Speeches: Tibor de Sorgo, ATRH President, Hungary

7th IRU East-West Road Transport Conference Budapest, 15-16 May 2003 Budapest Congress Centre (BCC), Alkotas u. 63-67 - 1123 Budapest, Hungary

Tibor de Sorgo
ATRH President, Hungary

Distinguished Mr Minister and Mr Chairman, Ladies and Gentlemen,

I am pleased to have the opportunity to greet you in Budapest, at the IRU - 7^th East-West Road Transport Conference. I take it as a great honour, as well as an appreciation of the Hungarian Road Haulage Association that the IRU accepted our invitation and thus, in the year preceding the significant extension of the European Union, allowed us, representatives of road haulers coming from the present EU member states, from the countries accessing the EU at the same time as Hungary, from the countries to join the EU at a later stage of its extension, as well as from those countries, which have not applied for a membership, but have closely cooperated with all of the above.

I take great pleasure in recalling the 1996 IRU Congress held in Budapest, as it was a significant event not only for us, being the hosts, but also for the IRU, as well as the whole profession of road haulage, the reason being that it was that time, when we, still the one and only profession in the world, formally committed ourselves to the notion of Sustainable Development as formulated at the Rio Summit, which has inspired the everyday life of our associations and entrepreneurs ever since, and which is the only right answer to the often unfair attacks aiming at our profession under the slogan of environmental protection.

What can we say about the situation of road haulage in Hungary now, one year before the accession?

Private ownership and market conditions are prevailing in the country, with the only exception of regular personal transport services, which are provided by state-owned companies operating in each county, offered at officially regulated prices, generating loss, on average, and being on a deteriorating technical standard. In personal transport, privately offered services have been restricted to special transport services, which shall remain this way as long as there is no regulation for the issue of reimbursement of the losses suffered in the provision of public services.

In the area of haulage, altogether 27 thousand businesses run a total number of 96 thousand vehicles, including trailers. Most of those are, in fact, private entrepreneurs operating one vehicle only. The domestic market is experiencing a significant oversupply, as a consequence of the earlier, excessively liberal regulations of joining the profession, as well as owing to the fact that many drivers, having lost their former jobs, purchased a used vehicle to become entrepreneurs. However, most of these people are struggling for their everyday living, without even thinking of replacing their own old vehicles with a new one. In particular, now, that legal harmonization with the EU laws and regulations has been completed, the rules of joining the profession have been extended to the already existing businesses as well. Even vehicles operating only within the country must be equipped with a tachograph and a speed limiter, limitation of the periods of driving, as well as the inclusion of rest periods have been made mandatory even in the domestic market. All these measures bring about an increase in the costs, which cost increase proves to be extremely difficult to shift over to the clients, due to the existing oversupply, as well as the keen competition in this area.

The situation is better in the international road haulage market, as a result of an internal restriction in the number of international transport licenses issued, set by the government at the initiative of the interested professional bodies: as many as 4800 vehicles over the carrying capacity of 20 tons had been licensed to undertake international transport, which number was increased with 150 vehicles at the end of last year only. In order to ensure an effective operation of the international licenses, vehicles of smaller capacity are not allowed to provide international transport services, except for vehicles below the carrying capacity of 3,5 tons, as these do not need such a license. Law-makers have set increasingly demanding technical requirements towards the international fleet, thus the average age of vehicles participating in the international transport is only 3 years. In the recent period, particularly unfavourable changes were experienced in the area of international goods transport. Our well-balanced 50% market share regarding the volume of exported goods leaving Hungary reduced to a mere 35%. Hungarian authorities and law-makers also carry a heavy responsibility for this change. Our greatest competitors are obviously the haulers coming from the neighbouring countries. A specific issue of international transport is the period of waiting at the border crossing stations. In spite of the modernization process going on within our country, due to the increasing volumes of traffic, the situation in this respect has not improved.

Based on the above, it can be clearly stated that the key issues of the Hungarian road haulage sector are as follows:

• regarding personal transport: lack of capital, low profitability, a shortfall of technical development;
• regarding domestic haulage: oversupply in the market, keen competition, lack of capital, as well as a shortfall of technical development;
• regarding international transport: a keen foreign competition, as well as difficulties in driving through the borders.

What can we expect from the present year, directly preceding the actual accession to the EU, as well as in the course of the integration process?

We expect that all the remaining tasks of harmonization shall be completed during this period, such as:

• regarding personal transport: reimbursement of the losses shall be properly regulated, thus privatisation of the state-owned companies shall become possible, while private businesses shall also be able to participate in the business of regular personal transport services;
• Regulation no. 3820/85 of the EU regarding the periods of driving and rest periods shall be introduced, although similar provisions have been already effective in Hungary; as having been joined to the AETR Agreement concerning for international transporters, the most principals of the Agreement have been inserted into the regulations for the domestic transporters.
• the quota of international transport licenses shall be cancelled, thus the internal limitation of competition shall disappear. The mutually opening markets shall show an increasingly colourful picture, we shall be able to increase our presence in terms of capacities in other countries, while a growing number of businesses shall transport goods to our country as well.
• customs borders shall be terminated between the EU member states. Although guarding the borders shall be maintained for a period of three further years, until Hungary shall finally join the Schengen Treaty, the time of border-crossing shall hopefully reduce to a friction of the time it presently takes. We hope that, in spite of a more thorough control, the situation shall not deteriorate at the Eastern borders, either. Hopefully, the modernization of infrastructure shall go together with the provision of an appropriate number of official staff as well.

however, the issue of introduction of an obligatory visa system shall be raised regarding those countries where no visa was required before.

Ladies and Gentlemen,

When we talk about harmonization, an increasing emphasis is placed on social issues, including the question of wages and salaries. It is a fact that Western European wages and salaries are approximately five times higher than those in Hungary in general, which is also true for drivers in particular. However, for the sake of social harmonization, as well as for the appropriate adjustment of wages and salaries, it is inevitable to introduce such a tax reform, which shall reduce also the relevant tax burdens currently existing in Hungary to the level of those in the European Union.

The Hungarian Road Haulage Association, in its capacity as an employers' organisation, has initiated a social dialogue with the representative trade union of the Hungarian drivers. As a first step, we devised a collateral employment contract, which is being adopted by a growing number of businesses.

Ladies and Gentlemen,

I look forward to and have great expectations regarding the forthcoming two days. Considering the experiences of previous IRU East-West road transport conferences, I am absolutely certain that we shall hear exciting presentations and discussions as well. I wish that everything said during the conference be integrated in our present knowledge and effect our day-to-day work, no matter whether we represent the political field or the profession itself.

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