1. The Role of Road Transport in Servicing International Trade
TARI
Tashkent, 4 May 2010
It is an honour for me to be here today with the students of TARI University. It is also a pleasure because road transport is the passion of my life, and when you have the privilege to live a passion it is not only a pleasure but a duty to share it with the younger generation.
For most people, electricity comes from an electric plug regardless of what is behind to produce it.
For most people also, road transport is always and immediately available on a simple query by telephone. I will try today to explain to you what is behind that telephone call ordering transport.
To understand the problematic of road transport, let me highlight some unique specificities of the role of road transport.
Road transport is the sole mode of transport providing door-to-door service.
Road transport is complementary to all the transport modes.
Road transport is always at the start and at the end of each transport operation.
Road transport is the only mode which is everywhere, always at the disposal of everyone. This is why road transport everywhere unites people and improves the distribution of wealth.
Martin MARMY Secretary General

2. Future of Road Transport: Search for global solution
Increased cooperation at national, regional and international levels
Development of the complementarity of the various transport modes  harmonisation of regulations and standards and deployment of Intelligent Transport Systems
Market opening including public transport  improve efficiency through competition
Improve vocational training and education  improve professionalism and quality and sustainable development
The major trends which will shape the future of road transport can be summarised by the need to find global solutions.
These solutions should be based on increasing cooperation between the public and private sector representing road transport to develop complementarity of the various transport modes and to improve professionalism in road transport.
© International Road Transport Union (IRU) 2010

3. Today’s Topics This is the IRU - Structure and Priorities
Road transport regulation and UN Conventions
III. Contribution of road transport to the logistics chain, economic development and the environment
My presentation today will be structured in three chapters …
Let’s start with the structure and priorities of the road transport industry.
© International Road Transport Union (IRU) 2010

4. This is the IRU
Road transport is structured at the national and global levels.
© International Road Transport Union (IRU) 2010 4

5. Evolution of IRU Membership
Members 74 Countries
Created 1948
National Associations from 8 founding countries
IRU membership started with eight founding Members to rebuild Europe in 1948, to [click] 180 Members in 74 countries in 2010.
Belgium
Denmark
France
Netherlands
Norway
Sweden UK
Switzerland
© International Road Transport Union (IRU) 2010 5

6. Evolution of IRU Structure
1948
IRU founded in Geneva
1973
IRU Permanent Delegation to the EU established in Brussels
1998
IRU Permanent Delegation to the CIS established in Moscow
The structure of the IRU has also evolved during that period.
The IRU now has four permanent offices.
2005
IRU Permanent Delegation to the Middle East established in Istanbul
© International Road Transport Union (IRU) 2010 6

7. The democratic structure of the IRU
The IRU has one of the most democratic structures.
The IRU is capable of working globally and regionally through its Regional Committees as well as locally through its national Members.
© International Road Transport Union (IRU) 2010

8. IRU International Commissions and Working Parties
Social Affairs
Economic Affairs
Customs Affairs
Legal Affairs
Technical Affairs
Road Safety
Services to Transport Operators
Dangerous Goods
Combined Transport
Taxis and hire cars with driver
All specific topics are dealt with within the international Commissions prior to their adoption as “the IRU Position” by the General Assembly.
© International Road Transport Union (IRU) 2010 8

9. These are also the priorities of the IRU Academy
IRU Priority Issues
Sustainable Development
Innovation
Incentives
Infrastructure
Facilitation
Trade
Tourism
Road Transport
These are also the priorities of the IRU Academy
To be able to work in an efficient manner, the IRU has set up priority actions. The IRU priorities are sustainable development and facilitation.
[click]
These are also the priorities of the IRU Academy.
© International Road Transport Union (IRU) 2010 9

10. The most effective UN facilitation instrument
TIR System
Since 1949, the TIR System managed by the IRU is the most effective multilateral trade and transport facilitation instrument.
© International Road Transport Union (IRU) 2010 10 10

11. Geographical scope of the TIR Convention68
Contracting
Parties 57
Currently 68 countries are Contracting Parties to the TIR Convention. However, only 57 use the TIR System on a daily basis.
TIR Operational Countries 1
Contracting Party in Admission Process 3
In Negotiation Process 6
Interested
Parties
© International Road Transport Union (IRU) 2010 11 11

12. International recognition of your vocational training
To provide international recognition is the main goal of the IRU Academy and of its accredited training institutes.
© International Road Transport Union (IRU) 2010 12 12

13. International Recognition through IRU Academy Advisory Committee
International recognition is provided by the IRU Academy Advisory Committee.
UNECE
United Nations Economic Commission for Europe
© International Road Transport Union (IRU) 2010

14. IRU Academy CPC Manager Programme
Fully compliant with European Directives 96/26/EC and 98/76/EC
Recognition
The IRU provides numerous diplomas…
© International Road Transport Union (IRU) 2010 14 14

15. IRU Academy CPC Driver Programme
Fully compliant with European Directive 2003/59/EC on Professional Driving
… and certificates for managers, drivers etc. …
Competence
© International Road Transport Union (IRU) 2010 15 15

16. Vocational training provided by the IRU Academy
CPC DRIVER PROGRAMME
CPC MANAGER PROGRAMME
TACHOGRAPH PROGRAMME & DRIVING & REST TIME RULES
… on all the main topics concerning road transport.
DANGEROUS GOODS (ADR) PROGRAMME
“IRU ACADEMY ONLINE“ INTERNET APPLICATION
TRIPARTITE HIV/AIDS PROJECT
© International Road Transport Union (IRU) 2010

17. WCO and IRU work together to provide facilitation learning package
The IRU Academy also works with the World Customs Organisation to provide a distance-learning package which is available for each customs officer.
© International Road Transport Union (IRU) 2010

18. The IRU structure should always be adapted to the changing world
Change is life.
The world is changing.
To be successful the IRU is obliged to adapt its structure and working methods to the changing world.
Change is life and we need to adapt.
© International Road Transport Union (IRU) 2010 18

19. European Union (EU) Member States
In the last 20 years, there were two regional leaderships: the European Union, which expanded from 12 to 27 countries…
© International Road Transport Union (IRU) 2010

20. Commonwealth of Independent States (CIS)
… and the 12 CIS countries.
Today, to better defend their interests, countries are joining one or more regional organisations, such as..
© International Road Transport Union (IRU) 2010

21. Economic Cooperation Organisation (ECO)
… . ECO, which has 9 member states…
© International Road Transport Union (IRU) 2010

22. Shanghai Cooperation Organisation (SCO)
… or the Shanghai Cooperation Agreement with 12 member states…
© International Road Transport Union (IRU) 2010

23. EurAsEC … or EurAsEC which has 9 member states.
© International Road Transport Union (IRU) 2010

24. Country membership of the Regional Organisations
In summary, this table demonstrates perfectly that alone a country can do nothing, and that to defend its own national interests it is much better to be a member of one or more regional organisations.
For example, [click] Uzbekistan is a member of 4 regional organisations.
© International Road Transport Union (IRU) 2010

25. New IRU structure – to better serve Regional Organisations
To take into account this regional development, the IRU has adapted its structure to better serve the new dynamic regional organisations acting on the Eurasian continent.
© International Road Transport Union (IRU) 2010

26. Today’s Topics This is the IRU - Structure and Priorities
Road transport regulation and UN Conventions
III. Contribution of road transport to the logistics chain, economic development and the environment
As road transport is carried out on public roads and in the public eye, road transport is the most regulated transport mode, also at international level.
© International Road Transport Union (IRU) 2010

27. Objective of the UNECE
Mission Statement: In its 56 member countries, including Georgia and Russia, the UNECE manages 57 multilateral instruments such as International Conventions and Agreements related to:
I. UNECE Regulations II. UNECE Conventions
- Road Safety - Facilitation of transport
- Energy saving and trade
Environmental protection
Most of the International Regulations related to road transport are managed by the UNECE.
© International Road Transport Union (IRU) 2010

28. I. UNECE Regulations Infrastructure
European Agreement on Main International Traffic Arteries (AGR)
Trans-European North-South Motorway Project (TEM)
Vienna convention (signalisation)
Other important UNECE regulations concern road infrastructure development.
© International Road Transport Union (IRU) 2010

29. Comparison of economic return from different types of infrastructure
World Bank supported infrastructure projects
The World Bank clearly demonstrates that investment is investment in road infrastructure is 2.5 times more profitable than investment in railways.
Source: The World Bank
© International Road Transport Union (IRU) 2010

30. Comparison of land used for roads as % of country’s total surface
It is good to know that also in highly populated small countries like the Netherlands, land used for roads is less than 1.5% of the countryside.
Average 0.5
Source: CE based on Eurostat and IRF
© International Road Transport Union (IRU) 2010

31. Evolution of Road Safety Performance (EU27)
Road fatalities (all road vehicles)
2000 = 100
This has been achieved through:
Major improvements of the human factor
Major improvements of the used infrastructure
Major improvements of the vehicle technology
It is well-known that road fatalities in the CIS are several times higher than the current road safety standard in the EU.
To improve road safety, we should improve vocational training because the human factor [click] is the most important.
Source: EU Energy & Transport in Figures, 2009
© International Road Transport Union (IRU) 2010

32. Road Transport benefits from facilitation instruments
II. UNECE Conventions
The role of road transport is so vital that: of 57 international transport conventions, 33 are UN Conventions aimed at facilitating road transport and trade
Road Transport benefits from facilitation instruments
The UNECE Conventions not only regulate road transport, but their aim is above all to further facilitate road transport and trade. Of 57 international transport conventions, 33 are exclusively dedicated to further facilitating road transport and trade.
© International Road Transport Union (IRU) 2010

33. G20 leaders call for facilitation of trade and road transport!
The need to further facilitate trade was confirmed in a unanimous statement of the G20 leaders in London.
© International Road Transport Union (IRU) 2010

34. Any penalty on road transport is an even greater penalty to trade
However, it should not be forgotten – as confirmed by all economic studies – that any penalty on road transport is an even bigger penalty on trade development.
Source: Hague Consulting Group, 1998
* includes lost opportunities
© International Road Transport Union (IRU) 2010 34

35. Securing trade entails protection from organised crime – Secure Parking needed!
17%
5-year attack rate
An IRU-ITF Survey 2008
Road transport is faced with another security problem - the increasing number of attacks on drivers.
The IRU has developed, free of charge, two web applications to help drivers.
1 in 6 drivers attacked in the past five years (30% more than once)
© International Road Transport Union (IRU) 2010

36. TRANSPark Search Sites around Berlin Site Close-up Route Planning
The TRANSPark application allows fleet operators to search among 3000 parking spaces.
© International Road Transport Union (IRU) 2010

37. IRU BWTO Graphs (Border Waiting Times Observatory)
The IRU, through its Border Waiting Times Observatory on the IRU web site, also provides waiting times at borders.
© International Road Transport Union (IRU) 2010 37

38. Road transport must be facilitated!
Inefficient transport/customs procedures discourage investment and make companies and national economies less competitive
Inefficient logistics
High transaction (trade) costs
Increased inventories
Poor Competitiveness
Reduced FDI
Lower transport volumes
Transport costs represent up to 15% of the export value
The lack of transport support and facilitation dramatically increases transport costs, which reduce national competitiveness [click] and therefore discourage trade and financial investment.
© International Road Transport Union (IRU) 2010

39. Border waiting times are costly for national economies
from 0.5 day
to 4.5 days
The scientific results of the IRU NELTI project demonstrate that up to 40% of driving time is lost at the border [click] and that inappropriate border crossing procedures increase transport costs by 38%.
Source: NELTI Final Report,
© International Road Transport Union (IRU) 2010

40. Reduce number and duration of border controls
Investment in UN border facilitation is not only cheap, but sometimes costless
For example The UNECE International Convention on the Harmonization of Frontier Controls of Goods and the TIR Convention
Goal
Reduce number and duration of border controls
In summary, it is much more effective for any government to effectively implement in priority the UN border facilitation instruments, such as the TIR Convention, before building roads.
Cheap
Implementation does not require large financial outlay, but mainly administrative/organisational measures
© International Road Transport Union (IRU) 2010

41. Today’s Topics This is the IRU - Structure and Priorities
Road transport regulation and UN Conventions
III. Contribution of road transport to the logistics chain, economic development and the environment
Let me come now to the last chapter: the contribution of road transport to the logistics chain, economic development and the environment.
© International Road Transport Union (IRU) 2010

42. Globalisation and the Logistics Chain
What does it take to have a cup of coffee in a café?
The combined efforts of
29 companies in 18 countries
Road transport has become
a vital production tool!
Let me explain with the simple example of a cup of coffee what globalisation and the logistics chain is.
In Europe, to have a cup of coffee [click] requires the collaborative efforts of 29 companies from 18 countries.
Only road transport is able to interconnect all these businesses. [click] This is why road transport has become a vital production tool.
Source: IRU
© International Road Transport Union (IRU) 2010

43. Road transport is the only mode to provide door-to-door service
We should not forget that in the modern economy 86% of road transport is carried out over short distances – less than 150 kilometres – and that only 0.9% of road transport is carried out over distances of more than 1,000 kilometres.
However, road transport is like an electrical wire. This is why road transport should be facilitated on all international routes.
© International Road Transport Union (IRU) 2010 43 43

44. Why China grows: the Asian Model
Real GDP growth, 5Y average 1 2 3 4 5 6 7 8
Real GDP growth in %
If you invest more,
If you add more labour,
If you have more labour with more investments you will have growth!
The growth of the Asian model demonstrates that growth in China and India is 5-8% while growth in the US or the EU is negative. [click]
This slide demonstrates perfectly that [click] if you invest more in the real economy, if you add more labour, you will have growth!
Source: UBS Investment Bank

45. New opportunities resulting from the reopening of the Silk Road
Saturated
to US West Coast
to US West Coast
As you know, China has become the factory of the world. [click]
75% of manufactured goods are produced in China.
Due to this huge growth of trade with China, [click] the main ports are saturated.
Let me show you why and where the ports are so saturated.
Sea transport
Key:
© International Road Transport Union (IRU) 2010

46. Evolution of sea containers in ports
The green dots show the evolution of the volume of containers in ports and demonstrate their effect on trade development.
In the 1970s, a high number of ports were linked by a high number of small container vessels. [click]
In the 1980s, bigger vessels fed fewer main ports, with only five key ports emerging. [click]
In the 1990s and 2000, the same trend continued. Globalisation kicks in. Start of the USA-Asia trade via the Pacific route. [click]
The last figure shows that 80% of world trade is concentrated in only 40 ports. This concentration creates not only congestion, delays and additional costs in the ports, but above all also creates a vast desertification of trade development mainly in Central Asia, Africa and South America, which are the regions which most require economic growth, social development and political stability.
© International Road Transport Union (IRU) 2010

47. Satellite Intercepts of the World’s Telecommunications in a 24-Hour Period
Modern Activity Gap: The blank swath in the northern hemisphere is centred on Central Asia!
This desertification of trade and prosperity can also be demonstrated by the density of daily telecommunication activities in these same underdeveloped regions.
Indeed, every red arrow points to those same regions which are deprived of the benefits of globalisation. Yet again, Central Asia is one of them.
Source: Centre for Strategic International Studies (CSIS), Washington, DC
© International Road Transport Union (IRU) 2010

48. Itineraries of the Ancient Silk Road up to 700 years ago
If the Silk Road worked for Marco Polo, then why shouldn’t it work for trade and road transport today?
If it was possible to transport goods along the Silk Road 700 years ago, why not today?
© International Road Transport Union (IRU) 2010

49. Interconnecting all the businesses along the reopened Silk Road
To East Coast
Saturated
To US East Coast
Labour costs = $200/month
Diesel fuel = 30 cents/litre
To Black Sea
to US West Coast
to US West Coast
For all these reasons, the IRU’s objective and dream has always been to interconnect, by door-to door road transport, every business to every major world market to drive prosperity, not only in a handful of ports, but in all countries in all regions.
Currently China-US trade is mainly transported through the Pacific, [click] which is, as I have just shown you, [click] saturated.
This causes unnecessary costs.
But to reach 60% of the US market, [click] one still needs to reach the East coast [click][click].
By doing so, without mentioning the reduction in mileage, companies will benefit from modern trucks, but a fuel price [click] of 30 cents per litre
and labour costs [click] of less than $200 dollars per month.
Sea transport
Land transport
Key:
© International Road Transport Union (IRU) 2010

50. Interconnecting all the businesses along the reopened Silk Road
To CIS
To East Coast
To EU
Saturated
To Mid East
to US West Coast
to US West Coast
By doing so, we can not only transport goods from China to the US East coast, but we interconnect all the businesses along the 12,000 kilometre Silk Road, thus realising new business opportunities with Middle Eastern markets [click], with EU markets [click] and also with CIS markets [click].
Thus, “looking West”, one can find fabulous new business opportunities.
Sea transport
Land transport
Key:
© International Road Transport Union (IRU) 2010

51. Beijing-Brussels Caravan
Launch of historic
Beijing-Brussels Caravan
Brussels
Today, with the support of the Chinese Government and of numerous other countries along the Silk Road, the reopening of the Silk Road was realised in September 2005.
Beijing

52. Black Sea Ring Highway Truck Caravan, April 2007
The Black Sea caravan, like the Beijing-Brussels caravan, clearly demonstrated that the main problems faced by international road transport do not result from lack of infrastructure but, above all, from inappropriate procedures.
The Caravan was initiated with the aim of promoting the future BSEC Ring Highway and identifying the physical road conditions and the non-physical barriers to road transport.
© International Road Transport Union (IRU) 2010 52

53. IRU New Euro-Asian Land Transport Initiative - NELTI
Launched in September 2008
Commercial transport deliveries performed by transport operators from 12 Euro-Asian countries
5 routes
In cooperation with the Asian Development Bank
The IRU NELTI project also confirmed that the real problem faced by international road transport is not the lack of road infrastructure but results mainly from a lack of support infrastructure and inappropriate procedures at border crossings where 40% of driving time is lost.
© International Road Transport Union (IRU) 2010 53

54. Road transport Euro-Asia feasibility study
The feasibility study by the American Chamber of Commerce demonstrates the advantages of road transport in linking Europe to Asia.
© International Road Transport Union (IRU) 2010

55. Road Transport and the environment
The IRU policy in favour of the environment, calling for a reduction in emissions at source, not only met UN Agenda 21 but has also allowed road transport to reduce its environmental footprint.

56. IRU’s 3 “i”s for Sustainable Development
1. Innovation – develop ever more effective “at-source” technical measures & operating practices to reduce environmental impact.
2. Incentives – encourage faster introduction by transport operators of best available technologies and practices.
3. Infrastructure – ensure free-flowing traffic through adequate investment in new infrastructure, to remove bottlenecks and missing links and make full use of existing infrastructure.
The IRU’s 3 “i” strategy, based on innovation, incentives and infrastructure, was implemented in 1994.
© International Road Transport Union (IRU) 2010 56

57. Evolution of Commercial Vehicle Toxic Emissions
- 88%
- 95%
- 97%
- 98%
Based on the IRU’s 3 “i” strategy, the road transport industry has been able to reduce pollution by the four main gaseous pollutants by 81 to 97%.
Source: EU Commission 2008
© International Road Transport Union (IRU) 2010

58. European Standard Vehicles vs. Modular Concept EU regular combinations
Furthermore, the innovative Modular Concept will also make a major contribution to the reduction of traffic flow, energy consumption and CO2 emissions.
Two vehicles instead of three
Less total fuel consumption
Less emissions per tonkm
Less total room on road
Lower cost per tonne/km
Less road damage
Possible to decouple to shorter combinations
Standard loading units
Same volume of cargo
© International Road Transport Union (IRU) 2010

59. IRU “30 by 30” Resolution - 30% CO2 by 2030
The road transport sector has voluntarily committed, on the basis of innovative technologies and practices, to reduce CO2 emissions by 30% by 2030 based on transport performance in tkm and pkm and related to the base year 2007.
The IRU has just committed to reinforce its cooperation with public and private partners to obtain a further reduction of CO2 by 30% by 2030.
© International Road Transport Union (IRU) 2010 59

60. Road Transport and Oil
We should not forget that road transport is fully dependent on fossil fuel.

61. In road transport, oil is Black Gold !
Indeed, for road transport, oil is like black gold!

62. What is the “real” price in US$ / barrel of one litre of diesel?
The current spot price in New York is $70 / barrel
But!
Fuel price at the pump The "real price"
UK: £ / litre UK: $285 / barrel
US: $0.728 / litre US: $116 / barrel
RUS: $0.66 / litre (= Rub) RUS: $105 / barrel
This is why the price of one litre of diesel at the petrol station varies on average in Europe between two times and four times the OPEC price of oil.
© International Road Transport Union (IRU) 2010

63. We need an Energy Policy instead of a fiscal policy!
19%
25%
34%
48%
50%
44%
60%
In fact, most of the oil-consuming countries have no energy policy, but only a fiscal policy.
US$/litre
Source: National governments; OPEC 2006

64. Road transport has no viable alternative to petrol and diesel fuel!
Weight & volume of fuel tank for same amount of energy
Weight coefficient
Volume coefficient
Petrol / gasoline 1
Diesel Fuel
Propane (C3H3) 8
1.9
Butane (C4H10)
1.4
Hydrogen (H2) - Gas at 200 BAR 25 22
Hydrogen (H2) - Liquid at -253°C 4
5.8
Metal Hydride - Magnesium 5
3.2
Metal Hydride - Vanadium 10
1.7
Metal Hydride - Iron-Titanium 20
Methanol (CH3OH)
2.2
2.1
Ethanol (C2H5OH)
1.62
1.53
Lead Battery 70 12
If numerous alternative fuels exist for road vehicles, none of the possible alternative fuels is efficient enough to provide the required transport service. For example, vehicles with hydrogen need to have tanks which are 5 to 25 times heavier than the current weight of diesel tanks.
© International Road Transport Union (IRU) 2010

65. Road transport is 100% dependent on oil Need to diversify the energy market
To permit our children’s children to benefit also from black gold in transportation, all governments should implement an efficient energy policy.
© International Road Transport Union (IRU) 2010

66.
This presentation is available to each of you with the IRU annual report “This is the IRU 2010” on the IRU website
© International Road Transport Union (IRU) 2010

67. © International Road Transport Union (IRU) 2010