Andean ministers analyze situation and outlook for international road freight transport

(Caracas, October 18, 2000).– The current situation and outlook for international road freight transport in the Andean community were analyzed today by the authorities of the five countries meeting in CAF headquarters in Caracas.

The meeting was organized by CAF, in cooperation with the CAN General Secretariat, to publicize a CAF study prepared by a broad-based group of regional and international consultants led by the Valencia Polytechnic University of Spain (UPV).

This university was selected by CAF because of its specialization in postgraduate and research studies on transport and logistics for Spain’s entry into the European Union.

The study is backed by exhaustive fieldwork, which consisted of 96 meetings with 267 people in the public administration, transport companies and federations, and representatives of freight generators in the five Andean countries.

CAF President & CEO Enrique García opened the meeting which was attended by the ministers of Transport and of Commerce of Bolivia, Colombia, Ecuador and Venezuela, with CAN General Secretary Sebastián Alegrett.

The report was originally requested by the CAN General Secretariat from CAF, which financed and managed it, to find solutions to the problems of international road freight transport which affects various Andean countries, particularly Colombia, Ecuador and Venezuela.

One of the key areas of the work was investigation of the difficulties in applying the Andean international road freight transport regime and the economic and social conditions of the border areas which are affecting the fluidity of intra-subregional trade.

The study warns that the problems of international road freight transport in the Andean countries "are due to a conflict between transport sectors, from which the respective public administrations are not absent."

According to the UPV experts, Andean road transport "is not prepared, from the point of view of infrastructure or from the situation in the sector, to give an efficient response to international trade."

Among other factors, the report mentions lack of technical harmonization on vehicle characteristics, a high degree of fleet obsolescence and different national cost structures.

Consequently, integrated treatment of the problem "requires an analysis of the conditions in which competition takes place," especially the institutional framework which defines the rules and characteristics of the agents which operate in the sector, the experts said.

The research found that international road freight transport is characterized by absence of a common policy, lack of public investment, different speeds of liberalization processes of the sector in the five countries, and a high level of insecurity for crews and merchandise.

There is also a clear imbalance between abundant supply which exceeds demand and a deficient level of development of land transport infrastructure.

The situation is complicated by the "differences in legislations and lack of rigor in their application," combined with scant progress in technical harmonization, deficient organization of business and social sectors, and a low level of professional qualification.

The study concludes that a common transport policy is needed in the Andean subregion, with short- and long-term actions to deal with economic, social and institutional aspects, as well as improving and reconverting the sector to adapt to the challenges of intra-community trade.