Title: Cabotage and sulphur regulation change: cost effects to Northern Europe

Authors: Olli-Pekka Hilmola; Ain Kiisler; Per Hilletofth

Addresses: Lappeenranta University of Technology, Kouvola Unit, Prikaatintie 9, FIN-45100 Kouvola, Finland ' Estonian Maritime Academy, Tallinn University of Technology, Kopli 101, 11712 Tallinn, Estonia ' Department of Industrial Engineering and Management, School of Engineering, Jönköping University, P.O. Box 1026, SE-551 11, Jönköping, Sweden

Abstract: Change has been persistent in European Union regarding new directive and international agreements concerning the logistics sector. Recently, cabotage rules were implemented for road transports, and new demanding low sulphur levels applied at English Channel, North Sea and Baltic Sea for sea vessels. Our research concerns the implications to transportation costs of these changes in largest Estonian, Finnish and Swedish companies. Survey shows that cabotage regulation change has resulted in no change within road freight prices (some possibility for decline). On the contrary, sulphur regulation has resulted in freight cost increase (up to 6% higher than before). Interestingly, respondents show some movement in the use of different routes to or from Central Europe. Using a longer hinterland transportation route through Baltics has some momentum to grow, while others are under of somewhat pressure. However, this noted change is not significant, and does not concern most of the companies.

Keywords: cabotage; sulphur; Baltic Sea; Estonia; Finland; Sweden.

DOI: 10.1504/IJBSR.2017.087099

International Journal of Business and Systems Research, 2017 Vol.11 No.4, pp.417 - 428

Received: 16 Jun 2015
Accepted: 14 Mar 2016

Published online: 23 Aug 2017 *

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