Trailer Swapping Building domestic capacity Expanding cross border trade Vientiane October 8 th 2019 29-01-20 1
Background • The CBTA has been signed for many years but not implemented – Each country wants to protect its own transport industry – Thailand and Vietnam transport dominates cross border in CLMVT • There is ongoing resistance to the full implementation of the CBTA. The transport sectors of the GMS countries are not equal in terms of capacity and the ability to compete with one another. – Myanmar , Laos and Cambodia are well behind in transport development – “ Early Harvest” does little to redress the imbalance • Meanwhile the lack of implementation is restricting cross border trade and not allowing it to open up to its full potential. • Myanmar trucking industry is not equipped to compete with Thailand or Chinese transport. Early Harvest does not address this issue.
Solution : Trailer Swapping • Allowing trailers to be swapped at the frontier and hauled by local tractor units will not usurp the CBTA, it will offer a half way alternative for those that are unable of unwilling to move toward the opening up of cross border transport and allowing foreign trucks on to their territory. • It will build local capacity while promoting trade in areas that have previously not been easy to develop due to handling issues. It will reduce the costs for those than embrace the use of integral and specialist trailers. • It will reduce transit times for Myanmar exporters as it will make it much easier to use Laem Chabang Port and BKK airport . 3/19/14 3
Objective of Trailer Swap Pilot • To prove that trailer swapping is a viable alternative to the GMS - CBTA Early Harvest, which has failed to provide any benefits to Myanmar (or Thailand) and does not address the current traffic flows or future demand. • To build a workable transportation system through incremental implementation that has the support of the trucking industries on both sides of the border. • To build capacity in the domestic markets so that local operators can share in the growth in cross border trade. 3/19/14 4
Trailer swapping already exists : dual registered trailers Run daily from Bangkok through Malaysia to Singapore Thai Tractor in Thailand- Malaysian tractor for MY & SIN 29-01-20 5
Trailer Swapping ➢ Trailer swapping at borders an intermediate step towards CBTA implementation – Reduces border handling costs and times and costs – Will expand cross border trade by making more possible – Reduces fuel and hence cost of transport – Allows door to door transport between Thailand and Myanmar ➢ Gives Local operators a larger stake in cross border operations ➢ Helps to build local Myanmar capacity to compete with other countries ➢ Can operate alongside CBTA Early Harvest ➢ Offers more options than Early Harvest does ➢ Not restricted to only EWEC roads to nowhere ➢ Gives exports better access to Thai ports 6
More regional integration reduces redundant infrastructure investments Step 4: Flow of trucks under Step 3: CBTA Exchange of Step 2: trailers at Exchange of border Step1: Manual containers transshipments Regional cooperation and integration Investment in redundant physical infrastructure 7
Economic Rationale • Improving the supply chain for products that require specialist and temperature sensitive handling will create trade that does not current exist due to high costs and unacceptable levels of wastage. • Reduced cost per ton kilometre by the use of higher capacity vehicle with lower running costs. A semi-trailer can carry up to 30 tons, up from 15 using a 12-wheeler • Semi trailers can expect to get 3 to 3.2 kms per litre of fuel compared with 2.3 to 2.5 with a 12-wheeler. This is an increase of up to 20 % for higher capacity vehicles • Border transhipment costs would go as there would be no need. The trailers can be swapped within 10 minutes and there is no waiting in line for the transhipment of containers or for the manual labour to be available. The risk of pilferage and damage is also taken out
The Economic Imperative To Make Cross Border Transport Work For The Industry • Border transhipment imposes unnecessary costs on transport and industry, whereas the swapping of tractor heads at the border to allow trailers to continue under bond to final destinations with will reduce wait times to minutes. • The risk of pilferage and damage will largely be eliminated further reducing costs to the industry • The semi trailers is the most cost effective rig available. It will reduce the cost per ton kilometre making the transport industry more profitable whilst substantially growing volumes • The supply chain for products that require specialist and temperature sensitive handling will be improved to international best practice which will create trade that does not current exist due to high costs and unacceptable levels of wastage.
The Economic Imperative To Make Cross Border Transport Work For The Myanmar and Thai Economies • The economies of both Myanmar and Thailand need more cost effective cross border transport to make the flow or more cargo economically viable and promote trade. • Current border transhipment costs are a major burden that is greatly restricting the potential for cross border trade. • The Myanmar and Thai transport industries need a balanced flow of freight in both directions to reduce empty running and costs. • Myanmar land access to a Pacific port in Thailand will ensure an immediate improvement in the balance of freight volumes • Transportation cost efficiencies will immediately open up land freight volumes that are currently untapped, leaving much current border trade unimpacted
Specialist Trailers • Refrigerated trailers preserve the cold chain – Frozen one way – Fresh fish the other way • Industrial gas tankers .. Makes cross border possible • Cement carriers • Fly-ash tankers • LNG tankers • Fuel tankers • Inter-factory movements All open up more possibilities for cross border trade
Articulated semi trailers • Ideal for carrying FEU containers • Ideal for cross border operations • Can swap trailers or containers at border • Quicker turn around • Can use different trailer types • Higher horse power tractors burn less fuel • Less fuel burn than 12 w rigid • Tractor interchange < 5min 29-01-20 12
12 Wheelers • Cannot (legally ) carry FEU containers • Need labour intensive transhipment • Best used as side loaders • Designed for high volume – low weight – Built for high value and air freight – Design payload is 10 to 13 tons… depending on wheels Twin steer 2 nd axle hard on tyres and maintenance • • Hard on fuel when heavily loaded • Already done 6 years plus when imported • Long second life if well maintained but thirsty if not. • High tech maintenance skills needed for newer vehicles 29-01-20 13
Demand in 000s of tons per day 2030 In cross border alone ! Location Direction Moderate case High Demand China Border On the way Ex China 23 32 To China 81 96 At the border From China 26 36 To China 84 103 Thailand Border On the way From Thailand 105 123 To Thailand 39 51 At the border From Thailand 64 85 To Thailand 47 60 Total Tons 469,000 586,000 Trucks @ 15 tons 31,266 39,267 Trucks @ 20 tons 23,450 29,450 JICA Report 2015 14
How would it work ▪ Regulations ▪ Responsibility ▪ Temporary entry ▪ Customs 15
Regulations • Mutual recognition – Trailers must be registered and legal in home country – Similar to ASEAN & GMS regulations • Host country haulier – Responsible for the foreign trailer at all times – Must check condition of trailer on take over – Liable for condition of equipment and insurance • Operation – Must run to local weight limits of host country – Allowed in for up to 30 days without permit – Always the responsibility of host transport company 3/19/14 16
Foreign Trailers ➢ Host country tractor units to be allowed to pull trailers from other GMS countries while on their own territory ➢ Permit properly registered trailers to enter for up to 30 days ➢ Seek reciprocal arrangements under bi-lateral agreements ➢ Trailer to be the responsibility of the traction company ➢ Trailer must be properly registered in country of origin 3/19/14 17
Entry into Host Country • Limited to 30 days • Must remain with host haulier …who picked it up • Must be inspected and signed for by host company / driver • Host company has a commercial agreement with sender – Paid by km or – Paid by trip or – Revenue share or – Other commercial agreement 3/19/14 18
Customs • Record log system with entry up to 30 days • Must remain in the responsibility of the one company collecting it • Covered under CBTA Annex 8 – Temporary entry of vehicles – Similar to vehicle passport system – Stamped in and out of countries • Electronic tracking – Use GPS tags on trailers : visible at all times on line • E-Seal on loaded trailers – Fitted at border of entry – Taken off on departure – Sends signal if opened en route 3/19/14 19
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