2nd Interactive Session: Izzet Salah

Distinguished Guests, Dear Colleagues, Dear Friends;

First of all, I would like to express my thanks to the Association of Estonian International Road Carriers ERAA and IRU for organising such a succesful conference addressing extremely significant issues with regard to the future of international road transport industry and express my gratitude for offering me the opportunity to be addressing you all, here in a beautiful country.

The EU, which is moving towards becoming the second super power in the world, has become a community of 25 members with a total population of 455 million upon the latest wave of enlargement and the 10 new members have brought a 433 billion Euro increase in the EU's gross domestic product annually. The enlarged EU now accounts for the 19 % of the world trade and 24 % of the global foreign direct investment is now flowing into the EU25. While the cross border trade is growing so rapidly, as it is the case throughout the world, there is a growing demand for freight transport in the EU. The European Commission estimates a 48 % increase in international freight transport by road in the next 10 years.

The abolition of customs controls and other formalities following the enlargement dissolved the long vehicle queues frequently witnessed at the East-West border crossings and as a result, the Central and Eastern European hauliers registered in countries which became members to the EU as of 1 May 2004, taking advantage of low labour costs and low maintenance costs achieved a full access to the Western European market and have concentrated their business in such a lucrative region.

Turkey, fully supports the enlargement process, of which she is an integral part, and has been laying down significant efforts towards the fulfillment of tasks she has been assigned for full membership. The share of road transport in the Turkish transport industry is 92% for goods transport. As of the end of 2004, the number of companies perfoming in international road freight transport sector was 1096 and the capacity of the own-asset truck fleet has amounted to 1.5 billion tonnes. The Turkish international road freight transport industry with a fleet of 30.000 tractor trucks, represents one of the largest fleets in Europe. A significant part of this fleet is composed of EUR 1, 2 and 3 categories of trucks. Exports of Turkey broke a record amounting to 64 billion dollars, 53 % of which have been carried by us, Turkish hauliers. According to UND data; in 2004, 14 million 558.000 tonnes of export goods in total were carried by Turkish trucks. The Turkish international road freight transport industry represented by UND is an economic sector with a 3.5 billion dollar-investment and employs 250.000 people.

Today Turkey; situated at the crossroads of a 600 billion dollar worth flow of goods between East and West; in the heart of the Eurasian trade with her extensive road network, railways, seas surrounding 3 sides of the country, airports and distribution centers; is connecting Europe, the Balkans, Black Sea, Caucasus, the Middle East and the North Africa. Thanks to this strategical position, she has the potential for becoming the most significant logistics hub in this geopolitical setting and this potential has been realized day by day. Meanwhile important progress in the harmonisation of Turkish transport transport legislation with the EU acqui has been achieved. After this general information on my country and my transporters, let's now return to our main subject "1 Year After…"

As you would already acknowledge, there has been a boom in 10 new EUmembers, in the realm of foreign trade, exports and imports in the aftermath of the EU enlargement. On the other hand, according to data published at the beginning of 2005 by Eurostat; the rate of foreign trade growth in new EU members is greater than the foreign trade growth rate of EU 25. In parallel to these developments in trade, transport industry has also achieved a significant progress. Following the enlargement of the European Union, transport volumes in the Eastern Europe are expected to double or triple in the next 15 years. Whereas, such estimates would be acknowledged when one considers figures before and after the enlargement.

When we have a look at transport statistics in new EU members; a comparison between the first quarter of 2004 before the enlargement and the second quarter of 2004 immediately after the enlargement indicates that there was a significant rise in international road freight transport in Czech Republic. Concerning transport statistics in Turkey, we may evaluate that the negative effects of the enlargement has not yet been significantly reflected in the sector's performance. Whereas the number of our export trips to European countries increased in 2004 by 16 %. On the other hand, while the number of transit operations from Europe via Turkey to Middle East and CIS countries increased in 2004 by 27% to 28.674, there was a 11% decrease in the period of January-March 2005 compared to the previous quarter in 2004. Considering export transport statistics in Turkey, we see that export operations to new EU members have increased however there has been a slight decrease in export operations to old EU member countries.

Although the figures has not yet been indicating a significant problem, the rise in the number of EU members upon the enlargement in May 2004, signalled the opening of a new front for the Turkish haulier. Because the number of countries the Turkish haulier must compete also increased and there occurred a new environment which poses a stronger competitive pressure with unequal conditions.

As a result of transit agreements signed between the new member countries and the EU, the said countries gained advantages such as exemption from permits and border crossing simplifications and this situation appears as a disadvantage for Turkish hauliers with regard to competition. After the enlargement, analyists state that freight costs in new EU member countries have decreased about 25 %. Average hourly labour costs in the 10 new member countries is said to be one fifth of the EU15. When we also consider the average prices of diesel, we see that the average price of diesel in 10 new EU members is EUR 0.87 per litre while the figure in Turkey is EUR 1.6 per litre (for Eurodiesel).

The intensive competition triggered by road transport operators from the new EU member countries which offer low costs, poses a challenge both for the West European transport and logistics industry as well as Turkish hauliers. The hauliers form the said countries also take the advantage of carrying out domestic transport in EU countries on the basis of certain quotas and they earn additional revenues through low cost advantages. Thus, these countries use the utmost advantage and power of the EU accession and the ones who rebelled for unfair practices before, are today in a position to apply similar unfair practices today.

Distinguished Guests,

I am here, representing a Turkish transport company and also, acting in my capacity of the Deputy President of a professional association representing the 97% of the Turkish international road freight transport industry. Therefore, we are aware of our vital role and responsibility as a non-governmental organisation and we are closely familiar with what I have just mentioned in all aspects.

In the domestic side, although certain barriers were laid down to restrict the access to profession in Turkey thanks to the new Road Transport Law, we have to fight against transporters that concentrate on cost-oriented competition and decrease the level of quality in the sector as well as high fuel prices and taxes; abroad we have other fronts to fight such as the unfair competition reinforced by the EU enlargement, social dumping and formidable visa and transit procedures, permit quotas that our operators have been subjected to.

Although, the "free movement of goods" was accepted through the entry into force of the Customs Union between the EU and Turkey in 1996, the EU still imposes quotas upon Turkish trucks which carry the goods supposed to be in free circulation and thus, creates a kind of non-tariff barrier. Moreover, the principle of free movement of persons has not been implemented by the EU in a way supporting the Customs Union. Along with these barriers, certain new and additional measures which were put into practice immediately after the EU enlargement have been causing inconveniencies and problems for non-EU countries including Turkish hauliers. For example; Hungary started to impose an additional transit charge upon non-EU hauliers. Now, let's have a look at the advantages and opportunities offered by enlargement...

Now, in EU25, there is a single set of rules, a single tariff and a single set of customs procedures. Once a good is cleared at one of the customs offices of the EU25, moves freely within the whole EU. With the enlargement the borders of the EU approached to Turkey and today we may enter the EU territories 400 kilometres before and 1 country before, which significantly saves time for our hauliers. Moreover, with the inclusion of the new EU members to Schengen visa system, there will be no more requirement to obtain individual visas for each of these countries.

Turkey, with a 9.9% growth rate above the EU average, annual export volume of 64 billion dollars, a consumer market as large as 70 million, her strategic location, low cost but highly-qualified labour market, young and dynamic population and taking advantage of a logistics industry offering world-class services and having one of the largest international fleets in Europe, to be supported by new investments in infrastructure and implementing new legal and fiscal regulations, has the opportunity to increase its competitive strength vis-a-vis the new EU members which has recently started to compete with the existing logistics centers in the EU in order to become the most significant logistics hub in the region.

The vision of the Turkish international road transport industry represented by UND is "to carry not only Turkey, but also the world". In parallel with this vision, as the representative of an industry which will play a key role in not only the future of our country on the eve of EU membership, but also will shape the future of the whole world and in an environment where the pressure of global competition is increasingly felt, we are giving priority to investment in human resources. Through cooperations with domestic and international organisations in particular with the IRU Academy, we work for raising the level of training in our industry, hence to increase professional knowledge.

As a final word, I would like to take this opportunity to mention that, with all our assets, we are committed to work for eliminating all barriers in order to move our industry into the future globally and to raise the level of quality throughout the world and reiterate that we are always ready for EU Membership as well as for joining efforts to realize the IRU motto "Working Together For a Better Future".

Yours Sincerely