transport route attractiveness index...contact: [email protected] benchmark trade...

EuropeAid 2008/155-683

This project is funded by

the European Union

TRT Trasporti e Territorio, Alfen Consult, and PTV AG

This project is implemented by

A State of the art Approach for Benchmark of

Transport and Trade Facilitation corridores

Transport ROUTE

ATTRACTIVENESS INDEX

TRT Trasporti e Territorio, Alfen Consult GmbH and PTV AG 1

Measures it , You can be improve it

UNECE Round Table

June 14, 2012

Contact: [email protected]

Benchmark Trade Facilitation Corridors

Walk through the content

1 Benchmarking O p t i o n s F o r R o u t e s A c r o s s

B o r d e r s

2 What Is TRAX

3 The Routes

4 Calculation Model

5 Results

2



The background

• Transport dialogue and interoperability between the EU and its neighboring countries and Central Asian countries

• A coordination project of the EC for TRACECA Route Transport Corridor Europe-Caucasus-Asia

3



Why TRAX : The Rationale

• To understands attractiveness of TRACECA routes compared to competing routes

• Find out “real preferences” of transport operators decision making on the route and modal choice along Transport corridors

• Provide basis for improvement of attractiveness

• Prioritize actions with highest impact on attractiveness

• Monitor attractiveness improvements over time (e.g yearly)

4



Methodologies for Benchmarking

UNESCAP Time/Cost-Distance Methodology

CAREC Time/Cost-Distance Methodology

WB Performance of Transport Corridors in Central and South Asia

WB Review of the International Corridors Transport Prices and Costs in Africa.

UNECE Inland vs. Maritime Transport Comparison Study

• The main instrument being used in recent years to assess the performance of transport routes is the Time/Cost-Distance Methodology that has been promoted by the (UNESCAP).

• LPI logistics index as provided by the World Bank concentrates on the overall logistics performance of countries not on applicable on Routes and corridors

5



UNESCAP METHOD

6



Joint study on developing Euro-Asian transport

linkages”

(UNECE-UNESCAP, 2008)

7



EATL Study

Draft Time – Cost diagram for both rail and maritime routes linking Almaty and

Istanbul (source: Comparison study: Inland versus Maritime transport, UNECE, 2010)

8



NELTI / IRU

9



Applied UNESCAP Approach

10



NELTI Study (IRU)

11



CAREC

12



WB / Performance of Transport Corridors in

Central and South Asia

13



Applicability for route attractiveness

• Time and cost methodologies remain short of

– clearly identifying benchmarking across different routes

– considering external factors relevant for the industry (reliability / Security)

– Provide a simple indication of a route attractiveness

• IDEA project developed with EC support and IRU cooperation TRAX

14



Effects on Flows

• Why the flow distribution is like this and how to improve it

15



Defintion of TRAX

Transport Routes Attractiveness indeX • It measures the attractiveness of a freight

route based on “Criteria” – Time from Origin to Destination

– Cost used for Cargo movement from Origin to Destination

– Reliability / Predictability

– Safety and Security of the cargo

16



TRAX Rationale

• transport decision made by logistics providers can be reduced to a rationale decision of a transport cost/time bundle which can be ranked in order (“opportunity cost”)

• Factors and variations (uncertainty) in transport time can also be reflected by the opportunity cost in the transport price (detours, border times, unexpected incidents, higher capital cost of transport equipment-in-use

etc.)

• TRAX is an attempt to capture the complex transport decision by a transparent and simplified model

17



Methodology and data sources

Four Step Approach 1. Obtained and analyzed “driver journals” from IRU

to reflect real life costs and times for transportation from/to EU-Central Asia via different alternative Routes

2. Questionnaire / Interviews with selected representative freight forwarders in Europe / Caucasus / Central Asia to obtain weights for the criteria

3. Calculate Route Index for the three routes 4. Analyze attractiveness blockers and develop

remedies action plans

18



STEP 1

Obtained “driver journals” from IRU to reflect real life costs and times for transportation from/to EU-Central Asia via different alternative Routes.

On a base of “driver journals” the next data is available to analyze

- Identify the Routes for analyses - Time: Min and Max Time on each route: Driving /

Wait, Stops (e.g. procedures on border crossing) - Cost: min and max costs of transportation, including

official, non-official payments on route and at border or ports

19



Three most popular alternative Routes from EU to

Central Asia Considered

Based on driven routes journals obtained from IRU in the framework of NELTI October 2009

1. Trans Russian Route 2. Trans Caucasus Route 3. Trans Turkey / Iran Route

20




Step 2 Questionnaire / Interviews with selected

representative freight forwarders and road carriers in Europe / Caucasus / Central Asia

• To obtain understanding for business decisions making

• To obtain weights for the such criteria as costs, time, reliability and safety from the business, through paired judgment for the selected criteria

• Quantify Safety and Security (Risk) • To find out the hottest problems from business view

1 1 3 2 4 21




Step 3 Calculate Route Index for the three routes Step 4 Analyze attractiveness blockers and develop remedies action plans

1 1 3 2 4 23



STEP 3 Calculation Approach

• Each corridor is deivided into a number of stretches and nodes along the whole corridor

– Stretches are roads or Ferries

– Nodes are as borders, ports, loading points, logistics centres etc and are assumed having no physical dimension

• We speak about corridors on a broader sense because each corridor might comprise many alternative routes (averaging)

Stretch 1 Stretch 2 Node 12

1 1 3 2 4 24



STEP 3 Calculation Equations

Route Stretch’s Index =

F(Ci x αc + TT i x Vt x αt + Ri x αr + Sr x αs )

Route Node’s Index =

F (Cij x αc + TTij x Vt x αt + Rij x αr)

Where as :

• Ci = Observed Transport cost on Stretch i

• α c/t/r/s = Weight of costs / time / reliability / Security in the route choice decision making,

obtained from the freight operators interviews

• TTi = Observed Average Transport time on Stretch i

• Vt = Value of Time for freight transport per cargo

• Sr = Perceived security and safety of Cargo in specific Country

*50 % Point in statistics; means 50 % of data mass are below and 50 % above this point

• Index is adjusted on KM based for comparison reasons

i=1….N (N stretches in total)

J=1…M (M stops in total)

1 1 3 2 4 25



STEP 3 Results

• TRAX Index for 1. Trans Russian Route 2. Trans Caucasus Route 3. Trans Turkey Route

• TRAX index for stretches of the routes

• TRAX index for nodes of the routes

• Regional evaluation: TRAX for sub regions

• Waiting times and costs on nodes and stretches

• Level of non official payments, others

1 1 3 2 4 26



Weights of the Criteria

Weights of criteria for selection of transport routes

1 1 3 2 4

WEIGHT FOR STRETCHES FOR NODES

COST 13% 22%

TIME 17% 29%

RELIABILITY 29% 49%

RISK 41% -

27



TRAX FOR ROUTES

3032

1255

6767 6373

72

6358

1896

7776

8839

76

8169

2994

11243 10849

146

INDEX TRAVEL COST TIME COST RELIABILITY SAFETY/SECURITY

TRANS-RUSSIA ROUTE TRANS-TURKEY ROUTE TRANS-CAUCASUS ROUTE

28



TRAX FOR ROUTES

3032

1255

6767 6373

72

6358

1896

7776

8839

76

8169

2994

11243 10849

146



The Trans-Turkey

Is half as attractive

compared to

Trans Russia

29



TRAX FOR ROUTES

3032

1255

6767 6373

72

6358

1896

7776

8839

76

8169

2994

11243 10849

146



Trans-Caucasus

Is almost 3 times less

attractive

Trans-Turkey

Is half as attractive

as the

Trans Russian

30



TRAX FOR ROUTES

3032

1255

6767 6373

72

6358

1896

7776

8839

76

8169

2994

11243 10849

146



31



TRAX FOR ROUTES

3032

1255

6767 6373

72

6358

1896

7776

8839

76

8169

2994

11243 10849

146



32



TRAX FOR ROUTES

3032

1255

6767 6373

72

6358

1896

7776

8839

76

8169

2994

11243 10849

146



33



TRAX FOR ROUTES

3032

1255

6767 6373

72

6358

1896

7776

8839

76

8169

2994

11243 10849

146



72 76

146

34



TRAX FOR ROUTES

3032

1255

6767 6373

72

6358

1896

7776 8839

76

8169

2994

11243 10849

146



72 76

146

TRAX INDEX INDEX TRAVEL COST TIME COST RELIABILITY SAFETY/SECURITY

TRANS-RUSSIA ROUTE 3032 1255 6767 6373 72

TRANS-TURKEY ROUTE 6358 1896 7776 8839 76

TRANS-CAUCASUS ROUTE 8169 2994 11243 10849 146 35



TRAX INDEX - STRETCHES

TRAX STRETCH INDEX INDEX

TRAVEL COST

TIME COST

RELIABI LITY

SAFETY/ SECURITY KM HRS

TRANS-RUSSIA ROUTE 1160 442 3619 955 514 5004 84

TRANS-TURKEY ROUTE 1192 457 3723 969 533 5384 87 TRANS-CAUCASUS ROUTE

2368 1572 5541 1862 1662 5740 139

1160

442

3619

955 514

1192

457

3723

969 533

2368

1572

5541

1862 1662



36



TRAX INDEX - NODES

TRAX NODES INDEX INDEX

TRAVEL COST

TIME COST

RELIABILITY HRS NODES

TRANS-RUSSIA ROUTE 2053 813 3148 5418 73 6

TRANS-TURKEY ROUTE 5353 1440 4053 7870 94 5

TRANS-CAUCASUS ROUTE

6493 1964 5702 8987 129 8

2053

813

3148

5418 5353

1440

4053

7870

6493

1964

5702

8987

INDEX TRAVEL COST TIME COST RE COST


37



TRAX DETAILS

38



TRANS – RUSSIAN : TRAX in detail

Region TRAX TRR-Europe TRAX TRR-RF TRAX TRR-CA total

Countries Belarus Russia Kazakhstan, Uzbekistan,

Kyrgyzstan

TRAX total 863 898 1452 3213

TRAX stretches 404 398 359 1160 TRAX nodes 459 500 1093 2053

39






Kyrgyzstan

TRAX total 863 898 1452 3213


STRETCHES and NODES TRAX

Are apr the same in Belarus

40






Kyrgyzstan

TRAX total 863 898 1452 3213


STRETCHES and

NODES TRAX

Are apr the same

in Belarus

NODES create more

difficulties for Russia

then STRETCHES

41






Kyrgyzstan

TRAX total 863 898 1452 3213


STRETCHES and

NODES TRAX

Are apr the same

in Belarus

NODES create more

difficulties for Russia

then STRETCHES NODES in Central Asia

contribute about 75% of TRAX

42






Kyrgyzstan

TRAX total 863 898 1452 3213


TRAX for Central Asia in 2 times

higher than West part of the route

43



TRANS – CAUCASUS: TRAX in detail

ROMANIA

BULGARIA

POLAND

UKRAINE

GEORGIA

AZERBAIJAN

KAZAKHSTAN

UZBEKISTAN KIRGIZSTAN

Region TRAX TCR-Europe TRAX TCR-Caucasus TRAX TCR-CA

total Countries

Ukraine, Romania, Bulgaria

Black Sea ferry, Georgia, Azerbajidzan, Caspian

Ferry

Kazakhstan, Uzbekistan, Kyrgyzstan

TRAX total 2765 3480 2616 8861

TRAX stretches 438 1381 549 2368

TRAX nodes 2327 2099 2067 6493 44




ROMANIA

BULGARIA

POLAND

UKRAINE

GEORGIA

AZERBAIJAN

KAZAKHSTAN



total Countries


Black Sea ferry, Georgia, Azerbajidzan, Caspian

Ferry


TRAX total 2765 3480 2616 8861


TRAX nodes 2327 2099 2067 6493

In all regions nodes are

the worst component

45




ROMANIA

BULGARIA

POLAND

UKRAINE

GEORGIA

AZERBAIJAN

KAZAKHSTAN



total Countries


Black Sea ferry, Georgia, Azerbaijdzan, Caspian

Ferry


TRAX total 2765 3480 2616 8861


TRAX nodes 2327 2099 2067 6493

Caucasus has lowest

attractiveness?

46



TRANS – TURKEY : TRAX in detail

TURKEY

BULGARIA

IRAN

TURKMENISTAN

UZBEKISTAN

KIRGIZSTAN

Region TRAX TTR-Europe-

Turkey TRAX TTR-Middle

east TRAX TTR-CA

total Countries Bulgaria, Turkey Iran

Turkmenistan, Uzbekistan, Kyrgyzstan

TRAX total 1007 3113 2425 6545


TRAX nodes 597 2723 2034 5353 47




TURKEY

BULGARIA

IRAN

TURKMENISTAN

UZBEKISTAN

KIRGIZSTAN



east TRAX TTR-CA



TRAX total 1007 3113 2425 6545


TRAX nodes 597 2723 2034 5353

STRETCHES ATTRATIVNESS

ARE ALMOST THE SAME

48




TURKEY

BULGARIA

IRAN

TURKMENISTAN

UZBEKISTAN

KIRGIZSTAN



east TRAX TTR-CA



TRAX total 1007 3113 2425 6545


TRAX nodes 597 2723 2034 5353

NODES ON THE EAST…. ANY REASONS

TO IMPROUVE

THE ROADS?

49



PAYMENTS ON ROUTES

OFFICIAL AND NON OFFICIAL

50



POLAND

BELARUS

RUSSIAN FEDERATION

KAZAKHSTAN


ROMANIA

UKRAINE

BULGARIA GEORGIA

AZERBAIJAN

TURKEY

IRAN

TURKMENISTAN

STRETCH OFFICIAL non OFFICIAL

RU 2% 98%

CAU 62% 38%

TUR 38% 62%

Route-by-Route comparison on level of non official cost

STRETCH OFFICIAL non OFFICIAL

RU 2% 98%

51



RISK FACTORS (Empirical)

COUNTRY Risk Factor Armenia 0,53 Azerbaijan 0,38 Bulgaria 0,03 Georgia 0,38 Kazakhstan 0,19 Kyrgyzstan 0,35 Moldova 0,15 Tajikistan 0,39 Turkey 0,04 Turkmenistan 0,26 Ukraine 0,06 Uzbekistan 0,17 Islamic Republic of Iran 0,25 Russian Federation 0,13 Romania 0,06 Belarus 0,15

52



Next steps

• We already extended TRAX method to Railway routes

• Compiled a set of soft measures for attractiveness improvements

• Practical guide for Border crossing

• Second round of TRAX calculation 2013

• Improvements to the transport forecast model

53

transport route attractiveness index...contact: [email protected] benchmark trade...

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