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Transportation Research Procedia 14 ( 2016 ) 213 – 222
2352-1465 © 2016 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Peer-review under responsibility of Road and Bridge Research Institute (IBDiM)
doi: 10.1016/j.trpro.2016.05.057
Available online at www.sciencedirect.com
ScienceDirect
6th Transport Research Arena April 18-21, 2016
Costs and benefits of speeding up reporting formalities
in maritime transport
Carlo Vaghi a,
*
, Luca Lucietti a
aFIT Consulting srl. Via Lavinio 15, Rome 00183, Italy
Abstract
The MEDNET project “Mediterranean Network for Custom Procedures and Simplification of Clearance in Ports” funded by the
MED programme (2007–2013), was aimed to establish and operate a network of port authorities and experts focusing on the
exchange of experiences concerning ports and customs procedures and simplification of clearance for vessels and cargoes.
Rete Autostrade Mediterranee (RAM), lead partner of the project, has implemented a pilot action focused on the analysis of
technical and legislative characteristics of the Directive 2010/65/EU on “Reporting formalities for ships arriving in and/or
departing from ports of the Member States”, its status of implementation in Italy, possible scenarios for integrating and upscaling
existing Port Management Information System (PMIS) and National Single Window (NSW) prototyping in Italy, Cost-Benefit
analysis (CBA) for re-engineering existing Port Community Systems (PCSs) in the port of Venice and Levante (Bari) to fulfil
reporting formalities according with the EU Directive.
In the analysis carried out in the two ports (the selected case studies), the CBA evidenced the huge amount of potential benefits
for the logistic chain triggered by the decrease of dwell time for containers in ports, through reengineering of the existing PCSs
within the envisage NSW framework. Dwell time is then crucial for the definition of scenarios of port competitiveness and
benchmarking, since it may be largely reduced by the implementation of pre-clearing procedures. Pre-clearing (“anticipated
electronic customs clearance”) is able to speeding up of formalities and the consequent relieving of port traffic congestion. The
simplification of customs procedures may result in significant benefits for the door-to-door transport time and costs. This aspect
has clearly emerged together with lack of top-down information by the two Port Authorities on dwell time.
CBA indicators are very positive for both ports and demonstrate how the re-engineering of PCSs in Venice and Bari is expected
to lead to a big amount of net benefits. Dwell time is a strategic Key Performance Indicators (KPI) for ports (both for public and
* Corresponding author. Tel.: (+39) 0677591430; fax: (+39)0677250649.
E-mail address: vaghi@fitconsulting.it
214 Carlo Vaghi and Luca Lucietti / Transportation Research Procedia 14 ( 2016 ) 213 – 222
private stakeholders), often very difficult to calculate due to confidentiality issues as well as being pre-clearing procedure just
testing in some ports in Italy. Nevertheless, a customized survey at the two ports among local stakeholders (e.g. customs
forwarders, freight forwarders, etc.) is deemed necessary and recommended. Despite of the information and data gathering
activities implemented at the two Port Authorities, the aforementioned integrative survey should enable to boost CBA results.
Key recommendations for ensuring the Italy’s NSW compliance with the Directive 2010/65/EU: a) Setting enabling legal
framework for the NSW development; b) Setting functional and technical specifications and testing for the NSW development;
c) Identification of core business processes for the NSW development; d) National consultation and working groups activities
with public and private stakeholders; e) Reengineering and upscaling of PCSs for their interoperability with the NSW; f) Setting
high-level (medium-long timeframe) master plan for the NSW full deployment.
© 2016The Authors. Published by Elsevier B.V..
Peer-review under responsibility of Road and Bridge Research Institute (IBDiM).
Keywords: maritime transport; reporting formalities; Cost-Benefit Analysis
Nomenclature
AIDA Automazione Integrata Dogane Accise
B/L Bills of Lading
CBA Cost-Benefit Analysis
ESB Enterprise Service Bus
FAL Convention of Facilitation of International Maritime Traffic (and related documents)
GAIA Gestione Automatizzata Informazioni d’Area
GUI Graphical User Interface
KPI Key Performance Indicators
NMSW National Maritime Single Window
NSW National Single Window
PCS Port Community System
PMIS Port Management Information System
RAM Reti Autostrade Mediterranee
SOA Service-Oriented Architectures
VoT Value of Time
1. Setting the scene
Directive 2010/65/EU on reporting formalities for ships arriving in and/or departing from ports of the Member
States is aimed at simplifying and harmonising these procedures by establishing a standard electronic transmission
of information and by rationalising reporting formalities. Member States shall accept the fulfilment of these
reporting formalities (as indicated in the Reporting Formalities Directive) in electronic format and their transmission
via single window no later than 1st June 2015.
The reporting processes should be drawn from and related to:
x Reporting formalities resulting from legal acts of the Union (Annex A of the Directive);
x Appropriate FAL Forms (Annex B of the Directive);
x Relevant national legislation if appropriate (Annex C of the Directive).
Two key roles can be identified within the aforementioned reporting process for ships arriving in and/or
departing from ports as follows: Data Provider and Data Receiver.
The Data Provider is the reporting party (“Reporting Parties”) which is represented by:
x Master of the vessel,
x Shipping companies,
x Shipping Agents,
x Other duly authorised parties on behalf of the Master or consignee.
© 2016 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Peer-review under responsibility of Road and Bridge Research Institute (IBDiM)
215
Carlo Vaghi and Luca Lucietti / Transportation Research Procedia 14 ( 2016 ) 213 – 222
The Data Receiver is the responsible or competent authority, entitled to the data from a reporting formality,
which is represented by Public national systems, covering all ports in one country; this involves reporting to
Customs, Fisheries, Maritime Administration, Harbour Master, Immigration, Health Authorities.
The establishment of the National Maritime Single Window (NSW) is the main requirement of the Directive
2010/65/EU. Each Member States shall ensure that the reporting formalities are requested in a harmonised and
coordinated manner within that Member State through a NSW.
Member States are setting up actions for the implementation of the Single Window concept to fulfil the deadline
of 1st June 2015. Baseline scenario for the different Member States is quite different from one Country to another
because each Member State is starting the process which should led to set up NSW from different technical,
administrative, legal and financial aspects actually characterizing reporting formalities for ships (and cargo) arriving
in and/or departing from ports.
Directive 2010/65/EU establishes (art. 3.2) harmonisation procedures at European level which should be
translated in Guidelines and Data Mapping under definition in eMS working group of DG MOVE.
Another key issue which affects the transposition of the Directive within the national contexts is how each
Member State is planning and developing NSW system according with the guidelines defined by the European
Commission by the eMS working group as well as fulfilling reporting formalities as established by the Directive
(Annex A, Annex B, Annex C).
2. The Italian proposal for National Single Window and Port Management System integration
Italian Coast Guard Headquarters and Italian Customs Agency are addressed to set-up and implement National
Single Window in Italy for fulfilling the Directive 2010/65/EU. The proposal for integrating the two existing
information systems (PMIS and AIDA) are in an advanced stage of implementation: PMIS2 – after the development
of its functional and technical specifications – is currently operating in several main Italian ports while AIDA is
even more advanced with the upgrading of the customs declaration (Cargo Manifest) for the fulfilment of FAL2,
according with the Directive 2010/65/EU.
PMIS was designed in 2005, long before the approval of Directive 2010/65/EU, in order to manage electronic
transmission of administrative reporting formalities related to arrival/departure of vessels at/from national ports, to
manage formalities related to vessels’ operations in ports (e.g. bunker operations, machine stop, allibo, etc.), to use
and update national reference databases of the Italian Vessel Traffic Management Information Systems (VTMIS)
platform (e.g. vessel, dangerous and polluting goods, etc.), as well as to monitor vessel mooring and movement
within port waters. PMIS is part of the VTMIS platform managed by Coast Guard. PMIS scope currently includes
the main part of formalities falling under Part A, B and C of the Directive 2010/65/EU, with the exception of cargo
formalities managed by A.I.D.A.
In order to comply with the aforementioned legal requirement, the Italian Coast Guard Headquarters is currently
working on the implementation of the NMSW by the reengineering of PMIS and its widespread adoption in most of
the Italian ports. More in detail, the Italian Coast Guard Headquarters is actually engaged with strategic activities,
such as the implementation of the NSW, as required by the Directive 2010/65/EU, and the simplification of custom
pre-clearing operation. The actual status of National Single Window in Italy (scenario “AS IS”) in terms of data
flows, involved parties as well as used data transmission interfaces, is presented in the Fig.1:
The Italian NSW – as conceived by the responsible authorities, will be an environment made up by two
interoperating systems (PMIS and AIDA) allowing the “reporting once” of relevant formalities, according with the
Directive 2010/65/EU. The “TO BE” scenario is presented in Fig.2, in terms of data flows and involved parties.
Italian Maritime Single Window framework will be structured in three levels:
x Presentation layer: a web-based Graphical User Interface (GUI) for interaction with business operators. The front
end interface (GUI) is the system component through which user can interact providing required reporting
information and displaying results on computer server side;
x Interoperability layer: Interfacing system that guarantees the M2M interoperability (system-to-system) – it
consists of a middleware solution based on Service-Oriented Architectures (SOA) through the use of Enterprise
Service Bus (ESB) – respectively with the information systems used by ship data Provider (Reporting parties) to
216 Carlo Vaghi and Luca Lucietti / Transportation Research Procedia 14 ( 2016 ) 213 – 222
exchange data and services B2A and with the information systems used by other institutional bodies responsible
(e.g. Customs Agency, Port Authority, etc.) to exchange data and services A2A;
x Business and Data layer: Process management system relating to Reporting Formalities understood as
orchestrator of processes to manage formalities related to Annexes A (Reporting formalities resulting from legal
acts of the Union) and B (FAL forms and formalities set in international legal instruments) of Directive
2010/65/EU, to create and edit the formalities related with Annex C for both the national (vessel practice) that for
the local part (local Ordinances), define Import models (by acquisition FAL2 customs) and Export models (e.g.
health declaration, etc.) and defining decision models (authorization processes approval).
Fig. 1. National Single Window: Scenario “AS IS”. Source: Ministry of Infrastructure & Italian Coast Guard (2014).
Fig. 2. National Single Window: Scenario “TO BE”. Source: Ministry of Infrastructure & Italian Coast Guard (2014).
3. Integration of PCS: two significant case studies in Italy
Port Community Systems (PCSs) have become an essential component for the efficient operation of many major
European ports. Typically PCSs have developed particular implementation guides for each reporting message and
support their Port Communities for interchange of Transport Orders, Gate Reports, Bookings, Shipping Instructions,
Custom Clearances, etc.
A PCS is an electronic platform which connects the multiple systems operated by a variety of organisations that
make up a port community. PCS is a platform that allows the smart exchange between public and private operators
in a port, by creating efficient processes, reducing procedure time and minimizing the use of paper documents. The
implementation of a PCS may reduce inefficiencies in port business processes, to facilitate the smooth flow of
electronic data as well as to integrate compliance with national and EU Directives.
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PCS users have access through an annual or monthly subscription fee per service used or for all services, a fee
per unit handled (e.g. tonnage, customs declaration, TEU, vessel, hour, tec.), per service charge, per EDI transaction
charge as well as fee per stakeholder.
The range of PCS key stakeholders consists of private companies (e.g. shipping agents, terminal operators,
freight forwarders, customs brokers, carriers, logistics service providers) as well as public or government agencies
(e.g. Customs, Port Authorities, etc.). In terms of the client structure, shipping lines and freight forwarders play the
most important role, followed by importers and exporters in general and Customs. Since the acceptance and
registration of customs documents (e.g. customs declarations, cargo manifests, etc.) is preliminary to the
intervention of other governmental agencies for control and risk profiling purposes (e.g. sanitary, veterinary and
police authorities) as well as for the execution of the other logistics activities within the port (e.g. loading/unloading,
warehousing, etc.), data received in connection with the entry, exit or transit of goods are first information that need
to be communicated to Port Community.
Two relevant PCSs in Italian Ports are LogIS (Port of Venice) and GAIA (Ports of Levante).
3.1. PCS in the port of Venice (LogIS)
LogIS [Venice Port Authority (2014)] is a web-based information technology system, enabling the management
of all ship-related documents. This system is a crucial tool for all those involved in the port community's shipping,
port and Logistics activities, including the Harbour Master Office, Shipping Agents, Freight Forwarders, Pilots as
well as Terminal Operators.
The system is a web-based platform which consists of four main components (modules):
1. Ship Module: dedicated to the management of the “ship reporting formalities” related to the authorization
processes which take place from the entry of a ship into the port until its exit; it has as main actors the
Shipping Agents and the Harbour Master; this module is also integrated with the AIS (Automatic
Identification System);
2. Security Module: it provides tools to manage the requests for access permits into the port area and it is
integrated with the access control component of the SaFE (Security and Facility Expertise) system which is
dedicated to video surveillance and access control;
3. Port Labour Module: it deals with the management of information about the companies which operate within
the port area, about the workers and their training, qualifications, accidents, roles in the companies, etc.;
4. Cargo Module: it provides details about loading and unloading of goods at the port terminals and it deals with
the activities related to the traffic management of the goods wagons.
All system components are integrated in a single platform, both in terms of application and database: in this way
LogIS fulfils the logic of single window system.
LogIS is also open to the dialogue with third-party software applications through a component specifically
dedicated to EDI (Electronic Data Interchange).
Furthermore, an additional component is under development the so-called “Online Applications Module” which
is currently in progress. This module will be dedicated to the electronic management of the requests for registration
to the records of users authorized to operate in the port area and the requests to obtain the permission to enter the
port area, for people and vehicles.
3.2. PCS in the port of Bari (GAIA)
Levante Port Authority has developed GAIA as the PCS of the ports of Bari, Barletta and Monopoli. GAIA is
a platform aimed at managing information about passengers, port events and intermodality though an integrated
system. GAIA is a Community system, able to exchange information with port actors system, allowing a simple and
automatic integration with the port actors’ platforms. GAIA is a public management system, ensures confidentiality
in data management, necessary to safeguard the private commercial activities that take place in the port and respect
the privacy rights of passengers and operators.
GAIA constantly monitors in real time the whole port processes, for each ferry departing from the port of Bari,
the procedure of issuance of the Security Card until the arrival of the ship at the port of destination. Provides
218 Carlo Vaghi and Luca Lucietti / Transportation Research Procedia 14 ( 2016 ) 213 – 222
information on the status of the boarding, on weather conditions, timetabling the ship’s arrival departures and,
through the tracking capabilities, notify passengers the exact location of ships while sailing and arrival times. All the
travel information are displayed directly on users' mobile devices (e.g. smartphones, tablets, etc.) allowing, in
a totally free and timely constant updates on boarding times and possible delays of ships.
Detailed information, particularly on the road congestion status, are also made available to drivers who, through
these services, decide the best possible route to reach the ferry, the required online authorizations for port access and
security areas. All the information generated by GAIA, are also accessible in the port area through special
interactive kiosks. GAIA is a modular system that consists of 8 modules, each related to a specific functionality.
ARGES project (developed under the European Territorial Cooperation Programme (ETCP) “Greece-Italy
2007–2013”) aimed at designing the first prototype of the Italian NSW by extending the functionalities of GAIA
[Levante Port Authority (2014)].
4. Cost-benefit analysis of the two case studies
In MEDNET project a Cost-benefit analysis (CBA) has been developed aimed at providing the financial
assessment of the evolution of the two analysed PCSs (LogIS and GAIA) towards the functionalities and features
able to fulfil ship reporting formalities, according with Directive 2010/65/EU and the envisaged Italian NSW
architecture. The CBA provides from the one side an estimation of investment and maintenance costs for the
evolution (re-engineering) of each analysed PCS for properly fulfilling specifications and processes related to the
Single Window concept (including cargo data) and from the other side an estimation of expected benefits that such
evolution (re-engineering) of each respective PCS would be able to generate for the different stakeholders categories
throughout a timeframe of 10 years. The overall objective of the CBA is to assess potential impacts of such PCS
implementations, comparing investment and operational costs with expected benefits which would be achievable.
Results are expressed in terms of economic Net Present Value (NPV) and Internal Rate of Return (IRR),
following the guidelines of the EC Guide to Cost-Benefit Analysis [European Commission – DG REGIO (2008)].
The same guidelines have been followed to assume a fixed 2.5% inflation rate and a 3,5% discount rate.
Two scenarios have been considered for the CBA:
1. Do nothing scenario (“As Is”): it describes the current state of time and cost of some port administrative
operations with the current state of implementation of Venice and Bari PCSs, namely LogiS and GAIA;
2. Implementation (“To-Be”): the scenario includes the assessment of time and time related costs of an enlarged
range of administrative operations when PCSs re-engineering is implemented. Benefits are assessed for
selected categories of stakeholders positively affected by the speeding-up of reporting formalities (ship-related
data and cargo-related data); benefits are compared in “To Be” scenario to investment and operational costs
occurred, connected with the implementation of PCSs re-engineering itself.
The CBA aims at gathering benefits perceived by the different categories of stakeholders from the re-engineering
of the PCSs. The main categories assumed to be involved in reporting formalities are Coastal Guards (ship data
receiver), Port Authorities (developer and manager of PCS), Customs Authority (cargo data receiver), Shipping
agents (ship data providers), Forwarding agents (cargo data providers)
4.1. Investment and operational costs
The calculation of investment costs is the assessment of costs necessary for the implementation of the new SW
infrastructure (software layers) needed to improve the PCSs in operations respectively in the port of Venice (LogIS)
and in the port of Bari (GAIA). The following assumptions have been made for the calculation of investment costs
(for SW infrastructure) and operational costs:
x Investment costs include preliminary analysis, users requirements definition, architecture design, system
development, testing and integration, final test and technical assistance;
x Operational costs mainly include maintenance costs for SW management and updating.
Different sources have been exploited to assess costs, such as information available at Port Authorities and
internal knowledge and market research on similar experiences.
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The re-engineering of LogiS in Venice with the implementation of an interoperability layer (ESB based-
-approach) for the PCS interoperability with the other information systems of public entities (e.g. PMIS, etc.) and
private companies (e.g. shipping agents, etc.) is assumed to cost 780,000 €, plus 200,000 € of annual maintenance
costs. The re-engineering and upscaling of GAIA in Bari is assumed as an investment for a vertical business and
data layer as well as for a interoperability layer to manage reporting formalities; expected investment costs are
390,000 €, to which annual maintenance costs up to 130,000 € have to be added.
Besides the “direct” investment and operational costs the scenario implies investment costs for the port
community, which members are expected to adapt their ICT endowment to the re-engineered PCS. According to
data available at Port Authorities' websites, the port community of Venice is composed by 209 stakeholders, whilst
Bari port community is composed by 53 stakeholders. Assuming that each stakeholder in the community bears
a lump sum cost of 10,000 Euro (allocated at year 1 of the CBA time horizon), total costs borne by the port
communities are 2,090,000 € in Venice and 530,000 € in Bari.
4.2. Benefits
The calculation of benefits has to follow precise guidelines in terms of leanness, since available data and survey
does not allow a detailed analysis of benefits connected to the simplification of reporting formalities for each
document simplified and centralised in a Single Window framework.
Focussing on most suitable and relevant goals, benefits have been calculated in terms of:
x increased speed and timely reporting formalities;
x reduced administrative costs for traders and shipping agents (“Reporting Parties”);
x reduced average time to submit reporting formalities;
x reduced administrative costs for competent Public Authorities;
x improved time-release of customs declaration;
x reduced time costs for goods connected to waiting times for storage at port before inspections.
Each category of benefits have to be translated into “monetary terms” on the basis of:
x time related costs: i.e. costs proportional to a time unit, labour costs per hour, etc.; such costs include salaries for
the personnel (employees) involved in ship-related and cargo-related data reporting processes when ships
arriving/departing from ports;
x time costs: these costs are usually nested in any “generalised cost of transport” function and related to the time
flow spent by goods in the door-to-door transport chain (including waiting times). In fact, the total costs for
administrative formalities depend also on the potential delays that would be generated in relation to the expected
and scheduled times for goods in the door-to-door transport chain. The reduction of the time required for carrying
out the different administrative procedures would produce a proportional reduction of delays on goods delivery
(inland side of the logistic chain) caused by reporting formalities. The benefits connected to the re-engineering of
LogiS and GAIA should then take into account the time costs arising from the application of intrinsic Values of
Time (VoT) of specific goods. Differently from “time related costs”, time costs are not directly perceived as
a monetary expense by the stakeholder demanding a transport service (e.g. the shipper), or affected by a delay in
the door-to-door transport chain (e.g. the consignee).
In the present study, the probability that dwell times of ships in the port of Venice and Bari decrease only due to
the re-engineering of LogiS and GAIA is considered as negligible. Nevertheless, the decrease of dwell time for
containers in the two ports is foreseen in the present CBA, assuming that the simplification of customs procedures
may result in significant benefits for the door-to-door transport time.
Specific input data has been gathered for the calculation of benefits, such as time spent for the execution of
specific reporting formalities (Cargo Manifest, Maritime Declaration of Health, etc.), personnel involved per
relevant stakeholder, average personnel cost, port community dimension, Freight traffic data. Specific figures for the
maritime freight VoT have been assumed taking HEATCO [Bickel et al. (2006)] as reference literature source.
A specific methodology adopted in [European Commission DG TREN (2009)] has been followed to assume the
number of Bill of ladings (B/L) handled per vessel arriving in the port, per vessel type (e.g., bulk ships usually carry
220 Carlo Vaghi and Luca Lucietti / Transportation Research Procedia 14 ( 2016 ) 213 – 222
freight for a lower number of consignees, such as requiring less B/L per vessels and then less replication of
connected reporting formalities; Ro-Ro traffic may imply ideally the opposite situation).
Other assumptions have been taken by [European Commission DG TREN (2009)], such as figures on time spent
per reporting formalities, referred to Italy. As a key and very cautionary assumption, a decrease of 50% of time
spent for reporting formalities between “As Is” and “To Be” scenarios has been assessed.
The application of port traffic figures by ship category (for Venice Port) and by commodities (for Bari Port)
allows the calculation of the number of B/L affected by the re-engineering of PCSs. The following traffic figures
have been taken into account. According to the calculation made, the re-engineering of PCSs has impact on:
x 108,578 B/L in Venice Port per year (2015)
x 100,151 B/L in Bari Port per year (2015)
The similar quantity of B/L in two ports having a very heterogeneous traffic size is not surprising: it is mainly
due to the high specialization of Bari Port in Ro-Ro traffic, having a higher average number of B/L per ship call.
The following vessel traffic is assumed for the CBA:
x 2,174 vessels in Venice Port per year
x 915 vessels in Bari Port per year
By applying the assumptions on time needed per reporting formalities in “As Is” and “To Be” scenarios, and on
workforce employed by stakeholder per reporting formalities, and the assumptions on yearly labour costs per FTE,
the following personnel time and time-related costs will be saved in Venice and Bari port communities:
x 80352.6 hours = 1,654,318 € in Venice Port per year (2015)
x 78337.6 hours = 1,612,833 in Bari Port per year (2015)
The annual amount of benefits generated from FTE savings is comparable in magnitude between Venice and
Bari. The conclusion comes from the assumption that the re-engineering of GAIA implies the simplification of a big
range of reporting formalities, whilst the current status of LogIS in Venice allows the execution in electronic form of
the major part of vessel reporting formalities.
As previously stated, time costs savings are proportional to the time saved in waiting time at port for containers.
Since no univocal figures on current dwell time for containers at Venice and Bari are available from official sources,
the present study gives an assumption of the net decrease of dwell time as the basis for time cost saving calculation.
According to the most recent reported example regarding an Italian Port (La Spezia) [The Meditelegraph (2014)],
the adoption of “pre-clearing” procedures resulted in a net decrease of dwell time for containers, from 5.5 to
2.7 days. Following a cautionary approach, and assuming that dwell times for containers in Venice and Bari are not
significantly lower than the “As Is” average reported in La Spezia, a standard saving of 2 days of dwell time is
assumed in the present study.
By applying such standard indicator to the inbound container traffic of Ports of Venice and Bari, and applying the
standard HEATCO value of 1.22 Euro/tonne*h, the following annual time costs saving figures have been obtained:
x 112,345,251 Euro in Venice Port per year (2015)
x 5,169,298 Euro in Bari Port per year (2015)
The decrease of dwell time for containers brings a to huge amount of benefits in terms of improved spare
capacity in port container terminals. This effect may be crucial also to enhance the image and the competitiveness of
ports adopting pre-clearing, and it would turn into an increase of container traffic. Nevertheless, such qualitatively
significant but not easily quantifiable category of benefits has not been calculated in the present CBA.
It could be noted that benefits for time cost savings are by far out of scale in respect to the rest of benefits
calculated above. Although the calculation has been made assuming reliable parameters and effects, the inclusion of
such benefits in the calculation of total NPV and IRR may bias the final CBA results.
Expected time cost savings are anyway to be remarked as a huge source of benefits for the two ports: efforts
leading to a real and significant reduction of dwell time may be crucial to enhance the competitiveness of Venice
and Bari Ports.
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5. CBA results
The discounted sum of costs and benefits – as calculated as annual figures in the previous section – in the 10-year
time horizon assumed for the CBA allows the calculation of NPV and IRR connected to the re-engineering of PCSs
operational in Venice and Bari Ports. The following graphs show annual benefits and cumulated cash flow diagram
per port analysed.
a b
Fig. 3. Diagrams of Benefits and Cumulated cash flows (€, not discounted) for (a) Port of Venice; (b) Port of Bari.
Final results of the CBA are the following:
x Venice: NPV 9,861,551 Euro; IRR 51%
x Bari: NPV 11,295,982 Euro; IRR 156%
Fig. 3 shows that the pay-back period ranges between 1 and 2 years from the investment, including investment
costs borne by the port community. This result leads to the conclusion that the re-engineering of PCSs is largely
economically viable even if the PCSs themselves may become obsolete in a shorter time than 10 years.
6. Conclusions
The exercise performed in the present paper is part of the analysis made by RAM in MEDNET project on the
technical and legislative characteristics of the Directive 2010/65/EU on “Reporting formalities for ships arriving in
and/or departing from ports of the Member States”, its status of implementation in Italy, possible scenarios for
integrating and upscaling existing Port Management Information System (PMIS) and National Single Window
(NSW) prototyping in Italy. A CBA has been performed to evaluate the economic impact to different stakeholder
categories generated by the re-engineering of existing Port Community Systems (PCSs) in the port of Venice and
Levante (Bari) to fulfil reporting formalities according with the EU Directive.
The CBA focussed on the two ports (selected case studies representing scenarios of implementation of the Italian
NSW) showed significant benefits in terms of increased speed and timely reporting formalities, reduced
administrative costs for Authorities and reporting parties in the port community, improved time-release of customs
declaration, and lower time costs for goods due to lower waiting times for storage at port before inspections.
The CBA evidenced the huge amount of potential benefits for the logistic chain triggered by the decrease of
dwell time for containers in ports, through reengineering of the existing PCSs within the envisage NSW framework.
Dwell time is then crucial for the definition of scenarios of port competitiveness and benchmarking, since it may be
largely reduced by the implementation of pre-clearing procedures. Pre-clearing (“anticipated electronic customs
222 Carlo Vaghi and Luca Lucietti / Transportation Research Procedia 14 ( 2016 ) 213 – 222
clearance”) is able to speeding up of formalities and the consequent relieving of port traffic congestion. The
simplification of customs procedures may result in significant benefits for the door-to-door transport time and costs.
CBA indicators are very positive for both ports and demonstrate how the re-engineering of PCSs in Venice and
Bari is expected to lead to a big amount of net benefits. Dwell time is a strategic Key Performance Indicators (KPI)
for ports (both for public and private stakeholders), often very difficult to calculate due to confidentiality issues as
well as being pre-clearing procedure just testing in some ports in Italy. Nevertheless, a customized survey at the two
ports among local stakeholders (e.g. customs forwarders, freight forwarders, etc.) is deemed necessary and
recommended, also due to the lack of top-down information at the Port Authorities, especially on dwell times.
Despite of the information and data gathering activities implemented at the two Port Authorities, the aforementioned
integrative survey should enable to boost CBA results.
The CBA exercise performed in MEDNET has accompanied a report [FIT Consulting (2015)] providing key
recommendations for ensuring the compliance of Italian NSW with the Directive 2010/65/EU, which are: a) Setting
enabling legal framework for the NSW development; b) Setting functional and technical specifications and testing
for the NSW development; c) Identification of core business processes for the NSW development; d) National
consultation and working groups activities with public and private stakeholders; e) Reengineering and upscaling of
PCSs for their interoperability with the NSW; f) Setting high-level (medium-long timeframe) master plan for the
NSW full deployment.
References
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European Commission – COM(2014) 320 final, Report from the Commission to the European Parliament and the Council on the functioning of
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European Commission – DG REGIO, 2008. Guide to Cost-Benefit Analysis of Investment Projects, 2008.
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Pellizzari, Naples Shipping Week – ECASBA, June 26th, 2014
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