Trade is booming in the Mediterranean, and seaports in the region are finally prepared to handle their fair share. No longer content to serve only as transshipment hubs, ports such as Italy's Gioia Tauro are beginning to establish themselves as alternative gateways to Europe-a role previously reserved for such ports as Rotterdam and Le Havre.

France, Italy, Israel, Spain, and Turkey are among the top countries for both US exports and imports (see table). "Our vessels are full inbound and outbound," notes Capt. K. Lemke of Zim-American Israeli Shipping Co. The ocean carrier is one of the leading carriers in the Mediterranean, with port calls at all the major seaports in the region. Part of the reason for the increased container volumes is the improved service. Better labor practices and management skills have also contributed to the resurgence, as have enhanced facilities and operations. Mediterranean ports handled over 19 million TEUs in 1998, and the number could grow to exceed 50 million by 2015, predicts one London consultancy.

Mediterranean Seaports: The New Gateways to Europe

Four and a half years ago, the Port of Barcelona was known more for its delays and security problems than its efficiency. Recognizing the need for change, port officials implemented a program that guaranteed turnaround times and improved cargo security. Now the port is one of the leading gateways for general cargo, automobiles, and high-value containerized shipments. At the same time, cargo theft has been dramatically reduced and unloading delays have fallen from 14 days to 24 hours. The Port of Gioia Tauro in southwest Italy has also experienced remarkable growth in its relatively short existence. The port opened in 1995, primarily as a transshipment facility. It's now the world's 16th largest container port, handling more than 2.2 million TEUs last year. Furthermore, the port plans to double its capacity within two years.

Container volumes, and profits, are also up at Greece's two leading seaports, Pireaus and Thessaloniki. Last year, Piraeus handled a record 950,000 TEUs. It's likely to exceed 1 million TEUs this year, with a significant portion of the volume attributed to its largest customer, Geneva-based Mediterranean Shipping Company. Both ports have recently been partially privatized by the Greek government. Complete privatization has been avoided, though, from fear of a dockworkers' rebellion.

Rail Service Still the

Weakest Link in the Chain

While Mediterranean seaports have been able to attract more shippers with their improved services, less-than-satisfactory rail service remains an impediment. Terminal operators and carriers realize they need to improve intermodalism to make Mediterranean ports more competitive. For example, last year 98% of cargo moving between Gioia Tauro and Milan was shipped by feeder vessel. Yet, rail service is three and one-half days quicker and $165 per FEU cheaper. And rail service to Switzerland from Gioia Tauro is 6 days faster than an all-water route around Europe to Rotterdam. Part of the problem with Europe's rail service is that the rail sector in Europe has not been liberalized. Therefore, each country owns and operates its own rail service, requiring a change in locomotives and engineers at each border. This process can take anywhere from four hours to two days, and results in an average speed of approximately 15 miles per hour on a cross-continental journey. Many of Europe's tunnels and bridges cannot accommodate double-stack trains, either.

Changes are coming, however. European Rail Shuttle, an independent carrier owned by MaerskSealand and P&O Nedlloyd, has been successfully cultivating intermodal traffic. Last year, the company handled 220,000 TEUs, about twice the volume of the previous year. The Port of Marseilles has received an enthusiastic response to its container shuttle to Lyon, and plans to expand the service to Paris, eastern France, and perhaps on to Germany and Switzerland. Meanwhile, other rail operators are creating cross-border alliances to boost their competitiveness. The merger of DB Cargo and Dutch NS Cargo to create Railion, a $3 billion-a-year market leader, may prompt other rail operators to follow suit. Britain's privatization of its rail service four years ago, which saw a 30% growth in rail freight, is another example of the benefits of private ownership. Ironically, developments in the trucking industry, such as weekend bans on trucks in several European countries, may ultimately be the catalyst for improving service in the rail sector.