Future Challenges for Transport LogisticsA Freight Forwarder’s Perspective

Issa BaluchChairman and CEO, Swift Freight InternationalImmediate Past President, FIATA

World Bank Transport Forum

March 27, 2006

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Index

Three challenges1. Infrastructure2. Laws, policies and procedures3. Long-term planning and vision

Changing role of the freight forwarderThe quest for increased safety and securityFIATAQ & A

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Infrastructure

Export competitiveness: a country must be able to bring its goods to foreign markets through the use of high-quality, low-cost transport networks.

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Infrastructure: African Railways

poor service and maintenanceoverstaffinglack of technical and financial disciplinefinancial losses

Railways need to be:upgradedrestructured opened to private investmentlinked to form a Pan-African network

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Laws, Policies, and ProceduresAirports, seaports, and container terminals are only as efficient as the people and processes inside.

Dubai: effective policies and procedures that complement the world-class infrastructure

tax incentives and export promotion schemesopen-sky policies paperless trade

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Dubai, United Arab Emirates

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Policy-related Obstacles for ExportsBurundi: floriculture exports

air traffic rights take 7-10 days exorbitant royalty payments

Bangladesh: ready-made garments and seafood exports

complex border tax regimegovernment bureaucracy

Karachi, Pakistan: transit point for Afghanistan

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Long Term Planning and Vision

Berlin Airlift: 2.3 million tons of cargo delivered to BerlinAllied planners spent two years preparing for the D-Day invasion in 1944.Panama Canal construction: engineers took months to upgrade infrastructure and build a railway network along the canal route

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Long Term Planning and Visiongovernments must have a vision and a planshare it with the private sectorenable supply chain players to become wheels of commercetraining and development stakeholders will want to share in the vision and partner with governmentSingapore and Dubai

clearly-articulated plans healthy partnerships between the public and private sectors

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Long-term Planning and Vision

incompetence and nepotism

having the wrong people in the right jobs or the right people in the wrong jobs

need for training and development

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Forwarder’s Changing Role

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The Forwarder’s Changing RoleDemands on global transport and logistics increasing:

leaner supply chainsjust-in-time production methodsoutsourcing of manufacturing

Few companies need a traditional freight forwarder.

Forwarders must integrate themselves into their customers’ globalsupply chains and add value.

Healthy public-private partnerships create an environment wherefreight logistics providers are enabled to add value to the supply chain.

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Quest for Increased Safety and Security

It’s a jungle out there…

ESRABCTPATAMS

ISPS

TAPA

CSI ISO 28000

WCO SAFE

EU AEO

DG TRENACI

FAST

PIP ESSTRT

SOBCAH

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Quest for Increased Safety and Security

Major challenge: drawing up minimum standards when there are differences in the technological capabilities of different countries

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Quest for Increased Safety and Security

Tasks of government:identify the terrorist threatset standardscertify known shippers and regulated agentscreate incentives for participation in such programsconvince the private sector of the importance of securing their supply chains

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Quest for Increased Safety and Security

Responsibility of the private sector:create a culture of security in businessbe committed to supply chain security

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International Federation of Freight Forwarders Associations (FIATA)

Zurich-basedsince 1926the global voice of freight logisticsrepresenting 40,000 forwarding firms in 150 countriesconsultative status with UNCTAD, ECOSOC, UNECE, and UNESCAP challenges: new trade conventions, security regulations, liability issues, and regional trade blocscreated documents and forms to encourage uniform standardstraining programs: help forwarders utilize the tools of the modern logistics industryhelp forwarders navigate challenges and changing conventionspromoting cooperation between national member associations, the training of freight forwarders, evolution within the industry, and value addition by freight forwarders

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In ConclusionThe freight logistics industry demands consistent, healthy, public/private partnerships in…

Private investment in infrastructureAdvanced information and communication technologiesThe implementation of paperless trade and e-commerce

Growth in infrastructure to be accompanied by laws, policies and procedures

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In ConclusionGovernment must share its vision with the private sectorPartner to implement trade-friendly policies and procedures:

Open sky policies to facilitate air cargoExport promotion and trade incentive schemesThe removal of red tape and bureaucracyThe eradication of lengthy customs and border proceduresSimplification of the tax/duty regime

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Thank you for your attention