FEASIBILITY STUDY OF FURTHER DEVELOPMENT OF PUBLIC LOGISTICS CENTERS IN LITHUANIA Final report

Transcription

1 FEASIBILITY STUDY OF FURTHER DEVELOPMENT OF PUBLIC LOGISTICS CENTERS IN LITHUANIA Final report 2014

2 Table of content Abbreviations The aim and scope of the project Review of significance of Lithuania for freight transit between East West and South North Statistics of freight flows by road and railway transport in Lithuania Container loading in Klaipėda s port and transportation by railways Statistics of international freight transportation by railways from/to CIS through Lithuania Statistical data of freights traffic by roads and railways in Vilnius region Statistical data of international freight transportation carried by Lithuanian railways Analysis of freight types carried by roads and railways Public logistic centres (PLC) and Rail Baltica projects value of implementation of White Paper COM(2011) Review of Vilnius, Kaunas and Klaipėda s PLC projects development Overview of works carried out to date of future Kaunas, Vilnius and Klaipėda PLC s Overview of legal framework in Lithuania Research of stakeholders Identification of stakeholders and their motives and interests Analysis of stakeholder effect on PLC development Stakeholders power and degree of interest in the theoretical model Stakeholders co-benefit analysis Public logistics centres development potential analysis Freight traffic directions, potentially served by Vilnius and Kaunas PLC s International freight transportation through Lithuania from/to CIS statistical forecast Freights transhipped and exported in Vilnius region statistical forecast Analysis of containerized cargo flows in Vilnius region Storage area growth forecasts and infrastructure and services of Vilnius PLC Forecast of freight flow serviced by Kaunas PLC terminal Storage area growth forecasts and infrastructure and services of Kaunas PLC Freight flow in region of Klaipėda and their forecasts Storage area growth forecasts and infrastructure and services of Klaipėda PLC Analysis and evaluation of multilevel cooperation schemes Germany PLC s management models examples of the good/bad practices Italy PLC s management models examples of the good/bad practices Greece and Spain PLC s management models examples of the good/bad practices Standardized management schemes and their SWOT analysis Impact study of public logistics centres development PLC development impact on socio-economic environment and environmental protection

3 Table of content 7 Preparation of logistic centres development plan Identification of economical/social and technical issues Analysis of the establishment stages of public logistics centres in Lithuania Study findings and recommendations Recommendations for development of Klaipėda and other logistics centres in Lithuania Results of the study and the main insights as well as suggestions

4 Abbreviations EU LR Consultant PLC TEN-T Feasibility study White paper International freight transportation European Union Republic of Lithuania Smart Continent LT Public logistic centre Transeuropean transport network Feasibility study of further development of public logistics centres in Lithuania WHITE PAPER Roadmap to a Single European Transport Area Towards a competitive and resource efficient transport system COM/2011/0144 final Freight transportation among origin and destination point in two different countries also including freight cabotage and freight transit 4

5 1 The aim and scope of the project Feasibility study of former development of Public logistic centres in Lithuania (here and after Feasibility study) was prepared by Smart Continent LT JSC (here and after Consultant). The client of the Feasibility study is JSC Lietuvos geležinkeliai. This study is a part of the BSR Transgovernance project of the EU programme for the Baltic Sea Region. The timeframe for the execution of the study is May August The aim of Feasibility study is to analyse the potential of developin public logistic centres in Lithuania clearly defining the current situation, which would develop and test a multi-level governance models for the planning of public logistics centers and establishing steps to include public institutions and business. Figure 1 shows project activities. Fig. 1. Project activities Source: made by Consultant 5

6 2 Analysis of current situation In this chapter analysis of current situation of Lithuanian public logistic centres and and freight flows in Lithuania is presented: Review of significance of Lithuania for freight transit between East West and between South North; Analysis of freight transportation by road and rail transport in Lithuania; Analysis of works done in establishment of public logistic centres in Lithuania; Analysis of legal framework and PLC management structures. Source of photograph: dlg.lt/ 6

7 2.1. Review of significance of Lithuania for freight transit between East West and South North Lithuania is very significant for freight transportation between East West and North South countries because of its geographical position. Primarily, Lithuania has non-freezing Klaipėda sea port controlling freight flows in Baltic Sea. Also main land routes between East West and North South countries passes through Lithuania making conditions for efficient freight transportation in these directions (see fig. 2). Fig. 2. Lithuania road and railway network map One of the main TEN-T transport corridors North Sea Baltic passes through Lithuania. Roads and railway lines forms this corridor in Lithuania by crossing country in four main directions (IXB, IXD, I, IA). IXB corridor line connects Kiev Minsk Vilnius Klaipėda. Length of main road in this corridor is 339 km and length of railway in this corridor is 418 km. Road and railway transport lines connects European and Asia transport nodes and networks and creates favourable conditions for freight transportations to Asia and Europe through Klaipėda sea port. IXD corridor line connects Kaunas Kaliningrad area. Length of railway line of this corridor is 120,6 km. Transport roads of IXD corridor are significant for freight transit between East countries and Kaliningrad area. I corridor line connects Talinas Riga Kaunas Warsaw (main road Via Baltica and newly building railway Rail Baltica ). Length of main road in this Source: made by Consultant corridor is 274 km and length of railway in this corridor is 360 km (foreseen length of Rail Baltica ). Transport routes in this corridor connects Northern countries with Central and West Europe and are most strategically appropriate land transport routes for efficient freight transportation among these regions. IA corridor line connects Riga Šiauliai Tauragė Kaliningrad area. Length of roads in this corridor is 190 km (E77 road) length of railway line in this corridor is 231 km. Transport routes of this corridor are significant for freight transit between North and Central and East European countries. Lithuania became significant country for containerised freight transit transport by railway transport because of favourable geographical position. Container trains of international importance Saulė, Šeštokai Express, Vikingas, Merkurijus (see appendix 2) and contreiler train Nemunas run through Lithuania. Container train Vilnius Shuttle connects Lithuania capital Vilnius and Klaipėda sea port. Container train Saulė runs from Chongqing (China) to Antwerp (Belgium) through Lithuania (through Klaipėda sea port). Also runs between Klaipėda and Almaty (Kazakhstan). A train Šeštokai Express carry containerized cargos Warsaw-Minsk-Šeštokai-Smolensk direction. A train Vikingas runs in two directions: Klaipėda-Minsk- Odessa and Klaipėda-Minsk-Bucharest-Stara Zagora-Istanbul. Meanwhile container train Merkurijus crossing Lithuania s border carry freight in direction Kaliningrad-Moscow. Carrying containerized cargos through Klaipėda s port, this train runs between Klaipėda and Moscow. Contreiler train Nemunas ply the route Kaunas (Palemonas) Vilnius (Paneriai) Minsk (Kolyadichi) and back carrying trucks with semitrailers. To increase this train attractiveness and effectiveness it is planned to extend this route to Klaipėda s city and to Kaliningrad. 7

8 2.2. Statistics of freight flows by road and railway transport in Lithuania Freight transportation by roads and railways comprise of more than 92 pct. of all freight carried by all transport types in Lithuania. The reason is a well-developed roads and railways infrastructure, which depends on the Trans-European Transport Network (TEN-T), which gives the abilities to use Lithuania s geographical advantage and to attract transit freights flow through territory of Lithuania in East-West and North-South directions. Because of this reason freight transportation by roads and railways tends to remain a high priority transportation types and which has the main focus. Statistical data of freight transportation by roads and railways is given in third figure. Fig. 3. Statistical data of freight transportation by roads and railways In period of Lithuania s railways carried pct. of all land transport carried freights in Lithuania. While road transport carried pct. of all land transport carried freights. In year 2008 roads and railways freight flow volumes declined because of economic crisis in Europe. The cause of decline was a big Lithuania s freight flow dependence of economic trends of other Europe nations. Since 2010 Europe s economic condition gradually raising again this market also improved. Even though in 2013 freight volumes transported by land haven t reached the level of 2008 and were 12 pct. less than During period of the share of freights carried by railways has increased compared to freights carried by roads and accounted 48 to 53 pct. of all freight carried by land. The main reason is low sensitivity to economical disturbance of railways carried freights (oil and fertilizers, which is the biggest freight share). While in the period of crisis freights carried by roads volumes declined from 52 pct. down to 47 pct. The reason of decline was decline in general freights flow volumes carried by roads, which are more sensitive to changes in economic situation. However in 2012 freights volumes carried by roads caught up with those carried by railways and become equal and in 2013 even surpassed it. Rise was the cause of recovering Europe s nation s economies, which gave the opportunity to general freights flows to grow. Fig. 4. Freight transportation by Lithuania s railways by transportation pct. of all transportation at the same time. The biggest share (39-46 pct.) of all railway carried freights in period of consisted of imported and exported freights (freights, involved in foreign trade processes). (see fig. 4). Transit and internal freights volumes carried by railway transport where the same in years Internal transportation accounted pct. of freight transportation by all transportation types, while transit freights accounted

9 2.3. Container loading in Klaipėda s port and transportation by railways Public logistics centres founded in Lithuania will serve freights traffic. That s why it is important to take a closer look and analyse accumulation of their centres and transportation through Lithuania s territory. The main containerized cargo flows are concentrated in Klaipėda s port and which are distributed in various Lithuania s territories or carried further through Lithuania s territory by road and railway transportation to East countries. That s why it is crucial for effective public logistics centres activities and development effective and efficient work of Klaipėda s port and ability to attract containerized cargo flows and traffic to Lithuania or past it to East nations. Containers (TEU) loading in Klaipėda s port and containers with freight transportation by railways statistical data since 2006 to 2013 is shown in 5-6 figures. Fig. 5. Container (TEU) loading in Klaipėda s port In years transhipped container (TEU) volumes in Klaipėda s port significantly increased and in 2013 at the same port were transhipped 74 pct. more containers (TEU) than in Because of crisis in Europe 2008 containers (TEU) loading volumes in Klaipėda s port significantly declined and in 2009 containers (TEU) load volumes were only 51 pct. of the same volumes of Containerized cargo volumes which went through Klaipėda s port and their dependence of other Europe nations economic conditions, was the cause of this decline. However, recovering economies of Europe s nations in 2010 led container (TEU) loading volumes in Klaipėda s port to grow. TEU loading volumes in 2012 compared to 2011 slightly (0,2 pct.) declined, even though in period of 2013 containers (TEU) loading volumes in Klaipėda s port were 6 pct. more than those in Fig. 6. Containers with freight transportation by railways in Out of calculated containers transportation by railways data were found out that in the period of container transportation by railways volumes increased by 44 pct. It is clear that in containerized cargo carried by Lithuania s railways were directly dependent to container (TEU) loading volumes in Klaipėda s port. Therefore it can be said that most of containerized cargo carried by Lithuania s railways are transhipped in Klaipėda s port. 9

10 2.4. Statistics of international freight transportation by railways from/to CIS through Lithuania To estimate influence of East countries to freight flow volumes carried by Lithuania s railways, there were analysed statistical data of international freight transportation by railways from/to CIS through Lithuania in years Statistical data of International freight transportation by railways from/to CIS through Lithuania is shown in figures 7-8. Fig. 7. International freight transportation by railways through Lithuania to CIS In international freight transportation by railways through Lithuania to CIS significantly increased and in 2012 freight transportation volumes in this direction were 40 pct. larger than in International freight transportation by railways volumes through Lithuania to CIS in changed at the same trend as international freight transportation by railways volumes through Lithuania from CIS, except of 5 pct. decrease in freights transportation to CIS in Fig. 8. International freight transportation by railways through Lithuania from CIS International freight transportation by railways to Lithuania and through Lithuania from CIS in significantly increased and in 2012 freight transportation volumes from CIS were 67 pct. greater than in It is noteworthy that in 2009 volumes of international freight transportation by railways through Lithuania declined compared with freight transportation volumes in 2008 and was 11 pct. less. Reason of this was economic crisis, which reduced trades volumes between CIS, Lithuania and EU. Even though in 2010 it is noticeable growth of freight transportation by railways from CIS to Lithuania and Lithuania s territory, which lasted up until 2012 in which freight transportation were 10 pct. higher than record year of Growing trends of freight transportation volumes from/to CIS shows that the need of serving these freights will increase, that s why established Vilnius public logistics centre (PLC) will have huge importance and service demand between parties interested in PLC foundation and development: carriers, forwarding agents and other companies engaged in freight transportation or logistic activities. Development of public logistics centres in Lithuania will allow enhancing freight transportation conditions through Lithuania s territory and reinforcing image of Lithuania as competitive transit country. It is believed that freights will be carried in Lithuania s territory not only by Lithuania s carriers but also by East carriers, who will show more interest in carrying freights to West through Lithuania and no other neighbour countries (Belarus etc.). 10

11 2.5. Statistical data of freights traffic by roads and railways in Vilnius region When analysing current freights traffic through Lithuania s territory, it is important to separate volumes and intensity in Vilnius region and evaluate the ability of Vilnius public logistics centre, which is under construction to serve all transported freight in Vilnius region. To evaluate freight volumes transported through Vilnius region and freights generated in Vilnius, it was analysed international freight transportation by roads through Lithuania to CIS, loaded/unloaded freights volumes in Vilnius region and freight transportation from Vilnius to EU, CIS and other directions. International freights transportation by roads through Lithuania to CIS, loaded/unloaded freights in Vilnius region and freight transportation from Vilnius to EU, CIS and other directions are given in figures Fig. 9. International freights transportation by roads through Lithuania to CIS Because of crisis in 2008 which affected Europe loaded/unloaded freights volumes in Vilnius decreased, however in 2011 transhipped freights volume started to recover and which were growing till the end of analysed period (see fig.10). Fig. 10. Loaded/Unloaded freights in Vilnius region Fig. 11. Freights Transportation From Vilnius to EU, CIS and other directions In international freights transportation by roads through Lithuania to CIS were gradually growing and in 2012 freights transportation were 81 pct. more than in 2006.(see fig. 9). From Vilnius region and Vilnius city most of freights in were transported to EU (45-54 pct.) and CIS (37-38 pct.) Freights carried to other countries accounted 8-17 pct. accordingly. Comparing importance of EU and CIS markets to Vilnius freights exports, we can assume that EU market in were more important, because to EU were exported pct. more freights from Vilnius region than CIS (see fig. 11). Because of huge dependence on the EU it is important to Vilnius entrepreneurs not only Vilnius public logistics centre but also Kaunas public logistics centre, which connected with 1435 mm rail and will allow to carry freight generated in Vilnius region to EU and back much faster and more effective. That s why future collaboration between these two centres will contribute in creating better business conditions in both Vilnius and Kaunas regions. Growing freights loading in Vilnius region, expanding freight transportation volumes through Lithuania shows that the demand of logistic services and growing freights traffic maintenance, which could be provided to Vilnius public logistics centre will increase. 11

12 2.6. Statistical data of international freight transportation carried by Lithuanian railways International freights transportation (import, export and transit) by Lithuania s railways accounts the biggest share (68-72 pct.) of all freights carried by railways. This is because of highly developed infrastructure, which connects strategically the most valuable cities Vilnius and Kaunas for freight transportation with Klaipėda s port, where it is transhipped more than a half of all transit freights carried by Lithuania s railways. Also Lithuania s territory is strategically the most suitable for freights carried between Russia and Kaliningrad region, that s why the biggest share of freight carried in between those two territories is carried by Lithuania s railways. Statistical data of Russia s and other countries freights carried by Lithuania s railways are shown in 12 figure. Fig. 12. Freights transportation by railways by countries Most of transit freights in 2013 carried by Lithuania s railways were transported from/to Russia (46 pct.) and from/to Belarus (32 pct.). The biggest share of Russia s transit freights were oil and oil products, transported to Kaliningrad s direction and through Klaipėda s port to West Europe, while biggest share of freights from Belarus transit through Lithuania s railways were fertilizers. From/to Poland and Ukraine were carried 7 pct. and 6 pct. accordingly of all transit freights carried by Lithuania s railways. The biggest share of Ukraine s transit freights carried by Lithuania s railways was food and feed transhipped in Klaipėda s port. Fig. 13. Freight transit through Klaipėda s port to Kaliningrad region. Since 2008 till 2013 the share transit freights carried through Klaipėda s port increased from 41 pct. to pct. compared to freights carried to Kaliningrad s direction (see fig. 13). The reason for the increase was the decline of freights to Kaliningrad transit (Comparing 2013 with 2008 decreased by 28 pct.) and increased freights volumes carried through Klaipėda s port (increase of 1 pct. compared to year 2013 with 2008). Declining transit freights flow to Kaliningrad s direction is linked to economic crises of 2008 which caused decline of freights transportation from Russia to Kaliningrad s region. Also political disagreements between Russia and Lithuania over the conditions of freights transportation through Lithuania s territory contributed to a decline. 12

13 2.7. Analysis of freight types carried by roads and railways The structure and types of freights carried by railways are significantly different than freights carried by roads (see fig. 14). While comparing the structures of freights carried by Lithuania s railways with freights carried by roads, it is worth to note that in 2013 most of freights (77 pct.) carried by railways were raw materials (liquid and other liquid cargo), while main part of freights (84 pct.) carried by roads at the same period were general freights (see fig. 14). Fig. 14. Character of the freights transported by railway and road Also worth to mention, that the main freights carried by railways were oil and oil products, chemical and mineral fertilizers and mineral products. These products are less sensitive to all kinds of economical unrest, while the biggest share (84 pct.) of general freights carried by road are more sensitive to economic changes and are unstable. Detailed structure of freights carried by roads and railways are shown in figure 15. Fig. 15. Structure of freights caried by roads and railways The biggest share of freights carried by roads in 2013 consisted metal ores (21 pct.), agricultural products (18 pct.), food, beverages and tobacco (14 pct.) and mixed freights (12 pct.). The smallest amount of freights carried by Lithuania s roads consisted of metal products (4 pct.), vehicles (3 pct.), electronic devices and other electric devices (3 pct.) and furniture and other manufactured products (3 pct.) in 2013 the most common freights were oil and oil products (34 pct.), chemical and mineral fertilizers (24 pct.), food and feed (12 pct.) and various mineral products, ore slag and ashes (11 pct.) On the other hand the least common freights carried by railways were wood, cork and cork products and paper (2 pct.) and inorganic and organic chemical products (2 pct.). 13

14 2.8. Public logistic centres (PLC) and Rail Baltica projects value of implementation of White Paper COM(2011)144 Foundation of PLC s in Lithuania (Vilnius, Kaunas, Klaipėda) and construction of 1435 mm rail track Rail Baltica are closely related with one of strategic EU transportation policy document White Paper COM (2011)144 and it provided key strategic transport policy and objectives for year 2050 and initiatives which supposed to be taken by all EU member states to achieve these goals. Setting up PLC and Rail Baltica (1435 mm) track will help to achieve these objectives of White Paper: Up to pct. More than 300 km of road freight should be transported by other types of transport rail or water transport; Up to 2050 ensure almost complete road safety and guarantee that EU will be the world leader in all types of transport security; Up to 2050 complete Europe s high-speed train network. Until 2030 extend existing high-speed rail network three times and to maintain a dense railway network in all member states. Initiative (action steps) of the White Paper objectives implementation. Fig mm rail track Rail Baltica In order to implement main EU Transport Policy White Paper targets it must to optimize multi-modal logistics chain, among other things, have to increase the use of resource efficient transport (for example, when goods are carried over long distances). Interface between long-distance freight transportation and final destination points should be organized more efficiently. The idea is to shorten the length of individual delivery as the most inefficient railway section as much as possible. It must be created structures connected with main network of multimodal freight transportation corridor. As well as given support for innovative and effective multimodal transport services, including of medium and long-distance rail services. Value of PLC and Rail Baltica 143 5mm rail to Lithuania. Value of PLC and Rail Baltica 1435 mm rail to Lithuania After the construction of the 1435 mm rail in Lithuania, the access to the South and West European countries will improve. It will also increase the attractiveness of railway freight Source:gelsistemos.lt transportation in Lithuania to these directions (see fig. 16). When the same type rail (1435 mm) will connect the entire territory of Lithuania with Europe s railway network, then it won t be necessary to tranship all incoming freights from Europe in Šeštokai railway station, which is the only since now who had two types of rails (1435 mm and 1520 mm) and in which incoming freights by 1435 mm rail from Europe were transhipped into trains running by 1520 mm railway line for further distribution. Rail Baltica rail (1435 mm) will be built through Kaunas city, which is on the intersection of I (North- South) and IX (East-West) particular importance road and railways lines. Transport routes IX direction is crossing Klaipėda and Vilnius, that s why newly builded 1435mm rail would give an easy access for delivering freights from South and West Europe and other lands not only to Kaunas, but also to capital city of Vilnius and Klaipėda s port. By implementing PLC projects and constructed Rail Baltica 1435 mm rail in Lithuania it is aimed to contribute to realization of main goals of White Paper: to decrease road freight volumes by formatting it to railway transportation, at the same time to increase safety in the roads. It also aims to optimize the organization of multimodal logistic chains and use more efficient and less environmentally damaging type of transportation. 14

15 2.9. Review of Vilnius, Kaunas and Klaipėda s PLC projects development It is decided to set up three public logistics centres (PLC) in three Lithuania s cities: Kaunas, Vilnius, Klaipėda (see fig. 17). Development of every single logistics centre is divided into a number of stages. Development of Vilnius and Kaunas PLC s divided into three stages, while Klaipėda s PLC into two. Worth to note that Vilnius and Kaunas PLC I stage works has already begun, while Klaipėda s PLC building is scheduled to , once the technical documentation will be finalized. Fig. 17. Public logistic centers in Lithuania 17 pav. Viešieji logistikos centrai Lietuvoje Development of Vilnius PLC project. I stage establishingland container intermodal terminal with all necessary infrastructure in the 54 ha territory of Vilnius municipality, near Vaidotai railway station. Establishing of companies will be generating the flow of containerized cargo. II stage 104 ha area of PLC is developed up to southern Vilnius bypass. III stage 300 ha area is developed down to southern Vilnius bypass. Development of Kaunas PLC project. I stage establishing intermodal terminal with all necessary infrastructure to carry intermodal freights transhipment between 1435 mm and 1520 mm wide rails. Future terminal capacity should be 1120 TEU, and should be accessible from the highway Vilnius-Kaunas-Klaipėda. Source: created by Consultant II stage finished the construction of Rail Baltica would allow to serve different trains on different tracks. Establishment of the logistics park in the former industrial Kaunas zone (Palemonas, Naujasodis) and Kaunas FEZ would allow development of transport, logistics and other commercial service companies. Also in the future it is available to expand in Kaunas free economic zone (FEZ) by laying accessible railway tracks. There are two possibilities: When project development costs is financed by Kaunas; When project development costs is financed by JSC Lietuvos geležinkeliai with exception that Kaunas FEZ should give reasonable arguments (for example predicted freight flows, payback time and etc.) and will sign an agreement freight flows assurance and long-term use of the railway siding. III stage reached volume of TEU/Year container storage area will be expanded in terminal and in territory of Kaunas PLC. Development of Klaipėda s PLC project. I stage 2013 July 29 JSC Geležinkelių projektavimas developed project design proposals; 2014 July JSC Geležinkelių projektavimas plans to provide technical design of the project. II stage 2014 February 18 - JSC Lietuvos geležinkeliai gave the proposals to Lithuania s Ministry of Transport. 15

16 2.10. Overview of works carried out to date of future Kaunas, Vilnius and Klaipėda PLC s Currently, three Lithuania s public logistics centres (Kaunas, Vilnius and Klaipėda), which are decided to set up, I stage of construction began in Vilnius and Kaunas (2013 between June and July) (see figures 17-18), while in Klaipėda s PLC construction scheduled to begin in once the PLC s technical documentation is finalized. Analysis of the works in Vilnius PLC. End of Feasibility study of Vilnius PLC has been prepared; 2011 prepared the detailed area plan and the assessment report of environmental impact; 2012 April prepared a detailed intermodal terminal project, which is the part of PLC; 2012 October 9 announced open call for tenders for constructions works of Vilnius intermodal terminal; 2013 May 16 signed intermodal construction contract with JSC Fegda. The contract value is ,9 Lt; 2013 June 21 announced the beginning of intermodal terminal construction; Until 2014 July 1 JSC Fegda were carried out 65 pct. of the total estimated construction. Fig. 18. Construction works of Vilnius PLC in 2014 May 6 Source: JSC Lietuvos geležinkeliai 16

17 2.10. Overview of works carried out to date of future Kaunas, Vilnius and Klaipėda PLC s Analysis of the works in Kaunas PLC at the end of the year there was prepared feasibility study of Kaunas PLC; 2011 has been bought the required land for construction of terminal; 2012 August prepared Kaunas intermodal terminal (composite part of Kaunas PLC) detailed project and specific documentation; 2012 October 9 announced open call for tenders for constructions works of Kaunas intermodal terminal; 2013 May 23 signed intermodal terminal construction contract with JSC Fegda ; 2013 July 2 announced the beginning of intermodal terminal construction; Until 2014 July 1 JSC Fegda were carried out 65 pct. of the total estimated construction. Fig. 19. Construction works of Kaunas PLC in 2014 May 6 Source: JSC Lietuvos geležinkeliai Analysis of the works in Klaipėda s PLC October has been prepared feasibility study of Klaipėda s PLC; 2012 April 17 Permanent commission of PLC s development and supervision subject to Ministry of Transport decided to set up Klaipėda s PLC in area of Klaipėda s city municipality near train station Draugystė ; 2012 May 9 appointed by Lithuania s government resolution Klaipėda s PLC project implementers is JSC Lietuvos geležinkeliai ; So far, it is developed a detailed project stage I of Klaipėda s intermodal terminal; 2014 July JSC Geležinkelių projektavimas planning to submit I stage technical project of Klaipėda PLC. 17

18 2.11. Overview of legal framework in Lithuania The analysis of the legal framework of logistics business. Overview of the current situation. At the time the legal regulatory framework of public logistics centres in Lithuania has not been has not been introduced yet. It lacks of reglamentation of transportation activities, inclusion of definitions of logistics and PLC s in relevant laws. In particular, the lack of specific logistics law, which would allow a legal relationship between the partners in logistics supply chain. Also no law has yet defined regalmentation of pubic logistics centres establishment, management and development. Emerging problems. Because of the absence of logistics business legal framework, there are no conditions to be created for effective public logistics centres in Lithuania. For example, private business near logistic terminals is unable to set up. The cause of this problem is that government in 2011 in one of its resolutions adopted amendment prohibiting subleasing a state land, which is still leased. This uncertainty is confusing investors and complicating their entry conditions. Prospects. The development of legal logistics base is anticipated in upcoming Lithuania s government autumn session In 2014 April 24 there were formed a working group to develop proposals for formation of legal base, which will regulate the establishment of PLC s, their activities and logistics processes. 18

19 3 Research of stakeholders In this chapter research of stakeholders of public logistic centers in Lithuania is presented: Identification of stakeholders and categorical distinction; Analysis of the identified parties needs and individual strategies proposal; Analysis of cooperation benefits between stakeholders. Source: intermodalcenter.lt/ 19

20 3.1. Identification of stakeholders and their motives and interests Taking into consideration technical specifications of the study the identified subjects, who are interested in PLC s foundation in Lithuania were divided into two categories: Lithuania s state institutions and EU and business subjects. During the work identification of stakeholders, which assignation to these categories is not appropriate, were divided into carriers, logistics, freight forwarder associations category and people and society category. After stakeholders identification and categorization were coducted stakeholders motives and interests anlysis, which is given in figures Fig. 20. Motives and interests of Lithuania s state institutions and EU Source: made by Consultant After the identification of parties interested in foundation of public logistics centers and determination of their intersts it is concluded that the main motives of Lithuania s state institutions in setting up PLC s is associated with more efficient use of public assets, macroeconomical situation improvement (new job places, lower unemployemnt rate, better social situation, collection of more taxes to the state budget), problem solving in environmental and road safety (by reducing flow of freight carrying vehicles air quality will improve, decrease the number of trafic accidents). 20

21 3.1. Identification of stakeholders and their motives and interests Fig. 21. Motives and intersts of intersted business subjects, associations, people and society Source: made by Consultant After the identification of parties (carriers, logistics and freight forwarder associations, people and society, interested in foundation of public logistics centers and determination of their intersts it is concluded that the main motives of Lithuania s state institutions in setting up PLC s is associated with the pursuit of more efficient logistical processes, costs reduction, greater competitiveness in the international arena and serviced freight flow volume growth, which will enable businesses to reach a larger freights turnover, revenue and profits. People and society are intersted in air polution, noise reduction, road safety and growth of better living environment. 21

22 3.2. Analysis of stakeholder effect on PLC development In order to identify the importance of the stakeholders and impact on establishment of PLC s and their development in Lithuania, analysis of Lithuanian state institutions, the European Union, businesses, carriers, freight forwarders and logistics associations and public and social impact of public logistics centres establishment and their development were carried out, which is given in figure 22. Fig. 22. Analysis of stakeholders impact on PLC establishment and development in Lithuania Source: made by Consultant After the analysis of stakeholder s impact on PLC establishment and development in Lithuania it was found out that the great importance in the development stage of public logistics centres belong to Lithuanian government, ministries and municipalities of the cities, which has the ability to assign the state land to development and establishment of public logistic centres. In addition to that they have the ability to regulate legal framework, which is related to logistics and activities and management of PLC. Those abilities have huge impact on successful functioning of PLC. The participation of carriers, logistics and freight forwarder associations in public logistics centres activities have great importance to development and operational efficiency of PLCs, because members of those associations forms the main freight flows through Lithuania, and which potentially will be serviced in new PLC s. 22

23 3.3. Stakeholders power and degree of interest in the theoretical model After the analysis of PLC stakeholders impact the theoretical model of stakeholder s power and degree of interest were created. This model shows all stakeholders grouped in four categories according to their nature and origin: Lithuanian state institutions and European Union, businesses, carriers, freight forwarder associations and people and society. Every single stakeholder is visualized in the model by different colour dots and the stakeholder number above the dot, allowing them to be identified. Stakeholders power and the degree of interest model are graphically displayed in figure 23. Fig. 23. The theoretical model of stakeholders power and degree of interest Source: made by Consultant In the theoretical model of stakeholders power and degree of interest we can see that the biggest degree of interest and power ratio in establishing and developing public logistic centres belong to Lithuanian state institutions ( Government - ministries of republic of Lithuania, Vilnius, Kaunas, Klaipėda municipalities) and EU. Government - ministries of republic of Lithuania and the municipalities of other cities have the power to grant state-owned land for the establishment and development of PLC and are interested in the creation of new working places and higher tax revenues, while EU is important for funding the construction of intermodal terminals in Lithuania. The lower degree of interest, but significant power characterized by carriers, logistics and freight forwarders associations, whose members are responsible for the most of freights carried through Lithuania and the selection and creation of freight transportation routes. That s why PLC s serviced freight volumes and effectiveness of their activities, development opportunities and revenues depend on association interest in usage of public logistic centres services by organizing their freight transportation. Great importance in theoretical model of stakeholders power and degree of interest has JSC Lietuvos geležinkeliai, which has especially large interest in establishing the PLC s and their effective operations and development. Established and developed public logistics centres will allow to increase freight transportation by railways volumes, that s why JSC Lietuvos geležinkeliai, which has the control over the Lithuania s railways will get direct benefits out of it. The least interested and with low power out of all analysed stakeholders is people and society, who will get indirect benefits of PLC s: because of lower traffic flows environmental quality will increase, air and noise pollution on the roads will be reduced. 23

24 3.4. Stakeholders co-benefit analysis Taking notice in the requirements given in the terms of reference there were conducted stakeholders interested in establishing and developing public logistics centres co-benefit analysis. First of all during the analysis there were identified and formulated main problems causing the need of cooperation between stakeholders. After the identification of the main problems, there were conducted main stakeholders interested in establishing and developing public logistics centres in Lithuania co-benefit analysis, which analyse the importance of cooperation in PLC s planning, establishment, development and effective operation stages. Interested subjects cooperation benefits analysis is given in figure 24. Fig. 24. Interested subjects cooperation benefits analysis Source: made by Consultant Considering the results of public logistics centres stakeholders co-benefit analysis we can say that active and effective communication between government institutions, businesses and carriers, logistics and freight forwarders associations in the stages of PLC s planning, establishment and development is crucial. Constructive cooperation between these subjects allows to prepare higher quality PLC s establishment and development projects, more effective legal framework, which regulates logistic activities and operations, PLC management and guarantee the effective public logistics centres operations and development in Lithuania. 24

25 4 Public logistics centres development potential analysis In this chapter analysis of public logistics centres development potential is presented: Vilnius and Kaunas public logistics centres development potential analysis; Klaipėda public logistics centre development potential analysis. Source of photograph: ohl.com/ 25

26 4.1. Freight traffic directions, potentially served by Vilnius and Kaunas PLC s In order to assess the freight flows potentially served in Vilnius and Kaunas PLC s, have been distinguished and analysed main freight transportation directions crossing regions of Vilnius and Kaunas. Identified freight import, export and transit through Lithuania directions crossing Vilnius, Kaunas and Klaipėda is given in figure 25. Fig.25. Freight traffic directions, crossing Vilnius, Kaunas and Klaipėda Freight flows potentially serviced by Vilnius PLC. Vilnius city and region is located in the most strategically suitable territory for economical freight export (import) to (from) CIS through Belarus border points. Railway transported freights to Lithuania can be further carried by railways or transhipped in Vilnius PLC and carried over by road transport or stored in warehouses built in logistic park. Exported freights to CIS from various territories of Lithuania will reach Vilnius PLC either by railway or road transport from Klaipėda and Kaunas, where in Vilnius PLC freights will be transhipped and formed as a new trains and transported further by railway. The biggest share (~40 pct.) of all freights generated in Lithuania is transported from Source:made by Consultant Vilnius through port of Klaipėda. This share of freight, which is potentially stored in Vilnius PLC, might be transported to port of Klaipėda by railways. While freights imported from port of Klaipėda by railways will be transhipped to road vehicles for further transportation or stored I PLC warehouses. The main transit freights flows generated in Lithuania is because of freight flows between EU and CIS and other east nations through Lithuania, so it is believed that given services in established Vilnius and Kaunas PLC s will attract and r serve bigger share of these freight flows. Freight flows potentially serviced by Kaunas PLC. Kaunas city and region is located in the most strategically suitable territory for freight import from EU states by mainland roads and railways through Poland. At this point freight transportation to (from) Lithuania and through territory of Lithuania to other countries are carried by international significance highway Via Baltica. It is also expected that after the construction of Rail Baltica 1435 mm rail Lithuania will be reached by large flows of freights, which potentially will be transhipped or served in Kaunas PLC. It is expected that share of containerized cargos generated in port of Klaipėda will reach and will be served at Kaunas PLC. 26

27 4.2. International freight transportation through Lithuania from/to CIS statistical forecast In order to evaluate the Vilnius PLC potentially served freight flow directions, by the time-series forecasting method from the data of freight transportation by roads and railways from/to CIS given in a review of current freight flow situation were forecasted statistical prognosis for Prognosis for of international freight transportation through Lithuania by railways from/to CIS and transportation by roads to CIS are given in figures 26 and 27. Fig. 26. Prognosis for of international freight transportation through Lithuania by railways from/to CIS Looking at prognosis for we can say that all freight transportation volumes through Lithuania to/from CIS have tendency to grow. In 2030 it is prognosed international freight transportation by railways from CIS through Lithuania will be greater than in 2014 by 86 pct. while international freight transportation volumes through Lithuania to CIS by railways will be greater than in 2014 by 82 pct. Fig. 27. Prognosis for of international freight transportation through Lithuania by roads to CIS. Also based on the time-series forecasting method have been concluded prognoses of international freight transportation by roads through Lithuania to CIS for Freight transportation volumes by roads to CIS through Lithuania also have tendency to rise. It is forecasted that in 2030 international freight transportation through Lithuania to CIS by roads will increase up to 94 pct. compared to volumes in

28 4.3. Freights transhipped and exported in Vilnius region statistical forecast During analysis of the freight flows potentially serviced in Vilnius PLC, were conducted statistical prognoses for of loaded/unloaded freights in Vilnius region and freights transportation from Vilnius to EU, CIS and other directions. Prognosis of statistical data of loaded/unloaded freights in Vilnius region and freight transportation from Vilnius to EU, CIS and other directions are given in figures 28 and 29. Fig. 28. Prognosis of loaded/unloaded freights in Vilnius region for Forecasts of loaded/unloaded freights in Vilnius region were made on the basis of time-series prognosis method. In order to create realistic forecast data from period of crisis were removed and data of with tendency to grow were used. It is forecasted that freight volumes loaded in Vilnius region in year 2030 will increase by 92 pct. compared to While prognosis of unloaded freights in Vilnius region shows, that unloaded freight volumes in 2030 will be 102 pct. greater than in Fig. 29. Prognosis of freight transportation from Vilnius to EU, CIS and other directions for It is forecasted that freights transportation from Vilnius to EU, CIS, and other directions have tendency to grow and yearly growth of this kind of transportation in potentially will reach 7-15 pct. Forecasted that at the end of prognosed year (2030) freight transportation volumes from Vilnius to EU, CIS and other directions will be 208 pct. greater than in

29 4.4. Analysis of containerized cargo flows in Vilnius region Back in 2008 during the preparation of Vilnius public logistic centre establishment study several surveys were carried out. Most of the participants were companies generating the biggest share of containerized cargo: Klaipėda container terminal, Smeltė container terminal and representatives of container lines (MSC Vilnius, Maersk Lithuania, CMA CGM Lithuania. Survey results showed that import to Vilnius region and export from Vilnius through Klaipėda port are transported 10 pct. of all freights transhipped in Klaipėda port; transit freights from/to CIS are carried 20 pct. of all freights transhipped in Klaipėda port; export to CIS directions are carried 10 pct. of all freights transhipped in Klaipėda port. Share of freights for Vilnius region were presented in diagram. Since transit freight flows from/to CIS will bypass Lithuania, diagram of share of freights for Vilnius region were made on the basis of data obtained during the survey. Diagram include only import to Vilnius region and export from Vilnius region through Klaipėda port and export to CIS countries. Fig. 30 Containers transhipped in Klaipėda port and containers for Vilnius region It is observed that in period of containers volumes transhipped in Klaipėda port and containers for Vilnius region increased by 65 pct. According to market analysis of intermodal transportation, which were held in 2009 during the preparation of Vilnius public logistic centre establishment feasibility study and which results showed that Vilnius PLC potentially will serve 25 pct. of container transportation market. Using the time-series forecasting method forecasts of containerized cargo (TEU) potentially served in Vilnius PLC in period of was created. Fig. 31. Forecasts of containerized cargo (TEU), given to Vilnius PLC Prognosed data shows that volumes of containerized cargo (TEU) given to Vilnius PLC will grow by 6-11 pct.annually. While at the end of prognosed period (2030) volumes of containerized cargo (TEU) given to Vilnius PLC will grow by 163 pct. compared with data in

30 4.5. Storage area growth forecasts and infrastructure and services of Vilnius PLC On the basis of storage area growth analysis, carried out in 2009 during the preparation of Vilnius public logistic centre establishment feasibility study and which results showed that Vilnius region has 50 pct. of all storage area in Lithuania; Vilnius PLC potentially will have 30 pct. of all storage area market in Vilnius region; storage area will grow on average by 9 pct. a year. After the evaluation of new data about Vilnius storage area trends the forecasts for Vilnius region storage area and share of the storage area potentially owned by Vilnius PLC in period of were created. Fig. 32. Forecasts for storage place in Vilnius region and in Vilnius PLC for period of According to the forecasts of storage area in region of Vilnius and share of storage area in Vilnius region we can say that annually storage area in Vilnius region and in Vilnius PLC will grow at least 7-11 pct. and at the end of period 2030 Vilnius PLC storage area will be 189 pct. larger than storage area in Vilnius PLC in Vilnius PLC will provide infrastructure entities, their capacity, quantity and services which will be provided by Vilnius PLC are given in figure 33. Fig. 33. Services, infrastructure and capacity of Vilnius PLC 30

31 4.6. Forecast of freight flow serviced by Kaunas PLC terminal In 2010 during the preparation of Kaunas public logistic centre establishment feasibility study was performed Kaunas city and Kaunas region freight flow analysis. This analysis identifies the major freight flow directions, which will be potentially serviced by Kaunas PLC: Klaipėda Kaunas: freights carried by this direction for the needs of Kaunas city and Kaunas region. In recent years freight terminal in Palemonas yard have been reached by 4-6 thousand of TEU. Assessing the potential of Kaunas PLC to serve containerized cargo flows from Klaipėda Kaunas direction in the study of Kaunas public logistic centre establishment was found out that reduction of railway transportation tariffs in Kaunas PLC to competitive road transport tariffs, will potentially allow to tranship 2600 containerized cargo at the beginning of the terminal activities and taking into consideration economic and consumer trends volumes could grow by 3 pct. annually. Western Europe Kaunas: largest freight flows in this direction are between Germany and Lithuania. Currently, the main part of freights between Western Europe Kaunas are transported by roads, but at the end of 2016 after implementation of RailBaltica1 project, during which will be built 1435 mm rail from the Poland/Lithuania border till Kaunas, Lithuania will become a part Europe railroad network and it is believed that part of the freights carried to directions of Western Europe Kaunas will be carried by railways. Study of Kaunas public logistic centre establishment showed that at the beginning of the Kaunas PLC activities, Kaunas PLC will be capable to tranship at least 3 pct. of all freights carried by this direction and in 2039 it could reach 15 pct. of all transhipped freight volumes carried in this direction. East West corridor: this direction corridor connects China Russia Lithuania Sweden Germany Denmark Benelux United Kingdom and other states making the most effective conditions to trade and to transport freight between these countries. Research of East West freight flow conducted in Kaunas public logistic centre establishment feasibility study showed that already in 2015 in this direction might be transported over TEU. It is forecasted that the biggest this direction freight flows will reach Lithuania in and at least 3 pct. of these flows will be transhipped and served in Kaunas PLC. According to conducted research and evaluated current situation and latest data were made prognosis of freight flows in Kaunas PLC. (see fig. 34). Fig. 34. Prognosis of freight flows in Kaunas PLC terminal in period of , thousands TEU It is forecasted that at the start of Kaunas intermodal terminal activities in 2015 the main terminal freight flows will reach Kaunas city and Kaunas region from Klaipėda port. Until the end of Rail Baltica 1 project in 2016 during which will be built 1435 mm rail from the Poland/Lithuanian border till Kaunas, part of freight flows in Western Europe Kaunas direction will be carried by railroads. Also it is forecasted that at least 3-15 pct., of all containerized cargo flows generated in this direction will be transhipped in Kaunas intermodal terminal and because of that freight transhipment in Kaunas PLC in 2016 will grow by 3,5 times compared to data of 2015 when freights from Europe at that time have not been transported by 1435 mm rail. Noticeable change in forecasted transhipments in Kaunas PLC in 2022, when it is planned to attract the biggest containerized freight flows carried through East-West corridor through Lithuania and Kaunas and part of which (~3 pct.) will be transhipped in Kaunas PLC. 31

32 4.7. Storage area growth forecasts and infrastructure and services of Kaunas PLC According to analysis of Lithuania and Kaunas storage area, which were done during the preparation of Kaunas public logistic centre establishment feasibility study in 2010 and after evaluating the situation of current storage area in Lithuania and in Kaunas, there were created Lithuania and Kaunas storage area forecasts for Storage area forecast was made based on the following key assumptions: During Lithuania s annual GDP growth rate will be at least pct.; During annual growth rate of storage area reach 5 pct. while since pct. Assumption is based on the fact that Lithuania is developing country and storage area growth until 2020 in Lithuania and Kaunas have high potential to grow, that is why forecasted annual storage area growth rate in this period is 5 pct. It is forecasted that since 2020 Lithuania s storage area supply will reach its demand and further grow at 3 pct. pace with growing economy; Created GDP ratio in Kaunas region to all country GDP will stay constant during all forecasted period. It will be thought that region of Kaunas creates about 20 pct. of all Lithuania s GDP; New warehouses in region of Kaunas will be built in Kaunas PLC in order to reach concentrated services, convenient infrastructure and created synergy effects. Fig. 35. Storage area growth forecasts in Kaunas and in Lithuania in period of Based on the forecasts of storage area growth in Kaunas and in Lithuania in period of we can say that during the forecasted period Kaunas region will have 20 pct. of all storage area in Lithuania. During the forecasted period storage area in Lithuania and Kaunas have a tendency to grow. At the end of forecasted period (2030) it is forecasted that storage area will be greater by 1,8 times larger than at the beginning of forecasted period (2014). Kaunas PLC will provide infrastructure entities, their capacity, quantity and services which will be provided by Kaunas PLC are given in figure 36. Fig. 36. Services, infrastructure and capacity of Kaunas PLC 32

33 4.8. Freights flow in region of Klaipėda and their forecasts It is planned that Klaipėda PLC intermodal terminal provide not only containerized cargo transhipment services but also will provide abilities to carry out controller transportation, i.e. in terminal there will be built infrastructure, which will allow to load trucks and semi-trailer separately on the railway platform for transportation to Russia, Belarus (shuttle contrailer train Nemunas ) and other directions thus increasing railway transported freights volumes and decreased transportation caused negative effects on the environment. Because of this reason Klaipėda PLC is extremely interested not only container volumes increase but also ro-ro freight volumes increase in Klaipėda port. Further is given containers and ro-ro freights handling statistics and forecasts. Fig. 37. Containers and ro-ro freights handling in Klaipėda port in period of Regarding to Klaipėda port containerized cargo and ro-ro freights handling data given by Statistics Lithuania are shown in figure 37. Also it can be said that in period of Klaipėda port containerized cargo volumes grew 80 pct. and ro-ro freight volumes 28 pct. Fig. 38. Prognosis of containerized cargo and ro-ro freight handling in Klaipėda port for According to factual data of containerized cargo and ro-ro freights in Klaipėda port using the time-series forecasting method there were created forecasts of containerized cargo and ro-ro freights handling in Klaipėda port for (see fig. 38). It is forecasted that in that period handling of ro-ro freights will increase by 59 pct. and handling of containers 77 pct. Growing container and ro-ro freights handling in Klaipėda port will increase serviced freight flows in Klaipėda PLC and to stimulate effective Klaipėda PLC development. 33

34 4.9. Storage area growth forecasts and infrastructure and services of Klaipėda PLC According to analysis of Lithuania and Klaipėda storage area, which were done during the preparation of Kaunas public logistic centre establishment feasibility study in 2010 and after evaluating the latest data of storage area growth trends in Klaipėda, there were created Lithuania and region of Klaipėda storage area forecasts for Storage area forecast was made based on the following key assumptions: There were about m2 storage area in region of Klaipėda in 2010, and in there were no new warehouses build; During Lithuania s annual GDP growth rate will be at least pct.; During annual growth rate of storage area reach 5 pct. while since pct (assumptions are explained in analysis of storage areas growth trends in Kaunas region; Created GDP ratio in Klaipėda region to all country GDP will stay constant during all forecasted period. It will be thought that region of Klaipėda creates about 13 pct. of all Lithuania s GDP. New warehouses in region of Klaipėda will be built in Klaipėda PLC in order to reach concentrated services, convenient infrastructure and created synergy effects. Fig.39. Storage area growth forecasts in Klaipėda in period of Based on the forecasts of storage area growth in region of Klaipėda in period of we can say that during the forecasted period Klaipėda s region will have 13 pct. of all storage area in Lithuania. It is also forecasted that at the end of forecasted period (2030) it is forecasted that storage area will be greater by 1,8 times larger than at the beginning of forecasted period (2014). Klaipėda PLC will provide infrastructure entities, their capacity, quantity and services which will be provided by Klaipėda PLC are given in figure 40. Fig. 40. Services, infrastructure and capacity of Klaipėda PLC 34

35 5 Analysis and evaluation of multilevel cooperation schemes In this chapter public logistics centres management models and their analysis is presented: Management models examples of public logistic centres in Germany; Management models examples of public logistic centres in Italy; Management models examples of public logistic centres in Greece and Spain; SWOT analysis of identified public logistics centres. Source of the photograph: yellowpagecollegedirectory.com/ 35

36 5.1. Germany PLC s management models examples of the good/bad practices Bremen PLC in Germany (GVZ Bremen). Bremen PLC is the first PLC established in Germany. It serves railway and water transport. The focus of this logistics centre infrastructure was developed by initiative of public sectors. Since 1987 Bremen PLC started to be managed by public-private partnership (PPP continue) method. Fig. 41. Bremen public logistics centre management scheme 22 pav. Brėmeno viešojo logistikos centro valdymo schema to private sector. Bremen PLC management is given in figure 41. Grossbeeren PLC in Germany. In the management of company which manages Bremen PLC (GVZe Bremen mbh) there are involved the federal government in Bremen, Germany railway and the private companies established in the PLC. There are also private companies involved in management of PLC too, which has no operations done in Bremen PLC, but which has stocks of company (GVZe Bremen) managing the PLC. Out of the management scheme given below we can see that up to 25 pct. of company s managing Bremen PLC stocks belong to public sector (federal government of Bremen), while the rest (75 pct.) belong Grossbeeren PLC were founded and developed by the initiative of Brandenburg government. Public logistic centre development in the first stages were financed by the funds of EU and by the funds of Germany state institutions and later revenues of sales and lease of prepared PLC land which added up to funding sources. Fig. 42. Grossbeeren public logistics centre management scheme In order to develop PLC activities and to manage them government of Branderburg have chosen operator Infrastrukturprojektentwicklungs gesellschaftmbh (IPG) working in the name of Brandenburg government. The main operations of this company are to administrate PLC, to develop transport and other infrastructure, to search prepared land buyers/investors. The management of PLC intermodal terminal were appointed to subsidiary of German national railway company DUSS mbh. To manage container service centre it was designated to BTS KombiwaggonGmbH. Example of Grossbeeren PLC management model is given in figure

37 5.2. Italy PLC s management models examples of the good/bad practices Bologna PLC in Italy (Interporto Bologna). Bologna public logistic centre is located near Bologna city in Italy of 300 ha area. This logistic centre serves railway and various types of road transport. In order to administrate and to manage Bologna PLC there were established private limited liability company Interporto Bologna SpA in To ensure effective development of all logistic services and development of intermodal terminal Interporto Bologna SpA founded three departments, responsible for research and innovativeness and development, consultations and development of PLC infrastructure. Fig. 43. Bologna public logistics centre management scheme Interporto Bologna SpA company managing Bologna PLC were established by publicprivate partnership. Representatives of public sector by venture agreement get 52 pct. of shares, the rest (48 pct.) for private sector. There are lot of parties involved in the management of this company: government of Bologna district, Bologna city, Bologna Chamber of Commerce, association of businesses and the railways of Italy, logistic operators, banks and other. The boardconsist of: members of the city of Bologna (4), members of Bologna region (2), and one of each other company s shareholders. The structure of all Bologna PLC shareholders are given in figure 43. Padova PLC in Italy (Interporto di Padova). Padova public logistics centre is a part of long-term investment project, initiated by the public sector institutions. This PLC serves railways and road transport types. Fig. 25. Padova public logistics centre management scheme In order to manage Bologna PLC there were established joint stock company Interporto di Padova SpA in Four major shareholders were participated in founding the company: the city of Padua, province of Padua, local Chamber of Commerce and the railways of Italy. Every one of them received equal parts of share 25 pct. each. Since 1992 the number of shareholders increased to 50. JSC taking care of only container transhipment services, while other PLC provided services are provided by private operators, attracted by PLC. All buildings in PLC are owned by join-stock company that leases them. By initiative of railways of Italy and PLC there were established additional company Nord-Est terminal SpA which responsible for making management of container terminal and related operations more efficient. The structure of Padova PLC stockholders are given in figure

38 5.3. Greece and Spain PLC s management models examples of the good/bad practices Thriasio PLC in Greece. Thriasio public logistics centre is located near the capital of Greece Athens. The founder of this PLC is Hellenic Railways Organisation. In order to manage the public logistics centre intermodal terminal and logistic park were established new company. The main objective of establishment of Thriasio PLC was to Fig. 45. Thriasio public logistics centre management scheme reduce freight volumes transported by roads and increase volumes of freight carried by railways. Current plans are to merge Thriasio PLC with Pireaus container terminal, which would allow increase serviced freight flows in Thriasio PLC. The scheme of Thriasio PLC management is given in figure 45. Zaragoza PLC in Spain (Platforma Logistica de Zaragoza). Zaragoza public logistic centre started its activities in This PLC serves railways and road transport types. In order to manage Zaragoza public logistics centre there were established joint-stock company Fig. 46. Zaragoza public logistics centres management scheme PLAZA S.A. The government of Aragon and two private banks ( Ibercaja and Caja de Ahorros de la Inmaculada ) participated in the establishment process of PLC. In this public-private partnership model public sector (the city of Zaragoza, government of Aragon) received main stake (64 pct.) and the rest of the shares (36 pct.) belong to banks. The management scheme of Zaragoza public logistics centre (Platforma Logistica de Zaragoza), which shows founders of the managing company is given in figure

39 5.4. Standardized management schemes and their SWOT analysis After the review of public logistic centres established in Germany, Italy, Greece and Spain there were distinguished three different models of multi-level cooperation schemes: Fig. 47. The first identified management model scheme Fig. 48. SWOT analysis of the first identified management model First model is public-private sectors partnership model, in which public sector entities along with private partners creates a separate company that is responsible for the PLC operations management, maintenance and development (Bremen, Bologna, Padua, Zaragoza PLC s) (see fig. 47). In this management model both public and private sectors participating in management of both public logistic centre and intermodal terminal. Inclusion of the private sector in the management ensures the attraction of specialists having more competitive and better entrepreneurial skills, while public sector ensures proper utilization of state or local assets. The following is given a first theoretical model SWOT analysis. Source: made by Consultant As can be seen in SWOT analysis of the first management model main advantages are related to private and public sector cooperation benefits. Private sector have better competencies of entrepreneurial skills, that is why it can attract more funds needed for PLC operations to bring higher benefits. At the same time public sector participation in management process ensures better usage of state or local assets and respect of public interests in PLC activities. Second identified theoretical model is also related to public and private sectors cooperation. This is publicprivate sectors partnership model in which public logistics centre infrastructure is developed and prepared for operations by public sector funds and initiatives, while for PLC operations management and maintenance private operator (Grossbeeren PLC) is hired. 39

40 5.4. Standardized management schemes and their SWOT analysis Fig. 49. The secon identified management model scheme Fig. 50.SWOT analysis of the second identified management model In this kind of model application unlike the first model public sector along with private sector does not create separate company for PLC management. Management is passed on the existing private company, which manages PLC after establishment. The following is a second management model SWOT analysis. As can be seen in SWOT analysis of the second theoretical management model strengths are related to experienced representatives of private sector managing PLC activities and more simple decision making. One of the strengths of this model is a possibility, that attracted manager might have its own clientele, which will start to use services of PLC since the start of PLC. Source: made by Consultant As the main second theoretical model weaknesses we can point out limited public sectors engagement in management process of PLC. That might cause insufficient representation of public sector and possible risk of non-transparent management of PLC. Other disadvantage is that without private sector participation in PLC planning and creation stage there is a risk that the public sector without adequate business development expertise can not provide suitable PLC infrastructure necessary for the efficient PLC operations. The last third identified theoretical management model like the first one is based on a new PLC management company establishment. In this case establishment of public logistics centre, infrastructure development is initiated and finaced by the state-owned enterprise (usually national railway organization, which is very interested in PLC establishment and development). While to manage PLC and maintain intermodal terminal new company is established (Thriasio PLC). 40

41 5.4. Standardized management schemes and their SWOT analysis Fig. 51. The third identified management model scheme Third identified theoretical management model unlike the second one is different in way that in this case new company is created instead of choosing successfully operating operator. It should also be noted that in this management model new created company is fully state or local capital, this is why private sector in operating activities of this company is not included. The following is a third theoretical management model SWOT analysis. Fig. 52. SWOT analysis of third identified managemnet model Source: made by Consultant As can be seen in SWOT analysis of the third management model advantages are related to simple public sector involvement in PLC management process. This is best way to meet the interests of public sector as well as simpler transferring procedures of public assets to PLC. As the main weaknesses of this model can be noted that by selecting this PLC management model, the newly established company at the beginning might not have sufficient skills for effective PLC management which in turn would impede attraction of the flow of freights to the PLC. Other weakness of this model can be attributed to all drawbacks associated with operations of state-owned businesses: complex business processes, due to the specific of the state company s accountability, existing risk that the state decided to increase dividends rate received from controlled companies could fall reinvestment in further development of PLC. Evaluating all three theoretical PLC management models, we can see that the best is reached when both private and public sector interest are presented (first model-based PLC management activities). In this model PLC management includes equally private and public sector, so the proper cooperation is necessary to be ensured in the planning and establishment stages in order to ensure installation of necessary infrastructure for effective PLC operations to be carried out. Attracting private sector in this case will ensure better business processes, which will instantly attract freight flows to PLC. 41

42 6 Impact study of public logistics centres development In this chapter analysis of public logistics centres establishment and development socio-economic impact and environmental impact is presented: Socio-economic public logistics centres development impact on stakeholders; Public logistic centres development environmental impact. Source ofphotograph: hellemanworld.blogspot.com 42

43 6.1. PLC development impact on socio-economic environment and environmental protection During the analysis of public logistics centres development impact on socio-economic environment two main stakeholders groups were identified: 1. Customers of public logistics centres services; 2. Residents of Vilnius, Kaunas, Klaipėda regions and Lithuania. Socio-economic impact. Impact on customers of public logistics centres services. Development of public logistics centres will have direct impact on customers of public logistics centres services. Concentration of logistics and logistics related services in one place will allow fast freight service which will reduce incurred time, financial costs of PLC clients, related to logistic processes and increase freight turnover. Also appearance of new direct freight transportation routes in which will be running shuttle trains enabling faster transportations of goods will also increase public logistics centres effectiveness and attractiveness for consumers. Impact on residents of Vilnius, Kaunas, Klaipėda regions and Lithuania. Development of public logistics centres will have indirect impact on residents of Vilnius, Kaunas, Klaipėda regions and Lithuania. Development of PLC is promoting freight transportation by railways, so it is believed that established PLC s of Vilnius, Kaunas and Klaipėda would allow reducing freight volumes transported by roads in Lithuania and increasing share of freights transported by railways. Reduced truck flows on roads will increase safety in the roads and quality of the roads. It is believed that development PLC s will attract new investments, create lot of working places which would contribute to an increase of Vilnius, Kaunas and Klaipėda regions socio-economic well-being. PLC s will generate huge revenues and thus the state and municipal budgets will collect more tax revenue. Impact on environmental protection. As mentioned before development of public logistics centres will promote freight transportation by railways instead of freight transportation by roads. Because of decreasing freight volumes transported by roads air pollution and noise pollution in the roads will decrease while quality of air will increase. Improving the living environment will contribute to a higher quality of life and the creation of quality in Vilnius, Kaunas and Klaipėda regions throughout all Lithuania. 43

44 7 Preparation of logistic centres development plan Econimical/social and technical issuses rising while planning, establishing and developing public logistic centres were identified in this chapter. Also the analysis of public logistic centres establishing stages were made: Identification of Econimical/social and technical issuses and their solving dessisions; Dettermination and analysis of stages of public logistic centres establishment. Source of photograph: progressive consulting.org 44

45 7.1. Identification of economical/social and technical issues The issuses regarding public logistic centre establishment in Lithuania were analysed while analising the development of PLC s in Lithuania. Issues regarding development of PLC s are divided into three groupes: economical issues, social issues and technical issues. Identified issues divided according to groupes are taken later in this chapter. Technical issues Vilnius PLC 1. Issue. Power line installation in state-owend land. JSC Lesto implemented 10 kv power line wich is necessary for functioning of Vilnius PLC intermodal terminal engineering systems and equioment operation. JSC Lesto faced with the issues while implementig power lines because inhabitants of Vilnius district municipality arbitrarily occupied the land neccesary for power line implementing and illigaly builded state owned land. Inhabitants mentioned disagree to remove illegal structures and leave state owned land. They demand for exceptions and additional decisions which rise costs of Vilnius PLC structure and irrational use of state funds. There will not be able to start inspection of intermodal terminal engineering systems and finish legalisation of structures. Decision: JCS Lietuvos geležinkeliai applied to the land owner (PI Vilniaus regiono keliai ) for enforcment of demolition procedures of illegaly built structures on state owned land. 2. Issue. Gaps in the legal basis. At the present PI Vilniaus logistikos parkas manages 23,4 ha area under use rights, which is neccesary for logistic companies. However, under Lithuanian legal basis PI Vilniaus logistikos parkas have no rights to subrent the state owned land managed under use rights to other investors. These unsure conditions of setting up and operating interfere investors. Decision: There is necessity to prepare and to submitt for consideration and to adopt Public logisic centre regulation law. This law should include establishment, management of PLCs and main principals of operating PLC. Ths law should include one of the main objects legal regulation of flexible disposal of state owned land for achieving goals set in PC establishment project. This regulation will promote private invetments in transport infrustructure dvelopment. 3. Issue. The necessity of Vilnius souther bypass continuation. Continuation of Vilnius souther bypass is neede for convenient acces with Vilnius PLC. At present time Vilnius southern bypass is only built untill Eišiškių street. Decision: Further steps of this project development are expected (i.e. construction of the roads and access to the terminal). 45

46 7.1. Identification of economical/social and technical issues Kaunas PLC 1. Issue. Lack of coordination between different projects. Cunstructio and inplementation works of Kaunas PLC are now almost over (forseen end of works year ). The terminal will be constructed for two types (1520 ir 1435 mm) of railway gauge trains. However, 1435 mm raiway gauge is still not built to the terminal, the line between Palemonas and Rokai is missing. For this reason there will be no possibility to fully use terminal capacity because only trains of 1520 mm gauge will be able to reach the terminal. Decision: Terminal operator will seek to maximize the use of 1520 mm railway gauge capacity after finishing the terminal constructions. Also new potential orders and shuttle trains to and from Kaunas PLC intermodal terminal in 1435 mm gauge railway infrastructure can be started to organize before 1435 mm railway gauge will be built untill terminal. It will allow to start using terminal capacity of 1435 mm gauge as soon as this gauge will be built untill terminal. 2. Issue. Different capacities of terminal and foreign countries railways. At present time only 650 m long trains can run from Poland to Lithunia because of Poland railway infrastructure capacity while in Lithuanian railway capacity allows 850 m long trains. This infrastructure incompatibility causes incomplete utilization of Kaunas PLC intermodal transport terminal capacity because there is no possibility to form shuttle trains which could shuttle from Kaunas PLC to Poland and vice versa. Decision: Only trains which fits Poland railway infrustructure will be able to run from Kaunas PLC to Poland. However, it is possible to hitch adittional wagons which will be pulled only in territory of Lithuania and unhitched in intermediate stations (for egzample in Šeštokai station). For this reason there is the need to look for Lithuania internal cargo market needs for cargo transportation in directions of Kaunas PLC and Poland. 3. Issue.Lack of territory for implementation of technical solutions planed in planning stage. Kaunas PLC area was insufficiently evaluated when it was selected In planning stage (when preparing feasibility study). Two railway tracks of 1520 mm gauge and two railway tracks of 1435 mm gauge and additional bypass tracks for each gauge were planned to be built at the beginning of project. Bypass tracks were necesarry for shunting locomotive to go back after puling wagons to terminal. However, once contructions of the terminal started it reveald that the area is not sufficient for such infrastructuture. For this reason only two railway tracks of 1520 mm gauge and two railway tracks of 1435 mm gauge were built and all these tracks are impasse. For this reason, the shunting locomotives pulling wagons for loading/unloading has to wait until the new train will be formed. Decision: The best approach of organizing train traffic in terminal is to form shuttle trains when the numbers of incoming and outgoing wagons are same. In this case, in order to avoid delay of train formation works and to avoid shunting locomotive manoeuvring difficulty it is better to organize terminal work container flows so that the train would have to stay in terminal as short as possible and it wouldn t be necessary to transform the train. 46

47 7.1. Identification of economical/social and technical issues Economical issues Kaunas PLC 1. Issue. Appearance of additional unforseen works. Additional unforseen works (such as excavation of contaminated soil, concrete foundation demolition, logging) appeared when doing terminal construction works. All these works are necessary for finishing terminal construction works in terms of construction contract and ensuring efficient work of terminal. Decision: Unneccessary works appeard when detalising technical project. For this reason some saving were achieved. An additional purchase is being organised for these savings. At present time works for 4,5 mln. Lt are carried out and saving are ~3 mln. Lt, so there is need for additional ~1,5 mln. Lt finansing. Social issues Vilnius PLC 1. Issue. The presence of residential areas close to public logistic centers area. Establishment of public logistic centres near residential areas may cause indignation of residents for increased noise level, high traffic flow and congestion in the area. Decision: Implement noise insulating walls in the areas where vehicles pose a significant noise, develop road transport infrastructure which allows reducing the negative influence of public logistics centre establishment and development on near located residential areas. Kauno VLC 1. Issue. The presence of residential areas close to public logistic centers area. Establishment of Kaunas public logistic centres near residential areas may cause indignation of residents for increased noise level, high traffic flow, congestion in the area. Decision: Implement noise insulating walls in the areas where vehicles pose a significant noise, develop road transport infrastructure which allows reducing the negative influence of public logistics centres establishment and development on near located residential areas. 2. Issue. Lack of coordination between institutions responsible for spatial planning. Kaunas PLC area was planned when preparing Kaunas city spatial plan. However, as it has appeard, state forest (a small area in the territory of Kaunas PLC) wasn t labeled in the spatial plan and the permission to harvest it hasn t been given. The change of staial plan took very long because of lack of coordination between Kaunas City Municipality and State Forest Service activities. These changes have paused Kaunas PLC constructions. Decision: Kaunas PLC establisher initiated changing of the spatial plan and coordinating of Kaunas City Municipality and State Forest Service activities in doing these changes. 47

48 7.1. Identification of economical/social and technical issues Klaipėda PLC 1. Issue. Lack of coordination between institutions responsible for spatial planning and Klaipėda PLC establishment. At the first stage of planning Kaunas PLC project Klaipėda state seaport authority was responsible for establishment of Klaipėda PLC. There were lack of coordination between Klaipėda state seaport authority and Klaipėda city municipality at the planning stage (when preparing feasibility study) because of lack of Klaipėda state seaport authority interest. This lack of coordination caused selection of wrong area for Klaipėda PLC which wasn t coordinated with Klaipėda city municipality. After transfering the responsibility of Klaipėda PLC establishment to JSC Lietuvos geležinkeliai it appeard that the area picked for terminal constructions belong to the wildlife reserve and it is forseen to develop recreational zone in it. For this reason no terminal constructions can be done in this area. Decision: At present time JSC Lietuvos geležinkeliai have made spatial plan which is now submittes for approval. New territory for Klaipėda PLC construction is forseen in this plan. 48

49 7.2. Analysis of the establishment stages of public logistics centres in Lithuania During the process of planning to set up public logistics centres in Lithuania it is essential to identify the main public logistics centres development stages. Accurately identified and summarized steps of establishing logistics centres allow for faster, consistent and time-efficient establishment of PLC, identification of the stakeholders, all parties interests and reduction of the possibility for potential problems in the future. For this purpose, the analysis was carried out covering all public logistics centres development stages. Fig. 53. Analysis of the establishment stages of public logistics centres in Lithuania Source: made by Consultant Summarizing the given information it is worth mentioning that establishment of public logistics centres is related to the main six development stages: PLC territory selection, preparation of feasibility study, detailed plan, environmental assessment report, technical project, tendering for construction works and signing and implementing construction works. In the stages of PLC planning and establishment participate the Government of Lithuania, which is responsible for selection of the territory for public logistics centre development, and JSC Lithuanian Railways, which is responsible for implementation of public logistics centres projects in Lithuania. All decisions related to the PLC area selection, preparation of feasibility study and amendments of laws should be coordinated with the Public Logistics Centres Development and Operational Supervision Commission, which is comprised of representatives of all interested parties. 49