Transport & Logistics 2022

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TransporT & LogisTics

Gr EEN L ANE FOr wESTEr N bALk AN

The major aim of the eU’s Transport Community is to complete the integration of Western b alkans’ transport markets into the eU.

matEJ ZakonJšEk Director at Transport Community Permanent Secretariat

Many people don’t know about Transport Community. That’s why we talked to Mr Matej Zakonjšek, Transport Community’s Director, who re vealed some of their most important pro jects that will help countries from the Western Balkans in joining the EU process.

How would you explain to our read ers what exactly the Transport Com munity is and how it is important for the citizens of Serbia and the Western Balkans?

Transport Community is an interna tional organisation the field of mobility and transport. Our membership consists of 33 participants: all Member States of the European Union (EU) represented by the European Commission and six regional partners in the Western Balkans, includ ing Serbia. The aim of the organisation is clear - complete integration of Western ‘Balkans’ transport markets into the EU. In other words, there should be no difference of how transport is organised in Sweden or in Serbia, Austria or Albania. With the ‘EU’s support, we want citizens of Western Balkans region to enjoy sustainable con

nectivity in the widest sense of the word. We believe that our work in five key areas – rail, roads, waterborne transport, road safety and borders – will prepare the re gion for EU integration. At the same time, while doing this, we want to contribute to good neighbourly relations in the region, which can be done by better connecting its major cities and creating a sustainable transport network that our citizens can rely on.

Where does the region stand when it comes to investments in transport in frastructure?

Western Balkans is geographically part of Europe, and the EU is its largest inves tor. Ongoing and future investments in transport infrastructure are implemented in the framework of the European Com mission’s Economic and Investment Plan for the Western Balkans. The plan priori tises investments on the indicative ex tension of the Trans-European Transport Network (TEN-T) to the Western Balkan. Actions are being taken to speed up the construction of new transport infrastruc ture and upgrade the existing infrastruc

ture to bring the core transport network up to EU standards. Major sustainable transport Flagship projects, connecting East to West, North to South and the coast al regions have been identified, and rail plays a central role in the plan. To further spur regional cooperation and integration, connecting capitals in the region and with the EU is an important priority, as well as the promotion of multimodal transport solutions and modal shift, and reducing transport-related pollution.

I will mention some of the projects, highlighting those with a strong relevance for Serbia. Your rail connections with Hungary and North Macedonia are already being modernised. In particular, the Niš railway bypass in Serbia will be finalised as a priority. Rail links with Croatia, vital in terms of freight and passenger transport, will also be improved. Demining of the Sava River and addressing bottlenecks on the Danube River will improve navigability of these important waterways and improve waterborne transport mode as part of the TEN-T network. Central European capi tals will be within easier reach through Sarajevo and links with the Adriatic coast improved. Rail Route 4 linking Belgrade to Podgorica and to Port of Bar will be fully re habilitated from the Serbian border to the sea, to restore this wonderful train route to its former glory.

Have you returned the railways to the Balkans, as you promised last year? Where is rail transport in the Bal kans today, especially compared to the EU?

Rail is one of the most sustainable, in novative and safest modes of transporta tion. To mark the European Year of Rail in the region, we organised, together with the EBRD and EIB, the First Western Bal kans Rail Summit in September 2021. Min isters in charge of transport in the Western Balkans dedicated themselves to taking full part in putting rail back on track. With available funding, coordination among governments, their EU-membership aspi rations and the wish to be part of the EU’s transport market, I am sure there will be improvements in the rail system and net works in the Western Balkans.

At the moment, there is a big gap between the region and the EU when it comes to rail. Transport volumes for pas

The cost of transportation is evident and is paid by the consumer through the price of the product or service.

sengers and freight have had an overall negative trend in the last twenty years, even though investments in rail infra structure in the Western Balkans during this time amounted to around EUR 2 bil lion. This is only 11% of total investments in the road sector during the same period. Statistics from Serbia indicate that rail passenger traffic volume is only around 7% of the road (source: Statistical Report in Serbia). These numbers leave a lot of room for improvement, given the poten tial of rail to speed up economic develop ment and offer citizens a sustainable, safe and fast mode of transport.

However, there are also numerous pos itive developments. The Belgrade – Novi Sad section, part of rail Corridor X, was completed in March 2022 and is currently the only section in the Western Balkan with the speed up to 200 km/h. In the first six months of operation, the Serbian na tional railway undertaking carried around 1 million passengers on this section, around 30% of the total number of pas sengers. Furthermore, construction works on the section from Novi Sad to the Hun garian border began in April and should be completed in 2024. Improvements are also planned on railway line from Nis to Skopje, in line with our overarch ing goal of bringing rail back on tracks in the region. In summary, to answer your question directly, in terms of political focus and support – we did bring rail back on track. Did the rail system evolve into the desired state of play? Not yet, there is plenty of work in front of all of us, but we are certainly getting there.

How is the implementation of the Green Lane project progressing? What are its advantages and what will it bring to the economy of the Western Balkans?

According to a 2015 World Bank study, waiting time at region’s borders was esti mated at about 26 million hours per year. A significant share of these waiting times could be avoided through improved in frastructure and better coordination. The

we believe that our work in five key areas –rail, roads, waterborne transport, road safety and borders – is preparing the region for EU integration

cost for Western Balkans was estimated to be 250-300 million EUR per year. This in cludes the costs for transport and logistic companies, but also missed opportunities in terms of the region’s economic attrac tiveness and general competitiveness.

Green Lanes are a great way to address these challenges. They were established at the beginning of the COVID-19 out break, as a joint initiative of Transport Community, CEFTA and Regional Coop eration Council to prevent shortages of essential goods and medical equipment. Their launch has proven to be one of the most successful examples of regional cooperation, managing to preserve trade flows, not only for the economic benefits, but also for effective fight against the pandemic.

Within the region, the first- priority truck lane dedicated to the Green Lanes in the Western Balkans was opened on bor der crossing Presevo-Tabanovce, between Serbia and North Macedonia. This prior ity lane serves as a green corridor for the agreed priority list of goods. In addition, establishment a well-functioning system on this crossing was facilitated by the so called „one-stop-go“ model, introduced in 2021, and now in operation in both directions. Waiting times have been re duced, while export, import and transit of goods have accelerated.

This year, the first Green Lane bor der crossing between Western Balkans and the EU became functional between Greece and North Macedonia. Exchange of pre-arrival information with Greece is now a reality, allowing for targeted risk assessments, and faster controls. This opened the possibilities for further expansion of the Green Lanes initiative to other EU Member States. Just a month ago, the electronic exchange had been agreed by the Customs Administrations of Albania, Montenegro and Italy for the goods transported by maritime transport via the SEED+ system (Blue Lanes).

By establishing the Green Lanes on the borders with the EU, we are bringing the region closer to the EU. This kind of cross

ings are a steppingstone to even better managed borders and lead to decrease of waiting times for passengers and freight. I really expect that other neighbouring EU Member States will build on the positive examples I mentioned, and that the con cept will be applied to all border crossings between the region and the EU.

Last year you launched a traffic safety campaign related to raising awareness about the safety of lev el crossings. How would you rate this campaign today? How success ful was it?

Our regional campaign “”It’s a Thin Line” aims to increase the safety of in tersections of railways and roads in the Western Balkans, was very successful. It addressed a serious issue in the region - 59% of collisions at railway crossings result in fatalities and severe injuries. I am pleased that in all six regional partners, we encountered the full support of the authorities to tackle this issue. By joining forces, coordinating our actions and hav ing a region-wide approach to increase public awareness, we can decrease the number of accidents on rail level cross ings towards zero by 2050. The campaign targeted a wider audience via animated videos, dedicated events and printed ma terials. It is part of “soft” measures to raise all traffic participants’ awareness about the dangers of improper crossing of road/ rail intersections.

In parallel, the Transport Community is supporting the regional partners in Western Balkans to improve the infra structure, to procure safety equipment and install proper signalling on level crossings. Mapping of priority railway crossings in the region was done with EU’s support and all six regional partners participated. The Prioritisation Report which was produced as a result of map ping exercise can now be used in the pro cess of obtaining appropriate financing from relevant financial institutions, in order to improve the condition of most critical level crossings in the region.

TThe company’s impressive develop ment, its sustainable and socially responsible business, the use of re newable energy sources and the implemen tation of the green agenda, are just some of the secrets of the success of M&M Militzer & Münch Serbia. We spoke about these and other topics with the company’s director, Filip Simović, who gave an interview for the Transport and Logistics special.

Your company has recently expanded to the entire Western Balkan region. Are you present in this market through your Belgrade subsidiary?

Last year in June, M&M Serbia expanded its operations to Sarajevo, Bosnia and Her zegovina, and Podgorica, Montenegro. Sub sidiaries in Albania and North Macedonia are under development. With its logistics centres, M&M Serbia serves as a regional hub. Through M&M, we have the oppor tunity to cover the entire region, with the highest level of services and excellent speed of shipment deliveries in all Western Bal kan countries. Of course, all new branches in the above-mentioned countries also function individually and provide services to the market in which they are located.

SErbIAN Tr ANSpOrT ANd LOGISTICS m A rk ET IS CONSTANTLy GrOw ING

Thanks to its sustainable development and the quality of the provided services, the M&M Militzer & Münch Company in s erbia doesn’t feel a crisis.

filip SimoVić, managing dirEctor M&M Militzer & Münch RS d.o.o.

How important is regional market con nectivity to your business?

Regional market integration is very im portant, especially since we have elevated the cooperation with regional countries to a much higher level compared to previous years. Our idea is to enable unhindered delivery of goods to end customers through the regular collection service we provide for clients with whom we already cooperate in Serbia, and who are present in Bosnia and Herzegovina and Montenegro too.

Considering the looming energy cri sis, how well are people and the econ omy adapting to it? Does your compa ny have a sustainable programme for them?

Even before the beginning and herald ing of the energy crisis, M&M Serbia was engaged in sustainable development. We offer our clients international transport services with environmentally friendly vehicles that use natural gas, as do our cou rier vehicles. We also constantly strive to reduce CO2 emissions. Also, by investing in a solar power plant, we are using a natural resource to supply our logistics centre with electricity.

Solar panels are growing in populari ty and demand. What does your com pany offer to the Serbian market at this moment?

This year, by investing in a solar power plant, we have become completely inde pendent, and by using natural resources, we can offer our clients services that are in line with the highest possible standards. Our solar power plant has a 300kwh capacity, which completely meets all the needs for the smooth operation of our logistics centre.

Transport and logistics are your core business. Where is Serbia at this mo

ment in relation to the region and Eu rope?

Compared to the region, Serbia is very much ahead of the curve considering a large number of foreign direct investments. The logistics and transport market is constantly growing in Serbia. It seems to me that more trucks and free storage space are often required, which is why we are constantly developing with transport partners and expanding our storage capacity. In the last year, there was a need to increase our stor age capacity from the existing 10,000m2 to 36,000m2.

Serbia is figuratively called „a house in the middle of the road”. How beneficial was that for transport and logistics? Do you think that we have utilized that advantage as a country or have other countries surpassed us in that?

The favourable geographical location of Serbia has had a beneficial effect on our becoming a leading regional centre. Large multinational companies re-export goods via Serbia to end consumers in the entire region. Nevertheless, Serbia has not yet utilized all its potential, but it is on the right track.

Green and socially responsible options are increasingly being considered in the modern age. What is your compa ny’s position on this matter?

The focus of M&M Serbia is coopera tion with large multinational companies that have a clearly defined environmental protection strategy. We are constantly im proving our services and in line with special requests, we offer the transport of goods by green trucks or by rail. After investing in the solar power plant, our next plan is to invest in an electric vehicle fleet and electric de livery vehicles for our courier service M&M Express.

regional market integration is very important, especially since we have elevated the cooperation with regional countries to a much higher level compared to previous years.

What is the situation in road trans portation in Serbia in brief?

The public road transport sector is the carrier of about 80% of the flow of goods in the physical and financial sense and in that sense has great importance for the economy, citizens and society as a whole, as users of services. Transport exists be cause of the users of the services and it is necessary to be economically and func tionally efficient so that the users of the services have certain benefits, quality of business and quality of life.

The public road transport sector employs around 64,000 employees. Of which, 44,000 work in freight transport and around 20,000 in bus transport and achieve a total annual income of over 2,000,000,000 euros. They pay for customer service because the mobility of goods and passengers is vital. In this sense, the creating of a business environ ment that eliminates transport obstacles and creates conditions for efficient, func tional, safe and economically sustainable operations of carriers is extremely im portant for the Republic of Serbia.

Serbian carriers in road transport have a number of problems that accumulate, and the state takes about 30% of the total income through various fees, excises, contributions and taxes. Gray economy, unfair competition, lack of drivers, de

GLObAL dr IVEr ShOrTAGE dr IVES US INTO ThE Cr ISIS

The lack of professional drivers is one of the biggest challenges for the transportation industry at the moment

tention at the borders and an unorgan ized business environment are the big gest problems for the quality of service and traffic safety. Serbia lacks a National Traffic and Transport Strategy that will define systemic and strategic solutions.

We saw the problems the UK faced after Brexit when they ran out of drivers. How pronounced is this problem in Serbia?

The shortage of professional drivers is one of the biggest challenges for the transportation industry at the moment, and will continue to affect transporta tion prices in the near future. The age structure of drivers is a concern as 34% of drivers are over 55 and young drivers under 30 represent less than 10%.

Earnings of drivers in Serbia have in creased significantly and are higher than in neighboring countries, working condi tions have improved significantly, but we are far from being an attractive country for drivers from other countries. Serbia must solve its problem with very specific measures, by lowering the age limit for entering the profession in accordance with the solutions and good practice that, for example, applied in Germany, but also by better organization, efficiency and more rational use of transport resources and arrangement of the business environ ment, while lowering costs, taxes and lev ies for public road transport.

What is the real reason for the driv er shortage?

For years, the production of new pro fessional drivers in road transport has

been decreasing. With the abolition of regular military service, the Serbian Army no longer trains drivers; since 2009, the age limit for entering the profession has been raised, so now in Serbia you can only take the bus driver test at the age of 24; the adoption of the law on the working hours of vehicle crews limited the engage ment of drivers, so since then more driv ers are needed to perform the same job; significant departure for better earnings of drivers to EU countries and finally, with the implementation of CPC (Professional Competence) for drivers, initial training is expensive and high costs of periodic training for professional drivers have been introduced every year. At the same time, there is an obvious demographic problem, the reduction of the working-age popula tion, and not enough drivers are being trained through high schools, which are needed by the Serbian economy, and the problems are growing every day.

The fact is that the economic growth in Serbia is obvious, new production capacities are being opened, Serbia is be ing built, unemployment is decreasing and demands for transport are increas ing significantly. Regional cooperation processes, the Open Balkans, as well as encouraging economic cooperation with the EU and other countries in the world, is a significant factor in encouraging the flow of goods and mobility of the popula tion, and thus increasing the demand for transport services.

At the same time, we are witnessing various processes and circumstances in Europe and the world, in countries that have a higher standard of living and

We spoke with Goran Aleksic, gen eral director of the road traffic business association „Srbi jatransport“, about many challenges that harm industry and economy worldwide and reflected on Serbia.

goran alEkSić

General Director of the Road Traffic Business Association Srbijatransport Member of the Executive Board of the Union of Employers of Serbia President of the Assembly of the Branch Association of Road Traffic Employers of Serbia

The cost of transportation is evident and is paid by the consumer through the price of the product or service.

where the lack of qualified labor is a prob lem. This leads to significant processes of labor migration, including the departure of workers from Serbia. The earnings of employed professional drivers have in creased significantly in previous years, even above the business opportunities of employers, but Serbia must certainly find other, own solutions that must provide this very important business resource for the functional sustainability of transport in the interest of its own economy and citizens as service users.

Does this problem affect traffic safe ty since due to lack of manpower we have professional bus and truck drivers who are now working and should have retired?

In Serbia, about 170.000 professional drivers are registered with the traffic safety agency, but a significant number of them do not work as drivers or have gone to work in EU countries, America or Canada. Estimates are that our economy lacks about 12.000 drivers, which is slightly less than 10% of drivers perma nently engaged at work.

This is an extremely large amount for our economy, which has led to a signifi cant drop in the supply of quality labor, intensive turnover of workers, lowering the quality of service, and which further cause an increase in the operating costs of carriers and greater risks for traffic safety. In order for employers to over come, for them, a huge problem, they hire pensioners and tolerate the mistakes of employed drivers, increase wages and thus, now, for the relatively low quality of the workforce, high wages are paid, which are more than a significant num ber of highly educated educational and medical workers in Serbia.

The technology of providing goods and passenger transport services in pub lic road transport is not possible without professional drivers, as an important and now irreplaceable resource of the transport economy. The Government of the Republic of Serbia must adopt urgent concrete plans, adopt strategic systemic measures and undertake activities in or der to ensure more favorable conditions for access to the profession and educa tion, thereby improving the quantity and quality of production and labor supply of professional drivers on the market.

How do you explain the situation that professional drivers today have a higher salary than university pro fessors and doctors, and yet even that is not enough for them to stay in Serbia and go abroad?

Countries with developed economies have greater capacity to attract the miss ing labor force, especially professional drivers in road transport as a priority professional resource for society, so the borders are open and the selection criteria for professional labor needed

by the economies of these countries are lowered. There are organized campaigns, young people are recommended to engage in these jobs, various incentive activities are undertaken, such as mini mum wage limit measures. Thus, the Government of the Republic of Germany made a decision that from October 2022 the minimum wage for all professional drivers working in Germany is 12 euros and it applies to German companies but also to all foreign carriers who drive on the territory of Germany.

Bearing in mind that the EU countries have a significantly greater capacity to attract workers, our country must create and combine various solutions in its own interest, which mainly rely on regional connections, own resources and poten tials, along with arrangements for a busi ness environment that encourages eco nomically sustainable public transport.

Given the rising inflation and the en ergy crisis, can we expect an in crease in transport prices? How much does the price of passenger and goods transportation affect the growth of prices of goods and ser vices?

The crisis and disruptions in the world economy have started since 2008. Since then, there have been successive events that deepen this kind of crisis (wars, droughts, pandemics, migra tions...). We must not lose sight of the position of Serbia and what kind of processes the society and the economy went through for 2 decades before 2008 (hyperinflation, rations, restructuring,

bombing, privatization...). At the same time, Serbia is in the constant center of attention and attempts to influence various countries and economies, but de spite everything, in the last 10 years, the constant growth of the economy, the rise of social standards and the improvement of the quality of life of citizens have been evident.

The current inflation in Europe and the processes that have caused disrup tions in the economies, including the lack of gas and energy products, have led to an increase in the prices of gas and Eu rodiesel fuel in Europe and thus in Ser bia. Rising energy prices and rising inter est rates, on the one hand, the growth of industrial production and the construc tion industry, which boosts the volume of requests for transport services, on the other hand, along with the intensive growth of professional drivers‘ wages, have led to disruptions in the structure of business costs, disruptions in cash flows and uncertain operations of carriers.

Transport has a large and multiple functional and economic impact on the price of products. The cost of transporta tion is evident and is paid by the con sumer through the price of the product or service. European economies pay spe cial attention to public transport through a defined lower level of excise duties and taxes for Eurodiesel, by suppressing the gray economy and unfair competition, by subsidizing the business of especially bus carriers and creating a competitive business environment in the interest of their economies and the roots of trans port services.

The technology of providing goods and passenger transport services in public road transport is not possible without professional drivers

Photo: shutterstock

SIX Tr IpS ArOUNd ThE wOr Ld

international cycling campaign finishes with 247,000 kilometres covered and 5,000 trees planted in corporate forest

The “Cycling around the World” campaign organised by inter national transport and logistics company Gebrüder Weiss ended as a resounding success. For six months, cyclists around the world hopped on their bikes and used a cycling app to re cord and add up the distances covered. The original goal was to circle the globe once, i.e., to cover a distance of around 40,075 kilometres. The result: participating cyclists substantially exceeded expectations by completing a total distance of 247,000 kilometres, more than six times the length of the equator.

“We would like to thank each cyclist for supporting our campaign. Our aim was to set an example of sustainable mobility. “Cycling around the World” will see a comeback next spring,” says Frank Haas, Head of Corporate Brand Strategy & Communications at Gebrüder Weiss.

The immense success of the campaign is also beneficial for the refor estation project supported by Gebrüder Weiss in cooperation with sus tainability partner natureOffice in West Africa. The logistics company financed planting one tree for every 40 kilometres cycled. Thanks to the cyclists’ efforts, the corporate forest in Sokpokopé, Togo, now comprises 5,000 trees and has reached its maximum capacity. The company also donated 20 bicycles to local school children, enabling them to reach a secondary school in Kpalimé every day which would otherwise have been difficult due to the lack of transportation infrastructure.

gEBrÜdEr wEiSS international bicycle campaign

Our aim was to set an example of sustainable mobility.

The common transport policy is one of the key pillars of the Euro pean Union’s economic policy, as a referential example of a regulated mar ket, state measures and, finally, the val ues towards which Serbia strives. One such relevant EU policy has been imple mented within the framework of “Coun cil Directive 2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation of energy products and electricity”. The directive aligns the amount of state taxes on en ergy products in regard to the competi tiveness of EU economies and products and regulates the possibility of a special incentive for public transport through an additional reduction of excise duty only for companies whose core business ac tivity is transport.

Through its fiscal policy, the state of Serbia has the autonomous right to de fine the amount of excise duty for certain motor fuels, but also to enable a certain rebate of excise duty for fuel used for commercial purposes. What Serbia is not but should be doing is incentivizing only public transport, through an additional reduction in the excise duties on Euro diesel, more precisely, an increase in the refraction of the paid excise duty only for public transport (and not for all transport purposes). This possibility for Serbia ex ists in the Directive’s preamble, which states “the Member States may differenti ate between commercial (public trans port) and non-commercial use of gas oil”.

The previous position stated in the Directive is fully in line with one of the main postulates of the common EU transport policy - favouring public trans

ENCOUr AGING T hE COmpETITIVENESS OF pUbLIC T r ANSpOrT IN SErbIA

s erbia is now a completely different country in terms of traffic and logistics, and it uses the advantages of being like „a house in the middle of the road” much more, as the great Jovan Cvijić used to say.

port (performed by specialized transport companies) in all aspects and types of transport in relation to own transport of passengers and goods. In economic the ory and especially in European practice, the main advantages of public transport are well-known and proven, both in the transportation of passengers and in the transportation of goods and in regard to individual (private) transport:

• Public transport is always more eco nomical and it is of a larger volume, therefore there is a faster decrease in fixed and total costs in transport that are inherent in this activity, which is the basis for reducing the selling price of transport;

• Public transport differs in everything from own transport, in terms of or ganization, cost structure, the public service obligation it fulfils, etc.;

• When production and commerce companies, as well as companies from any other economic branches, use public transport that creates an opportunity for these companies to spend the funds they would other wise use for transport capacities on developing their own business;

• As a rule, public transport implies working in a regulated (“white”) fis cal zone, thus reducing the possibil ity of operations in the “shadow”, especially with stronger inspection services and wider fiscalization of its activity. Curbing the irregular (“shadow”) segment in the transport business can have a big impact on the country’s shadow economy.

• Only investments in public transport capacities can solve severe conges

tion on main transport corridors and motorways, especially in large cities; All the intentions of the EU’s common infrastructural transport policy, from increased investments in new road trans port (in the less developed countries in Europe), through significant investments in the revitalization of the existing net work and the construction of new highspeed railways, go in the direction of fa vouring public transport, which is more massive, more profitable, more special ized, and in a word, the bloodstream of every economy and society.

It is commendable that the Serbian authorities have noticed this in the past ten years, with so many traffic infrastruc ture projects completed and many are nearing completion and/or just starting. However, one thing is clear - Serbia is now a completely different country in terms of traffic and logistics and uses the advantages of being like „a house in the middle of the road” much more, as the great Jovan Cvijić used to say. Substan tially increased transit traffic on the main road corridors validates this claim.

Scientific and various other empirical research has repeatedly demonstrated that the development of multimodal transport infrastructure is extremely important for the advancement, develop ment and competitiveness of the econo my and implies a better quality of life for citizens. New and revitalized roads and railways and other transport infrastruc ture are the basis for boosting the volume of traffic flows, but also attracting new (especially foreign direct) investments.

In terms of European experiences relating to favouring public transport

what Serbia is not but should be doing is incentivizing only public transport, through an additional reduction in the excise duties on Euro diesel.

profESSor SloBodan aćimoVić PhD, University of Belgrade’s Faculty of Economics

and the intention to reduce the share of transport for own needs in the total vol ume of traffic in each EU country, then the direction of the need to increase the competitiveness of public transport in various segments should be clear too, that is, to discourage individual (private) transport in the Republic Serbia.

One of the measures related to this can be implemented in the segment of additional excise duty refraction for fuel for public transporters. Business experi ence shows that companies opt for their own fleet only when they want to main tain a high level of customer service or if they have large volumes of transport for their own needs (e.g. certain large retail chains). Every different situation stimu lates the engagement of public transport companies. We can conclude from all of this that a very important aspect of pre ferring public transport can be done via the reduction of the inputs that go into its production, more precisely, the addi tional reduction of excise duties on Euro diesel for public transport. At the same time, all companies that do their own transport would be stimulated to consid er whether such a transport mode is still profitable for them or whether it is better to hire public transport companies.

Although we live in a time of con stantly growing fuel prices (due to inter national instability) and state control of the final fuel prices, primarily through the reduction of excise duties, we believe that such a situation will end sooner or later, but that one measure – that is an additional reduction of the excise duty on diesel only for public transportersshould always be in force.

Overall, favouring public transport through the additional refraction of paid excise duty is a good measure that can bring the following benefits for Serbia:

• Favouring the public transport model as a priority transport policy, because this model of carrying out transport activities, according to the economic logic of things, is more efficient and thus more ac ceptable for the economy that uses it. This would reduce the share of individual (private) transport, which by nature is less competi tive, consumes more energy, creates more traffic jams, noise, etc. This is not only business efficient and rational (at the level of a specific company or individual), but it can also have strong macro-ecological effects, bearing in mind that accord ing to research, public transport is

a significantly smaller consumer of energy per unit of transport (1ntkm or 1npkm) in relation to transporta tion for personal needs (in all types of traffic, especially road traffic);

• Faster alignment of our excise pol icy on Euro diesel with the relevant EU policy, that is, the specific EU Di rective, while using the possibility of clearly differentiating commer cial (public) from non-commercial (individual) transport. In this way, we would be able to redefine the do mestic fuel excise duty policy much better and be better prepared for negotiations with the EU;

• Increasing legality in the transport sector improves business competi tiveness, which is especially impor tant for road transport. It can also generate additional revenue for the state budget.

An additional reduction of the excise duty on diesel only for public transporters should always be in force.

Photo: shutterstock

Photo: shutterstock

in accordance with economic trends and changes in the busi ness climate, our company start ed a serious process of diversification of operations, Erich Cossutta, President of Dragon Maritime Group, says for Diplomacy&Commerce. Our goal is to be able to offer a one-stop shop to our cli ents, Cossutta says.

As the president of a company that operates in several countries of the region, how do you see the business climate in the region?

If we look at the real indicators, the region has achieved positive economic growth in recent years despite the global crisis. We also feel a positive trend in the normalization of relations, and we are especially pleased that the southern part of the Region has started to think unanimously. We still have a long way to go, but a positive outcome is very certain through regional economic integration and a common business approach. This is exactly why the Open Balkan initiative is important, since it aims to unify the region and integrate it into the single European market. This initiative means the removal of many barriers that signifi cantly slowed down and anesthetized the Balkans region.

How much do the new business cir cumstances – after the pandemic, the war in Ukraine, inflation and in stability, affect your business opera tions? What do the numbers say?

The recession caused by the pandem ic, and the consequences of the conflict in Ukraine are reflected in all national economies. The logistics sector itself faced many challenges, and all the weak nesses of global supply chains came to the fore. During 2021, the demand was at

ThE FUTUr E LIES IN mOdEr N TEChNOLOGy

one of our priorities in the coming period will also be digital transformation and joining the global digital supply Chain.

EricH coSSutta President of Dragon Maritime Group

its peak, but on the other hand, the lack of operation and congestion in the ports could not keep up with it. This caused a classic imbalance of supply and demand and led to a skyrocketing of freight rates, which rose up to 800% compared to the pre-pandemic period. At the same time, the allocation on ships was extremely limited, while transit times were much longer than usual. Today, the situation is drastically different, the high rate of inflation, geopolitical conflicts, the en ergy crisis and the pandemic have led to a drop in demand, and therefore a sharp drop in freight rates, and it is uncertain how long this trend will continue.

You do business in Slovenia, Croatia, Bosnia and Herzegovina and Ser bia. How much doing business dif fers considering the fact that two of these are EU member states and two are not?

There is no doubt that the differences exist. Slovenia and Croatia are part of a single EU market where the free move ment of goods and services is ensured, thereby saving time and reducing the costs of administrative procedures for forwarding and customs clearance. How ever, we have no major difficulties with doing business in Serbia and Bosnia and Herzegovina. Both countries are signato ries to numerous agreements and initia tives - free trade agreements, they are part of the SEED project, the Green Corridors initiative, the Open Balkans initiative. EU membership will certainly make doing business in Serbia and BiH even easier.

What are the idiosyncrasies of the Serbian market?

Serbia is a part of Europe and as such, is an almost exclusive link between the world’s most important markets, such

as the European Union on the one hand, and the Mediterranean and Asia on the other. Serbia’s geography facilitates lo gistical connections which is one of its special and crucial advantages in the modern world.

By joining the global digital “Supply Chain”, Serbia becomes a valid link in that chain and a place where the same standards apply as in the rest of the chain.

Through this global digital supply chain, Serbia really has an opportu nity to use all its potential, first of all geographical, but also production, logistics, intellectual, agricultural and all the others at its disposal. To quote Marshall:”Technology brings ways to bypass obstacles, that is, to pass through them”, including, for instance, bottle necks created by outdated customs pro cedures.

The logistics industry already has a large share in Serbia’s economy because, by its nature, it had to recognize Serbia’s advantages early on, and that it did. But there is still room for great progress in the development of Serbia’s strategic ca pacities.

What is it that separates Dragon Mar itime Group from its competition?

Tradition and people. I am part of a business that has been handed down in my family for generations, and today, together with my partners who are part of the ownership structure of Dragon Maritime Group, we endeavour to cher ish the same values, which is to always put people first. Our focus is always on our employees and we can boast a very low brain drain. Although tradition is very important to us, as a company we are always focused on the future and in novation.

Our focus is always on our employees and we can boast a very low brain drain

T he World Cargo Symposium (WCS) is the largest and most pres tigious annual event regarding car go air transport. The 2022 edition brought 1400 delegates to London, Eng land, from 27 to 29 September 2022.

In his keynote speech at the World Cargo Symposium in London, Brendan Sullivan, IATA’s Global Head of Cargo, high lighted four priorities to build resilience and strengthen air cargo’s post-pandemic prospects.

He stressed achieving net zero carbon emissions by 2050, modernising processes, finding better solutions to safely carry lithium batteries and making air cargo at tractive to new talent.

“Air cargo had a stellar year in 2021, achieving $204 billion in revenues,” said Sullivan. “At present, however, social and economic challenges are mounting. The war in Ukraine has disrupted supply chains; jet fuel prices are high and eco nomic volatility has slowed GDP growth. Despite this, there are positive develop ments. E-commerce continues to grow, COVID restrictions are easing, and highvalue specialised cargo products are prov ing resistant to economic ups and downs. In the future, achieving our net zero com mitment, modernising processes, finding better solutions to carry lithium batteries safely, and making air cargo attractive to new talent are critical.”

the road to net zero

In 2021, the aviation industry agreed on a balanced plan to achieve net zero CO2 emissions by 2050 through Sustainable Aviation Fuel (SAF), hydrogen and electric propulsion, more efficient operations and offsets, and eventually through carbon capture, an out-of-sector solution while technology develops.

“SAF is the key to achieving net zero emissions,” Sullivan noted. “Airlines used every drop that was available in 2021. And it will be the same this year. The challenge

is SAF production capacity. The solution is government incentives. We could see 30 billion litres of SAF with the right incen tives by 2030. That would be a tipping point by 2030 toward our net zero ambition of ample SAF quantities at affordable prices.”

modernISatIon and effIc Iency

“The challenges of the COVID crisis gave us confidence that we can change and adapt fast. We need to use that confidence to get even closer to our customers’ expec tations for modernisation. And we need to be true to air cargo’s unique selling point and move even faster,” said Sullivan.

IATA’s ONE Record allows everyone across the industry’s value chain to see the same shipment information. Already, 156 companies and four customs authorities are using it. Also, IATA Interactive Cargo Guidance provides a common framework so that tracking devices can monitor the quality and accuracy of conditions of time and temperature-sensitive goods.

Government support for the modernisa tion agenda through facilitating trade is also critical.

“The Revised Kyoto Convention, which brings standardisation, technology, pre dictability, and speed to trade facilitation and the World Customs Organization (WCO) SAFE Framework of standards to facilitate and secure trade are major steps forward in supporting global trade,” said Sullivan.

Safety

Safety, specifically finding better solu tions to safely carry lithium batteries, was highlighted as a priority for the industry.

“We can be proud of the progress we are making to further improve the safe han dling of lithium batteries,” said Sullivan.

“For air cargo, this is a top priority. But even the best regulatory structure means nothing if the rules are not followed.

Compliance is an issue with the transport of lithium batteries, particularly with the

A Ir CA rGO pr IOr ITIES FOr SUSTAINA bLE GrOw Th

proliferation of new—and inexperienced— entrants in e-commerce activities.”

IATA called for regulatory authorities (EASA and FAA) to accelerate the develop ment of a test standard that can be used to demonstrate that fire containment pallet covers and fire-resistant containers are capable of withstanding a fire involving lithium batteries.

To embed best practices on the safe car riage of lithium batteries across the value chain, IATA has expanded its CEIV Lithium Battery program to include airlines and shippers.

people

“People are the core of any improvement in what air cargo can deliver,” Sullivan suggested. “Sadly, we saw thousands of jobs leave the industry during COVID-19, especially cargo handlers. We are now com peting for talent in a very tight job market. And when we do find the right and willing talent, training and longer-than-usual se curity clearance processes delay their entry into the workforce.”

IATA is calling for governments to accel erate clearance processes, including those for security, as a short-term solution and long-term to do a better job of attracting, onboarding, and retaining talent.

Safety, specifically finding better solutions to safely carry lithium batteries, was highlighted as a priority for the industry.

IATA highlighted four priorities to build resilience and strengthen air cargo’s post-pandemic prospects

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