Wheels of Fortune: Riding High on Cycling’s Second Golden Age

International Transport Forum Walking and Cycling , , , , , , , , ,

With the bike industry posting record results, we take a spin around what’s afoot to assess whether pedal power is here to stay.

By Selwyn Parker

The Starley Rover launched cycling’s first golden age in 1885

Just around the corner from my apartment in the city of Perth, Scotland, is a little bike store that is now in its 115th year of business. In all that time, the shop has had just three owners – the founder who retired after nearly 50 years and a former RAF pilot who handed it on to his son. And the store has never been as busy – “every day is like Christmas”, the owner told me.

For a variety of reasons, we are witnessing the second golden age of the bicycle, more than a century after the first, as the most efficient form of transport ever devised makes a glittering comeback from relative neglect.

“The bicycle is seeing an extraordinary cultural revolution,” predicted Virgille Caillet, director general of France’s Union Sport & Cycle, as the revival was gathering speed two years ago.

The evidence for his view is mounting. In Britain alone a new bicycle is sold every ten seconds. Many cities are rapidly expanding their traffic-free cycling lanes, like Mexico City which is working on a four-fold increase that may become permanent after the pandemic. Since 2020, Bogota’s Ciclovia initiative has taken cars off a designated 560-km network of roads every single day instead of just the one. In the Czech Republic, the Rekola bike-rental system has been extended to five cities, while Madrid recently added 50 stations to bring its total to 250. Moscow’s bike-share programme, in its seventh year of operation, now accounts for over five million trips a year.

From a single Sunday to all-year-round: Bogotá’s “Ciclovía”

And that’s just outside. During the lockdowns, millions of exercise-starved people jumped on static bicycles. In fact, never in human history have so many people spent so many hours pedalling nowhere as fast as they could. According to UK industry newsletter BikeBiz, manufacturers of indoor bikes experienced a 440% week-on-week increase in orders through much of the pandemic. At the same time, subscriptions to virtual cycling sites like Zwift, Peloton, BigRingVR went through the roof. Currently, Peloton alone claims 1.67 million members, up by 25% since the first quarter of 2021.

Although they were not going anywhere, many indoor cyclists did a lot of good for others as well as their health, like Londoner Jacob Hill-Gowing, who raised EUR 17 500 for a worthy cause by riding 3 500 kilometres over 41 days in a one-bedroom flat.

Le Tour de Flat: Jacob Hill-Gowing pedals through the pandemic

The industry is celebrating, like Japanese giant Shimano that expects net group profit to jump by nearly 50% compared with 2020. “The global cycling market has expanded by 40% to 50% since 2019 owing to the effects of the pandemic,” explains president Taizo Shimano.

It is not just the pandemic, though, that is putting people back in the saddle. The rapid development of the e-bike is proving transformational, enabling even the relatively unfit to ride almost anywhere they want. Today’s models are lighter (down to 11kg in the latest releases), more sophisticated and more manageable than the clunky versions of a decade ago. At up to EUR 4 000 each, e-bikes outsell standard machines by up to three times, according to the industry. Official figures from a variety of European cycling bodies predict annual e-bike sales to more than quadruple to 17 million by 2030, way more than vehicles.

Battery-assisted bikes also threaten to revolutionise the delivery industry. As the batteries have got more powerful and lighter, a new wave of cargo bikes is emerging. As Velo-city 2021 – the cycling conference in Lisbon in September – will confirm in a session entitled Exploring the endless potential of cargo bikes, they are roughly 60% faster than vans in the more congested city centres, allowing them to deliver ten parcels an hour compared with six for vans, according to a study in London. As a not-insignificant bonus, they also slash emissions by 90% compared with diesel-fuelled vans.

And they are much cheaper – the latest models cost around  EUR 3 400, carry up to 80kg at a battery-assisted top speed of 25km an hour, and cover nearly 60km without a recharge. Little wonder then that many European cities offer fat subsidies for cargo bikes, with Germany’s Brandenburg topping the table at EUR 4 000.

Low-carbon London cargo

The big question is whether a pandemic-induced boom in cycling will fizzle out. UK’s Bicycle Association, the official industry body, is in no doubt. “Our data suggests the UK consumer has rediscovered their love of cycling – the trajectory is set for long-term growth,” predicts its latest report. A happy confluence of transformational factors in the form of improved technology, climate-change activism and a renewed focus on personal health in the wake of the pandemic suggests this observation is correct.

As bicycle historians know, the first golden age started in 1885 when the Starley Rover appeared. Known as the “ordinary”, it was revolutionary because of its diamond-shaped frame, equal-sized wheels and, eventually, air-filled tyres. Almost overnight, the invention changed people’s lives by giving them the freedom to travel far at several times the speed of walking.

Today’s bicycles, which are essentially still ordinaries in design, promise to give people back that same sense of adventure.

Selwyn Parker is an independent journalist and author of Chasing the Chimney Sweep about the first Tour de France of 1903.

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ITF Resources:

Re-spacing Our Cities For Resilience (PDF): React, reboot and rethink – how cities can meet this triple challenge to continue as catalysts for creative social and economic activity despite new health imperatives.

Best Practice for Urban Road Safety: Seven case studies of cities that are implementing data-driven road safety policies to protecting vulnerable road users in Barcelona, Bogota, Buenos Aires, Fortaleza, London, New York and Rotterdam.

Safe Micromobility: What are the safety implications of e-scooters and other forms of micromobility in cities. The report considers a range of actions to make urban traffic with micromobility safe, including in street layout, vehicle design and vehicle operation, user education and enforcement of rules.

Travel Transitions: How Transport Planners and Policy Makers Can Respond to Shifting Mobility Trends

Integrating Urban Public Transport Systems and Cycling

Cycling Safety

Silent Sailing

International Transport Forum Maritime ,

With the world’s fleet of electric vessels set to grow, Selwyn Parker explores the quiet revolution taking place at sea

The Bastø Electric ferry from Horten to Moss in Norway. Photo credit: Bastø Fosen AS

When a ferry named Bastø Electric began sailing the main Oslo fjord in March 2021, it was a landmark in a crossing that started nearly 440 years ago.

Ferries have plied between two towns – Moss and Horten –  on opposite sides of fjord since 1582, according to local historians. It’s just a 30-minute crossing, but it’s a vital link for locals. In an average year, these ferries, run by a company called Basto Fosen, transport about 1.8 million vehicles and almost four million passengers anxious to avoid the city’s heavy traffic.

It is Norway’s busiest ferry connection. As DNV GL – the classification society – puts it: “The ferries are a constant: a symbol of reliability, stability and trust.”

But reliable and trustworthy as they are, these crossings were diesel-driven. The Basto Electric, however, heralds a new era. At 144 metres long, she is the world’s largest all-electric ferry and can transport up to 200 cars, 24 big trucks and 600 passengers, all borne along by a 7 200 kW battery system.

By 2022 when the company converts two more diesel-powered vessels to all-electric propulsion, the fjord will be quieter and the air will be cleaner. According to DNV GL, the three ferries will slash diesel consumption by six million litres a year in what can only be seen as a portent of things to come in global shipping as the power of batteries continues to grow in ways that few believed possible even a decade ago.

“Bastø Electric is a paradigm shift for the route, the shipowner and arguably the wider passenger ship segment in Norway and beyond,” foresees the classification society.

And having written many articles about the electrification of shipping and talked recently with dozens of people within the industry, I can only agree. This is, literally, a quiet revolution. Because the world is much more interested in electric vehicles, the rapid advances in battery-powered shipping have received relatively little attention.

Shipping is a notoriously conservative industry, but it is becoming excited by the potential of electrification, with good reason. As experts point out, it offers huge advantages over diesel-powered propulsion because it is more responsive, more robust, easier to maintain, more reliable because batteries offer more backup, quieter, and of course, cleaner.

So what’s not to like? Well, batteries can catch fire but then so do engine rooms.

Even sceptics can see that the advantages of batteries over fossil fuels become more compelling as they continue to pack more punch for their weight. The latest Blue Whale system developed by Norwegian manufacturer Corvus Energy delivers three and a half times more energy – up from 545 kwh to 1 892 kwh – than its predecessor. It will be installed shortly on a Canadian roll-on, roll-off ferry plying the Salish Sea off British Columbia. Although the system won’t be powerful enough to drive the entire ship in normal operations, it will be able to do so for short periods.

AIDAperla leaves the Port of Hamburg, Germany

Giant cruise ships will soon switch to battery-powered propulsion in ecologically sensitive waters as well as to run some shore operations. One vessel, the 300 metre-long AIDAperla, will this summer go into “silent sailing” mode by virtue of a 10 megawatt battery pack, the most powerful in a passenger ship anywhere. Although these floating hotels can only ghost along under pure battery power – at least for the present, silent sailing is a winner with passengers who, after all, aren’t in a hurry.

Other sectors of shipping have seen the light. Until now, confined mainly to passenger ships, battery power will soon revolutionise that snub-nosed workhorse of the ports, the tugboat. Canada-headquartered naval architect Robert Allan Ltd has unveiled all-electric designs with the power of diesel-fuelled ones – but with none of the pollution. Small though it is, the typical harbour tug pumps out a lot of CO₂ – about 1 700 tonnes a year – which is equivalent to the emissions of more than 300 cars. Thus, as Robert Allan predicts, electric tugs have the potential to clean up some of the world’s busiest marine hubs.

Tugs at work in port

And in Japan, a consortium of companies has thrown its weight behind the development of the world’s first all-electric tanker, a 62 metre-long vessel to be launched in early 2022. Demonstrably good for the environment, the ship will also be congenial for the crew because the vibration is much reduced.

The global fleet of all-electric or hybrid-powered vessels of all kinds currently numbers around 250, if vessels in operation and on order are included. And it’s growing almost by the month. As the vast global fleet of inner-city ferries, for instance, falls due for replacement, all-electric power has become the default option. Rotterdam is converting its water taxis to battery power and Kiel is doing the same with the ferries that work the local fjord as part of the authorities’ pledge to become a CO2-free city by 2050.

The hybrid electric Gaarden ferry on the Kiel Fjord, Germany

Historically speaking, battery-powered ferries aren’t new. Since 1909, in a remarkable technological feat of the time, all-electric passenger boats have sailed the pristine waters of the Konigsee in Germany. But it was the Nordic countries that took zero-emission propulsion into the 21st century under a 45-year-old cooperative initiative that is now led by Oslo-based Nordic Energy Research. As a study by the International Transport Forum called Navigating Towards Cleaner Maritime Shipping noted in late 2020: “It is an approach that holds many lessons for shipping nations seeking to decarbonise their fleet as quickly as possible.”

It’s a fair assumption though that not even the founders of this initiative expected to see an all-electric, 144 metre-long ferry on the Oslo fjord as soon as 2021.

Selwyn Parker is an independent author and journalist who writes for a wide range of publications on transport and related technology in all its forms.

See more ITF work on maritime transport

Women-only ride-hailing: new data inspires the movement

International Transport Forum gender

More ride-hailing companies are offering women-centred services, but do they get women on the road?

By Alexa Roscoe, Disruptive Technology Lead, International Finance Corporation

The next time you open your favourite ride-hailing app, you may find a surprising feature: the option to choose a woman driver or rider.

Safety is a determining factor when women decide how, when, or if to drive and travel. In the face of widespread harassment in the transport sector, social mores restricting women’s mobility, and overall market demand, sector leaders like Bolt, Didi, and Uber are increasingly adopting women-centred products. This surge begs the question: Do these services succeed in supporting women?

There has been a rapid expansion of women-only options in ride-hailing…  

Last year, IFC published the first research on women-centred services in ride-hailing, interviewing more than 30 companies and identifying seven different active models of women-centred ride-hailing services. The paper explored whether gender-segregated transport, long a topic of heated debate in mass transit, increases women’s mobility and participation in ride-hailing- or whether it just reinforces existing barriers.

Since the report’s publication, services have scaled significantly, growing from pilots to formalised products active across multiple countries. Uber extended its “Women Rider Preference” product from Saudi Arabia to 11 countries in Latin America and Africa, recently extending it to drivers who identify as non-binary as well.  Didi, which in IFC’s initial report described using “Algorithmic Prioritisation” in China to connect women drivers and riders automatically, launched Didi Mujer (Didi Woman), giving women drivers the option to match only women riders in select markets. Most recently, Bolt launched a “Women-only” feature, now active in five countries, which takes a slightly different approach, allowing riders to request matches with women drivers rather than the reverse.

Rapid scaling of women-centred products – even in the face of a global pandemic – has brought them into the mainstream, making it increasingly essential to explore their impact.  

…but do they really open up opportunities for women?

Women-centred services have shown market demand across a remarkably diverse range of contexts. Previously, IFC’s six-country study found that these services would boost women’s use of ride-hailing across locations, particularly when travelling at night, alone, or in insecure areas. In Sri Lanka, 90 per cent of women PickMe riders would like to choose the gender of their drivers, and 25 per cent would be willing to pay a premium to do so.  

Yet confirming if these services succeed in getting women to work in ride-hailing is more complex. Following the legalisation of women’s driving in Saudi Arabia, Uber data shows many women started out by using the “Women Rider Preference” feature exclusively, but gradually transitioned into the main app.  Similarly, in Latin America one in five women who use the feature use it 90 per cent of the time. This suggests that segregated services could serve as a bridge for women into a sector in which they might not otherwise consider working.

Equally important, more than half of drivers who used the option in Brazil drove more overall and at night, when women drivers are least likely to be on the road but demand for rides is higher. This means the product has the potential to increase incomes by helping women work more, and more profitable, hours. As of June 2021, “Women Rider Preference” users had completed over 7 million trips.

Bolt also reported promising data for the first six months of the launch of its “Women-only” option, telling IFC that availability of women drivers increased by as much as 66 per cent in active markets. The feature also seems to be linked with higher trip completion rates for women, addressing a common challenge where men cancel their ride when assigned a woman driver. Globally, women drivers have an average 4.9/5.0 service rating, making them eligible for performance bonuses. As Bolt Regional Director for Africa and the Middle East, Paddy Partridge, noted “Women riders and drivers are essential to the advancement of the ride-hailing industry. The success of these “Women-only” categories proves that the more deliberate inclusion of women contributes to the growth and sustainability of the ride-hailing sector.”

Detours ahead?

Even in the face of strong demand, companies face significant operational hurdles. For instance, matching women drivers, who remain a minority across contexts, with women riders can mean that few drivers serve a large population, potentially decreasing driver incomes and increasing rider wait times. A homogenous user base can also mean dramatic fluctuations in supply and demand: in the early stages of their launch, founders of Egypt-based Fyonka couldn’t understand why they faced a sudden drop-off in driver availability- until they realised many women were at home helping their children prepare for upcoming exams.  

Successful companies intentionally exceed industry standards related to training, social norms, and security. For instance, Ghana’s LadyBird Logistics, a long-distance trucking company, sends out women drivers in pairs and arranges for safe overnight lodging.  Several others offer dedicated training or ensure family buy-in to help build the pipeline of recruits.

Getting women on the road

Women remain a small fraction of transport providers everywhere in the world. Transport gaps for riders reduce women’s labour force participation by more than 15 percentage points. Tackling both challenges means making all forms of transport affordable, accessible, and safe for women. Neither gender-segregated transport nor ride-hailing alone will ever be sole solutions, but as markets reopen and more ride-hailing companies recognise the need to better serve women as drivers and riders, we need to continue to look for new solutions from across the sector and to keep alive the debate on how best to serve women in ride-hailing.

For further discussion and case studies, see “Gender-Segregated Transport in Ride-hailing: Navigating the Debate” and join the conversation using #DrivingEquality. For more on women and ride-hailing, check out the resources below:

See more on ITF’s work on Gender in Transport, including the latest project on developing a Gender Analysis Toolkit for Transport Policies

S Express: boosting EV take-up on the road to our global climate goals

International Transport Forum Road , , ,

by Sophie Punte, Managing Director of Policy, We Mean Business coalition and Michael Grubb, Professor of Energy and Climate Change at University College London Institute for Sustainable Resources

 
Most people planning to buy a new car in the next year are likely to be considering an electric one. For anyone not considering going electric, they may live to regret it. In just three years’ time, electric cars will likely beat petrol and diesel cars on cost, environmental impact and performance.

It feels like the progress on electric cars has moved at high speed over the last year, and data shows it’s only going to get even faster. This is because electric vehicle (EV) uptake is on what’s known as an ‘S-curve’ of growth. On every occasion this has happened in the past with other industrial transitions, governments, business and consumers have been taken by surprise.

s-curve-graph

Remember the years up to 2012, when we would proudly pull out our latest model of (for many) the Nokia mobile phone? Yet once smartphones arrived, we all switched rapidly without much thought. What you got with a smartphone for a fairly equivalent price made it worth it. The speed of the transition was phenomenal. We’ve seen similar patterns of S-curve growth with the switch from video rental to streaming. The telecommunications and film industry business models have been completely transformed.

So what can we expect in the car industry? A new study by the University College of London (UCL) in collaboration with the We Mean Business Coalition (WMB) shows that global EV sales have increased by an average of 41% per year since 2015. If growth follows this S-curve trajectory, all new cars sold could be electric by 2040.

s-curve-transport-report

In terms of the climate crisis – while this is positive news – we’ll need to push harder to get on track for halving emissions by 2030 and a net zero future by 2050. To achieve that, we need new passenger road vehicle sales to be 100% zero-emission by 2035.

Given the exponential growth so far, we may be tempted to hope that the market will take care of the problem itself. But we must not underestimate the measures needed to ensure a smooth path to 100% EVs. Current charging infrastructure is inadequate; there isn’t enough of it and it’s not seamlessly set up to make it easy enough for consumers. Also, EV purchase costs are still out of reach for many.  

How do we deal with these challenges? Governments have a critical role to play, as featured in the report’s principal policy recommendations:

  • Invest in infrastructure for reliable, seamless and publicly accessible charging.
  • Commit to public procurement of EVs and incentivise private companies to do the same, for example through the Climate Group’s EV100 program.
  • Help buyers overcome up-front EV purchase costs by stimulating leasing schemes and second-hand markets for EVs and batteries.
  • Tighten emission standards and implement fiscal incentives to accelerate the simultaneous phasing out of the internal combustion engine.
  • Invest in a simultaneous rapid transition to renewable power to ensure EVs are genuinely zero-emission.

And let’s make sure that we look beyond EVs because this is the decade of action. We must take a holistic approach to maximise the opportunities available including to:

  • Futureproof legislation and infrastructure for a future where vans, light duty trucks and possibly even heavy trucks will go electric.
  • Continue energy efficiency improvements, for both vehicles and for more efficient driving and route planning.
  • Encourage appropriate use of cars and trucks alongside other transport modes; incentivise passenger travel by train, bike or foot, and efficient transportation of goods by rail or ship.

Moving on an EV s-curve will have deep implications, not limited to the clean vehicle and clean energy markets. Governmental action to stimulate a transition to EVs and renewable energy will therefore also require actions that go beyond the role that policy should take to stimulate these transitions. An upcoming ITF report points to three major areas that are worth greater consideration by policy makers and offers relevant recommendations on how to handle the challenges affecting them. These relate to changes in the demand for new materials and related supply chains, structural changes in government revenues from fuel taxes and impacts that a switch to EVs and renewables – as well a digital technologies – will have for jobs and changes in skillsets. Indeed, as we get excited about EVs, we should consider how to help transition workers from the traditional automotive industry into new jobs in EV manufacturing and beyond.

Taking action on all these fronts will ensure that the transition is achievable, sustainable and causes the least disruption to people as possible.

Our overall approach to car use could also make or break the success of the EV transition. What has become all too clear during the Covid-19 crisis is that collaboration between countries is essential to succeed. The same is true for the climate crisis. Emerging economies are an important market for second-hand cars including more polluting models. There is a risk is that these countries could soon be the dumping ground for petrol and diesel cars, keeping their emissions levels high with the associated localised air pollution effects. Tighter emission standards and preferably import bans for ICE vehicles and engines can reduce this risk.

The UCL/WMB report aims to give both business and policymakers worldwide the confidence to increase ambition in the transport sector and to boost the S-curve. Along with the ITF analysis on cleaner vehicles, it also helps to ensure that this technology transition will be resilient.

As we emerge from the Covid-19 crisis, governments can help business at key moments like the G7, G20 and COP26 to deliver clear, detailed policies to achieve their national targets in line with the Paris Agreement climate goals. As passenger road vehicles are responsible for 45% of global transport emissions, it is critical that we maximise their emissions reduction potential now. And EVs are not only better for the climate than petrol and diesel vehicles. They also improve human health through cleaner air and, if planned well, could increase jobs and growth. They can play an essential role in helping us build back better.

Supply chain reaction: why the time is ripe for sustainable logistics

International Transport Forum All Transport ,

With the stakes higher than ever in the run-up to the crucial UN climate talks in Scotland this November, Sophie Punte and Alan McKinnon share their vision of how logistics systems can and are providing a sustainable backbone for the planet’s ever-increasing movement of goods.

Electric vehicle last-mile deliveries in Shanghai, China

When logistics systems work, as they normally do, they are taken for granted and attract little media attention, despite handling USD 19 trillion of merchandise trade annually. The Covid crisis, however, has exposed both the importance and vulnerability of our just-in-time supply chains. These chains have played a critical role in the switch from conventional to online retailing during periods of lockdown and in the supply of personal protective equipment and now vaccines. On the other hand, cancelled ship sailings, trucks caught in 40 km tailbacks at borders, disrupted production lines and empty shelves in our shops have shown how susceptible logistics is to major disasters.

The pandemic has given us a glimpse of the kind of disruptions we can expect from climate change. Already, supply chains are being stressed by climate-induced events, such as the Australian and Californian forest fires and Africa’s floods and droughts. Meanwhile, adaptation of our built environment to ever-more-frequent and extreme weather events will generate much additional freight demand as we try to minimise the consequences of climate change.

Efforts to contain coronavirus have also given us a sense of the magnitude of the changes required to mitigate carbon emissions from freight transport. In May 2020, the International Transport Forum projected a 28% drop in freight-related emissions (PDF link) worldwide as a result of the Covid-19 lockdowns. Although emission levels have since rebounded, this level of decarbonisation will be required by 2030 to get freight transport onto a net-zero trajectory by 2050, though without having to resort to industrial and societal shutdowns.

With logistics’ share of global CO2 emissions at 10-11% and rising, efforts to decarbonise it must intensify. We believe that recovery from the pandemic presents an opportunity to build global supply chains that are both more environmentally sustainable and more resilient. Fortunately, these goals of sustainability and resilience are well aligned, and there are many ways in which they can be jointly achieved.

The logistics decarbonisation process is underway, though its pace and scale must increase to reach the Paris climate goals. In a recent European survey of 90 businesses, 30% had a target to cut total logistics emissions and a sustainability strategy in place or being implemented to deliver it.

New technology and a switch to low carbon energy will dramatically reduce freight emissions. Shenzhen, for example, has already deployed 70 000 “electric logistics vehicles” (ELVs). Small players like Workhorse are aspiring to become the Tesla of the electric delivery van market. However, we need faster action now and cannot wait until the world’s freight fleets migrate from fossil to zero-carbon energy. In the short to medium term, training in fuel-efficient driving, better use of freight carrying capacity, less packaging and shifting freight to cleaner, lower-carbon transport modes can all shrink the logistics carbon footprint.

In deploying these essentially managerial initiatives, we can ride the wave of digitalisation that is already transforming logistics. Digital freight platforms, like G7 in China, Sennder in Europe, India’s Freight Tiger and Flexport worldwide are taking the online matching of loads with available capacity to a new level. They are cutting the 20-30% of truck-kilometres typically run empty and raising fill rates in sea containers, planes and rail wagons. They are also helping entire supply chains to become more visible both operationally and in terms of their carbon emissions. This makes it easier for companies to report emissions to customers and identify ‘hot spots’ in need of efficiency improvement.

An increasingly carbon-intensive hot spot in many companies’ supply chains is the ‘so-called’ last-mile delivery to online consumers. By 2023, online shopping was expected to reach 22% of all retail sales worldwide before taking the impact of the coronavirus into account. A World Economic Forum / McKinsey study (PDF link) has predicted a 30% growth in CO2 emissions from last-mile delivery in the world’s 100 largest cities by 2030.

Where an online delivery replaces a car shopping trip, a significant net reduction in emissions can be achieved. Still, much more can be done to improve the energy and carbon efficiency of last-mile logistics by, for example, consolidating orders, using locker-banks and minimising returns.

The good news is that environmental action in the logistics sector is growing. In support of the EU Green Deal, a Sustainable and Smart Mobility Strategy was published in December outlining how the freight transport sector’s green and digital transformation should proceed. California has mandated that by 2035 only zero-emission vehicles are sold and is requiring truck manufacturers to transition to electric zero-emission trucks beginning in 2024. As part of its commitment to be carbon neutral by 2060, China is prioritising goods movement by rail and the use of electric delivery vehicles to curb freight emissions. About forty cities in The Netherlands are introducing zero-emission freight zones, as are cities in the UK, China and elsewhere.

Over 100 multinationals, including Unilever, HP Inc and Maersk, calculate and report logistics emissions using a standard developed by the Global Logistics Emissions Council or GLEC, thereby increasing consistency and transparency. DP-DHL was the first logistics company to commit to zero-emission freight by 2050, while IKEA will be making only zero-emission home deliveries by 2025. In the European study mentioned earlier, a majority of the 90 businesses surveyed reckoned that at least half of CO2-reducing measures in logistics also cut costs, giving them a strong commercial as well as environmental motive to decarbonise. Of these companies, 70% also reported that the pandemic would have either no impact or a positive effect on their logistics decarbonisation efforts.

Calls for a green recovery to the Covid-19 crisis are growing, supported by clear policy recommendations from the We Mean Business coalition. This needs to go hand-in-hand with making infrastructure climate-ready, at a cost of around USD 1.8 trillion by 2030 according to the UN-led Global Commission on Adaptation. Despite this huge spend, much of which will go on logistical operations, it should save around USD 4 for every USD 1 spent.

This year’s UN Climate Change conference (or COP26) in Glasgow presents an excellent opportunity to scale- up our collective efforts to achieve resilient, zero-emission freight and logistics by 2050.

Sophie Punte is the founder and board advisor of Smart Freight Centre, a global non-profit organisation dedicated to zero-emission freight, and Managing Director of Policy at the We Mean Business coalition.

Alan McKinnon is Professor of Logistics at Kuehne Logistics University in Hamburg, a lead author of the transport chapter of the IPCC’s Fifth Assessment Report and author of “Decarbonizing Logistics“.

The International Transport Forum’s 2021 Virtual Summit on “Transport Innovation for Sustainable Development” will be held from 17 to 28 May online. This special virtual edition of the world’s premier transport policy event features sessions for a brigher transport future including on low-carbon vehicles, actions to decarbonise freight transport, and on achieving more resilient and innovative goods transport. See the Summit programme and register to join the debate!

Stuck in the Suez Canal: Lessons from the Logjam

International Transport Forum Maritime

by Olaf Merk

On 23 March, a mega container ship got stuck in the Suez Canal – and remained stuck for six days. Despite the digging, towing and dredging, the only thing that was unblocked was creativity in the form of Suez memes on the web. The mega-ship proved to be the vessel on which all possible human problems could be projected. Now that she is refloated, hilarity can ebb away and give way to reflections on the implications of this incident.

Let’s start with the principal actors: the Canal and the ship. The Suez Canal is one of the world’s maritime chokepoints. Around 12% of world trade passes through it, approximately fifty ships each day, mostly container ships and tankers. The Suez route is considerably shorter than its alternative, the Cape route. Nevertheless, shipping companies regularly snob the Suez Canal, especially in times of low oil prices and as a way to put pressure on the Suez Canal Authority to cut canal dues.

The other actor was the mega-ship: the “Ever Given” is 400 metres long and 60 metres wide, she can carry more than 20 000 containers. This is exactly the type of ship for which the Suez Canal was widened and deepened in 2016.

What happened?

How exactly did the giant vessel get stuck? Little certainty here so far, and much conjecture. The ship owner remained silent throughout the process, as did the ship operator. The ship manager blamed the wind and denied that there was power failure.  That it is a mega-ship that caused an important global trade route to shut down is no coincidence, and many experts have warned about the risks they create. These gigantic ships are more difficult to manoeuvre and get more easily stuck due to their deep draft. They are also heavier than smaller containership, so more complicated to refloat.

More clarity should come from the investigation of the accident. The flag state of the “Ever Given” has a reputation for dodging such responsibilities, but it is hard to imagine that it dare to do so now given the global attention. Thanks to a heroic effort by the salvage company and the canal authority the ship was freed after a week and traffic on the world’s busiest shortcut could resume. Zoom out, happy ending.

But not really. The backlog of hundreds of other ships waiting to transit through the Canal is creating enormous challenges in ports and throughout the whole supply chain. Some observers calculated the costs of the Suez Canal blockage to be between USD 6 to 10 billion per week. Just remember: the reliability of ship schedules has been in freefall since June 2020. Two out of three container ships are delayed; in the beginning of 2021 the average was five days. If a few days of Suez Canal blockage leads to billions of dollars economic costs, imagine the extent of the loss due to delayed vessels just prior to the incident.

The costs of no canal

The supply chain disruption that we will see in the coming weeks is the quintessence of the mega-ship: maximise the economies of scale on the ships, but leave it up to ports to clean up any mess that may result. Ports will now be put under pressure to catch up and find additional handling capacity when this was already stretched. They will need to keep some vessels waiting and get blamed for “port congestion” that is not their fault.

This is nothing new: various organisations have recently blamed port congestion for increased freight rates, although these already started to rise in May 2020, well before port activity was back to normal after the dip due to Covid-19. Do not expect carriers to pay for the situation that their mega-ships have caused. The Suez blockage has reduced effective ship capacity, so will likely lead to further increases in ocean freight rates. Customers and ports will pay the price instead, and maybe a few insurers.

A report on “The Impact of Mega-Ships“ the ITF published in 2015 described this dynamic, in which mega-ships create benefits and profits for their owners and operators, while the costs they incur – such as those for longer berths or truck congestion in port cities – are left for others to pay.

Deeper causes of disruption

At that time, the mega-ship strategy of carriers was, to some extent, self-defeating: as new mega-ships contributed to oversupply of ships, ocean freight rates were going to be low and profits limited. This has changed now. The intended effect of mega-ships was to force a market consolidation, which has happened. The unintended effect has been increased cooperation between the major carriers. The world’s top ten carriers are now interlinked in various alliances and consortia, providing carriers with the mechanisms to coordinate ship capacity. During the Covid-19 crisis, they used this power to their advantage by stabilising and pushing up freight rates

Thus, the current disruption of the maritime supply chain is not about a mega-ship stuck in the Suez Canal, and it not about lack of adequate infrastructure in ports – ultimately, it is about a lack of effective competition policy for global liner shipping. In Europe, regulators are now urging ports to free up capacity to deal with the after-effects of the Suez incident. There have not been reports that they also urged carriers to reinstate more capacity to Asia-Europe trade routes when trade picked up again in Q3 and Q4/2020, but carriers deployed 4% less capacity than over the same period in 2019.

The mega-ship incident in the Suez Canal has shown the vulnerabilities of the global maritime supply chain. Some stakeholders will no doubt push for a new expansion of the Suez Canal, more port infrastructure and the development of alternative maritime routes, for example the Arctic Sea routes. This would be misguided. The main vulnerability is the mega-ship and the world of integrated mega-carriers that it has created.

Changes in deployed container ship capacity on different trade lanes (YoY)

Source: ITF, MDS Transmodal

Olaf Merk is Project Manager for Ports and Shipping at the International Transport Forum

Gender in the balance: the win-win of designing innovations for all

International Transport Forum All Transport, gender ,

This UN International Day of Women and Girls in Science, Magdalena Olczak-Rancitelli encourages us to seize the opportunity for more inclusive transport policies in the wake of the Covid pandemic

Increasing numbers of people cycling and walking has been one of the few pieces of good news to come out of the Covid crisis. But what if you live in a society where girls are not even allowed to learn to ride a bike? What if you’re afraid to walk to home from work at night? The pandemic has revealed many long-standing problems and highlighted many urgent issues for women and girls as transport users, and as employees in the transport sector. But there is hope: these issues can be addressed using the many tools at our disposal, from technological innovations to better government policy.

If we want to change behaviours, attitudes and capacities, the best place to start is by listening to the experiences and proposals of those most directly concerned. The third edition of the ITF Compendium on Transport Innovation for Sustainable Development: A Gender Perspective does just that. The publication presents a wealth of ideas from women on how to make transport more inclusive and sustainable.

The wide-ranging contributions share a common starting point: transport is not gender neutral. Women prefer flexible modes that facilitate trip chaining more than men, for example. And since women do most of the unpaid care work that many families depend on, they travel more with children and other dependents – the “mobility of care”. Anyone who has struggled to get small children and related paraphernalia up public transport stairs or onto a bus will be painfully aware that these needs are usually not accommodated in the design of transport infrastructure, services or vehicles.

Women also feel less safe and secure in public spaces, which deters them from choosing public transport, taxis, shared mobility, or from cycling and walking. Ultimately, this limits women’s and girls’ access to schools, jobs, health and other public services. The digital gender gap further hampers women’s access to online mobility services.

Even if the observational evidence is there for all to see, well-designed policies reply on good data. Gendered analysis helps assess whether specific gender needs are met properly and what the impact of innovation could be on mobility. Understanding what women want from cities, and how this translates into a vision for urban transport, should be at the heart of urban public policy. This, however, will require much finer and more differentiated knowledge of travel behaviour and users’ needs than has been the case until now. New data sources can help develop that knowledge base, but it is important to avoid biases that have become ingrained in past transport policy making. Public-private co-operation to collect, share and process gendered data is a solution, not least as a way to benefit from the wealth of mobility data created during the Covid 19 pandemic through track and trace apps.

Technology and planning alone will not suffice to improve our transport systems. Access to and affordability of transport often depends on education and income. Digital competence now also determines access to new mobility solutions, as well as the need to own a smartphone. Universal access to innovative transport services can only be achieved when these aspects are placed squarely at the centre of governance framework design.

Ride hailing is a good example. Few industries have been so greatly impacted by the pandemic, but the form of impact has varied enormously. In some markets, passenger trips have stopped, while in others there has been a sudden surge in demand as wary riders shift away from public transport. Focusing on women would not only be morally justifiable: it would enable a resilient recovery for the sector. Post-Covid recovery plans that are attentive to the concerns and needs of women will lead to an increase in female customers.

The experiences of women working in the transport sector been highlighted, and changed, by the pandemic. Customer-facing staff have seen their role expanded from ticket sales and information to policing social distancing and mask wearing regulations. Often their jobs are more dangerous where public co-operation is lacking. Transport staff, of course, risk greater exposure to the virus, as born out by infection and death rate data.

Women are often hailed as front-line “heroes” of the pandemic. The increased automation of ticketing, cleaning and other activities in response to the virus is more likely to threaten their jobs, however. Women must be given access to the training and skills development needed to benefit from the employment opportunities led by innovation. Some of the most innovative sectors – like remotely piloted aircraft systems (drones) – have pronounced gender disparities. The industry as a whole reflects the existing gender inequalities in science, technology, engineering and mathematics (STEM). Governance, nomenclature, and education must be combined in our approach to right this injustice.

Good governance is essential to point technological innovation towards equity and sustainability. But we need to rethink governance itself to follow rapid innovation and increased complexities. Exchange of good practices and ideas among all stakeholders – policymakers, business, civil society and academia – is essential to any good governance framework. The ITF Annual Consultation on gender provides a unique platform to advance dialogue on gender issues in transport and to facilitate knowledge exchange.

Our latest Compendium on Transport Innovation will inspire the discussions at this year’s consultation on 11 February 2021. But the discussions won’t stop there, and will continue in the lead-up to and during the 2021 ITF Annual Summit on Transport Innovation for Sustainable Development: Reshaping Mobility in the Wake of Covid-19.

2021 ITF Compendium on Transport Innovation for Sustainable Development: A Gender Perspective

Magdalena Olczak-Rancitelli is a Manager for Summit Preparation at the International Transport Forum

 

How shipping can help to avoid pandemics

International Transport Forum Maritime , , , , , , , , ,


Diseases like Covid-19 are passed from animals to humans. They spread because of animal trafficking, deforestation and human encroachment into wildlife habitats. Maritime shipping plays an important role here that needs to be addressed.

By Olaf Merk

Cruise ships played a highly visible role in spreading Covid-19
(Photo: Kotenko Oleksandr/Shutterstock)

The exact causes of Covid-19 are still unclear. Yet it is highly probable that it is a so-called zoonotic disease, transmitted from animal to human. Around 60% of existing human infectious diseases are zoonotic, including highly lethal ones such Ebola, Aids, SARS, West Nile Fever and the plague. Zoonotic viruses cause no symptoms in the host animal; for humans they can be deadly.

The main factor behind zoonotic diseases is humanity’s relation with nature. Viruses spill over to people as a result of the exploitation of the globe’s fauna, such as hunting and wildlife trade. Human encroachment into other species’ natural habitats, for instance through logging, mining cultivation or urban development, has increased contact with wild animals and heightened virus spill-over.

“Highly efficient transport networks can propel localised virus outbreaks into worldwide pandemics.”

As humans continue to invade unexplored wildlife areas, more zoonotic diseases are likely to jump the boundary between species and afflict us. Fully 75% of the emerging infectious diseases are zoonotic. Of these, almost half are linked to changes in land use, principally for the production of meat, soy and palm oil.  As science journalist David Quammen, author of “Spillover: Animal Infections and the Next Human Pandemic” put it back in 2012: “If you shake a tree, something will fall out.”

Carrying ballast

The physical interconnectedness of our globe through a finely-woven web of transport links has huge benefits for mankind.  The downside: highly efficient transport networks can propel localised virus outbreaks into worldwide pandemics – as happened with Covid-19.

The main responsibility falls on maritime shipping. This is nothing new – infectious diseases have spread aboard ships for centuries, including the plague in the Middle Ages and the lethal 1918/19 influenza. The role of shipping as an amplifier of infectious diseases has waned somewhat with the decline of sea-borne passenger transport. But ships still spread viral diseases, as the many cases of Covid-infected cruise ships show. A significant part of the spread of Covid-19 in Australia has been associated with infected passengers disembarking from a cruise ship in Sydney.

The ballast water dumped by ships contains alien invasive species
(Photo: Denys Yelmanov/Shutterstock}

Ships also carry pathogens in much more oblique, but no less dangerous ways: via ballast water. Ballast is an essential component of seafaring. During a voyage, vessels take on board sea water to replace weight lost through fuel and water consumption while at sea. The ballast reduces hull stress, optimises manoeuvrability and improves propulsion. No longer needed, the water is dumped into the sea again.

This simple practice can have lethal consequences. Ballast water contains a multitude of microbes, small invertebrates, larvae, and bacteria. Removed from their habitat and dumped elsewhere, they become “aquatic invasive species’ that can cause havoc in their new ecosystem.

“The 1991 cholera epidemic in Peru is believed to have been introduced into three ports through ballast water.”

The 1991 cholera epidemic in Peru is believed to have been introduced into three ports through ballast water from Bangladesh. The disease subsequently spread throughout Latin America, killing more than 10 000 people by 1994. The use of ballast water has been much stricter regulated in recent years, nevertheless it remains a primary conduit for invasive alien species worldwide – with immediate consequences for human health.  

A seamless (virus) supply chain

With a share of 80% of global freight, maritime shipping is the mainstay of the frictionless and cost-efficient transport chains that lubricate global trade. And therefore it is also implicated in the causal chain that links international trade into the causes of pandemics – both directly and indirectly.

Pangolins are the most trafficked wild animal
(Photo: Afrianto Silalahi/Shutterstock)

Legal and illicit wildlife trade is one aspect. Hundreds of millions of plants and animals are moved around the planet every year, with an estimated annual economic value of over USD 300 billion. Several zoonotic infectious diseases have emerged in part due to the human-animal contact that occurs along the wildlife trade chain.

Maritime shipping plays an important but hardly recognised role in this. Take trade in pangolins, one of the possible intermediary hosts of Covid-19. Pangolins are the most trafficked animal in the world, mostly because of their scales which are used in traditional Chinese medicine. An estimated 596 000 pangolins were illegally traded between 2016 and mid-2019 –  usually via ocean transport, with scales concealed in boxes or sacks in shipping containers and declared as fish or other cargo. Arrests, prosecutions and conviction rates are low, also because of corruption at certain seaports.

The forest for the trees

Another example of shipping’s role in the loss of biodiversity is its indifference towards illegal forestry. Depending on the source, illegal logging accounts for 5% to 40% of global wood production. Too many in the maritime supply chain turn a blind eye on illegal wood trade. Working in separate systems, suppliers, transporters and government agencies report forest products differently, which makes identification of – and action against – illegal wood trade difficult.

Shipping plays an important role in the illegal wood trade
(Photo:  Infinitum Produx/Shutterstock)

Law enforcement is weak in many ports. Some have become downright hubs for “wood laundering”, where the origin of the wood is covered up before it reaches its final destination. Ship operators and agents that do not check the legality of the cargo they transport enable such practices. The anonymity of shipping containers helps, as do vessels operating under “flags of convenience” with little regulatory scrutiny. Critics lament “a lack of due diligence, a denial of responsibility, and even of culpable negligence”.

Lessons to learn

The reaction of transport policy-makers to Covid-19 has so far been to address the immediate effects of the pandemic. Soon, the focus should shift towards how future pandemics can be avoided, and such a strategic reflection will need to consider the role of maritime transport.

Such a strategy should identify shipping-related measures to halt the future propagation of pathogens. It should also address the causes of pandemics, such as wildlife trade, deforestation and other pressures on biodiversity loss via changes in land use. Governments should not be shy about making financial help for shipping companies conditional on the implementation of measures which will help prevent the next zoonotic disease developing into a pandemic.

“Seaports should up their game and improve their capability for effective scrutiny of cargo.”

Maritime transport companies, for their part, could use their pivotal role in supply chains to better scrutinise their cargo. The ongoing digitalisation of the maritime supply chain improves the traceability of cargo and its characteristics, including its legality. That way, shipping companies could show they are serious about implementing due diligence on the cargo they transport.

Seaports should also up their game and improve their capability for effective scrutiny of cargo. Several ports have created Wildlife Traffic Monitoring Units to detect and prevent the illegal transport of wildlife. Seaports should also include combating illegal timber and wildlife trade as objectives in their sustainability strategies, and be accountable for their actions on this. 

Certainly certified

The shipping sector can also do a lot to contain further deforestation around the globe. Commitments to move cargo only for clients that comply with certification schemes that protect natural forests would go a long way. These are common in palm oil, timber and paper supply chains, but rarer in the soy and cattle sectors.

Deforestation is a result of export-oriented, intensive agriculture which needs sea transport
(Photo: Rich Carey/Shutterstock)

Examples include schemes run by bodies such as the Roundtable on Sustainable Palm Oil (RSPO), the Forest Stewardship Council (FSC), the Programme for the Endorsement of Forest Certification (PEFC), the Round Table on Responsible Soy (RTRS), the Amazon Soy Moratorium, and the Zero Deforestation Cattle Agreements and, for fish, the Marine Stewardship Council (MSC).

Last but not least, the international community will do well to think more about the role of maritime shipping in relation to biodiversity – in the oceans as well as on land – and include it in multilateral agreements. The new UN Global Biodiversity Framework, currently in preparation under the Convention on Biological Diversity, will define targets and pathways for the conservation and management of biodiversity for the next decade and beyond. It seems like a good opportunity for a strong signal that long-term lessons from the current Covid-19 health crisis are being learned.

Olaf Merk is ports and shipping expert at the International Transport Forum. Views are his own.

Safer arterial roads in Latin America: lessons from Bogotá, Fortaleza and Mexico City

International Transport Forum All Transport ,

Three Latin American cities provide effective road safety lessons using a holistic management approach to a culture hooked on speed.

Bogotá permanently reduced maximum speed limits from 60 to 50 km/h in May 2020 | Source: Secretaría de Movilidad de Bogotá

Road safety is a growing concern in cities aiming to become more liveable. Where people feel unsafe, policies to promote walking and cycling will be handicapped, and deliver far less than their potential. Reducing crash risks thus not only saves lives, it also unlocks sustainable forms of transport that cut pollution, fight congestion and improve the physical and mental health of citizens. Cities all around the world have committed to deliver safer streets. Many have taken a leadership role in the battle for road safety. Much can be learnt from cities that have achieved large reductions in traffic fatalities, as revealed in this ITF report. The publication details seven case studies of cities implementing data-driven policies that inspire best practices in urban road safety.

In Latin America, the case studies provide insights into how to address high road mortality rates (PDF) in the context of rising motorisation and a culture hooked on speed. Lessons from Bogotá, Fortaleza and Mexico City are the key to delivering safer arterial roads. In all three cities, streets with a mix of vulnerable road users and motor vehicle traffic were limited to 30 km/h in accordance with international guidelines, while arterial roads were limited to 50 km/h. Strategies to improve speed limit enforcement, including introduction of new speed control systems, were also part of the holistic speed management approach taken in these cities.

Safe speed limits on Bogotá’s most dangerous roads

In 2016, the administration in Bogotá adopted a ‘Vision Zero’ approach as the roadmap for their road safety strategy. From the adoption of a speed management programme, the city targeted arterial roads for speed reduction and installation of speed cameras. In 2017, these corridors accounted for three out of four traffic deaths.

The speed reduction programme on arterial roads first targeted the five corridors with the highest casualty rates. It tested the benefits and then disseminated results via social media before the expansion to other roads. Headlines included the number of lives saved since implementation and days without recording a death. The demonstrated reduction in lives lost convinced many of the administration’s strongest critics to accept the speed management programme as effective.

Positive results led to the reduction of speed limits on another set of five corridors at the beginning of 2019. The arterial roads that received treatment under the programme showed a decrease of 21% in traffic fatalities compared to the average for the three years 2015-2018, corresponding to 46 lives saved. Data from speed cameras also indicated improvement in compliance, with lower excess speeds although the proportion of vehicles exceeding limits, old and new, was unchanged at around 20%.

Arterial roads selected for new speed limit of 50km/h in 2018 and 2019 in Bogotá:

Source: Secretaría de Movilidad de BogotáSource: Secretaría de Movilidad de Bogotá

Plans for the programme to cover the entire arterial road network of Bogotá were accelerated by the Covid-19 crisis. The city announced a permanent reduction of the maximum general speed limit for all roads from 60 km/h to 50 km/h in May 2020. Intended to clear hospitals of traffic injury victims during the peak of the pandemic, the measure also aimed to protect the lives of citizens in the long term. 92 speed cameras placed at 40 points in the city will monitor speeding and issue automatic sanctions to offenders.

Disrupting the high-speed culture in Fortaleza

Source: Prefeitura Municipal de Fortaleza

Fortaleza is one of the rare places in the world that achieved the United Nations’ target of cutting traffic fatalities by half during the Decade of Action for road safety. The city went from a rate of 14.9 deaths per 100 000 inhabitants in 2010 to 7.4 in 2019. A successful strategy targeted the culture of speeding in Fortaleza through street transformations. Bike lane and dedicated bus lane networks were both expanded. Traffic calming measures were implemented in specific areas, with the redesign of pedestrian crossings, modernisation of the traffic light system, and speed limit reduction on arterial roads.

The city followed a similar approach to Bogotá in securing public support and winning over opposition. Each intervention was first tested on pilot projects, with positive outcomes publicised extensively. A first experience targeted Fortaleza’s most dangerous arterial road, the Avenida Leste-Oeste. Framed as an infrastructure improvement, this pilot proposed to complement the speed reduction with a redesign of the avenue. The new limit of 50 km/h accompanied new traffic lights, pedestrian crossings, lighting, bike lanes, and bus lanes. Narrower lanes and more frequent stop lights were also used to nudge drivers towards compliance with the new speed limit.

Redesigned Leste-Oeste avenue with safer speed limit of 50km/h:

Source: Prefeitura Municap de Fortaleza

The success on the Avenida Leste-Oeste was measurable: collisions involving motorised vehicles and pedestrians decreased by 63%. Data from the city’s camera enforcement system also revealed a higher rate of compliance. The city applied a tolerance period without penalties to give drivers the time to adapt: the police notified drivers of infractions but gave no sanction to people driving between 50 km/h and 60 km/h during the first six months. Positive results from this pilot project resulted in a decision to expand the same treatment to another four avenues. Fortaleza is now working on a Road Safety Plan for the next 10 years to scale up interventions and consolidate a Safe System approach (PDF) to the whole of the city.

Innovative speed control systems in Mexico City     

Source: SEMOVI Mexico city

In Mexico City, hostility to traffic surveillance and control mechanisms, in particular speed cameras, pushed local authorities to rethink their speed control system. The city shifted from Fotomultas (automatic fines) to Fotocívicas, a new system that replaced monetary fines with civic sanctions. Traffic penalties in Mexico City are now educational and correspond to the number of infractions perpetrated by the driver. They range from online courses, to awareness workshops, and up to 10 hours of community work.

The new system aims at improving driver behaviour and increasing compliance with speed limits. To curb speeding, Fotocívicas considers speed violations of more than 40% above the limit as more serious. Such infractions correspond to five penalty points, in contrast to one-point penalties for other violations registered by red light and speed cameras. The programme also relocated the surveillance technology to road sections and intersections with a higher incidence of traffic collisions and speeding.

An online course is one of civic sanctions from the new Fotocívicas system:

Source: SEMOVI Mexico City

Early results from the new system indicate improvements in the compliance with speed limits. Fotocívicas identified a reduction of almost 60% in the average speed of the vehicles exceeding the limit of 50 km/h on urban roads. The results also reveal a lower repeat offence rate: one out of three sanctioned drivers violated traffic rules on more than one occasion, in contrast with one out of two for the same period under the old system.

A positive repercussion of the awareness workshops among the population incited Mexico City to plan an expansion of this educational programme towards all drivers. As a first step, the administration selected motorcyclists engaged in commercial activities to be the first road user group to attend the workshops. Currently, one out of two crashes in Mexico City involve a motorcyclist.

Bogotá, Fortaleza and Mexico City are members of the ITF’s Safer City Streets network, which includes more than 40 cities across the globe. Together in the network, cities share data and draw lessons from their various approaches to urban road safety policy. To join the network, contact the ITF secretariat: alexandre.santacreu@itf-oecd.org

Why Container Shipping is a Lot Like Farming

International Transport Forum Maritime, Uncategorized

Transporting massive amounts of containers across the high seas has much in common with the business of rearing dairy cows or growing wheat – and alternative thinking about agriculture holds lessons for the maritime industry.

By Olaf Merk

Remorkers carrying containers to ships in Hong Kong harbour,

I have not always worked on maritime transport. One of my first assignments at the OECD was to conduct a Rural Policy Review of the Netherlands. This is how I met Jan Douwe van der Ploeg, professor at the agricultural university of Wageningen. I mention this because I think that his insights on agriculture are very relevant for container shipping. I will summarise them here briefly.

Van der Ploeg’s analysis of business models in agriculture goes against the received wisdom that economies of scale are always desirable. Over the past decades, farms have grown bigger through consolidation of land, driven by a race for market shares via cost reduction. This has required big investments in expensive equipment and huge loans to finance these.

In the process, agriculture and the local environment have become decoupled. The farmer’s main inputs (machines, seeds) are bought abroad. Most of the work has become automated. Agricultural land has turned into a space exclusively dedicated to production – it is no longer a multi-functional area where work and leisure, production and consumption can be combined.

Van der Ploeg’s merit lies in his detailed calculations showing that smaller but more diversified firms are more productive and profitable. They are less indebted, less dependent on intermediaries and less affected by price volatility, because they have developed economies of scope. And they provide more added value, jobs and biodiversity for the local community.

A container terminal seen from above

Striking similarities

Container shipping has followed a course strikingly similar to agriculture. The dominant idea: more economies of scale. The way to achieve it: cost reductions, ever larger ships and industry consolidation. The result: the large majority of the goods we consume are now moved by a handful of very large global shipping companies that source their workforce from developing countries and register their ships in tax havens. These companies have accumulated as much debt as a mid-size country they emit as much CO2 as a big country and have difficulties to be profitable except in the most bullish of times.

Container ports follow the same pattern. Completely sealed off from their surrounding communities, highly specialised, continuously trying to catch up with ever-larger ships, today’s container terminals leave no room for the intermingling that once gave port cities their charm.

In both agriculture and container shipping, policies – notably those of the European Union – are designed to pursue economies of scale. In agriculture the tool was subsidies; container shipping’s equivalent is the tonnage tax. Both sectors have special regimes that make them hybrids: market-driven sectors in name, but dependent on public support in practice.

In both, creating local synergies is an afterthought that goes by the name of rural development policies in one case and maritime cluster development in the other. In both sectoral policies, building large firms is more important than guaranteeing competition. In both cases, policy reform has become very difficult considering sunk investments, path dependency and regulatory capture by corporate lobbyists.

Cargo ship entering Singapore harbour, one of the busiest ports in the world.

Where the parallel ends

There are of course differences. Probably the most important is the extent of what economists would call the symmetry between buyers and sellers. Farmers buy from very large companies (seeds, pesticides) and sell to very large companies (food industry and retailers). In this constellation, company size could be a countervailing force to the monopoly power of buyers and sellers: larger farms – or cooperatives of farms – might better able to negotiate with the large multi-national companies in seed production, the food industry and supermarket chains.

In container shipping, liner companies buy from fragmented suppliers (shipyards, ports and port service providers) and sell to fragmented buyers (the companies that import and export), so it is the shipping company itself that is the major source of monopoly power. 

There is of course another major difference: agriculture is vital, in the true sense of the word. Container shipping is essential to the extent that global trade is. With many world leaders pleading for more regional sourcing, long-range containerised transport might be less inevitable than thought – which opens the perspective for possible fundamental change.

A policy choice

Professor Van der Ploeg proposes an alternative to the large-scale industrialised agriculture: smaller, more localised, quickly adapting to demands of clients. It is time to imagine similar alternative perspectives for container shipping, if only because that will make shipping more resilient.

The first step in sketching potential new futures would be to realise that there is nothing self-evident or inevitable about the strategy of economies of scale. It has been stimulated by public policies – and these policies can change.

Olaf Merk is ports and shipping expert at the International Transport Forum. He is the (co-) author of The Impact of Alliances in Container Shipping (2018) andContainer Shipping in Europe: Data for the Evaluation of the EU Consortia Block Exemption Regulation (I2019). Views are are his own.