European Association of Ukrainian Transport Companies

Role and Possibilities of Public Trade Associations in Promotion of National Transport System’s Integration into International Transport Market

Dear Madams and Sirs!

I would like to greet all the participants of the international seminar on behalf of the Association “European Association of Ukrainian Transport Companies” and to express my gratitude for a good organization of the present meeting.

Development of Ukrainian transport system and its integration into the international transport market predetermines the future obligatory development of the transport infrastructure and international corridors passing through the territory of Ukraine. This process presupposes emergence of certain problems requiring collective resolution, that is, their resolution by state authorities and scientists, on the one hand, and by principal participants of the transport process in the person of forwarders, public trade associations, forwarding agents and operators, on the other hand.

Thus, the state authorities are obliged to ensure the European standards of automobile roads, railroads, river and sea ports and airports, simplification and rationalization of national law regulations and standards, as well as unification of the customs procedures on the basis of rules and references of international conventions, carrying on a stable transport policy clear for all the market’s participants. On the other hand, in the process of fulfillment of professional duties on cargo forwarding it is only the direct participant – the cargo-shipper, forwarding company or terminal – that comes across a range of problems impeding the transport service development and which are difficult to resolve independently. Then, in our opinion, public trade associations should render their assistance for resolution of these problems, who having made certain generalizations and having systemized problem issues would send them to corresponding state bodies for their resolution. As it has been proved on practice, nowadays no state authority contributes to resolution of arising problems and those that have accumulated for years.

Here is a simple example. The European Association of Ukrainian Transport Companies” was founded in December 2005. During the short period of its activity we have sent several letters to various Ministries and Departments appealing for resolution of urgent problems that impede the future increase in cargo transportation and Ukraine’s integration into the international community. The major issues are the following:

1. The state bodies are widely advertising their support of the national manufacturer, but, in fact, nothing is done in this respect.

2. Nontransparent rendering of special rates by the „Ukrzaliznytsya” for certain companies for transit transportation of cargoes through Ukraine.

3. Lack of an integral policy concerning additional charges imposed at the railways of Ukraine leads to constant conflicts and to the competition in order by all ways and means to reach as much money as possible out of the client using their monopolistic right of providing services.

4. Reestablishment of financial guarantees for transportation of excise cargoes through the territory of Ukraine by the insurance company „Garant–Service” with the cancellation of the financial guarantee in the person of the „Ukrzaliznytsya” in 2005 caused a considerable outflow of transportation of such cargoes through the territory of Ukraine.

5. Having signed the Convention „CОТІF”, Ukraine acknowledged the international document СІМ used for transit transportation of cargoes through Ukraine at the area of 112 km on relation Chop – Dyakovo, and backwards. It has not been very efficient for an increase and simplification of transportations, because all sanitary, ecological, veterinary certificates, licenses etc., issued in the EU countries and admitted by all the EU participants, are invalid at our territory and they should repeatedly be applied for in our state authorities.

6. Assignation of particular kinds of carriages and containers to certain structural subdivisions of the „Ukrzaliznytsya”, in our opinion, caused their monopolistic use, transference to selected companies, mainly to foreign ones. Thus, for example, the state enterprise “Ukrreftrans” rejects rendering carriages for Ukrainian companies with their future loading at the territory of Hungary, explaining their reason as there is the only contract with the „Transsped” Company.

A similar situation arises with requests to the State Center “LISKI” for rendering car-carriers: the state center, regardless the delivery terms according to the INCOTERMS, predetermines as a condition for rendering car-carriers, that is, forwarding of the cargo from the station of destination to the departure station.

In our opinion, there is even a worse situation with providing services by the Ukrainian State Center „Ukrspetsvagon”, which technologically needs 20 days for a reply to any request, and this is the so-called “Ukrainian service”.

Therefore, we can state that establishment of such companies has not facilitated clients’ free access to the carriages, but it has had an adverse effect.

7. Up till nowadays there has not been resolved the matter on establishment of the international transport-logistic center in Transcarpathia, the project of which has been worked out by our Association.

Unfortunately, we have not received any definite response to our propositions.

In May 2006, at the anniversary celebration of the international forwarder that took place in Odessa, as President of the European Association of Ukrainian Transport Companies”, I gave an extended report on this subject-matter. There were also officials of the Cabinet of Ministers of Ukraine present at this international forum, who in presence of journalists and forwarders’ community were convincing us that all these matters are actual and require theіr solution, inviting us for a meeting in Kyiv. However, after Forwarder’s Day, to my telephone calls with a request for a meeting I received the following reply: „There are so many of you that we do not know already whom we shall meet”. All the facts prove that there are few state authorities promoting the transport business development in Ukraine, аs well as that democracy and the public society is at the low level in our country. In order to achieve solution of all the problems concerning our activity and to promote thus the future integration, all public unions and trade associations should amalgamate. Only having amalgamated we will be able to achieve certain results in increasing the level of the transport-forwarding service in Ukraine with the following integration into the international transport market. Our Association has already made the first steps in this direction. Thus, together with the Association “Ukrzovnishtrans” we have signed an agreement on cooperation in the sphere of common protection of the activity of our associations’ members.

One more important factor facilitating Ukraine’s integration into the international transport market is the professional training and professional advancement of the transport process participants. This function is performed mainly by private structures. Thus, one of the leading companies dealing with the professional training and professional advancement of international forwarders of Ukraine is a member of our Association – the Closed Joint Stock Company „Plaske”.

By our own strength the European Association of Ukrainian Transport Companies has worked out a project of an international logistic center and also the „All-Ukrainian Forwarding Rules”. Working according to these rules, we will approximate the European standards of the transport business and Ukraine’s image abroad will also be improved. The next factor promoting Ukraine’s transport market integration into the international one is informing people about successes and achievements of the leading scientific thinking of our country and of close and distant foreign countries in the sphere of the international transport development with the following implementation of new technologies directly by national transport organizations. In our opinion, here professional transport magazines and newspapers, television and radio should also make their contribution felt.

Taking into consideration all the above mentioned, I suppose to be heard by state officials and I hope that there will be created more favourable conditions for the activity of public organizations and trade associations. Experience of the world democratic countries proves that there is no alternative for a close cooperation of public organizations and trade associations with government authorities, and it is just after establishment of the public monitoring of the authority, ensuring transparence of its activity and accountability to the people, it will be possible to develop the public society and democracy in Ukraine, ensuring thus the future integration of Ukraine into the world community.