Energy Barge Final Conference

Development of the DanubeWaterwayIs it prepared for the challenges ahead?

Mag. Otto Schwetz, Port of ViennaVice-President Pro Danube Austria Budapest

23rd May 2019

BRINGING THE DANUBE INTO FLOW

Ecological and economic benefits

Our primary goal:to develop and promote as well as map out the conditions forwaterway transport

The waterway is a key transport channel of the future

The Danube has a competitive edge through its infrastructure

Platform Pro Danube INTERNATIONAL

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Pro Danube AustriaAssociation for enhancing the competitiveness of waterway transport

Pro Danube Austria

promotes the interests of the navigation industry supports and promotes

education and further training initiatives in inland waterway transport

recognizes andanalyses new developments and trends in the navigation industry promotes transboundary

collaborations and contactsas well as supports a strong international information networksupports its members through

qualified and practice-oriented information as well as fosters relationships and the exchange of experience among its members

Mission StatementPro Danube Austria

Strategy Pro Danube Austria

• via donau assists in the monitoring of weak spots and the implementation of related steps in the navigation industry

• Austria becomes "best practice"

DANUBE INFRASTRUCTURE

• Propulsion alternatives

• CO² issue in general

• Standardised use "River Information Services“ RIS

• Project derivation from strategic targets 1 and 2 at EU level

• Education and training of nautical staff

• Tapping of EU funds

• EU standards in case of legal certainty

"More cutting-edge FLEETS"

Platform Pro Danube INTERNATIONAL

1 2 3

Danube boasts highest transport capacity

Source: Statistics Austria, transport statistics, Eurostat

23.1%

26.6%

2.5%

55.6%

14.9 %

1.4 %

Transportcapacity

Transportvolume

Roadhaul

Railhaul

Danube

Transportcapacity Transportvolume

Best Practice at the Port of Vienna Heavy-duty handling at the port of Albern

Area: approx. 4.000 sqm

Loads of up to 450 tonnes may be handled at the heavy-duty centre during regular operations

Cutting-edge equipment -> allows handling of oversize loads

FACT BOXPipe-shaped desulfurisation unit

Length: 24 mWeight: 382 t

High-pressure tank of ACE bound for Russia

loaded onto specialised vessel

Duration: one hour

Another example:Transhipment of concrete segments for wind turbines

FACT BOXHigh-pressure container of ACE bound for Russia

Length: 50 mWidth: 5 mWeight: 190 t

Best Practice at the Port of Vienna Heavy-duty handling

15,651.16

10,097.01

11,771.63

FACT BOX

Best bulk category: scrap metals

Best Practice at the Port of ViennaBulk transshipment of scrap metals to vessels

2017

2016

2015

Scrap metal transhipments (tonnes)

Head office at Lobau

manufacture of lubricants; oils with different viscosity grades are delivered and blended with different types of motor oils

2018: 14 vessels with an aggregate weight of 11,859,007 kg to be unloaded at the Port of Vienna

FACT BOX

Vessels:14Weight ~ 11.9 t

Best Practice at the Port of Vienna Lukoil

Head office at the port of Lobau

Generation of biodiesel

More than 5 tonnes have been handled to date in 2018

FACT BOXPort handling2017:approx. 16,000 t

Best Practice at the Port of Vienna Münzer Bioindustrie

Location: port of Albern

Granary with 13,000 tonnes capacity

FACT BOXCapacity13,000 t

Best Practice at the Port of Vienna Bio-Pinczker

Passenger transportStatistics of WDE (subsidiary of Port of Vienna)

WDE 2014 2015 2016 2017

Cabin vesselmoorings 2,011 2,127 2,232 2,301

Cabin vessels passengers 297,957 319,305 323,287 345,254

Excursion boat / linerMoorings * 4,905 4,678 5,105 5,183

Excursion boats/liners passengers* 301,592 307,889 345,518 349,594

* DDSG BD and TCL figures included

FACT BOXTotal quayside area: 60,000 sqm

Total investments 2015 – 2017:

approx. 8.4 million euros

Investment Initiative Danube Region

Source: Port of Vienna statistics

PassengersCabin vessels

Totalinvestments

2017

2016

2015

345,254

323,287

319,305

1,982,780.90

846,297.73

5,528,108.34

Passenger transport:The Port of Vienna is used as a winter port for Viking Ships

Number of vessels moored at the Port of Vienna

2016

542014 2015

1 162017

95

The sum of external costsincurred by inland vessels is byfar the lowest (average valuesfor selected bulk goodstransports).

Source: Special Report on Inland Waterway Transport 2015, European Court of Auditors / PLANCO Consulting & Bundesanstalt fürGewässerkunde

Benefits of inland waterway transport Iin terms of external costs

2.01 0.80 0.27

Greenhouse gases

Air pollutants

Noise

Accidents

Cent per tonne kilometre

2.5

2.0

1.5

1.0

0.5

0.0

Source: Special Report on Inland Waterway Transport 2015, European Court of Auditors / via donau

Benefits of inland waterway transport IIin terms of transport capacity

7,000net tonnes

1 convoy of 4 pusher barges

175 railway wagons, 40 net tonnes each

280 trucks, 25 net tonnes each

In terms of transport capacity, inland vessels are superior to trucks and railway wagons.

Benefits of inland waterway transport IIIin terms of transport ranges

370 km

300 km

100 km

6 kmA truck is able to carry one tonne of cargo over a distance of 100 km, while a ship consuming the same amount of energy will carry the same load over a distance of 370 km.

Source: IGÖD

Port of Vienna: waterborne transhipments2016 –2018, overall figures (tonnes)

Loading capacity depending on draft

0

2.000

4.000

6.000

8.000

10.000

12.000

2,00 2,30 2,50 2,70

Convoy capacity

2,00 2,30 2,50 2,70Loading capacity / barge ( mts ) 1.000 1.250 1.500 1.750Loading capacity / convoy (mts ) 6.000 7.500 9.000 10.500

Convoy : pusher + 6 barges Europa II type Transport : Constanta - Hungary - Constanta

Draft (m )

Draft 2,00 2,30 2,50 2,70Upstream revenue for freight 13 Euro /mts ( Euro ) 50% 39.000 48.750 58.500 68.250Downstream revenue for freight 17 Euro /mts ( Euro ) 85% 86.700 108.375 130.050 151.725Total revenue ( Euro ) 125.700 157.125 188.550 219.975

Annual average revenues per convoydepending on draft

0

50.000

100.000

150.000

200.000

250.000

2,00 2,30 2,50 2,70

Upstream revenue for freight13 Euro / mts ( Euro ) - 50 %

Downstream revenue forfreight 17 Euro / mts ( Euro ) -85 %

Total revenue ( Euro )

Average total revenue per to.: 20,95€

Fix costs round tripConstanta - HU - Constanta 49.500 49.500 49.500 49.500Variable costs round trip Constanta - HU - Constanta

78.557 83.128 87.699 92.270

General & administration costs 12.806 13.263 13.720 14.177Total costs 140.863 145.891 150.919 155.947Total costs / ton (up + down) 23,48 19,45 16,77 14,85

salaries, maintenance, depreciation a.o.

diesel, port and channel fees a.o.

Draft 2,00 2,30 2,50 2,70

Total costs(€)/ton depending on draft

0,00

5,00

10,00

15,00

20,00

25,00

30,00

2,00 2,30 2,50 2,70

Total costs / tonne ( up + down )

Diesel price : 850€/ to

Draft 2,00 2,30 2,50 2,70

Total revenue ( Euro ) 125.700 157.125 188.550 219.975

Total Costs 140.863 145.891 150.919 155.947

Profit -15.163 11.234 37.631 64.028

Profit % -12,06% 7,15% 19,96% 29,11%

Profit per to -2,53 1,50 4,18 6,10

Profit in Euro (%) depending on draft

-50.000

0

50.000

100.000

150.000

200.000

250.000

2,00 2,30 2,50 2,70

Total revenue ( Euro )

Total Costs

Profit

Conclusions

• There was a high number of days with a fairway depth below 250cm despite favourable water conditions in the investigated period

• This clearly shows significant shortcomings in waterway maintenance on several sections of the Danube

• The failure in waterway maintenance results into direct financial losses for the barge operators or reduce significantly their earnings

• The transport users become deprived of the cost advantages of barge operations, are effected by delays in the supply and consequently have to pay higher transport costs which reduces their own competitiveness

• Without proper maintenance barge operators cannot earn depreciation of modern equipment consequently there is only maintenance investment (hardly any room for innovation except cost advantages of LNG can be exploited)

• Competitive and sustainable Danube transport requires:

PROPER FAIRWAY MAINTENANCE AND GUARANTED MINIMUM FAIRWAY DEPTHS OF AT LEAST 2.5 m which must be ensured IMMEDIATELY

1 = Vilshofen – Straubing2 = Cross border Wien – Bratislava3 = Palkovicovo – Mohacs4 = Bottlenecks in Bulgaria and Romania

12 3

4

Main bottlenecks along the Danube

Stable faiwayconditions in theFlowing sections

Optimised capacityutilisation of barges

Reduced transportCosts (per tonne km)

Stable or increasemodal share of Danube navigation

Reduced pollutant andgreenhouse gas emissions (per tonne-km)

Removing bottlenecks means:

Basis for the strenghtening of Danube navigation is a reliable waterway. The clearance of nautical bottlenecks whilst improving the ecological status in thefree flowing sections is of high priority. The integrative planning of initiatives allows for environment and navigation to profit simultaneously.

And in addition…

… unnecessary administrative barriers for river shipping companies will be removed

Romania: excessive formalities and fees for customs and other authorities causing additional costs and waiting times, e.g. :• Obligation to use T2L document for national cargo transport• Restrictive opening hours of custom offices in several important ports(e.g. Cernavoda)• Tariff scheme of Canal Administration ACN punishes operators when using additional barges

for compensation of low water conditions (charging system per ton capacity instead of cargo tons)

• Unique fees and procedures in Europe imposed by RNA/Harbor masters “services” like: • traffic supervision and control of safety of navigation• to allow ship repairs• for arrival/departure in Romanian ports• for authorization/approval/supervision of vessels bunkering• for annual endorsement of operation permit

Hungary: restrictions concerning the size of the ship convoyBulgaria: problems with custom clearance caused by restrictive opening hours

Slide No. 27

Control procedures vary in terms ofprocess steps, control documents, involved control authorities etc.

Different procedures even in theEU member states

Harmonisation urgently required→ reduced waiting times→ reduced personnel efforts→ reduced costs→ benefit for shipping companies

and border control authorities

Challenges along the Danube corridor

And here is the answer:Concrete steps towards simplification, harmonisation and digitalisationof border controls by Simon Hartl

Slide No. 28

Rationale for a joint working group

SIMPLIFICATION

DIGITALISATION HARMONISATION

Control Authorities

Shipping Sector

Budapest, 23rd May 2019

Thank you for your attention!

Mag. Otto Schwetz, Pro Danube AustriaPort of Vienna