2014:8. ZVT. Karolina Boholm, the Swedish Forest Industries Federation. Almedalen

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Counteracting a modal backshift

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Solutions and methods must be identified to make shipping competitive in order to prevent a modal backshift. But attempting to tax market changes in order to prevent them is not the way to go, according to Karolina Boholm, Director of Transport Policy at the Swedish Forest Industries Federation. Listen to the interview in Swedish or read the English translation.

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Karolina Boholm, Director Transport Policy at the Swedish Forest Industries Federation, how do you view the possibility of a modal backshift after 1 January 2015 when the SECA regulation come into force?

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“Well, it has been argued that this will be a consequence of this regulation. But we could discuss whether this is a good or a bad thing. I think it’s good; we have well-functioning maritime transport so obviously we will try to counteract this as much as possible. But quite often the discussion gets fixated on the idea that we have to somehow cement the market shares we have for different transport modes and then of course we have to consider the fact that market conditions exist and will lead to fluctuations over time.

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The shipping industry wants to have more market shares, which means that whoever loses them will try to prevent this from happening. So I believe that we need to keep an open mind and realise that market shares will change over time, both up and down. Instead, we need to work with different preconditions in order to support a positive development.

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What worries me the most, in many different situations, is what happens if the sulphur regulation is introduced, followed by infrastructure charges for rail traffic, and then also a tax on road transport is introduced to maintain modal shares. The argumentation is based on a wish to restrain road transport. But that means increase of costs, once again, for buyers of transport services. Transport buyers have put, together with the ship-owners, a lot of work into the issue of the sulphur regulation and the economic effects it entails, and if a ‘kilometre tax’ were to be introduced for lorries too, then this would cost the forest industry just as much as the sulphur regulation. We would then be hit twice! We would then really have an uncompetitive and lacklustre forest industry, together with other raw material based industries. There is therefore a large risk that even more freight volumes are lost if industries can’t be competitive and hence sell their products etc. That is, of course, not the intention.

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Instead I believe that solutions and methods must be identified to make shipping more competitive in order to prevent a modal backshift on a large scale. For instance, by working with efficiency in different ways, like removing the fairway dues, or providing compensation in some other manner. But I think it’s very dangerous to attempt to tax market changes in order to prevent them. And everyone has to accept that market shares will change over time. The intention of the sulphur regulation, or other factors that increase the cost of shipping, is not designed to move freight to other modes, although that might be the result. We can’t have an escalation with ever more levies being imposed. Those are my thoughts on modal backshift.”

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Thank you very much for talking to us about this Karolina.

Jul 18, 2014, 01:44 PM
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