Transport News issue three August 2016

Transp rt News August 2016

Companies Mastering Autonomous Driving, Connectivity and Electrification to Emerge as

Leaders of the Future

Plus: China and India, Key Markets for the Transport Sector / Europe Crawls Towards Low-Carbon Transport / Britain’s Railways, Safest Ever / Amazon App Turns UK Customers into Delivery Drivers / Brexit - What next?

2

Welcome to the 3rd edition of a brand new publication, Transport News INTL, which promises to cover all modes of transport.

Featuring the latest deals, appointments, research and news and all you need to know about the latest developments in the transport sector is covered in the second edition of this insightful magazine, Transport News INTL. Industry experts in their field, government and think-tanks from around the world shed light on the issues that matter, with special sections on rail, roads, logistics and aviation to name a few.

This illuminating magazine reveals the successes, challenges and opportunities in this sector and will keep you informed of all you need to know in one place, so why would you need to look elsewhere?

In the deals section, we learn that Beacon Rail Leasing announced on 17th June that it has closed on the acquisition of Ascendos Rail Leasing S.Ă r.l, a European locomotive and rolling stock leasing company, after having received clearance with the German competition authorities.

In news, the American Trucking Associations' advanced seasonally adjusted (SA) for-hire truck tonnage index increased 2.7% in May, following a revised 1.7% drop during April. In May, the index equalled 139 (2000=100), up from 135.3 in April. The all-time high was 144 in February.

In a special feature, reforms and modernisation of transportation infrastructure will open up growth opportunities for service providers according to research from Frost & Sullivan, which is among the many absorbing pieces of content in this edition.

TRANSPORT NEWS AUGUST 2016

Environment Contents

4. News Aviation 8.

The Impact of Brexit on the UK Aviation Industry 10.

‘Green light’ Heathrow and we will help you Build Your Vision

for a Better Britain – top UK Investor Tells new Prime Minister 12.

IATA and FIATA Announce New Air Cargo Programme 14.

Long-haul Destinations Soar +19% as Gatwick is set

for Busiest-ever Summer Environment 16.

Campaigners call on UK Government to Support

European Emission Standards for HGVs 18.

EU Plan for Road Transport Emissions Going in

the ‘Right Direction’, but Planes and Ships Neglected 20.

EU’s Largest Climate tool must be Strengthened

to Deliver on Paris Agreement 22.

Europe Shows Ambition on Cleaner Road Transport

– now it must Deliver Overview 24.

China and India Identified as Key Markets for the Transport Sector 30.

Europe Crawls Towards Low-Carbon Transport 38.

Growth Surge for Energy -Efficient Technologies

in Building and Transport Sectors 40.

Lessons from the Thames – a new Guide to Moving Freight by Water Rail 42.

Britain’s Railways are the Safest They Have Ever Been,

but There is Still Room for Improvement 44.

Dover to Folkestone Railway Will Reopen this Autumn 46.

Eurotunnel has Chosen to Receive Rail Weather Services

from the Met Office 48.

Better Journeys on the way for rail Passengers Across

the South Western Network Roads 50.

Amazon App that Turns its UK Customers into Delivery

Drivers Will Spark Uber-style Revolution 52.

Companies Mastering Autonomous Driving, Connectivity and

Electrification to Emerge as Leaders of the Future 54.

Innovation Funds Help Rolls-Royce to Open New Factory in Bristol 56.

UK Department for Transport Must Tackle Conflict of Interest in

Approving Cars and Immediately Remove Illegally Polluting Vehicles 58.

What the Fleet Industry Can Learn from F1’s Marginal Gains Philosophy Shipping 60.

Owner Managed UK Shipping and Transport Businesses

Confident of 2016 Improvement 62.

European Commission Report Recommends the Introduction

of a Ship Recycling License 64.

UK Chamber: Brexit - What next?

66.

Rise in Maritime Traffic Driving the Global Maritime Information

Market Through 2020 68. Deals www.transportnews-intl.com

4

TII Completes Add-on Acquisition of Jones An affiliate of Transport Holdings, LLC (“Transport Investments” or “TII”), a portfolio company of Revelstoke Capital Partners LLC (“Revelstoke”), a Denver-based private equity firm, has completed the acquisition of Jones Motor Group, Inc. and its affiliated companies (“Jones”).

TRANSPORT NEWS AUGUST 2016

Based in Limerick, PA, Jones is an asset-light transportation and logistics company with a diversified freight profile that includes flatbed, heavy-haul, dry van, refrigerated, as well as LTL. Jones is the oldest common carrier in the U.S., with operations dating back to 1894.

The combination of TII and Jones will create a leader in the industry with over $350 million in revenue and approximately 350 agents and 1,400 owner-operators handling approximately 170,000 loads, annually.

“In addition to greater scale and capabilities, Jones will further expand our services across end-markets and freight types,” said Douglas McAdams, President, CEO and Co-Founder of TII. “Jones has developed a strong reputation in the industry and is an excellent fit with the TII family of companies. Ken Lacey, formerly

the Senior Vice President, and has been with Jones for over 20 years has been appointed President of the Jones division within TII. James Koegel, formerly the President of Jones, will assume the role of Chairman of the Jones division within TII. We are pleased to have Ken and James join our team and look forward to continuing to provide high quality service to our agents, owner-operators and customers.”

With this investment, Revelstoke has now completed 22 acquisitions totalling over $1 billion in enterprise value since the firm’s inception in 2013. Winston & Strawn LLP acted as legal advisor and The Clarendon Group II, LLC acted as financial advisor to TII in the transactions. Drinker Biddle & Reath LLP acted as legal advisor to Jones.

News

NORMA Group Connects Lines in World’s Longest Rail Tunnel The longest rail tunnel in the world will be kept dry with the help of NORMA Group couplings that are used to connect rainwater pipes in the new Gotthard Base Tunnel.

NORMA Group, a global market leader in engineered joining technology, has supplied its technology for the construction of Europe’s newest rail tunnel, which will be officially inaugurated on June 1. Running under the Swiss Alps, it will be the longest rail tunnel in the world at 35.5 miles in length. NORMACONNECT FLEX pipe couplings connect pipes that remove rainwater from the tunnel.

“We are excited about having supported a public infrastructure project of such great magnitude,” said Werner Deggim, CEO of NORMA Group. “The new Gotthard Base Tunnel will bring people from different countries together much faster, more reliably and more safely.

This matches our high-performance joining products that connect pipes safely and reliably. Our engineered joining technology has the same qualities as this ambitious project.”

The Gotthard Base Tunnel at some points runs up to 1.5 miles below the towering Alps and reduces the travel time from Zurich, Switzerland, to Milan, Italy, from more than four hours to under three hours. In the future, around 260 freight trains and 65 passenger trains will roll through these two tubes daily at speeds of up to 155 miles per hour.

Around 28 million tons of rock mass had to be moved during tunnel construction, which took nearly 17 years to complete at a cost of $12 billion. Track and tunnel testing will begin in June, with the tunnel scheduled to open for passenger and freight traffic in December.

NORMACONNECT FLEX pipe couplings connect metal, stainless steel, concrete and plastic pipes and tightly insulate the gaps between pipe ends. The couplings can compensate for axial movements and changes in the length of straight pipe connections. The pipe joints also eliminate fire hazards because they can be mounted without welding. The couplings resist high-vibration loads because of their special geometry.

M4 Project Inquiry Date set The independent public inquiry into the M4 Corridor around Newport Project will begin on 1 November, Economy and Infrastructure Secretary Ken Skates announced in July.

With the independent inspector now appointed and the pre inquiry meeting set to commence next Monday (18 July), the Economy Secretary said that it was in Wales’ interest to have an independent review into whether the proposals form part of the long term, sustainable solution to the traffic problems at this gateway to Wales.

Ken Skates said: “I was keen to ensure that a date was set for the public inquiry into the M4 Project at the earliest possible opportunity in order that we can provide clarity on the process. It’s been clear for some time that for businesses, commuters and visitors alike, the current stretch of M4 around Newport is unable to cope with the needs of modern Wales.”

“This inquiry will provide open and transparent scrutiny of our proposed solution, and suggested alternatives, before providing vital feedback to inform a final decision on whether we proceed to construction.”

On the imminent pre-inquiry meeting, the Cabinet Secretary said: “The pre inquiry meeting will help the Inspector and all interested parties to prepare for the inquiry. Supporters and objectors from across Wales and beyond are all invited to attend to better understand how the inquiry process will consider all pertinent environmental, social and economic factors.”

www.transportnews-intl.com

6

Building a new wall at Calais is not the Answer to Migrant Attacks says RHA The Road Haulage Association is disappointed to learn of proposals to build a 4m high, 1km long wall at the Port of Calais. Commenting, RHA chief executive Richard Burnett said: “It is 12 months to the day since I presented the Association’s demands to protect lorry drivers in Calais to the Home Affairs Select Committee.

TRANSPORT NEWS AUGUST 2016

“I am very disappointed that despite presenting a robust case for increased security at the Port, one year on UK-bound HGV drivers are still running the gauntlet of aggressive migrant activity on a daily basis.

“This latest proposal, supposedly costing £1.9M, would be a poor use of taxpayer’s money. We made it clear to the Select Committee that security levels needed to be improved; not just within the Port perimeter but in the surrounding environs up to a distance of 5kms.

This advice now being given to members of the Association is that their drivers should not stop within 150 miles of the Port. It is imperative that the money to pay for a wall would be much better spent on increasing security along the approach roads.

“Of course we sympathise with the Calais businesses and residents whose lives and livelihoods are being blighted by migrant activity, despite a large part of the ‘Jungle’ being dismantled. However, our focus remains with the HGV drivers who now accept that physical threats are just a part of the job. This is morally wrong and cannot be allowed to continue.

Web Address: www.rha.uk.net

News

Improved Roadworks Information vital so Operators can plan Ahead, says FTA

Time for new UK Government to make some big Decisions, says Freight Forwarding body

The Freight Transport Association agrees that Highways England has made a positive start in its first year but the association would like to see a better flow of information on forthcoming roadworks so that operators can plan ahead.

Commenting on the fact that Britain has a new Transport Secretary and new Secretary of State for International Trade, British International Freight Association (BIFA) Director General, Robert Keen says: “In the few weeks since the Brexit vote, the UK has entered a period of great uncertainty on the political front and we hope that the new cabinet are ready to confront the massive decisions that now need to be taken.

"It is good to see that Highways England has made a positive start within its first year” said Malcolm Bingham, FTA's Head of Road Network Management Policy. FTA’s comments followed publication of the Office of Rail and Road’s (ORR) first annual assessment of Highways England’s performance and delivery of its investment plan, covering the period April 2015-March 2016.

FTA has supported the long-term certainty of £11.4 billion of funding for roads investment during the first road period, of which £1.8 billion related to 2015-16, but equally freight operators need the certainty of reliable information on the works that go to improving the road network.

Unreliable journeys can cost a truck operator £1 per minute for each vehicle standing idle in congestion and that cost has to be borne by the freight industry. More certainty of plans going forward will provide the industry with important information and allow companies to make informed decisions on how they operate their fleets as these investments in the network are made.

It is good to see that Highways England has made a positive start within its first year. We can see that satisfaction in the performance of the network will improve if motorists and businesses are better informed as to how the road system will operate.”

Malcolm Bingham, FTA’s Head of Road Network Management Policy, said: “It is good to see that Highways England has made a positive start within its first year. We can see that satisfaction in the performance of the network will improve if motorists and businesses are better informed as to how the road system will operate.”

“For a start, whilst we wish Liam Fox and Chris Grayling every success, we urge them and their colleagues in the new Government to stop the procrastination over the expansion of UK aviation capacity and move forward with the recommendations made by the Airports Commission by building more capacity at Heathrow airport.

“I am sure that Liam Fox understands that the UK's freight forwarding community is the engine of Britain's international trade.

“As the trade association that represents the UK's freight forwarding community, BIFA will be lobbying the government and counting on it to show that the UK is still a confident, outward-looking trading nation, still capable of taking bold decisions that have a direct positive effect on the UK economy, its international connectivity and reputation.”

www.transportnews-intl.com

8

The Impact of Brexit on the UK Aviation Industry Businesses will have to develop clear corporate and business strategy - these are no longer “contingency” plans, but rather long-term strategies in light of the new reality says Diogenis Papiomytis, Consulting Director of Aerospace & Defence at Frost & Sullivan

There are three separate forces impacting the aviation industry, following the United Kingdom vote to leave the European Union. These are, in order of magnitude: The great uncertainty It is still early days following the vote of 23rd June 2016 for anyone to have a concrete view on what comes next. For better or worse, the debate between the two opposite camps in the referendum only focused on the advantages and disadvantages of a possible Brexit rather than providing a theoretical implementation plan on the road to Brexit. Accordingly, companies have very little in terms of guidance on which to base their short- and medium-term strategies.

Although UK and European airlines with strong UK presence voiced their concerns prior to the referendum, clearly seeing Brexit as a major negative event, the majority of airlines have not prepared comprehensive plans ready to be put into action following the result.

It is clear that the general uncertainty will intensify and the impact on airline operations will be greatest if the UK delays negotiations or fails to secure continued membership in the European Common Aviation Area (ECAA).

Impact on trade and business traffic The UK is one of the world’s largest traders, with exports of $506 billion and imports of $684 billion in 2014 (Source: WTO). Moreover, an estimated 40% of Britain’s imports and exports by value travel by air (Source: Let Britain Fly), while almost 54% of Britain’s trade is with the EU (Source: Centre for European Reform).

Accordingly, as much as $257 billion worth of UK-EU trade may be affected by future Brexit negotiations. Clearly, carriers with significant cargo business and cargo-only carriers will be most affected by any decline in trade as a result of a potential increase in the cost of doing business.

More importantly though, business traffic is already impacted and will be further affected in future and until there is clarity over the future role of the UK in the European marketplace. A fall in premium traffic, which is the

TRANSPORT NEWS AUGUST 2016

main source of profitability for the majority of carriers, will put further pressure on yields and airline profits. It will come as no surprise if Europe experiences a new wave of airline bankruptcies, should major cost factors such as fuel prices compound the negative effect of premium traffic decline.

Impact of drop in outbound traffic The UK is primarily an outbound aviation market, with over two thirds of all UK traffic being outbound. As such, airlines with significant operations to/from the UK will be negatively affected by the current and future weakness of the British Pound vis-à-vis the Euro and US Dollar. As European and international destinations become more expensive for UK travellers, we would expect airlines to adjust and reduce capacity deployed to the UK. The fact that the UK will become more attractive as a destination itself, will not compensate the drop in outbound traffic fully.

What comes next?

Outlook Frost & Sullivan believes the net effect of Brexit on the aviation market will be negative in the short- to medium-term as airlines deal with the effects of uncertainty and drops in premium and outbound traffic. Over the long-term however, everything depends on the whether the UK successfully negotiates continuous membership in the European Common Aviation Area (ECAA). A possible exit from the ECAA will raise the costs of doing business for both UK and European carriers alike. Furthermore, there are concerns over the UK’s ability to negotiate beneficial trade agreements and Open Skies aviation bilateral agreements with the US and other important partners. Overall, we expect UK carriers to spend substantial time and resources on lobbying for a continuation in the (aviation) status quo in a post-Brexit world.

The Political situation The first steps towards the start of negotiations have already been taken, with the resignation of PM David Cameron and the appointment of Theresa May as the new PM. She already has said she will not trigger Article 50 of the Lisbon Treaty, which would formally

Aviation

take Britain out of the EU after up to two years of negotiations, before the end of 2016 (Source: BBC 14 July 2016). The intermittent period will be used to set up her new “Brexit” Cabinet and initiate a long consultation period. As part of this process a new Transport Minister is expected to be appointed. Irrespective of who assumes the position, aviation will be at the top of the new Brexit Agenda and the Transport Minister will likely make changes at the top of the Department for Transport (DfT) and the UK Civil Aviation Authority (CAA).

The need for Brexit Champions It is obvious that there will be a significant (Q3/Q4 of 2016) period of deliberation, during which time the inputs and opinions of the country’s top aviation stakeholders will be sought. It is essential that airlines, airports and aviation suppliers use this time to set up their Brexit task force and appoint special Brexit “Champions” that can effectively represent their (and their customers’) interests.

For airlines, this will mean empowering the Government Affairs, International Affairs and Legal teams to lead the efforts, with support from almost every other airline department.

The aim of the Brexit task force should be to persuade the Government of the need to remain in the ECAA and support the DfT’s negotiation team in the development of a clear business case to present to Brussels.

Your strategy is now obsolete Furthermore, aviation businesses have to develop clear corporate and business strategy.

These are no longer “contingency” plans, but rather long-term strategies in light of the new Brexit reality. Virtually every component of a company’s long-term strategy plan has now been made obsolete and needs to be reworked, incorporating alternative post-Brexit scenarios. This includes a redesign of long-term Network & Fleet Plans, Sales & Marketing Plans, Financial Plans, Operating Plans and R&D Plans.

Scenarios will need to be developed with data fed from an effective market intelligence function, incorporating market research and Voice-of-Customer (VOC) elements, assessing the impact of new regulations, future demand growth (or decline), customer requirements and competitor reactions.

Frost & Sullivan is ready to support all aviation businesses in these efforts, utilising its extensive European network and expert teams of Aviation consultants and market researchers.

For further information, visit: http://ww2.frost.com/

Bychykhin Olexandr / Shutterstock.com www.transportnews-intl.com

10

TRANSPORT NEWS AUGUST 2016

Aviation

‘Green light’ Heathrow and we will help you Build Your Vision for a Better Britain – top UK Investor Tells new Prime Minister Writing to the new UK Prime Minister Theresa May, USS reiterated the shareholders’ pledge to boost the economy, create jobs and leave a legacy of skills across the country if the Government gives the go-ahead to Heathrow expansion. Heathrow’s shareholders together control over $1 trillion in fund.

•

•

•

In partnership with six of the world’s top investors, USS has committed to help deliver the Prime Minister’s vision of a better Britain.

With a £16bn private stimulus package waiting in the wings, a decision to expand Heathrow will kick-start growth in every corner of Britain Heathrow expansion will leave a legacy of skills and prosperity, creating 180,000 new jobs across the country while boosting investor confidence in the UK

Committing to invest £16bn in a privately-funded stimulus package if Heathrow expansion gets Government approval, Heathrow’s shareholders have pledged to create new jobs across Britain as soon as the project is given the green light. The investors also highlight that a decision on Heathrow would boost investor confidence in the wider UK economy, demonstrating that the Government can take evidence-based decisions in the national interest.

The Commission also set out tough conditions to expansion, including restrictions on night flights and controls on air pollution and noise. Last month, Heathrow accepted those conditions in full and pledged to continue to build constructive partnerships with local communities.

The economic opportunities and the fair deal for local communities are why Heathrow’s new expansion plans are overwhelmingly backed by small and large businesses, trade unions, cross-party politicians and council leaders and airlines as the best solution to Britain’s aviation capacity crunch. Supporters include the CBI, FSB, chambers of commerce from across the country, trade unions Unite, the GMB and the TUC, 38 British airports and airlines such as easyJet, which plans to operate from an expanded Heathrow. A large proportion of the local community also backs Heathrow.

Commenting on the letter, Heathrow CEO John Holland-Kaye said: “As USS state in the

“At a time of uncertainty, a £16bn privately-funded infrastructure investment will create jobs and growth across the UK. We have a real opportunity to build a better future for communities across our country and help fulfil the Prime Minister’s vision for the UK.” Last year, the Government’s independent Airports Commission gave a clear recommendation to expand Heathrow, finding that doing so would create up to 180,000 new jobs, over 100,000 of which will be outside the south east and will benefit every region of the country.

With expansion, Heathrow has committed to create 10,000 apprenticeships for young people, leaving a legacy of skills and helping to eradicate youth unemployment in Heathrow’s local area.

letter, the Prime Minister can send the strongest signal to the world that Britain is a confident, outward-looking nation that is open for business by expanding the UK’s biggest port and global gateway, Heathrow.

“At a time of uncertainty, a £16bn privately-funded infrastructure investment will create jobs and growth across the UK. We have a real opportunity to build a better future for communities across our country and help fulfil the Prime Minister’s vision for the UK.” Web Address: www.heathrow.com

www.transportnews-intl.com

12

IATA and FIATA Announce New Air Cargo Programme Geneva and Zurich - The International Air Transport Association (IATA) and the International Federation of Freight Forwarders Associations (FIATA) announced on 18th July that an agreement has been signed by Tony Tyler, IATA’s Director General and CEO and Huxiang Zhao, President of FIATA, to implement the IATA-FIATA Air Cargo Programme (IFACP) to replace the existing IATA Cargo Agency Programme.

Over the decades that the IATA Cargo Agency Programme has operated; IATA Cargo Agents (freight forwarders) have evolved from being “selling-agents” for airlines to being their “purchasing-customers”. In consideration of this evolution, in 2012 IATA and FIATA joined forces to review, refine and re-engineer the existing Agency Programme. The new programme moves decision-making on the rules governing the airline-forwarder relationship away from an airline-led conference to a governance body - the IATA-FIATA Governance Board (IFGB) jointly managed by forwarders and airlines, which reflects today’s market conditions.

“IATA and FIATA have reached an important agreement on a new jointly-managed air cargo programme. This is the result of four years of hard work to modernise the relationship between freight forwarders and airlines. The IFACP also provides a framework to ensure that industry standards are relevant, pragmatic and fit for purpose. These standards cover the endorsement of freight forwarders and more broadly the safe, secure and efficient transportation of air cargo shipments”, said Aleks Popovich, IATA, Senior Vice President, Financial and Distribution Services.

“The Cargo Agency Programme has long needed updating. I am really pleased that FIATA and IATA have joined forces to provide our industry with a new, modern programme and a framework for operation that benefits both airlines and freight forwarders. IFACP will eliminate unnecessary administrative procedures and costs as well as free up valuable resources to tackle the complex challenges that today’s global trade presents.

These include regulatory compliance, safety and security and the introduction of new technologies. This agreement paves the way for a more successful future for the fastest and most fascinating mode of international transport”, remarked Mr. Rudi Sagel, Chairman of FIATA’s Airfreight Institute (AFI).

The phased rollout of IFACP will begin in early 2017 with Canada as the pilot country.

It is anticipated that full global rollout will be completed by end of 2018. The public

TRANSPORT NEWS AUGUST 2016

signature with the common endorsement of the agreement will take place at the October FIATA World Congress which will be held in Dublin, Ireland.

Q&A 1. What are the benefits of the new IATA-FIATA Air Cargo Programme (IFACP)?

The structure of the new agreement better reflects the new business models and the buyer-seller relationship that exists today between forwarders and airlines. With the establishment of a global IATA-FIATA Governance Board (IFGB), the industry will be better equipped to achieve key goals including: e-cargo priorities of greater efficiency and shared values, clarification of supply chain liability, improved compliance with safety and security standards through a more coordinated and concerted industry approach.

The IFGB governance structure will reduce the administrative burden in managing the programme as it includes the involvement of forwarders as equal partners in the decision making process which now correctly reflects the Principal-to-Principal relationship existing today between Freight Forwarders and Airlines.

2. What is the impact on the current IATA Cargo Agents?

There is no immediate impact on the current IATA Cargo Agents as the current participants of the IATA Cargo Agency/ Intermediary Programme will be provided with a new IATA-FIATA Air Cargo Programme Agreement when the programme implementation process begins in their country. Upon execution and receipt of the completed Agreement, the Endorsed Freight Forwarder will join the new programme. No further assessment will be required.

New entrants shall be granted access to the IFACP in accordance with the programme's rules, which are designed to be more reflective of how the air cargo business functions in today’s market. It is anticipated this process will be completed by end of 2018.

Web Address: www.fiata.com

Aviation

www.transportnews-intl.com

14 paul prescott / Shutterstock.com

TRANSPORT NEWS AUGUST 2016

Aviation

Long-haul Destinations Soar +19% as Gatwick is set for Busiest-ever Summer During the summer holiday period the airport will welcome 50% more passengers with children with 165,000 passengers travelling through during the busiest day this summer, the busiest day ever for the airport

• • •

•

Gatwick Airport expects 8 million passengers to travel through the airport this summer holiday, +6.6% on summer 2016 Long-haul destinations soar 19% this summer with 165,000 passengers travelling through on busiest day The airport is set for a summer of family fun with top entertainers and face painting plus free of charge children’s play areas, dedicated family security lanes and pushchairs Gatwick Airport is set to have a record-breaking summer with 8 million passengers forecast to travel through the airport this holiday, +6.6% on summer 2015.

Long-haul destinations continue to go from strength to strength at Gatwick +19% on summer 2015. Destinations proving particularly popular this summer include Orlando +17%, Tenerife +16%, Faro +13% and Bridgetown, Barbados +7.5% year on year.

• Alicante • Amsterdam • Madrid • Tenerife • Belfast A summer of family entertainment is in store for passengers travelling through the airport throughout the holiday. On Friday mornings between 22nd July and 19th August, Gatwick will be welcoming some of the UK’s top entertainers, street theatre performers and face painters.

More Gatwick terminal staff will be on hand throughout the break assisting passengers with the airport’s free of charge children’s play areas, dedicated family security lanes and pushchairs to use on arrival.

Gatwick Airport, Terminals Operations Manager, Wayne Tomlinson said: “We’re seeing more passengers than ever travelling through Gatwick, and this summer is no exception

“We’re seeing more passengers than ever travelling through Gatwick, and this summer is no exception being our busiest yet, with 8 million passengers travelling with us - many to long-haul destinations which have soared +19% on summer 2015."

Top Ten Summer Long-haul Destinations • Orlando • Dubai • Toronto • Cancun • New York • Vancouver • Bridgetown • Las Vegas • Montego Bay • Calgary Top Ten Summer Short-haul Destinations • Barcelona • Malaga • Palma De Mallorca • Dublin • Faro

being our busiest yet, with 8 million passengers travelling with us - many to long-haul destinations which have soared +19% on summer 2015.

“All teams at the airport have been working hard ahead of summer to make our passengers’ time with us as fun and hassle free as possible. Whether it’s our family entertainment, a dedicated family security lane, or a pushchair available on your arrival at the airport - we strive to offer helpful thoughts – providing the best start and finish to your time away whether you are off to Tenerife or Toronto.”

For further information on Gatwick Airport see www.gatwickairport.com www.transportnews-intl.com

16

Campaigners call on UK Government to Support European Emission Standards for HGVs Campaigners are urging the UK Government to support EU plans to introduce carbon dioxide standards and emission reduction targets for heavy goods vehicles (HGVs) regardless of Britain's decision to leave the European Union.

The European Commission recommendations, which are outlined in its European Strategy for Low Emission Mobility published on 20th July, aim to bring HGVs into line with cars and vans and reduce carbon dioxide emissions from road transport. Campaign group Freight on Rail believes it is vital for the UK to implement similar measures to meet its climate change targets.

Philippa Edmunds, Freight on Rail Manager, said: "UK targets to reduce carbon dioxide emissions from transport will simply not be met without tackling emissions from HGVs, so the Government must not abandon its support for EU standards. Carbon dioxide standards and reduction targets for HGVs are long overdue as truck manufacturers have failed to significantly improve truck efficiency of their own accord over the last two decades. Standards for cars and vans have been proven to work and now it’s the turn of the road haulage industry to clean up its act.”

“We’re seeing more passengers than ever travelling through Gatwick, and this summer is no exception being our busiest yet, with 8 million passengers travelling with us - many to long-haul destinations which have soared +19% on summer 2015."

The UK Government is committed to reducing carbon dioxide emissions by at least 80 per cent on 1990 levels by 2050. As part of this initiative, the Department for Transport is conducting a freight carbon review and has stated its support for the European Commission VECTO project to record truck emissions.

Web Address: www.freightonrail.org.uk

TRANSPORT NEWS AUGUST 2016

Environment

www.transportnews-intl.com

18

TRANSPORT NEWS AUGUST 2016

Environment

EU Plan for Road Transport Emissions Going in the ‘Right Direction’, but Planes and Ships Neglected Transport & Environment made a statement in response to leaked draft of the European Strategy for Low-Emission Mobility (July 2016) which is reproduced here.

The overall direction for road transport in today’s leaked draft of the European Commission strategy for low-emission mobility has been welcomed by Transport & Environment (T&E), though the sustainable transport group has urged stronger action on greenhouse gases from international aviation and shipping.

The announcement to set post-2020 efficiency standards for new cars and vans by the mid2020s is welcome, and recognises the essential role of EU-level action in reducing transport emissions and enabling member states to meet their 2030 climate goals.

T&E executive director Jos Dings commented: “This is a step in the right direction. Transport is the biggest source of CO2 and the primary cause of urban air pollution, so it cannot be allowed to undermine the progress being made in other sectors. The European Commission must avoid any watering down of the plan before it’s published.”

The draft is laudably specific in recognising both the key role for electro-mobility in ending transport’s oil addiction and the benefits electric vehicles will play in balancing smart renewable electricity grids. The proposal that manufacturers would be required to supply ultra-low emission vehicles (as they must in California and 12 other US states) is eye-catching.

But on biofuels, the Commission has regrettably refused to entirely rule out a continuation of the failed policy of using food-based first-generation biofuels; nor has it dismissed a role for gas trucks. Both the environment and the industry need certainty about plans to move from bad biofuels to sustainable energy in transport.

However, the greatest disappointment is the complete lack of ambition on international aviation and shipping. Given the growth in their emissions, which is projected to continue under business-as-usual, far more action is needed to ensure they contribute to Europe’s

“The Commission is reasonably specific about its plans to reduce road transport emissions but is missing the chance to outline how aviation and shipping, which are the fastest growing share of Europe’s emissions, can contribute to decarbonisation.

Europe’s climate ambition must cover all sectors, and all modes of transport.”

The leak includes the breakthrough announcement that efficiency standards for trucks will be introduced after 20 years of stagnation in their fuel efficiency. The US, China, Japan and Canada all started regulating truck fuel efficiency years ago – an area where Europe is falling behind. T&E added that the EU doubling down on its efforts to cut truck GHGs by enabling toll discounts for low-carbon trucks is a very welcome addition.

low-emission transport agenda. It is also disappointing that the Commission does not recognise the enormous potential of passenger rail to decarbonise transport and replace short-haul flights.

Jos Dings concluded: “The Commission is reasonably specific about its plans to reduce road transport emissions but is missing the chance to outline how aviation and shipping, which are the fastest growing share of Europe’s emissions, can contribute to decarbonisation.

Europe’s climate ambition must cover all sectors, and all modes of transport.”

Web Address: www.transportenvironment.org www.transportnews-intl.com

20

EU’s Largest Climate tool must be Strengthened to Deliver on Paris Agreement A joint statement from Carbon Market Watch and Transport & Environment (T&E) on publication of EU climate policy is designed to reduce emissions across the agriculture, transport, building and waste sectors (the Effort Sharing Decision).

On 20th July, the European Commission proposed national greenhouse gas emission reduction targets for EU member states in the 2021-2030 period, distributing EU-wide targets that member states agreed to in October 2014.

Worryingly, the proposal includes loopholes that put the real-world delivery of the EU’s climate pledge at serious risk. Carbon Market Watch and Transport & Environment call on the European Parliament and member states to strengthen the EU’s largest climate legislation in line with the commitment made in Paris.

William Todts, Climate Director at T&E, said: “This proposed 2030 climate law has a lot of potential. It could bind 28 countries, half a billion people, to 2030 targets that require real change. There are plenty of solutions and technologies to meet the targets in a way that benefit not just the environment, but also jobs, the economy and Europe’s energy security. The loopholes that EU governments have requested – and the Commission is giving them in this proposal – are not just unnecessary but actually damaging.”

The Commission proposal – covering 60% of EU greenhouse gas emissions across non-traded sectors – would allow countries to use 100m tonnes worth of surplus allowances from the EU’s carbon market (ETS) as well as 280m tonnes worth of credits from forestry to compensate for emissions in sectors like agriculture and transport. In addition, the proposal rewards countries which will miss their 2020 targets by setting the starting point on the basis of the average 2016-2018 emissions. This leads to an inflated carbon budget for these countries which are not on track to meet their climate targets.

First EU climate test since ParisThe EU and national measures – left open to members states to help achieve the climate target – can tap into the numerous possibilities in these sectors for sustainable growth and deliver concrete benefits for citizens in the form of cleaner air, better jobs, warmer houses, and less energy poverty.

Loopholes would weaken proposal’s overall impact The so-called “flexibilities” are supposed to make emission reductions more cost-efficient, but they risk becoming loopholes that allow countries to claim climate action on paper but not in reality.

“This is the first test since the signing of the Paris Agreement and the EU cannot afford it to let it fail” commented Femke de Jong, EU Policy Director at Carbon Market Watch. “The 2030 target for the non-traded sectors is only -30% which is not in line with the goal to limit global warming to 1.5°C. Worse, loopholes risk preventing the real-world delivery of this insufficient target by allowing countries to cheat their way out of their climate commitments.”

Rather than cutting emissions by at least 30 percent, the use of fake forestry credits and surplus ETS permits would lower the target for the non-traded sectors to merely 27 percent actual reductions.

TRANSPORT NEWS AUGUST 2016

Now that the proposal is out, the European Parliament and member states will start preparing their respective positions on it. “We hope that the EU will uphold its reputation as a global leader in climate action and respect its commitments both towards our global partners and the European citizens” added Femke de Jong.

The Effort Sharing Decision covers emissions reductions from the agriculture, transport, waste and buildings sectors as well as small power installations not covered by the EU ETS. Negotiations on the directive are set to conclude in late 2017.

Web Address: www.transportenvironment.org

Environment

www.transportnews-intl.com

22

TRANSPORT NEWS AUGUST 2016

Environment

Europe Shows Ambition on Cleaner Road Transport – now it must Deliver The announcement of new CO2 standards for cars, vans and, for the first time in Europe, trucks forms the centrepiece of the EU’s strategy for low-emission mobility and has been welcomed by Transport & Environment (T&E) as a meaningful step in the fight against climate change. But the Commission’s plan is completely devoid of ambition on cutting emissions from aviation and shipping, the sustainable transport group said.

The announcement of post-2020 fuel efficiency/CO2 standards for road vehicles will help member states meet their 2030 climate targets, which were also confirmed.

T&E executive director Jos Dings commented: “The Commission distributes the EU emission reduction target for 2030 to member states, and promises European action on transport to give them a helping hand. This is a good plan but whether it works will depend on how effectively the promises are delivered.

Cutting transport CO2 emissions will not only tackle climate change but also address energy dependence, cut energy bills and create jobs.”

Europe follows the US, China, Japan and Canada in introducing CO2 and fuel efficiency standards for trucks, the fuel economy of which has stagnated for 20 years. T&E welcomes the Commission’s pledge to act on this during this mandate, and make road tolls for trucks dependent on their fuel efficiency.

The commitment for a ‘gradual’ phase-out of food-based biofuels is also welcomed, but the detailed plans must await the announcement of the EU’s post-2020 bioenergy, policy due by the end of 2016. The Commission’s continuing support for natural gas trucks as a pan-European long-term solution is surprising given new evidence highlighting the high cost and low potential.

However, emissions reductions in vehicles could be offset by increases in aviation and shipping where there is no effective EU action and the Commission has abdicated responsibility to ineffective UN international organisations ICAO and IMO. It is also disappointing that the Commission does not propose any major initiative to revitalise passenger rail, a key tool in decarbonising and electrifying transport.

Jos Dings concluded: “While the European Commission has seized the initiative to decarbonise vehicles, the opposite is true

"The Commission distributes the EU emission reduction target for 2030 to member states, and promises European action on transport to give them a helping hand. This is a good plan but whether it works will depend on how effectively the promises are delivered."

Steps towards a California-style mandate for manufacturers to supply ultra-low or zero-emission vehicles are also welcomed along with ideas to measure emissions on the road. Such a mandate provides certainty and economies of scale that will give Europeans a wider choice in electric vehicles, which they currently lack. Zero-emission vehicles will be indispensable in achieving the full decarbonisation of road transport by 2050.

for planes and ships despite the importance of European action in these sectors. Double hull tankers, lower-sulphur marine fuels, and carbon pricing for aviation are all policies ‘made in Europe’. Emissions from planes and ships must not be allowed to replace those cut from vehicles.”

Web Address: www.transportenvironment.org

www.transportnews-intl.com

24

China and India Identified as Key Markets for the Transport Sector 48% of respondents to the Norton Rose Fulbright the way ahead Transport survey believe Asia Pacific offers the best investment opportunities over the next five years

•

•

• • • •

92% of rail and 77% of aviation respondents say market conditions are positive, compared with just 15% of shipping respondents 39% of all respondents say consolidation will form the most important part of transport businesses’ strategy over the next 12 months 52% say that a global recession poses the greatest threat to their industry 67% anticipate an increase in investment in technology over the next five years Infrastructure investment is viewed as the most helpful form of government support Bank debt will act as the sector’s principal source of funding over the next two years

The transport sector is looking to Asia Pacific as the key market for investment over the next five years, according to the seventh The way ahead Transport survey from global law firm Norton Rose Fulbright. China and India are the most popular jurisdictions for investment, followed by the US, with growth through consolidation viewed as the best investment opportunity currently. While confidence among respondents from the aviation and rail industries is high, owing to lower oil prices, the availability of funding and the impact of infrastructure improvements, the shipping industry remains the least optimistic as a result of overcapacity in many subsectors of the market.

“While respondents are most fearful of the impact of a worldwide recession, they will be watching closely the implications of the UK’s referendum result. The transport sector is international and highly regulated and any UK exit from the EU would need to take into account a number of complex issues.”

Over half (52%) of all respondents to the Norton Rose Fulbright survey agree that a global recession poses the greatest threat to their industry. However, despite political uncertainty, most agree that the transport sector can expect to enjoy further growth over the next five years. Rising passenger numbers and freight volumes are anticipated (by 73%) and an increase in the number of routes and services is expected (52%).Investment in technology is TRANSPORT NEWS AUGUST 2016

expected to rise, according to 67%, with low carbon technology and predictive analytics expected to represent the most significant driver of change in the transport sector over the next five years.

Infrastructure remains a key theme for the sector. After consolidation, infrastructure improvements are viewed as the best investment opportunity currently (by 19%), and infrastructure investment is seen as the most helpful form of government support (by 25%). For the aviation, rail and road industries, inadequate infrastructure is seen as the greatest challenge to the operational efficiency of their industries.

Bank debt, capital markets and private equity will represent transport businesses’ main sources of funding over the next two years, and 74% of respondents expect the availability of funds to stay the same, or even increase, over the next five years.

Harry Theochari, global head of transport at Norton Rose Fulbright, comments: “The transport sector is continuing to look to Asia Pacific for investment opportunities, encouraged by rising demand and China’s ambitious Belt and Road initiative, a modern day silk road which will improve China’s infrastructure links with the rest of the world.

“Sentiment is high in the aviation and rail industries, buoyed by the expectation of increased passenger numbers. However, shipping continues to feel the effects of overcapacity in many markets, and an increase in enforcement actions is widely predicted, although in the longer term respondents believe conditions will improve.

“Investment in infrastructure and technology, and consolidation through both M&A and joint ventures, will be key drivers for transforming the transport sector and assisting growth.

“The adoption of new technology in particular will help to address numerous issues the sector has been grappling with in recent years, such as low carbon technology to meet

Overview

www.transportnews-intl.com

26

increasingly stringent environmental legislation, and predictive analytics to anticipate repairs and maintenance and better understand and forecast consumer behavior.

“While respondents are most fearful of the impact of a worldwide recession, they will be watching closely the implications of the UK’s referendum result. The transport sector is international and highly regulated and any UK exit from the EU would need to take into account a number of complex issues.”

Aviation The majority (77%) of respondents from the aviation industry report that market conditions for their industry are positive, compared with 88% in 2015. Continuing optimism is largely attributed to lower oil prices. Of the respondents who view current conditions as positive, 46% cite the oil price, up from 18% who highlighted lower fuel and oil prices in 2015.

industry over the next five years is a global recession, followed by 31% who highlight an increase in terrorism.

Opportunities for investment Almost half of respondents (48%) expect the availability of funding to remain unchanged, while 33% believe funding will become increasingly available. The capital markets are expected to provide the industry’s main source of funding over the next two years, together with operating leases, which free up capital, both selected by 25%, followed closely by bank debt, cited by 23%.

Half of respondents expect investment in technology to increase over the next five years, with fuel-efficient engine technology expected to be the most significant driver of change (by 52%), again underlining the importance of fuel costs to the industry.

ventures, alliances and pools (15%). A further 19% believe that reallocating existing capacity from stagnant to growth sectors and clients will be key.

Investment in infrastructure improvements appears to be an increasingly attractive investment opportunity, by 21%, compared with 13% in 2015. To reinforce the importance of infrastructure investment, 27% say that inadequate infrastructure is the greatest challenge to the operational efficiency of the aviation industry.

Regulation Deregulation is viewed as the most helpful form of government support (by 42%), closely followed by infrastructure investment (by 40%). A need for greater global co-operation to tackle terrorism is also highlighted (27%).

Asia Pacific is viewed as the region offering the best investment opportunities over the next two to five years (44%), followed by North America (17%). By country, China (22%) is the most popular market for investment, followed by the US (19%) and India (15%).

Respondents are divided about what type of regulation has had the greatest impact on aviation over the past decade, citing fragmented global regulation (28%), the regulation of competition and barriers to entry (28%) and, to a lesser extent, trade and financial sanctions (15%) and increased environmental regulation (13%).

“While respondents are most fearful of the impact of a worldwide recession, they will be watching closely the implications of the UK’s referendum result. The transport sector is international and highly regulated and any UK exit from the EU would need to take into account a number of complex issues.”

Rail The majority (92%) of respondents from the rail industry report that market conditions are currently positive. This confidence is associated with the impact of infrastructure improvements (26%), the availability of funding for investment (22%), improved economic conditions in key markets (13%) and an increasingly liberalised rail market (13%).

While lower oil prices are assisting the aviation industry, 23% expect fuel prices to remain at their current levels over the next five years and a mere 4% believe fuel costs will fall fur-

ther. Despite the likely impact of higher fuel costs on profitability, 67% anticipate fares and freight costs will remain unchanged or will decrease over this period. Respondents appear more confident that growth in demand will continue and 83% anticipate higher passenger numbers and 79% an increase in the number of routes and services offered.

However, aviation respondents are mindful of a change in the health of the economy and 38% believe the greatest threat to the aviation TRANSPORT NEWS AUGUST 2016

Consolidation Nearly a third (28%) believe that a merger or acquisition offers the best investment opportunity currently, (compared with 5% in 2015), while the proportion of respondents who favour less formal co-operation via joint ventures, alliances and pools has fallen (by 11%, down from 28%) in the past year. Consolidation is expected to form the most important part of aviation businesses’ strategies over the next 12 months, via M&A (by 23%), or via joint

Confidence is also fuelled by the expectation by 88% of respondents that passenger numbers and freight volumes will continue to rise.

Not a single respondent believes that passenger numbers and freight volumes are likely to decrease, nor that infrastructure investment will be cut.

Investment opportunities Asia Pacific is thought to offer the best investment opportunities over the next two to five years (by 40%), followed by Europe (by 34%) - the most popular market for investment

Overview

www.transportnews-intl.com

28

in 2015. When measured by country, the UK (16%) leads, followed by the US (14%) and China (10%). Infrastructure improvements are thought to offer the optimal investment opportunity for the rail industry currently (by 44%), while 20% favour investment in additional rolling stock.

Most respondents (80%) anticipate that investment in technology will increase over the next five years. During this period predictive analytics (40%) and the use of autonomous technology (36%) are expected to be the most significant drivers of change.

Government support Infrastructure remains firmly on the rail industry’s agenda. While 26% report that the impact of infrastructure improvements is creating positive market conditions for the rail industry, 48% believe that inadequate infrastructure presents the greatest challenge to the operational efficiency of their industry.

Infrastructure investment would be the most helpful form of government support for the industry, according to 80%. Almost a third of respondents (31%) expect governments to represent the rail industry’s primary source of funding over the next two years, followed by bank debt (17%).

Competition laws and barriers to entry are highlighted as the regulatory developments that have affected the rail industry the most over the past decade (40%), followed by increased environmental regulation (24%).

Respondents hold widely divergent views when asked what they see as the greatest threat to the rail industry over the next five years, pointing to continued political and economic uncertainty within the Eurozone (28%), an increase in funding costs (28%) and a global recession (20%).

While just 4% view joint ventures, alliances and pools as the optimal investment opportunities for the rail industry currently, 35% consider that these forms of co-operation will form the most important part of rail businesses’ strategy over the next 12 months. This is followed by the ordering of new rolling stock TRANSPORT NEWS AUGUST 2016

(23%) as the industry seeks to meet the expected increase in demand for rail transport.

Shipping Shipping is the least optimistic industry within the transport sector, by a significant margin. Only 15% believe that current market conditions are positive, down from 33% in 2015 and 69% in 2014. Overcapacity is the principal reason given for this lack of optimism (66%), followed, to a lesser extent, by economic uncertainty in key markets (27%).

Respondents are more optimistic when asked to consider the outlook for shipping over the next five years. Fares and freight costs will increase according to 67% and the same proportion anticipate an upturn in passenger numbers and freight volumes. The number of routes and services offered is also expected to rise, according to 35%. However, just 22% believe that funding will become more readily available and 64% think that the number of enforcement actions will increase as lenders seek to protect their positions and recover losses. Most (68%) expect fuel costs to rise.

Investment opportunities Much of the shipping industry (58%) continues to favour Asia Pacific for investment opportunities over the next two to five years, followed, to a far lesser extent, by Europe (16%). China (17%) and India (16%) remain the most popular markets for investment.

A merger or acquisition is seen as the optimal investment opportunity (by 34%, up from 29% in 2015), while 13% favour joint ventures, alliances and pools (down from 28% in 2015).

Respondents expect consolidation to be at the centre of shipping businesses’ strategies over the next 12 months, either in the form of M&A (22%) or joint ventures (19%), while 22% expect a focus on the disposal of non-core assets.

Almost three-quarters (72%) expect investment in technology to increase over the next five years, with low carbon technology expected to have the most significant impact on the industry during this period (by 33%), followed by predictive analytics (by 24%).

Regulation Almost half (42%) believe that greater transparency in the application and enforcement of existing and proposed regulations would be the most helpful form of government support for the shipping industry, more so than fiscal incentives (32%) or investment in infrastructure (29%).

Environmental regulation is seen as the regulation that has had the greatest impact on shipping over the past decade (by 49%), followed by trade and financial sanctions (by 25%).

Supply and demand imbalances are seen as the greatest challenge to the operational efficiency of the industry (by 47%), followed by a lack of qualified people (12%) and emission controls (9%). A global recession is seen as the greatest threat to the health of shipping over the next five years (by 68%). To a lesser extent, respondents are also concerned about the impact of enforcement by creditors on debt obligations (12%) and continued political and economic uncertainty in the Eurozone (8%).

Bank debt is once again expected to act as shipping’s primary source of funding over the next two years (22%), followed by shareholder support (18%) and private equity (16%). Despite the problem of overcapacity in many sub-sectors of the industry, fuelled by new build vessels coming on to the market, 11% think that ECA funding will be the industry’s main source of finance.

About this survey The survey, entitled “The Way Ahead” is the seventh transport survey report released by Norton Rose Fulbright. It details over 200 responses from a range of companies involved in aviation, rail and shipping globally including financiers, owner/operators, manufacturers, government entities and professional services firms, during April 2016.

The full survey report is available at: http://13349.nortonrosefulbright.online/

Overview

www.transportnews-intl.com

30

Europe Crawls Towards Low-Carbon Transport On the back of the Paris climate deal and record high global temperatures, Europe is slowly crawling towards a 2030 low-carbon strategy for transport. Later this year the European Commission is supposed to present a strategy paper, followed by concrete policy initiatives over the next year or so. This article looks into what Europe has done so far in the context of 2020 initiatives and what the key lessons are for the forthcoming action with timeline 2030

What transport emissions are and where they will go European Environment Agency numbers (data from the EEA document ‘Greenhouse gas emissions from transport’) indicate that in 2013 European Union transport greenhouse gas (GHG) emissions (including aviation and shipping) were 1,161 million tonnes of CO2 equivalent. This is 20 per cent up from 1990 levels.

Transport is the only sector which has seen emissions rise in the past quarter of a century, to the point that it currently represents 28 per cent of the EU’s overall GHG emissions. However, on a positive note, transport emissions peaked in 2007; 2013 emissions are 12 per cent down from that pre-global financial crisis level of 1,314 million tonnes.

It should be noted that these transport numbers only include emissions from combustion of fossil hydrocarbons – mostly diesel, petrol, kerosene, and heavy fuel oil. Upstream emissions from the production of all energy sources used for transport, including electricity and all emissions from biofuels, are excluded.

Especially the latter is a serious omission, as this piece will show. In October 2014 EU leaders agreed that sectors outside the Emissions Trading Scheme (ETS) should reduce their GHG emissions by 30 per cent compared with 2005 levels.

Transport is the biggest of these non-ETS sectors, followed by buildings and agriculture. Assuming that transport should also contribute with a 30 per cent reduction, this means that surface transport should reduce its emissions by 23 per cent from 2013 levels.

Against a baseline scenario expecting stabilisation, this is no small task. And if the fiveyear ‘review-and-tighten’ process enshrined in the Paris deal takes effect in Europe too, we should plan for hitting lower numbers in 2030.

Unsurprisingly the refining sector is feeling the pinch of lower demand for its products; since 2009, 22 refineries in Europe have closed, leaving 84 in operation. Hitting European reduction targets would surely mean closing another 15 or 20 by 2030; an inevitable consequence of success. However, using less oil is an undisputed net economic boon for a

TRANSPORT NEWS AUGUST 2016

continent 90 per cent dependent on imports, the value of which represented €300 billion in 2013 or 2.5 per cent of EU GDP. In any case, if the world takes its Paris pledges seriously, low oil prices are here to stay, not because of oversupply but lack of demand. Low oil prices are not an excuse for inaction – they are a consequence of success.

Can Europe take credit for the emissions drop since 2007? The short answer is – only a very little bit, because most of the policies implemented either failed or disappointed. The long answer follows below. Without doubt, the potentially most effective policy Europe has adopted is the regulation to reduce CO2 ght: 1.538em;">emissions from cars to 95 g/km in 2021 – which is 40 per cent below the 2007 level of 158 g/km.

It is also the first disappointment. Between 2009 and 2014, the year the regulation was adopted, official average CO2 emissions of new cars dropped from 146 to 123 g/km, a sizeable 16 per cent cut in five years. Sadly, though, real-world fuel consumption (hence CO2 emissions) from new cars dropped by only 3–4 per cent, from 173 to 167 g/km, according to figures aggregated from 11 databases of logged fuel consumption of individual car models (see ‘Mind the Gap 2015: Closing the chasm between test and real-world car CO2 emissions’, Transport & Environment, 28 September 2015).

This less-than-1 per cent per year efficiency improvement is lower than what had been achieved before legislation (1–1.5 per cent).

The gap between official and real-world fuel consumption has grown to 40 per cent and for some recently introduced models it is even 50 per cent. Manufacturers achieved the vast majority of official CO2 cuts simply through exploiting loopholes in the test cycle.

The test procedure will change in 2017, and it will close quite a few of the largest loopholes.

But under pressure from the industry, the effect of the loopholes will still be carried over in the new test through a much (15–20 per cent) weaker 2021 CO2 standard. So we currently have a reasonable standard on a poor test; we will end up with a poor standard on a reasonable test. Real-world CO2 is expected

Overview

www.transportnews-intl.com

32

to drop over the next five years to 140–145 g/ km in 2021; a far cry from the expected 110 g/ km when it was introduced. Cars in 2021 will only be some 18 per cent more efficient than in 2009; much more is possible, even at negative societal cost.

On trucks, Europe has not yet achieved anything in terms of CO2 legislation; fuel efficiency has been stagnant (‘Europe’s lost decade of truck fuel economy’, Transport & Environment, 2 December 2015) for 20 years now, meaning that emissions grow along with vehicles miles travelled.

In terms of modal shift, stagnation is the word again; changes have been very limited apart from a big loss in share of rail freight in the 1990s. Since then, gains in some west European countries have been offset by strong losses in many east European member states.

A good trend, though, has been the progressive introduction of kilometre charges for lorries; this already covers 15 countries, the latest being Belgium on 1 April 2016. There is strong evidence (‘Price sensitivity of European road freight transport’, Significance et al., June 2010) that such charges encourage fuller and cleaner lorries, shorter distances, and modal shift to rail.

Michael Thaler / Shutterstock.com

Renewable energy policy in transport has so far been an outright failure. Almost all of the current 5.5 per cent renewable energy in transport is biofuels; and some 75 per cent of these biofuels is made up of biodiesel from virgin vegetable oil. Unobtrusively, on 10 March the European Commission uploaded an explosive report (‘The land use change impact of biofuels consumed in the EU’, ECOFYS, 27 August 2015) on the damning climate impact of such fuels.

The report only looks at emissions from land-use changes, such as forest clearing, ploughing, and peat draining resulting from biofuels consumption in Europe. This type of emissions, for biodiesel alone, is already some 30 per cent higher than the full lifecycle emissions of fossil diesel. Add in direct emissions – from tractors, fertilisers, and the like – and lifecycle biodiesel emissions are 80 per cent (!) higher than those of fossil diesel (‘Globiom: the basis for biofuel policy post-2020’, Transport & Environment, April 2020).

This further strengthens findings from an earlier study (‘Assessing the Land Use Change Consequences of European Biofuel Policies’, October 2011) for the Commission. Biofuels used in Europe currently increase, not reduce, transport GHG emissions and the picture will

not change until 2020. Notwithstanding this, all biofuels are still counted as having zero emissions, giving governments all over Europe a reason to mandate or subsidise them: it helps them meet their climate obligations, on paper. A huge policy mistake and a huge accounting error that needs to be fixed as soon as possible.

Shipping emissions have dropped strongly, by 23 per cent since their 2007 peak. This has little to do with trade which is close to pre-crisis levels, or with better ships (‘Historical Trends in Ship Design Efficiency, The Impact of Hull Form on Efficiency’, CE Delft, March 2016), but has everything to do with high fuel prices and fleet overcapacity, both of which give strong incentives for so-called ‘slow steaming’ – sailing more slowly, giving big savings in fuel consumption. Aviation emissions are close to pre-crisis levels; possibly the inclusion of the sector in the EU ETS for intra-EU flights has made a modest impact in controlling emissions but ETS carbon prices that equate to 1–2 cents per litre of kerosene are unlikely to have made a major difference.

In short – EU climate policy in transport has made precious little difference yet. Most of the 12 per cent drop in emissions between 2007 and 2013 has to do with lower economic activity and high oil prices.

But much can be done if only we learn lessons and use opportunities. The good news is that Europe has laid some useful foundations for further actions and that prospects for change are better than they were. By far the most important change in the energy, climate, and transport landscape since the financial crisis has been the precipitous drop in the prices of solar and wind power and in the cost of batteries. Solar panel prices have dropped by some 85 per cent in the past seven years; wind prices by some 60 per cent.

Cars and surface passenger transport Recently Bloomberg released a report (‘Electric Vehicles to be 35% of Global New Car Sales by 2040’, Bloomberg New Energy Finance, 25 February 2016) on the future of electric vehicles (EVs) – stating that the price of batteries

TRANSPORT NEWS AUGUST 2016

Overview

www.transportnews-intl.com

34

had dropped by two-thirds since 2010. This equates to a drop of 20 per cent per year; close to a revolution. These are stunning numbers and the end is not in sight, leading Bloomberg to predict a ‘Kodak moment’ for internal combustion vehicles at some point in the 2020s. In China, 52,000 electric cars were sold (‘Electric Vehicle Sales Continue to be Unstoppable in China – Up 170%’, Inside EVs, March 2016) in January and February 2016. This is on track to smash Europe’s 59,000 (‘Alternative Fuel Vehicle registrations: +20.0% in 2015; +21.1% in Q4’, European Automobile Manufacturers Association, 5 February 2016) in the whole of 2015 by a factor of five or so.

And of course there was the event every mainstream newspaper and website covered – Tesla’s unveiling of its electric Model 3 leading to – by mid-April – an eye watering 400,000 pre-orders from enthusiasts who had to stump up US$1,000 for the honour of being first in line to pay US$35,000 for a car at a point almost two years from now.

Will Europe capitalise on this opportunity or not? That’s the big question. In Norway the share of EVs in new car sales is close to 30 per cent; in Bulgaria exactly one (1) EV was sold in the last quarter of 2015. This shows that policy matters enormously.

For now, the continent seems, even in the wake of the VW diesel scandal, to cling to diesel as its prime technology, slowing down the transition to much more promising hybridisation and electrification avenues. Europe gives diesel cars a fuel tax break worth €27 billion (‘Europe’s tax deals for diesel’, Transport & Environment, 23 October 2015), something no other region does. As a result, one in every two vehicles sold in Europe is a diesel; elsewhere is it one in 20. Diesel cars have some 10–15 per cent lower CO2 emissions compared with a same-size regular petrol car, but cost around €2,000 more; the comparison is therefore one of apples and oranges. Investing that money in hybridising a petrol drivetrain gives 25–30 per cent CO2 benefits. Stimulating diesel is a very costly climate policy and isolates our carmakers on the world stage – even leaving aside the air quality problems we face as a result of 20 years of diesels dodging their emissions tests.

A key policy instrument is ambitious CO2 standards for new cars for 2025 and an associated ‘flexible mandate’ for ultra-low-carbon vehicles. That – supplemented with real-world testing to avoid a new round of exploitation of testing flexibilities – will convince Europe’s carmakers that there is indeed no choice but to invest in fuel efficiency and breakthrough technologies, after so many years of wavering.

Japan has the lead in hybrids and, together with South Korea, in batteries; China and California are much more aggressive in promoting electric vehicles and Tesla is the undisputed leader in EVs. Europe needs to turn its defensive attitude on electrification into an awareness that there is no choice; if we don’t act Asia and Silicon Valley will rule the roost in 2030.

More broadly, electrification goes hand in hand with the sharing economy; an electric vehicle, after all, is expensive to buy and cheap to use, and hence an ideal asset for sharing.

Electric vehicles can hence play an important role in delinking car use from ownership; an important precondition for smarter mobility with a much better match between demand and supply.

‘Electrification’ is not just about electric cars.

It is also about making Europe’s fragmented market work for the use of electric vehicles.

With growing distances driven on a charge, international standardisation of plugs and payment systems is urgently necessary. The rise of smaller electric vehicles, including ebikes, is a tremendous opportunity to fill the huge current void between cars (often way too heavy and large for the task at hand) and bikes.

And the electric mode we have, rail transport, can be more smartly used. Booking a rail ticket for a trip that covers more than one company is close to impossible. No EU-wide booking sites exist that offer multimodal booking; simply because the railway undertakings, in contrast with airlines, do not share the necessary data with each other or with third-party providers. As a result, people by default book air tickets for longer distances. Mandating the sharing of necessary data is surely a policy that should be thought through, especially for undertakings that receive public money for their services (most do).

Freight Freight transport should not be overlooked; in 2030 it will represent some 40 per cent of surface transport emissions. For trucks, we urgently need CO2 standards too, to break the TRANSPORT NEWS AUGUST 2016

Overview

Samot / Shutterstock.com

www.transportnews-intl.com

36

two decades of efficiency stagnation mentioned earlier. Numerous market failures hold back the supply of, and demand for, better lorries; standards can break these failures.

The EU is thinking of adopting a regulation to start monitoring truck CO2 emissions; the USA is in the process of adopting Stage 2 fuel efficiency standards and the expectation is that US trucks will be more economical than European ones within a decade. This is a real threat to the dominant 40 per cent share of the world’s truck market that EU manufacturers have today. Again Europe is sliding from a standard maker to a standard taker.

And Europe needs to think urgently on what zero-carbon freight looks like. Is it trolley trucks with catenary lines on the main motorway network, with diesel and/or batteries as backup for the last (dozens of) miles? Is it hydrogen made from sustainable electricity? Is it ‘power-to-liquid’? Biodiesel will surely not be available in the quantities required; vegetable oil-based biodiesel simply needs to be phased out as we have seen. Discussion on this vital topic is lacking.

Paris left aviation and shipping unmentioned, leaving the current situation of inaction intact; a gaping hole in the Agreement. Aviation remains one of the biggest anomalies in transport policy. It is the most carbon-intensive mode of transport and the fastest-growing one, yet it enjoys well-documented exemptions from fuel tax as well as from VAT on tickets; together these exemptions amount to some €30 billion a year.

The inclusion of intra-EU flights in the EU ETS was a very modest start to remedying this situation; yet the fury this modest measure unleashed amongst the world’s airlines was again an illustration of how used the sector is to special treatment and privileges.

This fury has led the International Civil Aviation Organization (ICAO), a UN body, to say it wants to ‘develop’ a global market-based measure; in October its Assembly will vote on whether it will pass, and in what form. It is already clear that carbon offsets will be its mainstay; just as Europe has rightly decided not to use them for compliance with its climate targets.

The impact of truck policies can be reinforced by differentiating kilometre charges for the CO2 emissions of the truck. Hauliers can then be certain that a truck certified for better fuel consumption and lower or zero CO2 will produce a good payback, if not in fuel savings, then in lower road tolls. The Commission should make a proposal to mandate such a differentiation.

At the very least, Europe should make sure that any global action complements, not replaces, the ETS. The ICAO also recently adopted a CO2 standard for new aircraft; unfortunately, it will make no difference to emissions (‘International Civil Aviation Organization CO2 standard for new aircraft’, International Council on Clean Transportation, 9 February 2016).

Aviation and shipping A study (‘Emission Reduction Targets for International Aviation and Shipping’, November 2015) for the European Parliament throws up the challenge squarely: ‘If, as in the past, the ambition of these sectors continues to fall behind efforts in other sectors and if action to combat climate change is further postponed, their CO2 emission shares in global CO2 emissions may rise substantially to 22% for international aviation and 17% for maritime transport by 2050, or almost 40% of global CO2 emissions if both sectors are considered together.’

In shipping one important challenge is to close the massive gap between efficient and inefficient ships, and to ensure that the huge potential for further efficiencies, including speed and power reduction, is used. The current so-called ‘Energy Efficiency Design Index’ for 2020 and 2030 fails to do this (‘Historical trends in ship design efficiency 2016’, CE Delft, 1 April 2016) and needs to be tightened; it is truly a low-hanging fruit.

TRANSPORT NEWS AUGUST 2016

Both the aviation and shipping sectors need to find a zero-carbon energy source urgently.

Airlines have been saying that biofuels will be part of the solution; however, they have resisted any binding measure towards that effect.

Apart from that, availability of sufficient truly sustainable bioenergy is very challenging.

Options such as power-to-liquid need to be looked at urgently; but without a serious policy to mandate or incentivise such better fuels, fossil kerosene and marine fuel oil and gas oil will remain the mainstay for a long time.

Conclusion Transport has, so far, been quite resistant to efforts towards decarbonisation. EU policies adopted in the first climate package (for 2020) have, almost without exception, either disappointed (for example CO2 standards) or failed (biofuels). This is not so much due to the lack of technical options – study after study has demonstrated the potential for significant cuts at low or even negative cost. The challenge is a political one – between the resistance to change of the car, truck, oil, aviation, and shipping industries, and the inability or unwillingness of Europe’s institutions (including, and especially, the Council of Member States!) to overcome that resistance.

As a result, Europe is in real danger of losing its lead to the USA and Asia – not to mention failing to deliver on the Paris deal. The good news is that Europe can draw plenty of lessons from its first efforts for its second (2030) climate package and that, more than ever, there are opportunities for progress, especially in the fields of energy efficiency and electrification. It’s not yet too late, but the clock is ticking Web Address: www.transportenvironment.org This article was first published by Oxford Energy Forum: https://www.oxfordenergy.org/wpcms/ wp-content/uploads/2016/06/OEF-105.pdf

Overview

www.transportnews-intl.com

38

TRANSPORT NEWS AUGUST 2016

Overview

Growth Surge for Energy -Efficient Technologies in Building and Transport Sectors Retrofitting in plants will buoy the market for energy-efficient solutions in the mature industrial sector, finds Frost & Sullivan. The market for energy efficiency may have slowed a bit in the industrial sector but in the transport and building sectors, it is all set to grow sharply.

With building energy consumption accounting to approximately 40 percent of the total energy consumed in both Europe and North America, the building sector is garnering significant attention from policy makers and technology developers. Similarly, the intensifying demand for fuel efficiency and better road, air and seaway connectivity has necessitated superior machine handling and operation, driving the adoption of energy-efficient engines and vehicles.

New analysis from Frost & Sullivan, Energy Efficiency in Transport, Buildings and Industry (http://www.frost.com/sublib/display-report. do?id=D6B5-01-00-00-00&src=PR), finds that governments globally are actively promoting energy efficiency through programs such as star rating for equipment and designing of energy efficient buildings. They have also introduced numerous policies mandating low energy consumption and are conducting awareness campaigns for their citizens.

Energy efficiency initiatives enjoy considerable government support all over the world, which is evident from the roll out of programs such as the ecoENERGY Efficiency for Industry program in Canada, Low Energy Apartment Futures (LEAF) in Europe and China Utility-Based Energy Efficiency Finance Program (CHUEE) in China. Most of the government programs provide tax incentives and grants to industrial participants as well as the citizens.

“Countries such as Singapore, the US, India and Canada have specific home and building energy programs. Building energy efficiency and management technologies have benefitted greatly from the government programs and schemes” said TechVision Research Analyst Guhan Sriram R V. “However, it is vehicle efficiency that is gaining the attention of technology developers and government bodies. A considerable portion of the funds is directed towards vehicle and engine efficiency. Canada, Europe and the US have a lot of programs targeted at improving vehicle efficiency.”

Urbanisation has caused an increase in the number of commercial and light duty vehicles, which obviously, have absorbed a sizable portion of the investments made to improve fuel efficiency. Another outcome of the urbanisation is the growing interest towards smarter and energy efficient buildings. Most of the innovations would be towards automation and better equipment control. Building materials, air handling units and building temperature control are few areas those hold the key to improve energy efficiency in buildings.

“The Southeast Asian nations are emerging as a highly enthusiastic set of adopters of energy-efficient products,” noted Sriram.

“In future, better energy policies and sizable funding are likely to attract investors and new technologies to this region.”

Energy Efficiency in Transport, Buildings and Industry, part of the TechVision (Sustainable Energy) subscription, analyses the adoption of energy efficiency solutions in the three major market segments: transportation, buildings and industries. The analysis is based on six dimensions: intellectual property analysis, funding, market potential, impact of Mega Trends, region-wise adoption and sector-wise adoption.

Frost & Sullivan's global TechVision practice is focused on innovation, disruption and convergence and provides a variety of technology based alerts, newsletters and research services as well as growth consulting services. Its premier offering, the TechVision program, identifies and evaluates the most valuable emerging and disruptive technologies enabling products with near-term potential.

A unique feature of the TechVision program is an annual selection of 50 technologies that can generate convergence scenarios, possibly disrupt the innovation landscape, and drive transformational growth. View a summary of our TechVision program by clicking on the following link: http://ifrost.frost.com/TechVision_Demo.

For complimentary access to more information on this research, please visit: http://corpcom.frost. com/forms/APAC_PR_CLow_D6B5_28Jun16 www.transportnews-intl.com

40

Lessons from the Thames – a new Guide to Moving Freight by Water Lessons learned from moving freight on the Thames form the basis of a new Freight by Water publication launched to coincide with the group’s conference on the PS Elizabethan yesterday.

Freight by Water - which is run by the Freight Transport Association (FTA) – hosted the event aboard the replica Mississippi paddle steamer to give delegates the latest information on water freight services in the Thames region and outline the Association’s proposals to grow the sector.

"Inland water freight can make a significant contribution to alleviating road traffic congestion in London and other major cities across the UK, but there are many planning and regulatory barriers that prevent those moving freight from capitalising on the benefits” says Alex Veitch, FTA's Head of Global Policy.

The new publication, which is available at www.fta.co.uk/growing-uk-inland-waterfreight was launched by its author Alex Veitch, FTA’s Head of Global Policy, at the event.

‘Growing the UK inland water freight sector: lessons from the Thames’ looks at the policy and regulatory barriers that are impeding growth and offers the Thames as a case study for other waterways across the country. The importance of safeguarding wharves from development is one of the key issues explored.

Alex Veitch, FTA’s Head of Global Policy, said: “Inland water freight can make a significant contribution to alleviating road traffic congestion in London and other major cities across the UK, but there are many planning and regulatory barriers that prevent those moving freight from capitalising on the benefits.

“This publication seeks to use the Thames to illustrate how inland waterways could play an important role in the UK’s freight network and calls for the establishment of a national Strategic Water Network to facilitate a more coordinated approach to investment and planning. Members of Freight by Water are keen to engage with industry partners and decision-makers to develop this concept and make it happen.”

Web Address: http://freightbywater.fta.co.uk/

TRANSPORT NEWS AUGUST 2016

Overview

www.transportnews-intl.com

42

TRANSPORT NEWS AUGUST 2016

Rail

Britain’s Railways are the Safest They Have Ever Been, but There is Still Room for Improvement The ORR’s annual assessment of railway health and safety says that they are the safest in Europe, but consistency of implementation needs to improve. This is ORR’s key message, as it launched its annual report on railway health and safety on 19th July.

The past year saw further improvements in the leadership of safety across the railway industry and for the first time ever there were no fatalities of any railway worker. However, ORR’s inspectors found that safety rules and procedures were not always implemented consistently.

ORR’s Annual Health and Safety Report of Performance on Britain’s Railways: 2015-16 highlights: • Good collaboration across the industry, leading to the publication of a unified mainline railway health and safety strategy. This has identified 12 priority areas requiring attention such as such as worker health and wellbeing, fatigue management and station operations.

ORR's Director of Railway Safety and HM Chief Inspector, Ian Prosser, said: “A decade of sustained investment and a shared commitment from industry leaders, managers, workers, unions and governments has dramatically improved health and safety on Britain’s railways. It is a significant achievement to be rated as the safest railway in Europe, but it’s vital no one becomes complacent.

“Our evidence highlights key challenges facing the rail industry. In particular, the need to ensure that safety arrangements set by railway leadership are implemented consistently, as well as managing the safety risks from rising passenger numbers.

“We need to see further evidence of industry

“Our evidence highlights key challenges facing the rail industry. In particular, the need to ensure that safety arrangements set by railway leadership are implemented consistently, as well as managing the safety risks from rising passenger numbers. " •

•

•

Safety at level crossings continues to improve, however standards are not yet applied consistently enough. There were still three incidents in which pedestrians were killed. ORR is scrutinising Network Rail’s programme of work to improve safety management at level crossings.

While for the first year ever there were no fatalities of any railway worker there was still loss of life and injury in stations. ORR is pressing the industry to increase its focus on safety for people using stations in response to the challenge of continued passenger growth across the rail network.

ORR’s inspectors have dealt with a number of significant safety issues, which are detailed further in the report.

improvement here. The safety of all those who use or work on Britain’s railways is our top priority. We will continue to play our part in holding Network Rail, London Underground, and the train operators to account for delivering an ever safer railway.”

The Office of Rail and Road (ORR) Annual Health and Safety Report of Performance on Britain’s Railways: 2015-16 can be found at: http://orr. gov.uk/what-and-how-we-regulate/healthand-safety/monitoring-and-reporting/annual-health-and-safety-annual-report-2016

www.transportnews-intl.com

44

Dover to Folkestone Railway Will Reopen this Autumn Work to repair and rebuild the railway has been taking place since December 2015, when the line had to be closed after it became severely damaged. Engineers are working to build a new 235-metre-long viaduct, supported by 134 concrete columns. The work is ahead of schedule and Network Rail is working towards completing the project in the autumn.

Network Rail’s area director, Paul Rutter said: “We understand the impact of this closure has had on passengers, and our engineers have been working round the clock to finish the repairs and get trains running again between Dover and Folkestone.

“We had set aside time for interruptions to the project through bad weather and other issues which can occur on major projects, but so far that contingency has not proved necessary. As a result, we are much further ahead than we had expected and have seen the overall cost of the project decrease. As soon as we have a firm date for reopening the railway line, we will let passengers know.”

Network Rail’s senior programme manager, Steve Kelby, said: “This project has been a challenging one and normally a scheme of this size would take two years to design and build.

We are very proud of everyone’s commitment to get this line open as soon as possible.

"It is very good news that Network Rail's engineers say they are confident the work will be finished in the autumn, much earlier than the December date originally predicted, as the earlier we can provide the full service our passengers need the better. Network Rail's engineers have worked around the clock and the progress made is remarkable."

MP for Dover and Deal Charlie Elphicke said: “This is great news for Dover & Deal. The works are clearly ahead of schedule. Rail travellers and our whole community are set to benefit. I am looking forward to the line reopening and am incredibly optimistic that this date may now come sooner rather than later.

"Many congratulations to Network Rail and Costain on the incredible job they have done so far. This is a timely reminder of how great our nation is at large scale civil engineering works as we embark on the next stage of our national journey."

“We would like to thank passengers and our neighbours for their patience while work has been carried out to rebuild the railway at Dover.”

“We would like to thank passengers and our neighbours for their patience while work has been carried out to rebuild the railway at Dover.”

Richard Dean, Southeastern’s Train Service’s Director, said the company was currently working hard on a developing a new timetable to account for the re-opening of the line over the Dover sea wall. He added: "I know passengers have found it difficult since the partial collapse of the sea wall severed the track we run our trains on at Dover. I would like to thank them for their patience.

"We put in place replacement buses, shuttle train services and a comprehensive compensation package for season ticket holders as the damage to the wall meant we were unable to run a full service.

TRANSPORT NEWS AUGUST 2016

About the Railway Upgrade Plan The Railway Upgrade Plan is Network Rail's investment plan for Britain's railways. It makes up two-thirds of Network Rail's £40bn spending priorities for the five years to 2019 and represents the biggest sustained programme of rail modernisation since the Victoria era. It is designed to provide more capacity, relieve crowding and respond to the tremendous growth Britain's railways continue to experience; passenger numbers have doubled in the past 20 years and are set to double again over the next 25 years - so we need to continue to invest in building a bigger, better railway.

Web Address: www.networkrail.co.uk

Rail

www.transportnews-intl.com

46

Gary Perkin / Shutterstock.com

TRANSPORT NEWS AUGUST 2016

Rail

Eurotunnel has Chosen to Receive Rail Weather Services from the Met Office The new contract, which started earlier this month, means the Met Office will provide Eurotunnel with wind alerts and wave overtopping forecasts for the Eurotunnel site in Folkestone, and also the Samphire Hoe nature reserve in Kent, which was created by Eurotunnel.

As well as this the Met Office will provide Eurotunnel with a bespoke road weather forecasting package from 1 October onwards.

Météo-France will deliver the forecast in French for Coquelles, the Eurotunnel site in France.

The overtopping forecast provides details of prevailing sea conditions (including wind, water level, swell direction, wave height and wave period) both near shore and inshore at

too and Météo-France deeply wishes to pursue this co-operation in the future."

The Met Office provides a range of services to the transport sector in the UK to minimise the effects of weather. The Met Office's forecast services are designed to meet the range of needs the customers have during the year.

Web Address: www.eurotunnel.com

"The idea of sharing the skills of the Met Office and MétéoFrance was quickly established and we made an offer together, which combines the best of our joint expertise for the benefit of Eurotunnel. This collaboration is not only innovative and enriching for us, but for the customers too and Météo-France deeply wishes to pursue this co-operation in the future." sea defences. Warnings are issued when there is the risk of waves breaching those defences.

The road weather forecasting package will provide Eurotunnel with the ability to prepare ahead of adverse weather conditions, such as snow, ice, heavy rain and high winds. This will allow Eurotunnel to better manage their operations during such weather events and increase the safety of customers and staff.

The aim of the service is to help enable the operational teams to keep the 57,000 passengers who travel through the tunnel each day, on time and safe during their journey. Kieran O'Regan, Expert Real Time Systems at Eurotunnel, said, "We are pleased to continue our contract with the Met Office and look forward to another three years of excellent service."

Françoise Honoré, Sales Manager for Transports at Météo-France, explained, "The idea of sharing the skills of the Met Office and MétéoFrance was quickly established and we made an offer together, which combines the best of our joint expertise for the benefit of Eurotunnel. This collaboration is not only innovative and enriching for us, but for the customers www.transportnews-intl.com

48

Better Journeys on the way for rail Passengers Across the South Western Network Plans to give rail passengers along the South Western network more trains, more space and faster journeys were on 4th July unveiled by Rail Minister Claire Perry.

The Department for Transport (DfT) has published documents setting out how bidders for the new South Western franchise will be required to provide plans for: • at least 95 additional services on weekdays from December 2018; • a doubling of services along the London Waterloo to Reading and Waterloo to Windsor and Eton Riverside routes from 2 to 4 trains an hour; • earlier first trains and later last trains on many routes from December 2018; • quicker journey times on at least 70% of all services from December 2020; • an increase of at least 20% in peak time capacity from December 2020; • a new delay repay compensation system for passengers - with a quicker and simpler claims process; • new smart ticketing technology and new tickets for part-time workers.

routes in the country, serving a diverse range of passengers and places and these improvements will deliver faster, smoother journeys for customers using these services.”

The 2 shortlisted bidders for the franchise were announced in February 2016. These are: • First South Western Trains Limited • Stagecoach South West Limited The current franchise is operated by South West Trains and covers urban, suburban, regional and long-distance routes between London Waterloo, Reading, Bristol, Exeter, Weymouth and Portsmouth. It also includes the Island Line on Isle of Wight. Bidders for the South Western franchise have until September 2016 to submit their bids, with the new operator planned to take over the franchise in June 2017.

“We are making the biggest investment in the railways since the Victorian era and this is great news for passengers who will see real benefits across the South Western network. The South Western franchise has some of the busiest routes in the country, serving a diverse range of passengers and places and these improvements will deliver faster, smoother journeys for customers using these services.”

The publication of the invitation to tender is a significant step forward in delivering better journeys for passengers. It details the minimum level of improvements bidders hoping to secure the next franchise will need to include in their detailed proposals. Bidders are also encouraged to include proposals for additional benefits over and above the minimum requirements published today.

Rail Minister Claire Perry said: “We are making the biggest investment in the railways since the Victorian era and this is great news for passengers who will see real benefits across the South Western network. The South Western franchise has some of the busiest TRANSPORT NEWS AUGUST 2016

Web Address: www.gov.uk

Rail

www.transportnews-intl.com

50

TRANSPORT NEWS AUGUST 2016

Roads

Amazon App that Turns its UK Customers into Delivery Drivers Will Spark Uber-style Revolution Delivery experts ParcelHero say Amazon’s Uber-inspired scheme that turns car owners into delivery drivers will transform deliveries. E-commerce delivery experts ParcelHero say Amazon’s launch of its revolutionary ‘Uber’-style Amazon Flex App in Birmingham this month will transform home deliveries. The UK launch, first revealed in yesterday’s Financial Times, means car owners can deliver Prime Now/Same Day items directly to customers’ homes using the new App.

ParcelHero’s Head of Public Relations, David Jinks MILT says: ‘By launching its new crowdsourced driver scheme in the UK Amazon steals a march on Uber, who have been slow to get their UberRUSH ‘Uber for things’ delivery service off the ground here. Turning its local customers into delivery drivers means Amazon can give even more delivery choices to shoppers while slashing its own logistics overheads.’

Amazon’s Prime Members are 50% more likely to order items through Amazon than elsewhere, and it is the choice of delivery options that keeps them loyal. By turning local motorists into delivery drivers even swifter deliveries can be achieved.

for Prime Now one hour deliveries, so the UK is a natural fit for the expansion of Flex.’

Predicts David: ‘Crowdsourcing and the so called gig economy are ideally suited to local deliveries and it’s a certainty Amazon won’t be the only big name to turn its own customers into delivery drivers.’

For more information on Amazon’s revolutionary logistics plans see https://www.parcelhero. com/news/e-commerce-2/amazons-prime-ambition-parcelhero-industry-report-2965

" Last year our report, Amazon’s Prime Ambition highlighted Amazon’s far-sighted plans for its beta ‘My Way’ App: which enabled everyday people to deliver items. It led to the successful roll-out of Amazon Flex in cities across the US. UK cities such as London and Birmingham are an ideal scale for Prime Now one hour deliveries, so the UK is a natural fit for the expansion of Flex."

Amazon estimates that its Flex drivers will be paid between £13 and £15 an hour including tips. The e-commerce giant has been advertising on jobsites since June, and the Flex App will allow the company’s part-time drivers to choose when and where they want to work, as well as guiding them to customers’ homes and allowing customers to track their orders – just as they would an Uber cab. Amazon says it’s a great opportunity for drivers to ‘Be your own boss: make great money, delivering when you want’.

David adds: ‘Last year our report, Amazon’s Prime Ambition highlighted Amazon’s far-sighted plans for its beta ‘My Way’ App: which enabled everyday people to deliver items. It led to the successful roll-out of Amazon Flex in cities across the US. UK cities such as London and Birmingham are an ideal scale

www.transportnews-intl.com

52

Companies Mastering Autonomous Driving, Connectivity and Electrification to Emerge as Leaders of the Future Frost & Sullivan’s Intelligent Mobility event identifies growth opportunities arising from convergence as key topic of the industry. Convergence on multiple levels will unleash business opportunities for OEMs, tech-companies and mobility providers, revealed Frost & Sullivan’s industry must-attend Intelligent Mobility event.

Experts agreed that the mobility industry is facing profound transformation with the convergence of autonomous driving, connectivity and electrification. Similarly, the line between public and private transportation is increasingly blurred, as customers shift towards more multi-modal preferences using technology enabled solutions.

“This convergence will be driven by data that revolves around both the car and the consumer. Future-oriented solutions will involve the development of intelligence on all levels rather than focusing on one pillar,” found Frost & Sullivan Senior Partner Sarwant Singh. “The shift from private vehicles to multi-modal integrated mobility is a further disruption the industry faces: Due to a convergence of social, demographic and technological innovations, we are witnessing a shift from people using cars as the preferred or even only choice to using them as part of a wider system.”

With high-profile speakers from industry players such as General Motors, Renault Nissan, Fontinalis Partners, Moovit, BMW, Toyota, Gett, XXimo, Mobility International AG, Arriva, TomTom Telematics, Inrix, Digital Barriers, HORIBA MIRA and BT, the two-day event further established Frost & Sullivan’s pioneering role in thought leadership with respect to the future development within the Intelligent Mobility market.

The opening panel on Mega Trends was joined

by OEMs, futurists and public policy decision makers to debate the future trends and their impact on mobility. Mr. Singh pointed out that in future, tech companies which offer solutions for autonomous driving will compete with traditional OEMs. This will lead to a disruption of the industry and expects the market to grow to $60bn in 2030. The automation technology roadmaps of 80 percent of the major OEMs are expected to be finalised this year.

The pace at which connected services, sensoring solutions and the like develop make it safe to assume that full autonomous functionality can be achieved within the next decade. During the sessions on the Future of Connectivity

TRANSPORT NEWS AUGUST 2016

and on Autonomous Business Models leading OEMs unveiled that convergence will allow the industry to master the challenges mobility faces today, with pollution and accidents making the issue a political and social one, going beyond customer needs.

In the discussion about New Mobility Business Models four leading OEMs exchanged their respective approaches towards shared mobility. They offered a broad spectrum reaching from car sharing, ridesharing and ride hailing to demand responsive solutions and smart parking. The discussed business models provided the basis for a fluid transition to the next panels, evolving around the Future of Corporate Mobility and Integrated Transport Solutions, which is facing similar challenges and choosing comparable modular solutions.

In future, fleet management will become more integrated and comprise not only company vehicles, but increasingly car sharing and other elements of the mobility mix. Hence, an integrated fleet management will function complementary to integrated mobility solutions, both aiming for one single platform to provide access to all services and products.

“Today’s niche business models will become main-stream, particularly digitally enabled mobility services, which will lead to a convergence of public and private transportation,” concluded Mr. Singh. “Overall, this will lead to a more convenient, user friendly, on-demand transportation network for the customer, which will revolutionise the way we use cars in urban areas in particular.”

To register your interest in attending Intelligent Mobility 2017, please click here: http://frost.ly/id

Roads

Steve Lagreca / Shutterstock.com

www.transportnews-intl.com

54

TRANSPORT NEWS AUGUST 2016

Roads

Innovation Funds Help Rolls-Royce to Open New Factory in Bristol A UK government-backed £4 million project to develop a composite electrical harness for aero-engines creates low carbon technology jobs.

Lighter, more cost-effective aircraft engines Research and innovation funding from a government-backed public-private sector partnership has helped aero-engine maker Rolls-Royce establish a new advanced manufacturing facility in Bristol. It is likely to employ as many as 40 people when in full production next year.

The factory, located on its Patchway complex, is part of the company’s SILOET programme, designed to accelerate the development and introduction of low-carbon aircraft engine technology.

(NCC) at Emersons Green, near Bristol, and the Manufacturing Technology Centre, Coventry.

Composite technology The two-year, £4 million project, called ENABLES, had support from the aerospace R&D funding programme, a partnership between the Department for Business, Innovation & Skills (BIS), the Aerospace Technology Institute (ATI) and Innovate UK.

Aerospace quality standard As a result, bf1 systems achieved AS9100 accreditation, the common quality management standard for the aerospace industry. It means that the company, based in Diss, will now be able to supply similar technology to other aerospace manufacturers.

A notable achievement during the two years of the project up to the end of 2014 was developing the capability to use composite materials to embed electrical harnesses. This high-temperature, composite raft technology is earmarked for Trent 1000-TEN and Trent 7000 engines that will power Boeing 787 and Airbus A330neo airliners from next year.

James Welham, finance director at bf1 systems, said: Initially, we were involved in some of the sub-projects and that widened into assisting Rolls-Royce with some of the industrialisation processes. The biggest success of the project from our perspective is the accreditation we achieved.”

The advantages lie in: • reducing the number of parts around an engine casing • cutting the time needed for engine build, strip and overhaul • trimming weight

The project also involved a Norfolk-based SME called bf1systems which built its reputation in the automotive and motorsport sector and also supplies the aerospace and sports markets. Justin added: “bf1systems benefited from our knowledge and experience of industrialising new technology. They brought the ability to innovate and rapidly trial ideas for development and manufacture.”

Rolls-Royce has filed 19 patents against different areas of the ENABLES technology.

It will continue to work with the NCC in the field of composite manufacturing technology development.

Web Address: www.gov.uk

Norfolk-based SME partner Justin Dalton, chief project engineer at RollsRoyce, said: “It’s novel technology that embeds the electrical harness within a composite raft structure. It’s one of a number of technologies that Rolls-Royce is developing.”

Eight of the current 20-strong workforce at the new factory benefited from retraining after transferring from another part of RollsRoyce’s operations. Rolls-Royce worked on ENABLES with a number of partners, including the Advanced Manufacturing Research Centre in Rotherham, the National Composites Centre

www.transportnews-intl.com

56

UK Department for Transport Must Tackle Conflict of Interest in Approving Cars and Immediately Remove Illegally Polluting Vehicles The UK Department for Transport (DfT) must stop acting for carmakers and start rigorously approving and bringing into compliance diesel cars in order to protect citizens from high levels of nitrogen oxides emissions, sustainable transport group Transport and Environment (T&E) has said. The group echoed the message from the UK House of Commons Transport Select Committee.

The report published on 15th July by the parliamentary committee highlights the conflict of interest within the DfT’s Vehicle Certification Agency. T&E gave evidence to the committee. The VCA both tests and approves the cars, and is paid by carmakers to provide consultancy services. Once a car has been approved it can be sold anywhere in Europe.

The committee’s report highlights that Skoda cars (which are part of the Volkswagen Group) were approved by the VCA and had the same defeat device fitted to them that has resulted in $15 billion in fines and damages in the US. Yet in the UK no penalties have been levied against Skoda by the VCA, which has even declined to confirm that the device is illegal.

Europe, nine were approved by the VCA. In other parts of Europe, vehicle approval authorities have forced manufacturers to voluntarily recall cars to lower their emissions.

So far Mercedes, Vauxhall/Opel, Renault and Suzuki have recalled vehicles and carmakers offices have been raided by prosecutors in France and Germany. But in the UK no such action has been taken despite potentially five million Euro 5 diesel cars on the UK’s roads being affected. If the emissions from these cars were lowered, dangerous levels of nitrogen dioxide in the air would fall. In the UK it is estimated that 23,500 people die prematurely from breathing NO2, according to the Department for the Environment and Rural Affairs (Defra).

“The VCA is acting in the interests of its carmaker clients and not as a robust regulator that ensures diesel cars approved for sale are legally clean. The new Secretary of State for Transport, Chris Grayling, needs to get a grip on his agency. VCA must swiftly take action to bring the polluting cars it allowed on the roads back in line with pollution standards.”

TRANSPORT NEWS AUGUST 2016

Greg Archer, clean vehicles director at T&E, said: “The VCA is acting in the interests of its carmaker clients and not as a robust regulator that ensures diesel cars approved for sale are legally clean. The new Secretary of State for Transport, Chris Grayling, needs to get a grip on his agency. VCA must swiftly take action to bring the polluting cars it allowed on the roads back in line with pollution standards.”

The Dirty 30 cars approved in the UK include the Ford Focus, Honda CR-V, Jaguar XE, Land Rover Evoke, Nissan Qashqai and Toyota Avensis. All of these carmakers have major manufacturing plants in the UK. A freedom of information request from Greenpeace confirmed that in the last decade the VCA had earned £80 million (€96m) in fees from carmakers.

A recent study by T&E highlights that the VW issues are the tip of the iceberg and most carmakers are switching down and off diesel exhaust treatment systems when the car is in normal use. Carmakers claim this is to protect the engine but some turn down the pollution controls at temperatures below 17°C, when the car is heavily loaded or when it is being driven on motorways. Of the 'Dirty 30' diesel models that were among the most polluting sold in

Web Address: www.transportenvironment.org

Roads

www.transportnews-intl.com

58

TRANSPORT NEWS AUGUST 2016

Roads

Every Little Helps: What the Fleet Industry Can Learn from F1’s Marginal Gains Philosophy F1 is at the pinnacle of motoring - an elite competition that requires cutting-edge innovation in engineering and tech to propel cars round a track at incredible speeds. The sponsors are the planet’s biggest brands, and the drivers are celebs, out-earning most of the world’s other high-profile sportsmen and women.

F1’s commitment to innovation is so great that it probably comes as no surprise that other industries can learn a thing or two from the way it operates – particularly how teams use connectivity and data to get a competitive edge. One example is McLaren, which has been sharing its data systems expertise with ConocoPhillips for use on oil rigs. But a bit closer to home, how can companies that have vehicles and people in the field learn from how F1 teams embrace connectivity and data?

Reams of deep data Every F1 race car now has more than 100 sensors across the vehicle collecting reams of deep data. Installed along a car’s chassis, tyres and throughout the engine, they measure the likes of stress and downward force, brake temperature, tyre pressure, fuel use and monitor how the car is cornering. Sensors on the suspension measure the car’s speed and how force affects the vehicle.

This data, as well as similar information on the competing teams is shared with the driver and up to 60 engineers and sports scientists.

Indeed, in a typical F1 team, data is also shared with 100 remote engineers across the globe.

Infiniti Red Bull says it takes under 300 milliseconds for data from the farthest track in Australia to reach Infiniti Red Bull’s UK team.

How is this data interpreted and actioned?

Real-time simulations run possible outcomes of the race. Every piece of information gleaned is analysed and changes are made live and in retrospect to increase the likes of fuel and aerodynamic efficiency. Data is also used to measure impact forces and can give doctors insight into potential damage a driver may have suffered as the result of a crash.

Continuous optimisation This continuous optimisation of F1 teams and their drivers comes from connected intelligence - information pulled from big, deep data. There is a laser focus on the need to be able to analyse and get better and better. It is learning through data. But you do not have to be a F1 team to benefit from these ideas.

Fleets learning from F1 While mobile companies are not focused on driving round a track at 220 mph, they do need to optimise routing, driver behaviour

and manage assets within their business to get the competitive edge in their marketplace.

This means using tech in the form of Mobile Enterprise Management (MEM) software platforms and vehicle-wide sensors to get feedback on driver and vehicle behaviour.

What behaviour can be fed back upon?

Driver behaviour can be the likes of harsh braking, acceleration or seat belt use. Vehicle information can be aerodynamics, weight of load, idling, delivery schedules or nuanced information like refrigeration temperature or crane extension.

Having visibility on, and then taking action against this data can change a business.

Managers that can see which of their drivers are accelerating too harshly or speeding, can communicate live or in hindsight to drivers to address the issue. Managers that are alerted to inefficient idling or delivery routes can then mitigate against it.

The impact this has on the fuel consumption, efficiency and safety of a vehicle – and the staff who operate them – is significant. Rolled out across a fleet, the effect on the bottom line of a business is vast. And these savings can be invested elsewhere in the organisation.

Gamification Tech can also be used to harness another aspect of F1 – driver competition. Modern mobile apps allow gamification to be applied to fleets. This means drivers can compete against others in their team or even nationwide on safety and efficiency measures such as speed limit adherence, braking and acceleration.

Through tech and data, the competitive instinct of drivers can be harnessed to drive down fuel costs and improve safety.

Ultimately…

There are clearly significant differences between F1 and mobile enterprise management.

But managers that are able to learn from the use of tech and harness the competitive spirit fostered within the sport will make great strides in their marketplace through significant bottom line savings.

Sergio Barata, General Manager EMEA, Telogis (website: www.telogis.co.uk). www.transportnews-intl.com

60

TRANSPORT NEWS AUGUST 2016

Shipping

Owner Managed UK Shipping and Transport Businesses Confident of 2016 Improvement A survey by leading accountant Moore Stephens has revealed that over three-quarters of owner-managed businesses (OMBs) in the UK operating in the shipping and transport sector are confident about their prospects for 2016.

The survey revealed that, despite facing a number of major challenges and risks, shipping and transport (S&T) OMBs were particularly focused this year on training staff, expanding their UK customer base, investing in new technology and pursuing cost-reduction initiatives.

The survey analysed responses from UK-based OMBs, and revealed that 78% of S&T OMBs were confident about the general outlook for 2016, with 71% expecting to hit their revenue targets for the year. These figures corresponded broadly to the responses from OMBs across all sectors, but expectation levels on the part of S&T OMBs dropped slightly in relation to hitting profit targets, with 60% expressing confidence compared to 68% of OMBs across all sectors.

71% of shipping & transport OMBs expected 2016 to be better than 2015, with 21% of these expecting a “much better year." The optimism of S&T OMBs in this regard was based on a number of factors, including organic growth, strategic acquisitions, continuing growth in UK and international markets, prospects of recovery among US clients, significant cost-savings, and hopes for improved shipping and freight rates. Lower charter rates and oil prices, however, were among the significant factors cited by the 14% of S&T OMBs who expected 2016 to be worse than 2015.

In terms of the top five risks deemed to be of concern to their business in 2016, many S&T OMBs identified strongly with the international nature of their business, with the strength of the global economy as the sector’s biggest risk, and international competition ranked equal second, together with employee skills shortages.

“In shipping, transport and logistics, generally the international market place is a lot more important than the domestic market place,” said Moore Stephens shipping partner Richard Greiner. “In shipping, it’s the whole market that impacts the wellbeing of the business.”

Philip Bird, Moore Stephens transport partner, agreed, noting, “Most logistics businesses, even if just operating in the UK, are dependent on the global economy and how well it does.”

S&T OMBs were far more likely than OMBs overall to identify regulation as a key risk, while over a third of S&T OMBs saw the availability of external finance as a key risk.

Staff training topped the list of the three main strategies planned for 2016 by S&T OMBs, with 82% saying they were likely or certain to undertake this during the year. Expanding the UK customer base (79%) and investment in new technology or IT systems (72%) came second and third respectively. Almost two-thirds of S&T OMBs planned to seek cost reductions.

Among S&T OMBs, 43% of respondents said they were likely or certain to undertake some form of merger and acquisition activity in 2016 and were also much more likely to downsize in 2016. “This is about reducing your top line, but improving your bottom line by pulling out of unprofitable activities,” says Richard Greiner. “In the shipping space, there are depressed areas of the market where operationally people are losing money. They cannot support that indefinitely.”

Meanwhile, 61% of S&T OMBs, surveyed before the Brexit result, did not think Britain should leave the EU – a result closely aligned with the views of OMBs generally. OMBs wanting to stay in the EU said there was “too much uncertainty as to the other options” and that a Brexit would “cause massive reductions in business opportunities at least for the first few years.” S&T OMBs were less likely than OMBs generally to think that leaving the EU would have a negative impact on their business – 29%, compared to 46% of OMBs surveyed overall – while 61% of S&T OMBs thought a Brexit would have no impact at all on their business, compared to 49% of OMBs overall.

Richard Greiner concluded: “Levels of confidence on the part of shipping and transport businesses may have dropped slightly since the survey closed in late 2015, but the findings still underline the resilience of those competing in the UK S&T sector.”

Web Address: www.moorestephens.co.uk

www.transportnews-intl.com

62

European Commission Report Recommends the Introduction of a Ship Recycling License The report written by Ecorys, classification society DNV-GL and the Erasmus University School of Law and published recently, looks into the possibility of introducing a financial incentive to enhance safe and environmentally sound ship recycling [1].

Ship recycling license fees would be earmarked to cover the cost-gap between substandard and sustainable end-of-life ship management. The capital amount accumulated during the operational life of the vessel would be set aside for the ship and only paid back to the last owner of the vessel as a premium if the ship is recycled in a sustainable facility approved by the EU. “We call on the European Commission to follow-up this report with a legislative proposal.

The effective implementation of European environmental policies has been dependent on making the 'polluter pay'. If the EU is serious about its commitment to sustainable ship recycling, all ship owners trading in Europe need to be held financially liable,” says Stephane Arditi, Products & Waste Policy Manager of the European Environmental Bureau.

The 2013 EU Ship Recycling Regulation requires all vessels sailing under an EU flag to use an approved ship recycling facility [2].

A major shortcoming of the Regulation, however, is that shipowners can circumvent the law by simply flagging out to a non-EU flag. At end-of-life, cash-buyers act as intermediaries and sell the vessels to substandard yards in South Asia often using flags of convenience which are grey- or black-listed by European governments under the Paris Memorandum of Understanding.

Last year, Bangladesh, where human rights abuses and pollution caused by shipbreaking activities are known to be the worst, was the preferred destination for end-of-life ships. EU owners account for around one third of the end-of-life tonnage beached in substandard yards in Bangladesh, India and Pakistan. Thus, the EU is the single largest market sending end-of-life ships for dirty and dangerous shipbreaking and has a particular responsibility to regulate ship recycling [3]. “EU shipping companies should not circumvent EU environmental laws and not utilise practices that would never be allowed in Europe. EU flag-neutral measures which apply equally to all ships calling at EU ports are necessary to increase environmental protection” says

TRANSPORT NEWS AUGUST 2016

Sotiris Raptis, shipping and aviation officer at Transport and Environment.

European ports are not opposing the ‘ship recycling license’ [4] and SeaEurope, Europe's ship yard and maritime equipment association, has expressed enthusiasm towards ensuring better implementation of the Ship Recycling Regulation - last month they called for support to enhance ship recycling capacity and R&D towards more cost effective solutions in Europe [5].

“The upcoming EU list of approved ship recycling facilities will function as an important market differentiator for yards that have already invested in proper occupational health & safety and environmental standards.

The use of the EU listed facilities will however depend on the introduction of an effective financial incentive that forces irresponsible shipowners towards better practices” says Ingvild Jenssen, Policy Director at the NGO Shipbreaking Platform.

[1] Article 29 of the EU Ship Recycling Regulation asks the European Commission to submit a report on the feasibility of a financial instrument that would facilitate safe and sound ship recycling, and to accompany this report by a legislative proposal if deemed appropriate. For Regulation text see http://ec.europa. eu/environment/waste/ships/ For the report on a possible financial incentive see: http:// ec.europa.eu/environment/waste/ships/pdf/ financial_instrument_ship_recycling.pdf.

[2] A list of approved ship recycling facilities globally will be published by the end of 2016.

[3] Approximately 40% of the world fleet is controlled by owners based in the EU+EFTA, only 17% of the world fleet, however, sails under an EU+EFTA flag. The vast majority of EU-owned ships are sailing under the flags of states such as Panama, Liberia and the Marshall Islands during operational life. The percentage of EU flags drops to less than 8% at end-of-life.

[4] An earlier proposal for a 'ship recycling fund' was narrowly rejected by the European

Shipping

Parliament in 2013 with industry stakeholders, including the shipping industry and ports, strongly opposing the fund at the time. Whilst ship owners remain unwilling to bear the cost of sustainable recycling, both the public and private European port associations – ESPO and Feport – have now expressed that they are satisfied with the new license proposal. The license scheme will not be administered by the ports. It is also time-based, with the option of a monthly or yearly license, rather than based on the collection of a fee at each individual port call.

[5] See press release from 11 May 2016: http:// www.seaeurope.eu/template.asp?f=pressreleases.asp.

For more information see our “What a difference a flag makes” report on why ship owners need to be held accountable for sustainable ship recycling beyond flag state jurisdiction: http://www. shipbreakingplatform.org/ngo-platform-whata-difference-a-flag-makes-why-ship-owners-responsibility-to-ensure-sustainable-ship-recyclingneeds-to-go-beyond-flag-state-jurisdiction/

www.transportnews-intl.com

64

TRANSPORT NEWS AUGUST 2016

Shipping

UK Chamber: Brexit - What next?

In a continuation of its work following the decision to leave the European Union, the UK Chamber of Shipping this week hosted a seminar entitled “Brexit: What Next?” with a line-up of senior commentators and industry experts to discuss the potential impacts, and opportunities for the UK maritime sector ahead of the negotiations to leave the EU.

UK Chamber CEO, Guy Platten commented: “Brexit, for all the concerns and worries, provides us with an unprecedented opportunity for the UK maritime industries to set out its needs and ambitions. Government’s minds will never be more open; they will never be more willing to listen than in the next few months.

“Since the vote the chamber has been working to analyse what risks and opportunities may lay ahead, and will be working with our members and stakeholders to produce and ambitious manifesto to present to the new government.

"A renewed focus on long-term industrial and trade strategies present a once-in-a-generation opportunity to shape an ambitious agenda for growth across the UK maritime industries – and it is one which the UK Chamber intends to seize.

Reflecting on the discussions, Mr Platten concluded; “Although the process of leaving the EU will be a difficult one and many hurdles both from a political and legislative perspective may lay ahead Overall, the impression was one of cautious optimism.

“The resounding message echoed that of the chamber in recent weeks - that the shipping industry will continue, as it always been, to be the engine of British trade – and will proactively play its role in seizing the many opportunities presented by Brexit and driving an ambitious agenda for growth."

During the event, attendees heard from leading experts offering political, trade, economic and legal perspectives on the potential next steps as the process of leaving the European Union begins, alongside an informative and interactive panel discussion which examined some of the key priorities for the industry as we move ahead.

Tom McTague, Chief UK Political Correspondent at Politico, and formerly Political editor at the Independent on Sunday, offered fascinating insight into the political ramifications since the 23rd June. Tom outlined just some of the challenges that the new Prime Minister may face in galvanising and reunifying the Conservative Party, whilst simultaneously walking a tightrope in developing a workable strategy for Brexit that will meet the high and divergent expectations of all factions.

Commenting on her European counterparts reactions to the vote, Tom also stressed that this domestic strife may prove a cakewalk in comparison to commencing discussions with European leaders angered by the vote and desperate to make an example of the UK in negotiations to prevent any further dissent within the Union.

From a trade perspective, Allie Renison of the Institute of Directors, set out just some of the possible approaches to trade deals in the negotiations to come, commenting that from a business perspective an EEA model – covering the movement of persons, goods, services and capital – would be a favourable outcome. She added however that again such a deal would be hard-won in light of internal pressures and the pervasive attitude in Brussels of “self-preservation”. Economically, current analysis, outlined by Dr Swati Dhingra of LSE predicts a negative impact upon GDP of Brexit based upon negative market sentiments and the administrative burdens that may arise from leaving the EU. Toby Stephens, a Partner at law firm Holman Fenwick Willan, rounded up the speakers, offering insights into the legal implications for companies and for the shipping industry.

He stressed that until we officially leave the EU, from a legal and compliance perspective little will change for companies, and outlined possible opportunities for the sector, such as potential freedom from EU State Aid guidelines, which may allow the UK cluster to become more competitive with other centres such as Singapore and Hong Kong.

Finally, the evening was rounded off with an interactive panel discussion comprising of CEO Guy Platten, Alistair Eagle, CEO of Seatruck Ferries, Richard Greiner of Moore Stephens and Toby Stephens from HFW. The discussions affirmed the industry position that free-trade and free movement of labour be crucial to any exit deal, in order for the industry, and the economy as a whole, to retain unfettered access skilled workers’ businesses need, regardless of where they are from.

Web Address: www.ukchamberofshipping.com

www.transportnews-intl.com

66

Rise in Maritime Traffic Driving the Global Maritime Information Market Through 2020 According to a market study released by Technavio on 12th July, the global maritime information market is expected to grow at a CAGR of more than 9% during the forecast period.

The research report titled ‘Global Maritime Information Market 2016-2020’ provides an in-depth analysis of the market in terms of revenue and emerging market trends. This market research report also includes an up to date analysis and forecasts for various market segments and all geographical regions.

The report categorises the global maritime information market into four major application segments. They are: • Automatic Identification System • Vessel tracking (except AIS) • Maritime information provision • Maritime information analytics • Automatic Identification System (AIS) The global maritime information market by AIS is expected to reach USD 98 million by 2020, growing at a CAGR of over 17%. The availability of archived AIS data for various research-oriented projects is enabling the companies operating in this market to establish optimised AIS networks and monitor the environmental risks of maritime traffic, including the historical trends of shipping.

The increasing launch of constellation satellites by companies such as Iridium and Inmarsat is enabling effective satellite communications technology, which is one of the reasons for the increasing growth rate of the satellite automatic identification system (S-AIS) market. “With the support of efficient data processing centres, these companies could bring out insightful AIS information to increase maritime situational awareness,” says Rakesh Kumar Panda, a lead analyst at Technavio for M2M and connected devices research.

Approximately 70% of the S-AIS market revenue is obtained from subscription-based services. Other growth factors include the increasing maritime trade through vessels with respect to the export of oil and other energy-related resources from Gulf nations.

Overall, the market is expected to grow rapidly during the forecast period with advances in AIS equipment and related technologies.

TRANSPORT NEWS AUGUST 2016

Vessel tracking (except AIS) The global maritime information market by vessel tracking (except AIS) is expected to reach USD 257 million by 2020, growing at a CAGR of close to 11%. Vessel tracking includes LRIT, VMS, radars, and earth observation imagery that work as part of a vessel tracking systems (VTS). It is used by coast or port authorities for managing maritime traffic.

The segment revenue is expected to grow considerably over the forecast period due to the service capability expansion, which will leverage the real-time abilities of the second-generation constellation. The segment is likely to include applications in VTS. For improved data services, companies are focusing on developing a broad range of alerting products and utilities to be accessed by customers via direct data feeds or SaaS platforms.

Maritime information provision The global maritime information market by maritime information provision is expected to reach USD 440 million by 2020. The maritime information provision segment includes various activities to collect and analyse data for maritime operations, logistics, port and terminal management, maritime trade, risk management, commercial shipping and port stakeholders, and fleet capacity analysis and forecasts.

This segment serves customers from offshore oil and gas companies, defence agencies, and coast guards. The service providers in this segment have their own set of procedures to gather data. There are some key methods of data collection such as the use of networked sensors and satellite-based remote sensing.

The segment revenue is expected to grow significantly in 2016-2018 with the increase in demand for drones. Drones would help improve the accuracy of information. Processing with regard to drones, sensors, and buoys is done using a few patented technologies to deliver high-quality information.

Maritime information analytic The global maritime information market by maritime information analytics is expected to reach USD 615 million by 2020, growing at a

Shipping

CAGR of close to 11%. The maritime information analytics segment comprises of aerospace and defence firms, data analysis software and solutions providers, and geographic information system providers. The information used to produce analytics products is collected via different technologies such as radar, AIS, in-field sensors, and satellite-based earth observation. The applications in this market include vessel monitoring and reporting on illegal activities.

The segment revenue is likely to grow significantly during the forecast period due to the increasing number of vessels. The rate of gathering maritime information will increase, which would contribute to maritime information analytics. “There will also be an expansion of service offerings from raw information provision to value-added information services (such as IaaS and DaaS delivery). These services are created with flexible standards-based delivery methods that ensure ease of implementation and quick deployment to expand and retain the customer base,� says Rakesh.

Web Address: www.technavio.com

www.transportnews-intl.com

68

Mergers: Commission Clears Acquisition of an Automotive Component Business of Faurecia by Plastic Omnium The Commission has cleared under the EU Merger Regulation the proposed acquisition of the automotive plastic exterior component business of Faurecia by Compagnie Plastic Omnium, both of France.

The clearance is conditional upon divestment of some production facilities in France, Spain and Germany.

Commissioner Margrethe Vestager, in charge of competition policy, said: "Plastic Omnium offered to divest key production facilities to address our concerns. This ensures that car manufacturers in Europe will continue to have a choice of suppliers for automotive parts, such as bumpers, at competitive prices after the takeover".

Both Plastic Omnium and the Faurecia business that it is acquiring manufacture plastic exterior components for the automotive sector such as bumpers and hatchbacks /tailgates.

The Commission had concerns that the transaction, as originally notified, would have led to price rises for plastic bumpers and other car components. The commitments offered by the companies address these concerns.

The commitments To address the Commission's competition concerns, Plastic Omnium submitted the following commitments: • Plastic Omnium offered to divest five Faurecia plants mostly dedicated to the production of plastic bumpers (four in France, one in Spain). The acquisition and operation of these facilities by a third party will fully replace the competitive constraint with regard to the supply of plastic bumpers in these regions that would otherwise have been lost through the transaction. These commitments will also eliminate the possible adverse effects that the transaction would have brought about for the production and supply of front-end carriers and plastic hatchbacks

"Plastic Omnium offered to divest key production facilities to address our concerns. This ensures that car manufacturers in Europe will continue to have a choice of suppliers for automotive parts, such as bumpers, at competitive prices after the takeover".

The Commission's investigation The Commission had concerns that the merged entity would not have faced sufficient competitive pressure from the remaining players in the market for the production and supply of plastic bumpers in the North, East, and West of France, Belgium and Spain. In these areas, car manufacturers would have been left with no or very limited alternative suppliers after the takeover.

For the same reasons, the investigation also raised competition concerns on the market for the production and supply of so-called frontend carriers (the structural component behind the bumper), plastic hatchbacks/tailgates and for the assembly of so-called front-end modules (complete front assemblies often including the front-end carrier, crash beam, bumper, grilles, etc.) at European Economic Area level.

TRANSPORT NEWS AUGUST 2016

•

and tailgates, as they fully remove the market share increment resulting from the merger.

Plastic Omnium also committed to divest two Faurecia plants dedicated to the assembly of front-end modules in Germany, including the research and development (R&D) centre connected to these plants.

The acquisition of these facilities ensures that a third party will replace the competitive constraint that would otherwise have been lost through the transaction.

These commitments address all competition concerns identified by the Commission. The Commission’s decision to approve the transaction is conditional upon full implementation of the commitments. The transaction was notified to the Commission on 23 May 2016.

Web Address: http://ec.europa.eu/

Deals

AE Industrial Partners Acquires Moeller Aerospace AE Industrial Partners, LLC (“AEI”), a private investor in aerospace, power generation and specialty industrial companies, announced that it has acquired Moeller Mfg. Company, LLC (“Moeller Aerospace”). The terms of the transaction, which closed on 12th July, were not disclosed.

Founded in 1953, and based in Wixom, MI, Moeller Aerospace specialises in the precision machining of complex hot- and cold-section turbine hardware across all major aerospace engine programs, with high proficiency in the machining of titanium-aluminide, low-pressure turbine blades and the manufacture of their proprietary Click-LocTM and FlexThreadTM products. With more than 500 employees, three manufacturing facilities and more than 60 years of industry experience, Moeller Aerospace is strategically positioned at the forefront of the supply chain to deliver the future growth of the aviation and power generation turbine engine industries “AEI has an extensive, successful track record in our key target markets of aerospace, power generation and specialty manufacturing,” said Kevin Atkinson, President of Moeller Aerospace. “There’s no doubt that with the infusion of AEI’s expertise, connections and capital, our company will have significant new business potential to develop and realise.”

“Moeller Aerospace is virtually unique in its products, technology, and reputation,” said Michael Greene, Managing Partner of AEI. “The company is a proven innovator in developing new products and processes that support the development and production of turbine engines for their key OEM customers, and has the potential to expand this expertise across its target markets.”

Kirkland & Ellis LLP served as legal advisor and PricewaterhouseCoopers LLP as financial advisor to AE Industrial Partners. Honigman Miller Schwartz and Cohn LLP served as legal advisor and P&M Corporate Finance, LLC served as financial advisor to Moeller Aerospace.

Moeller Aerospace represents the fourth platform acquisition for AE Industrial Partners Fund I. In the last year, AEI’s three other platform acquisitions include: Belcan, LLC, a global supplier of engineering project management and technical staffing solutions; Kellstrom Materials, which provides parts support and supply chain management for leading airlines and air transport operators worldwide; and AC&A LLC, which provides high quality composite parts and tooling to the aerospace and defence, space, and specialty automotive markets.

For more information, please visit www.moeller-aerospace.com and www.aeroequity.com

Jet Environmental and Jet AHU Acquired by Wozair Ltd Jet Environmental Systems Ltd, the provider of temperature control solutions for industrial and commercial buildings, and its sister company Jet AHU Ltd, which supplies and installs air handling units, was recently acquired by Wozair Ltd. Wozair Ltd has purchased 100 per cent of Jet Environmental Systems Ltd and Jet AHU Ltd shares.

Wozair Ltd is a privately owned international HVAC equipment manufacturer with a turnover of £39m in 2015. Headquartered in the UK with operations in Europe, Singapore, Dubai, Korea, USA and Australia, it provides specialist solutions in a diverse range of industrial sectors.

In a letter to clients and suppliers, Jason Hibbs, managing director at Jet Environmental, said: “The purchase is very positive and a major milestone in the development of the Jet businesses, ensuring a solid platform for geographic expansion and product development.”

Hibbs also confirmed that he and Jet Environmental’s senior management team will remain in place. “Jet’s success in providing the best air induction HVAC systems is down to its people and I am pleased that the same team that has supported the business for many years are looking forward to the next phase in our company’s history.”

Established in 1981, Jet Environmental works with the UK’s leading consultants, contractors and end users to provide energy efficient climate control solutions for large volume buildings. The company works across diverse sectors including pharmaceutical, confectionery, vehicle manufacturing and heavy industry. Clients include the NHS, Boots, AstraZeneca, GlaxoSmithKline, Sainsbury’s, Tesco, Waitrose, ASDA, Rolls Royce, L’Oreal, Debenhams, Argos and B&Q. Jet Environmental has installations in buildings up to 40m high and 1,500,000sq m in volume. Examples include logistics warehouses, mezzanine areas, retail park stores, leisure and exhibition centres, production and maintenance facilities and mail service centres.

For more information, visit: www.jetenvironmental.com and www.wozair.com

www.transportnews-intl.com

70

Grimshaw Chosen to take Heathrow into the Future Grimshaw have been chosen as the concept designers to bring Heathrow’s vision for expansion to life. It sends the clear signal to the Government that Heathrow is a ready-to-go, privately financed infrastructure project. The globally renowned architectural practice, which was founded in the UK by Sir Nicholas Grimshaw, was selected after a rigorous assessment from a shortlist of four of the UK’s top architects which also included Zaha Hadid, HOK and Benoy.

This follows on from the announcement of Arup, CH2M, MACE and Turner & Townsend as Programme Client Partners in March. They have been tasked with ensuring the programme is delivered to the highest industry standards in planning, innovation and Striking new images of the concept designs were revealed alongside a fly-through animation of a proposed new design for the Central Terminal Area, also by Grimshaw.

Grimshaw were successful in the competitive tender process not only for their visionary concept designs, which pushed the boundary of what an airport could and should be, but also for their unique ideas around how Heathrow could be expanded in a sustainable but affordable way. Grimshaw brings their experience of working on major transport projects across the world and were recognised as the stand out practice to help Heathrow deliver a world-class sustainable airport that will deliver innovation in passenger service whilst showcasing the best of British design.

future by expanding Heathrow. The £16 billion privately funded infrastructure investment would be a much needed boost for the economy, creating jobs and growth across the UK. Partner at Grimshaw, Jolyon Brewis, said: “We are passionate about designing a new future for Heathrow Airport; setting a benchmark for sustainable infrastructure, skilfully integrated with the communities it serves. Heathrow have ambitious plans for the expansion of the airport and we are proud to be selected to help deliver this inspirational vision.”

Partner at Grimshaw, Andrew Thomas, said: “We believe the expansion of Heathrow is vital to maintaining the UK’s place within the global economy and we look forward to developing a design that provides an authentic and uniquely British sense of place. Our concept will deliver an outstanding passenger experience by building upon the airport’s rich history, while also setting a new standard for the future of aviation.”

" We are passionate about designing a new future for Heathrow Airport; setting a benchmark for sustainable infrastructure, skilfully integrated with the communities it serves. Heathrow have ambitious plans for the expansion of the airport and we are proud to be selected to help deliver this inspirational vision.”

Head of Design at Heathrow, Barry Weekes, said: “We look forward to working with Grimshaw to develop their bold ideas so that once the Government approves the Heathrow expansion, we can create a world-class sustainable hub airport which delivers for our passengers, our airlines and also helps to integrate Heathrow with our local communities.

With the Concept Architect and Programme Client Partners now in place, we are now ready to begin the process of expansion once the Government makes the right choice for the whole of Britain.”

At a time of uncertainty following the result of the EU referendum, the Government can send the strongest possible signal that Britain is open for business and confident in its TRANSPORT NEWS AUGUST 2016

Web Address: www.heathrow.com

Deals

Navidar® Advises ShippingEasy in Its Sale to Triton Container International Limited and TAL International Group, Stamps.com® Inc. Complete Combination to Form Navidar® announced that their Triton International Limited client, ShippingEasy (the “ComTriton Container International Limited (“Triton”) and TAL International Group, Inc. (NYSE: TAL) (“TAL”) announced on 12th July that they have completed their combination to form Triton International Limited (NYSE: TRTN) (“TIL”).

TIL is the world’s largest, most capable and most efficient lessor of intermodal freight containers. With a combined container fleet of nearly five million twenty-foot equivalent units (TEU), revenue earning assets of $8.7 billion and an estimated global market share of 25%, TIL serves virtually every major shipping line in the world. The newly formed company expects to achieve $40 million in annual cost synergies.

Following the approval of the transaction at a special meeting of TAL stockholders and the closing of the transaction, shares of TAL common stock will cease trading on the New York Stock Exchange prior to the opening of the market tomorrow. Triton International Limited will begin trading tomorrow, July 13, 2016, on the New York Stock Exchange.

In accordance with the terms of the transaction agreement, Triton shareholders own approximately 55% of the equity of the combined company and TAL stockholders own approximately 45%. TAL stockholders became entitled to receive one common share of TIL for each share of TAL stock owned upon the closing of the merger.

Brian Sondey, Chairman and Chief Executive Officer, TIL, stated, “We are pleased to close this transformational transaction and look forward to capitalising on the significant operating and financial benefits of the combination to provide an unmatched level of service to our customers and create long-term value for our shareholders.”

Triton International Limited (“TIL”) (NYSE: TRTN) was created by the merger of Triton Container International Limited and TAL International Group, Inc. TIL is the world’s largest lessor of intermodal freight containers and chassis. With a container fleet of nearly five million twenty-foot equivalent units (TEU), TIL’s global operations include acquisition, leasing, re-leasing and subsequent sale of multiple types of intermodal containers and chassis.

pany”), has been acquired by Stamps.com® (Nasdaq: STMP), the leading provider of postage online and shipping software solutions to approximately 650,000 customers. Stamps. com purchased ShippingEasy for approximately $55 million in cash plus performance based inducement equity awards of up to 87,134 common shares and inducement stock option grants for an aggregate of 62,000 shares of Stamps.com common stock.

ShippingEasy, headquartered in Austin, TX, is a leading web-based shipping software solution that allows online retailers and e-commerce merchants to organise, process, fulfil and ship their orders quickly and easily. ShippingEasy integrates with leading marketplaces, shopping carts, and e-commerce platforms to allow order fulfilment and tracking data to populate in real time across all systems.

“Navidar’s senior attention and active involvement in every phase of the process was instrumental in ensuring a successful outcome for our shareholders. Their creativity, continuous dedication, and customised approach to executing M&A processes is a refreshing and results-oriented approach. Navidar puts its clients’ interest first and clearly has a deep commitment to the Austin technology community,” said Katie May, CEO of ShippingEasy.

“ShippingEasy is yet another successful Austin technology start-up story that furthers our city’s reputation of creating high growth SaaS software companies with technology that is rich in features and differentiation. It has been a pleasure to work with the ShippingEasy team and we are honoured to have advised the Company in this transaction,” said Stephen Day, Co-founder and Managing Director of Navidar.

To learn more about Navidar, please visit www.navidar.com www.transportnews-intl.com

Transp rt News Subscribe to Transport News INTL www.transportnews-intl.com