WAYS OF MITIGATION OF CROSS-BORDER GAPS IN THE INTERMODAL LOGISTIC CHAIN
Vladimir A. Lazarev
Admiral Nevelskoy Maritime State University, Vladivostok Economic Research Institute, Far Eastern Branch of the
Russian Academy of Sciences, Khabarovsk
Abstract: The article introduces the concept of cross-border logistic gap. It is defined that there are three types of cross-border logistic gaps: institutional, caused by differences between neighboring states at the legislative level; technological, caused by different tracks of scientific and technological development; and socio-economic gap, caused by a set of historical events that have shaped society and social relations.
Keywords: intermodal logistics, seamless logistics, state border crossing
The social specialization of labor is the objective basis for the emergence of exchange commodity flows between economic subspaces, which can be represented by individual households, business organizations, industries, regions, states and entire continents. The international specialization of labor, acting together with the growth of consumption, forms the globalization as a process of mutual cooperation of states, the process of joint use of the results of scientific and technological progress and intellectual activity, the process of joint economic growth. Consequently, there is the development and strengthening of processes increasing the interest of economies in the most efficient transport routes, and in the formation of integrated supply chains, on the basis of these routes.
In a globalized world, the role of transport is significant and growing. From the perspective of the global supply chain, the final price of a commodity consists of two parts – the use value of the commodity itself, and the cost of making the commodity available to the customer who wants it. Effective management of global supply chains is aimed primarily at increasing the ratio between the value of goods and the cost of goods delivery in the final price of goods. Delivery of goods to the consumer, solving the problem of
goods availability for the latter, simultaneously increases the share of unproductive costs in the final price of goods, and imposes an additional burden on the consumer. For this reason, one of the most important components of the manufacturer’s competitiveness – the ability to solve the problem of availability of goods at the lowest possible growth of the final price for the consumer. Providing the movement of commodity flows all over the world, the transport industry forms a significant share of the final price of goods.
It is estimated that in Russia the cost of transportation services may add from 15 to 20 percent to the final cost of production. The “Transport Strategy of the Russian Federation for the Period up to 2030”, issued by the Ministry of Transport of the Russian Federation in 2008, suggests (see p. 212) the reduction of the total transport and logistics costs in the final price of goods from 20% in 2011 to 10% in 2030. It is expected that due to the progress of transport technologies the share of transport in the gross domestic product will be reduced from 6.2% in 2010 to 4% in 2030. The current level of transportation costs in Russia is noticeably higher than in developed countries, and negatively affects the competitiveness of Russian products. The quality of transport services in Russia limits the possibility of their export, and from 2011 Russia’s foreign trade balance in transport services became negative (see p. 20).
Since 18th century, the territory of Russia was an obstacle to commodity flows between Europe and Asia. Commodity flows between Europe and Asia were very important to the economies of both macro-regions. However, no serious attempts were made to realize Russia’s positional advantage, and the logistics of commodity flows between China and Europe relied on the sea route along the southern seas, formerly around Africa and later through the Suez Canal. Talking about the transit potential of Russia, primarily are referring to the capacity of the Trans-Siberian Railway joining the territory of Russia in the East-West direction. Trans- Siberian Railway was built between 1891 and 1905. Later, the mainline was modernized but essentially remained as double-track railroad without parallel ways from Urals to the eastern terminal – Vladivostok. Single rail track in each direction establishes an objective limit on the annual throughput capacity and number of trains passing in each direction of the Trans-Siberian Railway. The
second component of Russia’s transit potential is the Northern Sea Route, a short and safe logistics channel for the commodity flow from Asia to Europe.
There is a dispute about what does mean the ‘multimodal’ and ‘intermodal’ logistics. Some experts insist the both terms are meaning the same. However, in this article we support the opinion that intermodal transportation does mean multimodal transportation that involves the state border crossing. That means in case of intermodal transportation the specific type of logistic gap appears which is not tied to change of transportation mode. Multimodal transportation suffers from gaps that appear because of cargo is reloading from, for example, railroad car to the ship. In case of intermodal logistic gap, the same transportation system exists on both sides of state border, but specific conditions do not allow the seamless logistics. The commodity flow crossing the national border is being affected by cross-border logistic gaps, which arise from the abrupt changes in the logistic environment.
There are few types of cross-border logistics gaps (Fig. 1)
1. Institutional gap. It appears as a change in the institutional environment where the commodity flow moves. The sources of the institutional gap are different legal systems and different state policies of the bordering states in relation to the same logistical flow. For example, for a logistics flow consisting of goods produced in China and crossing the Russian-Chinese border in the direction from China to Russia, the PRC will support the commodity flow movement, but after crossing the border, Russia will hinder the movement of the same flow.
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