Opinion on Inland Waterway Transport (94/C 393/11)

On 24 February 1994 the Economic and Social Committee, acting under the third paragraph of Article 23 of its Rules of Procedure, decided to draw up an Opinion on Inland Waterway Transport.

The Section for Transport and Communications, which was responsible for preparing the Committee's work on the subject, adopted its Opinion on 7 September 1994. The Rapporteur was Mr von Haus.

At its 318th Plenary Session (meeting of 14 September 1994), the Economic and Social Committee adopted the following Opinion unanimously.

1. Preliminary comment

Most of the issues dealt with in this Opinion concern only Belgium, Germany, France, Luxembourg and the Netherlands which are connected by a network of inland waterways. This applies in particular to points 4 ('restructuring in inland shipping'), 5 ('immediate measures') and 6.3 ('organization of the market'). On the other hand, some of the comments in the sections on 'harmonization measures within the framework of a master plan' and 'trans-European inland waterway network' apply to all the other EU States too.

2. Importance for transport policy

2.1. A clear indicator of the considerable importance of inland waterways for transport policy in the European Union is the fact that they account for 38 % of the goods carried within the Community, although only five of the twelve Member States have an interlinked inland waterway network. In 1990 12,860 vessels with a loading capacity of 12.1 million t transported a total of 425 million t on the inland waterway networks of Belgium, Germany, France, Luxembourg, the Netherlands and Switzerland.

2.2. Inland waterway transport meets most of the specifications for a modern, forward-looking mode of transport. It is cheaper, safer and more environmentally friendly than its rail and road competitors.

2.3. Generally speaking the rehabilitation and expansion of waterways infrastructure does not harm the environment, use up much land or concrete over the landscape. Environmental damage to the countryside can easily be repaired.

2.4. In addition, inland waterway transport is the only mode of transport with substantial free capacity. This is highly significant bearing in mind the forecast growth in goods transport in the wake of the internal market, the opening-up of the borders of the central and eastern European countries and the increasing division of labour in the economy.

2.5. This applies in particular to combined transport (multimodal). In this respect it bodes well for the efforts of the Commission and all the Member State governments to promote an environmentally benign and socially acceptable transport system by exploiting free capacity and the inherent advantages of each mode.

3. Economic situation

3.1. The persistent decline in freights since 1992 has led to a steady deterioration in the economic situation of inland waterway shipping in Germany, France and the Benelux; in the first few months of 1994 this assumed critical proportions. Small and medium-sized firms are threatened by closure and workers by the loss of their jobs. Highly skilled workers are leaving the industry, which could jeopardize any future revival in inland shipping. There has already been a slump in training in firms. The exceptions to this trend are those vessels participating in the tour de role systems with freight sharing and price maintenance.

3.2. In March 1994 the NEA (Netherlands Centre for Research, Information and Education in the field of Traffic and Transport) published a study, sponsored by the Commission's DirectorateGeneral for Transport, into inland waterway costs and prices; this shows that the gap between costs and freight rates has been widening continually since 1992 and in 1994 is at its widest point since market observation began under the Rhine Navigation arrangements.

3.3. In a document of 8 March 1994 the Central Commission for the Navigation of the Rhine (CCR) rightly states that the economic situation of Rhine shipping is so worrying that the loss of a substantial part of the fleet is now inevitable, despite every effort to rein in its operating costs.

3.4. The International Inland Waterway Union (Internationale Binnenschiffahrts-Union) and the Rhine International Navigation Consortium (Internationale Arbeitsgemeinschaft der Rheinschiffahrt e.V.) refer to a 'life-threatening crisis' and an 'unprecedented fall in freights'.

3.5. The root cause of the critical situation in western European inland shipping is the drastic drop in freights, up to 80 % in the case of cross-frontier tanker transport. Apart from specialized vessels and vessels participating in the tour de role system still used in the Netherlands, Belgium and France, it is in general no longer possible to cover costs in inland waterway shipping.

3.6. The reasons for this precipitous fall in freights are:

- the inland waterway fleets of Belgium, Germany, France, Luxembourg, the Netherlands and Switzerland have a structural overcapacity of about 15 % in the case of dry cargo vessels and 20 % in the case of tankers;

- the recession in these countries has resulted in a 4-5 % fall in bulk cargoes;

- in Germany the abolition of national inland shipping tariffs - in anticipation of liberalization of the transport market - has substantially accelerated the fall in freights;

- Europe's railways are engaged in a price war with inland waterways. Freights in Germany, which have fallen by 50-60 % in recent months, have been undercut even further by the Deutsche Bahn AG;

- inland shipping is made up of a large number of small carriers faced with a relatively small number of large shippers. Where there is overcapacity, this will inevitably lead to a fall in freights.

3.7. The economic situation of the inland shipping industry varies on account of distortions of competition in the Member States. It is worst in Germany where abolition of the pricing system for domestic transport has virtually completed the liberalization process, while other countries still have systems for sharing cargoes and maintaining prices (tour de rôle).

4. Restructuring in inland shipping

4.1. In June 1994, the Commission issued a report on the organization of the market in inland waterway transport and the tour de role system. The publication of such a blueprint is welcomed everywhere by the operators concerned, represented by the International Union for Inland Navigation (IBU) and the European Skippers Organization (ESO). Independently of this, all parties have called for immediate measures to safeguard the profitability and long-term viability of this indispensable mode of transport. Basically this report calls on the EU Council to lay down a harmonized procedure for the gradual abolition of any remaining tour de role systems and tariff-setting by an agreed date, backed up by a series of safeguard and accompanying measures.

4.2. The panoply of 'structural improvement' instruments developed by the Commission in cooperation with the countries concerned and contained in Regulations (EEC) Nos 1101/89, 844/94, 1102/89 and 3690/92, provides an opportunity to reduce the structural overcapacity by scrapping and to limit new building through the old-for-new scheme.

4.3. However, as pointed out by the Committee in its Opinion on the proposal for a Council Regulation (EC) modifying Regulation (EEC) No 1101/89 on structural improvements in inland waterway transport [COM(93) 553 final - SYN 475], the framework conditions contained in the original Regulation need to be improved. The necessary changes relate to the differentiation of scrapping premiums according to vessel size, a tightening up of the old-for-new system, an increase in the special contribution (penalty), the funding of the scrapping premium and some organizational arrangements.

5. Immediate measures

5.1. The Committee urges the Commission to take the following decisions forthwith, as part of the structural improvements in inland waterway transport, to ensure the economic viability and long-term future of western European inland shipping:

5.1.1. At the present time 373 vessels are on the waiting list for the current scrapping scheme. Scrapping cannot take place for lack of funds. The Commission is urged to coordinate and help organize the efforts of the individual Member States concerned to raise the funds required to pay the necessary premiums.

5.1.2. A new scrapping scheme should be introduced aimed at removing 15 % of the equivalent dry cargo tonnage including pusher craft and 20 % of the equivalent tanker tonnage. The general conditions of the relevant Regulations should be amended as follows:

5.1.2.1. The premiums for larger vessels should be differentiated so as to provide more incentive to scrap such vessels. The present per tonne premium rate should apply to vessels of 650-999 t. For vessels of 1 000-1 199 t it should rise linearly from 100 to 130 %, remaining at 130 % over 1 200 t.

5.1.2.2. The scrapping scheme should be based on a tendering procedure and not subject to any ceiling, i.e. it should also be possible to apply for premiums above the maximum rate.

5.1.2.3. The funding needed to achieve the above-mentioned scrapping target is estimated at approximately ECU 180 million for dry cargo vessels and ECU 95 million for tankers. The funds should come from the governments of the Member States and/or the EU. In this connection the ESC welcomes the inclusion of a heading in the EU budget as a first step in the right direction. It is no longer economically justifiable to ask the industry to finance the scrapping premium on top of the repayment of old debts from the earlier 1990 scrapping scheme.

5.1.2.4. In the case of dry cargo vessels and tankers, two separate scrapping schemes should be provided for vessels of less than and more than 1 000 t to ensure that larger vessels are scrapped.

5.1.2.5. The old-for-new scheme should be tightened to a ratio of 1.5:1. The special contribution should be raised, but not the scrapping premium. Article 8(1)(a) of Regulation 1101/89, which stipulates that the special contribution is to be equal to the premium, should be amended accordingly.

6. Harmonization measures within the framework of a master plan

6.1. As part of the master plan for European inland shipping announced by the Commission, measures are required to align the conditions of competition, to create a common market organization and to generate ideas on developing and financing a trans-European inland waterway network.

6.2. There are numerous social, fiscal and technical regulations which differ from one Member State to another and result in distortions of competition because they affect the cost structure of firms. It is therefore recommended that the following harmonization measures be taken:

6.2.1. Complete incorporation in national legislation of EU Directives on access to the occupation of inland waterway carrier.

6.2.2. Framing of minimum manning rules for all waterway categories and rules on crew rest periods for inland waterways in Belgium, Germany, France and the Netherlands.

6.2.3. Drawing-up of common occupational health and safety regulations.

6.2.4. Support for the setting-up of a Community Fund to maintain and safeguard vocational training and the acquisition of qualifications, so as to counteract the trend away from training.

6.2.5. Uniform European vocational training, leading to the acquisition of the same qualifications, would also serve this objective.

6.2.6. These measures could be usefully underpinned by an R & D programme to look into the possible uses of modern communications technology in inland shipping and by the provision of practical guidelines.

6.2.7. A study should be made of whether the guidelines being drawn up by the CCR for waste disposal in Rhine navigation could be applied to the interlinked western European inland waterway network.

6.3. The transport markets are organized differently in the Member States - resulting in distortions of competition and only partially helping to ensure economically viable freights - and are therefore in urgent need of alignment. Regulation (EEC) No 3921/91, which abolishes by 31 December 1994 the arrangements whereby cabotage within the Community is reserved for EU vessels, was a first step in this direction. From that date there will be no restrictions whatsoever on transport operations between any EU ports.

6.3.1. While domestic inland shipping tariffs were abolished in Germany on 1 January 1994, the Netherlands, France and Belgium still operate tour de role systems for sharing cargoes and setting prices. It is the intention of the governments concerned to dismantle these systems only gradually, with a transitional period of 5-6 years. The obligatory tariffs in the tour de role system guarantee good freights for the carriers; these can then be used to subsidize other operations for which freight rates are markedly lower. The disadvantage of the tour de role systems, however, is that they make it considerably more difficult to change vessels. They have the further disadvantage that shippers are unable to choose a vessel which meets their requirements in terms of quality, safety and size. Nor, unlike the rest of the market, are they able to influence freight prices. Rapid abolition of the tour de role system is a prerequisite for a harmonized market with equal conditions of competition for all participants. To offset this, selective transport policy measures should be encouraged to improve the integration of inland waterways into combined transport operations within the EU.

6.3.2. On 7 December 1992 the Council authorized the Commission to open negotiations with non-EU central and eastern European countries on East-West transport arrangements; such arrangements must take account of the economic situation and cost structure of the industry in EU and non-EU countries. Account must also be taken of the conditions created by the increase in trade between the EU and the central and eastern European countries. Free access to the market and unregulated freight prices must be phased in as economic conditions become comparable and cost structures within the third countries are brought into line with those of western European inland shippers. The principles underlying the bilateral inland shipping agreements concluded between some EU and central and eastern European countries should be incorporated in the proposed multilateral treaty. This applies in particular to the 50-50 sharing of cargoes in reciprocal trade and the prohibition on long-haul cabotage (within the borders of the EU) and on short-haul cabotage (within the borders of one country). Cabotage involving an international operation followed by a national operation must also be subject to authorization.

6.3.3. The Committee welcomes the statements by the Commission and Member State governments to the effect that when a pan-European transport master plan is drawn up, more weight will be given to environmental protection in transport policy. These assertions need to be backed up by concrete decisions and measures. In the case of inland shipping, this means that the potential for switching from other modes to inland waterways must be studied and if necessary helped along by political decisions, eg. by the charging of external costs in line with the pollution actually caused. The objective of transport policy must be to switch goods transport from lorries to rail so as to relieve the roads; the necessary rail capacity would be achieved by relinquishing bulk cargoes to inland waterways.

7. Trans-European inland waterway network

7.1. The Committee welcomes the Council Resolution of 29 October 1993 on the development of a trans-European inland waterway network which takes account of the desired technical compatibility of the waterways and lays down the measures to be carried out as a matter of priority. In this connection, the Po and its links with the Adriatic should be included in the list of priority measures for a European waterway network. This would boost the development of transEuropean connections with the southern as well as the eastern countries.

7.2. It would also be advisable to lay down a timetable of priorities for the separate development measures according to their importance for intra-Community transport. A logical extension of this would be to draw up cost-benefit analyses which take account of the advantages for the economy, society and the environment.

7.3. It is in the Community's interest to carry out the costly development measures under this programme rapidly. Co-financing from the EU budget to top up national financing is called for.

Done at Brussels, 14 September 1994.

The President

of the Economic and Social Committee

Susanne TIEMANN