The Hindu Business Line : Inter-modal transport and logistics — Evolving a system for Asia-Pacific region

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Inter-modal transport and logistics — Evolving a system for Asia-Pacific region

The lack of common guidelines or standards of operation for different stakeholders in the logistics chain, namely, freight forwarders, multimodal transport operators and logistics service providers, impacts the overall level of professionalism and competitiveness of industry.

Raghu Dayal

Reaffirming a long-term vision of an international integrated inter-modal transport system in Asia and the Pacific, an ESCAP (Economic and Social Commission for Asia and the Pacific) ministerial conference on transport held in November 2006 in Busan, Republic of Korea, desired the development of logistics to be integrated as an important additional element in the vision.

Framework for cooperation

The conference provided a clear framework for promoting regional cooperation in support of socio-economic development in the region, thereby meeting the growing challenges of globalisation. The commission thus adopted a resolution on May 23, 2007, on implementation of the Busan Declaration on Transport Development in Asia and the Pacific and delineated the Regional Action Programme (RAP) for Phase I (2007-2011) transport development in the region.

ESCAP had long back, at its 48th session in 1992, approved the long-term project on Asian Land Transport Infrastructure Development (ALTID). It comprises the 140,000-km Asian Highway (AH) and 14,000-km Trans-Asian Railway (TAR) projects besides concomitant transport facilitation measures.

The implementation of the ALTID project clearly demonstrated its practical importance in facilitating international trade and tourism. Earlier, in October 1996, the ESCAP Ministerial Conference adopted the New Delhi Declaration on Infrastructure Development in Asia and the Pacific.

Pact on network

The Ministerial Conference on Infrastructure held in Seoul in November 2001 deliberated phase II (2002-2006) of the New Delhi Action Plan and opted for the formulation, development and improvement of an international integrated inter-modal transport being given priority together with the formulation of the AH and TAR networks as the major building blocks of the integrated inter-modal transport system in the region.

Accordingly, the Intergovernmental Agreement on the AH network came into force on July 4, 2005. A similar agreement on the TAR network was also developed and signed by 18 countries of the region in November 2006 in Busan (later signed by India also).

It also laid down a roadmap for phase I (2007-2011) aimed at materialising the vision of an international integrated inter-modal transport and logistics system, with transport logistics constituting an important additional component.

The programme identifies eight areas in which ESCAP is asked to work in consultation with member-countries: (i) policy guidance at the ministerial level; (ii) transport infrastructure development; (iii) transport facilitation; (iv) transport logistics; (v) finance and private sector participation; (vi) sustainable transport development; (vii) road safety; and (viii) transport and the Millennium Development Goals adopted by the UN in September 2000.

One important measure of the programme is the promotion of the AH network. To demonstrate the regional connectivity made possible by the AH network, ESCAP, in cooperation with partners like IRU (International Roads Union), has planned to organise in mid-2008, a truck caravan along the Asian Highway routes, connecting Tokyo to Istanbul. The caravan proposes to follow the main East-West AH routes and could be joined by trucks coming from other ESCAP sub-regions.

The caravan would benefit from the successful experience gained by the IRU from organising two similar events, one the Beijing-Brussels Caravan (September 27 to October 17, 2005) and the Black Sea Ring Highway Caravan (April 19 to May 28, 2007).

Along its route, the Beijing-Brussels Caravan included countries such as China, Kazakhstan, Russian Federation, Lithuania, Latvia, Poland, Germany and Belgium.

Caravans to collect data

The first caravan aimed at demonstrating that road transport was an effective means of shipping cargo by land between Europe and the countries of the Asia-Pacific region, while the subsequent Black Sea Ring Highway Caravan was initiated by the Black Sea Economic Cooperation, again, organised by the IRU and supported by Governments and the private sector from the twelve BSEC member-countries around the Black Sea basin.

The caravan proposed for mid-2008 will, like earlier caravans, collect data relevant to the international road transport such as status of infrastructure, travel time and costs involved, non-physical barriers, facilitation measures en route and at the border crossing points.

In the meanwhile, there has been considerable emphasis laid on providing assistance, especially to landlocked countries in the region.

At an international ministerial conference of landlocked transit developing countries and international financial and development institutions on transit transport cooperation held at Almaty in Kazakhstan in August 2003, the Almaty Programme of Action was adopted for addressing the special needs of landlocked developing countries within a new global framework.

In support of the implementation of the Almaty Programme of Action, ESCAP conducted a feasibility study in 2004 for developing an agreement among the member-states of the Shanghai Cooperation Organisation (SCO) — with membership of China, Kazakhstan, Kyrgyzstan, Russian Federation, Tajikistan and Uzbekistan on facilitation of international road transport. The Prime Ministers of the SCO member-states, at their meetings at Bishkek, Kyrgyzstan in September 2004, as well as at Moscow in October 2005, and at Dushanbe, Tajikistan in September 2006, stressed the importance of the agreement and called for acceleration of the negotiation of the agreement.

It is recognised that lack of common guidelines or standards of operation for different stakeholders in the logistics chain, namely, freight forwarders, multimodal transport operators and logistics service providers, impacts the overall level of professionalism and competitiveness of the industry. Accordingly, raising the profile of the industry and harmonising the approaches to enhancing professionalism have emerged as the two critical areas for possible collective action and cooperation.

Need for regulations

At a meeting of executives of National Freight Forwarders and Logistics Associations held on June 20, 2007 in Bangkok, the issue of common minimum industry standards, including criteria for membership, registration requirements and codes of conduct for industry associations, came up for deliberation.

It was noted that while Government regulations exist in some countries, e.g., the Multimodal Transportation of Goods Act in India, the Multimodal Transport Act in Thailand, and decree of the Ministry of Communications regarding Transport Handling Services in Indonesia, regulations are under consideration or review in some other countries such as Malaysia, Pakistan and Sri Lanka.

The Federation of Freight Forwarders’ Associations in India (FFFAI) has offered to host the next regional event in Mumbai in 2008, and the Pakistan International Freight Forwarders Association (PIFFA) has offered to host the subsequent forum in the following year. A few similar programmes have been arranged by ESCAP towards the objective of capacity building in logistics.

Some training-of-trainer (TOT) workshops have been conducted in Cambodia, Lao PDR, Malaysia, Myanmar, Sri Lanka and Vietnam. Guidelines for the operation of logistics service providers, promoting partnerships and exchange of experiences within the region, and capacity-building in logistics. Such guidance may include proposals for member Governments to strengthen mechanisms to enable coordination and exchange of experiences between the governments and the private sector.

Corridor-based approach

In its resolution of May 23, 2007, ESCAP deemed that an effective approach to the realisation of an integrated transport system is through the operationalisation of priority transport corridors and routes within the system. The development of international transport corridors is an approach that could expedite the achievement of an international integrated inter-modal transport system.

It could also contribute to attaining greater efficiency in transport development in the region, taking into account technical and interoperability aspects to facilitate movements at border crossings.

Moreover, the corridor-based approach could facilitate the adoption and implementation at all levels of transport laws and policies based on common principles and standards, multilateral legal instruments and conventions and, thereby, more closely harmonise the regulatory environment in the region.

It is appreciated that an efficient transport corridor is characterised by a sufficient volume of cargo and a full range of services. A strategy to establish such a corridor could be the promotion of, and support for, the development of full-fledged transport and logistics services and the establishment of integrated freight and distribution hubs or dry ports at selected locations along the corridor.

Among the many examples of cooperation along transport corridors in different regions of the world, e.g., North America, in Southern Africa and Europe, the well known and successful instances include the 10 Pan-European Transport Corridors and four Pan-European Transport Areas. They were defined during three Pan-European Transport Conferences in 1991, 1994 and 1997 respectively.

In the ESCAP region, the operationalisation of the northern corridor of the Trans-Asian Railway has been effectively promoted through a Memorandum of Understanding, signed by China, Kazakhstan, Mongolia, Republic of Korea, Russian Federation, Belarus and Poland and two international organisations, namely, International Union of Railways (UIC) and the Organisation for Railways Cooperation (OSJD).

ESCAP is planning to undertake a study of priority transport corridors and good practices that could be implemented on those corridors.

Such a study would encompass priority regional transport corridors to be defined in collaboration with member-countries and based on achievements so far, including Asian Highway and Trans-Asian Railway networks, the Special Programme for the Economies in Central Asia (SPECA), etc.; an inventory of the conditions of these corridors to be undertaken in regard to the status of infrastructure, degree of facilitation, etc., based on inputs from member-countries; and proposals to be formulated for institutional arrangements on each of the corridors, taking into account the specific needs and capacities of the countries concerned.

(The author is a former Managing Director of Concor.)

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