This session explored the new role of surface transport and how to best connect it with other modes. It questioned the potential of these new routes, demonstrated that they can be successful, but concluded that a lot remains to be done to benefit fully from the advantages of long distance surface freight transport, and especially rail.
Surface transport is proving to be competitive on several new continent-crossing routes. Train operators now offer services between China and Europe while revitalisation of the Silk Road aims to link Asia and Europe and all the major markets in between. As an intermediate in terms of price and speed between air and maritime transport, these new options complement the current mode mix while enabling landlocked countries to connect with global supply chains, also generating new strategic logistic hub investments.
The market potential for such new routes is not yet fully evident. However, they are likely to redefine the optimal role of each mode and to have effects on maritime and air transport. The development of a multi-modal freight hub in the Arabian Peninsula, or the major infrastructure development undertaken by Morocco for instance, could have deep repercussions on the way goods move between Europe, Africa and Asia.
Freight volumes are predicted to increase fourfold by 2050 and trade patterns will shift dramatically with the economic centre of gravity of the world moving east. The changes will affect all areas of the world and all modes. It will be necessary to try and manage these changes rather than suffering from their consequences. In this respect, infrastructure development is crucial, especially in Africa where the state of infrastructure is often dire. However, for investments to go to a country, investors need to be reassured that they will make returns, which can only happen in conditions of peace and political stability. The potential of independent infrastructure planning and funding bodies to achieve implementation of infrastructure plans and ensure good public governance was highlighted by panelists.
Shifts in trade patterns can also be more subtle. In China, the relocation of production centers further away from the coast has pushed the development of the rail link between Asia and Europe. These services are proving increasingly popular, however, developing a rail link that crosses many borders and goes through mountainous areas or deserts is a difficult task. Transport and logistics in Eurasia is characterised not only by physical barriers and infrastructure gaps between countries with poor transport infrastructure, but also with non-physical barriers related to the absence of harmonised law or inefficient customs procedures. Improving surface transport, in terms of travel time and reliability requires coordination between all stakeholders, countries, shippers and logistics specialists. The question of trust, between the different logistics partners and between the transport provider and its customers, is also key to the success of new services.
Rail clearly has an added value for long distance surface transport, as it is potentially faster and cleaner than trucks. However, developing this mode further will require work on the inter-operability, both technical, e.g. rail gauge, and administrative. This goes back to another backbone of efficient long-distance trade and transport, which is the development of efficient soft infrastructure -- customs and regulation.
From an industrial supplier’s perspective, the most important aspects of any logistics solution are reliability, service quality and cost. Global supply chain players are also looking for more sustainable supply chains. These rely on the optimal use and optimal combination of all modes. A successful example can be found in North America, where continuous rail links between Mexico, the USA and Canada has helped decrease CO2 emissions while proving popular among shippers, because of its cost efficiency and reliability.
Finally, new technology will also change significantly, and sometimes reduce, trade flows. For instance, 3D printing technology will allow production onsite and will diminish the need for transport, especially for replacement parts.
Quotes:
“We need to try and manage changes (to trade patterns), rather than suffer from their consequences.”
Najib Boulif, Deputy Minister of Transport, Ministry of Equipment, Transport and Logistics, Morocco.
“We (in rail) have to deal with many different standards. The basic concept is standardisation.”
Jean-Pierre Loubinoux, Director General UIC.
“Technology development will impact mobility and the use of the different transport modes.”
Najib Boulif, Deputy Minister of Transport, Ministry of Equipment, Transport and Logistics, Morocco.
Related information:
Long Distance Trade (ITF Annual Consultation Day with International Organisations 2015)
Transport and Trade: Connecting Continents Summary of KOTI-ITF Seminar, Seoul, 24 March 2015
International Freight and Related CO2 Emissions by 2050: A New Modelling Tool, ITF, 2014
Transport and International Trade
Land Transport Options between Europe and Asia: Commercial Feasibility Study, US Chamber of Commerce, 2006
