Transport and logistics cooperation as a factor of integration in the Eurasian Economic Union.  Lecture by Egor Pak at the HSE.

On January 30, 2018 at the Higher School of Economics the eighth lecture was held as part of the open educational special lectures course on Eurasian economic integration. The organizer of the course is the Eurasian sector, CCEIS Higher School of Economics in cooperation with the Eurasian Economic Commission (EEC).

The lecture on the topic «Transport and logistics cooperation as a factor of integration in the Eurasian Economic Union (EAEU)» was given by Egor Pak, Ph.D. (Economics), lecturer, Department of International Economic Relations and Foreign Economic Relations, MGIMO.

At the beginning of the lecture Dr. Pak spoke about the role of the transport and logistics industry in the world economy. It is an important link in the economy and directly impacts labor mobility, development of production and investment attraction. Transport and logistics cooperation in EAEU is considered as a system, including transport and logistics services, technical and mobile vehicles, regulation principles of the industry.

The prerequisites for transport and logistics cooperation within the EAEU are inseparable from the prerequisites for economic integration, firstly, the need to diversify the economic structure. Secondly, the largely preserved technological, energy and transport interdependence of each country of the integration association.

The lecturer also talked about the main characteristics of the transport and logistics sector of EAEU. For example, the share of transport and logistics outsourcing in the EAEU is 35%, while the share of transport and logistics expenses in the final cost of the product is 20-25% on average.

Hereinafter he explained the structure of the transport and logistics market of the EAEU member states: transportion of goods and forwarding services (providers of logistics level 1 and 2 PL) make up 95% of the market, integrated services, including warehousing and distribution (3 PL) cover only 4%, and only 1% is management logistics, including services for the optimization of business processes along the entire  supply chain (4 PL). In comparison, in the world market logistics providers of level 3 and 4 PL account for about 42 %.

 Special emphasis was placed on such indicators as cargo turnover and the volume of transported goods. In general, the Eurasian integration process contributes to the growth of the transport and logistics industry as a service sector.

The material basis of the EAEU transport and logistics industry, i.e. the park of technical and mobile vehicles) was also looked at.  The specialization of each of the five Union member states in mutual trade of transport machinery was indentified. Belarus and Kazakhstan mainly export products of automobile transportation, Russia and Kyrgyzstan – the automobile and rail transport, Armenia – related transport equipment.

Egor Pak elaborated on the structural problems that discourage the deepening of transport and logistics cooperation in the EAEU. They include a high degree of wear and tear of the post-Soviet transport and logistics infrastructure, low efficiency of warehouse logistics, lack of multimodal transport and logistics centers. The economist also talked about the transit potential of the Union countries in the international transport corridors «East-West» and «North-South» as well as about the conjunction of the EAEU and Chinese Belt and Road Initiative.

At the end of the lecture Egor Pak responded to questions from the audience.

Existing and planned transport corridors in the Greater Eurasia

Source: The EDB Centre for Integration Studies, 2017. 

Translation: Alla Sheveleva

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