A Level Playing Field for Short Sea Transport Providers? a Comparative Analysis of Costs and User Charges for Short Sea and Land Based Transport Solutions.



A Level Playing Field for Short Sea Transport Providers? a Comparative Analysis of Costs and User Charges for Short Sea and Land Based Transport Solutions.

Authors

Harald M Hjelle, Molde University College, NO

Description

A comparative analysis of costs and user charges for short sea and land based transport solutions.
The paper focuses on potential distortions of competition between these modes of transport, caused by different charging regimes.

Abstract

A level playing field for short sea transport providers?
A comparative analysis of costs and user charges for short sea and land based transport solutions.

Background
Promoting short sea shipping as an alternative to land based modes of transport has been on the political agenda for several decades, and is currently supported by a number of EU R&D activities, e.g. the Marco Polo programme and its new enhanced focus on the Motorways of the Sea scheme. Creating a level playing field by harmonizing general pricing and financing strategies across countries and modes of transport has also been much focused over the past years.

Norway, with its long coastline and relative remoteness to central European markets should have natural advantages for establishing competitive short sea transport solutions. Still Norway experiences the same trends with an ever growing road transport sector as one can observe on the European continent. To some extent the short sea shipping industry blames the current charging regime for coastal shipping for not being able to compete.

The current charging regime that faces ship operators comprises a long list of charges partly related to the use of ports, and partly related to financing the operation of fairways, ship surveillance systems etc. Road transport, being the main competitor to short sea freight services, faces a quite different pricing regime.

A new pricing regime for Norwegian ports
Based on this, the Norwegian Ministry of Transport and Communications (NMTC) has commissioned a comparative study of the current charging regimes for short sea and road transport ? focusing on potential distortions of competition caused by different external conditions like this. The fact that the charging regimes are different is obvious, but how does this affect the competitiveness of the industries? Are the current charging regimes fair and efficient? Previous Norwegian studies have suggested that current charging regimes for neither of the concerned industries are efficient. These findings are reviewed in the light of recent international studies related to port pricing and a new pricing regime for Norwegian coastal and short sea shipping is proposed. How should charges be designed in order to create an efficient and fair competition between short sea and road transport?

The issue of implementation and stakeholders? different objectives
European studies of port pricing document the substantial methodological difficulties related to establishing a cost-based pricing strategy. Adding to this come the challenges related to the practical implementation of a pricing regime, partly due to the distributed responsibilities and variety of stakeholders in short sea infrastructure provision. A much focused issue is the different focuses of central governments, regional governments and port authorities. These issues are discussed along with an analysis of potential impacts of new pricing regime.

Most European studies in this field have focused on major ports, functioning as regional or intercontinental hubs. Since none of the Norwegian ports fall into this category, this study focuses on local and national ports, partly acting as feeder ports of these international hubs.



A tentative structure of the paper

1. Fair and efficient port pricing ? an analysis of the scope for marginal cost pricing
2. Cost structures and empirical evidence on marginal cost in Norwegian local and feeder ports
3. A comparative study of the charging regimes facing short sea and land based transport providers
4. A proposed new pricing regime for Norwegian ports
5. An analysis of possible impacts of the new pricing regime
6. Conclusions

Publisher

Association for European Transport