Cargo transport in and out of Italy is closely linked to the overall economic development. The country’s economic performance in 2017 was positive (GDP +1,5% on 2016) with a slow, but steady recovery to pre-crisis levels of 2007.
However, the 2017 Report from CONFETRA, Italian confederation of transport and logistics operators (more here) illustrates the Mediterranean country has some way to go to develop a state-of-the art logistics system able to compete with neighbouring countries and to support a sustainable shift from road to rail.
Since 2014, Italy's economy has been recording a positive and solid upwards trend, which is in line with the development of most EU member countries. For a list of up-to-date gross domestic products (GDP) of EU member countries please click here.
As a whole, European Union member countries recovered, at least partly, from the global financial crisis by 2011. However, Mediterranean economies have recorded a below EU average performance between 2011 and 2013, which reveals the fragility of Mediterranean economies. At the same time, it illustrates the large untapped potential for further growth – if the underlying conditions to support an efficient logistics system will be met.
Italian import and export
The development in terms of freight transport in 2017 reflects the wider macroeconomic growth in Italy. Both freight transport and the economy increased by around 5%, except transhipment and solid break bulk. The expectations for 2018 are for a stable if not positive development.
Both import and export volumes in Italy have been showing a healthy growth in Italy, a trend that already started in 2013. The country has turned into an exporting country during the past years, after decades of negative trade balance. Whilst this transition has been slow, it has been steady and in 2012 the country reached a consistent positive trade balance which has been continued since.
This demonstrates that the current Italian economy is as export driven as it was in the past, which today it is more critical than ever to sustain export capabilities with a first class logistics system, which is able to stand up to other global players, both inside and outside the EU.
More details on the value of commercial surplus in billion EUR can be found here.
However, at present the transport modes air and road are still the options of choice for many manufacturers, importers and exporters. Truck traffic across the main Italian border crossing points grew between 5 and 10% from 2016 to 2017.
Air transport volumes keep increasing well above pre-crisis levels, sea and road are catching up and are almost back to 2007 levels. However, rail freight volumes have some way to go, even if they have been steadily increasing since 2013.
To fundamentally sustain a switch from road to rail, appropriate policies and fiscal benefits are needed. Many incentives appeal to trucking and only few to intermodal rail transport. Italy has introduced a programme to support rail freight, the so called “cura del ferro” (iron therapy), but so far it has not had a notable impact, due to lobbying of competeting industries for example.
Ecommerce as an opportunity for an efficient transport system
With ecommerce continuing to boom, this could be a driver for building a strategic organisation of Italy’s logistics system. Italy’s e-commerce industry has been catching up with other developed countries. This comes with a huge potential, but also some risks, as a large number of independent operators move more and more goods within the network.
For Italy’s growing economy, which continues to build on imports and exports, it is therefore crucial to draw on a logistics network that is organised in a structured manner.
Digitalisation, e-commerce and the need to operate in an environmental friendly way are just some of the factors that are changing today’s supply chains. With intermodal transport acting as a backbone, Italy has a huge potential to benefit from these developments – and it should not risk to miss out on this opportunity. Some operators have already recognised this potential. For instance, the Contship Italia Group has just doubled Hannibal’s, its intermodal operator’s, service frequency to Niederglatt/Zurich. To cater to a growing demand for transport options to this growing market, the company now calls at Niederglatt five days a week. Hannibal Hannibal's first link to Switzerland Basel in 2013 to Frenkendorf/Basel and due increased demand has recorded year-on-year growth since then.
Italy's geographical position provides manifold opportunities to offer competitive import/export solutions via the Southern gateway to markets not just within Italy but also to neighbouring countries. The country is already on the right track, and especially intermodal services make for a sustainable option for further growth.
This article is part of CS WINdow, Contship Italia Group's quarterly newsletter, featuring insights on the global supply chain, with a focus on European intermodal logistics. You can subscribe to learn more: