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2nd Interactive Session: Airat Ismagilov
One year after EU Enlargement: 2nd Interactive
Session: "One Year After …" - Road Transport Companies'
Response
Extracts from the speech General information on the company "Kengatrans" Ltd. - the Moscow motor transport business Founded in 1997. The founders are physical persons. The company has a fleet of 14 articulated vehicles, primarily canvas tops and container trucks. The fleet operates mainly in the direction of Scandinavia (primarily Finland). The company also has experience of working in Western European countries - Italy, Germany, Belgium. Factors affecting the economic effectiveness of the company's activities: After 10 new countries joined the EC, the European Union territory increased by a quarter and its economic capacity by 5%, thus surpassing the USA. Its population increased by 20% to 450 million people. According to supporters of enlargement, the size of the single market will not only create new jobs and speed up economic growth but will also give Europe a great deal of influence on the world stage. After the expansion of the European Union the common border between the Russian Federation and the EC extended to more than two thousand kilometres. What has changed for small road transport businesses in Russia at this point in time? At the moment small and medium sized road transport businesses in Russia that transport goods internationally are faced with the problem of reduced profitability. Following the enlargement of EC countries some of the transit loads of "Kengatrans'" customers from Finland moved to the Baltic. The number of orders for the company in this direction has decreased by 23%. As a result problems for "Kengatrans" have become even more acute. First of all there was the problem of acquiring rolling stock that complied with modern ecological requirements. "Kengatrans'" transport fleet is 6 - 7 years old on average and its 50% complies with Euro 2, the other 50% with Euro 1. And, of course, today's fundamental problem - rising fuel prices. This is one of the most important factors that significantly increases hauliers' expenses. When considering direct expenditure on transporting loads (fuel, paying drivers, transport documents, travelling expenses) for "Kengatrans", fuel costs for the first 3 months of this year were 61% compared with 43% for the same period the previous year The effect of just two factors (the increase in the price of fuel and the switch of goods traffic from Finland) led to profits for the company for the first 3 months of 2005 going down by 40% compared with the same period of the previous year. And we must mention new barriers arising from introducing a visa system to countries that have newly joined the EC and the severity of the demands placed on them by the embassies of "old" members of the EC. Today Russian hauliers are facing problems getting visas not only from the embassies of "old" members of the EC but also from the embassies of such "new" members of the European Union as Slovakia, the Czech Republic, Hungary and Estonia. We must mention the general difficulties in the procedure for issuing visas:
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