Road transport reigns supreme on Mid-East run
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Long-term future looks good — and other modes are poor competition. Delegates sceptical of ro/ro alternatives to Turkey
THE FUTURE of road transport to the Middle East is assured for at least the next decade, it already occupies the leading position, and its lead over all other modes will con tinue to increase. This was the impression gained by delegates who attended the international seminar on Transport to the Middle East at the European Institute for Vocational Training in Paris last week.
The 120 delegates represented 20 European and Middle Eastern oauntries and were drawn from all sectors of transport. The British delegation comprised road transport operators, container operators, forwarding agents and the Road Transport Industry Training Board.
A succession of speakers from other modes of transport either defended their inability to meet the Middle East market 'adequately, attacked road haulage or pleaded with the road operators to co-operate with them.
It transpired during the threeday seminar that everyone was highly critical of Turkish transit arrangements. But when it was divulged by the president and director general of Transmendial, Istanbul, Mr Deragobian that " the terrors of 'Fahir will disappear next year," the road transport men showed their obvious delight.
(See page 16).
The first session of the threeday conference was devoted to rail transport and was opened by Mr Berner, a director of German Federal Railways, and was followed by a panel discussion under the chairmanship of the -seminar chairman Mr Jean Roux.
Slow by rail
The theme of both his paper and the discussion was that bulk loads could move more easily by rail but because of certain constraiets, mainly in Turkey, rail movements were much slower than road and only marginally faster than sea. The rail speaker made the -point that his interest was in full train loads rather than single wagon consignments, but agreed that railways never had and never would consistently meet their scheduled times.
The main obstacles for rail transport in Turkey were the Bosphorous and the Van Lake. At each of these points the rail wagons had to be loaded on to ferries and transported across the water.
To overcome this it was suggested that the Russian route from Poland should be used but because the Russians had a different rail gauge from the Iranians, wagons had to be discharged at the border. One delegate pointed out that there were 6000 rail wagons already held up at the Russian-Iranian border. Whereas last year rail traffic between Europe and Iran was 2,000 tonnes more than that carried by road, it is forecast that the 1975 figures have already reversed the position and that in 1976 rail will lose more of its existing 'tonnage to Toad and will fait to capture a compensating proportion of the additional tonnage.
The rail panel appeared resigned to the situation and treated it philosophically. Later one road operator, Mr Jakob Hofstetter, director of Universal Express of Basle, described the presentation as "The best possible advertise ment for road transport."
Waiting in port
The maritime presentation by Mr N. Boyadjis, chairman of the Chamber of Commerce of FranceLybia and a director of Sud Cargo, did little to establish confidence in solely maritime operations. More than 100,000 tonnes less moved by sea to Iran and Kuwait last year than in 1973. "The real problem is the last leg," he said, "Where there is at least a 60-day waiting period at ports and constantly 500,000 tonnes to be discharged."
Nevertheless Mr Boyadjis argued that while there was a serious imbalance of back-load traffic to Europe for all modes of transport, sea transport could load for India and the Far East "and this must be tin its favour." He nevertheless was forced to agree that this did not make the maritime price any more attractive than the road price but took up the point that bad roads and the constant threats of taxes were inherent dangers in road transport.
"The present rate of development in the Middle East -will continue for 10 years until the increased revenue from oil has been absorbed," he said. "In the meantime because of its increasing share of the traffic the road route will become overloaded."
He said that the present rate of growth in road transport to Iran was alarming. "In one month in 1974, some 1,217 vehicles passed through Bazargan on the Turkish Iranian border," he said. "In the same month this year the figure was 7,520."
It was at this point that Mr Boyadjis began to woo road operators by suggesting that unaccompanied ro/ro traffic through Merzin and Beirut was the solution to both overcrowded roads and ports. He sought the delegates' support for his suggestion, but those who spoke indicated that they would •be unwilling to entrust unaccompanied trailers to Turkish or Lebanese drivers.
According to Mr Boyadjis the next big development area in the Middle East will be Saudi Arabia when it embarks on its second five-year plan next year. "They will purchase heavily in Europe," he forecast, "and the already heavily overcrowded port of Jedda will suffer longer delays than the 80 days of today unless ro/ro is developed."
His plea for co-operation -between sea and road operators was based on the premise that, ro/ro ships were given priority at Mediterranean ports because they took up less space and did not require handling equipment. The premise was challenged later by Mr M. Jaeger, director of Levant Express, of Beirut, who said that almost every ship owner could claim some form of priority. "We have class one, two, three, four and five priorities at Middle East ports," he said.
The speaker continued to press his ro/ro argument but conceded that road transport was quicker, cheaper and more reliable. Then he forecast that European hauliers would be demanding higher rates after the recession had passed. "One day road hauliers will have to be doing their sums and they must -be prepared to pay everincreasing frontier taxes." He warned against taking traffic from "armchair forwarding agents," a reference to agents who never see the point of destination and therefore cannot appreciate the hauliers' problems. He supported strongly a "conference" of ship owners, forwarders Following this paper the conference divided into four working parties—two French, one German, and one English speaking. Here the UK delegates were joined by an American, Mr T. Albertson of Cargo and Shipping Ltd, of Iran, and a Dutch delegate, Mr R. M. Ten Broek. Following discussion the groups presented their findings to the rest of the delegates.
One French group warmly welcomed the "joint conference's proposal believing that it would lead to better co-operation. The second French group, however, took the opposite view, claiming that it was not practical. The Germans suggested that Mr Boyadjis was day-dreaming and had failed to recognise that the problem was in cleaning ports whether of conventional or ro/ro ships and this could only be overcome by using road transport throughout.
The British findings were preSented by Mr R. G, Nichols of Ferrymasters Ltd, who claimed that the presentation had been too general and said that a more detailed specification of the type of ro/ro operation envisaged by the speaker would be required before either hauliers or shipping and forwarding agents would buy it. He pointed out that sea cargoes could take up to 12 months from the moment of collection until discharge, and the. British delegation remained unconvinced that ro/ro could solve this problem if it suffered berthing difficulties or traction problems after the trailers had been discharged. "Delays of 280 days in the Gulf are now commonplace," said Mr Nichols.
The British delegates were concerned that Middle East customers were having to grossly overorder to compensate not only for delays but also for ship breakages. The German delegates supported the British findings.
Growing road delays
Day two was devoted to road haulage presentations and discussion. It was opened by Mr Roger Unterberger, director of M & S Shipping, of Basle. He told the ,conference that much could be done by looking at how the landlocked countries of Eastern Europe had developed their export business to the Middle East using road haulage. He said that Hungarocamion and Despred had almost mastered the technique. Even though Bulgaria had access through the Black Sea ports to Iran it was still developing its road freight. It is very significant that Despred has added 1,800 vehicles to its Middle East fleet this year."
Mr Unterberger said that there had been a 350 per cent increase in traffic by road in 1974 and this would be emulated in 1975 and into 1976. "But unless something is done along the route and at the terminals this dramatic increase will produce new problems," he said. "In 1974 there was a shortage of vehicles and at that time the round trip between Basle and Tehran took 20 days ; because of frontier and customs delays it is already taking 30 days this year."
He said that last week, as he was speaking, there were 800 vehicles waiting to discharge in Tehran and that a 15-day delay must now be considered normal. Quite apart from demurrage costs, which were considerable, the effect on the driver was incalculable and was leading to all sorts of corrupt practices. One man who had been delayed for three weeks in Tehran had been told • by a new arrival that his employer had gone bankrupt but that he (the new arrival) had been authorised to buy the vehicle and load and pay the man's air fare home. According to Mr Unterberger the outfit changed hands at a giveaway price but when the driver returned home he found his employer was still very much in business.
Because of the temporary spare capacity in Western Europe, cutprice operators had moved in on the Middle East market, said Mr Unterberger, and he was strongly critical of shipping and forwarding agents who entrusted their customers' goods to inexperienced and ill-equipped operators. "The only hope is that a rough winter in Southern Turkey will put them off the road," he said. "The biggest problem road operators face is in obtaining a proper rate against this abnormal competition and as long as you cannot bank on a return load you must calculate enough on the outward cargo to cover the total cost unless you are prepared to indulge in internal transport."
Internal pay-off
The way to combat 'cowboy competition "—they have them across the Channel too—was to engage in this legitimate and lucrative internal traffic. It was estimated that two internal runs would add 10 days to the round trip and would allow the operator to quote very competitively for the long-haul traffic. One operator later said that he was doing this and flying a change-over driver out from Europe to bring the vehicle home, thus reducing the total time a man was away from base.
Mr Unterberger said that Middle East countries were so desperate for internal drivers that inexperienced Pakistanis, South Koreans, students and women were being engaged and still there were hundreds of vehicles waiting for drivers. "The Bulgarians have an arrangement that each vehicle Will do three internal runs after discharge in Tehran," he said. He told the delegates that European drivers could work in Iran for six months without any difficulties. A number of delegates expressed the view that if there was such a shortage of competent drivers in the Middle East, then ro/ro traffic using local labour could not be depended on.
Referring to customs delays in Tehran, Mr Unterberger said that this could be reduced by processing traffic through one of Iran's 10 inland customs depots. He warned, however, that using these depots meant that the documentation had to be faultless or even greater delays would result.
The recovery of demurrage costs was a major problem and he advised that due allowance should be made for this in the contract With the exporter when the rate was first quoted. "Iranian customers refuse to pay demurrage, therefore hauliers must collect from the exporter and preferably in advance," he said.
Abnormal loads were particularly attractive traffic when the Iranians were involved in so much industrial development. They were ill-equipped with vehicles for heavy internal movements and he had knowledge of an 80-tonne transformer moving on a 60-tonne trailer. "There are twoor three large plant hire companies who have suitable loading and discharging equipment. But advance arrangements must be made," he said, "for both this and transport permits which are to my know ledge readily available."
The speaker considered that it was extremely important to have a specified forwarding agent in Tehran, which might speed up transit by 10 to 12 days. He pointed out that it was possible• to do this because already the USSR had its own agent. Operators who were now planning traffic to Iraq and Saudi Arabia would find the same delays there as they had in Iran.
Penalties of inexperience
The Turkish representative, Mr Deragobian, said that he was convinced that the expansion of road haulage to the Middle East could not be halted. He accepted the criticisms which had been levelled at Turkish transit but said that much of the blame must lie with those who allowed inexperienced and poorly equipped operators to engage in the traffic. "Last year alone 80 vehicles fell over Tahir mountain, many other drivers found themselves in Turkish jails for offences which they did not understand and even more found themselves delayed because of faulty or inadequate documentation. You should not give TIR work to small companies," he said.
The speaker suggested that because of the terrain and legal difficulties in Turkey road operators should engage agents to monitor the movement of their vehicles between Kapiculae and Bazargan. He went so far as to suggest that convoys of five vehicles should be mustered at the Turkish border and that a Turkish convoy leader should be engaged to escort them across the country; this would cost approximately £250 for each convoy, according to Mr Deragobian.
It was here that Mr Deragobian revealed that the Tahtir bypass would be opened in 1976. He was unable to say what toll charges would apply. When asked if the existing military road would be opened to transit traffic this winter Mr Deragobian said " No " and warned all operators that drivers should not attempt to use the road as it might lead to imprisonment. He said that drivers would be made to reverse along the road to the normal highway. "One man was made to go backwards for 10 miles last year."
Turkish ports were quite inadequate for lift-on lift-off containers because their maximum cranage could handle only 16 tonnes. "But," he said, "you could bring in your own cranage which we will allow you to do duty free." He added: "Provided you are highly organised, sea transport to Turkey could be cleared in eight to 10 days, otherwise it might take six months."
He was critical of vehicle manufacturers who had failed to provide services along the main Turkish highways and said that only Saviern in conjunction with his company had made such provision. (See CM October 17.) On the question of return-load traffic he said that operators would be ill-advised to consider this as a possibility "because the aim of the Turkish government is to protect its own hauliers." A German delegate asked if there were any plans in Turkey to limit the number of transits by nonTurkish companies. "Not yet," was the answer.
• Mr Afri of AFTR, of France, said that attempts had been made by France to set up a bilateral meeting with the Turks to discuss third-country movements. It had already been cancelled once, and despite being offered a number of dates for November the Turkish authorities had been unable to find a suitable date.
A number of delegates expressed fears that the Turks would impose further severe restrictions on transit movements. This was supported by one or two delegates who said that they knew Western European hauliers had been turning down traffic to the Middle East because of the Turkish problems.
Mr Deragobian was sure that the problems were being overcome and that the Tahir bypass would go a long way to solving both the geographical difficulties and the mental difficulties of the drivers.
Asked about police activity in Turkey he said that operators and drivers must rely on Turkish justice. "If a man is involved in an accident he must go to jail to await trial. This may take one week or three months," he said, "but if he is found not guilty the court will release him immediately."
Considering the question of quotas and regulations, Mr Berthel, managing director of Danzas, of Switzerland, supported the use of road because of the speed, mobility, door-todoor operation and the cost factors. He stressed, however, that there were atmospheric conditions which at the moment made roads unsuitable for certain traffics and in his opinion, heavy indivisible loads could only move by rail. There could be no comparison between sea and road traffic since in his experience a 10-day road consignment took 120 days by sea.
He warned that a tariff war was now raging in Europe due to the recession and surprised most of the delegates by saying that he could find vehicles at a rate 60 per cent below last year's figures. Nevertheless the British delegates were surprised to learn that the rate from France to Tehran by road varied between £3,500 and £4,000 a load.
Mr M. Woodman, chairman and managing director of Astran International Ltd, spoke on the development of road transport to the Middle East and in particular the evolution of his own company which has been engaged in this traffic since 1963. He said that in their experience the ro/ro ferry services were much dearer than through transit by road. When asked what he did to insure his drivers against fines and imprisonment in Turkey and other Middle Eastern States he said that it was handled by a Lloyds underwriter. He was not in a position to divulge the details but because of this type of cover the Londonbased insurance company had insurance contacts throughout the territory he was serving and they normally could secure the release of a driver relatively quickly, But Mr Woodman warned that even with these arrangements one of his own drivers had spent three months in jail and endured three trials in Turkey because of a typing error which had gone undetected until the driver arrived at the Bulgarian Turkish border. Mr Woodman challenged an earlier statement that other customs areas were similar to Tehran. "There is nothing as bad as Tehran for delays," he said. "We have our own space there and this has speeded things up for our drivers." He pointed out that customs dues are paid at the borders in most other countries.
The first sessions on Friday were devoted to temperaturecontrolled transport and Mr Lajos, the international relations director of Hungarocamion, told the delegates that there was a great future for this mode of transport. He estimated that 15 per cent more goods moved to the Middle East in refrigerated vehicles than in any other form of transport. He estimated 1975 figures for refrigerated goods as 20,000 tonnes general cargo, 30,000 tonnes butter, 18,000 tonnes beef, 4,000 tonnes eggs, 3,000 tonnes soft cheese. He said that his vehicles could reach Iran 10 days after the goods had been loaded at any European cold store. The main traffic, he said, came from the United Kingdom, France and the Benelux countries.
Mr Lajos welcomed the moves by Kuwait, Lebanon and Syria to sign the TIR convention. Soon most of the Near East countries would be in the convention but Iraq was not yet off the ground. He welcomed the fact that Syria had now opened its borders to non-Arab operators but was highly critical of the transit tax which at £250 he described as the highest in the world.
" Although the tax is being collected to finance the improvement of roads and bridges it is not based on vehicle weights but on the value of the content and these two things are unrelated," he said. The Hungarians, through the IRU, are to ask Syria to apply the tax on a tonne-kilometre rather than a cargo value basis.
He said• that customs procedures in Iraq were severe since each load had to have the attestation by the Iraqi consul in the country of origin and this sometimes delayed the start of the movement. "While we are still experimenting in the Middle East countries," said Mr Lajos, "we have a joint company with the Iranians and we now have a subsidary company in Kuwait." He could see no real alternative to road transport for temperaturecontrolled traffics.
The Interfrigo traffic director, Mr Benz, suggested that rail traffic was an acceptable alternative although he did little to boost his own case when he said: "The movement of 300-tonne train loads between Hamburg and Tehran, a distance of 5,737km (3,585 miles) takes 20 to 25 days for refrigerated traffic." Mr Benz estimated that this was good when compared with normal rail traffic which could take up to 90 days for the same journey, and all traffic took 10 days to transit Turkey.
He described road hauliers as being very generous if they were prepared to move goods at about £160 per tonne. "We do not sell our traffic at just any price," he said, "we have to cover not only the movements but the research cost." Mr Benz said that Interfrigo specialised in refrigerated traffic and that his base rates could not be divulged to the meeting, but printed tariffs were available if required. I later learned that the base rate is slightly more than £200 per tonne.
One of the things which is giving him cause for concern is that when a full train load of refrigerated goods arrives in the Middle East •there are no cold stores or refrigerated vehicles available for its transhipment. It seemed to some of the delegates that this made a case for them becoming involved in internal traffic to coincide with the arrival of an Interfrigo train. It transpired later, however, that only two trains a month were dispatched to Iran in the first six months of this year. It was also revealed that transit taxes charged in Middle East countries apply only to road transport; this is an attempt to bolster both the railways and the ports.
In answer to a question on how long it should take an Interfrigo train between central Europe and Baghdad Mr Benz said "Theoretically 16 days "; when pressed on the paint he said that the most recent and best time had been 24 days.
A six-man panel under the chairmanship of Mr Dardel, chairman of the Container Circle of France, discussed in a series of five-minute presentations t h e advantages of containerisation to the Near and Middle East. Here the general consensus of opinion was that containers were underutilised and that full utilisation could speed up the turn-round of whichever mode of transport was used. They could also be pressed into services as emergency warehousing where inadequate warehouses existed. One of the problems which this presented, however, was that if the box was left there had to be a tie up with an agent to clear the documentation. One of the panel members expressed concern that there were no container repair depots in the Middle East.,
The panel was generally agreed that 20ft containers were ideal for Middle East work and one member said that Russia had recently opted for this size exclusively.
Referring to a recent judgment, one of the delegates said that a European court had ruled that because a bill of lading had described the contents as `!65 packages in a 20ft container" the container became the package and the £1,000 insurance limit applied. It was stressed that bills of lading must be detailed if legalistic interpretations was to be avoided.
One member of the panel reminded the delegates that when a trailer belonging to a haulage company in Europe, pulled by a tractor belonging to a British operator, had been involved in an accident, the insurance company refused to recognise that the trailer was covered in the tractor operator's policy. It was stressed that before allowing unaccompanied trailers to be pulled by foreign traction the insurance cover should be examined. Among the arguments advanced for containers was that they reduced pilferage. The cost difference between containers and conventional sea cargo, however, seemed to be marginal and this was attributed to the stevedoring element of the cost which equals 60 per cent of the total, One delegate said that over 100 trailers with containers were now lying in Beirut harbour which had been closed to ro/ro traffic since September 26.
When the conference closed, the view expressed by most delegates was that the cheapest, fastest and most dependable method of transport to the Near and Middle East was by road vehicles, accompanied throughout.