimental and transitional. As soon as propulsion system technologies and equipment prove to be viable to meet the requirements of the Emission Control Areas (ECAs) in the long term, retrofitting may intensify, although building new ferries might be more economical. In this respect, limits for Sulphur Oxides (SOx) are having an important impact on the ferry industry supply side, especially on technologies relying on Liquefied Natural Gas (LNG), methanol, hybrid and electric power.

However, the actual number of ferries delivered with new propulsion systems and compliant with environmental rules is significantly below initial predictions (Lloyds Register, 2012; DNV, 2013). Abatement technologies (i.e., scrubbers) are developing faster than expected. Technology uptake also involves energy-efficiency measures and the compliance with the International Convention for the Control and Management of Ships’ Ballast water and Sediments (i.e., the Ballast Water Management (BWM) Convention), once ratified.

Within the Schengen area, there are no specific checks for EU citizens travelling by ferry. When travelling to non-Schengen EU States, EU citizens have to show ID entering the country at arrival and undergo normal cross-border checks. Before boarding the vessel passengers are normally checked by the ferry operator staff to verify their identity against the details on the ticket purchased (i.e., time, day and connection). Every port is different and ferry operators may conduct checks according to own embarkation processes.

In urban areas, ferries are integrated with land-based Public Transport (PT) operators along critical connections, and they serve a variety of needs. Ferries contribute to multimodality of passengers (i.e., commuters and tourists) and their flexibility to adapt service routes according to the needs is an advantage, especially where fixed links providing access to urban areas are congested. In addition to integrated ticketing, improvements to reliability, speed, frequency, or faster boarding times may be key factors in diverting passengers towards ferries. Ferries operating on a regional, national and international (i.e., cross-border) scale show different characteristics that change according to geographical and economic contexts. The value of a ticket is connected to the pricing policy of the ferry operator and it follows the approach used in the airline market: it is the result of the analysis of competitive prices, elasticity  of demand and potential for market segmentation. As part of larger networks, the ferry industry must also cope with developments of infrastructures and services in the form of competition with fixed links and low-cost airline carriers.

Key findings
  • EU maritime passengers are mainly carried by domestic or intra-EU ferry services that are concentrated in three regions: the Baltic, the North Sea and the Mediterranean.
  • More than half of the routes are operated in the Mediterranean, whose fleet outnumbers the other two regions in terms of both size and capacity, although the ferries are older.
  • Since the year 2000, the ferry industry has been undergoing a gradual consolidation. The mediocre overall performance of the ferry industry has been influenced by the abolition of duty-free regime and variations in fuel cost.
  • Ferries also face competition in the form of fixed links and low-cost airline carriers.
  • Further to the economic crisis, operators’ performance usually reflects the situation of the economy of the region where their core business is located.
  • The development of the fleet lacks dynamism. Newbuilding activities may intensify to meet the requirements of Emission Control Areas (ECAs). Actual numbers of ferries with alternative propulsion systems are significantly below initial predictions.
  • Technology uptakes also involve shore side power supply, energy-efficiency measures and compliance with the International Convention for the Control and Management of Ships’ Ballast Water and Sediments.
  • The value of a ferry ticket is directly connected to the pricing policy of the ferry operator. The calculation of ticket prices follows the approach used in the airline market.
  • In urban areas, ferries provide services along critical connections and serve a variety of needs. Their flexibility is an advantage where fixed  links providing access to urban areas are congested.
  • Ferries operating on a regional, national and international (i.e., cross-border) scale show different characteristics.

Link to the full study: http://bit.ly/573-423

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