Session 1

Market Sector Overview: Industry Challenges and New Opportunities for Short Sea & Feeder Shipping

NILS MINOR

General Manager Sales West & Central Europe, Unifeeder

BIOGRAPHY

Nils Minor started his career in shipping 17 years ago at an independent liner agent (Broekman) where he gained experience in various functions in finance, customer service, operations and sales.

Thereafter Nils held commercial roles for the Dutch Port Community system – Portbase - where he became an expert in marketing logistic IT solutions. In 2017 Nils joined Unifeeder’s shortsea business unit, where he currently is commercially responsible for the region West & Central Europe.

CATRIEN SCHEERS

Chairman of Fast Group

BIOGRAPHY

Catrien Scheers is Chairman of Fast Group (www.fast-lines.com). She has over 25 years’ experience in the shortsea breakbulk sector, built from in-house expertise as a shipowner, forwarder, terminal operator, ship agent and ship management.

Catrien holds a master’s degree in Communication and Media Studies from KU Leuven University.

With offices in Europe Fast Lines offer a total logistics solution which they call ‘Sofa style service’. Fast Lines continually invest in people, ships and in port terminals.

Catrien’s motto is “Assets are important, but people make the difference!”

From PREthinking to REthinking

Antwerp’s “Golden Age”

This lovely painting shows Antwerp during its heyday when Antwerp was the undisputed metropolis of the Low Countries.

Although this 16th century Antwerp looks idyllic it had its fair share of problems: 9 Safety: At night the city gates were closed but the city walls were worn out and the treasury was empty... 9 Environmental challenge: There was a lack of clean, drinkable water. 9 Migration: Due to the large migration, there was an acute shortage of houses. 9 Congestion: There was a lack of quays and ships had to sit at anchorage for long periods.

One young genius entrepreneur, Gilbert van Schoonbeke (1519-1556) found solutions to the problems raised. 9 Safety: he contributed to the restoration of the city walls. 9 Migration: as ‘project developer’ Gilbert gave the city a new face. 9 Drinkable water: In the ‘Nieuwstad’ (New City) he set up a brewerie. Breweries need water and that’s why he build a waterhouse, now known as the ‘Brouwershuis’ (Brewer’s House). https://archixplore.com/en/brouwershuis-beer/ 9 Congestion: Gilbert constructed ‘Vlieten’, side arms of the river Scheldt so that ships could unload and load quickly and efficiently.

Today we live in challenging times too.

Covid changed our world.

Empty racks made the previously invisible transport sector visible. When the logistics chain falters, store shelves remain empty. No logistics, no toilet paper, no vaccines. 90 % of everything comes to us by ship.

No Seafarers, No Shipping! No Shipping, No Shopping!

The good news?

During the pandemic logisticians kept working and ships kept sailing.

However, as a result of covid containers got stuck. In combination with massive online consumption this caused and is still causing congestion. I’m not madam soleil but I accept that this is not going to change immediately.

WHY?

9 Since the boom of cheap container transport, China became the factory of the world. Never before has there been so much for sale, for so little money. Goods from all over the world were coming to us quick and cheap. Covid 19 made this well-oiled chain falter. Have we not become too dependent on production in the Far East?

Is the time right to opt for nearshoring, manufacturing closer to home?

9 Just In Time logistics ensured optimization of warehouses, materials and people. Ideal because sustainable? Covid showed the weakness of this system. Lack of stocks shut down production lines. Since many companies were scaling down their warehouses we saw and still see the expensive storage depots in the ports filling up.

Could a solution be to evolve from Just In Time logistics to Just In Case logistics?

9 Since the start of the lockdown +150 000 seafarers have been stuck on their ships or in quarantine on their way home. It is about time we recognize seafarers as key workers. Just like nurses there needs to be an upgrade and more respect for seafarers. 9 Too often the maritime sector makes use of physical documents such as bills of lading. Since aircrafts remained on the ground many essential documents did not reach the users in time. Now it is time to further roll out the digitization of these

document flows.

9 Megaships like Ever Given and MSC Gülsün require mega terminals, giant locks ditto cranes and dredged rivers. And even then thing sometimes go wrong. These mammoth ships deposit thousands of containers at the same time in one place from where they go further into the hinterland. Due to consolidation there is little competition. Often it is take it or leave it for the customers.

Is big still beautiful or are there limits to growth and can shortsea be an alternative?

Opportunities for shortsea shipping

WHY SHOULD SHIPPERS CHOOSE SHORTSEA?

9 Traffic Jams. We all know the phenomenon. Traffic jams are everywhere and it’s a problem that is getting worse every day. Shortsea is an alternative for congested road transport.

With small coasters you can enter deep into the hinterland. 9 Shortsea Shipping is friendly for the environment. Ships consume less fossil fuels per ton-km than planes, trucks or trains. 9 Whether you want to ship containers, trucks, wind mill blades… Name a cargo and there is

a Shortsea Ship.

9 Think out of the box. With shortage of containers it is interesting to shift cargo back from containers onto a breakbulk vessel. 9 Breakbulk shortsea and oversized and overweight cargo are a perfect match. 9 Shipping large volumes is often profitable by Shortsea. 9 With Brexit and the shortage of truckdrivers there is a shift from trucks to shortsea shipping. Cargo from/to European mainland and Ireland shipped by sea cuts out the

UK land bridge and customs formalities. Because of Brexit many shipping lines started up services to/from Irish ports. Fast Lines Belgium also started a regular ‘Bel Eire’ breakbulk service from Port of Antwerp to Port of Drogheda. 9 As mentioned ships are getting bigger and bigger. These huge ships connect different parts of the world but are not able to discharge in small ports and this is where Shortsea steps in. Shortsea ships are ideal for transshipment. In analogy with roads, long-haul intercontinental transport routes are the highways of the oceans and shortsea shipping routes represent the inner roads. Both are vital!

IS SHORTSEA SHIPPING THEN AN EASY BUSINESS? NO, THERE ARE CHALLENGES:

9 Good port performance is a key factor in the success of Shortsea. Ports have to be efficient. They have to be accessible at a competitive cost. Shippers need effective and cost efficient port infrastructure with skilled flexible labor. 9 Compared to land transport shortsea faces more complex customs formalities. We are still waiting on The European Single Window Environment for Customs. 9 There is an overload of regulations and paperwork in shipping putting a lot of extra pressure on captain and crew. 9 As shipping is international we need international standards and simplicity. 9 Shortsea is driven by the private sector. As a consequence Shipping should be profitable.

Rail and Road are directly or indirectly supported by public funds. We want a level playing field. 9 Political issues: like the war in Ukraine. 9 Maritime environmental challenges like the installation of ballast water treatment systems and the pathway to zero shipping emissions

Whoever thinks Covid is the biggest challenge on our path, think again!

Most of the challenges in the logistics landscape are not caused but exacerbated by the pandemic!

A selection of the challenges of the 21st century: 9 Conflicts 9 Demographic challenges such as migration 9 Technological disruption

Professor Vardi states “We are approaching a time when machines will be able to outperform humans at almost any task” 9 Climate change 9 Implementation of the 17 sustainable UN development goals 9 Cyber-attacks

9 ...

I see Covid as an opportunity and challenge to shift up a gear in stimulating the agility of people and resources. My business card states architect of transport because in my opinion the logistics sector is too fragmented and often thinks in boxes while we have to think in the chain. Transport is as good as its weakest link.

Logisticians should create value: organize customers transports optimally i.e. deliver the goods to the unloading premises in the state of their departure as efficiently and sustainably as possible. I used to call this PRE-thinking. The pandemic teaches me to go one step further,

to RE-think.

Write ‘what if scenarios’ and start from a blank slate. Think ‘out of the box’, outside existing conventions. Is a container always paramount or can we ship some cargoes breakbulk and how do we do this efficiently? In this VUCA world (which stands for volatility, uncertainty, complexity, and ambiguity) we face major challenges that will affect our shortsea shipping industry such as the aging of the population. Today more 50+ as 30+ers are working in my company. When the current generation of 50+ retire it will be challenging to fill in jobs. It is paramount to deploy people smartly and efficiently. Mixed forms of working virtually and physically can be part of the solution and might provide a better balance between work and private life and as cherry on the cake it could diminish traffic jams.

There is a shortage of crew on ships set to be worsened by the Russia-Ukraine war. Ukrainian and Russian seafarers account for 14.5% of the global shipping workforce. Will we allow future captains to remotely support navigating as is already happening in inland navigation?

Does paperwork still need to be physically checked on board ships or can we use databases to shift these inspections to the technical department ashore?

Nowadays some of my ships have to wait for days before they are unloaded and loaded, due to a lack of dockers. Time to optimize the composition of shifts by using innovative safe technologies to handle cargoes.

Last but not least every industry, including shortsea shipping must contribute to a world in line

with the Sustainable Development Goals (SDG’s).

The SDG’s are a blueprint to achieve a better and more sustainable future for all people and the world by 2030. Fantastic! But how to report on the SDGs, where to start and how to see the wood for the trees? I make a plea for ONE NEW GAME CHANGING UNIVERSAL SDG LABEL whereby the United Nations 17 SDG’s are the driving force and building block that makes the life cycle of our

products fully TRANSPARENT from ‘cradle to grave’.

We do not even have to use language we can use pictograms comparable with the energy label on washing machines.

The implementation of these SDG’s disrupt our industry. 9 We must recruit diverse talent on board our ships and in our offices, regardless of cultural, racial, gender or physical diversity. 9 We have to build even cleaner and smarter shortsea ships. This comes with challenges.

Shortsea ships are built with a lifespan of 30 years. Today the average age of shortsea vessels of sizes ranging between 2600 and 4500 tonne deadweight are 20 + year.

Newbuilding orders remain low because there are dilemma: 9 At this moment we cannot sail emission free YET and what is the appropriate propulsion of the future? 9 What about autonomous sailing? Confusion is the name of the game. Shall we invest in old school ships on MGO, equipped for a full crew today? Will this type of ship become obsolete and if so, when?

My conclusion. In this VUCA world not one single man like Gilbert van Schoonbeke has an answer to all these questions. We cannot build the future of Shortsea Shipping alone! Therefore, I call upon all brilliant minds to work together across industries and companies on the challenges of the 21st century.

Covid taught me to RE-think TOGETHER beyond bubbles and silos. We have to work SMARTER

instead of harder to create VALUE and make our planet in line with the SDG’s. Only than the dark covid cloud has a silver lining.

JOHN LUCY

Director – Liverpool Freeport, Liverpool City Region Combined Authority

BIOGRAPHY

John is Director of Liverpool Freeport and is the UK representative of the World Free Zones Organisation.

John has been involved in international transport and trade for over thirty years and was the international haulage industry representative to various government departments during the Brexit preparations since 2018.

John is now leading the Liverpool Freeport Zone project which is capitalizing on the port being the UK gateway to transatlantic trade. The freeport zone is enabling the largest regional regeneration project in decades and will be foremost in innovative zero carbon energy and transport strategies.

Post Brexit Ro Ro Rebound-disrupting supply chain geography

INTRODUCTION

This keynote speech will address the unprecedented disruption in UK EU and rest of world trade and how it is leading to significant changing trends in RoRo routes to the UK and also in modal shift from RoRo to short sea shipping. The geography of the UK’s supply chains is changing rapidly and I will focus on what has changed and highlight the emerging trends in shipping freight from UK to EU.

Liverpool City Region Freeport Zone is one of the UK’s leading special economic areas designed to drive opportunity through inspirational, inclusive, innovative and sustainable investment to achieve transformational change.

LCR Freeport will ensure further engagement and development with our international networks to capitalise on our full potential as the pre-eminent western global gateway to the UK economy. The LCR Freeport will be the catalyst that accelerates trade and investment opportunities in the world’s fastest growing markets and helps raise the region’s global potential.

The LCR Freeport will be a low carbon, modern multi-modal, multi-gateway trade and logistics platform across a network of key sites which will attract high value inward investment and support growth and quality employment in key sectors and help regenerate communities across LCR through industry, innovation and collaboration.

The LCR Freeport will comprise three combined tax and customs sites, twelve customs sites and a primary customs site at the Port of Liverpool. It will benefit from existing and planned strategic multimodal infra-structure assets across air, maritime, rail and road. A key asset will be the Port of Liverpool which is a deep water, large vessel port capable of handling postpanamax sized vessels and which, with its strategic west coast location, is ideally positioned to enable the UK to fulfil an enhanced role in global trade.

The LCR Freeport will unlock over 310ha of land for development and over 700,000 sqm of commercial floorspace and result in over £150m of total investment in the first 10 years. It will: 1: establish a hub for global trade and investment and be the primary UK west facing multi-modal global gateway for trade;

2: attract over £150m of new investment over the first 10 years 3: deliver local regeneration including through the re-investment of retained business rates;

4: support the creation of an additional GVA per annum of £547m and create over 10,000 direct and indirect jobs

5: create a hotbed of innovation connecting identified business challenges with knowledge holders and universities able to provide research solutions; and

6: deliver the Net Zero Ambition – LCR was the first combined authority in the country to declare a climate emergency. Freeport funding will enable research and demonstration projects to be delivered which will showcase low carbon solutions across the LCR.

Benefits of LCR Freeport

LCR Freeport will offer a range of benefits relating to customs, tax planning, infrastructure and innovtion including:

Enhanced Structures & Building Allowances

10% per annum tax deduction for ten years of qualifying expenditure, on non residential structures and buidligns for which constuction commences for the date a tax site os confirmed and approved by govenrment and brought into use before 30/09/2026

Stamp Duty Relief

0% stamp duty on property to be used for qulaifying commercial purposes until 30/09/26

Enhanced Capital Allowance

100% first year allowance for qualifying ependiture of plant & machinery. 10% per annum tax deduction

Business Rates Relief

100% relief form business rates on qulaifying new properties and partial relief for expanded properties in Freport tax sites until 30/09/2026

NIC Relief

0% Employer NICs paid on salary up to £25,000 p/a applicable for 3 years per eligible employees (new hires who spend 60% of their workign time in the Freeport)

Customs

Tariff Benefits

Duty Referral for goods stored onsite and duty inversion for goods exiting the Freeport Savings from duties that do not need to be paid on outside goods anda ttract a lower tarfiff than their component parts

Duty expemtion for goods that are exported form the Freeport

Trade Benefits

Simplified and more streamlined import procedures

VAT Benefits

VAT suspension until goods leave the tax site entering into free circulation n the UK.

Planning

Supportive local planning environments

Local Development Orders provde greater certainty ofr new buildings

Public sector support for land remediation, site preparation, skills programmes and other investments

Permitted Development rights extended enabling quicker planning process

Target markets

The LCR Freeport will drive development in advanced logistics, manufacturing and research and development activities. The LCR Freeport Skills Academy and LCR Freeport Innovation Hub will be aligned to the Freeport’s key growth and opportunity sectors.

The Freeport will support the future success of the key sectors and prime businesses crucial to the LCR and NW economy. The key sectors identified in the LCR Freeport are: - Aerospace, Maritime, Energy & Automotive (Key Primes/Business supporting the LCReconomy include Peel Ports, Cammell Laird, Bibby, BAE, Bentley, Ford, JLR,

Stellantis)

- with specific focus on transition to electrification and low carbon fuels including hydrogen

- Bio Manufacturing and Chemicals (Key Primes/Business supporting the LCR economy include AstraZeneca, Seqirus, Teva) – pandemic resilience, vaccine supply chain, advanced chemicals manufacturing

- Food and Drink & FMCG (key Primes/Business supporting the LCR economy include

Heinz, Unilever) – focus on packaging and population centric logistics LCR Freeport will target global markets for enhanced inward investment building on the region’s extensive cultural and investment connections with China and the USA. A key focus of the LCR Freeport is to target high tariff, high value markets and partner countries who will find the customs and tax measures of most interest.

Conclusion

Liverpool City Region Freeport is set to enhance trade and investment regionally and nationally, boosting growth and prosperity, creating high-skilled jobs, increasing innovation and productivity in the region. Freeport will send a strong signal that the UK is an attractive trade and investment location which is open for business.