Guest blog post by Egons Mudulis and Dienas Bizness.
Ministers of Transport and Heads of Delegations of the Asia-Europe Meeting (ASEM) member countries, the European Union (EU), international transport organizations and institutions, transport associations, business leaders of the transport and logistics industry participating at the 3rd ASEM Transport Ministers’ Meeting agreed to promote multimodal transport connectivity between Europe and Asia. The theme of the summit «Development of Euro–Asia Multimodal Transport Linkages – Status Quo and Blueprints for the Future» reflected the priority of the Latvian EU presidency in the transport sector. A special emphasis was put on the emerging overland connections between Asia and Europe, profiling business case studies and perspectives from involved business and institutional stakeholders. The meeting took place in Riga, Latvia, on April 29–30, 2015.
Effective and multimodal connectivity is one of the preconditions to further deepen cooperation between Europe and Asia, the President of Latvia H.E. Andris Berzins said in the opening session. He pointed out the role of Latvia’s transport and logistics sector in developing both the existing container trains between the Baltic States and Central Asia and the future branch of the current shuttle trains from China to supply Northern Europe. «European transport policy must reflect the globalized nature of cross-border supply chain management, especially between the two world’s largest trading partners – Europe and Asia,» Minister for Transport of Latvia Anrijs Matiss added. Thus, a special emphasis on the emergence of Trans-Eurasian rail-based supply chains in the summit.
The Eurasian land bridge is creating new arteries of connectivity between Asia and Europe; however, as demand for transportation services increase, problems arise too, Vice-Minister for Transport of the People’s Republic of China Weng Mengyong said. Some of them: the lack of appropriate infrastructure, different construction standards for the infrastructure, as well as insufficient transport cooperation mechanisms and legal frameworks. He made several suggestions how to achieve safe and effective transport connections. One of those – an integrated low cost logistics system must be a priority for Eurasian countries.
The dialogue on the level of ASEM transport ministers not only will improve understanding among ministries, but would contribute towards increased cargo flows and passenger comfort, as well as will be useful to economies of all the countries involved, the Minister for Transportation of Russia Maxim Sokolov said in an interview to Dienas Bizness (The Daily Business). As cargo flow tends to choose the most convenient channel, Latvia has its place for the transit routes between Europe and Asia despite the fact that for now main Pan-European corridors do not cross the country.
Some participants of the summit gave written responses to the questions of Dienas Bizness about the challenges and problems of European–Asian connectivity, as well as the role of Latvia in it. «With regard to the railway connections, the fact that there are different gauges of the rail tracks does lead to unnecessary delays as cargo needs to be shifted on and off the broad gauge. In addition, there are many stakeholders involved along the land bridge between Europe and Asia,» President & CEO of Port of Duisburg Erich Staake wrote. According to him, many customers still need to be convinced that the railway connections are an interesting alternative to the sea route, given the fact that they are a lot faster than the transport by sea vessel and, at the same time, cheaper than airfreight. Due to its geographically strategic position, Latvia could play an important role with regard to Eurasian rail connections.
Rail transport is suitable for many industries and can be integrated into customer’s supply chains, was the message of Member of the Management Board for Region East of DB Schenker Rail AG Hans-Georg Werner during one of the panel sessions. He pointed out hi-tech/electronics (notebooks), automotive (complete knock-down parts), manufacturing (moulds, nuclear equipment), as well as consumer (cosmetic products) sectors. There are three conditions to achieve Eurasian connectivity with rail, Director General of the Association of the European Rail Industry (UNIFE) Philippe Citroën said. Those are interoperability (for technical compatibility), investment (for the completion of a sustainable network) and innovation (for more efficiency and capacity).
Hewlett Packard (HP) pioneered rail freight transportation connecting Europe with inland and western China, Head of Supply Chain Operations in Europe, Middle East and Africa of the company Volker Schmitz wrote. As the key challenges to be continuously addressed, he mentioned security, increasing frequency of trains and the increasing the East-bound trade and the load in the trains back to China. For Latvia to play a bigger role in the HP logistics chain, «we need to find possibilities which show an improved performance towards our customers,» Mr Schmitz explained.
President of COSCO Europe Ji Lin emphasized that European infrastructure is well established overall, but is unevenly developed among different regions. As far as Latvia is concerned, COSCO will pay more attention to this market due to geographical advantages. The company will study the feasibility of launching own-operated feeder services to Riga and developing sea-rail intermodal transport between China and the Baltic region via Riga.
Unacceptable border crossing times along Eurasian land routes was one of the obstacles mentioned by several speakers at the meeting. As the presentation of Chief of Transport Facilitation and Economics Section of Transport Division of the United Nations Economic Commission for Europe (UNECE) Miodrag Pesut noted, in some border crossing points of Eurasian rail routes it used to reach almost three days. Imbalance of westbound and eastbound cargo flows was identified as another problem. According to First Vice President of United Transport and Logistics Company Yerkhat Iskaliyev, amount of empty containers in China direction reaches 40%. To implement harmonized technical requirements across Europe and ensure alignment between rail and road infrastructure charges for freight were couple of recommendations made by Executive Director of The Community of European Railway and Infrastructure Companies (CER) Libor Lochman. As far as road transportation is concerned, new countries show interest in TIR (international Customs transit system), noted Secretary General of the International Road Transport Union (IRU) Umberto de Pretto. However, border crossing time and unofficial levies are still substantial problems.
This was a very important meeting that clearly showed the needs caused by the increasing global trade, as well as the commitment of stakeholders to move forward, said EU Commissioner for Mobility and Transport Violeta Bulc in an interview to Dienas Bizness. The aim of the Eurasian dialog, according to her, is to create a single Eurasian transport area not only to connect infrastructure, but to synchronize the regulatory framework as well. Globalization is emerging as one of the strongest forces for global development and growth, and transport is the key enabler of that, she said during the press conference. More and more networks are emerging and many partnerships are being formed to support the need for Eurasian growth and connectivity. «We have done some good and positive moves in Europe starting the process of enlargement of our core TEN-T network,» Ms Bulc emphasized. Recently an important agreement was signed with Western Balkans thus extending the network towards Asian countries. Dialogues were initiated with Moldova, Georgia, Armenia, Azerbaijan, and some other countries in the region that will be an important contribution for Silk Road connections.
One of the practical conclusions made during the summit is that Latvian supply chain corridor may be a good alternative to the existing China–Europe shuttle trains route through Polish town of Malaszewicze in order to organize more direct and efficient supply of Northern Europe, CEO of Samskip Van Dieren Multimodal Henk van Dieren acknowledged.
During the meeting, the Riga Declaration was adopted. Some of the key decisions of stakeholders included in the declaration emphasize the significance of Eurasian multimodal transport corridors and intermodal and combined supply chains associated with them as complementary, credible, and competitive transport solutions providing additional connectivity and serving as an effective tool for the economic development and integration of the Euro-Asian continent; recognize the market potential of environmentally friendly rail-based transportation between Asia and Europe in the rapidly expanding niche that addresses the needs of just-in-time logistic solutions; promote and coordinate investments in transport infrastructure to improve the connectivity between Europe and Asia; improve the supply chain and border crossing rules. The meeting also reached one of its original goals – to reinvigorate the ASEM Transport Ministers’ Meeting format. It was decided that the next Meeting shall be held in Asia in 2017, with several Asian nations announcing, already during the Riga meeting, their candidacies to host the next meeting.