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Despite the opening of the market, Jadrolinija can sleep peacefully

Despite all the troubles it faced this year due to crane accidents, it seems that Jadrolinija can sleep peacefully regarding competition. Although the doors of Croatian maritime liner traffic have been wide open to everyone in the world since our country’s entry into the EU, without any protection for domestic shipowners, foreign ones seem to be far on the horizon, and it is very questionable whether they will even turn towards our ports. Domestic shipowners take only a small piece of the pie (about 14 percent in total), which means that very little has changed in these 11 years of liberalization.

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Paula Vidović, director of the Agency for Coastal Liner Maritime Transport

—It seems that such is the near future as well, as there are no signs that domestic shipowners are ready for greater investments to compete with Jadrolinija in the tenders for the routes that the largest Croatian shipowner currently controls. However, perhaps the bigger problem is that the average age of all ships sailing in our part of the Adriatic is 27 years, so the director of the Agency for Coastal Liner Maritime Transport Paula Vidović expects that in the near future shipowners will apply for tenders with younger ships.

Even before we started preparing this story, the impression was that there are not many other shipowners, especially foreign ones, and the fact that there are a total of 11, but mostly with small market shares, confirms this. Vidović says that two foreign shipowners – Alilauro and Caronte & Touristi, both from Italy, applied for the tender on two occasions, however, neither submitted a complete offer, as a larger part of the documents was missing. One of the reasons why the Italian shipowners withdrew from the competition for concessions on some routes, Vidović points out, is a condition that was evidently difficult to meet.

Small market

– Certainly one of the reasons why there are no foreign shipowners is the rule that all crew members on the muster-list must be able to communicate in the language spoken by the majority of passengers, which in coastal liner maritime transport is Croatian. This is otherwise aligned with EU regulations – explains Vidović.

We also asked Italian companies why they withdrew from the competition for liner concessions, but we did not receive a response. However, the problem with workers from Croatia would likely be resolved as part of the crew could be ‘stolen’ from Croatian shipowners, of course, if they offered higher salaries.

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Ivan Malik, director of TP Line

Ivan Malik, director of the Zadar shipping company TP Line, sees several reasons why the complete liberalization of maritime liner traffic has not been utilized so far. First of all, he says, the Croatian maritime transport market, although important during the tourist season, is relatively small compared to some other European countries. In our part of the Adriatic, seasonality plays a significant role as market amplitudes are high – demand is great during the summer months, but maintaining profitability outside the season can be, our interlocutor claims, quite challenging, which requires shipowners to have a specially tailored business model that may not be attractive to all potential shipowners.

– Our company has a certain advantage over foreign ones because we know local conditions and regulations well and have developed strategies to deal with the challenges of seasonality. Another reason why there is no greater competition among shipowners in Croatia is that the existing infrastructure and distribution of routes also play an important role. Many routes, especially those year-round connecting islands with the mainland, are mostly covered by existing contracts, and the infrastructure is limiting, which affects the development of seasonal lines. The largest number of ports in the Adriatic, under current conditions, can hardly accommodate all interested ships at a given moment, making the creation of an attractive sailing schedule extremely complex – explains Malik.

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David Sopta, president of the management board of Jadrolinija

David Sopta, president of the management board of Jadrolinija, assumes that rarely any shipowner, while maintaining existing routes on their home market, has the capacity, or free ships for sailing in other markets. Most of these ships are bound by concession contracts. This means that it is certain that both Italian shipowners would have to invest in new ships to be able to sail in our part of the Adriatic.

Read the entire company story of Jadrolinija in the new issue of the printed and digital edition of Lider.

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