24 Tough economic


Issue 3 2015 - Freight Business Journal


///ITALY


Tunnel under the mountains set to revolutionise rail freight


It’s not at all bad, says FedEx times have


benefited FedEx in Italy in some respects, says the express carrier. To offset falling domestic consumption, Italian companies have


since 2009


shown a strong propensity towards internationalisation: the demand for air transport in Italy to international markets has consequently grown, says a report by the Italian National Institute of Statistics (ISTAT). FedEx in Italy bucked the trend


as much of the rest of the Italian economy plunged into crisis, investing in network expansion and its air and land fleet to support these trends. In the last three years it has


opened 24 new stations, doubled the number of vans (from 200 to 400) and created around 300 new jobs in Italy. On top of that, in October 2012, FedEx has launched a daily direct Milan Malpensa- Memphis flight to reduce cut off times and offer faster connections to the US for packages and freight. This growth is echoed by the rest


of the Italian airfreight industry. According to the Italian airports association, Assoaeroporti the cargo sector registered in crease of 5% in 2014 compared with 2013. As the eighth-largest economy


in the world, the fourth-largest in Europe and the third-largest in the Eurozone in terms of nominal GDP, FedEx views southern Europe and Italy in particular as a key market for the expansion of its Express network. Italy sends 56% of its products to


other European Union countries. Its main export partners are: Germany (13%), France (12%), US (6%), Switzerland (6%) and Spain (5%).


Exports in 2014 were up 2.1%


compared to the previous year, according to ISTAT and are forecast to approach 3.5% in 2015. Exports of made-in-Italy


products are driven by small and medium-sized enterprises, which are holding up better than large corporations and are managing to expand their presence abroad


despite this difficult period. FedEx Express managing


director for sales in Europe and Middle East Indian Subcontinent and Africa, Carlo Novi, says that in its last financial year (ending 31 May 2014) the Italian market went from strength to strength. The number of packages sent via FedEx Express from Italy to the rest of Europe increased by 28.4%, compared to the preceding 12 months. It adds that the number of packages sent via FedEx Express from Italy to North America increased by 6.4% during the same period compared to the preceding 12 months. Consumer demand in Italy is


also rebounding. The number of packages sent on a daily basis from the rest of Europe to Italy increased by 14.4% compared to the preceding 12 months. Italians are also showing


increased appetite for goods from the Asia-Pacific region. Since mid- 2010 imports handled by FedEx Express from Asia Pacific to Italy has shown year-on-year double digit growth of 11.6%. Italy exported over three times


as many packages to the BRIC countries (Brazil, Russia, India, China) than to the MINT countries (Mexico, Indonesia, Nigeria, Turkey). The internationalisation process is complex, but some of Italy’s small and medium- sized enterprises now manage it (almost) as their core business. Italy is known for its strong


north-south divide but about half of the new FedEx stations opened across the country are located in the centre/south of Italy where it sees huge new business potential. Before 2011, FedEx business was indeed concentrated in the northern Region (where its main gateway is located) but over the last two years Italy’s share of Euro- area exports has finally stopped diminishing and indeed has shown signs of a turnaround even in the Southern regions. Accelerating globalisation,


which has characterised the international markets since the


second half of the 1990s, has profoundly changed world trade, Novi continues: “Exchanges have increased, driven by more efficient information and communication technologies; the directions of flows have multiplied, with the affirmation of new hubs located in Asia or in the Middle East; and competition has become increasingly more intense on the international markets, as a consequence of the entry of emerging countries (with) lower labour costs.” This


cost advantage has


entailed offshoring of certain stages of the production process to emerging areas and, over time the fragmentation of production has led to the formation of complex and globally integrated value chains. But over the last 15 years, says


Novi, Italian exports have been able to resist the competition and have grown steadily, boosted by the provinces, with districts and chains of mainly small and medium-sized businesses, with strong regional identities. FedEx has seen a sharp increase in exports of products made by small enterprises in Umbria, followed by Tuscany and Emilia- Romagna. Apulia and Campania also show very positive signs. Friuli Venezia Giulia, Veneto, Marche and Lombardy are also growing, but not extent.


to the same Small and medium-sized


enterprises are holding up better than larger companies


and


are managing to expand their presence abroad despite the difficulties. The manufacturing sectors are giving Italian products a boost on the international markets with the large presence of micro and small enterprises – with a strong push from the leather goods sector, followed by clothing and furniture and design. For


Italian small and


medium-sized enterprises internationalisation is a key route to growth, although it is still perceived as an uphill struggle.


The Channel Tunnel was meant to revolutionise freight transport between the UK and, among other places, Italy. Things never quite worked out like that but, deep beneath the Swiss Alps, another massive tunnelling scheme could yet have a profound effect on modal shiſt to and from southern Europe. The 57-kilometre-long Gotthard


Base Tunnel (GBT) will, when it opens next year, be the longest railway tunnel in the world and the heart of a new north-south Gotthard corridor. And the 15-kilometre Ceneri Base Tunnel (CBT) will be the final piece in a new north-south corridor. Its completion at the end of 2019 will inaugurate a continuous level railway: the New Rail Link through the Alps (NRLA) along the Gotthard corridor. And although the new works


are entirely within Switzerland, the route is a vital corridor linking Italy with the rest of Europe. Railway tunnels through the


Alps are nothing new, of course - the original Gotthard Tunnel dates back to 1881. However, this tunnel, being at a much higher altitude, can only be reached through steep spiral tracks, adding greatly to the distance. Freight trains of up to 1,600 tonnes need two locomotives on the front and a third ‘banker’


loco to shove them up the steep gradients. According to the Swiss Federal


Railways (SBB), in the new tunnels “any remaining inclines will be gentle compared to the present system, which will enhance the efficiency of rail traffic and encourage even more freight traffic to switch from road to rail.” Freight trains in the new tunnel will only need one loco, and there will be no need to stop to attach and detach banking locos either. To complement the new tunnels,


SBB is therefore also developing a rail freight corridor with four- metre clearance, to be completed by 2020. It explains: “This will create a competitive infrastructure between Basel and Ticino and onwards into Italy, enabling standard semi-trailers with a four- metre headroom to be transported by rail.” SBB will not comment on the


likely level of traffic to switch from road to rail, saying that it is a matter for the federal government, but points out that switching transalpine freight from road to rail is a prime objective of Swiss transport policy. But it does say that by 2016 up to 210 freight trains could in theory use the new route and 260 by 2020, compared with only 180 today – in other words, a


theoretical capacity of up to five freight trains an hour by 2016 and six by 2020. Freight journey times will be cut by 35 minutes on the opening of the GBT in 2016 and by 50 minutes when both tunnels are open in 2020. Freight trains will travel at


100kmph and will generally be a maximum of 750 metres long. The freight trains will need to be dovetailed with


high-speed


passenger services operating at up to 200kmph. It won’t be the end for the old


Gotthard Tunnel and its spirals, still considered one of the railway wonders of the world. The route will be used for local traffic, including freight between the Cantons of Uri and Ticino. But this is unlikely to be the end


of tunnelling under the mountains. On 20 March, the European Commission and the seven Alpine states - Italy, Austria, France, Germany, Slovenia, Lichtenstein and Switzerland signed the Innsbruck Declaration that they would complete by construction of several major tunnels forming part of the Trans-European Transport Network. It lists eight tunnels to be completed by 2029, starting with the Gotthard base tunnel and finishing in 2029 with the Lyon- Torino tunnel.


Italy’s renaissance is export-led


Business is looking good, says Marco Nazzari, global freight management field sales director at Ceva Logistics. “We have just opened a local distribution centre in Padua Interporto for Magneti Marelli’s Aſter Market Parts and Services division, serving the independent spare parts network and aſter sales market. Also FIAMM, the well-known manufacturer of batteries and horns for automotive and industrial use, has recently awarded CEVA a two year agreement for the distribution of goods throughout Italy. “And we recently won the


prestigious Logistics Company of the Year award in Italy for the fiſth time; the award, presented by Assologistica (the leading Italian association of logistics companies) was given in recognition of CEVA’s TechCity – our logistics hub dedicated to the warehousing, handling and cross-docking of products for the electronics sector, opened in June 2014.” Prospects for Italy are looking


stronger he continues. Gross domestic product in 2015 is predicted to grow modestly (+0.5%.) with exports the main driver of this rebound. A ‘Made in Italy’ label is still highly desirable, particularly in traditionally strong sectors such as machinery, fashion, shoes, food and beverages. There are also some positive signs from innovative sectors such as aerospace, biomedical and pharmaceuticals. Encouraging trends are also being seen in the energy and aerospace sectors as well as manufacturing. In 2014 the freight market in Italy


showed slight growth of around 2% on 2013 and the trend is still positive so far in 2015. CEVA is finding ocean freight is dominating over air freight due mainly due to cost, but the latter is being used for pharma products, fashion and luxury goods, and fresh foods. CEVA Italy has developed


export solutions specially dedicated to small and medium enterprises to help them play their


part in the export renaissance. Northern Italy certainly economic engine


remains the


for the country, due to the higher concentration of multinational and SME companies and a large number of specialised economic clusters are located in the north. But southern Italy is no longer


regarded as the poor relation; there is a flourishing economy in sectors such as automotive, aerospace and food. Many multinational companies have invested in this part of Italy, to capitalise on the region’s reputation for excellence. The Italian freight market is still


regionalised, adds Nazzari. “To provide the required efficiency and quality standards for exporting and importing goods, you really need an agent specialising in the relevant key cluster and/or located in the region. CEVA Italy has eight freight management stations, as well as specialized logistics facilities, that are able to directly cover around 80% of Italian freight demand.”


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40