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Cross Border Transport & Trucking ACMECS March 13, 2007 Paul Apthorp
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Transcript of Cross Border Transport & Trucking ACMECS March 13, 2007 Paul Apthorp
Cross Border Transport & TruckingACMECS March 13, 2007
Paul Apthorp
Cross Border Transport & Trucking
• Overview of Global Network development
• The importance of the GMS as a “Cross road “
• The current situation along the EWEC
• Opportunities Missed
• SMEs
• What we need to do !
TNT - Road Network Development
12
34
5
ITITESES
FRFR
TRTR
ATAT
PLPL
CHCH
BGBG
ROROHUHUSISI
CZCZSKSK
HRHR
ALALMKMK
GRGR
YUYU
UAUA
BYBY
BABA
MDMD
DEDE
GBGB
IEIE LTLT
FIFI
SESE RURUNONO
EEEE
LVLVDKDK
MAD
GNQ
NXH
DFTBZQ
HLB
TKU
QAR WAW
DNG VIE
MIL
HNJ
TSR
SOFPTPT
TNT European Road NetworkTNT European Road Network
European Road Network – in numbers • Network coverage:
– 2,000,000 km per week (50 times around the earth) – 93 million km per year (2325 times around the earth)
• Network capacity– 700 trucks daily – 4,500 Europe-wide international line-haul trips per week– 17,500 tons weekly– 620,000 pieces weekly
• Resources employees– 12 RMC offices with 150 employees– 85 International own drivers– 1250 International drivers in total
TNT Middle East Road Network
BAHRAIN
Kuwait
Jeddah
Riyadh
Dhahran Doha
Muscat
AUHDXB
JBA
Saudi Arabia
Yemen
Oman
United Arab Emirates
Sila/Batha
IRAN
Jordan/Levant
TNT - Road Network Development
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Future2006Existing
Illustrative
South East Asia (5)
Middle east/Africa (2)
Asian Road Network Development
Existing2006Future
South East Asia (5)
China (4)
Modes of Transportation% freight moved on road, air & sea/ton-km (US, 2003)
Sea20%
Air2%
Road78%
% Freight moved on road,air & sea/ton-km (EU, 2003)
Air1%
Sea20%
Road79%
% Freight moved on road, air & sea/ton-km (Asia, 2003)
Air1%
Road22%
Sea77%
Existing Economic Corridors
Asian Road Network
• Phase 1 – Opened December 2005 – Daily SIN – KUL – BKK– Extra capacity added in First year
• Phase 11– Opened September 2007– BKK- ZVK- DAD – SGN / HAN
• Phase 111– Due Quarter 3 2007– HAN – NNG … linking to China Network
VTE
Singapore
Kuala Lumpur
Phnom Phen
Hanoi
Malaysia
Bangkok
Ho Chi Minh
ThailandVietnam
Cambodia
Laos
Myanmar
China
Danang
Nanning
ARN Phase 2
Phase 11
• Bangkok – Savanaket – Da Nang– Via EWEC
• The Current Situation !!
BKK Mukdahan(Border)
Savanaket(Laos)
DaNang(VN)
HCM
D1900 (D0) A0700(D1)
D1000
A1100
D1300
Lao Bao(Border)
HANA1600
D1800
A00.30(D2)
D0600 (HAN/HCM)
A0400(D3)
A0600(D3)
D0800
Bangkok – Savanaket- Vietnam
11hrs 1hrs 4hrs 5hrs
22hrs
24hrs 6hr
BKK 19.00 Day 0-----DAD 00.30 Day 2------SGN 06.00 Day3
Total 60 hours
BKK--------------------------------------DADTotal 30 hours
BKKMukdahan
(Border)Savanaket
(Laos)Danang
(VN)
HCM
A1900(D1) from HAN
A2100(D1) from HCM
D23.59(D2)
Lao Bao(Border)
HAN
A1900(D0)
D2100
D2100(D0)
Vietnam – Savanaket- Bangkok
A0700
D0900
A1200
D1400
A1600
D1800
A0600(D3)
950km
770km
250km 280km 800km20km
22hrs
24hrs DAD--------------------------------------BKK
Total 30 hours
SGN 19.00 Day 0-----DAD 19.00 Day 1------BKK 06.00 Day3
Total 60 hours
EWEC Transit & Clearance
MUKA 15.45D 17.00
DSWA 16.30D 17.00
ZVKA 10.45D 11.45
DSWA 09.15D 09.45
ZVKA 14.00D 15.00
MUKA 07.00D 10.30
LBOA 07.00D.09.00
LBOA 17.15D 19.00
Seno ( LAO )Seno ( LAO )
MUK- LBO Driving Time 4 hours
MUK- LBO Customs Time 6 hours
TH 12.15- VN 13.30
Transshipment & Customs Inspection & Reseal
TH- 13.30- VN 12.15
ARN Border Transit ClearanceBKK MUK SVK SENO DSW LBO DAD
Customs Clearance
Cross Bridge 10:00 A.M.15:00 P.M.
BKK customs clearance and
Declared
Send Information For
Pre-Clearance
LAO Customs Clearance to
Get permission of customs entry
Customs Inspection
and Seal The Truck
DAD customs clearance and
Declared
VN customs clearance
and Entry declared
ETA 07:00 A.M.ETD 10:30 A.M.
ETD 24:00 P.M.ETA 10:45 A.M.ETD 11:45 A.M.
Customs Check Seal and Switch CARGO
ETA 12:15 P.M.ETD 13:30 P.M.
Send Information For
Pre-Clearance
DSW customs clearance
with check Seal and
Entry declared
ETA 16:30 A.M.ETD 17:00 A.M.
ETA 17:30 A.M.ETD 18:30 A.M.
3 Hrs 1 Hr 1.30 Hrs 1.30 Hrs 2 Hrs
ETA 12:00 P.M.ETD 13:30 P.M.
ETD 07:00 P.M.
Pre- ClearanceBKK ( Day 0 ) MUK (Day 0) SVK ( Day 0 ) SENO DSW ( Day 0) LBODAD ( Day 0 )
BKK customs clearance and
Declared
Send Information For
Pre-Clearance
LAO Customs Clearance to
Get permission of customs entry
Customs Formality
Process
DAD customs clearance and
Declared
DSW customs clearance
and Entry declared
Customs Check Seal
and Switch CARGO
ETA 12:00 P.M.ETD 13:30 P.M.
ETA 12:00 P.M.ETD 13:30 P.M.
Send Information For
Pre-Clearance
ETA 14:00 P.M.ETD 15:00 P.M.
ETA 16:00 P.M.ETD 18:00 P.M.
ETA 06:00 A.M.
Customs clearance
with check Seal and
Entry declared
ETA 9: 00 A.M.ETD 9 :30 A.M.
ETA 5:30 A.M.ETD 8:30 A.M.
Prepare TRUCK permission
Prepare Customs Entry for clearance at
SVK/DSW
Get Permission 16:00 P.M.( Day 0 )
Original send by Car to DSW before Truck
Arrival
VN customs clearance
and Entry declared
Get TRUCK permission
Customs Entry and Customs clearance at
DSW
3 Hrs30 Min1.30 Hrs.1 Hrs.2 Hrs.
• Lao Transit Tax
– Still a “ local’ issue
• Customs Clearance at Dansawan Border
– Pre Clearance required at Savanaket 250 kms away– Original clearance papers must be sent from Savanaket to Dansawan– This is a two day process and requires a 500 km drive !!
• Crossing the Mekong
– The new bridge has only saved 45 minutes– The Customs process has not improved at Mukdahan or Savanaket
The Reality of the EWEC 2007 Its 45 minutes faster than before !Its 45 minutes faster than before !
• Air Freight
– Road feeder services
• Road Freight
– Unnecessary cost burden
• SMEs
– Joining the regional supply chain
Is The EWEC Missing Opportunities ?
• Time is more expensive than distance ( asset utilisation)
– The easiest and quickest route is generally cheaper than a slower shorter route.
– Transport takes the route of least resistance
• Freight rates are driven by market forces not distance
– Airfreight BKK – LAX $ 2.50 / kg – Airfreight LAX– BKK $ 0.90 / kg
Transport Cost in the Supply Chain
• Market forces are determined by route capacity
– BKK – SIN half the cost of KUL – SIN– 1600 Kms vs 400 Kms – More flights ; more carriers
• Air Freight
– GMS region has limited freighter capacity – Regional capacity limited… expensive– Road access to high capacity routes essential – Feeder services to Bangkok’s lift capacity
Transport Costs in the Supply Chain
• Transport costs can undo the benefits of Labour Costs
– Ho Chi Minh to Tokyo US $ 3.00 / kg shorter route.– High demand for freight space – Limited air freight capacity
• Alternative Lift from Bangkok
– Bangkok – Tokyo $ 1.80 / kg– Road Freight HCM –BKK $ 0.40 / kg …. Via EWEC ( no tax)
– Saving $ 0.80 / kg or $ 800 a ton– Based on a 10 ton shipment
Transport Cost in the Supply Chain
• Large vehicles are cheaper to run (per kg) than small
• Major costs elements of transport– Vehicle depreciation / capital cost– Driver– Maintenance – Fuel
• The only Major cost eliminated in a standing vehicle– Fuel
• Holding up vehicles Increases Transport costs
• This cost goes back to the ( customer) SMEs ! – Reducing their competitive edge
Transport – Achieving Economies of Scale
Top 10 Customers by Weight (Kilo)
33%
67%
Top 10 Others
Top 10 Customers by Revenue (€)
11%
89%
Top 10 Others
Wide Range of Customers
Customer Segment by Accounts
60%28%
5%1%
3%
3%
Adhoc
Small
Medium
Large
Major
GAM
Customer Segment by Revenue (€)
26%
27%7%
4%
15%
21%Adhoc
Small
Medium
Large
Major
GAM
Customer Segment by Weight (Kilo)
34%
25%5%
2%
8%
26% Adhoc
Small
Medium
Large
Major
GAM
Customer Segmentation
What SMEs need from Transport ?What SMEs need from Transport ?
• Access to Markets– The ability to send samples and trial shipments– Consolidation services– Regular scheduled services– Guaranteed , time definite services– Understandable and transparent customs services
• Competitive Transport service– Unit ( kg / m3) based costing for LCL cargo– The benefits of co-loading through economies of scale– Access to lower cost / higher capacity air routes– Local consolidation and ICD centers …for own account delivery
What do we need to do to help SMEsWhat do we need to do to help SMEs
• Border Crossings & Customs
– Smooth and Consistent Customs Clearance– Inland Clearance Depots … in FTZs and population centers– “Express” Clearance for documents and parcels– Bonding arrangements for transit to ICDs– Bonded Warehouse facilities to off load and store un-cleared
goods– 24 hour transit for bonded or ICD transit vehicles– Long opening hours for customs ..16 hours ?
For SMEs to be part of the Value ChainFor SMEs to be part of the Value Chain
• They need
– The ability to ensure on time delivery every time– Competitive transport with easy connections to Global routes– Consolidated feeder services for economies of scale– ICDs for local consolidation / distribution– Ease of import / export procedures
• They don’t need
– Uncertain transit times– Expensive feeder services due to lack of capacity– Paying for dedicated vehicles to ensure smaller quantities are dispatched in time to meet deadlines
• London to Paris 1981 $ 900 One way
– No channel tunnel …….. Ferry costs $ 300 one way.– No open market– Permits required– Customs clearance .. With costs– 12 meter Trailers ( 40 ft)– 18 ton maximum pay load– $ 0.05 per kilo
• London Paris 2006 $ 900 One way – Channel tunnel– No permits– Reduced customs procedures– 13.6 Meter Trailers– 24 ton maximum pay load– $ 0.0375 per kilo
Updating Transport – Competition and Moderisation
• London to Paris 1981 $ 900 One way
– @ 18 tons = $ 0.05 per kg
• Using UK inflation
– $ 900 in 1981 = $ 2300 in 2006
– 2006 price should be $ 0.1275 per kg
• Current Price $ 0.0375 per kg
Updating Transport – Competition and Moderisation
Transport Reality in the GMS
Thesis Thesis
• “The lack of an affective Transport Industry in Laos makes it difficult for the country to take advantage of the available regional supply chain”
– …made possible by the EWEC ( & NS)
Laos is LandlockedLaos is Landlocked
• Without a rail system
• Without an affective cross border transport system
• Without the ability to send its own vehicles to major regional ports or airports with competitive freight lift.
• Without reciprocal the rights that allow Thai and Vietnamese trucks to run in Laos.
• Without the ability or capacity to become part of the regional supply chain…….
Laos HasLaos Has
• Common borders with 4 other GMS countries
• Greatly improved trunk routes
• Light traffic and good transit times
• A four hour transit time from Thailand to Vietnam !
• Low labour costs
• Trucks from 3 neighbouring countries on its roads !
• No access to neighbouring countries !!
Laos Should be…Laos Should be…
• A base for Cross border International Trucking
• The Automatic choice for Foreign Trucking companies wanting to service the wider GMS region.
• A Flag of Convenience for International Transport
The Road Transport Industry The Road Transport Industry as a percentage of GDPas a percentage of GDP
• USA 1.2 %
• Japan 1.9 %
• Australia 4.9 % ……accentuated by Ton / Kilometres
• Thailand 5 %
• China 5.5 %
• India 7 %
• Laos 2 %………………….Why not 7 % ?
• Cambodia ?
•
What is Missing ?What is Missing ?
• A Competitive Cross Border Transport Sector
– Poor vehicle Standards• Overloading• Breakdowns• Poor driving standards
– Lack of access for Lao Vehicles of Good quality
• Smooth and efficient Border Processes
• Easy Market Access for SME exports
• Regional ICDs and Consolidation Points
Cross Border Transport Agreement Cross Border Transport Agreement
• Signed but Not Implemented ……
• It Covers
– Annex 2 “ registration of Vehicles in International traffic”
– Annex 9 “ Criteria for Licensing of Transport for Cross Border operations “• Eligibility, reliability, professional competency, financial solvency ..all covered !
- Annex 12 “ Border Crossing and Transit Facilities’
- Annex 13b “ Criteria for Licensing Inter-modal operators’
- Protocol 2 “ Transit Traffic”
– It is there… it needs to be implemented !
Things ARE Improving
Great New Infrastructure In PlaceGreat New Infrastructure In Place
But Only 45 minutes faster …thus far !
Don’t Waste the Investment !
• Implement the CBTA
–Urgently !