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European Commission

Siim Kallas

Vice President of the European Commission

Streamlining Europe’s supply chain: the way forward for logistics

European Logistics Conference /Brussels

7 November 2013

Ladies and gentlemen

Thank you all for attending today. I am happy to see so many parts of the wider logistics sector represented from this complex and interlinked supply chain.

I don’t need to tell you that logistics is one of the most dynamic sectors of our economy. But it is still worth recalling that as an industry, it accounts for at least 10% of Europe's GDP. It also provides more than 11 million jobs in the European Union. Six of the top 10 global logistics companies are European.

Logistics lies at the heart of Europe’s single market.

It is central to many business operations – to ship products to end-buyers, organise regular supply of raw and finished materials, provide long-distance forwarding and despatch services.

It is local, regional, national and international – sometimes all at the same time.

The nature of its operations means that gains made in efficiency have a direct impact on business performance and the competitiveness of European industry.

If we look at Europe's transport network as a whole, there is much more potential that could be unlocked for driving future competitiveness.

Since logistics companies typically use a wide range of transport options – planes, ships, trains and trucks - they are interested in improvements that affect the entire transport system.

So are we. This is why we need an integrated policy approach that combines all forms of transport in the most efficient, reliable and cleanest way possible. Of course, the supply chain has to remain safe and secure throughout, which has always been a priority in EU transport policy.

Europe’s large logistics providers already manage this very well – that’s why they’re world leaders. But that doesn’t mean that we can’t improve things and turn the many transport and service providers into a single interlinked logistics network for Europe.

Where the EU can help is to create an environment where transport companies and operators can run their business efficiently, so they can continue growing and keep Europe globally competitive.

But as ever, it’s never that simple.

For most operators, that kind of environment is still a long way off.

We know this because we asked for views from across the logistics industry. This yielded a long list of your concerns, particularly on internal market barriers and bottlenecks.

Too much administration, too many missing links in the transport network, technical incompatibilities, thousands of different national rules and standards.

There are also IT issues, problems with career development, training and recruitment, innovation and environmental standards.

This brings me to the main reason for holding today’s conference: to push the debate to a wider public, to discuss answers and approaches to these areas.

If we do not manage to remove the barriers, European logistics and freight transport companies risk losing their market shares. Today, our transport infrastructure is increasingly congested. More attractive and flexible alternatives are appearing elsewhere.

In global transport, I see a great deal of rising competition and a shifting focus in infrastructure, towards Asia in particular.

While Europe is still very competitive in global logistics, it would be dangerous to become complacent. We need to do more than just keep up with our rivals.

For some time, we have talked about the need for a solid European policy for freight transport and logistics.

This began, if you recall, with the Freight Transport Logistics Action Plan in 2007.

I believe there is now an urgent need for us to move forward with a longer-term European logistics policy, to identify and tackle cross-border and cross-sector problem areas. We need to set specific priorities for the future.

So what is being done to tackle these problems - and where can we do more?

With recent agreements on new regulations for the Trans-European Transport Network and the Connecting Europe Facility, we are changing Europe’s approach to transport infrastructure. This is a pivotal moment for European transport, because we can now start to map out its future – concretely.

Our first task is to remove all residual barriers between the different forms of transport and the EU’s different national systems.

It goes hand-in-hand with completing the TEN-T, improving and expanding the existing system – while making sure that its infrastructure is used properly and to its full potential.

This is how we can obtain the scale efficiencies of a true single European transport area. It will be underpinned by a network of integrated corridors that allow large volumes of freight to be moved over long distances.

They will use advanced intelligent technologies to achieve energy efficiency and reduce environmental impact.

When the corridors are built, they will bring enormous benefits to the logistics industry. Better links to ports, air cargo terminals, urban freight hubs and trans-shipment centres, to name a few.

Of course, improving the door-to-door logistics chain requires better use to be made of each transport sector - separately and combined.

Rail is a good example, as freight’s obvious choice as a clean alternative to road.

The same corridor concept applies. Nine international rail freight corridors are being developed which we hope will form the backbone of Europe's long-distance land freight transport system.

There can be large gaps between the service required by today's freight and logistics industry and the quality of service provided by European railways. Reliability, rather than speed – the ability to meet loading, departure, arrival and unloading times – is the key to modern cargo distribution.

This is the only way to provide safe and efficient onward transport planning, to reduce cost and emissions.

We can find similar problems in the maritime and air freight sectors. This is why the Commission has presented ambitious plans to streamline operations and performance in European railways, ports and airports.

While each of these plans is sector-specific in its details, there are some common objectives:

- to reduce congestion;

- stay safe;

- make the best and cleanest use of capacity, and

- to promote competition in open and fair markets.

As always, the watchword throughout is - efficiency.

Earlier, I mentioned IT and advanced technologies.

These can really help to improve freight transport management and journey planning by smoothing the information flow along the logistics chain.

Logistics will rely increasingly on all parts and people in the supply chain to work together and use information efficiently. To encourage and support this, the Commission is working to develop e-Freight to smooth the information flow.

That doesn’t just mean information about traffic but also details of infrastructure, administrative and cargo-related data such as its condition and location. It should be accessible for use by the relevant parties involved along the supply chain, while safeguarding commercial and data protection interests.

The Commission is now working on a strategy to outline our wider vision for e-Freight and propose some concrete steps forward.

Our aim is also to build on what is already being achieved in the maritime sector - SafeSeaNet and eMaritime - with national maritime single windows.

The next logical step would be to create a national single window for all reporting requirements, regardless of the form of transport.

We also agreed to develop an “eManifest” that would reduce customs procedures, for maritime cargo to start with.

Urban logistics offers opportunities for raising efficiency and reducing transport’s carbon footprint. Delivering and collecting goods in urban areas poses many challenges, not least the need to minimise environmental impact.

We promote alternative energy sources and propulsion systems through research programmes and support projects to deploy more low- and zero-emission vehicles in towns and cities.

There are many other areas where we can work together to reinforce Europe’s status as a globally competitive logistics leader.

That means both for now and the future, as industry trains the replacements for today’s ageing workforce. It could develop and align standards for staff qualifications that apply across all forms of logistics transport, for example.

Another area is the environment, where we have already discussed developing an EU-wide standard for carbon footprint and certification to improve comparisons between different freight transport services.

These are just two areas where the EU does not need to act - but where it could help to support and coordinate the alignment of standards. Industry could also agree to self-regulate in applying those standards, and thereby make itself a global benchmark in logistics excellence.

Ladies and gentlemen: what happens next?

With so many “pieces of the logistics puzzle” represented here today, this conference is an excellent opportunity to hammer out specifics of how European logistics should develop in the years ahead.

The best ideas should be incorporated into a strategy paper early next year, with concrete steps forward for further discussion and consultation.

It will be a follow-up to the 2007 plan – but much more than that. It will provide the basis for a longer-term policy vision for freight transport and logistics.

For a long time, we have talked in general terms about the future of the sector.

It’s now time to talk concretely about what we want to achieve and how to go about doing it.

This conference is the starting point for us – together - to map out the way forward for this vital industry.

Thank you for your attention.

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