Transport System Needs Harmonious Integration and Proper Regulators

1 july 2015

“The goal of our round table is to analyze the level of cooperation between different transport departments and different means of transport in the transportation system and to come up with proposals on how to make management of the transport system more effective,” Adviser to the Department for Sectors of Economy of the Analytical Center Mikhail Nizov said as he opened the round table on systems for interdepartmental cooperation and management in transport.

The Russia’s Transport Strategy through 2030 states that as global competition intensifies, the structure of the global economy undergoes changes, new technologies are becoming widely accepted, changes are also occurring in both national and international flows of cargoes and passengers. The experts noted that as demands for the quality of transport services, security and reliability of the transport system increase, the Russian transport system has to be made significantly more competitive. Russia currently has significant constraints on economic growth as a result of an underdeveloped transport system and demand in the innovative sectors of the economy for high quality transport and logistics services, the experts believe.  

The main cause of the current situation, in the opinion of Mr. Nizov, is lack of a system of cooperation in the transportation sector. “We cannot develop intelligent transport systems we need to route passengers and cargo,” he said “While we do have all means of transport available in our system they are all extremely underdeveloped because we lack cooperation and integration.” The entire system is extremely inefficient, the expert believes.

During the round table experts discussed integration and competition in the transportation system. The President of the Association of Refrigerated Rolling Stock Operators (ARRS) Vitaly Momot believes that rail transport is losing competition to road transport. He also noted that after the algorithm for calculating the refrigerated containers transportation charge was changed in December 2011, development of the entire refrigerated container transportation stopped. “Today in Russia we have got 8,152 refrigerated wagons, every year between 1,700 and 1,870 reach the end of their service life and as a result by 2018-2019 Russia will run out of all its refrigerated wagons,” Mr. Momot concluded. 

As for problems in aviation, civil aviation and small airports are currently getting a lot of subsidies and it has to be said that without such subsidies regional airports would not be able to survive. At the same time, the experts stressed there is not division between the channels through which different means of transport get subsidies and often they are not approved through proper channels, which distorts the market situation.

A lot of attention was paid to transportation costs during the discussion. In Russia, the share of transportation costs in the final price of goods significantly exceeds the global market average, specialists believe. One of the reasons for that is unpredictability of delivery times and the extra costs having to do with delays and losses and especially when goods have to be transshipped from one type of transport to another. Suboptimal management of transport capacity and infrastructure are preventing Russia from capitalizing on its advantageous geographical location to offer transit services, making the Russian transport less competitive and undermining the effectiveness of state investments, the participants in the discussion noted.

“We have neither a unified transportation sector nor a unified system to manage it,” believes the First Vice President of the International Academy of Transport Viktor Dosenko. Because of this extra costs are incurred both to develop the transport system and to arrange for deliveries, he noted. A harmonious integration is needed to tackle this situation as well as new tools and regulators, the chief of which must be the state. It has to be the job of the state to develop the principles for cooperation in the system, Mr. Dosenko considers.