1. © International Road Transport Union (IRU) 2005 Page 1 Road Transport: bridging Asia and Europe Road Transport: bridging Asia and Europe UNECE Workshop Geneva, 16 September 2005 UNECE Workshop Geneva, 16 September 2005 Peter Krausz Head, Goods Transport & Facilitation

2. © International Road Transport Union (IRU) 2005 Page 2 Road Transport: bridging Asia and Europe

3. © International Road Transport Union (IRU) 2005 Page 3 Contents:  Development of domestic road goods transport in Asia: China’s example  International road transport in Asia  Legal background of international road transport  Developing operational networks in Asia  Problems of transport operations by road  The global challenge and the industry’s reply Contents:  Development of domestic road goods transport in Asia: China’s example  International road transport in Asia  Legal background of international road transport  Developing operational networks in Asia  Problems of transport operations by road  The global challenge and the industry’s reply Road Transport: bridging Asia and Europe

4. © International Road Transport Union (IRU) 2005 Page 4 Chinese GDP and Foreign Trade bn USD 2003/1999: + 42%2003/1999: export + 225%; import + 249% Source: China Intercontinental Press, Beijing, 2004 GDPTrade

5. © International Road Transport Union (IRU) 2005 Page 5 China: Development of Domestic Road Transport Source: Road Transport in the PR of China, IRU 2003

6. © International Road Transport Union (IRU) 2005 Page 6 China: Development of the Expressway Network Source: Road Transport in the PR of China, IRU 2003

7. © International Road Transport Union (IRU) 2005 Page 7 China: Unequal Infrastructure Supply Source: Road Transport in the PR of China, IRU 2003 E: Eastern part M: Middle part W: Western part

8. © International Road Transport Union (IRU) 2005 Page 8 China: Commercial Vehicles – Tools of Production Source: Road Transport in the PR of China, IRU 2003

9. © International Road Transport Union (IRU) 2005 Page 9 China: Unequal Gross Weight Distribution of Commercial Vehicles Source: Road Transport in the PR of China, IRU 2003

10. © International Road Transport Union (IRU) 2005 Page 10 China: Modal Split development % per weight carried % per tonne-km Source: Road Transport in the PR of China, IRU 2003

11. © International Road Transport Union (IRU) 2005 Page 11 Logistics’ Contribution to Shanghai’s GDP Source: Road Transport in the PR of China, IRU 2003

12. © International Road Transport Union (IRU) 2005 Page 12 China: Trucking Features  Fragmented market: 1.5 million small size companies (2-3 vehicles)1.5 million small size companies (2-3 vehicles) Big players (Cosco, Sinotrans) with 1-2% (!) market share onlyBig players (Cosco, Sinotrans) with 1-2% (!) market share only Wide fragmentation leads to relatively expensive servicesWide fragmentation leads to relatively expensive services  “Red tape”: too many licences to obtain  Major issue: overloading  53% state-owned companies  Fragmented market: 1.5 million small size companies (2-3 vehicles)1.5 million small size companies (2-3 vehicles) Big players (Cosco, Sinotrans) with 1-2% (!) market share onlyBig players (Cosco, Sinotrans) with 1-2% (!) market share only Wide fragmentation leads to relatively expensive servicesWide fragmentation leads to relatively expensive services  “Red tape”: too many licences to obtain  Major issue: overloading  53% state-owned companies Source: eCargo News Asia, 25 July 2005

13. © International Road Transport Union (IRU) 2005 Page 13 General International Economic Context  China and India alone represent 1/3 of world population  China’s and India’s recent GDP growth: 5-10% a year  CIS states are also emerging  GDP growth rate < trade growth rate < container traffic growth rate  Chinese and Central Asian economies are very open Export/GDP ration between 40-60%Export/GDP ration between 40-60%  Asian economy still maritime oriented but inland areas are opening up and being developed  China and India alone represent 1/3 of world population  China’s and India’s recent GDP growth: 5-10% a year  CIS states are also emerging  GDP growth rate < trade growth rate < container traffic growth rate  Chinese and Central Asian economies are very open Export/GDP ration between 40-60%Export/GDP ration between 40-60%  Asian economy still maritime oriented but inland areas are opening up and being developed Source: CEMT/CM(2005)13

14. © International Road Transport Union (IRU) 2005 Page 14 Repercussions on International Transport  Today, land transport is a link serving maritime transport land transport is dominated by rail movementsland transport is dominated by rail movements  Tomorrow: Euro-Asian Land Bridge will be in operation; road transport services will rapidly grow in particular for time and quality-sensitive servicesroad transport services will rapidly grow in particular for time and quality-sensitive services  Congestion of ports and their hinterland  New potential for road transport: value for money  Inter-operability and multi-modality  Today, land transport is a link serving maritime transport land transport is dominated by rail movementsland transport is dominated by rail movements  Tomorrow: Euro-Asian Land Bridge will be in operation; road transport services will rapidly grow in particular for time and quality-sensitive servicesroad transport services will rapidly grow in particular for time and quality-sensitive services  Congestion of ports and their hinterland  New potential for road transport: value for money  Inter-operability and multi-modality Source: CEMT/CM(2005)13

15. © International Road Transport Union (IRU) 2005 Page 15 Progress of International Road Goods Transport in the Region – China’s Example Million tonnes 1’000 truck movements Countries considered: Russia, N-Korea, Mongolia, Vietnam, Kazakhstan, Pakistan, Kyrgyzstan, Burma, Lao, Hong Kong (85-90% of total!), Macao Source: Road Goods Transport: China –Europe, IRU 2004

16. © International Road Transport Union (IRU) 2005 Page 16 Multilateral Legal Background  UNESCAP Recommendation 48/11, April 1992: accede to UN Convention on Road TrafficConvention on Road Traffic TIR ConventionTIR Convention Customs Convention on temporary importation of vehiclesCustoms Convention on temporary importation of vehicles Customs Convention on ContainersCustoms Convention on Containers Convention on the Harmonisation of Border ControlsConvention on the Harmonisation of Border Controls CMR ConventionCMR Convention  GMS Agreement on the Facilitation of Cross-border Transport (Cambodia, China, Lao, Myanmar, Thailand, Vietnam)  In preparation: agreement of the Shanghai Cooperation Organisation on facilitation of international road transport (Kazakhstan, China, Kyrgyzstan, Russia, Tajikistan, Uzbekistan)  UNESCAP Recommendation 48/11, April 1992: accede to UN Convention on Road TrafficConvention on Road Traffic TIR ConventionTIR Convention Customs Convention on temporary importation of vehiclesCustoms Convention on temporary importation of vehicles Customs Convention on ContainersCustoms Convention on Containers Convention on the Harmonisation of Border ControlsConvention on the Harmonisation of Border Controls CMR ConventionCMR Convention  GMS Agreement on the Facilitation of Cross-border Transport (Cambodia, China, Lao, Myanmar, Thailand, Vietnam)  In preparation: agreement of the Shanghai Cooperation Organisation on facilitation of international road transport (Kazakhstan, China, Kyrgyzstan, Russia, Tajikistan, Uzbekistan)

17. © International Road Transport Union (IRU) 2005 Page 17 Bilateral and Regional Legal Background  China has bilateral road transport agreements with KyrgyzstanKyrgyzstan KazakhstanKazakhstan RussiaRussia UzbekistanUzbekistan TajikistanTajikistan  China has bilateral road transport agreements with KyrgyzstanKyrgyzstan KazakhstanKazakhstan RussiaRussia UzbekistanUzbekistan TajikistanTajikistan  Examples of a regional road transport agreement: Agreement on road transport among China, Pakistan, Kyrgyzstan and Kazakhstan Road transport protocol between Kazakhstan, China and Uzbekistan Agreement on transit between China, Kyrgyzstan and Kazakhstan Conventions often not respected, “unofficial” procedures in place

18. © International Road Transport Union (IRU) 2005 Page 18 IRU Members in Asia – a strong Network IRU Membership in Asia CRTA, China IRTB, Israel JTA, Japan PNC-ICC, Pakistan KAZATO, Kazakhstan ICCIM, Iran Nartam, Mongolia Kyrgyz AIA, Kyrgyzstan Asmap, RF KATC, Kuwait DHL, Bahrain CCIAB, Lebanon IATC, U.A.E. SNC ICC, Syria KCCI, Korea (S) THADA, Turkmenistan ABBAT, Tajikistan UCCET, Turkey AIRCUZ, Uzbekistan UND, Turkey 2005 180 Members 70 Countries 1948 8 Members 8 Members 8 countries 1948 8 Members 8 Members 8 countries Global membership

19. © International Road Transport Union (IRU) 2005 Page 19 International Road Transport Networks: the Example of TNT 1 International Road Transport Networks: the Example of TNT 1 Asian Regional Network Source: Companies’ view om Logistics along the EWEC, P. Apthrop, TNT 2005

20. © International Road Transport Union (IRU) 2005 Page 20 Myanmar Present in Mekong Subregion Myanmar Myanmar : no representation Thailand Thailand : Manpower : 2,200 Road fleet size(own vehicles) :333 Number of Depots :25 Total warehouse space available : 111,751 sqm Cambodia Cambodia : local provider exclusive agency Vietnam Vietnam : Manpower : 263 Road fleet size(own vehicles) :97 Number of Depots :6 Total warehouse space available : 6,160 sqm Laos Laos : local provider exclusive agency Source: Companies’ view om Logistics along the EWEC, P. Apthrop, TNT 2005 International Road Transport Networks: the Example of TNT 2 International Road Transport Networks: the Example of TNT 2

21. © International Road Transport Union (IRU) 2005 Page 21 International Road Transport Networks: the Example of TNT 3 International Road Transport Networks: the Example of TNT 3 Dubai EE Road FTL’s Planned Middle East Road Network Source: Companies’ view om Logistics along the EWEC, P. Apthrop, TNT 2005

22. © International Road Transport Union (IRU) 2005 Page 22 Problems of International Operations: TNT’s Example  International conventions not in use Borders not open as in Europe – restricted vehicle movementBorders not open as in Europe – restricted vehicle movement Long lines can take hours to cross, no fast lane, no 24h serviceLong lines can take hours to cross, no fast lane, no 24h service Technologically irrational trans-loading obligation at bordersTechnologically irrational trans-loading obligation at borders Customs regulations not standard between countriesCustoms regulations not standard between countries Off load and inspection at some bordersOff load and inspection at some borders Goods for 3 rd country searched at transit borderGoods for 3 rd country searched at transit border Double taxation of vehiclesDouble taxation of vehicles Vehicle standards not harmonisedVehicle standards not harmonised Security: communications black spots, hi-jacking, risk of theftSecurity: communications black spots, hi-jacking, risk of theft BribesBribes Local sensitivities ( e.g. Alcohol and magazines)Local sensitivities ( e.g. Alcohol and magazines)  International conventions not in use Borders not open as in Europe – restricted vehicle movementBorders not open as in Europe – restricted vehicle movement Long lines can take hours to cross, no fast lane, no 24h serviceLong lines can take hours to cross, no fast lane, no 24h service Technologically irrational trans-loading obligation at bordersTechnologically irrational trans-loading obligation at borders Customs regulations not standard between countriesCustoms regulations not standard between countries Off load and inspection at some bordersOff load and inspection at some borders Goods for 3 rd country searched at transit borderGoods for 3 rd country searched at transit border Double taxation of vehiclesDouble taxation of vehicles Vehicle standards not harmonisedVehicle standards not harmonised Security: communications black spots, hi-jacking, risk of theftSecurity: communications black spots, hi-jacking, risk of theft BribesBribes Local sensitivities ( e.g. Alcohol and magazines)Local sensitivities ( e.g. Alcohol and magazines) Source: Companies’ view om Logistics along the EWEC, P. Apthrop, TNT 2005

23. © International Road Transport Union (IRU) 2005 Page 23 The Euro-Asian Transport Challenge

24. © International Road Transport Union (IRU) 2005 Page 24 The Global Transport Challenge Sea transport Land transport Key: To EU To CIS To Mid East To US East Coast to US West Coast To East Coast To Black Sea Saturated Saturated

25. © International Road Transport Union (IRU) 2005 Page 25 Road Transport Industry’s Reply: past Euro-Asian Road Transport Conferences  Irkutsk, Russian Federation, September 2001 Solve Asian land-locked countries’ problemsSolve Asian land-locked countries’ problems Diminish losses due to barriersDiminish losses due to barriers Improve road infrastructureImprove road infrastructure Encourage CRTA joining the IRUEncourage CRTA joining the IRU  Tehran, October 2003 Recognise road transport’s vital role in international tradeRecognise road transport’s vital role in international trade Support UN conventions on road transportSupport UN conventions on road transport Governments, abandon protectionismGovernments, abandon protectionism Improve service quality through professional training, best practices in applying latest transport techniques and technologiesImprove service quality through professional training, best practices in applying latest transport techniques and technologies  Irkutsk, Russian Federation, September 2001 Solve Asian land-locked countries’ problemsSolve Asian land-locked countries’ problems Diminish losses due to barriersDiminish losses due to barriers Improve road infrastructureImprove road infrastructure Encourage CRTA joining the IRUEncourage CRTA joining the IRU  Tehran, October 2003 Recognise road transport’s vital role in international tradeRecognise road transport’s vital role in international trade Support UN conventions on road transportSupport UN conventions on road transport Governments, abandon protectionismGovernments, abandon protectionism Improve service quality through professional training, best practices in applying latest transport techniques and technologiesImprove service quality through professional training, best practices in applying latest transport techniques and technologies

26. © International Road Transport Union (IRU) 2005 Page 26 Road Transport Industry’s Reply: Beijing Euro-Asian Road Transport Conference “Road Transport: bridging Asia and Europe”“Road Transport: bridging Asia and Europe” Business Conference for 800 delegates from trade and transportBusiness Conference for 800 delegates from trade and transport Ministerial Conference of 15 Ministers from Europe and AsiaMinisterial Conference of 15 Ministers from Europe and Asia International ExhibitionInternational Exhibition Farewell to the Container Caravan by Road “Beijing- Berlin – Brussels”Farewell to the Container Caravan by Road “Beijing- Berlin – Brussels”

27. © International Road Transport Union (IRU) 2005 Page 27 Road Transport Industry’s Reply: Road Container Caravan Beijing – Brussels”

28. © International Road Transport Union (IRU) 2005 Page 28 Thank you.