Relevant topics

2020 August 18

How to build highly-demanded ITCs?

Recently, attention has been increasingly focused on development of transport infrastructure and international transport corridors (ITC). Russian export and international transit need reliable alternatives to available routes. This topic will be in the spotlight at the XV International Transport Corridors Forum (TRANSTEC, 14-16 September 2020). One of the experts invited to participate in the upcoming event shares his opinion with IAA PortNews.

The state represented by the Ministry of Transport, ad hoc federal agencies and executive authorities as well as industry majors with a public and private interest in the charter capital is striving towards establishment of efficient and competitive instruments to represent the country in the global transport market. Let’s consider what contribution can be made by each of us to meet the general industry task.

Not so long ago I was asked by my foreign colleagues about the BHAG for me and for the transport industry. The response seems to be obvious as it is outlined by Presidential Executive Order on National Goals and Strategic Objectives of the Russian Federation through to 2024, Comprehensive Plan for Upgrading and Expanding Core Infrastructure and other industry-focused programmes and concepts.

All my transport industry colleagues expressly understand the tasks on strengthening the country’s transport and transit potential, development of its transport infrastructure, enhancement of performance, digitalization of the industry, development of game-changing products and transport security of Russia. When asked about BHAG, all of us, I am sure, have a clear answer in terms of the general industry approach. But the ways to reach a goal can differ for each of us while correct target setting ensures the maximal result. I conceive it the following way:

The key elements of an efficient and well-balanced transport system are infrastructure, IT, R&D, manufacture, operation and unified digital environment (Bi). There is no doubt about competent steps towards effective transport infrastructure, research and development of state-of-the-art technologies (products), availability and development of major service and logistic providers. I would like to focus on challenges in development of cross-boundary digital environment, multimodal transportation from regulatory point of view (intermodal transportation with unified shipment documents), local production of crucial transport assets and international transit.

Ideal service

In our life, we all employ services of different transport industry companies. Prior to paying for a service we manage expectations of the result. Price, quality, safety, time, comfort. We are ready to compromise on something but not everything. We understand that transportation by an international transport corridor should be at a fixed price and a guaranteed time.

To make ITC more attractive we should pay special attention to trans-border operations. Development of a unified package of software for marine and railway check points will contribute to transparency, efficiency and speed of goods transition. Popular concept of a “single-window system” is slightly outdated already. It is time to speak about creation of a unified digital ecosystem for check points through integration of software used by state regulators, stevedores, Russian Railways, sea lines, IWW and road carriers, forwarders and declarants. Our European colleagues call it PCS (Port Community System).

International sea lines succeed in development and deployment of software solutions allowing for monitoring of cargo/goods movement. Stevedores involve well developed software systems for port control and operation (TOS, ERP, CRM etc.). Russian Railways is armed with state-of-the-art software tools. Having integrated all the components within a unified digital ecosystem, state control authorities will obtain an opportunity to perform all the operations and analyze documents prior to cargo arrival in in ports or railway stations that will let reduce the time of cargo transition to technologically required period.

That is one of our challenges for the nearest future. In this respect, we are involved in an active dialogue between the Ministry of Transport, Federal Customs Service, Federal veterinary and phytosanitary watchdog and ad hoc regulators. The development of an industry-focused plan “Digital Transport and Logistics” covering PCS will ensure a required foundation for establishment of a digital ecosystem and for controlling of the country’s transport balance.

Step by step

Legitimized multimodal transportation and a unified digital transport document is already widespread in railway transit operations. It is more complicated for transportation involving several types of transport when cargo delivered by sea is transshipped onto road transport and then onto railway and leaves the country by sea. A unified transport document is a necessary step to enhance the transport system efficiency.

International cargo transit is among the crucial activities for make the most of the country’s geographical location and for strengthening of its geopolitical position. We keep an eye on the development and the demand for East-West, North and Central Eurasian Corridors, North-South ITC. Large-scale work is underway on the development of the Northern Sea Route as a transit corridor.

Statutorization of the state policy on transit development is required on a federal level. All the stakeholders should be involved to this end.

Photo from FB.ru portal
As of today, the key issue is facilitation of transit cargo clearance in checkpoints. It is reasonable to come forward with an initiative at the level of the Eurasian Economic Commission to streamline transit clearance and speed up crossing of the Eurasian Economic Union’s external border (with an approach similar to that of sea transit cargo clearance).

For economic security of EEU member states it is necessary to ensure a border-to-border pass-through monitoring of cargo transit with application of E-seals and other tools of goods movement control as well as simplify paperwork approaches. A green transit corridor, fixed fee and timing will contribute to competitiveness of INCs crossing the territory of Russia.

Local production of containers in Russia

Once more crucial activity related to BHAG is serial production of transport assets in Russia including manufacture of all types of high-capacity containers (HCCs), smart HCCs, reefer HCCs, etc. The major global manufacture of high-capacity containers is China. Russia supplies to China all necessary raw materials and gets back ready products. In line with the Istanbul Convention, operations with foreign HCCs in Russia are subject to certain restrictions which regularly raises to cost of such equipment positioning for Russian export and inland transportation (including transportation of fish). Therefore, it affects competitiveness of Russian products in the international market.

Expansion of HCC fleet of Russian origin will additionally contribute to pursuance of the President’s Executive Order No 204. State support of serial production of river-going and river/sea class ships (for rated IWW depth) will give an extra impetus to ITC efficiency development.

Position in the world

No less important in terms of BHAG is adequate self-presentation of Russia’s transport system and ITCs in the global on the global stage. Admittedly, first they judge how nice, then - how wise. The second aspect has never been a problem for Russia. As for PR, it should be developed in view of all elements and expectations of potential customers. It is essential to share a “common language” with a client and base on core principles – fixed fee, time, quality and responsibility.

Establishment of Russian Transport Routes JSC as ITC aggregator and operator, innovative center for competence development, instrument for promotion of Russia’s transit policy and products in the international market would become a breakthrough towards achievement of long-term ambitious goals.

Transport and infrastructure development is among the key drivers of economic and GDP growth while any challenge or crisis is a luck in disguise. Global transport market will grow with Russia to offer more competitive transport products.  

Transport industry expert Pavel Polyakov, Chairman, Legal and Commercial Committee, Association of Sea Commercial Ports.