Transport Congestion Peril to Global Economy

Tuesday, June 05, 2007
Inadequate transportation infrastructure and congestion will negatively impact worldwide economic growth in the years ahead and urgent action is required globally to accelerate the pace of infrastructure development. That’s the warning from Ron Widdows, CEO of one of the world’s top-ten container shipping lines, Singapore-based APL.

The 54-year old ECMT, created to focus on Europe’s transport issues, convened its meeting in Sofia to consider a single issue for the first time: “Congestion: A Global Challenge.” Widdows became the first private-sector speaker to ever take part in the conference. The ECMT took an additional step to expand its scope by launching the International Transport Forum. In addition to EU and other European country ministers, ministers from Canada, Mexico, and Japan, other non-European countries as well as the U.S. Department of Transportation and the United Nations were represented at the conference.

This was the latest in a series of high-level alarms sounded by APL and Widdows to warn against overcrowding at seaports, highways and railways worldwide. It was the shipping executive’s first major opportunity to address European and other major government ministers on the impact of supply chain congestion, following a series of engagements with the U.S. Department of Transportation and the Bush Administration’s Domestic Policy Council in 2006. Widdows told his audience of government leaders that transportation infrastructure can’t keep pace with global growth in trade. By 2010, he said, global container volumes will be double the level of 2000. But in many of the world’s key markets, he added, the transportation infrastructure won’t be able to handle the load without negative impact to the flow of goods. To illustrate the problem, Widdows said that in the first quarter of 2007, only 46% of container vessels globally arrived at ports on time – the lowest level on record. At the port of Rotterdam, only 35% of vessels arrived on time. At European ports overall, less than 30% of vessels arrived on time.

The problem is caused by transport bottlenecks around the world, Widdows said. For example, he pointed out that:

o Emerging economies in India and Vietnam urgently need to build and expand ports and inland road and railway infrastructure.

o In the leading consumer economies – Europe and the U.S. – there is a need most significantly for expansion and greater efficiency at ports.

o Europe in particular must find a means for rail transport to play a larger role since trucks continue to be the primary mode for inland transport, creating greater congestion on the roads and a negative impact to the environment. Widdows called for an expedited, but environmentally sensitive response to the problems of congestion. He urged governments – including the European transportation ministers -- shippers and transportation industry executives to collaborate on solutions.

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