1. Present and future of the container liner shipping on the Danube Dr.-Ing. Saša Jovanović River Port Agency Manager Belgrade Chamber of Commerce March 25, 2010

2. European Sea Gateways North Western European Ports Area - 62% of GDP in Europe Southern European Ports Area - 26% of GDP in Europe Central and Eastern European Area - 12% of GDP in Europe, only 1% of direct sea freight 72% of the European distribution centres located in NW North range ports: Le Havre, Antwerp, Rotterdam, Amsterdam and Hamburg serving the most of Central and SE European countries Adriatic ports growing fast: Koper, Rijeka, Trieste Port of Constantza in the Black Sea emerging from 2001

3. Factors determining the port selection Geographic misbalance of supply and demand of goods Level of purchasing power in the hinterland Level of industrialisation of the hinterland Level of containerisation Transit times on sea routes Efficient hinterland connections Port efficiency Supply chain efficiency: time, cost and risk Number of lines calling the port or port range Emerging markets However, congestion of land connections started causing modal and even geographical shift

4. Central and SE Europe Container Flows Austria (450.000 TEU) - North Sea ports: 70% - Adriatic ports: 30% - Black Sea ports: irrelevant Hungary (250.000 TEU) - North Sea ports: 75% - Adriatic ports: 25% - Black Sea ports: irrelevant Slovakia (100.000 TEU) - North Sea ports: 90% - Adriatic ports: 10% Serbia (30.000 TEU) - North Sea ports: 2% - Adriatic north ports (Koper, Rijeka): 80% - Adriatic south ports (Bar): 13% - Black Sea ports: 5%

5. Emerging of the Port of Constantza Growing transshipment port Emerging markets in the Black Sea Potentials for geographical shift Congestion of the hinterland connections from the North Sea ports range Vast capacity of the inland waterways transport Growing concern for environmental effects of transport Launching of first liner services on the Danube: Constantza – Giurgiu and Constantza - Belgrade

6. Geographical Advantages of the Port of Constantza

7. Container Volumes in the Port of Constantza

8. Inland Port Distances from Constantza

9. Case Study: Belgrade – Constantza Line It is a very well known fact that Serbia is a landlocked country In such position, orientation towards the nearby seaports as hubs is a must Nevertheless, Danube “Sea” offers vast possibilities for strategic transport orientation towards Constantza port hub The Danube “12-lanes highway” offers good possibilities for reaching the maximum benefits – maximum number of TEU at minimal costs KOPER RIJEKA BAR THESSALONICA CONSTANTZA BELGRADE HAMBURG

10. Motivation and first experiences Then came the idea… Jugoagent undertook an analysis of cargo flows in Serbia Results showed that both freight rates and inland haulage routes from/to traditional export-import ports (in the Adriatic, Aegean, Med and North Sea) were fairly stable It seemed that no alternative could be foreseen But… As general agents for ZIM ISS Jugoagent strongly supported a direct Constantza call of ZIM’s Far East liner services from where originate the great share of Serbian import cargoes Danube proved to be the best possible option for inland haulage to/from Serbia Best partner for inland haulage via the Danube found in Bulgarian River Shipping Port of Belgrade offered strong support and exclusive conditions

11. Jugoagent activated a strong marketing campaign Industry was attracted by attractive rates, acceptable transit time and contingency plans in case of nautical hindrances Jugoagent’s clients accepted the challenge Official opening of the eastbound service took place in the Port of Belgrade on May 12, 2005. Port of Belgrade became an important gate for cargoes to/from Mediterranean, USA, Middle and Far East and Australia and for import cargoes from Far East and other world areas The beginning...

12. Inland Haulage Tariffs Comparison (20’)

13. Constantza – Belgrade Statistics 2005 - 2009

14. Looking for a convenient self-propelled vessel, adjusted to nautical conditions on the Danube, capable of carrying reefer containers Expansion N-NW in cooperation with EDDSG in Marco Polo II Expansion downstream and further eastwards, directly connecting via water the region with Black Sea ports of Novorossiysk and Odessa and the huge market of ex Soviet Union where duty free trade agreements with Serbia are in force Great opportunity for Serbian exporters of fruit and vegetables and cargoes requiring refrigeration during transport Monitoring of the shipping situation and cargo flows in the Adriatic, which in great extent influences the transport via the Danube Development and expansion

15. Prospects of container shipping on the Danube Increasing purchasing power for wide consumption goods Increasing level of industrialisation Boosting economy and increase of FDI More than 70% of containerised cargoes arriving to Europe originate from Asia Port of Constantza being in East Europe will eventually become the “eastern gate” Transit time from Far East is 4 to 5 days shorter when compared to North Range ports (Le Havre, ARA, Hamburg) Congestion in North Range ports, road taxes environmental effects

16. Prospects of container shipping on the Danube Romanian investments in hinterland connections (IWT and rail) Better gravity position to serve the main economic centres in CEE However, higher volumes are needed in order to enjoy the benefits of the economies of scale “Two container layers cover the costs, the third one makes the money” Development of inland (river) ports “large multi-modal business & logistics parks” Port privatisations, at least in Serbia, will have to be revised (need for public financing of infrastructure) Initially, large fleets are needed for the smaller volumes

17. Thank you for your attention! Bulevar Mihaila Pupina 165a 11070 Belgrade, Serbia Tel :+381 (11) 20 18 700 Fax :+381 (11) 31 12 070 e-mail :office@jugoagent.net office@jugoagent.net Web :www.jugoagent.net Maritime-River Agency