Port: growth through internationalisation, logistics and development of tourism

On 11th October (2018) the conference "Economy of the Sea - development opportunities for the territory of Lazio" was held, organized by Intesa Sanpaolo in collaboration with SRM (Study center connected to the Intesa Sanpaolo Group), the Centre-North Tyrrhenian Sea Port Authority and the Order of Chartered Accountants and Accounting Experts of Civitavecchia.

During the meeting, new data related to freight and passenger traffic of the port were presented, widening the analysis on the port opportunities for growth and development. Three strategic assets emerged which, if pursued, will lead to a new step for the growth of the port and the city of Civitavecchia: internationalisation, logistics, development of tourism. How to get them? By strengthening the role of home port, today represented only by 34% of cruise travellers, and focusing on Simplified Logistic Zones (SLZ), a new tool in the hands of the ports in the center and north of Italy.

Before jumping into the numbers we present some food for thought: 50% of cruise travellers go to Rome, while 37% stay at Civitavecchia. This means that every year over 700,000 tourists stay in Civitavecchia.

Please find below the press release and the study presented during the conference.

PRESS RELEASE

Civitavecchia, 11th October 2018 -  The highways of the sea are an strategic asset for the development of the Lazio territory. This has been the main topic discussed at the conference about the Economy of the Sea organized by Intesa Sanpaolo in collaboration with SRM (Study center connected to the Intesa Sanpaolo Group), the Centre-North Tyrrhenian Sea Port Authority and the Order of Chartered Accountants and Accounting Experts of Civitavecchia.

The meeting, held at the Convention Room of Molo Vespucci in Civitavecchia, was opened by Cristiano Sforzini, president of the Order of Chartered Accountants and Accounting Experts of Civitavecchia, and it was the occasion to present the 5th edition of the "Italian Maritime Economy” Report by SRM.

The data contained in the report were explained by Alessandro Panaro, responsible for the Maritime Economy Area in SRM, and detailed by Pierluigi Monceri, regional director of Intesa Sanpaolo for Lazio, Sardinia and Sicily and Francesco Di Majo, president of the Centre-North Tyrrhenian Sea Port Authority, talking about the regional scenarios and local challenges and opportunities.

Afterwards, a round table was held on "Banks, companies and institutions in support of the territory" counting as main participants with Guido Andriani, professor of navigation in the Nautical Institute Calamatta of Civitavecchia, Antonio Errigo, Deputy Director and responsible for international relations at ALIS and Giannandrea Palomba, President of Panama, with the moderation of Marcello Di Martino, commercial business director of Intesa Sanpaolo for Lazio, Sardinia and Sicily.

The Report highlighted the growth of Italian ports thanks to the growing importance of the international component of maritime transport. In Short Sea Shipping we are always leaders in the Mediterranean. Italy has the potential to act as a strategic point of embarkation and disembarkation and as logistic hub for the "Silk Ships" (ships that travel along the Silk Road).

Particularly, the focus of SRM has highlighted the great role that the maritime and port system of Civitavecchia, Fiumicino and Gaeta play in the growth of the territory and it has stressed which are in perspective the new drivers to be developed to ensure that the port is increasingly a main player, with investments in infrastructure and the attraction of entrepreneurial investment.

Pierluigi Monceri, regional director of Intesa Sanpaolo for Lazio, Sardinia and Sicily: "In Lazio there are over 33,000 businesses hooked to the maritime system and they generate something like € 7.5 billion of added value and 134 thousand jobs. Civitavecchia recorded in 2017 handling of 17 million tonnes of cargo and, with 2.2 million passengers, it is the first cruise stopover in Italy and the second in Europe. The so-called economy of the sea constitutes an increasingly strategic asset for growth and development and the connection between all the actors involved must always be stronger. Geographical location is not enough and competitors are increasingly aggressive: it is necessary to be aware of our role and our potential to not miss opportunities related to this great area. The Intesa Sanpaolo Group supports the transport and logistics industry convinced that enterprises and infrastructure in this sector represent a heritage of Italy, and specifically, of Civitavecchia and Lazio".

Alessandro Panaro, responsible for the Maritime Economy Area in SRM - Studies and Research for the Mezzogiorno: "The Mediterranean is increasing its centrality in the context of maritime traffic in the world, it is not by chance that in the last twenty years the container traffic increased by 500%. New phenomena start facing the Mare Nostrum as for example the many investments that China is making in logistics and in maritime and port facilities, the naval gigantism that is taking on increasingly worrying proportions for our ports and an aggressive policy of attraction of entrepreneurial investment placed in the field from the countries of the area MENA (Middle East & North Africa) through the Free Zones.

These challenges require an increasingly innovative port system, ready to make investments targeted to the growth of the territory and integrated with the logistics and to define as soon as possible strategies that go in synergy with businesses; in this sense the SLZ - Simplified Logistic Zones can give a strong hand to simplify those bureaucratic procedures that always represent the problem of our port system. The Port of Civitavecchia, Fiumicino and Gaeta with a great vocation of cruises and with a particular vocation directed to the service of the production system must be in the first row for allowing the country to not miss the opportunities that the Mediterranean is bringing".

Francesco Maria di Majo, president of the Centre-North Tyrrhenian Sea Port Authority: "The study carried out by the SRM is very important for our network and it is particularly critical and appropriate for the port of Civitavecchia since it highlights the potential of a port considered a key point for the economic development of not only our region and Italy. The Port of Civitavecchia and the ports of the network, Fiumicino and Gaeta, have been lately recognized as strategic, also at European level. So much so that the European Investment Bank (EIB) approved a €195 million financing, the largest EIB grants in a Port Authority, aimed to the enlargement of the port of Civitavecchia and the building of a new commercial port in Fiumicino. In Civitavecchia, the project eyes construction of infrastructure, such as the completion of works on the ferry docks, the extension of the breakwater, and related road connections. In Fiumicino, the project foresees building of the new fishing dock and the first phase of the development of a new commercial port serving ferries, RoRo and cruise ships, thanks to the building of two new breakwaters and an important dredging". 

STUDY, DATA AND CONCLUSIONS FOR THE DEVELOPMENT OF THE PORT

LAZIO AND CIVITAVECCHIA

The Lazio region has a maritime system with over 33,000 businesses (18% of the country), and it generates €7.5 billion of added value (17% of the country) and 134 thousand jobs (15.4% of the country).

Civitavecchia recorded in 2017 handling of 17 million tonnes of cargo with a growth compared to 2016. The maritime import export of Lazio is worth more than €15 billion

The amount of bulk cargo moved is significant but we want to emphasize that what gives value to the trade of Civitavecchia is especially the ro-ro transport (car and wheel vehicles in general), nearly 5 million tonnes with a 3% increase compared to 2016. The ro-ro is a sector that enables the country to reduce pollution and accidents (trucks travel safer on ships) and it gives strength to our car export. This sector has a high added value especially if related to the transport of new cars. Civitavecchia represents 5% of national traffic. The Ro-Ro traffic of the port has grown by 23% over the past 5 years.

Last year in the port of Civitavecchia, the traffic of new cars was 280 thousand units, what confirms the positive trend of 2016. Civitavecchia is connected through the Motorways of the sea with regular services to Mediterranean ports of Barcelona, Tunis, Olbia, Porto Torres, and with the extra Mediterranean ports of Halifax, Davisville, New York, Baltimore, Jacksonville, Houston, Tuxpan, Veracruz.

Civitavecchia is the first cruise stopover in Italy with 2.2 million passengers and the second in Europe (after Barcelona) and it is a reference point for tourism. It is the «gate» to the Capital. Nearly a quarter of Italian cruise passengers goes through this port. The challenge of the port now is to enhance their role as home port, that is, going from transit port to embarking port.

ITALY

Overall, the country managed in 2017 over half billion cargo tonnes with a continuous and steady increase registered in the last five years (+9.4%).

Ro-Ro transport - 21% of the overall - had a significant development growing by about  37% over the past 5 years reaching  107 million tonnes in 2017. Only in the last year the increase was 8.5%. The Ro-Ro is an important part of the traffic in the SSS-Short Sea Shipping (also including other modes of goods transport and indicates a ship that travels inside of the Mediterranean basin).

In the Mediterranean and European countries over 600 million tonnes of goods travel in SSS every year and Italy is a leader in transporting 218 million tonnes of goods, 36% of the total and it has behind strong competitors such as Spain and Greece. It is evident the valence of our country in the traffic of this type of transport mode.

The most important axes of transit of Ro-Ro vessels in Italy are the Northern Center Tyrrhenian and the Adriatic. Particularly, the first covers the majority share of the total with 36.6% of tonnes transported, having a strategic role for the country. The ro-ro has a close bond with the automotive sector (one of the main sectors of our country with an added value of €12 billion).

Car sale in the world has grown from 72 million cars sold in 2007 to 93 million in 2017 and it is estimated to increase further to reach 115 million in 2030.

Two great phenomena are worth noting in Ro-Ro: naval gigantism and growth of the fleet. These two factors will surely lead to the beginning of a process of selection between ports prefering those with more facilities and car parks. Civitavecchia will have to respond to these challenges.

Between 2007 and 2017, the average size of Ro-Ro Car Carrier ships grew by 20 % to reach an average hold capacity of 5,390 units. New vessels in the future will reach a capacity of more than 8,000 units. In the same period, the overall capacity of the fleet grew by 50% and the growth of car sales was less significant (+ 36%) but still on the rise.

The Port moves goods from the highest value compared to its competitors, which may be an opportunity.

Value of goods (non-energy goods) exchanged in Lazio by sea is higher than other regions. It is a correlation between the value of import/export and tons of goods excluding fuel. Every import/export tonne has a value of over 2,700 euro. This is also thanks to car trade.

Another related important concept is logistics. Logistics is in fact able to increase the added value of goods. The multiplier effect of the integration logistics is in some cases significant. In addition, when logistics are linked to maritime activities, there is a greater value of trade as added values like Ro-Ro increase. The automotive sector generates an important added value. Every euro exported or intended for internal consumption generates additional €0.60 in the economy.

CRUISES: VALUE FOR THE TERRITORY

In 2019, record cruise traffic in Italian ports is expected, reaching 11.5 million cruise travellers with an increase of 5.5% compared to 2018. The reason for this brilliant result are to be found on new mega-ships visiting Italy. In addition, we must consider the role played by the large ports that are trying to improve services and programming of the moorings.

In the forecasts for 2018 Italy is the first European destination with 10.9 million cruise travellers (+7.3% compared to 2017) for a total of over 4,600 moorings. The Italian 2018 season has involved 47 airlines, 145 ships and 80 ports.

Civitavecchia will be the first Cruise Ship Port in Italy. In 2017 it was second in Europe after Barcelona and the only city to dispute the primacy of over 2.0 million visitors per year with the Spanish city.

In 2018 Civitavecchia will break 2.4 million visitors and 775 ships moored with an increase of 12% compared to 2014 and 9% compared the 2017. Civitavecchia boasts the presence of shipping companies in the cruise sector that represent the 50% of the cruise market in the Mediterranean.

The city driver of the port is Rome, welcoming every year over 10.3 million tourists, Civitavecchia being the natural arrival by sea.

Of all cruise travellers, 34% embark/disembark at Civitavecchia (home port), 66% are in transit and from these, 90% descend from the ship for an excursion. There is therefore still to improve this aspect. Being a home port remarkably increases the added value of the cruise since tourists stay for more time in the city and rely more and more on local suppliers. Of all cruise travellers 50% reach Rome, while 37% stay at Civitavecchia.

Cruises are to be considered a strategic asset for Italy and for the Lazio region; they are also an instrument that favors the tourist visibility, at national and international levels, stimulating access to most important and most beautiful places of Italy and generating a significant economic impact.

The overall economic effect of the activity Cruise in Civitavecchia, according to Certet-Bocconi estimates are equal to more than € 400 million. Specifically, for the area of Civitavecchia the impact is more than € 90 million, so Civitavecchia could increase the benefits for the territory by improving their home port configuration.

SLZ (SIMPLIFIED LOGISTIC ZONES)

Decree Law 91/2017 enabled the establishment of SEZ-Special Economic Zones for the ports of the South and the Budget Law 2018 has introduced the SLZ Simplified Logistic Zones for ports in the Center and North of Italy. The innovation resides on the fact the the drivers of the development process is the Port Authority (Port System). In fact, the committee that will guide the SLZ is chaired by the President of the port.

SLZ impact on the territory mainly based on three indicators: export, investments and port traffic. Some estimates by SRM have identified these percentages of growth.

EXPORT: from an analysis performed on a panel of free zones there is an increase in the export (theredore, an increase of business for enterprises) up to 40% more than that generated on the territory.

INVESTMENTS: public resources have a multiplicative effect of 1 to 3: every euro of tax credit will enable further private €2.

INTERNATIONAL TRAFFIC: an analysis on a panel of Mediterranean ports showed increases in traffic of the 8.4% annual average (in Italy such traffic in recent years has increased by an average of 1.1%).

Obviously these impacts are when a SLZ scheme starts, therefore in the medium - long term (usually 7-8 years).

Civitavecchia could constitute a SLZ network since these areas are designed for port systems that have more ports around.

It is necessary to draw up a development plan i.e. a territorial project credible by presenting to the Government that such illustrious strategies are that the FTA wants to engage to attract investment and in which areas and how these are related to the port area.

In Italy, Trieste has a free-trade zone that ensures international trades at the harbour and storage of goods which potentially ensure logistical operations even if the SLZ is wider and designed also to offer other facilities.

The incentives that SLZ may provide are: in the first place, bureaucratic simplifications that are a great demand by companies that must invest; second, facilitations for the clearance of goods and exent them from payment of tariffs; third, state and regional appropriations to finance investments to facilitate business to come in the territory. All this will define a locational package, called a catalog of benefits that the SLZ can offer to companies interested in investing in the territory.

In the catalog, also banking incentives must be included: for example, Banco di Napoli, part of the Intesa Sanpaolo Group, has provided a specific ceiling of credit facilities amounting to 1.5 billion euro for companies interested in investing in SEA and also constituted a SEA Advice Desk.

Many foreign countries use this tool including Morocco, Egypt, Turkey and they attract traffic and investments.

Civitavecchia could then set up a project of this kind, giving strength to its main sectors and generating a development process, not fast but gradual over time aimed to ensure that the growth this territory needs.

CONCLUSIONS

Civitavecchia should increasingly focus on the drivers that represent their vocation, this does not mean to lose the status as a polyfunctional port but to make strategic choices.

Cruises and Ro-Ro have a considerable multiplicative impact on the economy so first, the role as home port (port of departure and refuelling) must be strengthened and second, a system increasingly directed to give logistics to cars should be implanted in time.

In order to receive logistical investment it is necessary to design tools that promote the attraction of investments. Let's not forget that the ports of the Center - North have the possibility to establish Simplified Logistic Zones.

The «port of the future» must guarantee to the territory: internazionalisation, logistics and development of tourism. These are the three assets on which Civitavecchia must set their growth and SLZ could contribute to help some of these assets grow.