“Silk Road? It’s quite fashionable now” / INTERVIEW

Interview with Fabrizio Vettosi (VSL). Doubts about intermodal transport’s ability to compete.

IS THE Far East still the guiding light of the Italian shipping sector? Fabrizio Vettosi, the managing director of Venice Shipping and Logistics (VSL) answered, “Yes, the world is consuming and producing more and more in the East and in the South, not in the North and the West. Beyond reshoring, that is the return of production activities to countries like the United States and Germany, the world goes where demographic trends are pointing. The drivers of demographic development are in East Asia, in the broad sense, not just China; and Africa.”

Do you believe in the Chinese Belt and Road Initiative, the so-called new silk route?

“I’ve never believed in One Belt One Road, but now I understand that it has become a concrete reality. If anything, I have some doubts about the fact that the land-based modality can be more convenient than maritime transport.”

What do you mean specifically?

“China controls the shipments, shipbuilding, and also the transport capacity, now that it has become a shipowner. We can see China’s total control in the dry bulk sector. Crude oil travels to India and East Asia, and then the refined product goes to the United States and Europe. In short, the centrality of East Asia to international maritime transport is not in question.”

So have you changed your mind?

“I do not know whether the Silk Road will bring benefits in terms of transport costs. Rather, I see it as a drive to improve the supply chain. But I do not believe that intermodal transport is cheaper than maritime transport on routes over 4,000 or 5,000 miles. I believe that today in Italy the Silk Road is fashionable, just as it is to talk about Gianluigi Aponte’s activities.”

The new Silk Road project also includes investments in infrastructure.

“Well, in the last two years, China has invested $9 billion, or 20% of the allocated financial resources to shipping infrastructure, namely to ships.”

But they have also bought terminals from Savona to Spain.

“The Chinese are investing in Spain and also in Italy, but these operations have nothing to do with the Silk Road project. And they are not only investing in container traffic, which accounts for 15% of global maritime traffic. The Chinese are no fools, when they start doing something they do it very well. They have also become the main carriers in the dry bulk sector, with 16% of the total carrying capacity.”

Has Chinese development had an impact on the crisis that the Italian shipping sector has experienced in recent years?

“Italian shipowners were making decisions in 2008 with the same mentality that they had in 1958. They thought that they were in a cyclical crisis and did not understand that it was a moment of discontinuity in the economic conjuncture, linked to the development of demand for transport to the Far East. An extraordinary demand was created, and it fell right into the lap of the Chinese. China understood the change and built new ships, keeping transportation costs low. We have fuelled their resources, building our ships in their shipyards and increasing their investment capacity. We gave them the opportunity to defeat us. We made our decisions as if shipping would never change, but the whole world has changed.”

So, is the split that took place in Confitarma at least indirectly a consequence of the difficulties that the Italian sector has experienced because of Chinese competition?

“Confitarma is undoubtedly the most authoritative association in the sector, and it is the only one that is internationally known. Now we are about to destroy it, it is suicide. In Italy we have a sort of addiction to associations, but many people forget that an association’s task is not merely to sit around a table, it is a serious commitment. In Italy we have many associations in the transport sector, but if we pay attention to their proposals for what is to be done, they are all the same. They are all saying the same thing.”

Can technological development shorten international distances and bring us closer to East Asia?

“An episode that occurred recently in Rotterdam does not make me optimistic. I met a Genoese operator who asked me to explain to him what the blockchain is, a term I have been hearing for three years. We are still looking to the past. There is always a resistance to change.”

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