Andean Ministers meet at CAF to analyze situation and prospects of international freight carriage by road

Caracas, Oct 18, 2000. The present situation and future prospects of international freight carriage by highway within the Andean Community (CAN) were analyzed today, October 18, by the authorities of the five Andean countries at a meeting in the headquarters of the Andean Development Corporation (CAF), in Caracas.

The meeting, organized by the Andean Development Corporation (CAF) in cooperation with the General Secretariat of the Andean Community, was convened to report on a study performed by CAF through a large group of regional and international consultants, headed by Spain's Universidad Politécnica de Valencia (UPV).

This university was selected by CAF because of its focus on postgraduate studies and research in the areas of transportation and logistics, in the context of Spain's insertion into the European Union.

The study is backed up by exhaustive field work which included 96 meetings with 267 individuals belonging to public administration and transportation companies and federations, as well as representatives of the freight-generating groups in the five Andean countries.

CAF President Enrique García opened the meeting, which was attended by the Ministers of Transport and Trade of Bolivia, Colombia, Ecuador and Venezuela, and the Secretary General of the Andean Community, Sebastián Alegrett.

The General Secretariat of the CAN had initially requested this report from the Andean Development Corporation (CAF), which financed and managed the project, to find solutions to the problems of international freight carriage by road affecting several Andean countries, in particular Colombia, Ecuador and Venezuela.

One of the lines of research delved into the difficulties encountered in applying the Andean rules and regulations on international freight carriage by highway and the economic and social conditions of the borders that are affecting the smooth running of intra-subregional trade.

The study warns that the problems of international freight carriage by highway in the CAN "stem from a conflict confronting the transportation sectors, from which the respective public administrations are not absent".

According to the UPV experts, road transportation "is unprepared, in terms of both infrastructure and the situation of the sector itself to cope efficiently with international trade."

Factors mentioned, among others, are the lack of technical standardization of vehicle characteristics, the high degree of obsolescence of the fleet, and the absence of uniform cost structures among the several countries.

Hence, say the experts, the integral treatment of the problem "calls for an analysis of the conditions in which competition is effected", in particular of the institutional frame that defines the rules of the game, and of the characteristics of the agents operating in the sector.

The research revealed international freight carriage by highway to be characterized by the absence of a common policy, the paucity of public investment, different rhythms in the five countries' sector deregulation processes, and a high level of insecurity both for crews and for the merchandise they carry.

A huge mismatch between the abundant supply and the less-abundant demand was clearly observed, as well as the deficient level of development of road transport infrastructures.

The situation is compounded by the "different rules and regulations and the failure to ensure strict compliance with them", added to the insufficient progress made on technical standardizing, the deficient organization of the business and social sectors, and the poor record of professional qualification.

The study concludes that it is necessary to draw up a Common Policy on Transportation in the Andean Subregion, with short and long-term actions, to cover the economic, social and institutional aspects, as well as the improvement and reconversion of the sector to adapt it to the challenges of intra-community trade.