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Speeches: Janusz Lacny, ZMPD President, Poland

7th IRU East-West Road Transport Conference
Budapest, 15-16 May 2003

Budapest Congress Centre (BCC), Alkotas u. 63-67 - 1123 Budapest, Hungary


ROUND TABLE 1: Tourism, Trade and Traffic Prospects between the Enlarged EU and non-EU Countries on the Eurasian Continent

Development tendencies of road transport between the enlarged European Union and countries not associated in Europe



Janusz Lacny
ZMPD President, Poland


The subject of this paper is very interesting both from the point of view of the currently functioning economic systems in Europe and the tendencies of their formation in the future. Currently, a tendency is observed among production, trade and service companies, not only on the European market, to look for possibilities of reducing prime costs, and through this strengthening its competitive position on the market. This also concerns the situation after 1 May 2004, when the European market will be enlarged with the successive 10 countries. This mainly results from the fact that customers look for goods and services that are cheep and of appropriately high quality. On the other hand, production enterprises, wanting to survive on the market, must reduce their costs. It is a requirement of the contemporary economic market, where logistic management systems prevail. Such activity is an inseparable part of a strategy of every company, and certainly it will be a long-term tendency.

Because of the tendencies to reduce costs, there appear new organisational forms of realising a supply chain, and namely:

  • partnership forms of realising supply chains,
  • complex forms of realising supply chains.

The partnership form results from using outsourcing by a company. This outsourcing means buying different types of services, if only they are cheaper than provided within the company (e.g. transport, storage and sorting services, customs services, etc.). Because of this, production companies search a reliable partner (or partners) that would satisfy specific requirements. It is not easy, because potential partners must fully trust one another and, what's more, commercial secrets come into play. The main purpose of such partnership is deriving benefits for both parties and working out procedures for problem situations.

The partnership form of realising a supply chain exists mainly in Europe, and among very large business entities. This means that large production or trade companies search large logistic operators (e.g. road transport companies), in order to perform specific business tasks together. Therefore, small road transport companies, or small logistic operators (forwarding agencies) will have little chance to enter into partnerships.

In the case of the other form of realising a supply chain, which is a result of cooperation between production, trade or service companies with a logistic operator, there are also large possibilities of reducing costs for both parties. The concept of complex logistic service is not new and has existed in the literature, but it has been rarely used in practice. This concept is based on the following assumptions:

  • a company is provided services by one, two or three logistic operators depending upon a volume of production; in most cases it is one logistic operator,
  • a logistic operator assumes many functions of a former forwarding - transport department of a company,
  • a logistic operator plans, performs and inspects the whole process of executing each order,
  • the function of a production company is only to manufacture a product and to prepare it for shipment,
  • a logistic operator may actively participate as early as in a production preparation phase or commercial activities because, having contact with a buyer or a supplier, it is able to design optimum timing in a goods movement process.

In case of accepting a scheme of cooperation between a logistic operator and a production, trade or service company, the prime costs of a company are reduced substantially. On the other hand, the logistic operator, having regular contacts with the given company, can ensure the effectiveness of transports. The operator does not have to search or wait for a transport order, what means better using means of transport. The operator possesses full information about production and a date of its acceptance, and also about storage requirements. In addition, because he delivers goods to buyers or receives specific products on a regular basis, he can contact them and agree a date of delivery or obtain information about their requirements, which in turn may be submitted to a manufacturer or trade or service companies. Therefore, he becomes an essential link connecting different enterprises, buyers and supplies in a supply chain.

Such a model of cooperation between logistic operators and companies begins appearing in business practice, and the first results of an analysis indicate that it is effective in the present economic conditions, which means that all links in this chain profit from it by reducing costs, and whereby they do not have to make additional investments to obtain better economic effects. This model of cooperation on the modern transport market requires that strong logistic operators must be present, who can satisfy the needs of customers, and also will be able to compete effectively on the concentrating market in Europe.

Taking into account the previous considerations we may try to answer the questions included in the subject of this paper. We may assume with a large probability that such logistic systems (supply chains) will develop most dynamically. Nothing shows now that there could be any substantial change in this respect. Partnership agreements among different types of companies on the logistic market, and also attempts to construct complex forms of servicing companies, have already crossed the borders of countries or economic blocs. Already now the European Union States together with the candidate countries, and also with the other European and Asian countries, are creating supply chains, for e.g. delivery of raw materials from the East to the West and of finished industrial and food products from the West to the East. The creation of these supply chains is becoming an optimum solution for the modern economic systems in Europe and Asia in view of cost rationalisation. It seems that this tendency will grow between the enlarged Union and the countries not associated in Europe and farther, in Asia. Here it is worth of reminding that recently China, after becoming a member of IRU, has shown an interest in being included in the land supply chains.

When accepting such directions of activities, we must say that road transport will continue to have a significant position in realising supply chains. In the last 10 years the share of this sector in cargo transports, both in the European Union and candidate countries, increased from a level of about 40% to over 70%. Obviously, this may be evaluated negatively by saying that it is a very expensive and little-ecologic branch. However, from the point of view of economic effects of companies, which are achieved by use of modern logistic management systems, it is widely used by customers as effective and bringing measurable economic benefits for all parties. In the modern market's logistic processes, vehicule transport is used most often. What's more, there are no clear presumptions that the role of road transport would reverse radically in the nearest 10 years causing benefits to other transport branches, even to railway transport.

Indeed, the White Book of the European Union of 2001 'European transport policy 2010, time to make a decision' clearly states that the role of road transport should be limited through

  • transferring goods to railway transport,
  • introducing combined transport on a broader scale,
  • charging road transport fully with external costs (thus an increase of charges for use of highways in Germany from August 2003).

However, one must notice that these issues have been raised in the Union for more than 30 years, and no explicit effects are visible. One may suppose that by having a more energetic transport policy in the enlarged European Union, more radical interest in the combined transport may be imposed on individual Member States. This means that on long routes such as Western Europe - Russia or farther to the east, railway transport would carry entire truck sets with cargo, and road transport itself would perform only to-from carriage functions between vehicle loading and unloading points.

As we analyse the previous experiences in this field, we have to admit that such assumption appears to be purely theoretic. Considering the fact that in the modern logistic systems the cheapest solution is transport, under just in time system, directly from a buyer to a supplier using the same means of transport, we must assume that the role of road transport on the market will be still growing. This comes both from the extra-nationality of economic systems and management systems and from the operation of a technological factor, which is required for satisfying customer requirements.

It is estimated that an annual increase rate of road transport carriages between the countries of the enlarged Union (25 States) and the non-candidate countries will be averagely about 3% per annum. This results from the estimated economic growths during the nearest five years in the European and Asian countries, from the possibilities of introducing combined transport on long routes, and additionally from the further development of a supply chain network. Obviously, these are approximate, hypothetic values, because at the moment it is hard to be a prophet of economic development.

The realisation of such assumptions will bring definite consequences for the transport policies of individual countries. In order to considerably increase the role of the combined transport within the nearest 10 years, both the countries of the enlarged Union and the non-associated countries will have to increase their expenditures for railway transport infrastructure (point and line infrastructure) as well as to take care of steady developing road transport infrastructure. If this fails, an annual increase rate of road transport requirements may be even 7%.

In general, we have to say that the observing of the European transport market, and also the long-lasting experiences in transport policy of the European Union, lead to a thesis that the role of road transport on the European and Asian market in the nearest 10 years will grow regularly and no recommendations can help stopping it. If positive financial results of enterprises are a final objective, this objective must rule the technology of realisation in the given economic systems. No recommendations or directions, in specific economic conditions, shall replace the hard rules of economic calculation.


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