Transport the key to economic growth
First publishedon www.WorldHighways.com
Ray LaHood underlined the USA's commitment to being a partner in international transport. (Photo: Marco Urban, OECD/ITF)
Delegates from around the world discussed the future of global transport at the 2009 International Transport Forum in Leipzig, Germany
In the face of the global economic downturn, transport will play a key role in supporting economic growth and in the creation of new confidence in the world's economic future, the delegates of the 2009 International Transport Forum (ITF) agreed.
As almost all global threats have strong, central links and impacts, the transport sector will remain at the forefront of most global challenges, the Forum's Secretariat pointed out.
"The Forum's lively and fruitful discussions have exceeded our expectations.
"Despite the severe financial and economic crisis and the possibility that the impact of the downtown may not be transitory, the global transport community is confident that, based on consultation, cooperation and coordination, it will bring about change for the world's transport of tomorrow. I believe that the Forum 2009 laid some decisive groundwork in shaping the world's transport and its support in boosting the global economy for the years ahead," said the Forum's Secretary General Jack Short.
Headlined Transport for a Global Economy: Challenges and Opportunities in the Downturn, one of the world's leading platforms for international transport hosted 52 Ministers and top business leaders from around the world in Leipzig, Germany.
The discussions of the 2009 Forum focused on, among other subjects, the economic downturn and stimulus packages; the risks of protectionism and the challenges of sustainability as well as the financing of transport and the reliability and security of transport chains and the need for international cooperation.
Keynote speaker: Antonio Tajana, the vice president of the European Commission. (Photo: Marco Urban, OECD/ITF)
Several Ministers, including the official ITF host 2009, Germany's Minister of Transport, Wolfgang Tiefensee, as well as Binali Yildirim, the Turkish Minister of Transport, the chair of the Forum, stressed the significance of technological solutions and close international cooperation as opposed to individual national strategies in order to help transport to boost the economic recovery process. The new US Secretary of Transportation, Ray LaHood, making his first official appearance in Europe at the Forum, underlined his country's commitment to being a partner in international transport and extending the US high-speed rail system in the context of the nation's stimulus package.
While acknowledging that transport systems, in general, have never been as efficient, clean, safe and cheap as today, the ITF Secretariat stressed the fact that on all these fronts enormous challenges lie ahead, if the global transport is to meet the demands of the 21st century.
Analysing the economic downturn, the Forum concluded that the impact of the severe downturn, which has led to dramatic volume reductions in transport markets of 20%, may not be over soon.
Jack Short (left) with Binali Yildirim, the Turkish Minister of Transport and chair of the forum who stressed the significance of technological solutions and close international cooperation. (Photo: Marco Urban, OECD/ITF)
Two reasons were identified for this assessment: the risk of policies leading to protectionism or excessive restrictions on financial intermediation may prevent pre-crisis economic interactions from returning, and the crisis reflects and may correct global imbalances, most notably (but not exclusively) that between the US and China. In addition, restoring some balance may reduce trade-intensity of growth, which, in turn, will affect future transport volumes.
Looking at stimulus packages around the world, the ITF concluded that, while many of these have significant transport components, projects with short lead times, particularly suited to maintenance and upgrade work of infrastructure, are required in order to create jobs rapidly and to resolve chronic maintenance backlogs in many countries.
Discussing how to keep markets open and to avoid protectionism, the Forum observed that further deregulation would serve as a permanent stimulus to the economy. Therefore, transport markets need to be opened to international competition, with opportunities remaining in all modes and in most regions. Global competition and regulation issues, however, are not handled by a single institution, but by the individual Transport Ministries. Here, the ITF could play an important facilitation role.
Assessing sustainability issues, the Forum stressed the continuous challenges set forward by climate change. In this sense, sustainability in the transport sector does require improvement in economic efficiency, safety, social impacts and environmental protection.
"Road transport, in this time of economic crisis, can help drive economic recovery" - Janusz Lacny. (Photo: Marco Urban, OECD/ITF)
Incentives for technological advance and economic instruments for providing incentives for operators, industry and consumers to reduce emissions are central to this end.
The financing of transport needs continues to be challenged by a "funding gap" between the needs of the sector and available funds, the Forum observed, and this gap will widen as public finances are stretched in the longer term.
Analysing supply chains, the Forum observed that the future development of supply chains will depend on the price of energy and the price attached to external costs such as CO2, but increasingly on the capacity to provide reliable end-to-end services. It also stressed that border crossings remain a serious problem, causing both delays and increasing costs. Among many supply chain issues the Forum underlined that risk-based regulation should target resources to areas where they will bring about the most benefit, while for example, key challenges like container scanning need to be addressed by multi-lateral, cost-effective approaches.
As a supra-national and inter-governmental event, the Forum provides a unique opportunity for strategic thinking on the essential role played by transport today and in the future.
The International Transport Forum 2010 Transport & Innovation will be held from 25-28 May, 2010 in Leipzig under the Presidency of Canada.
Road transport industry's call for help
Organised as part of the Forum, the joint ITF-IRU (International Road Transport Union) Workshop on Road Transport: Promoting Global Trade, Travel and Development, concluded that road transport can be a key driver of the global economic recovery provided governments worldwide promote and further facilitate trade and road transport.
IRU President, Janusz Lacny, said: "It is encouraging to see that potential remedies to the present crisis are fully supported by the leaders of the G20, who set the path for further facilitation of trade and road transport at the recent London summit. Road transport, in this time of economic crisis, can help drive economic recovery. But to do so, historical errors of the Great Depression of the 1930s, where the economic crisis was exacerbated by the halt in transport and trade, should not be repeated."
Indeed, government and industry data draw a bleak picture, pointing to a decrease in road freight transport activity of up to 50%, a doubling of bankruptcies, a dramatic increase in unemployment (permanent or temporary lay-offs), which already amounts to 140,000 jobs in the EU, 120,000 jobs in the CIS and 200,000 jobs in North America.
IRU vice president, Graham Smith, added: "The passenger road transport sector also suffers from shrinking tourist demand. Bearing in mind our excellent safety and environmental record that makes buses, coaches and taxis genuine travel alternatives of the future, it is essential that policy decision makers at local, national or international level fully support the industry by doing away with artificial barriers, like unjustified bans on entering touristic cities or unfounded driving and rest time restrictions."
Workshop participants identified a series of regulatory and fiscal measures to be implemented by governments at national and international levels to support the road transport industry, as has been done for the banks.
These measures include introducing real business incentives for safer and cleaner vehicles; modifying insolvency legislation to allow road transport companies in economic distress to reduce transport capacity and pursue only profitable business operations inducing financial institutions to provide adequate credit lines to transport operators, and reassess and reduce current taxes.