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Posted: March 26th, 2022

Developing a resilient Mediterranean Sea ferry network for passenger and cargo movement amidst fluctuating demand.

Developing a resilient Mediterranean Sea ferry network for passenger and cargo movement amidst fluctuating demand.
1. Introduction
Transport to Malta is another instance. It is common knowledge among Maltese citizens that there are frequent disruptions of ferry services between Sicily and Malta, with providers often canceling their trips with short notice due to unprofitable demand. Hence, the ideal of a sustainable and uninterrupted cargo and passenger movement in the Mediterranean calls for a comprehensive and networked sea transportation system that can provide direct and indirect services between locations. This will, in turn, require a sustainable system with a steady demand aggregated from several sources and at various locations, as well as a solution that can cater to the demand and yet still be profitable to their providers.
The Mediterranean Sea is a location with an unstable demand due to the various political and socio-economic conditions in the regions surrounding it. Nonetheless, the demand for sea transportation for people and goods in the maritime region will persist. A remarkable example is the international tourist sector in Spain, which requires a continuous supply of goods and products from various other Mediterranean countries. Travel in this region is difficult and time-consuming due to the many different small ports and non-direct routes that are currently available.
1.1 Background
1.1 Background
The Mediterranean Sea is undoubtedly a blessed physical and historical environment which has brought about numerous benefits to all races of men over the centuries. It has facilitated the movement of people, goods and ideas from time immemorial. Until the beginning of the 20th century, the sea was primarily a means of communication serving coastal communities and a vehicle for movement between countries fringing its shores. The idea of a Mediterranean ferry service was first mooted in the beginning of the 20th century, with its primary aim to forging closer links between Mediterranean countries to facilitate whatever new forms of movement were then emerging, and thus contribute to greater mutual understanding and unity. This was to be achieved through the promotion of transport development at specially reduced rates for rolling cargo and accompanied trailers. This first era of purposeful European ferry development lasted some 25 years, the transport itself had variable levels of success, but on the whole the service did develop some significant links between the countries of the Mediterranean even if these have been forgotten in the mists of time. The primary driver of these services was initially the CGTM organise a motorway of the sea between France Italy and Greece with a service known as Meyrepell ‘motorways of the Aegean’. These services carried the specific aim of modernising the countries concern and were funded by government agreement. An EVR cargo train ferry waggoner service was also set up to bring tourists to Greece from Germany and Switzerland. The success criteria for this endeavour and extent of services provided was never thoroughly documented. During the second half of the 20th century the general movement of people into and resident within Mediterranean countries increased dramatically. Initial international migration between primarily Western European nations was boosted by the economic success of France and Southern Italy and the tourist trades of countries such as Greece and Spain who soon became destination countries for the retired and elderly from countries who had they themselves maintained various colonial ties to the Mediterranean. This migration was further boosted by the oil crises that made employment in oil rich Middle Eastern. During the 60’s and 70’s a great deal of unification effort between European nations and movement of civil service jobs particularly those concerned with Agriculture was facilitated by the European commission and acts of Interregional Development several of the aforementioned train waggoner services were funded by the EC.
The other decree of 1985 on a quality general aimed to initiate a general raising of living and working conditions throughout the EU, some Mediterranean countries were able to make improvements to their infrastructure using funds from the structural adjustment to harmonise transport rates. In 1986 a lorry accompanied combined transport service was initiated with primarily Italian drivers. This era of services brought about significant linkages between certain countries concerned the Italy Spain link saw other take various guises on roll on Low built with mixed success until the present day. Phase current effort of Structural Adjustment with development of cohesion countries is often sighted as a cause for increasing competition between countries to the detriment of the more established transport links, and as has been seen in other regions the sea is becoming eclipsed by abundant road links. This has led the current situation where there is an abundance of different services many of which are specific to certain countries or irrelevant of their aims methods and success criteria. The past and present aims and criteria of these services is an aspect the tales real understanding of the needs of transport move today.
1.2 Problem Statement
FLARE project however, is not focusing on the tourism aspect but rather on the freight industry. This is due to the fact that commercial vehicles carrying freight generate more revenue for ferry operators as opposed to tourist vehicles. This is because of the much publicized ‘Cruise and Carry’ concept which while it may be beneficial to the tourist industry for that particular country, has caused a high level of deindustrialization in the countries which the ferries originate from and cease to generate any significant revenue for ferry operators. FLARE project aims to secure a sustainable future for those Mediterranean countries which are reliant on the revenue generated by the freight industry.
Seaborne transportation has played a vital role throughout history for its technological and socio-economic development. During the last decades, there was significant growth and increasing competition in this sector and the Mediterranean Sea is not an exception. Ferries today are technologically advanced and there is an increasing demand to use the Mediterranean Sea as their route due to its geographical location and climatic conditions. Approximately 400 ferry operators use this route and these figures indicate the high level of competition amongst the operators. This competition is further intensified due to the fact that ferries are highly dependent on the state of the tourism industry and the current global economic crisis has put pressure that is seen as ‘make or break’ for many ferry operators.
1.3 Research Objectives
This work sets out to identify key challenges, opportunities, routes, and stakeholders for the movement of people and goods in the Mediterranean Sea. Our objectives are to:
– Develop a research network between academics, policymakers, and industry that will ultimately improve the maritime economy.
– Analyze the implications of recently proposed measures for the shipping industries and their ability to lower freight costs and improve access to new markets in North Africa and the eastern Mediterranean.
– Evaluate the propensity for the sea to act as a domestic highway for coastal states and for inter-island movement, as a result of the increase in competition from alternative transport modes.
– Assess the wider economic and social implications of changes to passenger and freight routes, specifically which regions will benefit and which will lose out as a result of the changes to linkspan location and the introduction of faster vessels.
– Develop an understanding of the precise maritime transport needs for specific regional and sectoral communities, matching what the market can provide in cost-effective transport with what the potential demand is.
– Assess transition dynamics, assessing how long it will take for the changes to ‘bed in’ and what kind of hysteresis effects can be expected from changes to transport infrastructure on the nearby economic activities.
– Evaluate the degree of resilience that the new and existing network will have to a range of global and regional environmental, market, and security shocks and to provide policy recommendations on this basis.
2. Literature Review
Briefly, the geography of the Mediterranean Sea is outlined as it plays an important background role in the origin of the passenger and cargo ferries. This is followed by the history and characteristics of the ferry industry and its importance for the social and economic development of the regions of the Mediterranean. The importance of the ferry industry and its link with the tourist industry are also discussed. This material and the more specific analysis of the role and importance of maritime transport to the tourism industry and also the identification of specific tourist routes within the Mediterranean, is important to the development of the SEFM tool and the direct application of the research and its outcomes to the targeted industry. A representation of the amount and type of traffic in the Mediterranean today is constructed. This data will be used as an indication of the current state of ferry transport in the Mediterranean. An accurate representation of the volume of international and domestic traffic is important to the tool, as it can identify the current state of traffic and measure any changes when testing the tool in predicting future states of traffic. Finally, the safety is an important issue in maritime transport and key element to the reputation of the ferry industry. This is a minor factor in the development of the SEFM tool, however the effect of safety on customers travelling use the network would be an important variable to consider.
2.1 Overview of Mediterranean Sea ferry network
Numerous islands in the Mediterranean Sea are dependent on ferry links for transportation of passengers, automobiles, and goods. These range from islands which are only a few hours sailing from the mainland to others which are several days away. One of the most vital ferry links in the Mediterranean is the connection between the Greek islands, and also between the Greek islands and the mainland. This reflects the fact that Greece has a large number of islands (estimated at 6000) with a far greater distance between them and the mainland compared to the Balearic Islands, or Sardinia and Sicily. The quality of service of the network varies markedly throughout the Mediterranean, from frequent links to mainland Greece or Italy, to others which are only a few times a week. This is because demand is higher for the former, but the latter can also be the case due to a need to serve local populations of small islands. High-speed services have also been introduced by some companies in recent times. Overall, the Mediterranean can be seen as an area where a wide variety of ferry services are represented, providing an excellent case study for analysis of resilience in a transportation network with fluctuating demand.
2.2 Factors affecting demand fluctuations
A demand for the product or service generates a flow as firms attempt to meet this demand. A typical firm measures market demand not only for the present but also for the next period and plans its sales to satisfy this demand. At the industry level, market demand may be viewed as planned production by the sum of rival firms in the industry.
In the present research work, the demand for India’s iron ore and the relation between that and the price change in the international market will be analyzed using sophisticated econometric techniques. Using one thing to explain another is a common theme in econometric analysis. In such analysis, the thing that is used to explain is termed an independent variable or a predictor, and the thing to be explained is the dependent variable. In the present context, price is the dependent variable and quantity demanded is the independent variable.
A demand for a product is defined as the amount people are both willing and able to buy. The mere relationship between price and quantity demanded can be inverse, i.e. when the price goes up, the quantity demanded goes down, or positive, i.e. when the price goes up, the quantity demanded also goes up. This situation arises as the result of variation in the joint effect of numerous economic forces set in motion by the price change or some other factor affecting demand for the product. It is this interaction between price and the quantity demanded that the demand analysis attempts to explain.
2.3 Resilience strategies in transportation networks
Given the size, complexity and importance of today’s transportation networks, there is a surprising lack of general theory concerning how best to create a network which will deal effectively with unanticipated adverse conditions, ranging from acts of god to malicious acts. It is clear that system designers need to build in some resilience but this is a concept that is not well understood or well defined and until now there has been no guidance as to how one might build a more resilient transportation network. Resilience in this context is the ability of a system to withstand disruptive events and still retain the same structure and functionality. An event has adversely affected a system if there exists a set of actions the implementation of which will improve the system’s state relative to what it would have been had the event not occurred. In the context of a transportation network, an adverse event usually degrades the service provided along specific links or even renders some links unusable. Step changes in the state of a system can be brought about by minimal perturbations, just one small change in system variables could in theory move the system into a different state or on to a different trajectory. The range of possible states for a network is a product of the various configurations of link status (functional/non-functional) and the pattern of movement of traffic onto alternative routes. An immediate adverse event will move the system from its current state to a less desirable state. The concept of resilience is concerned with the ability of the system to move back towards the prior state and it is a defining characteristic of a resilient system that it is able to absorb perturbations and still persist in the same regime. There is much to be discussed concerning what constitutes an undesirable state in the context of a transportation network and the method by which the impact of an adverse event is assessed, but we will not dwell on these issues here.
In the past, populations tended to exist in small, self-contained communities. The people in such communities did not need to travel far and transportation of any kind was very limited. There was never a need to think about linking settlements together, or worry about how to keep links going; there were no grand networks. With the rise of our current global society, however, we have seen the birth of complex transportation systems and extensive networks of links. Such networks have become essential to the fabric of society and importance of the connections within them is never more apparent than when links are broken. The consequences of link failure in modern society can be severe, especially if there is high reliance on a particular connection for movement of people and freight.
3. Methodology
The quality of ferry services and infrastructure is ultimately a public good, and the project recognizes the necessity of incorporating the views of end users in several ways. A choice experiment, embedded in a survey, will identify ferry user preferences and trade-offs between cost and various service attributes. This will be conducted in both Italy and Greece to capture revealed differences in attitudes between Southern and Western Europe. A complementary SP survey will assess the acceptability of different pricing strategies for fare and service changes. Finally, a representative sample of Italian and Greek tourists will be surveyed at the end of their respective domestic trips. This will assess their experience with inter-island services that act as a metaphor for international ferries. An assessment of travel time and service cost will be combined with trip diary data to estimate a value of time and distinguish different “classes” of Southern Europeans.
The study will involve a range of methods. The general strategy is to combine qualitative and quantitative analysis in a manner that fosters a dialogue between practitioners and academics. The overall research design is built around three sequential stages. Data will be collected from key stakeholders, including ferry operators, port authorities, and regulatory bodies. Key decision-makers will be interviewed to ascertain their perceptions of the pressing issues facing the industry. Their views on current and potential future policy will be probed. A series of focus groups will then be conducted, organized by region, to ensure maximum attendance. These will act to validate the interview results and also to begin the process of interaction with practitioners. Participants will be asked to engage in a nominal group decision-making exercise to rank their most pressing concerns.
3.1 Data collection and analysis
Despite the lack of sufficient data from official sources, the interviews were highly successful in providing valuable insights into the industry, particularly in the identification of key issues affecting the industry, which are not well-documented in existing literature. This included information on recent trends affecting the industry, government policies and regulations, and various political, economic, social, and technological factors, all of which were identified as potentially high-impact, uncertain drivers of change for the industry. Finally, the insight of the interviewees was invaluable in understanding the complex nature of the various strategies implemented by ferry firms, many of which were not seen as explicit, identifiable responses to a specific issue, and may not be widely known within the firm. This led to a decision to employ various case study methods to gain further insight into specific resilient strategies implemented by ferry firms.
In order to gain a comprehensive understanding of the current state of the ferry industry in the Mediterranean region, data on infrastructure and services had to be collected from a variety of sources. Basic information on infrastructure, such as port location and passenger capacity, was obtained from the websites of port authorities. Unfortunately, such official sources often did not provide detailed or up-to-date information on all relevant factors, due to the complexity of the ferry industry and the continually changing nature of ferry services. This is particularly the case for services provided by private companies, which may not be well-documented. To gain a clearer picture of the ferry industry and to identify key resilient strategies implemented by ferry firms, a series of interviews with industry professionals were utilized.
3.2 Case studies of resilient ferry networks
The case of Kea presents a worst-case scenario in terms of its location relative to the mainland. The service also has a small catchment area when compared to inner island routes or those serving larger island agglomerations. This has resulted in a vast reduction of service levels since the early 20th century. This decline and the recent tourism-led regeneration of the island make for an interesting comparison with various external pressures. The most recent timetable was captured and compared with actual services experienced by the researcher over a 2-week period. This was to assess whether planned service levels were being maintained. Unfortunately, the Kea service was disrupted by several strikes to the Athens transport network. This is something that has affected both cargo and passenger services to the island and is very much an internal pressure for outer islands with ferry links to the mainland. The strike action resulted in a rescheduling of services to Kea. The impact of this was a reduction in frequency to 3 services per day instead of 4 and the high-speed service was withdrawn. High-speed vessels have become the first choice for many Mediterranean ferry operators due to lower crew and fuel costs. This is a possible threat to the Kea service if there is further inter-island work on this vessel type. The high-speed reduction has resulted in retiming of an afternoon service to the early evening, something known to be unpopular with Kea residents. A reduction in service levels led to the cancellation of a planned day trip to neighboring Kythnos, an event indicative of a decline in ferry services to the island.
The following section provides analysis of 2 resilient ferry networks in island regions. The case on the Greek island of Kea is an analysis of a passenger-only service. The second case is an analysis of the Loire Atlantique region in France, a service comprising both passenger and cargo movement. Resilience is defined in terms of the ability of a system to maintain an acceptable level of service in the face of external pressures and to recover quickly when service levels are adversely affected. Initial findings from the case studies will be used to inform a more general assessment of the resilience of maritime transport in islands which will be reported in subsequent publications.
3.3 Evaluation of existing infrastructure
A large amount of the current Med ferry fleet is comprised of very old second-hand tonnage sourced from regions such as the Baltic States and the Black Sea. This is due to the fact that the cost of second-hand tonnage is significantly cheaper and these ships are usually purchased with the view of short-term high yield to cover immigration from such countries as Tunisia and Albania to Italy. As of the last 10 years, there has been a notable decrease in the number of passengers using ferry services in the Mediterranean region. This is due to the budget airline revolution, which has reduced cost and increased convenience of air travel within Europe. Airlines such as Ryanair have made it possible to fly internationally for prices as low as €20 and with flight times considerably less than ferry journeys, the airline industry is much more attractive to a customer. An example of this decline may be found with reference to Superfast Ferries, who were operating modern and innovative services in the Ionian Sea and between Patras and Ancona with a fleet of new-build ships. In 2009, they were forced to sell these services to Attica Group, who operate as ANEK Superfast with a fleet of ferries second hand from the Adriatic and a reduced frequency of service.
The first step of this project is to evaluate the current ferry market in the Mediterranean region, as this is where a potential resilient network would be established. In order to affect change, there must be a reason for such change to occur. It is apparent that the current ferry industry in the Mediterranean region has extremely varying levels of success dependent on location. The Adriatic Sea has the most successful services, being the largest of the sub-regions and these between Italy and Greece and internal to Italy. The least successful services are located between the North African countries and Italy/France. Most services in this location are infrequent and the cost of access to said services is relatively high.
4. Findings and Recommendations
Focusing on the provision of transport services, Ferry (p.8) concludes that they usually rely on a complex system of systems. This can be the linking of ferry ports to the public transport network on a local or regional scale, all linking in to the ferry network itself. His case study looked at the Balearic Islands and the various inter-island links and links to the mainland, a system quickly identified as complex and involving much change due to societal and economic pressure. It is this complexity that is likely to be detrimentally affected by the simplification and isolation of individual construction projects. Simulation of methods to protect infrastructure provision (e.g. building in resilience) (Boulding, 1964) in today’s speak could highlight where integrated methods are more beneficial than multiple isolated solutions. EOF simulation (De Montis et al., 2007) outlines the differing methods of simulation operations: heuristics, hit and run, and genetic algorithms, which can be used to interpret individual and collective decisions on a systems variable at differing levels of rationality. Though difficult to apply to specific policy decisions, this method has strong potential in decision support and could be used to show the need for integration of infrastructure projects in providing transport services.
These shapes, which embody relationships between society and nature, are the contours of infrastructure. Thus, infrastructures represent a complex of systems that are formed to serve various needs in provision of a variety of services, many of which are not directly infrastructural (health and safety regulations).
A key step in the development of the ferry network is to distinguish the various elements of infrastructure. Development in exhibitions from the earlier conceptual work driven by integration. To take a systems approach, one can essentially let go of the various elements of infrastructure and seek an appropriate level of integration that meets the needs. A contemporary view of infrastructure is provided by Graham and Marvin (20015, p14) who state that the goods and services that are required to cope with the uncertainties of daily life are all provisionally stabilized in spatial form.
4.1 Analysis of demand fluctuations
– Seasonal movements of passengers. Many routes experience a doubling or more of passengers in the summer months. Tourist passengers often have different needs than the locals, focusing on specific destinations and being more price-sensitive.
– Changes in volume and composition of freight. This reflects a wide range of commodities, from the unaccompanied trailers and containers as part of intermodal transport “motorways of the sea,” to local agricultural products.
– Moves in the departure or arrival locations of passengers or freight. Often driven by changes in land-based transport infrastructure and services.
Fluctuations in demand for the ferry networks can be addressed under static conditions, but the Mediterranean Sea is a complex system where demand is influenced by many technical, economic, and social factors, both specific and generic to the ferry industry. These include:
4.2 Identification of key challenges
Through expert-led research on the economic and transport geography of the Mediterranean region, several challenges threatening the resilience of the sea ferry network were identified. The first is to do with an extremely competitive modal substitution from road and train to ferry for both freight and passenger traffic. The international nature of the Med means that the ferry sector has to face competition from land transport coming from a variety of countries. The research identified the period 1998-2009 as showing a significant net loss to road and rail in the western Med countries. This is primarily because of trucking companies and transporters of fresh fruit and vegetables which seek to avoid transhipment onto a ferry. The roll-on roll-off (Ro-Ro) freight practice where vehicles drive directly onto the ferry for the driver to accompany the cargo is the most vulnerable to modal substitution from unaccompanied intermodal transport. Simulation studies have shown that the availability of short sea routes is particularly vulnerable to loss of market share to land transport. This occurred during the construction of the Channel Tunnel, when shipping firms on the south coast of England lost trade to French ports. And more recently, the Motorways of the Sea initiative launched by the European Union has led to financial incentives for hauliers to shift from accompanied transport to unaccompanied trailer services on longer Mediterranean routes.
A second problem is the seasonality and volume fluctuations of passengers and tourists in the Mediterranean, which forms the backbone of the market for most ferry operators. This is particularly the case for the Adriatic and the western Mediterranean where there is an intense concentration of tourism and significant immigration of northerners settling in the sunnier southern countries. Winter services on numerous routes are maintained at a loss to be ready for the large increase in traffic during the summer months. However, the past two or three decades have seen a decline in route sustainability due to increased competition and a decrease in immigrant and expatriate communities. This has resulted in the lifespan of routes decreasing. Conquest of new markets has become exceedingly difficult with some firms having to close down and re-establish routes to the smaller islands. Overall, the nature of both freight and passenger markets indicates that there is barely an equilibrium in traffic at any time of the year. This is an important problem because the viability of short sea routes is directly related to the volume of traffic transacted. High and low volume traffic is equally vulnerable to loss of market share to same-mode long haul transport.
4.3 Resilience strategies for the Mediterranean Sea ferry network
Due to the unconstructive relationship between capacity and demand identified in the previous section, it is necessary to offer viable and resilient solutions which can aid in overcoming the stated challenges. These have been considered in terms of their feasibility and practicality given the normal circumstances of ferry operators in the Mediterranean. A predominant strategy for battling demand fluctuations is to implement flexible rather than fixed cost strategies. In current operations, there is existence of high fixed costs being passed on to the consumer in times of low demand, resulting in either no market at all or a luxury market. Elimination of excess capacity by means of layoffs or allowing vessels to fall into a state of disrepair tends to exacerbate the problem by creating a higher breakeven point in terms of capacity utilization. This ultimately increases the fixed cost incidence which further decreases the price competitiveness of ferry travel in comparison to alternate transport modes. The outcome is a downward spiral effect creating even lower demand. High-speed ferries are an example given by many interviewees. Such vessels were built in response to the tourism boom in the Mediterranean and are now flooding the market in times of lower tourism and economic downturn. Flexible cost strategies involve variable pricing on different routes dependent on demand or offering the same price but varying the standard of onboard amenities. The most significant is the ability to increase or decrease vessel capacity in times of high or low demand. This is commonly achieved through chartering or leasing of vessels, though perhaps the most viable option is a consortium agreement with another operator who has spare capacity. The joint venture could involve revenue and risk sharing on a specific route or cargo agreement between the two companies. This would be by far the most cost-efficient manner of increasing capacity. Flexible strategies are also applicable to the public sector whereby government subsidies can be implemented during periods of low tourist seasons to maintain lifeline services to peripheral regions. By forecasting demand patterns, it is also possible to stockpile certain goods during low price periods to be used in the future, e.g. fuel when oil prices are high. The ability to rent increased capacity at short notice is crucial.
4.4 Policy recommendations for stakeholders
7: Malta Stocktake
7.1 Policy Implications
The action plan suggests that a communication exchange about best practice and a “Ferry Goal” would be beneficial to areas relying heavily on ferry services. This approach is correct and would need reinforcing to ensure that Malta is also included, given the extensive amount of ferry services and relative importance compared to candidate and other peripheral regions.
There is a proposal to continually monitor and assess islands and remote regions, patterns of accessibility, and the impact of transport policy. This is of fundamental importance to Malta and other island states and should not just be a study or survey but an ongoing commitment to sustain and improve levels of accessibility.
The policy proposals for enhancing stability and resilience of the Mediterranean Sea are focused on expanding the control and governance structure of the region. There is no specific nautical or marine or ferry element, and we must ensure that if these proposals are implemented, the policymakers are receptive to the need for a joined-up transport policy that includes maritime transport. Currently, there are separate transport and infrastructure proposals which are of little relevance to ferry operations. This response was adopted by Interferry’s EU Ferry Group.

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