THE FORUM OF TRANSPORT WORKERS OF EUROPE AND ASIA

What should the cargo transportation policy be?

Oleg Beliy,
Director of the Institute
for Transportation Issues

         A policy on cargo transportation is certainly a factor of great importance in the development of a transportation industry. It is even more important because it determines the general transportation strategy.
        The first step in forming this strategy is searching for the very resources that make transportation a source of budget revenue. The state should manage its share in the transportation network so that its operation contributes to the state budget.
        The second step in building a strategy is to clearly define the state's leading and organizing role in the development of the industry. Its organizational structure should mold the processes of self-organization within the market of transportation services.
        The third step is the use of modern science in implementing methods of complex system information in order to forge and adopt the soundest and most effective decisions.
        No transportation networks can be developed until coherent political, financial, economic and other important relations have been forged between states, regions, large and small economic groups, enterprises, non-governmental organizations, individual politicians, businessmen and entrepreneurs. On the other hand, the structure of relations between the objects and subjects participating in the transportation network is strongly influenced by geographic location and the longevity of the relations. From this one may conclude that those who have control over the space in which cargo transportation operates (country, region, local administrative bodies) dominate the network.
        The Russian Federation is geographically located in the middle of the international cargo flows between the North-South and East-West. These flows have greater advantages compared to the present circular transportation routes. They can bring large financial revenues to the state, which owns all transportation networks (air, land and water) in the Russian Federation. The partial exploitation of these networks for cargo and passenger transportation should be in the economic interest of the government, especially in times of financial deficit.
        In this way, instead of being a budget depletor, the transportation industry would become a budget replenisher. The claims commercial transporters may have to subsidies from the national budget are unjustified. Most of them lack competitiveness in the world market of transportation services because their infrastructure is worn and technologically obsolete. Because there are neither budget nor investment means, it is impossible to renew over 5-10 years the outmoded fleet or build missing roads and railways, or achieve new energy efficient technologies, etc.
        American, European and Asian Pacific states have mutual political, financial, trade, economic and cultural interests. In order to consolidate stable relations between them, the existing communication network must change. The APEC conference held in Malaysia in November 1998 recognized the need for creating shorter routes. Priority was given to direct air routes crossing the Russian territory, which are of primary importance both for passengers and cargo, using large capacity planes.
        At present, intercontinental cargo transportation through the Russian Federation has come to be considered an integral part of world traffic flows. It is also a crucial component in the organization of international transportation corridors. So far however, cargo has flowed in only two directions: North-South and East-West.
        Intercontinental cargo transportation can also use internal waterways, using "river-sea" type ships along a large transportation ring: the Baltic Sea - the Neva - the Baltic canal system - the Volga - the Volgodon canal - the Don - the Azov Sea - the Black Sea - the Dunai - the Rein - the Baltic Sea. This water route already exists and could be used depending on the political will and interest of all those countries through which the ring runs.
        We deliberately emphasize cargo transportation. It requires minimum expenditure and offers high budget revenues based on the existing freight tariffs whose value depends on the geographic location of the hosting country.
        The transportation industry, unlike other more homogeneous industries, includes various types of transportation means. They are presently developing in an environment of contradictory relations within the transportation service market. They all have specific technical features, levels of competitiveness and a number of other characteristics. Yet they must operate in a common transportation process and therefore, need a common strategic head center to develop a policy that uses all transportation resources to the maximum.
        These observations on the need for a conceptual foundation geared towards developing the transportation industry within a reforming market economy allow us to draw some conclusions:
        First, the strengthening of the state should be directed towards a more rational use of the existing resources to better organize the cargo transportation network.
        Second, a common coordination center for the state's executive power will improve the organizational structure of the transportation industry.
        Third, it is necessary to use up-to-date science and new information technologies in the search for more effective solutions for transportation.