During the course of 2007 various analysts highlighted poor infrastructure and transport as a serious issuefor the Italian economy. Against a background of falling direct foreign investment, Andrea Goldstein, anOECD economist, told Reuters news agency in September that Italy was low down the ranking for thenumber of international corporate headquarters based in the country. ‘You don’t stay in Milan if you can’tfly to Beijing from there’ she said - highlighting the fact that there were no direct connections from thatcity to the Chinese capital. Other analysts drew attention to highway congestion as a disincentive tobusiness. Earlier, in August, nine organisations representing Italy’s road, rail and maritime industries hadsignalled their intention to lobby the government to reverse years of falling efficiency andcompetitiveness. The group included ship-owners association Confitarma, port associations Assoporti,Assiterminali and Assologistica, road hauliers grouping Cna-Fita, forwarders’ federation Federspedi, andthe state-owned rail freight group Trenitalia Cargo. In a statement it said that ‘one percentage point lostin logistics efficiency is equivalent to the loss of EUR2.5bn (US$3.4bn). According to the latestestimates, Italy lags behind the European average by 5%-6%. The group made a number of demands,including greater financial autonomy for ports to encourage investment, better intermodal connections,refinancing to help the conversion from single hull to double-hull tankers, and the reform of regulationscovering the road haulage industry. BMI’s Italy Freight Transport Report 2008 predicts that freighttraffic, measured in million tonnes-km (mntkm) will increase by an annual average of 1.4% in 2008-2012,marginally behind the growth rate that we expect the wider economy to achieve in the same period.Our forecast takes account of what we could describe as a ‘gradual improvement’ scenario, in which thefiscal deficit is gradually brought under control and moderate economic growth takes place. Althoughthere are clear problems with the underlying competitiveness of both the wider Italian economy and thefreight sector, the fact remains that we do not expect any sharp reduction in Italy’s ‘transport intensity’,the underlying relationship between freight traffic and value of output. So the important factor to bear inmind is that even moderately faster economic growth, an annual average of 1.5% in 2008-2012 comparedwith an average of 0.7% in 2002-2006 should boost freight volumes. We also project that transport andcommunications GDP, boosted by the telecoms sector, will grow to US$184.4bn by 2012, representing8.2% of total GDP (up from 8.1% in 2007).
Italy’s freight transport industry could do better than this, however, and there is a real sense in which it isunderperforming its potential. One relatively adverse factor is the operating environment. We have scoredthe operating environment at 38 (out of a theoretical maximum of 70), which places Italy at the low endof the European ranking. Its weak points include the regulatory and competitive environment. Improvingin these areas would make a significant difference to industry performance, as it would boost confidencelevels and ultimately, investment.
BMI believes road freight transport will retain its dominance throughout the forecast period, although air,sea and rail freight will also make their contributions to the overall total growth. Road haulage shouldgrow at an annual average of 1.4%, with rail freight expanding by a marginally slower annual average of1.3%. Measured in tonnage terms, sea freight should rise by 1.0% each year, while airfreight shouldrecover and increase by 1.9% a year. Across the different modes, then, BMI’s conclusion is that while thefreight industry will see moderate growth, there remains significant room for improvement and efficiencygains.
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