THE EUROPEAN PETROCHEMICAL ASSOCIATION

NEWSLETTER REPORT ON THE 27th LOGISTICS MEETING Monte Carlo November 2000

1. Introduction 2. EPCA 27th Logistics Meeting - Business Sessions 2.1 Status of the industry at the beginning of the new millennium 2.2 Is there a new economy? 2.3 Impact of e-commerce on the supply chain 2.4 Impact of distributor companies on the petrochemical business in the future 3. EPCA 27th Logistics Meeting - ECTA Workshop 3.1 Standardisation of equipment 3.2 Performance measurement 3.3 Developing intermodal transport opportunities 3.4 Rail Transport Working Group 3.5 Future agenda items 4. EPCA 27th Logistics Meeting - CCA Workshop 5. EPCA 27th Logistics Meeting - CEFIC Workshop on SQAS Road 5.1 SQAS Road 5.2 Dow safety programme 6. EPCA Logistics Scholarship - Rail Freight - «The Wake-up Call»

1. INTRODUCTION This edition of the EPCA Newsletter covers the proceedings of the 27th EPCA Logistics Meeting which was held in Monte Carlo on 21-25 October 2000. In addition to the regular Business Sessions, the 27th Logistics Meeting also featured three industry association workshops and a presentation by the EPCA Logistics Scholarship student on the subject of his MSc dissertation. Comprehensive coverage of the presentation themes and main discussion points of the Business and Workshop Sessions are covered in the paragraphs below.

2. EPCA 27TH LOGISTICS MEETING - BUSINESS SESSIONS In his opening remarks, Paul Evertse of ExxonMobil Petroleum & Chemical and Chairman of the EPCA Logistics Committee, reported that this year attendance once again reached a new record high. At 580 registered attendants, the figure was almost 14 per cent ahead of that recorded for the 26th Logistics Meeting in Amsterdam last year. The theme for the 27th Logistics Meeting was «Petrochemical Logistics in the Third Millennium: A Revolution or Business as Usual?». To launch the 27th Logistics Meeting, Paul Evertse handed over proceedings to a long-established friend of

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EPCA, Michael Buerk of BBC TV. Michael once again moderated both of this year’s major EPCA events - the Annual Meeting and the Logistics Meeting - keeping a firm hand on proceedings and eliciting from the speakers those insights and opinions most relevant to a petrochemical audience.

2.1 The industry at the beginning of the new millennium Hilfra Tandy, Editor of Chemical Matters in the UK, has been writing about the chemical industry since the 1970s, providing incisive analysis throughout this period of the forces driving the petrochemical sector. Her strongly held views, combined with the EPCA guidelines encouraging the plenary session speakers «not to be afraid to be provocative», ensured delegates of a lively speech from Hilfra entitled «The Status of the Industry at the Beginning of the New Millennium». Hilfra quoted several industry watchers in her opening remarks like Graham Copley of Sanford C. Bernstein & Co in New York, Joel Klein, Assistant Attorney General in the US Justice Department and Ted Schettler of the Physicians for Social Responsibility (PSR). These quotes highlight the reason why chemicals are held in low esteem in many quarters, and why chemical producers cannot afford to ease back on their ongoing efforts to promote the positive side of the industry through initiatives like Responsible Care. The new millennium is a time of dramatic change for chemical producers, a time during which commercial pressures have never been greater. In 1999, for example, cross-border mergers and acquisitions (M&As) in all sectors reached a record $720 billion, one-third up on the previous year. EU companies were the most active, investing $500 billion and selling $350 billion in equity to foreign investors. The pressures which are driving this activity can be summarised as follows: (a) achieving top-line growth; (b) improving operating efficiency; (c) building a global market; and (d) gaining competitive advantage. M&A activity in the chemical sector reached approximately $46 billion in 1999, also a record, but trends for the year to date show that the value of M&As in 2000 could drop by over 10 per cent compared to 1999 levels. Hilfra Tandy provided figures to show that M&A activity does not necessarily lead to unqualified success for the new, consolidated enterprise - far from it. She said that size does not automatically confer competitive advantage, and the M&A track record is there to prove it. The average premium paid is 36 per cent above market value, and only 33 per cent of the participants end up recovering costs incurred in the deal. According to Hilfra, the companies created by M&A activity can be categorised as either the good, the bad or the ugly. Onethird will succeed - the good. Those driven to M&A through fear of missing the boat - the bad - often have time to repent at their leisure. The ugly are those cases where incompatible corporate structures are brought together, resulting in an inability to execute strategy and the destruction, rather than the creation, of value.

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Against this background of conglomerates struggling through M&A transactions, it is worth noting that one of the most successful chemical companies of the past two decades is Huntsman - a family-owned organisation which has established a leading position in a number of different chemical markets. On the question of whether or not market focus is a good idea, Hilfra Tandy pointed to a Boston Consulting Group study which found that «focus» can be a straightjacket in certain cases. «Success is not dependent on the narrowness of a company’s focus, but rather on the quality of its management,» said Hilfra. A restructuring option which provides less immediate results on the balance sheet than M&A but which has yielded greater success over the longer term is alliances and joint ventures. This is the fastest growing area of strategic activity, and the success stories are those in which the partners have taken time to plan their combined strategies and structures. Alliance revenues are expected to treble from $170 billion, or 10 per cent of the industry total, to $600 billion, or 20-30 per cent, by 2005. Innovation is also changing the face of the chemical industry at the start of the new millennium. As Chad Halliday, Du Pont president, has remarked: «What chemistry and physics were in the 20th century, biology and information will be in the 21st.» As his own company reaches its 200th birthday in 2002, its transition to a life sciences company should be just about complete. «The industry is not moribund,» Hilfra Tandy told EPCA delegates. «It is crackling with ideas, concepts and the ability to reinvent itself.» Whether through M&A, strategic alliances or straightforward organic growth, there has been considerable consolidation in the global chemical industry in recent years. The fact that the extent of this consolidation is still very small compared with most other industry sectors indicates that the process is far from complete. «There will be further casualties in the years ahead, but that is what evolution and revolution are all about,» Hilfra Tandy said in conclusion. «At the end of the day it is the calibre of management that determines whether or not an enterprise will be a success, irrespective of its structure.»

2.2 Is there a new economy? In his presentation entitled «Is There a New Economy?» Roger Bootle of Capital Economics Ltd considered whether the internet has brought a faster growth in productivity and fuller use of resources without generating inflation. In principle the internet has the potential to reduce costs by cutting out the middleman and to trim margins by means of price transparency. Yet it is still early days. In Europe, for example, the internet is still only of limited importance. In the US the economy has been resurgent for over five years, yet commercial use of the internet is only two years old. Some of the perceived positive effects of the new economy are, in fact, rather «old economy» in origin, said Roger Bootle.

The most apparent impact of the internet has been an opening up of competition across boundaries and market sectors. To date, this is a development which has brought benefit primarily to the consumer. In the longer term the internet holds the potential to underpin a new era of trade growth, not least because transport costs will become relatively less important. With the manufacturing axis moving progressively eastwards, exports from the US, Europe and Japan will increasingly take the form of intangibles. Looking to those factors which could slow progress for any new economy which does establish roots, Roger Bootle identified several topical issues. On the question of oil prices, although consumers are paying a lot more for their fuel compared to the beginning of 1999, in real terms oil still costs a lot less than it did in 1980. Inflation is also not a major worry, nor is the Euro despite its lack of strength against the dollar. What does worry Roger Bootle, however, is the huge US current account deficit, currently running at $100 billion per quarter and likely to reach 5 per cent of GDP by the end of 2000. Summarising, Roger Bootle said that there is a lot of life left in the so-called old economy, and this will drive global progress over the next couple of years. Economies are performing, on the whole, more efficiently than in the past, and there is a better tradeoff between the twin evils of inflation and unemployment. It is now possible to achieve reductions in both at the same time. Looking at individual regions, EU member countries are forecast to do relatively well and the Euro will recover. However, after its long-running economic boom, the US is in for a hard landing, which could result in a period of recession. Japan and the rest of Asia, too, will be hard hit, and deflation could be a problem. And all this without the

new economy yet being a factor. In fact, the benefits of e-commerce in the business sector have been over-hyped and the internet-based new economy remains a miracle yet to happen.

2.3 Impact of e-commerce on the supply chain The Business Session of the morning of October 24 was opened by two presentations on the «Impact of Ecommerce on the Supply Chain». First David Kepler, Chief Information Officer for Dow Chemical Company, provided a view from a major shipper. Then Paul Hodges, Vice President Europe of ChemConnect, stated the case from the vantage point of an e-commerce service provider. The Dow view is that «we are at the middle of the beginning» of the e-commerce revolution, and that consolidation is needed to whittle down the excessive number of companies offering e-commerce services at the moment. Ultimately, the revolution will put power into customers’ hands, and it is important for Dow to utilise IT as a business enabler and value creator. A so-called eBusiness Strategy has been developed, Step 1 of which calls for an improved customer interface by seeking to make Dow the easiest company to do business with. Other elements of the strategy are an improved supplier interface; the creation of ecompetency in company processes; the creation of efficient, open electronic channels; and the creation of new business opportunities. Dow is enroute to achieving these objectives, said David Kepler, by providing customers with private extranet connections; secure access to data and marketing information; and a secure drop box. E-commerce enables a variety of customer contact routes, from direct sales and normal auctions, to reverse auctions and neutral exchanges. A total of 1,000 companies have now been provided with private extranet connections, and by the end of 2000 Dow hopes to have 50 per cent of its strategic customers so registered for direct e-commerce sales. Dow is basing its future strategy on the premise that the internet will create business models based on buying behaviour. The buyer will become the captain of the emerging value chain and Dow is seeking to position itself all along this chain to serve customers in the optimum way.

Taking up the running, Paul Hodges of ChemConnect said that e-commerce does indeed represent a revolution, and that it is the first that he has experienced in 25 years in the chemical business. E-commerce not only holds promise for the customer, it also frees the chemical producer from the obligation to be a fully integrated

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monolith with the ability to handle every function in-house. Companies can now make choices and focus on specifics. Services provided by other parts of the value chain can be outsourced as required. The transition of integrated companies to networked companies has already begun to happen, and the process will continue over the next 3-5 years, pointed out Paul Hodges. The companies taking the lead in this transition, underpinned by a full commitment on the part of senior management, will build up a big lead over their competitors. As it will be impossible to bring all elements of an organisation into the process overnight, it is best to concentrate initially on those business units interfacing with large numbers of sellers and/or buyers. When Michael Buerk questioned the two speakers in the ensuing discussion period as to how e-commerce will impact the movement of chemicals and the demand for transport, both agreed that LSPs are integral parts of the supply chain and essential factors in the e-commerce equation. One immediate impact of the new business approach will be the rapid weeding out of logistics inefficiencies and any overcapacity in the transport sector. This, in turn, should have a positive impact on freight rates for LSPs.

2.4 Impact of distributor companies on the petrochemical business in the future The final Business Session focused on chemical distributors and their future role in the petrochemical sector. Once again two views were provided - PierreYves Divet of Vopak Distribution Europe speaking on behalf of the distributor and David Priestley, European Distributor Manager for BP Chemicals, giving the chemical industry outlook. In the chemical producer sector, said David Priestley in his introduction, there has been a considerable amount of consolidation amongst companies while the pressure for higher productivity is increasing. In the distributor sector business is being reshaped by e-commerce initiatives and the forging of more partnerships and alliances with producers. Against this backdrop, for chemical distributors the role of traded product within their business portfolio is diminishing rapidly. In the case of BP, ten years ago the company utilised 160 distributors to sell on 15 per cent of its total output. By next year BP will be moving some 40 per cent of its output through only 20 distributors. «With greater emphasis being placed on efficient supply chains and ecommerce solutions to satisfy customers’ precise needs, producers and distributors will need to work together more closely in future to meet these challenges,» concluded David Priestley. Pierre-Yves Divet provided an idea of the scale of operations undertaken by a major chemical distributor when he described his company’s European operations. Prior to the recently announced acquisition of Ellis & Everard, Vopak in Europe employed 1,700 people at 45 sites. Over 5,000 different products from 1,000 producers and totalling 1.5 million tonnes are handled each year. Vopak, in turn, distributes products to 50,000 customers and raises 500,000 invoices each year. Although a distributor is not a logistics service provider, it must have an efficient logistics network in place to enable strategic storage, blending, repackaging and rapid deliveries to be accommodated. To ensure successful utilisation of these capabilities, a distributor must be in possession of market knowledge, qualified sales staff, geographical cover, a range of complementary products and financial strength and stability.

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In the discussion period that followed the two distributor presentations, both speakers confirmed the diminishing role of chemical traders. This is occurring primarily because of the partnerships developing between producers and distributors. At the same time producers are controlling their businesses more closely than in the past, and distributors are consolidating into larger entities to meet the increasing demands of a producer sector which is also consolidating. On the question of ecommerce, again both speakers were in agreement. The consensus is that it is early days, that the ultimate impact will be huge and that there is no turning back. Both companies are building e-commerce experience initially with their North American enterprises, and believe that this experience will enable rapid assimilation of the technology throughout their European operations.

3. EPCA 27TH LOGISTICS MEETING - ECTA WORKSHOP In his introduction to the morning European Chemical Transport Association (ECTA) Workshop on October 23, Luc Haesaerts, ECTA Chairman, said that the purpose of the session was to provide a progress report on the achievements of the Association and a number of its seven Working Groups.

3.1 Standardisation of equipment One of the Groups, the Standardisation of Equipment Working Group, has now completed its first task. The joint EPCA/ECTA/CEFIC body had earlier prepared draft «Guidelines for the Standardisation of Road Transport Equipment» which cover road tankers and tank containers for liquids and for powders and granulates, as well as trucks, trailers and containers for the carriage of packaged chemicals. The guidelines, which have now been agreed, were prepared to bring uniformity to the many equipment standards that exist in Europe. ECTA is currently working on the implementation of these guidelines.

3.2 Performance measurement Dr Horst Kubek of LKW Walter International, ECTA Vice Chairman and Chairman of the Performance Measurement Working Group, updated workshop delegates on progress with its «Guidelines for Standardised Delivery Performance Measurement». Unveiled in draft form on the occasion of the 26th EPCA Logistics Meeting in Amsterdam in November 1999, the guidelines are now ready for implementation. However, there is a need for cooperation on the part of all involved parties if optimum benefit is to be derived from these

delivery performance measurement guidelines. The recommendations have been prepared to help dispel the confusion caused by the current proliferation of individual company reporting systems, and to enable manufacturers and their LSPs to collect delivery performance data in a standardised way. The system is based on reporting by exception, whereby hauliers record and report each individual shipment that deviates from industry requirements. Not only does the system identify weak points and reduce time spent collecting data, it also fine-tunes the mechanisms created to secure continuous improvements in performance. Dr Kubek encouraged all delegates present to implement the new standards at the earliest opportunity.

3.3 Developing intermodal transport opportunities Freight volumes in Europe continue to expand at a rate double that of the region’s GDP. Despite efforts to boost rail, barge and shortsea transport, road movements of goods continue to grow at a rate much greater than that for any other transport mode. By 2010 road transport is expected to account for 80 per cent of the European freight market, up from 54 per cent today. To ease road congestion, protect the environment and promote efficient transport operations, ECTA is encouraging the development of intermodal transport opportunities in Europe, not least on the transalpine routes. Fundamental to this initiative is the need for modernised, privatised and liberalised transport operations and more enlightened pricing and service policies on the part of the railways. More uniformity in rail voltages, safety systems and signalling systems will also facilitate intermodalism. LSPs believe that the competition should be between transport systems rather than between modes.

3.4 Rail Transport Working Group The ECTA Rail Transport Working Group is under the chairmanship of Wolfgang Rogall of DB Cargo, and is charged with employing the latest advances in logistics technology and practices to promote the safe, efficient and environment-friendly rail transport of chemicals in Europe. During the workshop in Monte Carlo, Dr Rogall pointed out that the nature of European railways is changing, with the traditional national rail organisations being split into infrastructure and transport service providers. Infrastructure providers are, effectively, the new monopolies and it is important that these companies work with each other and industry to provide free access to their networks and to ensure that freight is not disadvantaged compared to passenger transport.

With 13 rail companies as members, the ECTA Rail Transport Working Group has held four meetings to date. The current work programme includes the following three items, i.e. (a) guidelines on the standardisation of rail equipment; (b) a pilot border-crossing monitoring project involving freight moving between Italy and Benelux countries; and (c) delivery performance measurement guidelines.

3.5 Future agenda items

To achieve progress with these aims, it will be necessary for all participants in the transport chain, including shippers, to make a commitment. One area where cooperation could lead to improvements is the current railway practice of dispatching the majority of its freight trains in the early evening for arrival first thing the next morning. This, in turn, concentrates the bulk of road deliveries to and from the railheads at rush hour peaks. The use of «drop and swop» movements, involving either road trailers or intermodal containers, and the creation of a greater number of time slots could yield significant improvements in transport efficiencies. These are some of the issues that will be tackled in the coming months.

The ECTA Workshop concluded with a brief review of two new subjects that will come under study in the coming months. Both are aimed at securing further improvements in productivity. The first relates to the problem of adequate human resources, most notably the potential lack of drivers with the requisite qualifications and experience. Another issue is the need for strong long-term partnerships between LSPs and shippers. Closer relationships will make it less likely that shippers will want to switch LSPs. This, in turn, will ease the pressure on LSPs to maintain sizeable fleets of transport equipment which are flexible enough to meet requirements of a wide and diverse range of chemical company customers. In contrast to the traditional shortterm approach, an integrated partnership would provide all the participants with opportunities to optimise existing resources and create value.

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4. EPCA 27TH LOGISTICS MEETING - CCA WORKSHOP The Chemical Carriers Association Inc (CCA) held a workshop on the morning of October 23. Knut Dybvik, CCA President, introduced the Association while Margaret Doyle, CCA Executive Director, covered the issues currently of concern to the membership. Founded in 1978, CCA represents over 65 per cent of the chemical tanker tonnage worldwide and 85 per cent of the tonnage calling at US ports, and provides an industry voice before many different legislative and regulatory bodies. The Association, which is based in Washington, DC, is increasing its focus on recent rulemaking initiatives impacting chemical tankers stemming from activity at the International Maritime Organization (IMO) and in the European Union. From a commercial point of view, chemical tanker owners are emerging from one of their worst ever markets in 1999, brought on by severe overtonnaging. This, in turn, was caused by a coincidence of depressed demand as a result of the 1997 Asian economic crisis, and the delivery of a large number of new ships ordered when the market was buoyant prior to the onset of the crisis. Notwithstanding the depressed freight rates over the past two years, the network of maritime safety and environmental protection regulations governing chemical tankers, already one of the most rigorous in the world, continues to be tightened. The Association is active with a number of rulemaking initiatives with the aim of ensuring the chemical tanker sector is adequately represented. For example, CCA is currently working with the US Coast Guard on the development of (a) updated requirements governing marine vapour control systems and (b) a standard for hazardous substance response contractors. At an international level, the issues with which CCA members are currently engaged are the revision of Annex II of the Marine Pollution Convention, ship vetting inspection frequency and post-Erika regulatory initiatives, including increased port state control scrutiny on all tanker sectors.

One of the reasons for the CCA presence at EPCA was to explore the potential for greater cooperation between chemical tanker operators in the US and Europe. While ECTA provides a forum for European land transport interests, there is no equivalent body for the European chemical tanker sector. Knut Dybvik identified some CCA initiatives which could be relevant for Europeans, notably a common shipboard incident and near miss database, and a project to harmonise the different chemical names for the same substance sometimes encountered in the

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various modes of transport. It was also pointed out that the CCA experience of dealing with US state rulemakings as well as the fallout from the US Oil Pollution Act of 1990 (OPA 90) could have relevance for Europeans in light of the proposed EU rulemakings following the Erika accident.

5. EPCA 27TH LOGISTICS MEETING - CEFIC WORKSHOP on SQAS ROAD 5.1 SQAS Road The Safety and Quality Assessment System for road vehicle operators serving the European chemical industry (SQAS Road) is to be revamped to enhance its value as a risk management tool for chemical shippers. Jos Verlinden of CEFIC told delegates to the SQAS Road workshop on the afternoon of October 23 that the initiative entails the provision of a central management structure, formal assessor training, greater transparency and availability of report information and targeted promotion of the scheme. Over the last five years SQAS Road has provided chemical shippers with a uniform system for assessing the quality, safety and environmental performance of road transport operators. Under the scheme qualified inspectors carry out assessments of individual hauliers every three years on behalf of the entire chemical industry. SQAS Road replaced a complex and duplicative industry regime in which individual chemical companies carried out their own audits on every road haulier they utilised. Under SQAS Road there are now 70 qualified assessors in 11 countries, and the system has been adopted by the majority of Western European chemical transport companies. A total of 443 haulage companies have been assessed, and 73 have been reassessed. The availability of questionnaires, and guidelines backing these questions up, in seven languages has helped win acceptance for the scheme. Major chemical companies have also accepted SQAS and use it as a risk management tool. The implementation of SQAS Road was reviewed by CEFIC in 1999. It was found that, although the scheme had gained widespread acceptance, optimum benefit was not being derived from it due to the informal administration arrangements. This, and one or two questions about the quality of some inspectors, had compromised industry faith in the system to a certain extent. It was felt that the management of the system needed to be tightened up, while the industry commitment to the project needed to be reinvigorated across the board. CEFIC agreed that SQAS Road needed to be more closely and formally managed, in a similar fashion to the Chemical Distribution Institute (CDI), which is the SQAS system covering the sea transport of bulk chemicals and chemical gases in tankers. As a first step, Jos Verlinden has been appointed by CEFIC to handle the day-to-day administration of SQAS Road on a fulltime basis. As SQAS manager, he is supported by a Steering Group, comprised of chemical company participants, and a User Group whose membership is made up of representatives of chemical shippers, road haulage companies and certification bodies. Central to this new management control is a

fee-paying system, covering the cost of both haulier assessments and report access, and structured to ensure that the scheme is financially self-supportive. The second element of this enhanced SQAS Road scheme is a formal assessor training and qualification programme. Assessors are being asked to undergo a dedicated two-day training course, followed by an examination and an interview. Before the assessor is formally qualified and presented with a certificate, they will be asked to carry out one or two of their early haulier assessments under the supervision of a senior inspector.

evaluation of assessment results. Obsolete reports will be archived automatically.

5.2 Dow safety programme In a presentation which followed the report on the revamp of SQAS Road, Serge Cosemans of Dow Europe stated that his company is committed to reducing the number of serious and moderate accidents involving the transport of its chemical products by 90 per cent over the 10-year period ending in 2005. In the case of road transport, to achieve this target, the rate of such accidents would have to be brought down to three per 1 million shipments. Between 1994 and 1998 good progress was made and the chemical producer was on target for achieving its goal. However, last year turned out to be a setback, not only for Dow but for Europe in general, as the total number of road accidents involving chemical transport doubled. «In 1999 vehicles carrying Dow products were involved in 21 accidents, of which three involved fatalities,» said Serge Cosemans. «In 12 of the accidents the vehicle rolled over. This was particularly surprising, as we had only ever experienced the odd incident of this type in the past. The worrying trend is continuing. Thus far in 2000 we have recorded five serious accidents, two of which involved fatalities. In all five fatal accidents since June 1999, we discovered that the vehicle driver had not been wearing his seat belt. In two of these fatal accidents the vehicle rolled over.» Dow defines a serious or moderate road accident as one where the driver is injured or hospitalised; where more than 450 kg of product is spilled; or where losses absorbed by Dow exceed $10,000. An analysis of the accidents over the past six years shows that at least 80 per cent are due to the human element, leading to the conclusion that the vast majority of accidents are avoidable. With the incident trend currently moving in the wrong direction, Dow has found it necessary to increase its accident prevention commitment in order to achieve progress towards the corporate goal of zero accidents. The main elements of the updated Dow accident prevention action plan can be summarised as follows:

Another feature of the enhanced scheme is the switch from a paper-based to a paperless system for the handling of assessment reports. As is the case with CDI, data entry, comments, retrieval and analysis, as well as the compilation of statistics and archiving, will be handled through a database on the web. It is possible that the electronic database concept will be extended to other SQAS packages for use in processing assessment report data. With the paperless system, assessment reports will be directly accessible via the internet, although access will be restricted. Only qualified assessors will be able to enter reports in the database. The system is being designed to ensure total transparency of assessment results for the chemical companies, while predefined queries will allow a quick

(a) step up internal training and safety awareness; (b) implement an effective root cause investigation process; (c) share learning experiences; (d) seek shipper/carrier partnerships on safety; (e) enforce site access requirements; (f) increase communications with drivers; (g) reward outstanding safety performance; (h) develop human behaviour-based programmes; (i) ensure safety is not compromised by commercial considerations; (j) increase commitment to the SQAS carrier assessment scheme; and (k) provide advice on how carriers can contribute to improved safety.

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extent necessary is unlikely to happen in the short term. Governments will only make the necessary investments, said Christophe Pignal-Jacquard, when roads become so clogged with traffic that dramatic solutions become necessary. That is not to say that interim steps should not be taken to promote greater use of the railways and to prepare for the day when sufficient funds are invested in the railways to halt the decline in their overall share of European freight market. It is incumbent upon industries which utilise rail transport, including the chemical sector, to raise their collective voice and lobby for the solutions deemed to be necessary. The overall action plan for reviving rail advocated by Christophe Pignal-Jacquard can be itemised as follows: (a) implement transitional measures to promote greater liberalisation; (b) invest in infrastructure to increase capacity where warranted; (c) modify capacity allocation and charging systems; (d) support R&D which promotes clean and efficient technologies; (e) encourage initiatives which identify niche markets for rail freight and demonstrate the feasibility of transferring freight from road to rail; and (f) coordinate the development of a common European transport policy.

‘Most of the accidents in which our products have been involved did not occur because procedures were inadequate, but rather because of people’s behaviour,’ concluded Serge Cosemans. ‘We can only achieve our goal of zero accidents if everybody increases their level of safety awareness. This has to be a commitment that starts at the top, with senior management, and is promoted throughout each company involved in the logistics chain.’

In commending Christophe Pignal-Jacquard on the work that he carried out on this dissertation, Paul Evertse said that he had not only provided much food for thought for the EPCA membership but also identified specific areas which the ECTA Working Group on Rail could usefully add to its work programme.

6. EPCA LOGISTICS SCHOLARSHIP RAIL FREIGHT - «THE WAKEUP CALL» The 27th Logistics Meeting concluded with a report by Christophe Pignal-Jacquard, a student at Heriot-Watt University who has been provided with a Logistics Scholarship by EPCA. In his dissertation, which was submitted for the award of a Master of Science degree in Logistics and Supply Chain Management, Christophe investigated the European rail freight situation before recommending actions which, he believes, will help in the revival of rail transport, including for chemicals, in the region. In a nutshell, a European rail renaissance depends on market liberalisation; fair and efficient pricing; interoperability and interconnectivity of national networks; and improved levels of customer service. Unfortunately, freight is afforded a much lower priority than passengers in most EU countries and rail freight is often not on the political agenda. With the European Council supportive of the railways in principle but unable to sanction the level of funds necessary to revitalise the regions’ railways, it is up to individual national governments to take up the cause of rail transport. However, national spending on rail to the

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THE EUROPEAN PETROCHEMICAL ASSOCIA TION ASSOCIATION Avenue de Tervuren 149 - 1150 Brussels - Belgium Tel: +32 (0)2. 741.86.60 - Fax: +32 (0)2. 741.86.80 - e-mail : [email protected] / [email protected]

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