Transportation
PREREQUISITES FOR THE FAST DEVELOPMENT OF THE COUNTRY
INTERVIEW
MAJA BAKRAN-MARCICH,
Deputy Director-General of the European Commission’s Directorate General for Mobility and Transport
Transportation Is About Values, Not Just Roads Serbia, along with other countries of the Western Balkans, should take a firm commitment to reforming its entire transport system. Having new infrastructure without having a regulatory framework that enables safe, interoperable and efficient transport operations is like having a brand new car without tyres: it looks good, but it isn't going anywhere
J
udging by the number of transportation projects currently in the pipeline, it seems that the Western Balkan countries have taken the opportunity to become part of the Trans-European Transport Network, and the EU’s internal transport market, seriously. However, “it is not the number of projects that matters in the end, but rather the quality of the projects,” emphasises our interlocutor – Maja Bakran-Marcich, Deputy Director-General of the European Commission’s Directorate General for Mobility and Transport. Quality means good preparation to avoid delays in implementation. Good preparation and mature projects are much more attractive to potential investors, says Bakran-Marcich, continuing: “in the region, unfortunately, we see too many examples 4 |
175
| M AY
of projects languishing in the pipeline for many years, with no real development. In my opinion, one of the main priorities for the region, including Serbia, is to remove unnecessary administrative obstacles that delay the implementation of projects.” • What do you expect of the recently formed Permanent Secretariat of the Southeast Europe Transport Community? - As Commissioner Bulc has mentioned on several occasions, if the Transport Community is a “game changer” for the whole region, then the Permanent Secretariat will be the instrument driving that change. What the Secretariat can offer in particular is assistance in the implementation of EU legislation, the preparation of projects seeking financing, coordination of infrastructure
planning and the development of transport strategies at the regional level. The objectives given to the Permanent Secretariat are clear: support the transformation of the transport system of the region with a view to its integration into the EU. Significant efforts need to be exerted when it comes to the alignment and implementation of legislation. Targets are very ambitious for both the EU and Western Balkan partners. • What would be this body’s role in adopting the legal framework related to interoperability, safety, security, public procurement and the environment, as well as regarding other related issues? - The role of the Secretariat will be instrumental in providing assistance to all partners in these fields, in order to overcome the
difficulties and prepare their respective transport systems for future integration into the EU’s system. The Permanent Secretariat’s mandate is not, however, to overcome deficiencies in the regional partners’ administrations when it comes to implementing this new regulatory framework, but rather to transfer experience and competences to these administrations. The alignment of transport legislation with the EU’s, driven by the Permanent Secretariat, will advance in parallel with the strengthening of the administrative capacity of each partner to cope with its obligations. • As was noted recently, the European authorities would “work with China to plan platforms and corridors”. To what extent could that impact on the projects that China has with the region’s countries? - China is an important investor – through loans – in infrastructure projects in the Western Balkans. In the meantime, Western Balkan partners have ratified the Transport Community Treaty, which represents a tool to foster their integration into the EU transport market. The Transport Community is basically a regulatory framework covering – among other things – the development of the Trans-European Transport network, through well identified priorities and the framing of infrastructure financing through the implementation of rules for sound project management, crucial among which are compliance with both public procurement and interoperability standards. In short, it is crucial that potential Chinese investments (or those of any other stakeholders involved in the development of infrastructure in the region) fully respect these conditions. In such a case, and considering the very high level of investment needed for Western Balkan infrastructure development, we could be in a win-win situation. If these conditions are not met, it may indeed undermine the benefits that the Western Balkans could derive from their membership in the Transport Community. I would also like to remind your readers that Chinese investment typically comes in the form of loans, and not always with very favourable interest rates. On
the EU side, while we are hoping to have an increase in pre-accession assistance amounts for the post-2020 EU budget, we have a number of other instruments at our disposal, with a number of them actually providing grants from the EU budget (like the Connecting Europe Facility). One element that clearly distinguishes financing from the EU budget is that projects need to be prepared according to the EU methodology, with detailed documentation submitted regarding elements such as economic and environmental sustainability, while tendering procedures need to follow the EU’s procurement rules. There is also a strong element of auditing in all the projects financed from the EU budget. At the recent EU-China Summit (9th April 2019) we agreed with Chinese colleagues on the outline of key elements for the Joint
mentation of reforms in the transport sector that were identified in the framework of the “connectivity agenda” have not yet been met. The dynamism generated by the Berlin Process has not been followed by concrete results. I regret that fact, but am confident that now – with a new cooperation framework in place – this process could be relaunched with more success. The next “Western Balkan Six” summit takes place in less than three months, and we plan to propose a very ambitious set of activities aimed at improving transport patterns in Southeast Europe as a contribution of the Transport Community to the “connectivity agenda”. • To what extent are these large projects, which aim to bring growth and create jobs, influenced by continuing political disputes among the Western Balkan countries?
Our goal is to accelerate Europe’s transition towards zeroemission mobility, as well as to ensure a socially fair and competitive internal market for road transport services
Study on Sustainable Railway-based Comprehensive Transport Corridors between Europe and China. The Study will assess the current situation of railway-based corridors between Europe and China, analyse them and propose the most sustainable ones and related key projects. The geographical scope of the Study extends to countries located between the territories covered by the EU’s TEN-T policy, on the one hand, and the territory of the Peoples’ Republic of China, on the other. In other words, the Study will look into corridors connecting our extended TEN-T network (which includes the Western Balkans) and China. All countries will be consulted during the Study’s implementation. • The Second Western Balkan Summit is behind us. How would you assess its impact on the ‘connectivity agenda’ within the Western Balkans and with the EU? - Many expectations regarding the imple-
- Large projects will bring growth and jobs if they are combined with an ambitious regulatory and reform policy, to which I would also add the need to resolve the ongoing disputes among regional partners. • How would you asses the work done by the Serbian government in terms of turning transportation projects into development? - Serbia has a very ambitious infrastructure programme and, indeed, new or upgraded infrastructure is needed for the country to be better connected with its neighbours and to respond to the increased mobility needs of businesses and citizens. It is also crucial to ensure that the new infrastructure is green, sustainable and digitalised. That is why we are using our Connecting Europe Facility instrument to finance a number of large rail and inland waterway infrastructure projects in Europe. Serbia is the only non-EU country already profiting from this important financial instrument, M AY
|
175
| 5
as you have successfully secured financing for the upgrade of the Iron Gate I (Đerdap I navigational lock) on the Danube (the EU is contributing 40% of the total cost of €28.5 million). However, I would once again like to insist that – beyond an infrastructure
programme – it is necessary to implement ambitious transport policies aimed at bringing Serbia’s transport system to standards that are much closer to those of the EU. I would like to invite the Serbian Government to exert additional efforts to ensure that Serbia catches up with the EU in terms of road safety – multimodality – and the development of innovative and decarbonised transport solutions. It is only through a comprehensive approach to the transport system that Serbia can improve the situation. This, in a nutshell, is the reason we’ve set up a “transport community”, not an “infrastructure community”. It is therefore important to provide a global response to the transport of tomorrow, rather than focusing only on transport infrastructure which – per se – will not be sufficient to improve the situation. 6 |
175
| M AY
• As a former Head of the Directorate for the Coordination of European Affairs at the Ministry of European and Foreign Affairs of Croatia, what experience would you share with your Serbian counterparts when it comes to accession negotiation chapters 14 and 21?
country. From the transport perspective, there are numerous stakeholders – just consider complex systems like national railways or the road transport sector. For Serbia, a country on the Danube, I would say that the inland waterways sector also has great potential. As regards air transport, due to the existing Agreement on the European Common Aviation Area, Serbia is quite advanced in terms of alignment with the EU Acquis. This was not the case at the time when Croatia was negotiating Chapter 14, as this agreement was not in force, so Croatia had to exert truly significant efforts to fulfil benchmarks in the area of air transport. Some very important reforms lay ahead. Probably one of the most difficult ones will relate to the full liberalisation of the rail sector. Serbia is lagging behind in road safety, while passenger rights need further enhancements. Moreover, harmonisation in the road transport domain will also be very demanding, as there will be a number of new legislative acts entering into force in the EU during this period. I believe that you are monitoring the intensive debate underway in Europe following our proposal for some major reforms in the internal transport market entitled ‘Europe on the move – An agenda for a socially fair
The main goal of the Transport Community Treaty is to help our Western Balkan partners to align with EU rules. We are prepared and motivated to work towards fully connecting the Western Balkans with the EU - Both of these negotiating chapters are very demanding. On one hand, Chapter 14 covers roughly 20 per cent of the entire Acquis, while Chapter 21 is very important as it will define the EU’s transport, energy and digital network in Serbia. I still recall quite well the long meetings between Croatian negotiators and the European Commission on various transport-related issues. However, the most difficult part of the job when it comes to accession negotiations takes part in the candidate
transition towards clean, competitive and connected mobility for all’. Our goal is to accelerate Europe’s transition towards zero-emission mobility, as well as to ensure a socially fair and competitive internal market for road transport services. As these proposals slowly become legislative acts over the next several years, it will mean that Serbia will also be obliged to adopt them. Through the Secretariat, we shall be able to offer assistance to Serbia in implementing all of these reforms. ■
M AY
|
175
| 7
BUSINESS
DEVELOPMENT OF PASSENGER TRANSPORT
Awaken The Danube VUK PEROVIĆ, TATJANA STRAHINJIĆ AND VELJKO KOVAČEVIĆ
O
n this occasion, the main goals, plans and activities of the project were presented. The project partners also presented the unique possibilities offered by the Danube Region of Serbia and the current results of the Port Governance Agency. “For the fourth year in a row, the Agency’s data show large increases in cargo handling and record quantities of transhipped cargo. A total of 11.8 million tonnes were transhipped on rivers in Serbia Last year, or 11.5% more than in 2017”, said Vuk Perović, Director of the Port Governance Agency. “International passenger transport has been marked by steady year-on-year growth. According to the Agency’s data, the six international passenger terminals in Serbia recorded 1,150 port calls and over 157,000 embarked and disembarked passengers during last year’s nautical tourism season.The number of port calls was up 15% on 2017, while the number of embarked/ disembarked passengers was up by a fifth.
The Port Governance Agency has announced the continuation of the project "Awaken the Danube", promoting passenger transport and tourism in the Upper and Lower Danube regions, connecting eleven individual cities: Smederevo, Kladovo, Donji Milanovac, Kostolac, Golubac, Veliko Gradište, Novi Sad, Belgrade-Zemun, Sremski Karlovci, Apatin and Banoštor “The international passenger terminal in Belgrade is still the most attractive to foreign tourists, with more than half the total number of port calls and about 80,000 tourists It is followed by the terminals in Novi Sad and Donji Milanovac. During Easter last year we opened a terminal in Golubac, which completed the nautical season successfully with 44 port calls and more than 6,000 embarked and disembarked passengers. Since the trend in passenger water traffic shows constant growth we expect to double the number of port calls and passengers by 2025.”
The current value of water transport projects is 205 million euros, and additional investment in water transport is expected by the end of the year
8 |
175
| M AY
Veljko Kovačević, Assistant Minister of Transport, Construction and Infrastructure, pointed out that the current value of projects in water transport is 205 million euros, and announced that additional investments in water transport are expected by the end of the year. Kovačević added that, in parallel with projects to improve port infrastructure and waterways in Serbia, the ministry will pay special attention to the renewal of the domestic fleet. Promotion of the natural resources of the Danube river basin in Serbia will enable the development of the eastern and northern parts of our country, and river-based passenger traffic in Serbia. The Port Governance Agency aims to place the cities of this region on the tourist map of Europe and for Serbia to be ranked among the leaders in passenger transport. ■
M AY
|
175
| 9
BUSINESS
VLADIMIR LEKIĆ, General Manager, Dragon Maritime SEE d.o.o. (Ltd.) - an agent of Cosco Shipping Lines Co. Ltd
Serbia & China Have Never Been Closer Thanks to company Dragon Martitime SEE, which is a general representative and agent of Cosco Shipping Lines, China's largest shipping company, the transport of goods - through imports to and exports from Serbia – has been eased considerably. Thanks to this company, Belgrade has become a regional hub for the development of intermodal transport
W
ith the increased presence of Chinese companies and major growth of Chinese investments in Serbia in the period ahead, we also expect a significant increase in goods trading between the two countries, as well as our company’s establishing of new services, says Vladimir Lekić, general manager at Dragon Maritime SEE. Your company, as the general representative and agent of Cosco Shipping – China’s largest shipping company, has eased the transport of goods to and from Serbia significantly. To what extent will this contribute to deepening collaboration between Serbia and China? - Following the successful development of intermodal services between the Port of Piraeus and the countries of central Europe, Cosco Shipping launched a regular rail link between Piraeus and Belgrade in May 2017. Having gained a direct link to the main Chinese ports, Serbia is becoming the first Balkan country with such a service, while Belgrade is becoming a regional hub for the development
of intermodal transport across the region. Thanks to its geostrategic position along Corridor 10, Serbia plays a key role in the development of the “New Silk Road” by providing the most efficient transit route that’s traversed annually by more than 1,000 Cosco Shipping container trains, while the current project to construct a high-speed railroad between Belgrade and Budapest will significantly increase the flow of cargo and enable faster transit times compared to traditional transport routes via Adriatic and North Sea ports. The huge “One Belt, One Road” global project will increase economic activity and the trade exchange between the two countries. What does your company expect from the Serbian market? - Cosco Shipping is recording growth of more than 70 per cent on the Serbian market and is also present with all services and transport routes of our company. With the increased presence of Chinese companies and major growth of Chinese investments in Serbia in
With the selection of the most efficient services, clients can rely on an average transit time of 25 to 30 days along the entire transport route from main Chinese ports to Belgrade
10 |
175
| M AY
the period ahead, we also expect a significant increase in goods trading between the two countries, as well as our company’s establishing of new services. Cosco attaches great importance to the development of intermodal terminals, i.e. so-called dry ports, which is why there is great interest in establishing them at different locations in Serbia, which will provide an additional boost to economic activity and strengthen Serbia’s role in the strategic “One Belt, One Road” project. A regular service from the Port of Piraeus to Dobanovci was launched two years ago, which provided Serbia with a direct connection to China’s main ports. What are the main advantages of this service compared to other transport routes? - This unique service represents the most serious alternative to traditional container shipment routes via Adriatic ports, offering the shortest transit time on the Western Balkan market, as well as very affordable freight rates. Thanks to the high frequency of connections between ports of the Far East and the Port of Piraeus, clients have the option of selecting up to five weekly services with various transit times. Complete transport between loading ports and Belgrade, or in the opposite direction for exports, is covered by the Bill of Lading of Cosco Shipping company. ■
M AY
|
175
| 11
BUSINESS
STEFAN FIJALA, Executive Director of LTC d.o.o. (Ltd.)
The Solution Is In The Digitalising Of Work Orders Applying information technology to improve the quality of services and after-sales processes
I
nformation technology changes the shape of industry and the way companies generate profits. By analysing our generic value chain, we noted certain anomalies that directly impact on models of improving the quality of services and processes within the scope of internal logistics. The only way to spot irregularities and deviations in the process was to create software, which we’ve called LogiMind. How aware are companies of the importance of digitalisation and do they know what it implies? - Companies usually strive to keep pace with business trends, but that certainly isn’t enough to create competitive advan12 |
175
| M AY
tages. Digitalisation changes the structure of industry, exposing companies to new opportunities, but also to threats. At the same time, the possibility of choosing strategic solutions increases, such as redefining business processes and changing the traditional approach with clients and suppliers. Digitalisation represents only the final outcome of comprehensive reforms that must essentially be implemented much earlier. As a consequence of this, digitalisation remains at the basic level in Serbia. We face daily challenges in the implementation of high-tech solutions, because there is often a lack of adequate infrastructure that would enable the system’s further upgrading. What does it look like to launch such a complex project from scratch; in your opinion, what are the advantages and disadvantages of such a challenge? - Creating software isn’t the most complicated part of this kind of project. It is a much greater challenge to understand the work the client has to do and to harmonise our business processes with their value chain in order to improve quality of service. Being part of a team that creates something unique is a benefit in and of itself. Apart from that, the experience you gain during analysis and project workshops is invaluable. For more than two years, which was how long
the creation of this software lasted, this implied overviewing all aspects of the business we were doing. The focus was on after-sales, because we concluded that the digitalisation of this sector is currently the most important for the further development of the company. After all the situations we had and all the challenges posed, I can freely conclude that the choice of associates, i.e. the project team, is the most important and crucial segment determining success in achieving the goal. Considering that you’ve been active in this industry for a long time and that you come across various demands, what formed the basis for your selecting of a field of analysis that would later define the software’s structure? - The focus is certainly improving the quality of service – services in this case. Clients expect accessibility and the swift resolving of problems in a safe way. An inevitable factor is also the value of the service provided. In order for us to be able to do all of this, we analysed our service and asked each other lots of questions. How do we function generally? How do we measure certain things? How do we conduct training? How do we receive requests and how do we handle them? Do we have defined processes? Who tracks and controls them? How do we improve processes? How do
we utilise anomalies observed? Do we have set priorities? How do we report to colleagues in the service sector? How do we communicate with other sectors in the company? How do we communicate with suppliers? How do we communicate with our clients? And lots of different questions that actually defined the direction in which we should move. Could you describe LogiMind in brief? - That’s a good question, and one often asked by clients themselves. LogiMind is a web B2B application which has the main
by a works order that’s actually a link between all sectors, but also a link between the client and LTC. The digitalising of work orders represents the key within the scope of a single service process, i.e. any kind of business dealing with services. Considering that you do business with global corporations, have you considered expanding your business to other locations? - Demand and interest exist, which is positive. How this will impact on the future of LogiMind is something that we’re really not able to predict at this time. It is up to us to
improve the software, and its application should generate results that will define new standards of industry within logistics, and more specifically in the field of goods transport. Forklifts were once the main topic of conversation. Now they represent only one of the factors of the business model that we have placed on the market, and which relates to the forming of a completely new look at internal logistics. A key factor in the creation of this business model and its success is digitalisation, which actually gives us the opportunity to think in the direction of serving new markets. Can you tell us more about how you see the development of internal logistics in the future? - Manufacturers have traditionally been focused on the production and quality of physical goods, in which they can create added value that they will offer to end users. Increasingly demanding markets dictate the pace of innovation, where internal logistics offers a range of possibilities for optimising and improving business. Logistics, as one of the primary activities in the value chain, takes a key place in forming the competitive advantage of companies. By observing global corporations, you can notice a focus on improving logistics processes and models, part of which is represented by internal logistics. The way in which forklift fleets are managed, usage models, controls and optimisation are a segment in which LTC continuously exerts efforts to innovate in ways that that will enable the development of these factors. It remains to be seen whether these efforts will also redefine the future of internal logistics at the global level. ■
purpose of ensuring the complete flow of information between the client, on one side, and LTC and its sectors, on the other. After a client initiates a service request, LogiMind will disseminate information within the service sector, warehousing and finances. The software functions in relationships within the company, i.e. between sectors, in a completely identical way. The central position in the software matrix is occupied
For more than two years, which was how long the creation of this software lasted, this implied overviewing all aspects of the business we were doing. The focus was on after-sales, because we concluded that the digitalisation of this sector is currently the most important for the further development of the company
M AY
|
175
| 13
NEWS U.S.
INCREASED PAY FOR DRIVERS Pay for road haulage drivers has not been great, with the annual salary in the U.S. averaging around $40,000. However, driver shortages have prompted some companies to drive up sign-on bonuses by as much as $6,000 and increase salaries. Unfortunately, even with these increases, drivers are still making - when adjusted for inflation - about 50 per cent less than they were in the 1970s. However, it seems we can expect these increases to continue as long as the ELD (electronic logging devices) Mandate remains in effect. Those just starting as drivers, or those intending to stay in the game for a few more years, should enjoy better compensation. The U.S. already has a shortfall of around 60,000 truckers, while that number is expected to increase to around 174,000 in less than a decade.
UK
AIRLINE EMISSIONS GROW OUT OF CONTROL UK-based Jet2 was the fastest growing airline polluter in Europe last year, with its carbon emissions up by a staggering 20% in just 12 months, according to official EU data released last month. It was joined in the top 10 fast growing airline emitters by fellow low-cost operators Wizz Air, EasyJet, Vueling, Norwegian and Ryanair, as well as national carriers TAP, Finnair, Lufthansa and KLM. Airlines’ carbon emissions grew 4.9% on flights in Europe last year – in contrast to the other sectors covered by emissions-trading, such as coal and cement plants, which declined 3.9% overall. Carbon pollution from flying in Europe has risen a staggering 26% in the last five years – far outpacing any other mode of transport.
RUSSIA
CARGO TURNOVER INCREASE AT BERINGOVSKY PORT Another Chukotka priority that forms part of the infrastructure plan is Beringovsky port, which handles over 700,000 metric tons of coal per year from the nearby Nagornaya Mine. Reconstruction of two of the port’s berths is planned by 2020 at a cost of 1.25 billion rubles, according to the Transport Ministry. The spending plan includes 927 billion rubles to increase the combined capacity of Russia’s sea ports to 1.3 trillion metric tons. The Russian government is pursuing a 6.3 trillion ruble ($96 billion) six-year modernization plan to revamp the country’s highways, airports, railways, ports and other transport infrastructure through 2024.
NORWAY
BILLIONS FOR RAIL PROJECTS A total of NOK 27 billion (€2.84 billion) is planned to be allocated to large-scale rail projects in Norway in the state budget for 2019, 12% more than in the current budget. The construction of an InterCity line in Vestfold, to the southwest of Oslo, and planning for an InterCity line in Østfold to the southeast, plus another rail tunnel in Oslo are among the big projects that would receive increased funding. The Norwegian government is also pledging a billion for the construction of the Ringerike, an extension of the Oslo-Bergen line from Hønefoss to Sandvika, in the 2019 budget, the newspaper Bergens Tidende reports. This will used on preparatory work, ground drilling and further planning of the long-planned project, which will eventually cut the travel time between Bergen and Oslo by one hour. Construction is not expected to start until 2021-22, and the Ringerike line is not expected to be completed until 2029. 14 |
175
| M AY